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The Rise and Fall of the WWW Newton’s Third Law of Motion: "For every action, there is an equal and opposite reaction." I have always loved physics (and I'm sure that statement alone just turned off half the audience!). The thing I love most about physics is that it helps me define what's happening around me, and gain a better understanding of the world I live in. I also think almost any principle in physics has a bearing on any aspect of life, provided you're willing and able to look at things from a different perspective. My favorite law in the world of physics is the one quoted above - Newton’s Third Law of Motion. This quick little statement goes a long way to explaining the current state of the Internet economy. First There Was The Boom... Can you remember the good old days of the Internet economy? You know... 12 months ago or so when everyone was getting rich, or was already rich from their inflated stock evaluations? If you had the word "Internet" in your company plan, you were a golden child who could do no wrong. Companies like Yahoo!, eToys, CyberCash, and NBCi were flying high. All this boomtown-type growth came in a relatively short period of time - just a handful of years. A few people questioned this growth, and some businesses failed, but in general the Web was an economic gravy train. ...Then There Was The Bust Like the air coming out of a punctured balloon, the Internet hype came to a screeching halt. Suddenly, companies are going out of business. It seems as if no one in the Internet space is hiring. Stock portfolios that were once measured in the millions are now measured in the thousands. And anything even remotely connected to the Internet is seen as an instant failure. Enter: Newton So there are the two sides of the coin. And Newton’s Third Law once again rears its mighty head. You can’t have peaks without valleys. You can’t touch without being touched. You can’t be worth billions of dollars with vaporware and not have that paper money eventually go up in smoke. That's exactly what happened to the Internet economy. It had its amazing explosion, but eventually the world had to pay for that fast growth with a fast decline. Physics dictates that is the course of events and I think reality just played itself out. It's Not all Bad News The interesting thing about the recent implosion of the Internet world is that it should not be viewed as unhealthy. One of the beauties of our global economic system is that it will always come out of a sharp decline, and emerge stronger for the experience. The companies, ideas, and people that are the true leaders will find a way to thrive in this environment. Eventually the world will find a middle ground and there will be business to be done. The Internet will again become valuable (maybe not to the inflated extremes it was before) and companies will start to invest resources into the development and production of this medium. I think the world is amazed at the fury of the fall in the Internet economy. Most people have never seen riches made and lost this fast in their whole lives. They've never seen a true revolution take place in the economy, but this is what the Internet story is all about. A true revolution is awlays followed by a chaotic time, before the leaders emerge, and everything seems to be in turmoil. Remember high school history and what you learned about the French Revolution? At least the Internet revolution didn’t cause anyone to lose his or her head literally. So... What Do I Do Now? The Internet and the online business society it has produced are on a bad stretch right now. I don’t know exactly when the world will clear up and settle down. But since I lean on Newton’s Law to guide me, I would have to say it would be equal to the time it took for the Internet’s meteoric rise (about 5 years). This doesn’t mean you should just sit around and wait for this time to pass. You should adjust your plans to this environment and work to make yourself, your company, and your ideas stronger. If you can succeed in this down time you can succeed anytime. When people get going in the morning, start checking their email, and begin trying to make a nickel for the day, I don’t think Sir Isaac Newton ever passes through their mind. But hopefully he might, now that you've read this article. Maybe next time you see an apple fall from a tree you can think about what this means to the Internet economy and how you should approach your business. About the Author Tom Kuegler is currently General Partner of Porthos Consulting and has been on the executive staff or a founder of successful multiple Internet software or technology companies. He is also the author of all three editions of the highly acclaimed book, Web Advertising and Marketing. Tom has spent a great deal of time lecturing at colleges, seminars, companies, and conferences about the corporate benefits of utilizing interactive technologies, presenting at over 100 events. He can be reached at: kuegler@porthosconsulting.com All articles published on EthanCote.com are copyrighted by their respective author. They are not to be taken without the consent of the author. |
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