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Blue sky still shining on net

IF YOU thought the Internet was an area where entrepreneurs with drive and vision could forever change the fundamental rules of an industry, you’re too late, those days are gone already.

According to Steven Vonder Haar, a senior writer with Internet magazine Interactive Week: “Start-up companies that once hunted to create so-called ‘paradigm shifts’ on the web now search mostly for untapped business niches that can be served using existing technology. The thirst for technical revolution has given way to the comfort zone of evolution”.

By ‘paradigm shift’, Vonder Haar means the big ideas that proliferated in the early days of commercialisation of the worldwide web around 1995 and 1996.

Some ideas, such as Amazon.com’s idea of high volume online book retailing, have gone on to be great successes. Others such as ‘push technology’ had died by late 1997.

From a business perspective, this doesn’t make the Internet a less exciting place to be.

In many markets, from cars to machine tools to dishwashers, the Internet is wiping out the ‘distribution margin’ and creating opportunities in markets that seemed pretty well sewn up a few years ago.

But you need to move fast. Whether you’re taking an existing business online or intend a start-up, most industry analysts will tell you to move soon, because the entry cost to online markets gets bigger every day.

Take a market like online book selling.

When Amazon.com first entered the market, they had few competitors. The range of product Amazon sold and the relative ease with which customers could purchase soon got the company noticed and it went on to become one of the biggest brands on the net.

Because Amazon entered the market early, it found it relatively easy to build a brand consumers have come to recognize and trust throughout the world.

The web is much more congested these days and building a worldwide brand from scratch will come at a substantial cost.

Even if you have an existing brand with an established following, if you’re not on-line now, you’d better make a start soon.

You may need to make a substantial investment in your existing business systems before going online and this will need careful consideration.

Companies such as Amazon are setting the standards for online service that many new entries will find hard to emulate.

If you’re looking for a book at Amazon.com you can search by title, author, price and a number of other customer categories such as recipes or travel.

Customers using Amazon can also set up an account – that means they don’t have to enter all of their contact and credit card details every time they place an order. They can even check the status of their order whenever they wish.

Many businesses could not even offer the type of computerised order processing to their own staff that Amazon offer their online customers.

The major question for many businesses is: will the investment in business processing be worth it, and what is the down side if we don’t?

The good news for businesses that have been investing in computerised business systems over the past few years is they are well positioned to go online in the near future while there is still some blue sky to be won.



• Raphe Patmore is CEO of Internet consultancy Biz E Planet.

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