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In the report "The Rebirth" by John Reese, a veteran internet entrepreneur, he reminisces of how he built a top 500 most visited website in the world. As a result of the traffic, he attracted several contracts of over half a million dollar a year each, for adverting on his website. Then one day he woke up to phone calls one after the other from his advertising clients. There were all calling to inform him of a breach of contract. They explained that they were canceling all their commitment with him and if he wanted he would go ahead and sue them. But they also noted there was nothing left to sue for. Driven by mostly flawed business models, the infamous online bubble burst was here. Millions of dollars were lost.
Mr. Reese has since reinvented himself to one of the most successful and popular internet business men in the world. But the disease that hauled the whole of the last century's internet economy into a nose dive is still much alive. Indeed the disease is no different from the recent vibrant schemes of "investing" (sic) that have mushroomed in the country, which the media oft refers to as pyramid schemes.
There is such an inherent desire in the human species to get something for nothing, defying many natural laws. Whatever goes up comes down; action reaction; for a harvest you need a seed, just to name a few. But as we know, if you kept throwing stones long enough at a target blindfolded, you will one day hit it. It really takes numbers to take advantages of lapses in natural order. And if there is one thing that can deliver numbers in the business sense it is the internet.
A case is recounted, where an individual would blast 30 million emails to make 3,000 sales. This conversion ratio of one percent of one hundredth is a redefinition of dismal. And that such an individual would still refer to themselves as a business person without batting an eye-lid is a wonder. Today with CANSPAM regulation that makes sending unsolicited emails illegal, this game will land you in jail easy.
A happy customer is one that gladly parts with a form of value called money to get a perceived greater value of a good or service. That business is about creating value should never escape an internet entrepreneur; and this is why. To quote the late Gary Harlbert, one of the top copywriters of recent times, "Business is three things, a product (value), a pitch and a delivery system." The internet is simply a delivery system. But due to its agility, it does provide in more ways than one an unprecedented level of opportunity. An array of of business models can be developed and run online with very low cost. And these models vary from illegal ponzi and pyramids to astute businesses like ebay. But it is the grey models in between these two that tend to be hazy. This makes it easy to pick a model that does not add value to your customer. As we noticed with arbitraging Adsense, this will not be sustainable.
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