From .Com to .Profit: Inventing Business Models That Deliver Value and Profit (Wiley Audio)

The authors discuss six "value imperatives," which they feel successful Internet companies must have in their business models. These imperatives are:

1) "Perfect Your Logistics"

2) "Cultivate Your long-term relationships"

3) "Harmonize your channels [of distribution] on behalf of the customer"

4) "Build A Power Brand"

5) "Transform Your Capital And Cost Structures"

6) "Become a value-adding intermediary"

The book devotes a chapter to each topic. One of my favorite chapters was "Perfect Your Logistics," where Earle and Keen give many examples of how companies have used the Internet to save money and significantly reduce their operating costs. The Internet allows companies to be more efficient.

Earle and Keen say that improvements in logistics will be a huge advantage of the Internet. While consumer-based Internet companies have captured the most public awareness, the biggest benefit of the Internet to businesses will be greatly increased efficiency in doing mundane things, such as ordering paper clips. Business-to-business transactions will probably create more savings and opportunities than business-to-consumer transactions.

"From .com to .profit" does an excellent job discussing business-to-business hubs and portals (web sites where businesses can come to broker supplies and services).

The book's discussions of branding, value-added intermediation, partnerships, and relationship building are also excellent.

I took off a star for some silly statements about capital structure. Earle and Keen write that the Internet has created a "capital revolution," and if a company can show a "Price/Vision" premium, investors will continue to bid up the price on the company's Internet stock. Wanna bet? The Internet has not created a "capital revolution." It has created an investment mania.

Earle and Keen go on to glibly write, "There is no correlation over the longer term between market value and any standard accounting measure of profitability. ..." Ah, can we have some evidence, please? This seems an incredibly silly remark to make without supporting evidence! Unprofitable companies over the long-term tend to disappear from the stock market. Some apparel companies do manage to limp along for decades without ever being profitable. But, such companies are hardly a good investment.

The authors observe that once you have highly-valued stock, it can be used as currency to acquire intellectual capital and other assets of real worth. This is true. And, as Earle and Keen point out, not having highly-valued shares to trade for intellectual capital is a disadvantage of privately-held companies. But, let's not legitimize funny money as a way to build a business!

Overall, "From .com to .profit" offers a lot of great insight into business models and into what separates customer-focused, successful business operations from less successful operations, making it worth a read.

Peter Hupalo, author of "Thinking Like An Entrepreneur"


Good discussion of eBusiness   January 24, 2001
 5 out of 6 found this review helpful

Dot-profit provides a good review of the economics and fundamentals of electronic commmerce. This is particularly needed given the state of the market. While the book is good for understanding the sources of value and benefit found in eCommerce.

The book while strong on rational does not provide enough detail to implement. I like Peter's books so I read his other books on eCommerce. I found the eProcess Edge out at about the same time as a good refernece for building what it takes to move from dot-com to dot-profit. Reading both has given me the high level business strategy and the business operations requirements needed to act on the advice.


Solid Introduction to Creating E-Business Models   September 12, 2000
 46 out of 52 found this review helpful

The authors tell us that the purpose of the book is to answer this question: "What can business do -- and do now -- to set priorities and competitive direction for being on the Web so as to provide value to customers and generate profits at the same time?" In answering this question, they have a point of view. "It's not transactions or price that create the value that gets customers coming back to a seller. It's relationships, collaboration, and community."

This book is for people who have not thought about what elements must be present in a an e-business model in order to ensure profitability, sustainability, and success. If you company is starting its first e-business initiative, this book could save you some lost time and money.

If you have done this thinking, chances are that you will not learn much from this book. I found no concepts that I had not read in at least 5 other books about e-business success. The microeconomic analysis of creating a profitable business over time was also incomplete in that it did not pay enough attention to the role of speeding up progress, reducing start-up losses, and creating permanent advantages. I graded the book down one star for these missing elements.

The book focuses on six areas for progress (value drivers, in the parlance of the book), and provides an imperative for each:

1. Relationships (cultivate your long-term customer relationships)

2. Logistics (perfect your logistics)

3. Branding (build a power brand)

4. Channels (harmonize your channels on behalf of the customer)

5. Intermediaries (become a value-adding intermediary or use one)

6. Financial Dynamics (transform your capital and cost situations)

Each value driver and imperative is detailed with check lists to consider and useful, contemporary examples that you can check on on the Web for yourself.

A weakness of the book is that it pushes a bit too hard on the idea of building relationships as the primary way to create profit. Certainly, relationships will always be important, but I suspect that most successes in the future will be built on superior, trustworthy service rather than on relationships per se. The book is also too quick to abandon being the low-cost provider of superior products and services as a valid, broadly-available business model. With specialization, many will be able to achieve that. Further, the book is not imaginative enough in thinking of new ways to add value to customers that cannot be done except on-line.

On the other hand, it is the best book I have read for explaining the importance of having a carefully considered e-business model, and providing a structure for examining the options.

In the final chapter, the authors look at new trends in technology (especially wireless applications) that will affect how you help customers.

The authors have excellent credentials. Nick Earle is the head of HP's E-Services.Solutions group, and Peter Keen has written widely on business and the Internet. The final chapter also draws on the thinking of Rajiv Gupta, general manager of HP's E-Speech operation. The quality of their backgrounds show in the clear articulation of their points of view and the examples they choose.

After you finish this book, ask yourself the question of how you can create advantages for your business that customers feel are very important and can never be overcome by competitors. And don't limit yourself to on-line solutions to get there. When you come up with a solution, you'll be off to a good start in creating a superior business model.