Wealth-Coaching

We all hear the stories of the Dot com bubble that burst
around the turn of the millennium. Companies such as Egghead.com, Garden.com
& Pets.com were a few of the many internet businesses that succumbed to
that infamous demise of the Dot Com Bubble. Yet despite the many internet
business failures, internet businesses still continue today (probably in much
greater numbers) and many are thriving and raking in huge profits for the
owners. Think about Google… last year, it was valued at $27.2 billion. Just
recently, it was valued at $100 billion. That’s over $70 billion of value to a
company in a little over 1 year. And that’s after the Bursting Bubble…Not bad for a company that’s only 7 years
old.

But that’s one end of the spectrum. The other consists of
people like you and I who start our home based businesses selling our favorite
products or services. People like Pat and Angie Lacey who are located in a small
town in Alaska. Their specialty
is rodeo equipment. Without any computer experience, this young couple launched
UglyFaceRodeoGear.com and within less than a year had sales of well over
$200,000. The Lacey’s are some of
thousands all over the world who are seeing excellent results from their
internet businesses.

Why They Failed

So, as I was reading an article about the Dot Com Bubble of
the late 1990’s, I came across the following statement,

 “What separates these companies from
their circa-2000 predecessors says Irene Gahan, chief executive of the Irish
Internet Association, is a strong focus on niche opportunities, less exposure
to venture capitalists and a strong emphasis on revenues and profitability.”

What Irene is describing are characteristics of good
business. Many of the Dot Bombs’ focus, though, pre-2000 was to provide a
product or service, get a ton of venture capital, hire an army of employees and
spend a lot of advertising money. What was left out of the picture was how revenues
and profitability would support the business into the future. You see, the
venture capitalists were probably initially excited with the unique service
that was being promoted, but at some point, they needed the real hard numbers
of ROI to verify that they had made a wise investment. Unfortunately, in many
of those instances, their investments didn’t pay off.

During that time, I worked for one of these high profile
internet companies. I won’t reveal who they are (lest they come after me with a
pitchfork), but I can attest that there was a lot of overspending going on. Then,
the time came when they had to make some major changes. Alas, the hard
realities of business finally sunk in. Employees were laid off, offices were
closed, free programs now had fees. In a way, they were forced to be profitable
in order to survive. Fortunately, they made it, but it wasn’t easy.

The internet owners of today are different… at least the way
they do business (as a whole) is different than the pre-2000 era.

Check back for more information on internet businesses
post-2000…..