Smoke and Mirror Web Companies

by Tom Snyder on Mar 17, 1999

If you follow the Stock market (or even just watch the news), you’ve undoubtedly seen the frenzy surrounding Internet and other high tech stocks. IPO’s that produce 1000% increase in stock values within a few weeks. Stratospheric stock prices for companies that are nothing but red ink and an Internet-association. What gives?

The Internet is HOT! However, the average person doesn’t have an iota of understanding when it comes to the technology that runs it or the business models that fuel it. So, what happens when you get that volatile combination of hysteria and ignorance? People eventually get burned. I’m not a stockbroker, or a stock market analyst, but I do know that many Internet-based companies are the Stock Market version of the Emperor’s new clothes. It may make for some hefty profits if you know what, when and why to buy, and when to get out. At some point, however, the real value of these companies will become painfully clear, and you won’t want your financial future tied to them.

Not all companies are what they may appear to be. If it happens on the national level, you can bet it’s happening here, too. The purpose of this article, however is not to provide you with investment advice, but rather to provide you with some guidance in the world of local Internet businesses, and more relevant, Internet consulting, design and development businesses.

The beauty of the Internet for a small business is that your Web site can make your company look like whatever you want it to. That especially applies to Web developers. Because we are all in the business of making companies look great, it’s obvious that we’d want to make our own sites look great, too.

And that can create problems for people who judge a Web design company just by its Web site!

We’ve been in the Internet business for three and a half years. During that time, we have seen so many Web “companies” come and go that we can’t remember half of them. We use the term “companies” because the vast majority of them were one or two man shops (in many cases a twenty-something computer programmer in a bedroom, garage or cubicle). And we use the term “were” because as quickly as they arrive, they disappear.

This is causing us to see two disturbing trends.

Trend 1: Businesses needing new Web developers because their old Web company has vanished.

Early warning signs were non-responsiveness to requests for updates. After that came non-responsiveness to phone calls. Then came the “This line is being checked for trouble” messages, followed shortly thereafter by the “ this number is no longer in service” message. In many cases this is just the beginning of the Web site owner’s troubles. The largest area of new business for Websight Solutions are companies who have fallen victim to the here-yesterday, gone-today Web designers. We are amazed by the things we’re seeing as we take over these projects. As you’d expect, many are ridden with bad source code, awful graphics, bad navigation and just plain bad design; Domain Names not registered to the client, but rather to the Web designer (making it almost impossible for us to take over hosting and get their sites back online); contracts that didn’t spell out who owned the Web site files, making it impossible for the client to even use the files they paid for.

Trend 2: Web site development business that we’re losing to companies that we know will be gone within a year.

We don’t mind losing a contract to one of the other stable, reputable area Web design firms. But it’s frustrating to us to see decisions being made on the basis of price alone, or even on deceitful claims. We know how the story will end, but it’s hard for us to convey that to people without it sounding like sour grapes.

A standard Modus Operandi these days is for small start-up Web design wannabes to offer below bargain basement hosting rates. In so doing, they get sites originally designed by reputable, credible developers to re-locate on their servers. Once there, they replace the original designer’s copyright notice with their own. Then they add this client to their customer list, thus implying that this is the level of work you can expect from them, when nothing could be further from the truth. We have actually seen several potential clients go with another design company based on what they thought was the quality of their work… when it was actually OUR work they saw, listed on that developer’s site!

So what’s a company to do? Do your homework!

Even if you don’t know “Jack” about the technology or the Web industry, you can still make sure that you make the right discussion. Check out their Web site, yes, but then do more than that. Make sure your potential Web developer is a reputable, stable company (make sure that they are a real company!). Ask to see their mission statement. Find out what part integrity plays in their business philosophy. Ask them about their business plan. Visit their facility. Meet their staff. Check out their credentials. Check their references. Find out who REALLY designed the sites they list as theirs.

Be ready to spend a little more money for the right company. Quality, expertise and integrity always cost a little more. But know that you’ll not only be getting your money’s worth, but you’re also helping to assure that your Web developer will be there next time you need them.

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