Net businesses, still reeling from the Spring 2000 dot com shake out, should add a dash of caution when making their New Year's Resolutions, taking to heart some guidelines mined from the Net's performance over the past year.

1. Start with a business plan.

   A business plan is not a desire to launch a website, secure a couple of hundred million in financing from venture capitalists, burn through most of it on advertising to attract eye-balls to your site, then wait for a revenue producing model to unfold before you.

   This was tried in Phase I of the Internet and proven flawed, and, more importantly, unprofitable, and finally, a disaster, as the funds dried up and the Ponzi scheme shut down.

   A business plan is a road map to delivering value in exchange for revenue. Understand what your unique value proposition is and how people will pay you for it and you will have the centerpiece of your plan. If it's not crystal clear, if it doesn't produce a profit in a reasonable amount of time, if it requires extraordinary events to happen fortuitously and simultaneously or you wouldn't invest in it and aren't prepared to put large chunks of your life - " blood, sweat and tears"-- into making it work, then don't expect others to invest in it, either.

2. Face the dot com landscape squarely, that is, with realistic expectations.

   As Ann Winblad of Venture Capital firm Hummer, Winblad said of the dot com boom : "This was more than a love affair; this was an orgy. This was crazy. ... In the first quarter of 2000, by the second week in February, venture capitalists, mostly venture capitalists in Silicon Valley, were spending a billion dollars a week, primarily on startups or early rounds [of financing] in startup companies. This was nuts! And this was very expensive for all of us. "

   This was an orgy, too, for ad agencies, who started telling dot com clients it would cost $25 million to build their brand nationally and immediately, 3 months tops, and that didn't even count the cost of the agency services which were steep. Partly these services were steep because they were, after all, ad agencies, and the marquee names were in demand. But, aside from the economic laws of supply and demand, costs were layered on because of the speed demanded by the Internet, with overhead spiraling out of control.

   And all that expense was o.k., as long as there was money to burn and, as the venture capitalist's exit strategy, a rich IPO plucked you out of it. But, ultimately, the expense was on the back of the public, or if they hadn't had time to make it to market before April, it was on the back of the venture capitalist, now suffering an economic hangover from the evaporated boom times.

   It's time, now, to have realistic expectations.

3. Speed can kill.

   The common wisdom on the Net was to launch and execute at warp speed, which has come to be known as "Internet Time", ultra compressed, where business cycles pass you by in a flash. Speed to market was said to be critical, as the first company in a particular space wins all the chips ( think Amazon), the second gets the spill over ( think Barnes and Noble). Those that pile on afterwards get gobbled up or "disappeared", the fate of the 4th through the 18th pet supply company.

   But after the dot com shake-out, it appears speed may be a double- edged sword. Yes, you can rush to be the first in a space, but now there is doubt that even the illustrious Amazon.com is in the right space, with the right products and the right infrastructure, ultimately, to succeed. With scant time to learn from mistakes and limited experience to judge from, and more money spent for redundant systems, since no one is positive which will work best, each scheme takes on added risk, not to mention increased debt. Answers are provided not by experienced operating executives but, often, by venture capitalists who may or may not truly understand the operating model.

   Speed can succeed but it can also kill.

4. Remember the game is just beginning.

   According to The Gartner Group "In the next two years, 95% of the world's dot com companies will fail" but, at the same time, 5% could be gigantic winners. "The Net will become the dominant medium and the dot com winners will make huge fortunes. The only question is, who will the winners be?"

   Shake-out does not equal crash and set-back does not equal defeat. Failure can be temporary, it does not have to be permanent. In fact, success usually comes after working diligently and systematically through a whole series of failures. Success is the end point not the beginning of the journey and the Net is young and so, by the same measurement, are the web sites on it. This is not a matter of waiting for lightening to strike but the long and disciplined process of refining your business plan and building out an infrastructure to make it successful. Although riches can come almost overnight in a gold rush or oil boom, great businesses are built over time. Dot com businesses which can succeed are both sophisticated and complex. They need time to be perfected; honing their business will be a continuous process. 4. Go on a cash diet As someone has said of the various women's sites which have gone crash in the night, if they had each started with a $1 million investment, they might have made it and had the opportunity to ramp up. Many of them were web sites in search of a business plan. Advertising revenues alone could not sustain them, both because of the uncertainty of the ad market and because the sites themselves were not targeted enough. They advertised to the whole universe of women and, in so doing, put themselves squarely in competition with Yahoo, AOL and those sites which already dominated the ad market.

   Smaller and smarter could be a good credo now, waiting until a concept is proven before approaching venture capitalists for financing. It's true that many venture capitalists have refused to prop up all but their top web sites; for the rest, they're turned off the spigot and pulled up the moat. "Don't call us, we'll call you". But at the same time, venture capitalists have more money to invest than ever, although, having probably been burned in the shake out, they are being more selective. Now may be a good time to work hard and get your company looking really solid, showing some actual profits before approaching venture capitalists or even angel investors.

   The good news is the money men are still in the game, and anytime the money men are still in the game, you can bet there is money to be made, it just may take a bit longer and require more patience and realism than before the Spring of 2000.

5. View the Net Like Nature itself, as an endless cycle of creation and destruction

   If one stands back for a moment and takes a hard look at at the evolution of the Net, it seems perfectly clear that all of us Net surfers and Net entrepreneurs are simply entering a new cycle on the Net and each cycle is an improvement, of sorts, on the previous one.

   As one pundit, John Carroll, put it in Business 2.0 , "It's those Nasdaq-plunging, start-up collapsing, venture-capitalists-fleeing, god-I-need-a-vacation-and-some-tequila-not-in-that-order blues". He goes on to give some guidelines for survival, assuring those in this position they will survive but perhaps in a somewhat altered state.

   The state one emerges in is, arguably, a natural part of evolution, a cycle which applies, not just to the Net and to the stock market, but to all forms of life. Today, it's back to basics; tomorrow it could be something else, something we can scarcely imagine yet.

   But we have already learned one thing about the Net. It will continue to evolve. B2B marketplaces may be the New thing, but inevitably, one day, there will be a new, New Thing. Only the best of the breed will survive. The cycle of creation and destruction will continue with traditional businesses and new Net business models, alike, being constantly created, then deconstructed, transformed, reshaped, then reenvisioned and recreated. It is the survival of the fittest, all over again, only this time it's on the Net. And, this, as Martha Stewart says, is a good thing, even if it's something we may not want to hear at the moment.

   In order to win, you have to stay in the game. Corollary: Never run out of cash.

   If you run out of cash, they take you out of the game and then you're toast. Make cash flow your mantra. Fire people if you have to. Stop subscribing to the newspaper, bring coffee in a thermos from home, and make your copies at night at Kinko's. Do what you have to do, in order to not run out of cash. Many huge companies, even auto makers have had to count their actual cash green backs each night on their desk to inch their way through to survival. You can do it, too.

6. Like what you do, and success will come.

   People are generally good at doing what they like and like what they're good at doing. If you've founded a Net business you enjoy, even if it's about fly fishing, others will probably enjoy it as well. In time, you'll build a following and, ultimately, you will make money.

   And you won't even have to worry about the Nasdaq plunging or the VCs pulling back their financing. You will make it by doing what you like, protecting the downside, and letting the upside take care of itself. And, with any luck, you can look forward to a very good year.