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E business Critical Success Factors
The Great Failure
What is Dot Com Bubble
E – Business Critical Success Factors
Defining E- Business - E business is a term used for different businesses but they are not accurately defined. I am not going to defining it, it will narrow down the scope of term. Any activity carried out on the information technology super highway, or on internet on web portal or which is related to the activity being carried out on net is called e-business. This can software development, application development, online shop, online services, SEO and many more activities, e-learning and webinar, videos and anything which travels through electronic channels or supports the functioning of electronic channels and creates a business opportunity is e-business.
This is biggest opportunity, fastest growing opportunity, still failure is highest in this sector. There are different reasons for failures. This will remain biggest opportunity for the next decade when virtual economy grows five times faster than real economy.
This world of e-business has big lessons in past failures, which can make future success possible.
The Great Dot Com Bubble
Many people wrote many things about this. Some of them wrote books on the issue and there is a movie also. Still many more analysis can be written. I am just writing few lines on the issue. What is called Doc com bubble has two things; one is dot com excesses and financial excesses, both fired by greed to make more money.
The Financial Market
This was the golden era of Financial Market, NASDAQ Exchange, and the technology companies dominated stock market reached its peak. This is astonishing story of rise……. And fall. The technology heavy exchange reached its peak of 5112. The story goes like this 1990 NASDAQ is 340, 1995 it was January 1995, it doubled to 762. It was not long when it again doubled to 1500, July 1997, what a magic double the return in 2 years. This is not end of story, it has just started, and it was October 1997 the index doubled to 3000 and above, and it reached all-time high of 5112 then down 5042 on 10th March 2000. It was 15 times from 1990, i.e. just 10 years and 7 times the value of 1995, i.e. 700. This mad rush is encouraged by many.
There are many reasons for rise of stock market and creation of bubble. The first and foremost of those is availability of easy money. The market is flush with money; there is enough liquidity in the market and not enough opportunities available. When investors and especially private equity player saw the rise of e economy, they started betting on it, i.e. investing in such companies.
Media has played very crucial role in creating stories about how the economy, the so called new economy will look like and how fast it will grow and why you should invest in it. These stories and fancy Placement memorandum by private equity players created this big boom, I call it big bubble which burst because there is only air and nothing else.
The E Market
The new cyber age has started 1990 when personal computers become user friendly and affordable. It is really the era of Microsoft, when new operating system comes and more and more people started using it. This has created new opportunities, new business and different opportunities. The opportunity in software development is what everyone looked at and invested heavily, it is a product which is reproduced with almost no extra cost and that is the reason it made fancy for the investors. The private equity player exploited the opportunity and created the companies; raised millions of dollars, listed then on NASDAQ and then just vanished, there many examples of such companies.
The other factor is internet age, super cyber way. Which has created other opportunities? The internet has become available publically in 1994. Over the period it has evolved as fast communication medium and business and peoples started using it for multiple task. This is very fast medium and at very low cost.
It has created new dimension to the economy and everyone ran after it without going deep into its feasibility and this created bubble and it bursts giving tears to many.
E Business Ideas
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The Failure of Next Generation
10 Brilliant Startups That Failed Because They Were Ahead Of Their Time
Being first and ahead of others may not always bring you success. These are the great failures, because they are first and ahead of others and ahead of time. In internet ventures it has happened again and again, ahead of time or being ahead of others may not always result in success.
- SixDegrees.com was the original online social network
SixDegrees.com was the first online social network. It has done very well initially but falstered after that. It may be true that people weren’t ready at that time for social mingling and penetration of net was not high enough.
- AskJeeves was original search engine
It has originally developed arithmetic of search based on webpage hyperlinks and also linguistic queries. It has all the factors which made a search engine success but it is well ahead of time.
- Webvan the original street view
The story of wrong planning, this is great Idea but execution is faulty. Home groceries at your doorstep.
- Pets.com could have been great
This is a startup that had poor timing rather than a poor concept. It is a great idea, doing very good today but failed to deliver because of timing. Today Pet Supplies is a big business.
- Dodgeball was mobile social networking before people cared about that stuff
This is mobile social network before time, there is 3G and 4G networks, and messaging ( text message ) is the only way which is very friendly and attractive enough for the idea to click. Foursquare which the same idea as Dogeball is big hit.
- GO Corporation the original Palm, the original smartphone
The idea is to develop smart phone and touch screen phone with mobile operating system but the idea was too early to succeed.
- LetsBuyIt.com was original Groupon
The original packed online group buying services failed because of not enough promotions available.
- LoudCloud did cloud computing when people thought clouds meant things in the sky
This was original cloud computing but too early for the idea.
- WebTV was just the first to fail at bringing the internet to your TV
This was original Web TV, the idea is to bring net on TV but failed because it was too early.
- NextNewNetworks was MTV of the web
It was bought by Google. It failed in its idea to be MTV of web.
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Why to Start E Business
Would you like to start E Business?
Why Do Internet Business Fail
The first and foremost is idea. What is idea and how much appealing is idea. If idea is great and can go in long way to success then this is best opportunity. Unfortunately this is not true and most of companies which die in early age, the first and foremost are idea. Their idea does not have appeal, mass appeal to success. Online business needs mass appeal and reach, so that it can make great success. Because most of the ventures do not have this appeal they could not break even and die at early stage.
The second important point in failure is market. Knowing your market is very important factor. Whom you want to sell? What you want to sell? How you want to sell? How you want to reach him? These are the question. When you answered these questions, there is next question. How big is opportunity? Can you make money on it? Who are the competitors and how will you get pie of the cake. Because these questions are not clear to new entrepreneur, this resulted in failure.
Technology, Execution and System
Another challenge is technology. Not only the availability of technology matters but also its affordability and commerciality makes it very important factor. Early age internet ventures fail because they did not have access to technology and so are today. The systems must be at place. How the business is going to be run. When new business fails to imagine how business will be run and does not have system, even though it is in demand, it will fail. This is another reason for failure. Technology and system are in place but fails execute the plan, the business is doomed.
Strategy, Plan and Marketing
When plans go awry, strategy fails to deliver and no corrective steps are taken, this is full script of failure. The marketing fails and customer does not turn up, because you never reach them and don’t know what to do. These are sure reason for failure. If we look at failures of small online business we can say it played a major role in failures.
Going out of money is sure failure. When business is growing, there are needs which are planned and known but there are many things come which are many times not known, not having enough cash pull results in sure failure. Those who do have enough cash or cannot arrange enough on time is reason for failure.
The one win is human; who run the show is human. Not having right people, at right time at right place is reason for failure. Most of the time not having talent is the reason for failure, the team effort get you to the success, when there is no team which can deliver the failure is eminent. This is one more reason for failure.
Patience and Commitment
The patience plays very important role. Many startups lose patience and leave the project when they were very close to success. Startups need time and commitment before they can deliver the result, unfortunately many entrepreneurs loose the patience and success with it.
Start loses many times because they don’t have enough support. Not having support of mentors, family and friends in difficult times plays important role in failure. It is a nail in the coffin. Having good support of family, friends and mentors is very important if venture has to succeed.
How to Plan Market Study
Critical Success Factors
The definition of success is different for different types of business and services offered online. But two most important factor for the defining the success are reaching out to the targeted audience and money. These two factors are at core of all types of products and services which are available online. If the portal or we can call it online solution is reaching successfully to the target audience successfully and it has very good rate of hits then this is first success.
The second factor in defining the success is how many of those target audience which are successfully reached are happy to be on the your portal, if they are happy then many of them can be converted to the revenue or the factors which will ultimately make money from the solution.
The second factor which is used to define success is money. When the portal will start making money, how much money it is making with every successful conversion and how to increase the visit to conversion. It is important to know, how to increase the money for every conversion. It is important to define how to keep this customer coming again and again.
If these success factors are defined correctly and followed and corrected when there is a deviation then the project is very much successful.
Critical Success Factors
- Leadership and His Team – The Human Factor
This is the foremost factors which make or break the idea. In all human endeavors the success is directly linked to the human being. There is no success and there cannot be success without the right combination of the passion, the zeal to succeed, the right people at time and at right place is formula of success. Ahead of all is this is the Leadership. Leadership plays most important role in success. The leader, his idea, his motivation, his passion for his idea and patience along with knowledge and hands on will make it all happen.
The leader who led from front and takes leads and motivates his team in right directions is the one who will reach the goal. He remains committed 100% in difficult time, with patience and with all his passion takes the ship out from the storm will sure to win.
The second Human Factor is his team. The team is of equal importance. Team plays very important role in the success of project. Without a good mix of team, their devotion and commitment no project can success. They are the equal contributor to the success. Along with team, mentor, family and friends are very important in success. Their emotional and monetary support and motivation goes a long way in success.
- Vision, Idea and Goal
The second critical success factor is vision. What really the promoter wants from this venture. What is the vision for the venture? When the vision is clear and can be quantified and qualified then the journey can be taken. With the vague vision which is not clear enough and cannot be quantified then the planning and execution of the Idea is difficult. Having very clear vision is the first part of success story.
Idea is the selling point. The idea is core to the success. Without this there is no start up and no business venture. This idea must be good enough, which can bring on to the paper. What are the requirements of the idea and how it can be executed? Is the Idea really commercially viable or not. The commercial viability of the idea must be studied well, market, financial and technical studies. When it is done and road map is ready on the paper the journey should start.
Goal – Goal is the extension of Vision and Idea. It is the quantified and qualified definition of the venture. Without the quantification it is just not possible to start any journey. After doing the feasibility studies the quantification is must for the success and defining the milestone for the journey to success. Without setting the goal journey can never be completed.
- Target Market, Strategy and Reach
The third critical factor is your audience. Define very critically who is your target market? How big is your target market? Does this make business sense? Will this make a break even? How much customers is needed to break even? How much hits are required? How will you going to get these hits?
Defining market potential, understanding their needs, and really analyzing do they really need your solution. When these points are settled and you are happy with outcome, design your marketing strategy. Plan your reach and start on it. Planning will play very critical role in achieving the defined goals.
If you are able to understand your market, then half of the battle is won. When you are able to reach them, another 25% is done. Then there come the real difficult task of conversion of these to revenue.
Money is important. Availability of enough cash till the venture starts generating positive cash and profits is very important. The execution plan must have a detailed budget for expenditure. In my opinion at least cash for 1000 days must be available whenever it is required. Availability of cash makes a person comfortable with working on execution smoothly. Most of the time small venture does not have cash when required and this was a major for the closing of venture.
Budget should also envision all expenditure as well as contingencies. For small start the contingencies should be more i.e. up to 40 % for first year, 30% for second year and at least 25% for third year.
- Innovations ,Technology, and Systems
The technology is changing faster than ever. The web technology changes are faster than you think. This is one reason you must keep in mind while planning a venture. One of the critical reason is availability and affordability of key technology. This affordability has two aspects, it should be affordable to customer as well venture. The popularity of new technology and its related aspects plays important role in success. Many times it has happened that ideas were fantastic but there were no technology available or available technology is not affordable, this is one point. While doing plan a detail due diligence of technology is should be done.
The planning, designing and execution of all systems for the project is an essential element. The online venture needs systems which are suitable for the type of business. They must be easy to handle and friendly. Not only the front end but back end should also be well design and planned.
- Delivery, Customer Satisfaction and Post Sales Management
Customer Satisfaction is the GOLDEN RULE. This customer satisfaction has many dimensions and but I will right in brief what can make your customers delighted.
- Deliver what you have promised. – This is THE FACTOR of success. The product must be confirming to the quality promised. It should be better than what has promised will delight your customer. It should be exactly of the look and performance and technical specifications as mentioned. If this is done, the customer will come back to you.
- Deliver on time – The product must be delivered as promised. This may be before but definitely not later than promised.
- Accept Return and all complaints – The right to return should be accepted and all complained must be addressed. If customer want another product or full refund, both options should be respected.
- Listen to them and engage with them – Listen to their voice. Ask them about product and service and engage them. This will remind them of the product they bought from you. The customer will feel close to you and will come back to buy again.
Know thy competitor. This is important. Who else is selling similar products and services? How fast competition can come, if there is no one today? How it can be taken care of? What are the strength and weakness of the competitor? These are the factors which can make life easy in long term for new venture. Without knowing the competition and their strength and weakness ,it is difficult to win the market.