It isn't possible to understand the Internet

Another paradox of the Information Age is that you can only begin to understand the Internet once you realise that the Internet is impossible to understand. This is true of any complex dynamic system: they are all impossible to understand in any logical structured way. But, just knowing this is knowledge itself, valuable knowledge, telling you that you cannot base any sensible strategy on trying to work out what a dynamic system is going to do next: especially if it is in a state of chaotic activity. This applies to the Internet and to any e-business or e-commerce activity involving the fast changing world of digital communications. Just being aware of this though, puts you at an advantage to anyone else who thinks they can base a strategy on anticipating what they think the next phase of Internet development will lead to.

The value of this understanding is that it allows you to plan a strategy expecting unpredictable and unknowable changes to occur. Like the professional poker player, playing along with the player who has aces back to back, it gets you to play the kind of game that works by taking advantage of any change when it comes along. This is the classic strategy of the entrepreneur, who will anticipate change and has a strategy to be in the right place at the right time to take advantage. The first move in this strategy is always to just get in the game: without committing yourself to any major investment in time or money.

This is well exampled by Dai Williams, who describes, in another post to a table in the virtual cafe, how a company lost out by playing an "aces back to back" game instead of the open play that was needed at the time.

...the IT organisation in question historically focused on large companies and government bodies as customers. They generally respond to requests for tender (or similar documents) and then go through a (very) lengthy - in effort if not always in time - bid process, even if the net result is to qualify the opportunity out. This process inevitable means high cost of sale; hence they need large and profitable deals to come out of it in order to carry this cost of sales. This means that they cannot afford to bid for small to medium pieces of work (either for small to medium companies or less significant pieces of work for large companies).

This was illustrated a couple of years ago when the company withdrew support for it's web development group. Because website projects were generally small in themselves, they could not be done profitably with all the sales overhead. Rather than apply different processes to this class of work, the company in question decided not to pursue this type of work. Unfortunately today most e-commerce opportunities involve, to a greater or lesser extent, a website element. Furthermore, many e-commerce projects are actually run as extensions to an initial website project and hence often awarded to the company that ran the initial (small) project. The company in question is now desperate to win "e-commerce" projects, they still have no useful web based collateral (i.e. a portfolio of past projects) and can't see that they need to have website development capability.

Anyway, to return to my original point, the response of these large IT companies to this problem has been logical enough though singularly unhelpful to the development of e-commerce. They have started to talk up the issues around what is fundamentally a very simple opportunity for most companies. Frequent reports highlight the need for scalability, security and total integration (all laudable aims incidentally) and conclude that anyone with a budget under $1 million for their e-com site is being naïve and simplistic.

Companies that offer to do it cheaper are painted as fly-by-night, unprofessional and probably unwashed. Unfortunately, this description appeals to many of the corporate decision makers who still don't really trust the ideas and ideals that the net represents and resent the fact that they are being harangued as too slow to react. This then becomes a self-fulfilling prophecy as the large IT companies wheel out statistics showing that large corporates ARE now spending $1 million+ on their Websites - extra reasons for mocking a smaller budget.

This example may sound extreme but is not untypical. When Industrial Age corporate managers are used to using money and professionalism to defeat problems, they are totally at a loss when it comes to the fast moving chaotic world of the Internet and e-business. They make big mistakes and often compound these mistakes by trying to get a result though throwing even more money and resources at the problems. They then get the kind of service that preys on this kind of mentality and it becomes, too often, a case of the blind leading the blind into an expensive fiasco.