Part 3 : Read the chapter and succeed online

So small companies and startups still have room to play, even after this awful slump in the tech and web equities market?
Sure. We just need to realize that if the Internet story were a book, we'd only be on perhaps the second chapter. Granted, we're already learning that the notion of getting rich quick is as unrealistic in the new economy as it ever was in the older one.

But most of the book about the new economy hasn't even been plotted yet, much less written. We don't even know all the themes and sub-texts, much less how the tale is going to end. And most of the really interesting characters and events are yet to appear.

There is a huge scope for innovation, new servicing concepts, new uses of email, and interactive websites. And almost all the ideas I hear of share one fundamental aspect, which is that they can be developed for very little capital by very few people. So, even if your team is small and resources limited, this is not the time to give up on the new economy.

But will these newer people need really serious investment support at some point?
Some will of course. But many won't. Thanks to the current financing shakeout, the entrepreneurs involved will learn that they need to make a business plan that earns some money early, and thus that they need to make their product or service stageable - pay as you go.

But for those who do need funding, it will be there, if they have a realistic plan and the right team to execute it. Zaplet.com just raised US$90 million, even in this supposedly terrible market, thanks to having a great concept and the leadership of Alan Baratz. If you think this is exceptional, just read the daily report from VentureWire, where you'll see dozens of deals being done each day.

In fact, in the third quarter of 2000, new investments in venture funds went up, not down. That doesn't surprise me. For all the cheap shots in the press about the shortsightedness of the VC people, they actually have a track record, mostly, of successfully calling winners over time, on average. And I don't see any of the bigger players pulling in their horns. They're just looking for more plan and management quality than perhaps they may have demanded a year or so ago.

Can we get into more specifics of what larger companies need to be doing or planning for online?
Yes, but maybe next time, OK? That's a really large question. Besides, I'm not sure I have any really useful answers!

OK. But before we leave off for this week, let me ask you this question; if you could start any new Web-based enterprise you wished, what would it be?
Hey! That's a trade secret! But, actually, it's easy to answer. I would form a new, consumer and smaller business-focused version of Fed Ex and United Parcel, with the ability to move goods ordered online directly to the consumer using a more or less scheduled delivery concept. Meaning one delivery for all the stuff you ordered online this week, or whatever.

I'd add a specialized distributed team that can go into a home or shop and install any of a hundred devices, appliances, systems, local networks, etc.. Then I'd offer this massive-reach, low-delivered-cost channel to all those companies who cannot, on their own, beat the cost of individual deliveries. We would beat the heck out of current after-sale delivery, ongoing support and warranty-fulfillment costs for those companies, with virtually no sales expense ourselves.

Couldn't United Parcel, say, do this on their own?
Sure. And they may, but I doubt they can manage such a major cultural transition very easily. But that's the surest way I know to be a profitable part of the new economy, because no matter which website people buy from, it all has to be delivered somehow. And the more personalized those various products become, thanks to technology and online customized ordering, the more skill and interactive support the deliverer is going to need to make sure the stuff works as promised and ordered.

Continued...