[ The opinions expressed by authors on Linux Today
are their own. They speak only for themselves and not for Linux
Companies using the Internet want to succeed and do so in
Internet time. Analysts need a program guide to tell the players
from one another. You can help your clients by understanding and
using a “best practice” approach. You have the formula for creating
a successful business on the Internet.
The Internet IPO Lottery
Many pioneers of Internet businesses used to compare the Web to the
movie “Field of Dreams”. A voice whispered in their ears “build it
and they will come”. If you or someone you know buys lottery
tickets, then you know lottery commissions use your own compulsion
and imagination to get you hooked. You buy a lottery ticket because
you mentally see yourself winning.
Going into business on the Internet has the trappings of a
lottery. First, you see the prize winners in the form of Internet
billionaires. Second, you see banner ads and spam telling you
someone can show you how to win. Finally, you can buy your ticket
on many Geocities style sites. You can have a free Web site, for
just a few dollars you can commerce enable your site and watch the
dollars roll your way.
The great glow you felt the day you bought those lottery tickets
only dampens a little when the numbers appear on television or in
the papers. You got two out of six numbers. Or, better yet, you got
three of six and won five dollars. Sometimes, you win four of six
and get twenty dollars. You know you found a system and if you keep
playing you will win. You’ll fine tune your system and win. Now,
when you get your money, you won’t spend it like other winners. You
have a financial plan and you will continue living just as you do
now with only an improvement here and there.
The Internet billionaires club differs only slightly from the
weekly lotto. People with dreams of Internet billions have
technical abilities and feel special. They may not line up at the
counter and buy five dollars worth of tickets, but they often buy a
recruiter’s pitch and go for lower salaries in hopes those stock
options will cash them out.
Wake-up, Bottom-out and Get Real
The Internet provides a remarkable opportunity to distribute goods
and services faster than in the past. The Internet helps shoppers
make informed buying decisions. Informed buying decisions and
faster distribution models doesn’t mean you will turn into a
Two examples of reality can help get you unhooked from a lotto
addiction. The first example involves Sun Microsystem moguls of
Silicon Valley liked the NetDynamics business plan. NetDynamics
promised a very workable CORBA-Java solution to interoperability in
an enterprise. Using a variety of methods, NetDynamics provided a
way to Web-enable CICS applications and have them work with Oracle
database solutions, for example. NetDynamics could turn hard coded
SAP application screens into browser forms. Suddenly, the lone
applications that you still needed to run after a SAP conversion
had a way to work with the enterprise behemoth.
The founders of NetDynamics and their venture fund partners went
on a recruiting hunt for the best talent in the industry. They
pulled frustrated managers and sales people mainly from Oracle.
They promised an IPO and handed out many stock options as a bonus.
The stories of worthless stock options provide a cliché.
NetDynamics had raised $15.4 million in three rounds of venture
capital. Investors included Hummer Winblad, US Venture Partners,
Intel, The Galleon Group, Attractor Investment, VanWagoner Capital,
and Integrated Capital Partners.
NetDynamics, Inc. offers the first comprehensive Enterprise
Network Application Platform, solving the problems organizations
face in integrating disparate computing environments, scaling
business-critical applications and managing distributed systems.
The NetDynamics platform leverages a powerful, open and secure
architecture to enable innovative business solutions. More than 650
customers including AT&T, Chevron, Fidelity Investments,
NationsBank, and Service Merchandise, use NetDynamics, which also
is supported by more than 100 leading systems integrators, VARs,
and ISVs. Based in Menlo Park, Calif., the company was founded in
Sun Microsystems acquired NetDynamics for approximately $190
million in 1998 in a merger. Netscape set the precedent for the
price by paying $180 million for Kiva — NetDynamics rival.
Those employee stock options? Ah, well, dah, I guess they’re
only good if the company does an IPO. Ask around and you’ll find
many such stories of hard work, promises and the numbers just
didn’t fall right for the holders.
The next example of Internet lotto fever comes to us courtesy of
AMR — momma of American Airlines and Sabre among other
subsidiaries. Sabre arrived in electronic business before anyone.
They appeared on the Internet with Travelocity.
While yomomma.com, makemerich.com and others have seen
incomprehensible stock prices, a solid citizen like Sabre receives
very little notice as an Internet company. Compare Travelocity
revenues with Amazon.com and Broadcast.com and ask yourself a
simple question — what? Myriad reasons exist for the discrepancies
most of which have to do with the way Wall Street structures IPO’s.
Underwriter warrants, trading profits and portfolio positions can
drive IPO prices while little speculative money finds its way into
the trading booths of pre-existing public companies like AMR.
These two examples can serve us. Like the lottery, they
represent the norm in our industry rather than the exception.
Winners Rose and Bill from their little cottage in the country
represent something like one in fifty million who played the game.
Consider the other 49.9 million who didn’t win. You don’t see
headline stories about the losers.
Internet Marketing Realities
In late 1996, I watched a new Internet company rise from obscurity
to one of the top Web sites on the Internet. I found them on a
referring site at NT Magazine. The company calls
themselves Beverly Hills Software( http://www.bhs.com/ ). Trying to find an
X-server for an M$ client and a DEC Alpha running NT, my search led
me to them. They had recently launched their site and within a few
months as I watched, they hit the stratosphere.
visitors downloading software. I thought that seemed like a
relatively large number at the time. On my next visit, I became one
of 250 visitors at the site. Before they removed that obnoxious
little script running in the bottom of my browser I was one of
2,000 + visitors. This occurred over 90 days.
I started running searches for BHS on newsgroups, on the WEB and
at various relatively unknown places such as the InterNIC. A friend
and I ran into them at InternetWorld in Los Angeles and got some
first hand information.
BHS used a strategy for becoming known and welcome at that time
that represents a remarkable set of “best practices”.
Unfortunately, some slick dudes have taken those practices and made
it impossible to do a reasonable search on the Web these days. For
example, I searched for information to verify some facts about the
Sun acquisition of NetDynamics for this article. After hunting
through 30+ normally reliable engines, I wound up at http://www.sec.gov and searched the
tedious EDGAR database for Sun Microsystems’ SEC filings until I
got the information.
Even today, BHS has lost sponsors and visibility. A few
announcements in newsgroups, registration with search engines,
referrals from reciprocating Web sites and magazines will not bring
the hits like they once did. Instead of the myriad banner ads I
once saw at the BHS sites, they now belong to the Link Exchange and
get banner ads like “dog pile”. Yuk!
What You Can Do Today
What can you do, today? First, drop the expectations of instant
billions. Second, determine your real reason for being. Third,
focus on specific areas of interest. Fourth, make the site
accessible. Fifth, have service be the specific objective of your
Web business. Sixth, manage your site daily.
Drop the Expectations of Billions
If you go into a venture with an expectation that does coincide
with reality, you stand the chance of being disappointed and
disillusioned. Thousands of sites exist on the Geocities incubators
with “under construction” graphics that haven’t been touched in a
year or so. You’ll need fortitude and endurance if you plan to make
your site work. Take the expectation away and work your venture one
day at a time. This takes persistence and will power. Many of us
find ourselves lacking in these qualities. Some thrive under such
Determine Your Real Purpose
What’s your real intention for your Web site? Is it to just make
money? Good luck.
An endeavor without a reason for being will fail. I don’t mean
you shouldn’t expect to make money from your site. If you put
service first and do the best job possible, the money will come as
An endeavor without a vision will fail. Without a vision you
can’t determine your mission. Without a mission you can’t set
realistic goals. Without goals you’re like the people who don’t
know where they are going and don’t know how to get there.
I don’t think anything else needs saying about vision, mission
and goals here. The evidence for strategy and tactics working in
one’s life has many reporters. If you need to find out more, cruise
your friendly local bookstore.
Focus on Specific Areas of Interest
The formula for successful Web sites says you must provide content
that can create a community of interest. A community of interest
will provide brand identification. When you have brand
identification you can facilitate e-commerce.
What do you do best? Do you build the best firewalls in the
Linux Universe? If so, create a web site that covers all areas of
firewalling. Write articles and submit them to Linux publications.
Fill your site with how-to papers on Linux firewalls. Write and
submit your articles to the Linux Documentation Project HOWTO
archives. You can find information on writing and submitting a
HOWTO at http://metalab.unc.edu/LDP/HOWTO/HOWYO-INDEX-4.html.
A Linux consultant has two objectives in doing his own site
development. First, you want to establish yourself as a “known”
authority in your area of interest. By providing significant
content, you can demonstrate to the world what you do best.
Secondly, you want to build a following or a “community of
interest”. By creating a specialized site you will attract others
with a similar interest. You will also gain commercial attention,
command a higher rate and receive more inquiries to provide
consulting services. In establishing yourself on the Internet, you
tell others you have special skills they need.
For example, two of our engineers specialize in security.
Prabhakar Vijayarangam brought me several articles on firewalls. We
pieced them together and wrote our own how -to article for the
“consultants tool kit” at lcsrc.org. Following the publication of
the article interesting events occurred. For example, we received
approximately fifty e-mails from Linux specialists giving us
feedback on the article. One of the people who wrote us, provided
ample material to create an article on a dmz. His material gave us
the ability to provide additional service to our clients. Since he
lives in Europe, he didn’t mind sharing his solutions. His material
will add to the knowledge base of Linux solutions. He will also
present his article at several conferences and has been asked to
speak at SANE on Internet security.
In the meantime, Prabhakar’s client load has increased. People
have called him to help them either fix or implement IP
masquerading, packet filtering, setting up proxy services, and so
Look around and see what problems Linux users encounter. You can
find this information in newsgroups, by running searches at
Searchlinux.com and corresponding with Linux users you see at
familiar web sites. A couple of nagging problems seem to persist in
the Linux world – interoperability with other platforms and
messaging. I can see two opportunities for Linux consultants.
Consider building a site dedicated to interoperability. Such a site
could contain mountains of content. If you want to build a
“community of interest” take that one on. A Linux consulting site
dedicated to messaging can also create a massive “community of
interest”. How many people do you know that want to use Lotus Notes
on Linux desktops? Did you know that several people have run Lotus
Notes using WINE?
How about tutorials on sendmail or the use of Internet
newsgroups within a corporate intranet. People around the globe
look for video conferencing solutions and that’s an emerging market
Content drives Web sites. Matt’s script archive
provides a great example of focus. From the early days of the Web
through now, Matt Wright has consistently provided high quality
focused content. Many people consider his site a historical marker
in cyberspace. People drop by regularly to see the content he adds.
Many sites link to him for prestige.
Whatever you do, make sure your effort provides a tight focus or
specialization. Provide ample content and updates regularly. Also,
make sure that your topic has an audience.
One of the early commerce successful stories on the Web provides
another example. A technology guy wound up with his family cheese
cake business. Through next day delivery via Federal Express, this
bakery could bring a cheesecake to your door fresh and ready to
eat. I got one for Christmas one time from an uncle. At first, I
thought he’d lost it. It only took one bite to discover he was a
man of impeccable taste.
This company’s president knew how to bring a Web site on-line
and put out several Web pages. He provided information on how to
order cheesecakes and put out the company’s product line. In a
little over a year, he received no orders from the Internet.
One day, he did something very bold. He took the family’s secret
recipe and published on his Web site. You guessed it, the calls and
orders swamped his small staff.
First, a search engine indexed the recipe and people looking for
cheesecake recipes wound up at his site. After reading the recipe,
a person soon discovered the enormous effort required to make the
cheesecake. Finally, just pure economics came into play. Just the
cost of ingredients made doing it yourself too costly. For the cost
of the cake and shipping, you could have the world’s best
cheesecake in the morning.
I refer to this as my cheesecake story. Eric S. Raymond calls it
Open Source. Eric says, publish the recipe and build a
Make Your Site Accessible
I’m sorry, but the costs of entry into the Internet market don’t
require you to go the route of a mole. You can put up a commerce
enabled site for a couple of hundred dollars and register a real
domain name. You can forget the www.geoplop.com/TechIndustry/
Boulevard/Housecalls/988876814/ index.html routine.
You can lease a Cobalt RaQ2 or comparable Web server for
approximately $75 a month from a local ISP with 13 GB of hard drive
space, 128 MB of RAM and remote administration capabilities. Rack
space, due to the small form factor, runs about $25 per month and
co-location charge run anywhere from $50 a month and more. More Web
appliances will soon appear from several manufacturers such as IBM
and you can pick and choose your interface, processors, memory and
disk configurations. Co-location at a proper facility also gives
you access to large bandwidth connections, often redundant OC3’s
from different backbone providers.
When you finally add your expenses from a Total Commerce
tm or Geoplop site, you’ll spend more for 50MB of disk
space. You’ll also find some hidden charges if the site becomes
popular based on some formula for the excess disk space used from
simultaneous hits. You will also have no control over CGI scripts
you can use. These high density starter sites prevent you from
getting revenues from mirroring popular download archives, getting
direct advertising and setting up virtual sites and your own mail
server. Forget about backend databases.
You want to control the applications you think best fulfill your
needs. Co-location will afford you the ability to choose your own
Web server such as Apache instead of IIS 4, for example. You can
choose your own scripting language, e-commerce software, credit
card clearing utilities such as Cybercash or Open Market and
As we see, accessibility involves more than how a surfer can get
to your site. Good accessibility includes the ease of access you
have to your site.
Have Service be the Specific Objective of Your
The Web model of distribution anchors itself in service. If people
think of someone or a group as valuable, they do so because the
person or persons provide something useful to them. We can define
value as usefulness and usefulness as service. The definition of
usefulness in its most primitive form means “serving the purpose of
Web businesses fail when people don’t provide enough content to
create a community of interest or to serve their existing community
of interest. For example, I have a personal complaint about a
certain computer manufacturer. I purchased a server from them and
it’s still under on-site warranty. However, they refuse to provide
updated firmware to make the BIOS year 2000 compliant. To make
matters worse, the warranty period runs out in July, 2000. While
the same models sold with faster pentiums have Y2K BIOS flashes
that also allow the user to upgrade to a 233Mhz MMX processor, my
machine is upgradable to only a 166MHz.
In talking to a support representative, he informed me that the
company only made a limited quantity of the model I own due to a
change in processors during the time they considered it in service.
I have located an OEM BIOS for the motherboard that accomplishes
everything I want, but the manufacturer says they will void the
warranty if I use it. Further, they won’t provide me with any sort
of service documentation including a motherboard diagram for jumper
The cost of losing a customer in any business can be calculated
with relative ease. The computations involve the costs of
advertising, promotion, marketing collateral, service, certain
legal and human resource costs, facilities and outsourcing among
others. Recently, I saw one study where the cost of losing a
customer for a digital wireless phone company ran approximately
When you see someone purchase a cable company , for example, try
not to act surprised when you see what one firm pays another for
the customer base alone. Even the high cost paid for small Internet
Service Providers doesn’t seem quite right to some of us. Customer
acquisition costs justify the price, however. The typical churn
rate for an ISP runs approximately 30% of the total customer base.
The take rate, or percentage of offers made to people signing up is
usually less than 10%. The companies with the best track record as
ranked by Inverse suggests that the churn rate is lower and the
take rate higher for those ISP’s with the best customer
The key to providing service revolves around the content a site
provides and maintains. The quantity and quality of content
determines the number of users a Web site will attract and hold. If
your client sells pharmaceuticals, it should provide significant
information for the health care practitioners who need information
about the products. For example, management at Alcon Laboratories
owned by Nestle, argue incessantly about the look and feel of their
Web site. They have paid high six figures for a fairly bland Web
presence. They could have taken an iterative approach, put as much
information about the products up for the people who prescribe
their products and stopped worrying about the color of the
graphics. Cool graphics will not create a community of interest —
but content will.
Manage your Site Daily
Finally, site management and content management coincide so closely
to a Web business’ success that some of us find it difficult to
distinguish between the two. A successful site will provide a
service that updates daily. Look at the high volume sites on the
Internet and you will see that their content changes often.
We use the phrase “scrubbing a site’s content” to describe
analyzing logs to determine the most visited areas of the Web site
and where people spend the most time. Some Web analysis software
can make distinctions so closely that you can tell if an
originating URL happened to be a bookmark in the visitors Web
If you see that certain pages get the most hits, find out why.
Recently, I saw an abnormally high number of hits at an area of our
site where a certain kind of content resides. I found the referring
URL, visited it and discovered a link in an article. The link
resided in a paper distributed internally to a group of Web
developers on Web site management.
Companies using the Internet for business want to succeed and do so
in Internet time. The easy times of succeeding in the fast lane of
the Internet have passed. Now, you need to ride in the HOV (high
occupancy vehicle) lane and make sure you have enough content so
you won’t be fined. You can help your clients by understanding and
using a “best practice” approach. You have the formula for creating
a successful business on the Internet.
Adelstein, CPA, is the CIO/CFO of Bynari, Inc. He’s the author of several
books and articles on business and technology and has management,
consulting and hands-on experience in the Information Technology