EnTrends

The first quarter of 2001 has been a
shocker for many, if not most, online
businesses, particularly those that rely
heavily on third party paid advertising
on their websites and in their ezines.
It doesn't seem to matter who you are
- the Wall Street Journal or one-
person webfront operation.

Hot on the heels of spiraling stock
indexes and dot-com failures, many
people are just plain leery of anything
that has an "Internet" label. As a
result, many online business owners
are shutting up shop, figuring that the
returns just aren't worth theinvestment
of time and money.

But wait. Let's take a deep breath
and look at what's really going on
here. You should be encouraged.

THE GOLDRUSH

In the beginning the Internet was the
new frontier. With all those
metaphors being bandied about all
over the place - talk of gold rushes,
pioneers, gold nuggets just lying there
for the taking - "go west young man
(or woman)", echoed in our ears,
"stake your claim to your share of the
Internet riches".

And so every man and his dog and
every woman and her cat slapped up
a website and started publishing an
ezine. After a while, our pioneer
started making actual money charging
for advertising on her website and in
her ezine and selling the latest
information product and business was
plentiful.

THE PLATEAU

After a while, things started to level
off. No longer experiencing the heady
rush of exponential growth on a
weekly basis, things started to level
out. Business remained solid,
however, and our pioneer, now

thinking of himself as a capital E
"Entrepreneur" figured, OK, this is the
end of the first big growth phase. It's
time to start consolidating. And so our
entrepreneur started investing in already-
formed relationships, concentrating on
existing customers, developing his "List"
of contacts and joint venturing like crazy
to try and sustain momentum.

THE SHAKE-OUT

But then things started to go wrong in
the promised land. All of a sudden the
most promising, courageous and
innovative Internet businesses started to,
well, bomb. All of a sudden, venture
capitalists were demanding business
plans that actually required the business
to turn a profit. No longer was it
enough to be on the cutting edge of an
emerging new economy. Now all of a
sudden the bankers started talking about
"returns on investment", "time value of
money", and (shudder), "profit"!

Now Internet businesses were expected
to come up with business plans that
looked like those from the real world
and which included real numbers, real
timelines and real results. No longer
were bankers looking through rose-
colored glasses. That pink ink really
WAS pink (or, more precisely, now that
we look at it a little closer, more red
than pink, actually).

Suddenly money wasn't being thrown at
Internet entrepreneurs' feet. Suddenly
loans were being called up and
businesses shut down. Suddenly
investors were watching stock prices
dwindle ever so inexorably, day by day.
Suddenly investors were losing life
savings and vowing to never again invest
in the new economy.

REALIGNMENT

After the big bang, the landscape was
strewn with the carcasses of one-time
high-flyers, brought down to earth by

nothing more earth-shattering than
simple gravity. But like blades of
grass emerging from the scorched
earth following a bushfire, the small,
conservative, money-parched, lower
case e entrepreneurs got to their feet.

Unburdened by crippling debt and
understanding all along that an
Internet business is no different from
any other business - revenues must
always exceed expenses after all -
their businesses survived the great
Internet shake-out.

For so long bemoaning to themselves,
"How are we supposed to compete
with the big guys?", suddenly a new

realization ... "How are they supposed
to compete with us?". How are the
"big guys" able to target niche markets
the way we can so effectively and yet
generate the kinds of bucks necessary
to fund their infrastructures; how can
they possibly provide true customer
service on a genuinely personal level,
as opposed to employing an army of
autobots? How can they possibly be
nimble enough to turn on a dime in
response to changing dynamics that
occur on a seemingly daily basis?
What their failure tells us is, quite
simply, they can't.

So, although we're all paying the price
of the Internet backlash, over time
new norms will be established. The
pendulum has now swung to both
extremes - the goldrush arc and the
backlash arc. A pendulum, though,
finally comes to rest dead center.

So, hold your nerve, position yourself
and your business in that center,
where you've been all along, and
you'll be ready to take your place in
the NEW new economy which will
soon emerge.

Elena Fawkner is editor of A Home-
Based Business Online ... practical
ideas, resources and strategies for
your home-based or online business.
http://www.ahbbo.com