Last week, we discussed how the pace of Internet business has made most everyone feel woefully behind and at the brink of being steamrolled by the competition. No matter how far you feel behind the e-business curve, we proposed, a strategic business plan is critical for successfully guiding your business’s online efforts.
Of course, some of you may feel that there’s little or no time to waste on a strategic business plan particularly when there’s so much left to do to implement the online transaction, supply-chain management, and customer relationship management systems you needed yesterday.
With e-business evolving so rapidly, wouldn’t any strategic business plan become obsolete before it’s even printed? By the time you execute on such a plan, wouldn’t you risk fighting a business war that the marketplace has long declared over?
Though it may seem counter-intuitive, these questions illustrate some of the very reasons why you need a strategic business plan or at least one that’s constructed properly. The days of the five-year plan may be over (e.g., five years ago most people hadn’t heard of the Internet). Yet a strategic roadmap enables a business to continuously build upon previous efforts in a common direction instead of changing strategies at the whim of Internet investors.
Where Do You Want Your Business Strategy to Go Today?
Make no mistake: The Internet industry, its investors, and the trade media willing to hype it are a fickle bunch with short attention spans.
Last week, Greg met up with a former co-worker and learned of his crash-and-burn experience as CTO for an environmentally conscious e-shopping start-up. Apparently, venture capitalists have recently decided that the halcyon days of B2C (business-to-consumer) e-business are over and are thus no longer funding such start-ups. Consequently, investors forced the e-shopping start-up to shut down with only a day’s notice.
Investor fickleness kills off not only e-businesses. A number of e-businesses first built upon stillborn ideas, such as CyberCash and BackWeb, should have been euthanized long ago. Yet some investors kept them on life-support long enough to completely change business models much to the bewilderment of other, seemingly worthy start-ups that have had the plug pulled.
Meanwhile, the industry trade media suffering from what can only be described as acute Attention Deficit Disorder has only egged on this investor behavior. Like excitable puppies darting off to sniff every fire hydrant in the neighborhood, those reporting on the “new” economy have only compounded the perception that business plans must be rewritten daily.
Witness the endless parade of e-business buzzwords, each with a shelf life of fewer than six months, that we’ve been exposed to: push, infomediaries, online communities, auctions, portals, vortals (i.e., vertical portals), B2B, wireless, broadband. (The last three being the investor buzzwords du jour.) It’s easy to get caught up with the here-and-now while losing sight of the long view confusing what makes a good press release strategy with what makes a good business strategy.
Ready, Aim, Business Plan!
Effective strategic Internet business plans aim for targets above the daily din of industry hype and hoopla. Thus as new industry trends arise for example, B2B, wireless, or broadband your overall strategy can co-opt them rather than be replaced by them. In effect, these trends can become new tactics for executing on your strategic plan without diluting it.
For example, Yahoo rode the wave from directory service to content aggregation portal to become a producer of original broadband financial news. Throughout these industry shifts, Yahoo reached its dominant status by remaining focused on becoming an open platform for all Internet media.
Therefore, when wireless became all the rage, Yahoo didn’t have to scrap its business plan and start over. Yahoo made a strategic acquisition, partnered with Sprint, and turned wireless phones into an extension of its core data and information services.
Similarly, years ago CNET (disclaimer: Greg’s former and future employer) set out to corner the online consumer market for computers and technology. While it’s seemingly morphed from Internet content publisher to vortal to now B2B data provider (through CNET Data Services), the core focus of its business has remained largely the same.
Of course, not everyone in this industry is out to build a long-term business. If your mission is to maximize the speculative value of your business and strike while the iron is hot, there’s certainly nothing wrong with looking to cash out at the right opportunity. There are abundant examples of this the most notable one of late being the recent 3Com spin-off and IPO of Palm Computing.
But if you’re one of the many e-businesses in it for the long haul, how your business plan reacts to emerging industry trends is a litmus test of its resilience. Maybe your business isn’t based on bricks and mortar. However, it shouldn’t be based on quicksand either.