Digital Darwinism

After carefully analyzing your business, whether you don't feel the heat of Internet competitors breathing down your neck, or you do--and we've put you in a panic--it's a good idea to re-evaluate your marketing strategy on a regular basis. A business unaffected by the Web even six months ago may now be in competition with a company that has found a way to do business better online. And even if most of your products or services can't be provided online, as with car repair, tailoring or painting, a Web presence can get your name out there and offer information to people who may eventually become customers. (See "No Fear," below.)

"Smaller businesses should band together and create local sites for greater visibility," advises Kate Doyle, former analyst for Jupiter Communications. "The companies should complement one another, rather than go head to head against each other."

And don't lose sight of what's most important on a Web site: content. "You can have the best Web-site designers and invest money in fabulous technology. But if you don't build a marketing plan for your customers to visit--and come back time and time again--you will ultimately fail," says eMarketer's Ramsey.

Tom Williams, 65, owner of Venture Press, a publishing company, and PubMart, a how-to Web site for entrepreneurial publishers, both located in Coral Springs, Florida, has sold books for years through traditional bookstore outlets, which he describes as "death on the small publisher." The growth of desktop publishers offering services through the Web during the past few years put even more pressure on his firm.

Williams took a hard look at the cost of a Web site and realized it made sense. With the advent of his site last April, he's been able to more directly reach niche markets and retain most of his sales. He says he is now "well into the black" with this investment.

Yet there is a saving grace for entrepreneurs who feel uncomfortable because of their lack of a Web site. As Kadison observes, the Internet's greatest asset is also its greatest liability. The ease of entry into the Internet market means your greatest hurdle will be getting traffic to your store, considering most users visit fewer than 10 Web sites on a daily basis, according to eMarketer. In addition, many companies forget that their sites must be maintained and that monthly expenses add up quickly. "The Internet isn't as easy as it looks," Kadison says.

"Make no mistake," Ramsey adds, "the Internet is a very different way of doing business. Small businesses that are quick to try, learn and adapt will be the most successful. By going through the inevitable failures, these companies will learn what works and what doesn't, and they'll have a much richer understanding of the Web and how net users shop and buy online."

The coming millennium will indeed be transformative in terms of how we shop and what we buy. By reacting positively to the inherent destructive qualities of change, small, traditional businesses can harness the wave of innovation rather than be crushed beneath it.

This article was originally published in the February 1999 print edition of Entrepreneur with the headline: Digital Darwinism.