Opinion

First-mover advantage or going out on a limb?



Gregory Darmohray

First-mover advantage? What advantage? The events of the past few months in both business-to-consumer and business-to-business (B2B) sectors have made this axiom of Web wisdom look like a euphemism for "going out on a limb". With e-business, first-mover advantage can prove to be a real handicap. Trailblazers encounter technical and marketing pitfalls, so don't let the fact that others have a headstart put you off taking your firm into the e-business fray.

The business tide is turning - it is taking basic corporate Web sites along the transactional route, building Web links with customers and partners, and integrating with supply chain systems. You have a real opportunity to learn from the experiences of others, avoid the traps, and catch up in double-quick time. Here are some simple business rules that will help you make up the ground and overtake the first-movers - fast.

  • Watch and learn. Chances are that another operation may already have touched on an area that you would like to move your site into. If so, can you improve on the existing idea?

  • Ensure your site is up and running fast, within an "Internet year", or 90 days. According to a recent report by Gartner, a typical B2B site costs about £750,000 to build and takes six months or more. You can't afford either.

    The biggest cost and time factor - upwards of 80% - is custom coding of infrastructure such as authentication and security. Modern, pre-built e-business solutions can halve these costs and cut time by two-thirds by using a robust building-block approach. Custom code is a bad investment - Boo.com raised only £250,000 from its technology, reputedly worth £26m, and Netimperative.com was recently sold for £126,000 despite a £650,000 investment just last year. So get your infrastructure out of the box.

    Finally, the site must be able to adapt and evolve according to your changing needs. It also has to be able to scale up. It is certain that, once deployed, the site will need to grow to reach larger audiences. So make sure you own the site. If you can't easily modify the site using internal resources whenever you need to you will be left behind. This is another good reason for avoiding custom-made solutions - every change means recoding costs and wasted time.

    You will soon have an advantage over first movers.

    Gregory Darmohray is director of Europe at Webridge

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    This was first published in August 2000

     

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