The headlines are everywhere. Dot-coms going out of business by the thousands. Tech stock values, stratospheric a year and a half ago, down to almost nothing today. Programmers and developers who were making $100,000 last year living in homeless shelters this year. The critics who called the Internet the “CB radio” of the 90’s claiming vindication.
If you didn’t know better, you’d think the Internet was done. But to paraphrase Mark Twain, “Reports of its death are greatly exaggerated.”
So what happened to turn the Internet boom into doom and gloom? And, most importantly, where is it headed?
The fundamental problem that led to what Alan Greenspan called the “irrational exuberance” over the Internet was the idea that somehow the old rules didn’t apply. Profitability didn’t matter. Sound metrics were immaterial. A “get rich quick” mentality prevailed. At the time of the Internet explosion, people simply believed that the New Economy would change everything… including the fundamentals of success.
A lot of people are discovering, the hard way, that they were wrong. The New Economy was a myth, and I for one am glad to see it go.
Seeing the Light
Fortunately for our company, we had our epiphany before it was too late. During the Internet heyday, I was brought to a harsh reality — one that many of my counterparts failed to acknowledge. A few years ago, while I was touting the fact that, at the time, our Internet company was over 3 years old (!), I realized that I was bragging about our longevity to a customer whose business had been around for almost 120 years. While my industry’s biggest challenges were dropped carriers on our cell phones, busy signals when we tried to dial into our ISPs, and the toughest decision of all: foosball table or air hockey table in the employee lounge, this client had survived World War I, the Great Depression, World War II, the gasoline crisis of the 70’s, the 20 percent interest rates of the early 80’s and countless other challenges. Talk about a lesson in humility!
It confirmed what I guess I really knew all along — that a good business isn’t just about succeeding during times when the economy is booming, it’s about being able to succeed when inevitably, times are bad. That requires sound business management, profitability that anticipates coming downturns, win-win relationships between you and your staff, and meaningful value propositions for your clients. It’s about amazing care and service in all your business relationships.
And it certainly isn’t about abandoning all you know to be true to jump on the latest fad with reckless abandon just because it’s the “latest thing.” Our 120-year-old client has seen plenty of innovation and new technology. It began with the typewriter. Then the automobile; the telephone; radio; airplanes; TV; fax machines; the mainframe computer; overnight shipping; the desktop PC; networks; the Internet; wireless.
And the secret to their success? Looking at each of these innovations as it came down the pike and finding out how to use each one in a way to reinforce who they were and what they did, and to do so in a way that didn’t sacrifice good sound business principles or what they stood for.
With this in mind, we’ve changed our company’s tagline. Since our inception, it has been “Compete in the New Economy.” Now, our tagline is “Compete in the Next Economy.” Our marketing department developed it to try and distance us from the negative connotations that the “New Economy” carries with it… to help us appeal to the high tech companies that were first products, then victims of the “New Economy” — the companies who are still reeling from the punches and asking, “what’s next?”.
The tagline, however, has a different relevance to those of us here in the Midwest with customers who are 25, 50, 100 and 120 years old. Those customers have been competing in “next economies” for decades. And now that the Internet infatuation is behind them, they’re looking for someone to help them determine how to use the enduring and sound aspects and benefits of the “last economy” to help them succeed in “the next economies” that will happen over the next 120 years.
So what have we learned that we can share with you?
- Use the technology to reinforce what you want your customers to believe (and can substantiate) about you. It’s more than just your brand or brochure. It’s your service. It’s your philosophy. It’s your mission. It’s how you do what you do that sets you apart from your competitors.
- Base your next technology strategy on sound business practices. Don’t assume that people will do business with you just because you have an e-commerce initiative. Plan on people doing business with you because of your reputation, your products, your pricing, your service — whatever it is that makes you great. And use the technology as a way to extend those features to the segment of your market that prefers to interact with you using that technology.
- Don’t cut corners. If you truly can’t justify the expense to do it right, don’t look for a technology “partner” that will give you an incredible deal or a competitively-suspicious price. Companies like that won’t even last through the current economy — much less survive into the next!
- Be careful to select a technology partner or vendor who shares your principles.
- And look for a partner or vendor that’s stable enough to be around for a long-term relationship — and by long term I don’t mean till the next economic downturn, but into the next economy, and the next, and the next.
So while the “New Economy” is dead, the Internet is not. It will still change everything. For those who understand what it takes to succeed in ANY economy and know how to use this powerful tool, it will solidify and further equip them to distance themselves from their competitors.
And what about the companies that think it’s a magic wand, a get-rich-quick scheme, a technology that will allow them to succeed even with bad business practices, or those who still dismiss it as the “CB Radio of the 90’s?”
Just as it would have been had they decided the use of telephones or faxes for business was going to be a passing fad…
They’ll soon be writing their own obituaries.