You're skeptic about getting a website, huh?

If you are reluctant to get a web site because of what happened in the high-tech sector in 1999-2000, then let me tell you this:

Dot-com businesses were, what is more properly defined as, concept companies. Although the idea was that these companies were in business to generate profits, their plan wasn't exactly what you might have thought. All that a concept company pretty much had was a web site ("dot-com"...) and some -- usually far-fetched -- business model. As for the business plan, the plot was to get the company an IPO - Initial Public Offering - as early as possible in its existance, from which point on, the assumption was, the "ball would roll". Thus the concept "If you build it, they will come", an idiocy they use to use as the only reason they would justify why a web site should be built.

So, exactly, how did this thing work?

In order to get an IPO, certain conditions had to be met. For example, hiring a large number of employees and opening nation-wide branches simultaneously. And all these before having the slightest idea whether the proposed "business concepts" would even work... This approach not only permitted dot-coms to create the image of "BIG" companies, but it was also a prerequisite to recruiting investors, task which, ironically, represented the least of their worries... The large required investments were almost invariably made available on the promise to act BIG and FAST. The general accepted assumption here was that the faster a company would get "big", the more solid guarantees to make profits there will be. Big profits, might I add, the "understanding" was. So investors - some of whom even understood the process - were lining up begging to throw their truck-loads of money at these companies.

Now that the money was ready to go to work, there was also the need for some kind of blue print that would illustrate the company's market value. No problem! There was no shortage of creativity either. To my knowledge, (some) dot-companies were also among the first operations which had the businesses plans written (entirely?) by their accounting departments. The better the chief accounting engineers and their marketing plans could "grease" the perception of what these companies "were worth", the higher those outlets' stocks would rise. (Whoever invented, in the first place, this practice by which we are blindly putting all out trust and, sometimes, our entire future in companies' financial statements...? Sadly enough, this is not an issue limited to just dot-coms).

For the investors, again, although "sooner" was the preferred time frame, a later "BIG cash in" on their initial investments, was also an accepted term. Their adopted position was - an old business reality - that some businesses, if not most of them, do not necessarily generate profits right away. (Can you argue with that?) However, in the dot-com scenario the three-to-four year proposed incubation period was also a concept, a perception of progress and value where business feasibility did not have anything to do with reality. (Remember, although some dot-coms were created by very bright people who were probably the only ones who understood what their businesses were about, at some point in their existence it was the money 'who' started to do the thinking...) Eventually, some investors did cash in BIG too, but don't let their number be confused with that of those who were, literally, wiped out from the markets and even the business world altogether. And, we're not even counting here the tens of thousands of well-trained, high-performing x-employees whose stocks, which at one time were "worth" millions of dollars, were also wiped-out. (Sadly enough, today recruiters are telling them that "they're worth nothing since their current salaries are ZERO!" ...)

From where I'm standing, I keep asking myself, what kind of economics are those where the price of one share is worth more than the selling price of the product that created it in the first place? Or, what exactly is that those companies' CEOs were planning when, during job interviews, the applicants' main concerns were to get an idea as to how long it may be - preferably, not to long... - before they would become millionaires while working at their new jobs?

Anyway, if you understand that this business concept was applied to hundreds of companies, than you also understand why businesses with real market value were caught up in this time-skip, domino effect when they got stuck with overwhelming volumes of cancelled orders which were initially "projected" by the dot-coms' "strategists". When the dot-coms were, finally, relabeled as "dot-downs", the internet equipment makers - for example - which have established themselves as strong, respected, market players and, which have earned every credit by working hard and generating REAL money, had found themselves motionless on thin ice. At that time, and by no fault of theirs, they were forced to reposition themselves, unfortunately, on lower levels of a new and turbulent stock market.

Let's understand this correctly...

In fairness to all that happened, we should also understand the following:

1] The dot-com era was NOT a dirty, economical plot engineered in advance by anyone who may have been caught up in their natural drive to make more bucks easier and faster, while sizing some opportunity in what was a high-tech-favorable-market scenario. No, the people who took part in creating the dot-com era - and the bases of a new economy - were very well intended in their actions. We all owe them a lot of knowledge otherwise we would not have today.

When the dot-com-mania started, for anyone with at least a vision for the future, those decisions seemed to have been the "proper course of action". For the most part, the people who helped make it all happen were some of the best and brights at what they were doing and knew very well their jobs. What they didn't know was that when looking at the future one can only jump so far ahead of reality. And, how could they have known it? They weren't taught that in business schools. That kind of knowledge one only gets at the school of hard knocks. Probably, the best school on which progress has always been made.

2] Not ALL dot-com-labeled businesses failed. And we are not talking about the ones who are still around and struggle to keep it that way. In fact, there are plenty of them out there. If you don't hear of them is because they are preoccupied more with making money than with plastering your e-mail box with their great ideas. If you'd like to check some out, you can find hundreds of them by browsing our directory.

The Bottom Line

The dot-com melt-down which wiped out billions of dollars in stocks was the result of a faulty transfer and application of old business rules and assumptions to new market configurations. It WAS NOT the web sites (behind those businesses) that created the mess.

Well, this is pretty much it on this subject. Of course, you don't have to agree with me, but this is not the point. The point is that by adding a web site to your business, you're NOT going to kill it. In fact, I have every reason to believe that a web site will only make your business stronger.

Chéf-du-Content, Padronius