Six months ago, the frequently asked question in the dotcom circuit was: "What’s your revenue model?" Have you noticed the subtle shift now that no one asks about just revenue models but also "How much money do you have left in the bank?" Hang on to it for as long as you can, seems to be the message.

Bali has got the right ingredients to be a dotcom entrepreneur. Few start-ups have the kind of exposure he got at Bhrigu’s outfit in Singapore. Fewer still do the kind of fact finding that is required to analyze an opportunity objectively. A right mix of enthusiasm, bright ideas, exposure to existing dotcom businesses and a strong financial backing would seem to be all you need to convert a greasy garage operation to a dot corp. You must know your customer and focus on adding economic value; create something that has a real need beyond as Markandey puts it, "curiosity value".

To be able to add economic value, the Net has to do what airplanes are doing. Air travel supplements rail travel where the distances are short enough for man to endure inside a steel cage! One may travel by train in India or even across Europe, depending upon time, cost and convenience. Chugging on a train across the Atlantic is neither feasible nor desirable even if such a link were available. The Net supplements and adds value to many things that we do. It does not have to replace all of them. We still use cars, don’t we? So while one may shop for books and music online, sacrificing the touch-feel-hear experience, one may not like to do away with the morning newspaper altogether. Similarly, education is a collaborative experience, not just teacher to student. So the Net can supplement teaching by keeping class schedules ready, tracking scores, providing additional study material for student or even video aided classroom broadcasts. But will it kill schools? Unlikely. The computer is yet to develop an interface as friendly as that of a teacher to a 12 year old!

What most would-be Net millionaires miss, is that the Internet does not expand the size of the wallet exponentially. An online business has to rely upon weaning away customers from the brick and mortar stores. I don’t buy more books simply because an online bookstore is around. Newspapers should attempt to provide research results on the net, supplement news articles with more photos, not just provide "full versions" or articles on the web. If I am reading about the Fiji-crisis, the online edition should provide me with a history of all previous events in Fiji, a background on the Fijian ethnic society and maybe the President’s biography. Over time, broadband will allow me to view footage of the crisis getting dissolved. Markendey’s observation about media on the Net ignores these new dimensions. Publishers experimenting with media reports over the Web need not wait for the infrastructure to be up-graded – they can do it with the future in view and they will be ready when the bandwidth explosion takes place.

The Net today is not a good multimedia medium. If your site offers audiovisual and most of your visitors are on a modem connection, are you really serving them? Many dotcoms focus on inundating their customers with options and technology that only end up confusing them. For building a web store, the product mix, character of the store, back-end logistics are as important as branding. If you are in the information commerce space, provide something that has clear demonstrable value. If you are in the online community space, focus on the needs of target members.

A B2C venture targeting a consumer base of 3 million users in India can’t expect to recover its investment overnight. Only 3% of users have ever transacted online. The cost of brand building is huge for online business since they assume and take on the responsibility of making the world their marketplace, which itself is a fallacy. There are not many dotcoms that have truly global appeal. Customer acquisition costs in India could be as low as $2 and go up to $10. For this reason, focus on niches in important. The Gartner-Group estimates the average Indian online consumer will spend $30 annually by 2003. In contrast, key consumers (niche) will average $1,400 annually.

In the real world, one bookstore would do well and encourage others to set up a bookstore maybe further downtown or in another city. This strategy served well in dispersing the service geographically. Book-stores in the same block would compete on the breadth of their offering, pricing and ambience. These differentiators exist online as well. Quality of service, availability of books and shipment cost – all important factors for an online buyer. Firstandsecond.com for example, uses a unique model to deliver more than 1 million books to Indian buyers at a price lower than the landed cost of a book from Amazon.com, thus differentiating itself and providing economic value.

The innate desire to get there before someone else does drives the job market. Sky-high pay packets are thudding back to earth. South China Morning Post’s Internet arm SCMP.com cut 18 jobs in June. Along with a sound business plan, you also need a sound financial position. Otherwise, be ready to merge or get acquired. Which may not be a bad thing at all and the grapevine says this is precisely what many dotcoms are aspiring for – to invest Rs 2 crore and be bought for Rs 200 crore! Bali – analyse your Net biz ideas critically. Allow them to mature. Cut through the hysteria and see whether your offering promotes loyalty. Whether you see a use for it three years hence. Are you able to offer a new product or differentiate from existing ones? The importance of differentiation is more so in the world since the barriers of time and distance that hold in the Old Economy seem to melt in the digital economy. Do not succumb to technological distractions. Ignore speculation based stockmarket booms. Is Barnes & Noble better positioned to enter new markets given its warehousing capability and brick and mortar stores coupled with an online one? Or is Amazon.com better positioned sans its brick and mortar baggage? They are competing business but not competing business models, each has its advantages and both can be winners if they provide value to the customer. Any business must have a clear strategy and a viable customer base. Getting there before others do has been typical of the huge bucks spent on brand awareness by web businesses, without paying heed to costs. In India itself, we have seen new magazines e.g., Outlook being launched and carving a niche for themselves. New TV companies like CNBC India entering the market space have garnered a significant share of the pie. None of this happened overnight. Dotcoms today are positioning themselves for the time when the Internet becomes as commonplace as the telephone or TV. The digital economy moves fast, so new websites cannot afford to wait for five years to garner market share. But using sensible business practice is much better than squandering on false premises and running it aground. For such businesses, a space exists and the future is bright. Get ready for the world after B2B – B2C – C2C – C2B. Focus on the P-to-P (path-to-profitability) and R-to-R (road to rationalisation) and thereby success.