A year into Britain's e-commerce revolution, the pioneers who learned on the job offer some key advice to new entrants
With the UK's Internet revolution now a year old, it is perhaps time to ask what lessons have been learned by those would-be dotcom entrepreneurs and those within large companies trying to set up e-units.
At a recent meeting of the First Tuesday venture marketing group, Sonia Lo, of new "demand aggregation" specialist Ezoka, which hopes to help e-tailers fulfil customer demand, and Michael Ross, of Easyshop, offered their advice.
According to Lo, you must "find, respect and hire people with previous experience. They're absolutely critical".
She suggests hiring people with relevant industry knowledge. If you go into a new area which you're trying to revolutionise via the Internet and you don't understand the fundamentals, you're not going to get very far.
This certainly applies to the technology, hence the current search by a number of companies for chief technical officers.
"This is technology-driven at the end of the day. A good chief technical officer is worth their weight in gold and if you don't have one, it's going to be really hard going - finding money, getting a site up and running, and hiring people - until you do," says Lo.
Other advice from Lo includes:
Build a "favour" bank - be prepared to ask for favours and be able to return them
Be suspicious of VCs, advisers and anyone who speaks in jargon. It generally means they don't know what they're talking about
Move quickly - don't be afraid to merge to gain market share
Communicate - remember your responsibility is always to your shareholders (this includes your employees). Don't ever surprise your VCs - it will result in the "board meeting from hell" if you do
Answer your phone calls and e-mails promptly - you never know where it might lead
Get good advisers, and if you feel you've given them a free education, don't hesitate to get money off your bill
Get as much sleep as you can. In this business, you're the only safety net and if you are under the weather or exhausted, delay major decisions.
Michael Ross joined Easyshop, one of Europe's leading underwear retailers as chief executive in September last year. Then, Easyshop was turning over about £1,000 a week, had 12 employees and 2,500 sq ft of office space. Now it has 32 people, turns over £20,000 a week and has a 10,000 sq ft warehouse.
One of Ross's key challenges was deciding whether to "hire good people or wait for fantastic ones". Easyshop gives psychometric and quick thinking tests
Some of Easyshop's biggest challenges were:
Technology - Easyshop has historically done all development in-house, but a challenge was to get past Version 2.4 of its Web site, and to decide what to outsource
Money - "The challenges are getting a plan in front of the right person".
Fulfilment - "This is hard. We came in on Monday with 300 orders to fulfil. The principle is easy, but dealing with fraud, returns, split order, credit card authorisation and so on, is not easy".
"Coming into an existing company and struggling to get the right balance of consensus-building while imposing a new vision in an industry where nobody (or very few) people know the right answer".
The volatility - "Retailing on the Internet is not for the faint-hearted".
Fortunately, Ross retains a sense of humour. "One of the hardest things so far has been telling my 84-year old grandmother that her grandson, the management consultant, was now selling women's underwear."
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This was first published in February 2000