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CNN Sunday Morning

How to Make a Dot-Com Business Successful

Aired April 08, 2001 - 09:40   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: Well, we've heard about the demise of many dot-coms in recent weeks but e-business is still business. We have some tips for this type of success this morning.

From Washington, welcome Geoff Thompson, author of "E-business to Go: Insider Secrets to Make Your Small Business a Big Business On the Internet." He already launched three successful dot-coms.

Hi, Geoff.

GEOFF THOMPSON, AUTHOR, "E-BUSINESS TO GO": Good morning, Kyra, good to be with you.

PHILLIPS: Good to have you here. I mean what amazes me the most, I think, is all the dot-coms that went under yet you say it's possible to be very successful. Tell us about your success stories.

THOMPSON: Well, there's no question, we're in a volatile period of our economy right now. But here's the amazing thing -- there's really no better way and no better time to launch an e-business than by launching it with a lean and mean, what I call, online profit machine.

I've spoken to thousands of small businesses and entrepreneurs from coast-to-coast. And except for those venture-funded dot-coms that you mentioned, many average folks, individuals out of their homes to large organizations are succeeding where they didn't, mainly knowing who their customers are, refusing to spend a lot of money and then keeping money at the end of the day and becoming very profitable.

PHILLIPS: So what has done well on the Internet? Give me an example. What type of business is doing well?

THOMPSON: Yeah, most of the businesses that are writing success stories today are those that do pretty much the exact opposite of the way the venture-funded ones did. So instead of having a large general store online like ValueAmerica, which pretty much proved last Christmas that you couldn't sell computers and cheesecake at the same time, they're going with a narrower focus.

So let me contrast for example, Send.com, the venture-funded florist that burned through about $20 million in less than a year, couldn't make it work. But Aaron Benton out in Los Angeles, by kicking some boxes out of the back room of his retail florist, grossed three million and kept a million of that. So it's the narrow focused niche markets that are really proving to be winners.

PHILLIPS: So where do we begin?

THOMPSON: Well, you start by taking a step back and saying, who do I want to market to? One of the things that the venture-funded firms seem to be more focused on were stock options and getting Super Bowl commercials out there.

If you know who your customers are and you can narrowly focus on those, that's where the starting point is. Then figure out how you can become the best in delivering consistent, repeatable delivery even if it's just one product. For example, don't be just an online physical fitness store; follow the lead of the Stevenson brothers in Memphis, who didn't even offer treadmills online. They are the Treadmill Doctor -- narrow focus, treadmill parts.

PHILLIPS: Geoff Thompson. Once again, the book is "E-business To Go: Insider Secrets To Make Your Small Business A Big Business On The Internet." Thanks for the insight. Different twist this morning.

THOMPSON: Great to be with you, Kyra.

PHILLIPS: Thanks, Geoff.

NELSON: Who would have thunk (sic) it, right?

PHILLIPS: Exactly.

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