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Why this question? It’s simply because I love dotcom, dotcom technologies, dotcom
models, dotcom businesses and everything related to these stuffs. Internet has made the
world flatter and made our communication easier. None can deny that. From my
everlasting passion with internet companies, I just want to see them as a whole and to
scrutinize what make them succeed. Then the next step is How a tiny start-up can
simulate these giants to build up another successful one in Vietnam?
In my opinion, each dotcom at least falls into one of two models and has three most
crucial factors to be able to get it’s trophy on the Internet. What are two models and three
rules?
1. Two models:
Breakthrough-by-technology model
Breakthrough-by-business-model model
2. Three rules
First-time rule
Content rule
Interactive rule
Two models
Three rules
1. First-time rule
Dotcom is the first one to appear on the market. As you already know: Hotmail is the first
email service, Yahoo is the first search engine, Ebay is the first auction site… They might
not really be the first ones to appear on the market, but at least they did make people
think that.
There is no doubt that after appearing of the pioneer, many other companies will copy to
build their competitive products. But the first-runer is often the first-runer, he has the
most powerful advantage to remain his leader position.
2. Content rule
Content must be from users or even from developers.
This means system doesn’t have to create its own content. The system only provides a
core engine/a market ground then users or developers will do the rest. Google/Google
News, Paypal, Ebay… are some of the best examples for this rule.
FaceBook excellently follows this rule: It even doesn’t have to create applications for
it’s users but it just created an open platform for developers. We can call it an open
online social networking platform. Developers voluntarily develop applications for
Facebook’s platform.
Content must be completely online. I mean a dotcom business is only related to
online stuffs. All of it’s user’s activities are online. It provides nothing from the
offline world. It doesn’t supply book, cd, or any products… so as a result it just needs
servers, software engineers, salepeople, and software. Most of the most successful
dotcoms follow this rule, except Amazon.
Why this rule? To answer this question we have to back to answer Why online?
People do their online businesses because they can do something with a lower cost,
on a larger scale at any time with a high speed. So if an online business model is
related too much to offline content, this model can not utilize all the useful things of
the online world. Offline content often goes with offline problems: warehouse,
shipping, logistics... Offline problems are usually solved with higher cost.
The most important role of this rule is to help a company to do many great things
with a humble number of employees and a little of cost as well.
3. Interactive rule
System can be strongly interactive
Among end users: Ebay, MySpace, Digg... and all social networking sites. For
example, in Digg, people can rate for an article, then article with high-ranking
will be listed on the site so that other people can read. In social networking sites,
such as Yahoo 360 and Facebook, you can see that Facebook users’ interactions
are easier and more frequently than those of 360 users.
Between system and developers: Google Earth, Facebook (open online operating
system or platform). Developers can use Google Earth or Facebook to create their
own applications.
Among business partners: Amazon, Google Adsense, LinkExchange. People can
refer buyer to buy book on Amazon and get commission. Or they can use Adsense
code to advertise on their site to get advertising money from Adsense program.
Whenever system can be interactive among end users/developers/biz partners, it has the
bigger chance, the longer time to survive than it’s competitors. In this case,
users/developers/biz partners automatically create content and do marketing works for the
system.
Amazon business model focus to sale too many things from offline world, that why it had
to take many years (6 years) before making profit. One of the main reasons is the offline
cost (warehouse, shipping…) is too high. Any online model with many offline content
will cost its owners much of money, so if you can not draw a large amount of VC money
like Amazon – and if your company can not stay alive for years before dying, please
should not be seduced to violate this rule.
Let’s see Vietnamworks and Vinagame the two biggest dotcoms at the moment. They
don’t have to create their content: Vietnamworks receives resume and jobs from job
seekers and employers, Vinagame just supplies online game for game players.
How about some of the next successful dotcoms: VnExpress and 24h: they have to build
a big team to create their content (break rule 2). Their users can not interact together
(break rule 3) while VietnamWorks users (job seekers and employers) as well as
Vinagame users (game players) can strongly interact together.
A successful dotcom might not follow all three rules, but the more careful it can apply
these rules, the more successful it can be.
Next version updates: virtual economy rule & virtual franchise rule.
Reference:
- Dotcom stories:
• http://www.internet-story.com
• Webvan: http://retailindustry.about.com/library/uc/uc_wiat9.htm
• Boo.com: http://news.bbc.co.uk/1/hi/business/1629742.stm
• Pets.com: http://www.news.com/2100-1017-248230.html
• Failures: http://www.witiger.com/ecommerce/dotcomfailures.htm
- Search Engine War:
• http://www.clickz.com/showPage.html?page=3080161
- Facebook’s story
• http://en.wikipedia.org/wiki/Facebook
• http://topics.nytimes.com/top/news/business/companies/facebook_inc/index.ht
ml?inline=nyt-org
• http://www.nytimes.com/2007/10/04/technology/04facebook.html?_r=1&oref
=slogin
- Digg: http://en.wikipedia.org/wiki/Digg
- Gmail & Hotmail & Yahoo Mail: http://www.news.com/2100-1032_3-5182805.html
- Dot con, John Cassidy, 2002
- Google, Câu chuyện thần kỳ, David A.Vise & Mark Malseed, 2006
© 01-2008 by minh.buiduc@gmail.com