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Sailing the new Internet

Last time I used the analogy of a well-built boat to
represent the Internet. The large amounts of investment
capital that were initially available and which are now
running away can be cast as Landlubbers that had no idea
about the realities of sailing. They probably had visions
of cruising the Caribbean and tropical sunsets only to be
confronted with big waves and tropical storms. If you want
to review the article it is posted at:
www.IMSWebTips.com/issue74top2.htm

Of course hindsight is 20/20 and we can only take an
analogy so far. The message I tried to get across in the
last article is that despite the doom and gloom about the
Internet these days, it should only be seen from the
perspective of an investor, most of whom put money in with
the hopes of making a quick buck and who are now avoiding
it through the fear of loosing their shirts. Both views are
extreme and do not reflect the reality of the Internet.

If you are still working at developing an Internet presence
or business, have the resources to do it and have a viable
business model, the current change can be a significant
benefit to you. With many dot Com companies vying with the
dinosaurs for a place in the archeology texts, there will
be a lot less clutter, distraction and competition for the
survivors.

So what are some of the new realities for the Internet and
the people that rely on it to make their living?

1. If you are a potential investor, making a quick buck on
the stock market is going to be a lot harder. Internet
stock values are going to be based upon results and not
hype. You are simply going to have to look at potential
investments based on all the criteria you would use when
making any other investment. There are still going to be
more big-winners with spectacular returns than in almost
any other business segment but not because of pyramiding
stock values. If that is how you hope to make a quick buck
then go to Vegas. It also requires little skill and is a
lot less risky.

2. If you are an Internet entrepreneur then your time will
be better-spent generating revenue than trying to raise
investment capital. Revenue has several significant
advantages over investment capital. First, it adds real
value to your business. A dollar earned is potentially
worth $200 because it validates your business model and can
probably be repeated which investors and bankers like.
Secondly it is 100% yours and your current investors. New
capital dilutes your shares while revenue increases them.
Finally, real investors will find you like moths to a flame
if you are doing well; and you will be in a much better
position to negotiate.

3. If there is less money available for Internet businesses
the money that is available will go a lot further. In one
of my previous articles I mentioned how many advertising
agencies would not let you in their door unless you had a
minimum if $100,000 US to spend. Guess what! I'll bet you
don't have any trouble getting in their door these days
with a lot less than that. And if you do go in their door
ask them how their previous Internet clients are doing.

Whether you want to buy banner ads, hire top talent or
buy Internet products and services, it is going to be far
more affordable. Although it is now a lot harder to raise
new money, the money and resource you already have are now
worth significantly more in purchasing power. In effect, it
is almost as if the resources you still have available have
been doubled without the need to dilute your shares.

Of course, if you were hoping to do an IPO any time soon,
buy a yacht and sail into a Caribbean sunset, well that may
take a little longer.

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"IMS Web Tips" ISSN 1488-7088
© Copyright 2000 Virtual Mechanics
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"IMS Web Tips" is a weekly news letter for all web site managers regardless of experience who are looking for detailed information on creating, maintaining and promoting their web sites.

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