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May 00

.COMming it

I attended a BIT colloquium today about the “dot com space”. Basically it regarded an overview of opening an internet-based firm and what needs to be done in order for one to consistently grow and prosper. One point I particularly agreed with was that a .com company is “an ordinary company with a special status”. An internet company has to be run in the same way a conventional company is run – management, service, budgeting and revenue are all factors which must be taken into account. The only difference is that .com companies are capitalising on a new and arguably revolutionary way to do business (that is, online). Ignore business fundamentals, and the .com will flop regardless. Developing an “enterprise-wide” vision is also important. There are so many .com companies that base themselves on a single product (example), hoping it will be a “killer app”. Unfortunately, you cannot run a business on a single product (especially not when you’re giving it out for free!) – you have to diversify and expand (except in ultra-rare cases such as ICQ, but they got bought out). Common sense tells us that a business that gives their one and only product to customers for free cannot last long without some wide, future-looking strategy.

The recent “stock market correction” in tech stocks have caused concern for many people. Too many people reckon that the “internet age” is over and that .comming it is no longer a prosperous proposition. That’s not right. The IT industry is bustling and still strong. True, consumer hype has pushed up stock prices and consequently overvalued many tech companies. However, this does not mean the industry is hollow. There is a strong foundation underneath it all and the e-business model is definitely sound. Many companies are caught up in a “race for IPO” and only envision short-term gains. I mean there are much more avenues for the IT industry to expand in to. The prospect of “m-commerce” is largely untapped (due to the wait for infrastructure and hardware to be developed) and this represents a huge future market (everyone has a mobile!). In my opinion though, whereas e-commerce was revolutionary in terms of a way to conduct business, m-commerce, although significant, is more evolutionary new (in the way e-commerce was new). It takes the internet and makes it very accessible. With all these things being developed, I don’t think the IT industry will quiet down for quite some time.

The colloquium, which had speakers from AC and Telstra (that guy was a hypocrite… he emphasised that .com companies were all about service, and that service was paramount in any firm that is internet-involved. Telstra as we all know, is not exactly renowned for its service) also, mostly, answered my question about – where do startups get their venture capital from? The guy from AC was in charge of an AC subsidiary which provided assistance for people looking to start up a .com business – right from idea development, funding, implementation, publicising and expanding. Additionally the company has links to various venture capitalists (like the Macquarie and Deutsche Banks). I guess the relative availability of venture capital funding has made the industry so attractive, and this both can produce spectacular successes, just as often as it makes spectacular flops. Whatever the future holds, however, I’m convinced I’m going to be involved in an exciting industry that I love.

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