Slashdot Mirror
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."
This is essentially Frodo meets Oregon Trail, right? Instead of your son getting dyssentry, Frodo gets knifed in the shoulder. Instead of breaking a wagon axle, you get consumed by Barrow-wights. Instead of meeting friendly travellers, you meet ring-wraiths.
Who have installed "mysql errors" instead of our
dimunutive hero, the hobbit Frodo. Not even the mighty
"Slashdot Effect" could stop them! Sauron will
recover the one ring and we are all doomed!
Even Slashdot wants to hide some things
*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.
Wow, nothing captures the grandeur and rich detail of a 1000+ page epic like 128 colors, 160x200 resolution rendered by a graphics chip running at 1.19 MHz. The screenshots transport me back to 1986 when I first read the book.
google cache of /. linked site (old):
E :w ww.atariage.com/
o ur ney.html
w :w ww.lysator.liu.se/tolkien-games/entry/journey.html +%22lord+of+the+rings%22+atari+game&hl=en
http://www.google.com/search?q=cache:5qsLqbqhik
Doing a google search I found the game on another site (with a screen shot):
http://www.lysator.liu.se/tolkien-games/entry/j
and the cache:
http://www.google.com/search?q=cache:wpuA4XgOLV
Perhaps Slashdot should expand it's horizons as a place to get news and chat about current trends to something a bit more ambitious. Since many websites due either to incorrect configuration, bad design, or lack of bandwidth, seem to crash or not survive being Slashdotted. Perhaps is the time to start giving out Slashdot Awards. Those who survive being Slashdotted should have a placard on their website saying "We have been Slashdot Harddened."
Okay, lesson learned. Stay as far away from Slashdot as possible if you want your poor server to live longer than 30 seconds once an article has been posted to the front page. :) Here are some links to the images on the server that will bypass MySQL, so you can at least see them:
:)
Screenshot #1
Screenshot #2
Screenshot #3
Screenshot #4
Screenshot #5
Screenshot #6
Screenshot #7
Prototype Cartridge
Prototype Box
Binary Image
Here's a MySLQ-free writeup we did, although many of the lnks internal to AtariAge won't work right now.
Information about 2600 Lord of the Rings
Enjoy!
Well, I don't know much about this vaporware Atari 2600 LotR game, but a lot of other games based on Tolkiens world has been made. ;)
... which reminds me: Mudconnecter has a list of some MUDs based on Tolkien's books. Of those, Elendor MUSH is probably the best one. I remember playing it some years ago...
Check out this neat site. It has all the info you need about computer-based Tolkien games. LotR for Super NES is probably the only one I've tried so far, and it didn't quite meet my expectations
Oh, and didn't someone announce a MMORPG a few years ago? I wonder what happened to it
Ahhh, google wins again:
http://www.lysator.liu.se/tolkien-games
Lots of LOTR games! Apple II, C64, Atari 400 and ST, Amiga, Acorn, etc...
-nate
A program called "Bored of The Rings" was produced for the BBC, Spectrum and Amstrad home computers many moons ago by Tolkien Games. These days it can be downloaded for emulators from here.
:v)
Oh, they did the real Tolkien Trilogy too, which can be downloaded separately via links from here. I just prefered the spoof.
Vik
Here's what I know about the game:
This game was programmed by Parker Bros a long time ago, and was pretty much finished (I'm not sure what (if anything) they left out... it looks finished to me). However, there are two parties that apparently own the rights to the LOTR stuff, and there were problems getting the liscensing rights and other legal mumbo jumbo. As a result, the game couldn't be released because the two sides couldn't come to terms on things.
As for what to do in the game, the other goons at AtariAge and I have figured out this much:
1. You have to get to Rivendell, the city at the top of the map. To do this, you basically run up and to the left. When you find the path, follow it. It's much faster. If you need to look at your map, duck into the forest (or a town) and press the button.
2. You can pick up other party members along the way. I'm not sure exactly where they all are, but one is for sure in the city on the left.
3. The birds don't seem to do anything (we haven't figured that part out yet), and the only way we know of to get the horseman off your back is to dodge into the forest. He won't follow you. As for turning white when you press the button? I have no idea what that does either.
4. Eventually, if you get far enough along the path, you'll come to a river (It's flashing for some reason). There's a bridge across it if you look for it.
By the way, AtariAge is back up... sort of. You can view the LOTR article and associated material, and you can get to the forums... but everything else is offline until their MySQL server is put back online.
-"One machine can do the work of fifty ordinary men. No machine can do the work of one extraordinary man." -EH
Using a local cache would require Slashdot to serve vastly more data than it does now.
Serving lots of data to a large audience costs a lot of money. Linking to a site doesn't. It's that simple. Slashdot wants to save a buck.
However, one hit from Slashdot can eliminate a small site's readers for the rest of the month, if they have monthly traffic limits. Or worse. It is irresponsible to link to a small site this way.
What I don't understand is why Slashdot just doesn't start a policy of linking the actual site AND its Google cache. Let the readers choose. If Google complains, work something out with them. Some sites would kill for this kind of traffic. Use it as an asset. And stop killing the little guys.
He who refuses to do arithmetic is doomed to talk nonsense.
I used to work with a fellow who was in Parker Bros. during the Atari heyday and even into the PC gaming arena for a short while. What he says makes a lot of sense and it does lead me to believe it to be true...
For each new game that came out, four were actually made. The reason for this was that it cost $250,000 to produce a game and about $3-4M to actually market and sell the damn thing. Thus, it was crucial that they picked winners. Looking at the type of games that Parker Bros. was coming out with, you can easily see how these games were not destined to be classics... The loss of developing 3 losers for every winner was covered in the returns made on the one game that was released. While it may still sound like a weird way to do it, the return on investment proved it to be the correct thing to do. They were able to release new games on a regular basis without worrying about a single game bogging down their cycle.
Note for those who dispute development costs: The ratio of marketing costs to development costs still holds true for a lot of development that happens today for a variety of different products. A dozen cubicals of programmers is a lot cheaper than TV spots, magazine ads, distribution, packaging, art work, product placement in stores, etc...
So we can see how it was entirely possible for a LOTR game to not be selected because by comparison to the other games coming out at the time, it sucked. How could such a classic suck? As someone mentioned earlier... How exactly are you going to get a 1,000 page book filled with rich imagery into a 4k cart running on a 2600? The people who would buy such a game (LOTR fans) would have held it up to a higher expectation and been disapointed. The rest of the world would have said "Lord of the who?" and ignored it. And *click*... There goes $4M down the drain...
Here are some screenshots:
- lotr1.png
- lotr2.png
- lotr3.png
-jfedorYou do one thing (in their case) and you do it well. Then you use that one thing to make money.
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.
I don't consider jumping on the latest tech fad to be a sound business model.
Try creating something new for a change.
And further, people don't want to hear it because they happen to value their freedom. They would rather be more constructive than destructive.
The Internet-Enabled Remote Bitchslap(patent pending) will be the biggest thing EVAR!
Oh yeah, and an addition to CallerID called CallerIQ.
Get in or be left in the dust? You mean follow suit like all the other dotcoms did in the late 90's?
Gold rushes without stopping to evaluate the true ROI rarely yield results. Better off buying lottery tickets w/ next week's payroll.
Roku is the high-end digital media player for HDTV buyers with money to burn. Roku was founded and financed by Anthony Wood, who made out well when he sold ReplayTV to SonicBlue. He's a rich guy selling gizmos to other rich guys, but not all startups have Anthony's resources. Here is a success story from one resource-challenged startup. Wallflower, which is also in the digital photograph display business, managed to get itself off the ground with a strategy I've seen only once before: dumpster diving.
The company makes (expensive) digital picture frames that compete with Ceiva, Digiframe, and Pacific Digital. Nothing special there. But Wallflower's startup plan was based around building its high-end products with pieces from recycled computers. To get started, Wallflower founders Mitch Kahn and Gordon Clyne bought 150 old but unused laptops from liquidators and via eBay, for $25 to $150 each. They were obsolete as workstations (most had 133MHz CPUs and smallish hard drives) but had the right pieces to make nice picture frames--most importantly, working 12" LCD panels.
Mitch and Gordon's small team disassembled the machines, mounted the displays in handmade wood frames with the motherboard and hard disk, and added Wi-Fi and their own Linux-based software. Basically, the Wallflower displays are Web servers that appear on a Windows desktop as disk drives--you put one on your network and you can just drag pictures onto it, and call up its internal home page to manage its settings. Now you have a nice big electronic photo frame to show your digital pictures, and changing the display is as easy as typing a URL into your home computer.
Frankly I can't see spending $500 for one of these things--but what do I know? Shortly after Forbes ran an article about the product, Wallflower sold out of its inventory of Frankensteined picture frames. Left with nice cashflow from its rising order volume, and needing more certainty in its supply chain than Weird Stuff Warehouse could provide, Wallflower recently gave up on the whole recycled kick and started buying components from manufacturers, the way most computer companies do.
With the new manufacturing strategy, the company is able to offer more features and bigger screens, but it had to raise its prices since these components are more expensive. Although I imagine they save a fortune in assembly costs, since they no longer have to dismantle laptops to get their parts.
There is a thriving economy in the leftover computer business. Lots of old equipment ready to be used in new and exciting ways.
Ebay has just taken the traditional auction and used the internet to automate much of the process.
Really, most internet businesses are just innovations, taking a new technology and using it to replace or suppliment an existing medium. The problem with most internet businesses in the dot com era was they didn't understand this and/or fell into the trap of "This is compeltely different" and it wasn't.
Now the internet has helped reduce cost in industries like mail order because it is possible to reach billons with one site unlike say a traditional catalog that would have to be mailed out which costs a lot of money in print and postage. However, there is no secert method to business models. Its still breaks down to: provide a product or service to fulfill a need. Do it well, keep down costs, and hopefully make a profit.
"The problem with socialism is eventually you run out of other people's money" - Thatcher.
- 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!
...in bed
You need a solid plan, a solid product, and a company that can be successfully run by idiots (because sooner or later it will be). And you can't discount the role of serendipity -- for it was she that made successes out of the unlikeliest things. Take chopsticks, for example; who would have thought that a pair of wooden twigs would have caught on here in the U.S. mining colonies in 1800s (where they were invented by immigrants seeking to differentiate their new and tasty cuisine) to the point where they've actually spread across Asia and now account for 3% of our lumber exports! Or the success of the Post-It note: once thought to be entirely useless outside of the labs in which it was developed, it created a whole new 'need' in society for these notes that could be attached to things without paperclips.
At the end of the day, sometimes you just can't predict what'll be wildly successful and what will fall by the wayside. But I think if you find something unique and stick with it you've got a good shot.
Try not. Do or do not, there is no try.
-- Dr. Spock, stardate 2822-3.
Being a FedEx employee I think it's obvious which one I hope will survive.
However, massive restructuring will have to occur if this is to happen. Sure we are a market leader in margins and, as a cargo airline we have a good record of adapting new technologies, but we're still running on a heirarchy reminiscent of the generation that brought us Fred Smith. Reworking our buildings from warehouses to more dynamically creativity-inspiring circular buildings would be a decent start. We work on a hub concept. We need more creativity and flexibility in on-road route planning, more power taken from beaurocrats in Memphis who really don't get a good picture of on-road day to day activity other than pages full of numbers at the end of the day and share that power in the form of actual couriers and managers being able to make more broad decisions based on their locality. We have our own form of standards. The point is that practices that work in an inner city (which spawns the greatest density of deliveries and pickups) are completely wrong for people out in the country who may have ten to twenty stops a day.
And I'm not saying this as a courier. I'm an administrator, but I think it's very important to put more faith in our frontline employees. Unfortunately not all of the higher-ups share that point of view.
Dotcom ventures, all negative late-nineties stigma aside, are still in the realm of providing virtual services. Even if those are for real products, people will STILL want to feel like they're interacting with other people. Make it too impersonal, and you'll ultimately lose touch with your customers (and their reality). It'll be interesting to see what "they" do to reverse the trend.
Not to mention there will, in the forseable future, be a consistent and even increasing demand for companies like FedEx. As more people migrate to do their shopping online, they'll need companies like us to deliver the goods.
Damon,
http://actionPlant.com
Commodore went out of business because the people running the company were corrupt and stealing from it - ask any Amiga fan ;)
The internet is just a thing , you know? If you have a product/content people want, they will buy it.
What about Dell and Walmart. They don't do anything
rare, unique, hard to duplicate or hard to substitute but they are huge successes. Why?
-cp-
President Bush to Liberate Alaska!
Folks don't want to waste time looking for the best deal - that's why Amazon and Ebay have done so well (Wal-mart too for that matter). However, I think with both companies expanding into the same territory, one will eventually fall, although it will take a while. Probably amazon.
---If you can't trust a nerd, who can you trust?
Amazon.com is proof that click and mortar works.
No, they're not. Amazon has no offline book stores, so they are not "click and mortar". BN.com, BestBuy.com, even ToysRUs.com (powered by Amazon, interestingly enough) are click and mortar stores, and aren't doing nearly as well as the pure dot-com, Amazon. So if anything, Amazon proves click and mortar *doesn't* work.
See how much clearer things are when you understand what the hell you're talking about?
God invented whiskey so the Irish would not rule the world.
... Dell and Walmart. They don't do anything
rare, unique, hard to duplicate or hard to substitute...
Au contraire.
Both companies are extremely adept at taking cost out of their respective supply chains. Consequently they are profitable at price points their competitors cannot easily match.
Advertising is what keeps AOL afloat (at least for the time being). Not word of mouth. Microsoft dominates for any number of reasons, but none of them are customer loyaltyor good community relations (though to his credit, Bill does give plenty to charity).
I'm not saying that you can't make money with your method. Apple managed to stay around during the late '90s, prior to Jobs's return, largely due to fanatical customer loyalty, from all accounts. But Apple is now on the way back up (perhaps, though they aren't exactly profitable yet, if I remember right) because they've managed to expand their customer base by good, expensive advertising.
Consumers aren't exactly rational. It's cheaper for Dell to advertise how good their tech support is than actually improve it. It's cheaper for Apple to advertise how amazing their PowerBooks are than, say, bring the price within range of Intel laptops (not that I don't covet a nice 12" AlBook). You can get business through word of mouth. But you get ahead through sound business practices and aggressive marketing.
I'm speaking only of creative content, but I believe the a voluntary compensation method (i.e., tipping) is the only model that will compensate creative artists (without worrying about the problems of piracy, drm, etc).
I've cited this here already several times, but I wrote an essay for sharethemusicday.com that describes why a voluntary compensation model would work.
Robert Nagle, Idiotprogrammer, Houston
You Mean Real Trusted Computing or MS's version?... The problem is there is no actual standard other than We are trying hard from the industries largest companies that are failing miserbly in areas reguarding security.
The problem with "Trusted Computing" is that inorder to come up with a standard and have it enforced, the standard would be rejected by most software companies because it would require them to open up the code and development process to outsiders to inspect for compliance with the standard.
Who needs WiFi when we can have Packet Over Sheep! http://datacomm.org/PoS-InternetDraft.txt
yahoo, excite and hotbot were called search engines?
And Amazon sold books, and did it well?
Then somebody said "Portals" and they became "portals".
Then somebody said "Auction" and they all followed e-bay.
Then somebody said "e-commerce" and they all started selling everything.
And books became Amazon's sideline to their patents on everything but the color of money. And their site became a Navigational Nightmare(TM) (patent pending).
Now everybody wants to be a search engine again.
The reason Google is succesful is because it does it gives people the information they want, and stays the hell out of their way.
Amazon grows because it partners (only English lets you make a verb out of a noun, or modify one type of word into another easily. That's why it's the most flexible and most important language in the world) with its customers to create a service that is more valuable than the retailing alone.
By allowing its customers to contribute on-line feedback about its products (that is, people can upload their opinions about the books that they have bought; positive or negative), Amazon has created the model internet business. Customers work with Amazon to deliver better product and service to other customers.
It helps that Amazon is big enough now that it doesn't have to worry about Betelsman sueing it out of existance every time someone writes a less-than-positive book review. Compare that the dasmo (Dumb-As-Shit MOtherf---ers) Anti-virus company that included a clause in it EULA that prohibited anyone from saying anything less-than-positive about the product in any public forum (including a web site with ten hits in a year).
Generally internet companies take the first step to success when they have the epiphany that their customers are all smarter than they are. But since that happens to so few companies, internet successes remain few and far between.
Thank you,
Amazon.com is definetly the business model to follow. In the past 5 years they have been experiencing true booms in business.
I'll agree that Amazon.com is a business model to follow, if you don't mind a model like this:
1. Get open-ended financing
2. Sell everything at a loss
3. ???
4. Profit!
Now, I'm obviously not an expert, but my Googling only finds a couple of quarters where Amazon turned a profit, and the latest news is that the company's losses were almost $40 million over the last 9 months -- and that was considered a Good Thing because it was a 75% drop in losses.
When I was in Junior Achievement, they told us that successful companies made "larger profits," not "smaller losses." Amazon may not be going anywhere anytime soon, but treading water (even if you're the size of a battleship) hardly seems like a "success".
Stressed? Me? Of course not. Stress is what a rubber band feels before it breaks, silly.
I applaud you for your wisdom and the following is not a slam on you.
Why is it that in today's business world we label idiots like Darl Mc Bride and other CEO's as "industry leaders" or "examples of what leaderships should be" when they take the customer and ream them up the arse as hard as they can, whenever they can, yet the real business men and women have the attitude like the above poster, who seem to have scruples and are interested in doing a good job.
Why do we as a country reward assholes and ingrates by giving them job's a CEO's CTO's and CFO's or worse yet, electing them to government offices and ignore the real business professionals?
Customer service is #1.. without your customer you are absolutely nothing. Yet today's big business trend to to piss on your customer at every chance... from retail to banking (espically banking!) to services, to everything....
why?
Do not look at laser with remaining good eye.
the problem is that your business model won't scale, and therefore, the VC, investment bankers and senior management hifliers won't be beating a path to your door...on second thought, that's exactly where most tech startups go wrong, so carry on then, you're doing great!;>
I now ask the Slashdot community: which internet business models they believe are going to succeed?
It's an interesting question but we need to know exactly what the business model entails. Is it PURELY Internet? If this was the case, I would say Google has a good model. They managed to stand above when there were a huge number of search engines available for users. They managed to find the righ mix of algorithm coding, marketing, and selling adwords.
Same goes with eBay. Remember when there were a few different auction sites available to users? Yet eBay managed to differentiate themselves and move to prosperity.
When we define "Internet business" though, do we mean only "Internet"? No brick-and-mortar ties at all? Meaning we exclude entities such as Dell?
I think the basic formula for a successful Internet business has these following traits:
1) Be the first to gain as much market share as possible. This includes Amazon, eBay, iTunes. In eBay and Amazon's case, they gobbled up the share and let the other's die out. iTunes happened to do it by providing the most viable and easy to use music download service. Others are finally getting on the bandwagon but have to play catch up with them now.
2) Differentiate yourself. When you can stand out from the crowd, people use you. Dozens of booksellers, everyone uses Amazon because of their mix of ratings, price, one-click buying, etc. Google differentiated themselves in the beginning when they claimed to have indexed over 1 million pages. iTunes by being amazingly easy to use and by getting major labels to jump on board.
3) Ease of use. Google is damn easy. Amazon is easy. eBay is easy. iTunes is easy. Sure you can use other services, but Amazon has spent a lot of time, money, and research on ways to make their user experience easy and enjoyable.
4) Act like a normal business. Gone are the days of getting $4.4 billion for an idea with no real business sense. If you want to have a successful BUSINESS model, act like a business.
I'm sure there are more, but these four basic rules will be seen in all successful Internet businesses.
"He uses statistics as a drunken man uses lampposts...for support rather than illumination." - Andrew Lang
So if anything, Amazon proves click and mortar *doesn't* work.
Amazon lost 149 million last year. Conversely, ToysRUs made 229 million. ToysRUs.com may not have made money, but it is apparently part of a business strategy that is functional. Indigo books made money last year (well, a bit anyways). Barnes & Noble made money last year ($100 million - not too shabby).
Anyways, I just find it entertaining that Amazon is being trotted out as a success in comparison with companies that are actually making money.
Let's not stir that bag of worms...
Litigation. Obviously.
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.
GPL Deconstructed
I've owned three companies, so I'm no master of the art of building businesses. What I can tell you from my experience is The "Business Model" rarely is responsible for success or failure. Blaming failure on "the model" is about as accurate as say, blaming the OS for a complile time error in your code. Reality is there are very few business models. Here are some examples:
* Comodity service, periodic (annuity) style bill.
* Distributor
* Reseller (buy, markup, market, resell)
* Service - flat fee (I'll do that website for $50K)
* Service - hourly rate (I'll bill you $150/hr)
The top causes of business failure are well documented. If memory serves correctly here are five top business killers:
* Undercapitalization - Not enough jack, jack.
* Demand Over/Under estimation - Build it they don't come... or too many crash your party
* Fraud & Embezzlement - Where did the money go?
* Cost overruns - 50% of the budget on furniture? Eghad!
* Poor sales - We're a ____ company. Our product is 733t. We don't need to sell anything.
Most of these mistakes are fairly easy to make and usually gang rape the business owner - as in you are undercapitalized because you underestimated the demand, cant produce enough widgets to fill orders and are experiencing legal expenses because you overpromised and underdelivered.
-- $G
In the 70's, 80's and early 90's, we had a proprietary unix system which we sold to a customer that was about 80% of their business system. This system wasn't too flexible but it was the defacto business model for centralized order and business transaction processing. We had to provide the user everything from the hardware to the network to the software. It was a turnkey solution for the most part but it wasn't as flexible in providing revenue streams.
In the mid 90's we developed a windows application solution. Now we provide the application CD and tell them the requirements (SQL server, windows network, recommended hardware requirements). Everything except our software is a commodity on their network now and so we extract ourselves from the costs of having to work on buying it. We allow the customer to pick their own or they can pay our consultants to help them out. We negotiate contracts for how much an hour they would have to pay for consulting. Everything is driven by consulting, custom work, training, services. Our software is the only hard good we produce any more, and its questionable if you want to call that a hard good these days. In fact we aren't worried too much about piracy, because our main source of income is the customer paying on the contracts we sign for purchasing the software (which requires a huge amount of setup) and for supporting the software, which is a percentage of their initial purchase contract.
Expertise is never a commodity and as companies find a way to make hardware construction cheaper, people move to providing quality by just having a bunch of knowledgable people sitting around who know how to provide some kind of technological help (read: billable consulting, not tech support) to a specific market space.
I also see the tech support outsource trend swinging back to the US a bit as US companies demand better quality of support. Between the cookie cutter, script reading mentality of overseas operations and some unintelligible accents, customers, especially businesses, will demand a change. They already are.
"All great wisdom is contained in .signature files"
When I say local networks, I mean last-mile solutions. Of course, some of the technologies involve longer distances than that -- up to the last 22,500 miles if you happen to own a geosynchronous bird. There will be opportunities outside of the areas served by the big players -- telcos and cable companies. This is a business where there are significant economies of scale, so small guys will have to win on the basis of superior service. Wireless technology is probably important, since wired solutions are CAPITAL-INTENSIVE, and will generally require permission from local regulatory agencies. Building the devices used in such networks doesn't seem like a particularly profitable business -- if there's a significant market, there's going to be lots of competition and the profit margins are probably quite thin.
There are opportunities to make money if you can provide some form of compelling content. I've always thought there were opportunities in almost any small city with a university. There are dozens/hundreds of music majors with performance requirements -- can you create and distribute a library of performances? Can you design and implement a multimedia tutoring system that connects students and tutors? Can you make deals with the local last-mile providers so your servers are close to the end user, rather than having to trust the Internet for performance and/or reliability?
Ya know, food, clothing, shelter, books, lamps, toys, etc.
Property.
People aren't interested in an internet economy. They're interested in stuff. If you can find a way to use the internet as a leg up supplying stuff to customers, well, there ya go.
But anyone who thinks of the internet as a way to get people to just send them money isn't going to go anyplace.
People are also interested in certain services, like having their pool cleaned and the oil in their car changed. Ain't gonna happen over the internet at all. Real reality trumps virtual reality every time. That physics stuff is a bitch.
There will be some niche markets, but there's a catch. They're short term. If you're willing up front to realize this, get in, make some money, get out, invest it elsewhere in "stuff" you'll do ok. Most tradtional businesses have trouble thinking like this. It's entrepreneur territory.
Doesn't mean a corporation won't see the limitation of the model, come in, stomp your guts, then abandon the market though.
As always, be careful out there.
KFG
...to screw you over and take away your rights and freedoms in ways that give dictators wet dreams. TC wants to control what people see, whether they can print or save it, listen to it or watch it, and where they can do so.
Science is built (at least in part) on the concept of reproducibility - people can generate results and ideas previously seen by others and thus verify their truthfulness. This filters into how a free society works - people gather information, and others attempt to verify it and act on that which is verified. With TC, and the differential permissions it allows, one cannot necessarily verify information collected by others, thus disabling individuals from distinguishing between truthful information and lies. (By disabling the ability to transmit content, it isolates those who have the information and judgement to distinguish fact from lie from others while allowing them to be found.)
TC will likely be difficult to hack. If it can be hacked, it dies. If it can't be hacked, it gives a lot of power to people in high places who have already shown that they can't be trusted. Giving a lot of power to the untrustworthy (and even if they could be trusted, with that kind of power, they won't be trustworthy for long) so that I can pay to watch movies and play music on my computer (or pay for whatever else someone wants to sell me) doesn't seem like a good deal to me, but I guess the TC people are big believers in Barnum.
All your rights are belong to us. And you even get to pay for the privilege.
As someone else put it before, TC says "We don't trust you. You have no choice but to trust us."
Replicating a crummy business on-line won't be enough. The successful companies will be those that harness new technology in ways that make the customer experience more pleasant.
If three or four businesses will sell me a widget on-line, I'll stick with the one that can offer three features.
Response by real live people. When I have a question I do not want to waste ten minutes trying to find contact information on a website. I don't want to use webforms that try to tell you that you can only have "approved" topics. Instead I want an e-mail link that goes to a real live human being.
It's not that I mind an automated response, but it should show some relationship to my e-mail. Some companies can do that well, but many cannot. If my e-mail tells you that I've already tried the solution on your website, the I do not want an automated response telling to check your website before calling.
Especially one that says "DO NOT REPLY TO THIS E-MAIL".
I want your website to have truthful information about what is in stock. I cannot imagine why any retailer would buy an on-line sales system that didn't also track inventory. I don't order anything that is on back order, and if your website can't tell me if it's in stock, I just go away.
Finally, a successful Internet business model is one that recognizes that on the 'Net business is global. I am astonished by the number of companies who seem to have no interest on the bulk of the human population that lives outside of the U.S. In particular those who seem to have not noticed the 30 million potential customers in Canada.
Your on-line business model should plan from the beginning to handle currencies, shipping, and languages from all over the globe. To do otherwise is to cut yourself off from some very large markets.
Your company may be located in Peoria, but people from all over the globe can access your website. Why wouldn't you want to sell to them??
Three Squirrels
Darl McBride - President, CEO
I'll quote:
In other words, he is good at talking people into giving him money to fund his projects. People who read Slashdot probably don't believe this, but I will bet that he is slick to the "right" people.
So, the reason why he is considered an industry leader is because people believe him when he says, "I'm an industry leader." Confidence men work the same way. Did you ever read the life story of Carlo Ponzi? Here it is The Life of Carlo Ponzi. A lot of people have heard of Ponzi shcemes, but most people don't realize that at one time Carlo Ponzi was considered, you guessed it, a business leader:
Who knows, in the future we may call something, "A McBride scheme."All the creatures will die, And all the things will be broken. That's the law of samurai. (Jubai, 1605)
Actually, that is only one business model. Loosely stated from my operations management book:
1. When a new idea is found, the initial companies need to move in fast and get name recognition. Sponsoring events, Charity work, etc. is the Advertising medium used here.
2. Once a demand for a product has been started, companies need to provide quality, which they can charge more for. Word-of-Mouth is the advertising media here.
3. Once the market has developed enough customers, companies need to provide low price products. Advertising sales works here.
4. Once all 3 are fulfilled, a company needs to dominate via saturation and economies-of-scale. Word-of-mouth and advertising sales work here.
The examples for department stores are:
1 is Sears, Gimbels, Macy's etc...
2 is Nordstroms, Nieman-Marcus, etc...
3 is KMart, etc...
4 is Walmart.
Eventually, there is only room for stores that fit 1, 2 and 4. In terms of internet firms, if I am buying on impulse I'll go with Amazon or Travelocity, because those companies are the first I think of. There are plenty of firms that will sell things for cheaper prices, and I'll use Google to search for them if I don't like the price I found initially. But I don't know of any companies that started on the Internet that have a wonderful service or quality reputation where I would shop which would fulfill 2. And as of 4, I don't know of any company that I would trust to always have the product I want.
Ultimately what the Internet has provided us is communication beyond the wildest dreams of telephpony, wired or not.
/. - Started as News for Nerds, Stuff That Matters - even our beloved(hated) /. is an aggregation - a community for those who (sometimes) have no community. Without an aggregator like /. how would nerds from around the world find one another to discus important topics of the day?
A look at the big winners:
* e-Bay - Started as a way to buy and sell collectibles - now an aggregation of small vendors and casual shoppers selling 1.7 million items a DAY!
* Amazon - Started as an on-line book store with the content of your local shop - now an aggregation of just about any book in (and sometimes out of) print and available to you in a few days (or for pickup at Borders).
* Google - An index of all this Internet stuff - now an index with so much info that it has made itself a household word.
*
* iTunes Music Store - the next great aggregator - they have found a way to BROWSE music and sell it legally. A creative mix of low-tech product, high-tech delivery, on-line shopping, and off-line use (iPod).
So yeah Dell can make a few bucks on a commodity product, but the real winners are the ones who make a new market space by putting people in touch with the products or information that is more valuebale to them than what's in their wallets.
I only came here to do two things; kick some ass, and drink some beer...looks like we're almost out of beer.
yep, that's boo.com, a fashion store on the net, the advantage of the net over traditional bricks and mortar clothes shops is clear:
Customers cannot
see,
feel,
or try on the products
they need to pay postage
they have to wait for the clothers to arrive
couple that with a multi-million dollar marketing campaign that was so good that you can't even find out about them with google.
pure genius!
A pizza of radius z and thickness a has a volume of pi z z a
Ok when you are looking at losses and profits, your really not getting the whole picture. I smart company never makes profit, unless it worries about it's stock going up. The less profit you make the less taxes you pay. Amazon has a lot of assumed costs, that aren't necessarilly real, these include depreciation and some other things that are set as standards by the IRS. For instance I buy a machine for 200,000$ the IRS says it depreciates at 40,000$ a year. Whichi means that for five years I have to right off a depreciation of 40,000 dollars, keeps my taxes down, but to the bottom line it looks like a cost, I didn't actually spend 40,000 dollars, that is just the assumed cost of replacing said item. It will be fully depreciated in 5 years even though I may not replace it for 10 years, do you see what I mean? Trust me amazon is doing very well.
Anonymous Cowards - Oh God, How I hate you
This is question I've wrestled with for a long time.
I think it boils down to one thing: people just don't care.
Corporations grow so large that instead of long term gain in mind (making the customer happy), they try to find each and every way to improve the bottom line.
Minimize inputs: employee pay, design/research time, manufacturing/testing time, customer support.
Maximize income: lots of marketing (IMAGE is everything), high prices, lots of control over the end-product after it's left the shelf.
You get bombarded with ads to buy crappy products, made by overworked and underpaid people, and as an added bonus get to fuss with control measures that make it difficult to switch to a competing brand. Cellphones sound familiar? CDs?
And everyone eats it up because they don't care. Capitalism works if the consumer is interested in looking out for himself, but these days most folks are completely happy to give everyone their money and say "Take care of me." This is why nobody sells a product anymore, they sell a "solution."
Politics is the same. Nobody takes a vested interest in taking control of their lives and exercising their own power. People contract with the cellphone company that promises them the best service, pay loads of money and then get reamed and the same is true with politicians. People elect politicians who promise to take care of them, happily turn over 20%+ of every penny made and most end up hating the government.
Nobody cares. Society has no problem giving up every dime if someone promises to take care of them -- but it's rare that anyone is held accountable.
I'll end this with a favorite quote of mine:
"If you love wealth more than liberty, the tranquility of servitude better than the animating contest of freedom, depart from us in peace. We ask not your counsel nor your arms. Crouch down and lick the hand that feeds you. May your chains rest lightly upon you and may posterity forget that you were our countrymen." [Samuel Adams]
~Dalcius
Rome wasn't burnt in a day.
To become a business that succeeds over the long haul, you need to become difficult to replicate for some reason. Fundamentally there are only a few ways to stand out, and not all of these are necessarily viable strategies for a given market:
Companies that undoubtedly have a defensible position include:
Companies that are iffier:
While you do have a point about luck, you're info on chopsticks is so wrong it's funny. From EverythingChopsticks.com:
"For those really interested in chopsticks visit the Kuaizi Museum in Shanghai. The museum has collected over 1,000 pairs of chopsticks. The oldest pair is from the Tang Dynasty (618 - 907 AD)."
From chinavista.com:
"When the Chinese began to use chopsticks as an eating instrument is anybody's guess. They were first mentioned in writing in Liji (The Book of rites), a work compiled some 2,000 years ago, but certainly they had their initial form in the twigs which the primitive Chinese must have used to pick up a roast after they began to use fire."
And finally from About.com:
"The honorable and upright man keeps well away from both the slaughterhouse and the kitchen. And he allows no knives on his table." (Confucius)
While I don't share Confucius' abhorrence at the mere thought of a man in the kitchen, his dislike of knives is more understandable. Confucius equated knives with acts of aggression, which went against his non-violent teachings. Some experts credit Confucius' influence with the widespread adoption of chopsticks throughout China. Scholarship had triumphed over the warrior lifestyle.
Chopsticks were in use by the Shang dynasty (1766 BC - 1122 BC). In fact, the first chopsticks may have been twigs used to spear a roast cooked over an open fire. The enduring popularity of chopsticks may actually be linked to Chinese cooking methods - before stir-frying the food is cut into tiny pieces, making them easy to manipulate with a chopstick."
"Gold still represents the ultimate form of payment in the world." - Alan Greenspan, 1999
The thing about Amazon is that they haven't sat on their laurels. Digitizing whole books and making them searchable is invaluable and basically mimicks that old ability to browse books.
I worry though that we'll end up with these large super-conglomerates who hold whole market segments, somewhat like Microsoft achieved in computers in the 90's. The only real competitor to Amazon for books is Barnes and Nobel, but Amazon's really beating them in many ways.
I think that this underestimates the significance of what Amazon has done. Your typical pre-internet mail order store took six weeks to deliver an order from the time you mailed it in, and had a much more limited selection of items. Amazon's key innovation was speed: they have a huge stock of items that can be shipped in less than a day, and their order fulfillment is extremely dependable. Because you can get an item delivered in only a few days (or 1 day if you're willing to pay extra), people will buy things on Amazon that they would otherwise have gone to the store for. Conventional catalog houses did't "steal" business from the brick and mortar sector this way. It can actually be quicker (in terms of my time) to order something from Amazon than to drive to a store and look for it, especially if the item is not guaranteed to be in stock at the first store I go to. Amazon has certainly changed the way I shop, and I suspect many others would say the same. That is a new business model at work.
Similarly, EBay has created an entirely new market for used goods, like nothing that existed before. Yes, it is similar to conventional auctions, but it draws in an entirely new pool of customers who would never have bought or sold at an auction before. That is definitely a new business model.
The final blow was when in fall of '93 Mehdi decided to build a few 10's of thousands of the new (AA/AGA) machines (A1200, etc), and 300,000+ of the old chipset-based machines (A600). Needless to say, the old machines didn't move off the shelves very fast at Xmas, and that was the final nail.
There were other instances like that too. Mostly it was caused by not following up on successful products (C64, A500, to some extent A3000) and trying to milk them for too long. The A1200 was the right machine; it was just too late by a year or two. Engineering had it's issues too, in particular biting off more than we could chew on the total redesign of the chipset which was never quite finished ("AAA"), and not giving enough attention to the potential high-volume products, though in general engineering was pretty focused on them.
It's tough when the CEO won't let marketing talk to engineering directly, and insists all contact go through him and his cronies... Disclaimer: I'm an ex-Commodore engineer from these times, and after bankruptcy was declared, we burnt Mehdi Ali in effigy in my backyard (literally).
No, you didn't actually spend $40,000. You spent $200,000. Of real money. It's just that the IRS doesn't let you write it off as an expense all at once. Instead, you have to depreciate it over its useful lifetime, which was 5 years (absurdly long) for computers last time I checked. That means a $40,000 deduction for each of 5 years, as you noted. But it's not a "free" way of lowering your taxes.
What is a free way of lowering your taxes is writing off nonsense losses like reduced "goodwill". Accountants have tried to tell me why this is supposed to be real, but it always sets off my bullshit alarms.
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.
Tech Public Policy stuff