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Final Cut

The Dot-Com Crash

What can we learn?

By Harry Urban
Publisher

It’s easy to poke fun and postulate with glee as the first generation of dot-coms continues its nosedive. Indeed, the plastics industry has seen its fair share of Internet start-ups go bust. But it’s not fair to lump the failed companies together as greedy geeks who finally got their due.

There is more to be gained from the failed dot-coms than the fabulous computer hardware, pinball games and Razor scooters available at their liquidation sales. Beyond the bold, often blind, enthusiasm of the early 21st century Internet start-ups is a boatload of mistakes and concepts for us to ponder as the survivors in the new economy:

• It’s the people, stupid — The dot-coms have tried to relegate our industry (and other industries) to a database of players - buyers and sellers. No doubt, the plastics industry can be categorized this way, but behind every URL and every e-mail address sits a human processing device that’s more complex than even the most graphically enhanced web site. Getting the players together in the past has always required more than a few “clicks.” Chances are good that buying and selling plastics materials and equipment will continue to be based on personal relationships for many years to come. The dot-coms should have spent as much time and money in dealing with potential users as they did in honing their web platforms.

• The dot-coms proved how inefficient the industry is — The powerful databases that were put together showed just how fragmented and disorganized our industry really is. Many of them were masterpieces that took countless hours to produce because of the complexities of our industry. Too many spec sheets, catalogs, e-mails, faxes, and phone calls are required to conduct business today. The dot-coms promised to cure this, but as mentioned above, they left out the people. Nevertheless the industry needs to streamline its information. The next generation of Internet start-ups (and companies considering their next step on the web) would do well to remember their predecessors’ goals.

• Hail the disintermediated middleman — The dot-coms served fair warning to the middlemen of the world to lead, follow, or get out of the way. Whether you’re a machinery distributor or a travel agent, you’d better bring something more to the table than a marked-up invoice. The Internet is a level playing field on which every “old economy” company can learn new tricks. Just ask the folks at Omnexus, Eastman and General Electric.

To be sure, the venture capital isn’t flowing as freely into the web as it did 18 months ago. And the early enthusiasm has unfortunately turned into rabid cynicism. But there’s no doubt that the web’s potential is remains untapped. The second generation of dot-coms should be plenty grateful to their predecessors.

E-mail me at hurban@vancepublishing.com for more information.

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Plastics Machining & Fabricating
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