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  Ed, 12 May 2000 @ 1:54pm

  
  

  Pure Plays Still Deserve Trashing

  The study says that the profitable e-commerce sites are generally associated with existing catalog companies, so the prevailing scorn toward flash-in-the-pan "pure play" dot coms is still somewhat justified. But more seriously, it might be some cause for concern: the hype surrounding dot coms is supposed to be justified because the Internet is supposed to be a new way of doing business that will fundamentally change the economy. If it turns out that the Internet is just an evolution of the existing mail-order catalog business, then where is the fundamental change and how will the "new economy" sustain itself?

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  • 

    Mike (profile), 12 May 2000 @ 2:44pm

    
    

    Re: Pure Plays Still Deserve Trashing

    Well, I think it's an overhype situation, where things got totally blown out of proportion. When Amazon first hit the VC radar screen it was "revolutionary" because it was a bookstore that didn't have any infrastructure costs to build stores, and could serve the whole world immediately *and* didn't have it's own warehouses, and the potential seemed huge... So, the VCs invested. But, then they realized that didn't really scale, and suddenly they did need to build infrastructure and warehouses and such, but VCs forgot that was why they had invested in the first place.
    
    By the way, I do tend to blame VCs for a lot of the problems also. They tend to try to push these businesses to be a lot more and a lot bigger than they can be. So things that could be nice profitable small businesses get forced into being huge unprofitable ridiculous dot com plays that get mocked.
    
    As for the "new economy" however, I think there is a ton of potential, but it's not about just moving stores online, but it does have to do with companies that do fundamentally change the way companies do business.

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      Ed, 14 May 2000 @ 2:19pm

      
      

      Re: Pure Plays Still Deserve Trashing

      Some e-commerce ideas are a fit for the web and some aren't. Despite Amazon's losses, bookselling is a good fit, perhaps the best fit discovered so far (which makes sense, because that's why Bezos picked books). If you think of a B2C e-commerce site as an infinitely large catalog that can be updated continuously, then you can identify items that fit. Books fit because of the infinite catalog size. Computer peripherals fit because of the continuous updates. Pet supplies do not fit. Here's another one that obviously did not fit: http://www.herring.com/industries/2000/0515/ind-bbq051500.html
      
      The current problem is that, until recently, VCs have been willing to fund anything e-commerce. There's a huge grain of truth in the "IDontWantMyToothpasteDelivered.com" protest/parody; eventually the "pure play" companies that don't have a compelling reason to sell their wares via e-commerce will wither and die. That's the way it should be.

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