You're skeptic about getting a website, huh?
If you are reluctant to
get a web site because of what happened in the high-tech sector in
1999-2000, then let me tell you this:
Dot-com businesses were, what is more properly defined as, concept
companies. Although the idea was that these companies were in business
to generate profits, their plan wasn't exactly what you might have
thought. All that a concept company pretty much had was a web site
("dot-com"...) and some -- usually far-fetched -- business model.
As for the business plan, the plot was to get the company an
IPO - Initial Public Offering - as early as possible in its existance,
from which point on, the assumption was, the "ball would roll". Thus
the concept "If you build it, they will come", an idiocy they use to
use as the only reason they would justify why a web site should be built.
So, exactly, how did this thing work?
In order to get an IPO,
certain conditions had to be met. For example, hiring a large number
of employees and opening nation-wide
branches simultaneously. And all these before having the slightest
idea whether the proposed "business concepts" would even work... This
approach not only permitted dot-coms to create the image of "BIG"
companies, but it was also a prerequisite to recruiting investors,
task which, ironically, represented the least of their worries...
The large required investments were almost invariably made available
on the promise to act BIG and FAST. The general accepted assumption
here was that the faster a company would get "big", the more solid
guarantees to make profits there will be. Big profits, might I add,
the "understanding" was. So investors - some of whom even understood
the process - were lining up begging to throw their truck-loads of
money at these companies.
Now that the money was ready to go to work, there was also the need
for some kind of blue print that would illustrate the company's market
value. No problem! There was no shortage of creativity either. To my
knowledge, (some) dot-companies were also among the first operations
which had the businesses plans written (entirely?) by their accounting
departments. The better the chief accounting engineers and their marketing
plans could "grease" the perception of what these companies "were worth",
the higher those outlets' stocks would rise. (Whoever invented, in the
first place, this practice by which we are blindly putting all out trust
and, sometimes, our entire future in companies' financial statements...?
Sadly enough, this is not an issue limited to just dot-coms).
For the investors, again, although "sooner" was the preferred time frame,
a later "BIG cash in" on their initial investments, was also an accepted
term. Their adopted position was - an old business reality - that some
businesses, if not most of them, do not necessarily generate profits right
away. (Can you argue with that?) However, in the dot-com scenario the
three-to-four year proposed incubation period was also a concept, a
perception of progress and value where business feasibility did not
have anything to do with reality. (Remember, although some dot-coms
were created by very bright people who were probably the only ones who
understood what their businesses were about, at some point in their
existence it was the money 'who' started to do the thinking...) Eventually,
some investors did cash in BIG too, but don't let their number be confused
with that of those who were, literally, wiped out from the markets and
even the business world altogether. And, we're not even counting here the
tens of thousands of well-trained, high-performing x-employees whose stocks,
which at one time were "worth" millions of dollars, were also wiped-out.
(Sadly enough, today recruiters are telling them that "they're worth
nothing since their current salaries are ZERO!" ...)
From where I'm standing, I keep asking myself, what kind of economics are
those where the price of one share is worth more than the selling price of
the product that created it in the first place? Or, what exactly is that
those companies' CEOs were planning when, during job interviews, the applicants'
main concerns were to get an idea as to how long it may be - preferably,
not to long... - before they would become millionaires while working at
their new jobs?
Anyway, if you understand that this business concept was applied to
hundreds of companies, than you also understand why businesses with real
market value were caught up in this time-skip, domino effect when they
got stuck with overwhelming volumes of cancelled orders which were
initially "projected" by the dot-coms' "strategists". When the dot-coms
were, finally, relabeled as "dot-downs", the internet equipment makers -
for example - which have established themselves as strong, respected,
market players and, which have earned every credit by working hard and
generating REAL money, had found themselves motionless on thin ice. At
that time, and by no fault of theirs, they were forced to reposition
themselves, unfortunately, on lower levels of a new and turbulent stock
market. |
