TheimpactoftheInternetbusinessmodelAmazonwasonceviewedaskance怀疑地bycynics.Theylickedtheirchopsoverthefirm’sfailuretomakemoney.Theythusmissedthefinancialsignificanceofits‘businessmodel’.Theconvenience,speedandpricingadvantagesofsellingAmazon’sbooksonlineeasilyoutweighedthetraditionalmethodsofmarketing.Founder-CEOJeffBezoswasconvincedthatthenegatives-thegapbetweenAmazon’scostsanditsrevenues-wouldbegraduallyclosedasthemarketingproposition,deliveringhighervalueatalowerprice,wonmoreandmoreconverts.Forquitesometime,astheonlinemodelsgatheredstrength,Iusedtoattackbusinesspeoplewiththewarningthattheyfacedthemostdeadlyofenemies.Theold,time-honouredmarketingchoicelaybetweenthreepropositions.First,apremiumpriceyieldinghigherprofitsathighercoststhanthecompetition;second,me-toopricesthatexploitedgreaterefficienciesonthesupplyside;third,atthebottom,acut-priceplatformthatreliesoninferiorproductionandsupplyforitsviability,butwhichisinherentlyweak.Thekeywordswerebest,sameandworse.Butbusinesslistenersnowhadtolearnanewword,themostpowerfulofall-FREE.Internetusersinthenewworldhadquicklydiscoveredthattheirneedsinmanymarketscouldbeservedatzerocost.Thatway,thenewsupplierscouldswiftlybuildcustomeracceptancebasedentirelyontherelativesuccessofaliterallypricelessmarketingplatform.ThefirstBigBangwasdeliveredbyanunknownstart-upnamedNetscape.Thebrowserinnovatorswhosenon-payingusersenjoyedtheirservicesforfreeneverfoundtheanswertotheproblemofPricelessProfitexceptwhatcanbecalledafinalsolution:NetscapewassoldtoAOL(AmericanOnLine)for$4.2billionin1999.ThepioneershadbeendefeatedbyBillGatesofMicrosoft,whosebundlingofitsbrowserwithother‘FREE’necessitiespulledthecarpetawayfrombeneathNetscape’sfeet.Thatwaseasythoughcostlytodo,evenforaBillGates,whosestrengthslaymoreinthebasicsofbusinessthaninhightechnology.Thosebusinessstrengths,however,werefundamental,andstillare.Therichestmanintheworld,however,stayedthatwaybyfullyrecognisingtheforceofthesimpleprocessthatcreatedhiswealth.EveryMidasfacesthesamedifficulty;thesuccessofthenewideainevitablyattractscompetitors,somenewineveryrespect,othersestablishedinothermarketsectors.Buthistoryshowsclearlythatallgoodthingscometoanend,unlessyoucanidentify,exploitandleadthenextstageofmarketchange.Thenegativequestionisclear:Whatchangesmustwemaketothebusinessmodeltosustainthecompanyandserveitsmarkets?Thepositivequestionismuchharder:Howcanwebuildanewcompanythatwillbedevotedtothenewmarketsandtheiropportunities?Thefloodofnewdeviceshasitsrisks-Apple’stabletcomputerhasattractedmuchcriticism.Nobodyseemedveryclearoverwherethemarketlay.ButApple’sSteveJobshaschanged‘theWorldAsWeKnow.It’soradicallyalready-notleastwiththebrilliantiPhone-thathecanbeforgiventheoddfalsestart.Thatsoundsmildlypatronisingandsomewhatcareless,butremember-theworldisnolongerhowweknewit.
