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The insta-business plan re-strategizer!

The market is skittish and IPOs are being postponed: Time to rejigger your B-plan! Our foolproof guide shows you the way.

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By Scott Kirsner

April 13, 2000 |

It used to be that an Internet start-up was in great shape if it could alter its strategy and its story as nimbly as a next-day tailor. But these days, the market's so moody you've got to swing with the alacrity of a well-greased weathervane.

This week the New York Times quoted Robert Lessin, the co-CEO of Wit Capital, saying, "There will never be a new stand-alone business-to-consumer dot-com created again." The Wall Street Journal reported that Safeguard Scientifics, a venture group, had decided to stop investing in business-to-business plays in order to focus on the "next big thing": infrastructure that supports the Web's growth. CNET's News.com described the "gloomy climate" for open-source companies, noting the stock slides of Red Hat, VA Linux Systems and Andover.Net, and Linuxcare's delayed IPO.

In case you haven't figured it out: B2C is out. Linux is on the wane. B2B, which was white hot just a month ago, is now getting a lukewarm reception. Infrastructure is in, and so, for the moment at least, is wireless. (Just not wireless schemes that involve launching 66 satellites and selling handsets the size of a box of Cap'n Crunch.) But what early- and later-stage investors want to hear is changing as often and as dramatically as a diva during a VH-1 special. If your business plan was written back in the first week of April, or, heaven forbid, in March, it probably needs some revamping.

You'll need to address today's crucial questions. What's your broadband strategy? Now that do-gooder privacy activists have raised a ruckus about collecting too much customer information and using it "improperly," how will you be able to find out which videos your site's visitors rent, and whether they are unkind and do not rewind? How will you conquer the wireless market? (Note to Dr. Koop: Wireless no longer refers to radios.)

Don't feel bad, you're in good company with that delayed IPO. Think of this as an opportunity. While your S-1 filing is in a holding pattern, now is the perfect time to perform some cosmetic surgery on your story.

To help, we've compiled the list that follows. Think of it as Business Plan Helper. Retin-A for your road show. Weave four or five of these items into your standard PowerPoint presentation, and you’ll instantly make your company more appealing to skittish, lemming-like investors, without actually having to change what you do on a daily basis.

  • We're an applications service provider (ASP). You betcha.

  • You may recall that the last time we spoke, we described our company as an "e-tailer." Since that time, we have acknowledged the existence of a greater power (NASDAQ) and begun our recovery. We have made amends with our early-stage investors. When we feel the urge to sell to a consumer, we get in touch with our sponsor, VerticalNet. We no longer hang out with people who work at online retailers or B-to-C commerce sites. In fact, when we encounter such people at networking events, we deliberately spill drinks on their shoes.

  • Did we mention that we're an ASP? Recurring revenue is our life.

  • Our chief executive has gray hair, indicating his/her impeccable judgment, his/her courage under fire and his/her superb ability to manage large teams. Previously, (INSERT NAME HERE) worked in the aerospace and mail-order chutney industries.

  • Our marketing plan does not involve expensive TV ads that run during the Super Bowl, the Oscars or the World Series. We're taking a guerrilla approach –- far more targeted and less expensive. In the dark of night, we prowl affluent neighborhoods, breaking into people's houses, booting up their PCs and changing their default home page to our site.

  • Starting a business-to-business marketplace for Krazy Straws was a valuable learning experience for our company, but we always viewed it as simply one step on the way to becoming an infrastructure player. Our new offering is a communications platform and set of protocols, sold on the ASP model, that enables buyers and sellers of chocolate milk to validate freshness and choco-rific-osity.

  • We are on the verge of signing a major software distribution agreement with a New York firm. We can't say more at this point, only that he has folding tables on both Broadway and Sixth Avenue.

  • We are in the process of applying for several important patents on our business model, our process for placing an order in exactly 23 clicks and the precise location of the hanging spider plants in our office kitchen. We believe these patents, in addition to one that has already been issued to us for a method of communicating online with our customers' pets, will afford us a large, easily defensible competitive space.

  • Our team includes top technologists who have experience working at (or with the products made by) Netscape, Sun Microsystems, Microsoft, Oracle, Dell Computer, Sega, Radio Shack and Chevy's Fresh Mex.

  • Our unique ad-targeting methodology allows us to charge a much higher than average CPM (cost per thousand impressions). By cross-referencing our database of online customer profiles with an existing database of nationwide sperm donors, we can display highly relevant advertisements to site visitors. For example: a site visitor who lives in a cold, northern climate and is likely to have a hyperactive child who will be required to stay indoors for much of the year would be very likely to respond to an offer to purchase bite- and scratch-proof furniture covers at a significant pre-birth discount.

    To avoid issues with privacy advocates, we have set aside several thousand shares of friends and family stock for them.

  • Forrester Research projects that by 2003, Internet start-ups will have focused so relentlessly on infrastructure that there will be no remaining actual content on the Web.

  • Jupiter Communications expects that within five years, the Pets.com sock puppet will develop cataracts and start growling at both strangers and inanimate objects.

  • We have registered for or purchased 713 individual domain names to protect our current and future brands, trademarks, product lines and advertising slogans, including "DontchaKnowIBoughtThisEasyCleaningRiceCookerOnline.com" and "HowtoCleanYourEasyCleaningRiceCookerwithJustaCanofAjaxandaPneumaticChisel.com."

  • Like a stool, our revenue model rests on three sturdy legs: advertising, e-commerce and the vending machines we installed outside our office.

  • In order to focus more on transactions, we have discontinued our "e-zine" and disbanded our 30-person editorial staff. Several former editorial staffers have been redeployed throughout the organization as espresso-machine operators, valet parkers and masseuses, in an effort to boost morale and improve retention.

  • To get to scale, we've implemented a scalable architecture that reduces the cost and complexity of scaling. Scalability is our "secret sauce."

  • Once the initial buzz on our company starts to peter out, we intend to revive it by changing our name to something that will generate scads of jokes at our expense, making us feel popular once again, like MobShop.com or Cruel World.

  • We're deploying across multiple platforms to reach a wider audience: PCs, PDAs, cell phones, pacemakers and the wide range of "back massagers" marketed by Brookstone. A beta version enables users with electric toothbrushes to transfer funds between their checking and savings accounts, and will soon be able to facilitate stock purchases (at market only).

  • Our app is so viral, it makes the Black Death look like amateur hour.

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    About the writer
    Scott Kirsner is a Boston writer who covers business and technology for Fast Company, Boston Magazine, Wired and CIO.

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