My first piece of advice is simple: treat the Internet as an opportunity for your business — rather than as a business opportunity, in and of itself.

The fact is, there’s more mileage in using the Internet to better execute your existing strategy than there is in treating it as an entirely new business model.

The Internet as a business opportunity

We don’t need to look far to find examples of businesses for which the medium *is* the business.

Yahoo!, eBay, e*trade and are obvious examples. Here in Australia we have dStore, and Wine Planet. These businesses use the Internet as the source of both their value proposition and their competitive advantage. (Obviously, without the Internet, none of these businesses would exist.)

Now this isn’t the first time in history that businesses have sprung into existence around a distribution channel. Catalogue companies owe their existence to the postal system. And, for multi-level marketing (MLM) companies, the distribution channel (direct sales) is certainly the business.

The Internet as an opportunity for your business

So do traditional businesses have to emulate the business models of the dot coms in order to exploit the obvious potential of the Internet?

Definitely not! Just think, your business probably benefits from the postal system — even though you’re not a catalogue company — and from direct sales — even though you’re not a multi-level marketer.

The trick is to find ways to use the Internet to better deliver on your existing value proposition — and to strengthen your existing competitive advantage.

If the relationship you have with your clients (and potential clients) is the source of your competitive advantage (and if you are not a cost or technology leader, it should be) the Internet provides you with a number of opportunities to develop greater market intimacy.

E-mail, which is surely the Internet’s most powerful capability, enables you to communicate with clients and potential clients as often as you can think of something relevant to say — absolutely free of charge!

And the Web enables you to give clients and potential clients remote access to your organisation’s valuable knowledge base (articles, case studies, FAQs, etc) — without requiring you to incur any distribution costs.

Getting it wrong!

You should avoid using the Internet to commoditise your service offering. Or, in other words, to marginalise the importance or your client relationships.

The danger is that the commoditisation of your service will damage your existing competitive advantage — and open you to direct competition from organisations that can compete more effectively in a commoditised marketplace (e.g. the dot coms).

For example, I think that it would be a mistake for a boutique recruitment agency to attempt to create an online employment market (and quite a few have done this). The dot coms ( and — as well as News Ltd’s CareerOne — have an unassailable lead in the online recruitment market. In teaching its clients to shop for recruits online, our hypothetical recruitment agency would be delivering its clients into the jaws of hungry lions.

This agency would be better off using the Internet to provide its clients with a steady supply of information on how to best recruit, train, manage and retain employees. It could also make resources available online for clients (e.g. customised employment contracts, letters of engagement, performance appraisal documentation, and so on).

These services would help clients to appreciate and value the experience and the skills of recruitment consultants. And to place value in an enduring relationship with this recruitment agency.