Writing an article for one of my other blogs made me think of some of the simple but powerful truths concerning online marketing.
Most of us know the relatively short history of the Internet, and what some may call the "irrational exhuberance" of the days when the mantra "the Internet changes everything" was thrown around like someone really knew it. The dotcom bomb took care of that ignorance, as it helped people learn there are certain principles that will always apply no matter where technology goes as far as it relates to business.
Andy Grove, the former CEO of Intel (INTC) said concerning this type of thinking: "The Internet doesn't change everything. It doesn't change supply and demand. It doesn't magically allow you to build businesses by turning investors' money into operating expenses indefinitely. The money always runs out eventually - the Internet doesn't change that, as we have seen."
He's absolutely correct in this.
On the other hand, let's look at the music industry and how its slumbering during the biggest change since it starting putting music on devices to be listened to, have caused it to come crashing to the ground. It's possible that it may never go back to the success it had in the days before online downloadable music was offered.
How do these two situations reconcile themselves for those wanting to build online businesses?
First, it may sound odd, but people still try to through out the idiotic notion that you can build a business online that someone doesn't need to pay its bills or make money. It's said in different ways, but the underlying premise is the "build it and they will come" mentality. For most online marketers this will never be true.
We've still got to have a product or service people want. That never changes. We still must price our products and services correctly to make sales. We can't just use investment money to pay for operations - as Grove said - indefinitely.
Yet, what do we say about the way the music industry held back and made some of the biggest mistakes of their history?
It wasn't that the foundation of the music industry was changing - that will always be the same - it was the distribution system that was changing. They made the old mistake of using their financial resources to prop up the way they made money in the past, at the cost of going ahead into the future. A lot of businesses have been making these types of mistakes for a long time.
How should we look at online marketing then? We must understand that the principles of business will never change. We must take in more than we operationally pay out. At the same time, we need to understand that life and people continually change, and we can't overly protect what we are doing today at the expense of where future growth for the business will be.
When it comes right down to it, we have to discern the difference between that which never can change, and that which will always be in a state of flux. Those who do this right will be the big winners in the chosen markets they serve.
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