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Internet Strategies for the Small Business Investor: 7 New Rules of Play

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Integration specialist and Internet consultant Laura Brown defines seven new rules of play for the small investor seeking to enter the Internet arena.

Integration specialist and Internet consultant Laura Brown defines seven new rules of play for the small investor seeking to enter the Internet arena.

Internet Strategies for the Small Business Investor: 7 New Rules of Play

By Laura Brown

Small business and individual investors must redefine the rules of play, if they hope to benefit from the many strengths of the Internet. Since many Internet strategists assume a starting price of $1-2 million per year to place a business on the web (see net.gain by John Hagel and Arthur G. Armstrong, or the Corporate Internet Planning Guide by Richard J. Gascoyne and Koray Ozcubukcu) and follow-on costs of up to $15 million are considered reasonable, small investors must find ways to turn their weaknesses into strengths.

As in the competitive approach that David B. Yoffie and Michael A. Cusumano called "judo strategy" in the January-February 1999 issue of Harvard Business Review, the small business or start-up can turn their opponents' resources, strengths, and size against them. Start-ups can be flexible, quick, and can use the Internet to level the playing field. They can use "just in time" and "just enough" strategies to prevent wasting limited resources on premature expenditures of time and money. And they can seek partners and allies for the strength of interdependency between equals. What emerges is a new set of rules for Internet start-ups:

Rule #1: Think big, but start small and build, learning as you go

Rule #2: Test the market, then capitalize on findings

Rule #3: Develop just enough to achieve your goals

Rule #4: Develop iteratively, testing and refining between iterations

Rule #5: Use what's at hand, before investing in new tools

Rule #6: Develop partners, allies, and networks

Rule #7: Take advantage of the unique strengths of the medium

Rule #1: Think big, but start small and build, learning as you go

What I've learned is that you need to shift your way of thinking back and forth from big-business "corporate-think" to small-business "net-think". Or, if you like, from big-business hierarchical to small-business relational. Shifting back and forth means staying in the middle, and it allows us to make a departure from the "all or nothing" way of planning.

We have to learn to take the next small step, without knowing what all the steps will be in advance. In project terms, this means planning for the next 30-90 days, and adjusting as you go. It means changing the way you think about commitment and investment. You make small investments, and see how they work, then you adjust, and make another small investment. The trick, I think, is holding your vision and the larger commitment to seeing it through, but letting the form of it shift and grow as you go. This is how iterative market research is done.

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