The Fall of the Dotcoms Becomes The Dance of the Elephants

As unglamorous as it may sound, the time of the giants has arrived on the Net. They turned out not to be as as plodding as legend has them; or, if they are, it, perhaps, turned out to be a good thing. All those high flying dot coms may have gotten lost in the mists of promise, flown too close to the sun, like Icarus, and with melting wings, plunged back to earth. But they definitely accomplished a major feat; although some doubted it could be done, they taught the elephants to dance.

Some of the elephants anyway.

K-Mart danced better than almost anyone might have imagined, when it envisioned and breathed life into Bluelight.com. It not only danced but, at least, if it savored the magnitude of its success, it very likely did a jig and blew a trumpet at the same time.

Others may not have fared quite as well but, let's face it, they are the giants, they do have deep pockets and that allows them to keep trying until they get it right. What legacy businesses bring to the Net are the huge advantages of brand, products, sales history and a customer base. The fact that many were slow to see the full potential of the Net may have actually, and luckily, worked to their advantage. No one knew, in the beginning what the sucessful business models would be. The giant's lack of speed allowed them the tremendous advantage of standing on the sidelines until after the dot com crash of the Spring of 2000, watching which businesses burned to a crisp and which were left standing.

As authors Slywotsky and Morrison point out in How Digital is Your Business"Internet businesses are easy to start and expand rapidly because of their virtual nature and low capital requirements, but they are also easy to replicate and commoditize. E-commerce copycats who flooded markets with the same basic, low-price value propositions, are already going bankrupt or failing to find new financing." That would include, for example, the 13 or so heavily financed pet stores that opened on the Net and then imploded, in less time than you can say "jack rabbit".

By way of contrast, legacy businesses have "painstakingly built competitive barriers through investments in physical assets and infrastructure, brand building, organizational expertise and patent and distribution rights." That is another way of saying that they not only have physcial assets, like a plant and buildings which have a worth independent of their business, but they also know what they're doing. In the opinion of many analysts, Amazon.com's entry into the world of bricks and mortar is open to question by reasonable business people, since it is not clear yet whether they do know what they're doing in the real world of product distribution.

An Uneasy But Fruitful Marriage

So, for this period of time-- and no one really knows yet how long it will last---- there is a more cautious web afoot. Conservative businessmen and somber accountants are approaching the serious business issues of their web sites. Luckily, many of them have learned the best lessons from the dot com world: personalization of their sites; customization of products. Software now gives businesses the ability to know a customer more intimately, respond more rapidly, with products which are closer to their needs, perhaps even customized according to their directly inputted order, following the Dell example of how it custom builds its computers.

Pure web plays are out.

Big business is in.

But will it last?

Restoration of the Dream- Spinners; Reincarnation of the Dot Coms

The answer might be found in nature, where there is an endless cycle of creation and destruction. Or in the Bible, where it says " To all things there is a season. There is a time to reap and a time to sow." There is a time to dazzle and a time to remain very still, wrapped in a cocoon, waiting to emerge.