Scary Start-Up Machine
Web Commerce Today, Issue 26, September 15, 1999
The September 27, 1999 issue of Time Magazine carried a pretty scary series of articles in their "Silicon Valley: The Second Wave" cover story, "Get Rich.Com." The series chronicles the fast-paced development of 90-day e-commerce start-ups by teams of young college and business school grads working crazy hours under crazy conditions for the chance of getting a piece of a successful company when it goes public. Typically these start-ups are enabled by venture capital infusions of US $5 to $10 million.
How do smaller businesses compete with this? With difficulty. The key, I think, is to be very sure your business plan is sound and that your new Web business has a clearly defined-niche and a clearly-defined target. And, enough money for marketing.
I got a call recently from a man who wants to start a Christian book store on the Web. He told me he has a database of about 10,000 products to load into the store, adding a few hundred more each month. "How much money have you set aside for marketing?" I asked, as kindly as I could.
In my mind I was ticking off the major Christian book stores with Web presences and millions of dollars to market them: CBD Christian Book Distributors (http://www.christianbook.com), Family Christian Stores (http://www.familychristian.com), TrinityZone (http://www.trinityzone.com), and others. The same day I read that Amazon.com had set up a Christian Book Store http://www.amazon.com/exec/obidos/redirect?tag=wilsoninternetse&path=ts/browse-books/12290
As my mind raced, my caller thought about my marketing bucks question, and then said, "Oh, how much do YOU think I need to spend on marketing?" He hadn't thought much at all about marketing costs.
Unfortunately, we are a year or two beyond the point when you can just put up an online store, register it with the search engines, and have a decent chance of success. Now many of the regular business rules apply. To compete with the other Christian book stores on your block -- your "block" is the whole country now -- you've got to have a unique idea, and be willing to spend money and time to market your enterprise relentlessly. Dear friends, without the wherewithal to do marketing, don't expect to succeed.
Here are the stories in this Time Magazine cover story. This series isn't so helpful in the business plans it analyzes as much as the desperate throw-money-at-it business attitude it describes.
SILICON VALLEY'S SECOND WAVE: Get Rich.Com -- The geeks are gone. Now it's b-school grads churning out e-business plans and dreaming of Maseratis. http://pathfinder.com/time/magazine/articles/0,3266,31136,00.html
- THE START-UPS: Life at Warp Speed -- Internet companies rarely let their wheels touch the ground. http://pathfinder.com/time/magazine/articles/0,3266,31140,00.html
- Virtual Assistants. http://pathfinder.com/time/magazine/articles/0,3266,31179,00.html
- Social Life: Forget about it--until after the IPO. http://pathfinder.com/time/magazine/articles/0,3266,31184,00.html
- THE PLAYERS: Women -- Plenty are in the game, often doing women sites. http://pathfinder.com/time/magazine/articles/0,3266,31187,00.html
- Venture Capitalist. http://pathfinder.com/time/magazine/articles/0,3266,31188,00.html
- Early Retiree. http://pathfinder.com/time/magazine/articles/0,3266,31189,00.html
- Incubators: Where ideas are first nurtured. http://pathfinder.com/time/magazine/articles/0,3266,31190,00.html
- George W.'s Ambassador. http://pathfinder.com/time/magazine/articles/0,3266,31196,00.html
- San Francisco's E-49ers. http://pathfinder.com/time/magazine/articles/0,3266,31199,00.html
- Migrant Coder. http://pathfinder.com/time/magazine/articles/0,3266,31202,00.html
- Publicists. http://pathfinder.com/time/magazine/articles/0,3266,31203,00.html
- Roads Not Taken: Watching friends succeed. http://pathfinder.com/time/magazine/articles/0,3266,31251,00.html
