More than 1800 Internet companies received funding in 1999. Many of them dream of becoming the next Amazon (AMZN) or E-Bay (EBAY), or, as their press releases often indicate, revolutionizing the way we do business. Most will fail.

Why? Some fail because of bad implementation and internal politics. Many also fail because the CEO's are "hollow, shallow and motivated primarily by greed and jealousy", as the CEO of Forrester Research (FORR) recently stated.

But a key reason also lies in the way they think about e-marketing. They think marketing is easy and intuitive, and are constantly admonished to run quickly or die.


By now, you're convinced (as you should be) that dot.coms need to move at lighting speed. But you may have also bought the hype pushed by many new magazines that the rules of commerce have changed, rendering the old rules useless. I bet the new dot.coms have bought these ideas as well.

When you join the perception of extreme uncertainty over the rules with pressures to run fast or die the situation is ripe for the use of short cuts in thinking what we in academics call "heuristics". There are many short cuts in thinking. Here are a few I'm sure you'll recognize.


Marketing research can be time-consuming and difficult. A much quicker (and typically wrong) way of assessing market needs is to use anecdotes, and particularly personal anecdotes.

Take for example a Wall Street Journal story (2/16/200) about how an advertising campaign for Blue Nile was based on the reactions of a VCs' mother and nanny. Sounds bizarre, unless you believe that solid advertising research can be based on a few people (which it usually can't).

I imagine that lots of marketing research for e-businesses is based on similar personal anecdotes. These anecdotes typically come from the most digitally savvy and interested consumers, like the people who usually start these dot.coms. Unfortunately these people don't look at all like the general population. The digitally savvy are more likely to want a feature rich handheld computer, rather than the far simpler and popular Palm Pilot.

In fact, I've received a lot of email since writing this column that begins with "I think this product is great" followed by the implicit statement "therefore everyone else thinks its great too".

The use of anecdotes, passing for marketing research, is lousy research and results in e-businesses that frankly seem quaint but of limited purpose. I always wonder whether Trisenx's "smell on the web" or Crowdburst's "instant mobile communities" idea has been based on broad samples of marketing research, or just anecdotes and intuition. But then again, I'd say the same about most of the companies that show up at the big Internet trade shows.


Have you ever experienced a situation where everyone in your little start-up company convinced each other how great the product was with only anecdotes to support it? And information that disconfirmed this belief was pushed aside? I've seen this happen in many companies. This situation has a name groupthink.

Here's an example I saw happen few years ago. Anxious to enter the world of multimedia data, Informix (IFMX) (really it was the engineers) became entranced by its new datablades technology. As a result, they decided the market would want its abilities to manipulate non-traditional data. The trouble of course was that no one was interested in exploring potentially disconfirming evidence that major companies may not be interested in this benefit. They weren't for example, banks wanted to store text data, not pictures.

(Of course, you might accuse me of using anecdotal evidence here, but the concept of groupthink is well documented across many companies and industries.)

With so much compensation tied up in Internet stock options and so little time to execute, why wouldn't management remain convinced that they're fulfilling a real need in the market, even when there is paltry evidence to support it?


Analogies seem to be the lifeblood of Internet predictions. After all, if the world is moving fast with so much uncertainty you have to rely on analogies, and historical analogues are very popular. Internet bubbles and tulips are just one example.

But lots of these analogies aren't very good. For example, I recently received an email from Softbook concerning my recent column on E-books. I was informed that several reputable business analysts, such as Jupiter, IDC and Anderson Consulting, have spent significant time on the category and predict an adoption rate similar to cellular phones.

Is this a good analogy? No. The adoption of cell phones is a natural extension of cordless phones, and for that matter thousands of years of attempts of people to communicate with each other over distance (smoke signals, telegraph, tin cans and string). Also, with cell phones no viable alternative technologies on the market for making phone calls (except, of course, pay phones). E-books have no direct historical analogue, other than people's interest and needs to read, plus they have many alternatives.

Of course, if you're committed to e-business built on anecdotes and groupthink, analogies will morph themselves into a perfect match.


Recently, I've heard the term "out-of-the-box" thinking more than ever before. Many companies now use it as part of their pitch. For example, CSC (CSC) uses it for their tag line "This is no time for conventional thinking."

When all you know is getting to market quickly, out-of-the-box thinking won't do unless you have a profound amount of prior training. Good training has another benefit. It allows you to see how many buzzwords used in Internet language are simply very old ideas in a new context. Take for instance the new idea of "viral marketing" which is simply an electronic version of the old "word of mouth" idea. Put the word "virtual" in front of most of the time-tested distribution ideas and you have all sorts of new fancy buzzwords.

I can't imagine world class sports figures working this way. They, too, compete in an incredibly fast-paced, uncertain environment). successful performance in competition requires having spent several years learning the fundamentals and often the history of the sport.

But it seems dot.coms focus more on out-of-the-box thinking than on the fundamentals of marketing.

Consider, for example, the continuing debate over media advertising. To create brand awareness, dot.coms spend millions on advertising. Most of the ads use clever, outrageous, or hip concepts, with attitude of course. What is prominent in the ad, however, is not the brand name.

Not sure? Look through the ads of your favorite Internet offline magazine and see how prominent the company names are relative to everything else in ads. No wonder people can't remember the names of the dot.coms that advertised on the Super Bowl.

Who can bother with the fundamentals when this is a New World, with new rules?

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image of Allen Weiss

Allen Weiss is founder, CEO, and Positioning Practice Lead at MarketingProfs. Over the years he has worked with companies such as Texas Instruments, Informix, Vanafi, and EMI Music Distribution to help them position their products defensively in a competitive environment. He is also the founder of Insight4Peace and the former director of Mindful USC.