Silicon Valley Watcher - Former FT journalist Tom Foremski reporting from the intersection of technology and media

These are the new dotcoms of the new rules economy...

Posted by Tom Foremski - February 2, 2005

by Tom Foremski for SiliconValleyWatcher.com

There is a new kind of dotcom company that will emerge during Internet 2.0—this current and very distinct emerging phase of the Internet. I’m not sure what to call the new dotcom but I know what it is. It is a company that plays by the emerging new rules of the economy. New-rules companies will decimate established companies in many/most sectors but at varying rates.

(This “new-rules enterprise” concept is something that I will write about as a series of essays on the “new-rules economy.” I’d like to hear back from you, my loyal readers, if you agree with my logic and maybe we can even turn it into a group project that further defines new-rules business models.)

Here are some of the characteristics of a newrules enterprise:

The first rule of the newrules enterprise is that it is new, brand spanking new.

The second rule is it is staffed by a small group of executives that know the most efficient business processes for what the venture will produce.

The third rule is to stick as much open source/industry platform software and hardware onto the business processes as you can, creating a highly automated highly-efficient business venture with virtually free IT.

The fourth rule is to use as much web services IT as possible.

The fifth rule is you do not use venture capital--you and four others throw your credit cards into a bowl and work free for six-months to create the nucleus of the venture. It’s an atomic ventures world. It’s the $40k startup. When IT, and other infrastructure costs are so cheap and available to everyone then knowledge capital becomes the competitive differentiator—who is on your team.

The sixth rule is don’t put anybody on the payroll unless you absolutely have to.

The seventh rule is the venture does not go public, it stays private. It will have private investors/owners and those investors would be paid in dividends. By staying private newrules enterprises are a blackbox corporation. Competitors cannot peek inside because it is private and thus cannot benchmark their business model against it.

The eighth rule of the newrules enterprise is that there will be a lot of intellectual property that is not patented but is kept secret.

The ninth rule is don’t put anybody on the payroll unless you absolutely have to.

The tenth rule, and the most important, is that the newrules enterprise uses blogging techniques and technologies to market research/help produce and sell products and services that near-perfectly match the needs of their customer communities.

. . .

There are more rules of the newrules enterprise…but, I think you probably see what all this means and will lead to…such as: no more need for VC funds and investment bankers (except to balance your checkbook and shine your Bentley.)

I’ll step through the advantages of newrules versus old rules enterprises in the next part of this essay....Also, how the enterprise software market, in its current form, will disappear because its enterprise customers will flail and fail against swarms of newrules ventures.

rck 1041

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