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Re-Thinking the Network Economy

Re-Thinking the Network Economy

Re-Thinking the Network Economy

The True Forces That Drive the Digital Marketplace

by Stan Liebowitz

Economist Liebowitz explains why the bust was inevitable, despite the declarations of many people — from respected academics and risk-conscious venture capitalists to stock brokers and investors — who should have known better. The theme of this summary, however, is not, “I told you so!” but rather “Here’s what will work.” The Internet does offer many incredible business opportunities, Liebowitz writes, as long as businesspeople and their advisors don’t ignore the traditional, fundamental concepts and strategies of commerce and economics. The laws of supply and demand still hold true. Economies of scale are still pertinent. The rules, in sum, still apply.

What You'll Learn

  • Internet companies must follow the same laws of economics as their bricks-and-mortar counterparts. The impact of laws, such as economies of scale, depends on the industry, not on whether a company is Internet-based.
  • The first-mover advantage is a false theory based on false evidence. Many Internet companies made the mistake of rushing to market with inferior products and services - and paid for it.
  • Not everything can be sold on the Internet. Internet retailing pioneers had grand ambitions, only to discover that for many products, nothing beats an old-fashioned, bricks-and-mortar store.
  • Customer service still counts. Internet companies may be able to sell information-based products, as long as the customer does not get better service from a human operator.
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