Don't Forget 'Business' in Business Model

Ann All

These are heady times to be an entrepreneur.

 

Thanks to the falling prices of technology -- cheaper storage and bandwidth, software-as-a-service, open source software and free or inexpensive Internet telephony -- it's become much less expensive to launch and operate a company.

 

As this CIO Today article points out, companies both big and small are also lowering the cost of innovation by opening up their application programming interfaces (APIs), among other means of harnessing the efforts of outside developers.

 

Though it's cheaper to run a company in Web 2.0 than it was in Web 1.0, entrepreneurs would do well to remember that they'll still need a business strategy -- and preferably one for the long haul.

 

In this strategy+business piece, several business professors warn against "getting big fast" and jockeying for an early mover advantage, two largely ineffective strategies pushed hard by venture capitalists in the dot-com days. Another no-no: "following the herd," a concept that appears to be popular with today's start-ups who want to create "the next YouTube."


 

It's better, they say, to test big ideas with small bets and to constantly test conventional wisdom. SMBs that don't do so risk becoming part of what some pundits are saying could become a tech meltdown similar to the one that occurred in 2000.



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