STRATEGYANDTHEINTERNET:TRENDSANDPREDICTIONSRealTechConferencePeterStanger-2RealTechConf-PS-June01-tor-lmE-COMMERCEISDEAD“E-CommerceIsDead,LongLiveE-Commerce”-TheIndustryStandard,April2000“Going,Going,Gone:Business-to-ConsumerSectorGoesBust”-Forbes.com,April2000“Canyoubuildabrandonlinesellingthird-partygoods?Theanswerisno,eventhougheveryoneusedtothinktheanswerwasyes”-BryanRutbert,WarburgDillonRead“Thelivingdeadhavegottenawaywithmurderbecausethepublicmarketshavefundedriskierventures.LookatAmazon.com-ifcouldbethebiggestlivingdeadthepublicmarketshaveeverseen.”-WarrenPackard,DraperFisherJurvetson-3RealTechConf-PS-June01-tor-lmTOMSIEBELCEO,SiebelSystems“Ifyoucan’tgenerateprofits,significantmarketshareandcustomersatisfaction,youreoutofbusiness.”“OntheB2Bexchangeside,Idon’tthinkanyonewillsurvive.Theyareallgone.”-4RealTechConf-PS-June01-tor-lmTHECAPITALMARKETSHADITALLWRONGTravelocityBarnsandnobel.comExpediaDrugstore.comEgghead.comPricelineeBayAmazon$123BWebvaneBayAmazonAllOther$11.4B-5RealTechConf-PS-June01-tor-lmISTHEREVOLUTIONOVER?July28,1794-6RealTechConf-PS-June01-tor-lmTHEBUMPYRIDEOFECONOMICREVOLUTIONS1860-18901895-1925-7RealTechConf-PS-June01-tor-lmFUNDAMENTALFORCESAREATWORK120100804060200177017801775IndexWorkersperbushelofmanufacturedcottonEngland1770-83PriceoftheModelTtouringcar1908-20191019151920198519901995PriceofCPUcomputingpower$/MIPS1982-95Lowerprocessingcosts...…withincreasedthroughput...FibercapacityTime1050104103102…andpowerfulnetworkeconomics020406080100012345678910nValueincreasesasthesquareofconnectionsProfitLossValueCost02v6v12v20v30v42v56v72v90vn(n-1)vF+0F+2cF+3cF+4cF+5cF+6cF+7cF+8cF+9cF+10cF+ncValue,costConnectionsCostincreaseslinearlywithconnections…lowerstoragecosts...$/MBAverageHDsizeinPCatretail(GB)Harddrivesize(GB)Cost($/MB)0.000.200.400.600.801.001995199619971998199920002001200220030255075100-8RealTechConf-PS-June01-tor-lmLONGDISTANCEWholesale(Network)•Design/build•Operations/maintenance•Resale/interconnectionRetail•Sales/ma...
