Ah, those were the days: IPOs, "e" and "i"
everything, Superbowl ads, Pets.com, eager VCs and aeron chairs.
But enough reminiscing. It wasn't that great anyway. Now that
most of us have caught our breath after the dotcom free fall,
it's time to get ourselves together and figure out how to move
forward and make e-business work.
Rob Powell is a one-man band. The founder, owner and manager of
EngineerSupply.com steered his engineering equipment
site through the storm, all the while maintaining a full-time
engineering job. E-tailing has been one of the most maligned
victims of anti-dotcom sentiment, but Powell, 31, shows it can be
done smartly and profitably.
Powell's first good move was registering the
EngineerSupply.com domain name in 1999 in Christiansburg, Virginia.
He had heard and read about the online boom and was excited to
secure a site of his own. Six months later, the site was launched
as a purely informational resource that became popular with
engineers. As Powell got up to speed on the vagaries of e-commerce
over the next two years, he slowly weaned the site off information
and built a retail outlet in its place.
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While his site was evolving, e-business as a whole was choking.
The dotbomb list was sobering for Powell to read, but he had one
definite comfort: profitability. He's willing to share his
secret to thriving in e-tail: "my small amount of
overhead." Drop-shipping products straight from the factory
and backing it all up with fastidious customer service kept
revenues rolling. If this sounds familiar, it's because
we've been hearing about it in the offline business world since
before the Internet was a gleam on Tim Berners-Lee's
monitor.
"It's never
too late to tweak your business model, but it's a bit harder to
really pin down what makes a smart e-business
model."
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What's the best news? The worst is probably over. Heather
Petersen and Lauren Wang had their own doomed
dotcom once. After the crash, they took their hard-earned
expertise and started Handl Consulting, a technology business
consulting firm in San Francisco. "The way people talk has
changed," says Petersen. "What they're focused on has
changed. It's come full circle in some ways. Hopefully,
we're going to be back on some kind of an upswing."
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At a time when most e-businesses can't get the time of day
from venture
capitalists, DataCert, a Web-based e-billing company in
Houston, has just rounded up $11 million in funding. With 61
employees and profitability just around the corner, CEO, president
and founder Eric M. Elfman must be doing something right. For
Elfman, 39, the answer is simple. "Smart business models still
get funded," he says.
It's never too late to tweak your business model, but
it's a bit harder to really pin down what makes a smart
e-business model. The dotcom shakeout helped by imposing the
survival-of-the-fittest rule. Keys to DataCert's strong showing
are focus, more focus and a dose of forced luck. DataCert narrowed
in on legal e-billing, specializing in working with Fortune 500
companies. Smart move. That's definitely a solid marketplace. A
carefully planned move into health-care e-billing next year will
help propel them forward. Know your target market, keep it
specific, and make sure it is actually worth mining.
Limited capital in the early years of DataCert kept them from
being swept away in the waves of hype circa 1998 and 1999. "To
us, it was always about the customers and revenues and dollars
coming in the door, and not about eyeballs and stickiness,"
Elfman says. "This bootstrap mentality, even though it was
forced on us, was good in the long run." Bootstrapping
is once again the name of the game. Accept it as a challenge that
will help keep your e-business lean and competitive.
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