Running Your Own Race

There was an article on the front page of the Los Angeles Times
a while back that caught my eye. The headline was "Small Dot-
Coms Thrive While Industry Giants Melt Down". Here are the
opening paragraphs ...

"Beneath the chaotic dot-com busts of the last half-year, an
overlooked breed of Internet companies - mostly small and
nimble - is thriving.

"They have no public stock, no Super Bowl commercials,
no million-dollar product launch parties, and no naming
contracts with professional sports stadiums. Their small
size has allowed many to weather a storm that has quickly
taken down hugely stupid, profligate and unlucky internet
firms.

"This year's grim portrait of the Internet economy has largely
been painted by big-money Wall Street nose dives such as
those by Priceline.com, Drkoop.com and Etoys.

"By contrast, the mundane dot-com survivors are small
operations with few employees that have trudged along, slowly
but steadily, in a parallel universe that more closely resembles
the so-called Old Economy."

Well, gee, no kidding. Finally the dust begins to settle and
the resulting landscape resembles, well, something suspiciously
like the real world. And WE, the "mundane dot-com survivors"
are the ones trudging along in a parallel universe? I think not.
We've always been firmly rooted in the real world. It's the "hugely
stupid, profligate and unlucky [and what's "luck" got to do with
it?] internet firms" that were always living in a parallel universe
of
their own imaginations.

So what's the lesson for those of us still around after the great
internet shakeout of 2000? It's this: just run your own race.
Forget about what the so-called mega dot-coms are doing.
They're not operating in the real world, they're in some la la
land where venture capital is (or, more accurately, was) a
bottomless pit and the bottom line doesn't seem to matter.
Yet. What's the future for such businesses? They're destined
to bite the dust! I don't care how much money they have at
their disposal, sooner or later they have to pay the piper.
There is NO successful business model on earth that doesn't,
at some point, require black ink on the all-important bottom
line.

So, don't stress out over what your mega-competition is doing.
Look to your niche and focus on that. Ever tried emailing one
of those mega sites? I have. You get auto-generated
responses. No such thing as personal service. And how could
there be? They're in a parallel universe, after all, where such
things as basic customer service are delivered by autoresponders,
not real humans.

For you and me, the "mundane dot-com survivors", the trick
is to focus on *business* and not get caught up in the hype and
swirl of The Internet. We understand that the internet is but a
tool at our disposal, not some mystical plane where you can
afford to throw out antiquated "old economy" principles such as
the fact that revenues must exceed expenses in order to make
a profit.

The LA Times article profiled a small dot-commer who is
thriving despite the so called "melt-down". A sole-employee
business, this entrepreneur "turned her idea for a coupon-clipping
Web site into a profitable business by keeping expenses low".
Fancy that. Keeping expenses low. What an epiphany. The
business took a year and a half to turn a profit with expenses of
around $800 a month. It has remained in profit ever since,
generating a salary of between $75,000 and $125,000 a year for
its owner.

Even more startling is the fact that "the vast majority of Internet
companies have never seen a drop of venture capital or had a
public stock offering. Of the about 10,000 dot-coms in the United
States, fewer than 500 have publicly traded stock. Only a
quarter have received venture-capital money, depending instead
on money from more patient private investors, their own
checkbooks and credit cards or - remarkably - company revenues."