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A Report of an Evening with Kinsley, Negroponte, Polese, Bateson, Janney & Lanier
at Hartford's Bushnell Memorial

The "E-Gang"
and Twelve Rules of Digital Business
- Doug Simpson 7/23/99

In "The E-gang," the cover article in the July 26 issue, Forbes features this year's list of the New Digital Entrepreneurs, the people "reinventing the rules of business, customer by customer, new issue by new issue." 

They also list what they told Forbes are the rules that they live by:

1)  Trade products for loyalty.
In the Internet Age, great companies will be based not on products but on deep relationships with customers, and the more you give customers up front, the more loyal -- and eventually lucrative -- they will be.  William Gross, Idealab.

2)  Let the community run your business.
The best Net successes are not about products, but about creating communities where users can shape the business to their needs;  managing such a community requires entirely different skills and procedures than does managing a traditional business.  Margaret Whitman, Ebay.

3)  You should be in communications.
By assisting their clients to better communicate with each other and their customers, a company can build a steady stream of revenue.  David Hayden, Critical Path.

4)  To start a revolution, give up control.
"Open source" systems, of which the Linux operating system is the best example, allows its own users to develop and extend the system, enabling rapid development.  Linus Torvalds, Linux Movement.

5)  Let technology outrun the law.
Much of the technology of the Net has made traditional legal rules, like music copyrights, almost impossible to enforce. Trying to hold back change while waiting for the legal system to adapt may counterproductive and futile.  Eugene Hoffman,

6)  The power lies with the newcomers.
At established firms, new ideas are seen as risky and too often reworked to fit with existing products.  Managers in such companies may use traditional strategies that don't work with the new environment.  Those traits may be disabling on the Net.  Donna Dubinsky, Handspring.

7)  Don't just quit the club -- defy it.
New pioneers in Net businesses often come from positions of success and power in traditional institutions, and set up processes that wholly replace the institutions from which they came.  William Hambrecht, W.R. Hambrecht.

8)  Reinvent your startup.
Find a middle ground between a dictatorship and the slow decision making of consensus building.  Robert Knowling, Covad Communications.

9)  Put strategy before technology.
What's important about the Net is not technology: it is creating a clear vision of what a company is trying to accomplish for its customers.  Eric Brewer, Inktomi.

10)  Make your technology invisible.
Business should not be about the next high-tech widget, but about making things work.  Chris McCleary, USInternetworking.

11)  Create a scene.
Cultivate your customers;  they may also be your investors.  Startups have to start the public relations push early, creating a brand while creating products.  Pamela Alexander, Alexander Ogilvy P.R.

12)  Go public first, make money later.
Is the Internet just a bubble? No, the next trend, business selling Net-based services to other business, will dwarf the revenues of the past four years. Mary Meeker, Morgan Stanley Dean Witter.

The full article, on Forbes Online, is at:

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The Net offers tremendous opportunities for those who can appreciate the "increasing returns" economics of networks, the power of community, and its opportunity to eliminate the costs of intermediaries and manual hand-offs in the distribution chain.

This focus page will be archived at nnarc-12rules.html and may be edited in the future. Check in at Net Nuggets from time to time. The information contained herein is believed to come from reliable sources, but no warranty of accuracy is expressed or implied. The author may own shares of securities mentioned in this focus and that were purchased on the open market. This article is for information only and is neither an offer to buy or sell a security and is not intended to constitute financial or legal advice.

If you have written an original, objective essay or business analysis that you'd like to share, please share it via email with me or subscribe to the email forum and post it there. Subscription is free, the member list is unpublished, and EGroups protects against spam.

The Innovator's Dilemma : When New Technologies Cause Great Firms to Fail
by Clayton M. Christensen

Hardcover - 256 pages (June 1997)
Avg. Customer Review: 5 out of 5 stars

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