Grow Your Business, Not Your Inbox
In the quickly evolving e-business world, one of the most important tasks facing netpreneurs is education. Despite a 24/7 work schedule, business owners who want to keep up with the latest trends must carve out time to learn how to stay competitive. A single idea can make a business. A missed opportunity-well, that could turn a thriving Web site into another dotcom disaster.
As far as e-commerce goes, the entire business changes every day. And when you ask founders of dotcoms to prioritize the areas where they strive to keep learning, you'll find things like marketing trends, the latest changes in technology, evolving business models and the structure of financing deals make the list. They need to keep tabs not only on competitors, but on everyone in e-commerce. Sources of information include the informal and formal) the actual and virtual. They all agree that keeping up is not a choice-it's a requirement for survival.
"People ask how I can possibly do all this reading, but I can't not do it," says Shelly Spiegel, founder and president of Search Communications , an online clearinghouse for college admissions videos in Philadelphia. Spiegel, 41, fits it into her busy schedule, reading 40 publications every month, no matter what.
Cynthia Harrington is an Austin, Texas, freelance writer specializing in business issues. Her work appears in Bloomberg Wealth Manager and Profit magazines. She teaches online courses about investing and Internet start-ups for notharvard.com.
Business Models In The New Economy
To succeed in the old economy, companies found methods of doing things and then executed those models better than the competition. But in the Wild West of the Internet, today's accepted methods could be tomorrow's failures. That's why the evolving business model is one of the most critical issues for netpreneurs to track. Companies must always be thinking about future models and planning for them.
"I keep a profile of all our competitors," says Thomas Dalton, 38-year-old co-founder and vice president of sales at USBid.com, a Melbourne, Florida-based business-to-business site that brings together buyers and sellers of electronics components. "There are constantly people entering the space, and the business model is constantly morphing."
Early business-to-consumer models were based on attracting and retaining eyeballs (viewers). Web sites would give away content to attract viewers, then sell the eyeballs to advertisers. When advertising didn't pay the bills, the model transformed to include transactions. Suddenly, e-business wanted paying eyeballs.
Eventually, that model segmented into different methods of charging for transactions: direct selling (Amazon.com), demand-collection systems (Priceline.com) and auctions (eBay). And there are some analysts who think the next great business model won't deliver any physical inventory at all; they believe tomorrow's e-businesses will sell only digital content delivered online (such as books, music, movies and more).
You can expect new technology and applications to occupy a big chunk of the time you spend in self-education. And if you don't know the latest technology, you'll surely become dependent on others who do-which can get expensive. "Consultants get paid more to install expensive systems," points out Ben Narasin, 35, founder and CEO of Fashionmall.com, a virtual mall in New York City that sells space on its site to fashion, footwear, accessories and beauty retailers. "On a company site tour, I saw one company using two Pentium computers to accomplish what other companies were doing with $100,000 boxes." Narasin duplicated the setup at his own firm and saved money.
Keep Updated With Technology
Netpreneurs should also keep up on technological developments in order to gauge future growth. InfoPost is a marketplace where individuals and businesses can buy and sell digital content. According to InfoPost's 28-year-old co-founder, Josh Tang, "How fast the consumer is adopting these new technologies is a predictor of the speed of our growth."
Not keeping up with changing technology could actually eliminate some businesses. In fact, Spiegel's company recently updated its Web site to take advantage of one Net trend in particular: streaming video. Although her company started out marketing college admissions information to teens-they searched her Web site for videos, which she then mailed to them-an alliance with Precision Media, a streaming media company in Plymouth Meeting, Pennsylvania, now allows her to provide entire presentations via streaming video. Says Spiegel, "If I had stayed in video selling, everything would have passed me by."
But it's not enough for business owners to stay educated; they must educate their customers, too. Geoff Sherr, senior strategist with CarryOn Communication Inc., a PR firm in Beverly Hills, California, that specializes in cutting-edge Internet companies, illustrates the point. "We're always needing to educate clients about the online ways of thinking in PR," he says. "While the offline world measures results quantitatively, the online world is a dynamic setting. For instance, if Women.com does a story about a client, the story links to the client's Web site. The online world measures the result of that story about the company by the hits the company has gotten to its site from that link, not the offline thinking which would be the exposure in the story."
Spiegel is even more adamant: "If I was the only one educated about developments, I wouldn't have any customers. Take streaming video. My clients perceive the quality of the video to be inferior, so they don't think their audience will watch it. Yet research shows that teens are already watching videos on the Net, which is the number-one place they go to research a college." To educate clients, Spiegel posts new developments from her research in a biweekly newsletter.
Tomorrow's customer is as important as today's for business-to-consumer companies. Current Internet customers are largely urban-based professionals, a market that's been tapped and is widely known. Tomorrow's growth must come from somewhere else. "It's not the people who are on the Net that are the driving force behind the economy," says Sherr. "It's that broader audience. What truly makes a billion-dollar business is its ability to reach middle America, so what will affect the change are low-cost PCs, free Internet access and the major long-distance carriers expanding DSL connections to small towns."
But for dotcoms even to succeed tomorrow, they've got to be studying the industry's financing climate. Dotcom founders should track what deals are being done, how the deals are structured and who's getting funding from whom. Fashionmall.com's recent purchase of collapsed Internet retailer boo.com's domain name made front page news worldwide. The Time Warner/AOL merger has also played a role in shaping the Internet. Tang says that one of the top issues he follows in all his reading is which companies are getting new funding: "I want to know what dollars are out there and where they're going."Where is the heart of the high-tech world? Read "High-Tech Hot Spots" for the best breeding grounds to set up your business.
Track Developments Of Other Internet Companies
OK, so the need to stay educated is great-but that doesn't change the fact that the time you have to pursue new knowledge is still limited. So take this tip from the pros: they read; they meet; they ask; and they listen. Most netpreneurs agree, the best sources of information are your peers-no other source is as current. "Things are happening right now," confirms Dalton. "There are lots of people doing things for the first time. We have to see what others are doing, through analysis or partnering."
In order to stay abreast of the marketplace, most netpreneurs track the developments of other Internet companies. Every other week, Sherr selects two or three companies from different sectors and reads everything written about those companies-that way, he can track trends and developments. Tang scours press releases from competitors, looking for what partnerships they've announced and finds out what the CEOs say about why their companies formed particular partnerships. Narasin takes every opportunity during Net conferences to network with other attendees and tour companies via on-site visits.
Seminars and conferences remain other good places to meet peers. Several organizations and publications offer them-one is Shop.org, a trade association that focuses exclusively on Internet retailing. Robert L. Smith Jr., Shop.org's executive director, describes his challenge: "Our group of e-tailers is not [homogeneous]. Some of our members haven't launched a site yet, and others have three to five years of experience. Some members are pure Internet plays, some are multichannel (incorporating the Net with catalogs or brick-and-mortar retailers), and some are brand marketers like Levi, going direct to the customer over the Net. One of the things they all want from us is networking opportunities, opportunities to come together to learn and form alliances. To serve that need, we're creating member forums, in person as well as over the phone and the Net."
But peers don't have to be your only source of valuable input. Business allies, such as vendors, accounting firms, employees, investors and board members, can all contribute. Tang likes to stay in contact with current investors for a better understanding of the financial landscape; his firm also uses the bookmarker Backflip to let employees circulate articles of interest. Dalton finds the research from his accounting firm, PricewaterhouseCoopers, to be a good source for new developments.
Brett Morrison, 31, founder and CIO of ememories.com stays abreast of technology with the aid of software and hardware companies. Morrison, whose Los Angeles company manages digital photos for families, attends conferences where his software vendor demonstrates the products in development. Says Morrison, "They do a good job of letting us know what's coming out so we're ready to implement it when its released."
Get Info From The Net And Business Schools
An obvious information source for netpreneurs is the Net itself. Searching for news, following press releases on competitors' Web sites and receiving daily e-mail alerts from industry press and stock analysts give comprehensive looks as well as save time. "E-mail newsletters are timely," says Narasin. "I read mainly two newsletters daily, the Silicon Alley Reporter and NY New Media. But there are constantly new publications."
Although the Internet is timely, the printed word isn't totally obsolete in the e-commerce world. Due to a Web culture that is rapidly developing, the information in books is outdated by the time they're printed and shelved. Some netpreneurs still read them; however, it's more likely that they read a variety of daily, weekly and monthly publications.
"I subscribe to 20 magazines," says Morrison, "but there's no single place to keep up on developments in our market. I have to let them backlog, then I get on a plane with 10 pounds of magazines, read them cover to cover and leave them."
With all these issues to follow, the need for continuing education seems obvious. Yet most business owners agree that formal classes are not the answer. One problem is time.
"For me to sit on the sidelines for two years right now. I'd miss the boom," says Spiegel. As a result, netpreneurs learn by doing, and its the ultimate pass/fail course.
||Your mother was right when she told you to get an education. Check out "The Deliberate Entrepreneur" for the best schools to get your MBA from.||
Keep in mind, though, that while you may not be going to school today, tomorrow's e-commerce stars are. Schools nationwide are adding e-commerce components to their business school curriculums. MIT's Sloan School of Management has an eBusiness Track and a Center for eBusiness@MIT. The Marshall School of Business at USC founded its Electronic Economy Research Program Lab (the EbizLab) in 1998, making it one of the first of many similar research arms of business schools. The e-business program at the University of Washington's business school was credited with saving the MBA program at the school, which had dropped off U.S. News & World Report's list of the top 50 business graduate schools.
Narasin clearly views formal education in a positive light. "When I'm hiring and I see that people have taken courses like e-commerce when changing careers, it shows a commitment to their new field," he says.
Even those who dismiss the idea of going back to business school to extend their education discover that keeping up with all the changes and developments in this fast-paced world of the Internet still takes time and focus-make that a lot of time and focus. But the successful ones insist that making the effort isn't a choice-it's a necessity.
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Where netpreneurs get their education-in print and on the Web:
The Industry Standard:www.thestandard.com
MIT's Magazine of Innovation Technology Review:www.techreview.com
Silicon Alley Reporter:www.siliconalleyreporter.com
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