Virtual Sanity: Business Ideas That Made Sense Online and Ones That Didn’t

In its early days, any hyperbolic metaphor fit the Internet; it was the Wild West, a final frontier, a tool to provide enduring business miracles for old problems.

In reality, many Internet pioneers were undone by promising to shoot the moon with unproven or inherently-flawed business models (eToys, Pets.com, WebVan), while others got carried away in enthusiasm for the medium such as pay-to-surf companies(!) or were even engineered to trap investors while never offering a realistic business plan. Though the Internet was still unproven territory after the dotcom crash, in 2001 the clearest heads were those invoking core business principles and common sense rather than searching for an economic savior.

Early adoption is generally a good move to stay competitive. Business is an arms race, and lagging behind on critical technology that could add value, cut costs, or accelerate production is often a serious misstep. Smart adoption, however, means holding back on new technology until your business has a roadmap on how it will use it. That might mean making employee device policies conditional based on need rather than automatic, carefully assessing your company’s need for software licenses, and evaluating if and how new technology will save labor. For example, coordinate your social media presence according to ROI, and don’t devote a disproportionate amount of time to trends because they’re trendy.

Always plan for your customers. An era of increased business accessibility has emphasized the collaborative role of the customer. Customers are encouraged to engage with developers or manufacturers to achieve the best end-product possible for the consumer. The era of increased input lets customers articulate their goals better, which leads to increased satisfaction with final results. Businesses, for their part, are more likely to increase retention if customers are satisfied, and B2C industries can greatly bolster their brand with good customer relations. This truism wasn’t changed so much by web as it was augmented; increasing access has increased a business’s responsibility.

Always have a reason. The best, and most enduring lesson of the dotcom bust is to avoid the pitfalls of fads and base business decisions on facts. Regular SMEs can’t count on being bought-out if they develop a novel idea, but fail to turn a profit. Measuring ROI on marketing and R&D and controlling costs remain as fundamental to a business’s success as ever before. If your company can be the next Facebook, great, but just because an idea is innovative is never a reason to abandon common sense.