In the last few years, we all witnessed an explosion in the virtual world as people adopted the Internet as a tool for communication and transaction. Consequently, investors and entrepreneurs rushed to the negotiating table to start web companies. Deals were closed left and right without much due diligence because the opportunity cost of missing out on the Internet wave outweighed the risk of financing as many e-commerce projects as possible. Most of the funds raised went to marketing since brand building became the primary goal of every start-up. With so much money available, online companies tossed advertising funds into practically every corner of the globe.

The year 2000 marked a shift in this story with high profile start-ups going bust one by one. Overvaluation and sporadic 'marketing spend' failed to yield sustainable and attractive returns.

Today's financiers and e-entrepreneurs are much more cautious on fund-allocation. Nonetheless, marketing and business development remain as the two critical factors of success for today's budding e-businesses.


© 2000 Clyent Internet Architects