Ecommerce & Beyond

As it’s the end of the year I would like to look back on the last 15 years in the ecommerce industry. Yes, scarily, I go back that long. And one of my first memories was being told by a major venture capitalist that “the internet is like CB radio, here today, gone tomorrow”. The rest, as they say, is history.

Ecommerce then...

The underlying technology of ecommerce has changed over the years, but the underlying principles have, surprisingly, barely moved.

I was looking at a publication that I wrote around 12 years ago – “85 Top Tips for Selling Online”, and then comparing it with some research that Yell has performed in the last few weeks.

In the top tips booklet we said “Keep it simple, make it easy to recognise what you sell”. The Yell research said that among the consumers they surveyed, 81% cited easy-to-find information as very important in the purchasing decision.

Most of us would have no problem ridiculing a government that said they were planning to put a man on the sun.

But the question we need to ask ourselves is whether we continue with equally ridiculous business strategies, and only try to change them after we’ve been frazzled?

The issue is that with hindsight we can see that a strategy was ridiculous, but at the time it seemed fine. It’s amazing to think just how long it took Kodak to realise that film was dead, how long it took Yahoo to know it should have bought Google; and how long before Google knew they should have snapped up Facebook.

These are big companies, but in my experience it’s just as easy to make mistakes when running a smaller outfit. So what is it that prevents people seeing clearly when they need to change strategic direction?

A two-fold dilemma

Firstly, we all know that no business succeeds unless it has sticking power. Sticking power is great, except when you’re sticking to something that’s going to fail.

When I was a kid Guy Fawkes’ Day was a big deal. But the cost in human terms was horrific. Every year, thousands were badly burnt by fireworks, topped up by a few deaths. There was a campaign to emphasise safety – and storing fireworks carefully was one of the cardinal rules.

Wind the clock on a few years, and there is an issue just as incendiary as fireworks – the storing of payment card details, especially for ecommerce merchants. It may be less threatening to human life but certainly presents a big issue to business survival.

There are three problems here:
-    The first is that there are some very nasty, very skilled people out there whose sole occupation in life is to break into websites and steal card information.
-    The second is that the card payment industry has a nasty big baseball bat which they use to whack people with fines that break their rules (PCI DSS) or let hackers in.
-    Finally, the media are ready to demonise any company that loses personal details, particular about cards, and especially if there are a big brand. Just ask Sony.

Over the years, I’ve read numerous articles on open source, and many of them repeat the same myths. These are that all open source projects are driven by altruism, and that thousands of programmers work together on projects, each one fixing bugs as they find them.

The reality for virtually every open source project is that a small clique jealously guards its application. Letting anyone and everyone in to change the code would result in a quality disaster, as anyone with knowledge of software engineering knows. Many open source projects are pushed by one or two individuals, and cease all development when the main guy gets a girlfriend. If you’re a lucky user, they never will. But relying on luck isn’t a great business philosophy.

It’s about reducing marketing cost

Having dismissed the bearded, student-driven movement that comprises the majority of open source, we’re left with some serious software pushed by some serious players. And here we need to understand that open source is not about benevolence, it’s about reducing the cost of marketing.

The IT industry is notorious for the use of obscure acronyms, and with the talk about “The Cloud” it’s not much different.

In fact, The Cloud is simpler than it might seem, as the term is really just another name for the internet, and Cloud Services are services or applications that are delivered over the web. When we’ve shopped on Amazon, searched on Google, communed on Facebook or logged into our Hotmail account, we’ve used a cloud service.

So why the big fuss? The answer is that a number of trends have come together. The number of people online has grown to be the vast majority of the population. Broadband is generally fast, reliable, and most importantly always on, unlike its dial-up predecessor. Computers continue to get cheaper and there’s a plethora of new smartphones getting in on the internet act. All in all, this adds up to a lot of change and the result is a landscape that looks completely different when it comes to running services over the web.

The perfect solution?