April 27, 2003
Don't look now, dot coms are making money!
Bill Gurley makes an important point in his recent "Above the Crowd" column. In our rush to abandon dot com-dom, which has even out paced the rush TO dot com-dom, we've thrown the baby out with the bathwater. Let's remember that the dot com boom put a premium on ideas--an idea (perhaps good, perhaps not) was virtually all you needed to get funded, go public, and get rich! Now, those that will be successful will be the ones who take the great but failed ideas of the past 5 years and make them work. Many will be larger corporations, but many too will be entrepreneurs. If Yahoo, Amazon, and eBay can survice the last few years, they are ready for anything. Same goes for companies who can emerge out of the current doldrums--they will be survivable and well positioned for the next uptick. And you can bet that the ideas for these companies will probably have been hatched in the boom times. It's time for deja vu. It's time for deja vu.
A friend, and successful dot comer just wrote to me: "call me crazy, but I sincerely believe that one of these days people will even sell pet supplies profitably online. dead serious." Crazy--like a fox.
Don't look now, but many dot-coms are working. While most industries struggle to swallow the overwhelming effect of a prolonged lethargic economy, consumer Internet companies are just now hitting their stride. While telephone companies are still reducing capital expenditures, and enterprise CIOs have cut their budget "another" 10 percent, consumers are spending more and more dollars online. If you are convinced that there is no growth in this pathetically slow economy, perhaps it's because you turned your back on these remarkably silly dot-com businesses.