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The Pendulum Swings Both Ways

2014 Elena Fawkner

The first quarter of 2001 has been a shocker for many, if not
most, online businesses, particularly those that rely heavily
on third party paid advertising on their websites and in their
ezines.  It doesn't seem to matter who you are - the Wall
Street Journal or one-person webfront operation.

Hot on the heels of spiralling stock indexes and dot-com
failures, many people are just plain leery of anything that
has an "Internet" label.  As a result, many online business
owners are shutting up shop, figuring that the returns just
aren't worth the investment of time and money.

But wait.  Let's take a deep breath and look at what's really
going on here.  You should be encouraged.


THE GOLDRUSH

In the beginning the Internet was the new frontier.  With all
those metaphors being bandied about all over the place - talk
of gold rushes, pioneers, gold nuggets just lying there for the
taking - "go west young man (or woman)", echoed in our
ears, "stake your claim to your share of the Internet riches".

And so every man and his dog and every woman and her
cat slapped up a website and started publishing an ezine.
After a while, our pioneer started making actual money charging
for advertising on her website and in her ezine and selling the
latest information product and business was plentiful.

THE PLATEAU

After a while, things started to level off.  No longer experiencing
the heady rush of exponential growth on a weekly basis, things
started to level out.  Business remained solid, however, and
our pioneer, now thinking of himself as a capital E "Entrepreneur"
figured, OK, this is the end of the first big growth phase.  It's
time to start consolidating.  And so our entrepreneur started
investing in already-formed relationships, concentrating on
existing customers, developing his "List" of contacts and
joint venturing like crazy to try and sustain momentum.

THE SHAKE-OUT

But then things started to go wrong in the promised land.
All of a sudden the most promising, courageous and innovative
Internet businesses started to, well, bomb.  All of a sudden,
venture capitalists were demanding business plans that actually
required the business to turn a profit.  No longer was it enough
to be on the cutting edge of an emerging new economy.  Now
all of a sudden the bankers started talking about "returns on
investment", "time value of money", and (shudder), "profit"!

Now Internet businesses were expected to come up with
business plans that looked like those from the real world and
which included real numbers, real timelines and real results. 
No longer were bankers looking through rose-colored glasses. 
That pink ink really WAS pink (or, more precisely, now that we
look at it a little closer, more red than pink, actually).

Suddenly money wasn't being thrown at Internet entrepreneurs'
feet.  Suddenly loans were being called up and businesses
shut down.  Suddenly investors were watching stock prices
dwindle ever so inexorably, day by day.  Suddenly investors
were losing life savings and vowing to never again invest in
the new economy.

REALIGNMENT

After the big bang, the landscape was strewn with the
carcasses of one-time high-flyers, brought down to earth
by nothing more earth-shattering than simple gravity.

But like blades of grass emerging from the scorched earth
following a bushfire, the small, conservative, money-
parched, lower case e entrepreneurs got to their feet.

Unburdened by crippling debt and understanding all along
that an Internet business is no different from any other
business - revenues must always exceed expenses after
all - their businesses survived the great Internet shake-out.

For so long bemoaning to themselves, "How are we
supposed to compete with the big guys?", suddenly a new
realization ... "How are they supposed to compete with us?".
How are the "big guys" able to target niche markets the
way we can so effectively and yet generate the kinds of
bucks necessary to fund their infrastructures; how can they
possibly provide true customer service on a genuinely
personal level, as opposed to employing an army of
autobots?  How can they possibly be nimble enough to
turn on a dime in response to changing dynamics that
occur on a seemingly daily basis?  What their failure tells
us is, quite simply, they can't.

So, although we're all paying the price of the Internet
backlash, over time new norms will be established.  The
pendulum has now swung to both extremes - the goldrush
arc and the backlash arc.  A pendulum, though, finally comes
to rest dead center.

So, hold your nerve, position yourself and your business in that
center, where you've been all along, and you'll be ready to take
your place in the NEW new economy which will soon emerge.

_________________________

Elena Fawkner is editor of A Home-Based Business Online ... practical ideas, resources and strategies for your home-based or online business. http://www.ahbbo.com

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