Likely Success of Internet-Related Business Models?

guess-for-success asks: "In Lester Thurow's latest book, published by HarperBusiness Books (Fall 2003), Fortune Favors the Bold: What We Must Do to Build a New and Lasting Global Prosperity, there is a chapter which discusses the beginning of new industries. During this time, several business models are introduced and only a few will survive. Looking at the PC industry, Commodore was the industry leader in the 1980's, but ultimately failed and went bankrupt in 1994. Successful business models such as Dell were not introduced until years after the industry began. I now ask the Slashdot community: which internet business models they believe are going to succeed? Which companies will rise to the top? Will they be infrastructure related companies such as Cisco and even FedEx, or will they be true dot.com's such as eBay or Amazon?"

"You can find out more about Lester Thurow here. He is a professor of economics and management at the Massachusetts Institute of Technology and has been the Dean of the Sloan School of Business at MIT. He has three New York Times best selling books to his credit and consults widely around the globe."

Comments

Blown away, already? We need a local cache!!!

[no_such_user]

*Already* this site is /.'ed beyond usability. It's too much. Slashdot needs to provide a local cache of pages it links to, for all non-major league sites. To not do so is irresponsible - and makes the point of posting the links at all pretty much moot.

Google has the right idea

[Anonymous Coward]

You do one thing (in their case) and you do it well. Then you use that one thing to make money.

Re:Google has the right idea

[squiggleslash]

Google doesn't stand still. They keep adding to the service, what they don't do is screw with the core product.

I find it interesting that Commodore is given as an example of a failure. Commodore had ups and downs throughout the eighties, going into Chapter 11 on at least one occasion. For the most part, it was merely managed badly and once Commodore was able to get the Amiga on track, it did very well.

Where it went wrong was, ironically, in thinking that it needed to ape Dell. During the late eighties and early nineties, it came out with a series of Commodore-branded PCs, believing that it needed to keep an oar in that market in case the Amiga golden-goose stopped laying its eggs. This was disasterous for a couple of reasons: Amiga development revenues were diverted to PC development which meant the Amiga slowly became less revolutionary compared to what else was in the market, and the PC industry was already a commodity market - you couldn't make money there unless you were very lucky and Commodore was further hampered in that respect by having a name that didn't play well with traditionally conservative PC buyers.

Had Commodore avoided that kind of diversification, they probably would be around today. The Amiga would probably not be their base product (though, like the Mac, the name may have stayed for products that do not resemble the original in any respect), but the fact that it had a good name, was a "different choice" that would have attracted people who do not want Windows, and would have ensured Commodore had control over their own platform, would have meant the product would have had substantial reason to succeed.

Never underestimate the power of bad management decisions to kill a good business model.

Re:trusted computing

[bhtooefr]

Trusted computing gives control of YOUR computer to the company that made the software or hardware. It means that the company can trust the computer. You can't trust a TC computer.

The old business rules still apply, more than ever

[tekiegreg]

What makes a business work you ask? Well let's analyze some of these examples:

• Amazon: Found a need for an online bookstore where there was none, and capitalized on it...
• Fedex: Found a need for overnight delivery service where there was little, and capitalized on it...
• Cisco: Regarded as the highest quality maker (tho some may contest but the reputation is there) of networking equipment, realizes the need for the best hardware for the best systems...
• Ford Motor (my pick): Recognized a need for cheap automobiles and capitalized on it...

Now the negatives:

• Commodore: Entered an industry well penetrated by apple, IBM, Tandy (back then) and company and tried to play along, didn't make it....
• Webvan (my personal pick): Tried to make it in an online grocery world where profits are slim and competition in related industry (traditional grocery) is fierce.

See a pattern here?

In short, to launch a successful business, you need to have a core competency in mind, that is an idea that is:

• Rare
• Unique
• Hard to duplicate
• Hard to substitute

If you have that, and all the other elements of a proper business (good management, proper quality, good promotion, etc) fall together, I should see no reason why a business couldn't succeed. I'll defend this against any reply or email to the contrary.

Anyways there's my 2 cents from a person who just graduated with a Bachelors in business, I'd love intelligent replies from people who think otherwise, thanks!

Gold Rush

[core plexus]

Take a lesson from any Gold Rush in history: the people supplying the shovels, sex, and other services were the ones who really got the gold. Let that guide your business model.

-cp-

President Bush to Liberate Alaska!

Re:Let's See...What have we achieved so far

[2nd Post!]

You mention iTunes MS but forget the iPod and Mac product lines which is the real money maker for Apple.

WalMart and Microsoft stores don't *follow* Apple's internet business model.

If the next bubble is content, you need to device a profit center. The internet is good at distribution, therefore removing the costs associated with it. I suspect the next bubble is not so much content, but content awareness: If Apple can make it easy to find stuff you like amidst a sea of choice, then you will keep using iTunes MS and a future prototypical Video Store.

The money of course is when you buy a device to store/facilitate all this content. A video iPod is about as likely to occur when you start seeing 300 disc DVD changers; then Apple will produce the digital equivalent, iPod2, which can store 300 DVDs in a convenient footprint and equivalent quality.

Re:Yes, operations matter

[alizard]

Actually, in their core competency, intellectual content, they can at least survive against WalMart.

Do you shop for books and music at the brick-and-mortar WalMart? If you're here, you almost certainly don't.

If a store doesn't have what you want, the lowest price doesn't matter.

It's widely known that WalMart selects its intellectual content to be "family-friendly" and forces publishers to censor what it does buy.

I don't buy censored books and movies and you probably don't, either.

Amazon makes its money selling to literate people, a market the WalMart doesn't even understand.