|SSP (Shameless Self-Promotion)||This
Week's Clue: Web Commerce, The Movie
A year ago, I helped Kate Maddox, now interactive editor at Advertising Age , finish a book on web commerce. It has now been released as part of the Wiley-Upside series under the name "Web Commerce: Building a Digital Business," . I decided, on the eve of Internet World, to devote this week's main item to updating its lessons.
First, design from the user out. Don't ask, what should I do? Ask instead, what do people want? Then, make sure what you give them is first-class. If your aim is true, you'll quickly draw competitors anyway. If your aim isn't true, you have no chance if what you offer isn't top-notch.
Second, make sure you have passion for your subject. I can't emphasize this enough. Web sites, magazines, and TV shows have this much in common, someone at the top who lives and breathes the subject. They also have someone else - someone who lives and breathes the subject of business. Most also have someone who lives and breathes the subject of sales, and someone who lives and breathes the technology. These are the key personnel ingredients in any successful Web business.
Third, it's transactions stupid. Web sites aren't primarily "content," or "community." They're primarily a means for "doing bidness," as we say in the South. Forget all this talk about disintermediation - a Web site by its nature is a financial intermediary. Now, you could have an information business, but if your site isn't leading to money changing hands somewhere (and you don't aim at getting a piece of it) you've got a hobby, or a personal advertisement. I'll admit this up-front - A-Clue.Com is a personal advertisement (and a very good one) aimed at getting me more freelance journalism work covering business and technology.
Fourth, you don't need a lot of money. You need a coherent strategy, a specific (unfilled) niche with a clear transaction flow. If you have a clear strategy the rest is easy. Web servers and Internet connections are fairly cheap - it's the time spent creating and maintaining the site that costs. (That's why you need passion.) If you're entering a market that already has a dominant player, of course, you will need a lot of money. And you'd better have a better approach than that dominant player (or a LOT more money) if you're to stand a chance.
Fifth, let's get our terms straight. A database is your stock. An "e-commerce" program is your cash register. "Personalization software" is your sales clerk. HTML is the glue that binds all this together. Don't let this industry's double-talk force your eye off the ball. Bill Clinton's got nothing on us when it comes to double talk. The difference is, he sounds slick while most of us just sound smarmy.
Sixth, it's not just the Internet. The public Internet, in fact, is just the tip of the Web iceberg. You can make big money in private areas, on private networks, enabling private transactions. That's where the biggest money is being made these days. And it doesn't take many players to make things happen for you, if their transaction volumes are big enough, and if you're saving those players enough to make playing in your playground worth their while.
Finally, the usual rules apply here as elsewhere. Have fun. Don't spam. Don't fear failure - it happens. Don't sell anything you wouldn't buy yourself. Remember that a good name is more important than money, and if you have the former, enough of the latter will eventually come to you.
If it sounds like everything I know about the Internet I learned in kindergarten, that occurred to me as well. Pity I was such a bad student then....
SSP (Shameless Self-Promotion)
I call it the Fall Tour. I'll be at New York's Internet World, searching the aisles for Clues and the press room for new work. Hope to see you there. I'll also be debuting a new talk called "Clues to Commerce" at John Audette's Cascade Conference, which runs from October 14-16 in Bend, Oregon. If the talk goes over well, we'll do it again sometime.
You can now order "Web Commerce: Building a Digital Business," , by Kate Maddox with yours truly (but with on the cover) through Barnes & Noble. It's on sale at $20.95, (down from a cover price of $29.95, and down from Amazon's price of $27.95) part of the Wiley/Upside series. Let me know what you think of it.
A-Clue.Com has also been picked up by Andover News as its Monday e-commerce column. Thanks to you, A-Clue.Com now goes to over 900 Clued-in subscribers each week. Thanks to Multimedia Marketing Group a UnityMail customer, it's also an in-line HTML file (no more messy Web codes). Besides producing A-Clue.Com, I contribute regularly to such publications as Net Marketing , Boardwatch, Datamation and Atlanta Computer Currents . Your magazine can join the list - send me an e-mail and let's start the ball rolling.
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And now back to our show...
It's the hottest new buzzword among the "portals" (and how I hate that word). Now that we're going there for searches and e-mail, we can be organized into interest groups who'll spend even more time in the same-old same-old places.
As always the model is AOL , but having built a NetGuide community for the onliner a few years ago I can say with some authority that most of their communities are phony. They're active message boards with file sections and, sometimes, chats - basically they're bulletin boards. Worse, they're not run by Sysops who are finally getting their due, but by marketers. These people take big bucks to sit together in meetings, then hire moderators for a relative pittance.
The big idea in the new community game is software. Geocities built its communities with software that let anyone build a Web page. Excite, which officially launched its effort September 16, claims to have 1,000 groups already under its umbrella. Anyone can start one with a "template" that even lets you build communities hidden from the larger Internet ("gated" communities). And (of course) Microsoft has now gotten into the act.
The economic model here, of course, remains advertising. Even where a vendor pays millions for an "exclusive" arrangement with Excite or MSN, they're getting either a chance to lure customers off-site or an assurance no one else will get that chance. GeoCities and Tripod (now part of Lycos) have sought profits in this area by finding creative ways to deluge those seeking this "free lunch" with more and more types of advertising. The natural response of the Internet community at-large is to not take such pages seriously - if you want to do bidness, get your own URL.
I might like to start my own community, either for the kids' school or my far-flung family. The problem here is, as with sysops everywhere, finding the time to tend the garden. Small communities can easily die-off, leaving the sponsor (Excite in this case) with tons of used disk space resting on faulty economic assumptions. Business and professional groups don't succeed online until someone (usually a volunteer) selflessly invests the time needed to create and maintain content the group needs to succeed. Most of us, in most of the groups we join, are takers, and to succeed an online community needs someone to be a giver.
So here's a Clue for MSN, Excite, and anyone else trying to build software communities. It's an old idea, one that worked well for Compuserve for years, one that Prodigy tried until their all-in pricing made it untenable, and one that turned two loudmouth investors into foolish millionaires (http://www.fool.com). That is, find some money (real or imagined) for your gardeners. It doesn't have to be a rake-off of online hours that don't bring in money anyway. How about contests (a trip to headquarters as top prize) or "frequent flyer" miles, earned by users on behalf of their gardeners? Those who get the incentives right will win this game.
Why don't we have broadband yet, and why won't we get it for years? Monopolies. Bell-heads and cable head-ends are monopolies, with no incentive either to compete or tolerate competition. The capital needed for huge projects (cellular and satellite systems are, like phone and cable networks, huge projects) only comes when investors have some assurance of profit. The assurance can't lie in the cleverness or big smiles of the guys and gals offering the deal. It must come from guarantees they'll be little, if any, poaching on the sacred turf of profit which is about to be seeded by these big bucks, and watered by those big smiles.
In June I told readers of Computer Currents, based on what I considered solid assurances from BellSouth and Media One (the local monopolists around these parts) that we'd have broadband in Atlanta this fall. Well, my sources lied to me and I, in turn, lied to my readers. The proof I lied lies in the modem that delivered this to you (despite the fact I'm 100 feet from a BellSouth switch) and the analog cable box that (usually) gives me 50 channels with little on, in a corner of this room. (Not only do I not have it, I've gotten lots of letters from readers saying they don't, either, despite repeated assurances to the contrary.)
Despite their PR, monopolists will provide service first to those areas with lots of rich people, or to companies offering to spend big (and for years) on using their new bandwidth. I was told in June BellSouth would cooperate with other ISPs in provisioning ADSL service here. None (and there are about 30 in this market) is now working with BellSouth, although two have said they'll work with the company's local access competitors. (US West has been more intellectually honest - they just refuse to tariff any other DSL service but their own.) It's truly galling no one in the media or business will take these facts seriously, but there's no money in that. So read all about it - just click here or here . Agreeing with these conclusions may get you branded irrelevant or worse, but there they are. And there is a Clue here - don't abandon the assumption your users travel via modem.
This week Internet World makes its annual file-dump at New York's Javits Center. I've been going to these things for over 15 years now (since the 1983 Spring Comdex in Atlanta) so I figured you might like some Clues in how to get the most from such an event.
First, have a plan. Make appointments within the convention center if you can - you don't want to add commuting time to those few hours you'll have for work. Focus on one niche, both in the conferences you attend and while you're on the floor. Try to keep your mouth shut and your ears open. (This is very difficult in my own case - I come from a long line of motormouths, so be warned.)
Second, know where we are. Back up to the PC revolution and understand we're now in the late 80s. You'll see major vendors (http://www.microsoft.com) who'll pretend to offer information but who'll give you nothing new. Hardware, bandwidth, and major application vendors will all be here to talk to their channels, not to you. The stuff worth seeing may be squirreled-away off the show floor, or hidden in the corner of a booth. The stuff worth hearing will show a clear path (and clear value) between the customer's pocket and that of the vendor. Expect to hear this a lot - "we're unique because." At this point in the game, that's a lie. When you see something unique, you'll know. But don't expect to see anything unique, and what you do see will have dicey prospects.
Third, use the parties. These are the "third shift" of any trade show. I'll be hunting that most elusive quarry - an editor with money to spend. Know what you're hunting for, and plan your time accordingly. Don't stay out too late. You may have to write in your room, and you definitely have to be ready for that morning meeting.
Now as to the specifics of this show. The Chicago show last summer featured a host of e-commerce software start-ups. You want to listen for alliances and (most important) sales forces and other bodies who can get stores going. You should demand answers on broadband deployment (see above) and hold your enthusiasm for applications based on it pending real answers. Expect to hear a lot of blather from Microsoft's friends about the mean old Justice Department, then remember that just like other Washington lobbyists they're paid to say it. Expect to hear a lot more paid-ads against government interference in taxation, privacy, and a host of other issues. Take it with a grain of salt.
If you see anything really exciting, please Clue me in. Your Clue is it takes all of us working together to get the story.
Clued-in are Patricia Riedman and (my editor) Kate Maddox of Advertising Age for their story debunking this nonsense about "exclusive" deals with "portal" sites like AOL. The piece adds needed perspective on what's been a feeding frenzy.
Clueless is MoviePitch.Com , a "service" in which you pay $20 to have someone who pitches movie stories for a living read (not pitch, read!) your idea for a movie. . How's this, for a movie idea? Hollywood pitchman steals ideas from the masses and makes 'em pay for the privilege - "The Sting" meets "Good Will Hunting." Call it "Ill Will Hunting." (I see Danny DeVito in the title role - don't you?)