Learn, Work Through,Rise Again from

a Dot Com Failure

If you do fail, remember, most people have failed, not once, but many times. You learn more from failure than success. One thing you learn, in the same vein as "don't put all your eggs in one basket", is "Don't Put Everything into Succeeding Beyond Your Wildest Dreams." The other thought you need to bear in mind is "Protect Your Downside and the Upside Will Come."

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As difficult as it may be, those of us who've gone into the dot com business, or, are thinking of going into the dot com business, must hold two apparently contradictory thoughts in mind at the same time:

"In the next two years, 95% of the world's dot com companies will fail". The Gartner Group

"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?"

In effect, both these thoughts might be true. 95% of the world's dot coms could fail and the 5% left standing could be huge winners. But this is not necessarily true, although it is The Gartner Group's current opinion, which could be followed up by a different opinion next month or next year. This is the world viewed in one kaleidoscopic second of constant change and evolution. 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.

You can win this game. But, in order to win, you have to stay in the game.

Rule # 1 : 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.

The First Step - Face the Current Dot Com Situation Squarely

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, and although they are being more selective, they are also prepared to invest more in each company.

So, 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.

Figure Out Where You Are On the Dot Com Spectrum

The Truly Doomed

These are the B2C, business to consumer, companies who have already spent a ton of money, and never really figured out how they were going to become profitable. Some of them, particularly some very large ones, are still up and running, but they are like Bruce Willis in Sixth Sense: they are already dead and just don't know it yet. If you have any doubts, go to any of the Internet conferences where venture capitalists, who are beholden to no one, at least no one in their audience, speak about the Net and they will tick off the "living dead" for you. Several of them are large women's sites.

We probably shouldn't feel too bad about this, as these are major players with big bucks, big credentials, and lots of gold in their parachutes.

Spinning Your Wheels

If you can't seem to get traction, think about changing your business model. Some successful sites, change their model every 10 months. Try to think in terms of a fee based service, where your revenue starts immediately.

Too Ambitious?

The days of trying to be all things to all people are dead. Don't try to do too many things at once or appeal to too many different groups. Keep it simple. Do one thing and do it well, or target one demographic group and know that space better than anyone else.

Too Small?

You're never too small if you're making a profit. Just find ways to make that profit larger. If you're selling to a dozen outlets now, work on selling to two dozen, and hold on to what you've got. Often, achieving success is like the answer to the question: How do you eat an elephant? One bite at a time.

Be Savvy About the Failure Industry

Today on the web, some have coined the term "vulture capitalists", for those venture capitalists who feast on the bones of fallen dot coms. There are also auction sites, consolidators and consultants, all looking to make a buck off failed or failing dot coms. Remember, if they see something worth while in your company, you might try to focus on it yourself and engineer a turn-around without them.

Granted, some of these people might put you with a company which you have synergy with, and which will infuse your company with cash. Others might bring very wise consultants with years of experience. But, these people aren't your godmother. You will pay dearly for these services and you have a very good chance of losing your company anyway. Frequently you are better off digging in, trying to borrow more money from your maiden aunt and re-energizing your own team with a fresh business plan geared for the moment.

What If Failure is Inevitable?

If it's your very last resort, you may want to approach a consolidator and see if he can put you with another company.

Although it's often possible to reinvent yourself in the dot com world, since you are only changing business models, not trying to morph yourself from a cattle rancher to a ship builder, there may come a time when that option is no longer open. Perhaps you didn't start earlier enough looking for a strategy of change or perhaps you let a venture capitalist or ad agency encourage you to spend too much, too fast, not pausing to learn enough lessons along the way. If you had an outrageous "burn rate", you are not alone. And although you must take responsibility..it's like President Kennedy and "The Bay of Pigs"..if you don't take responsibility and try to blame others, people will write you off as "not ready for prime time" and never give you another shot. So grit your teeth, shoulder the blame and know you've learned a lesson: just because venture capitalists have money doesn't mean they know everything. They all took a bath, too.

If you do fail, remember , most people have failed, not once, but many times. You learn more from failure than success. One thing you learn, in the same vein as "don't put all your eggs in one basket", is "Don't Put Everything into Succeeding Beyond Your Wildest Dreams." The other thought you need to bear in mind is "Protect Your Downside and the Upside Will Come." We should probably add the word "eventually" and sprinkle that with a liberal dose of persistence. All of which is another way of saying "You have to stay in the gameÊ.. for the long haulÊ in order to win it."

The good news is that venture capitalists had rather invest in someone who's launched a dot com once, even if it failed, than someone who's never launched one at all. Experience counts. Failure is only temporary.

Since every success is the result of previous failures, if you fail, it means you've given up too soon. Get busy and hang in there for the next wave.