Yobie Benjamin has followed internet and e-commerce trends for longer than those terms have existed. As chief of global strategy for e-commerce and emerging technology at Ernst & Young in San Francisco, Benjamin works with dotcoms and Fortune 500 companies looking to excel on the net. He shares with CIO some of the myths and best practices of global e-commerce.
CIO: What are the biggest mistakes companies make when launching a global e- commerce operation?
BENJAMIN: Many people assign a VP for e-commerce, but that's not enough. I've seen it a dozen times: you have this VP, this bright star, he's so happy... the next thing you know he's scouring for resources. Success requires sincere investment from the highest level -- the chairman, CEO and major shareholders.
People ask, "Should I start an e-commerce division?" I say no. It creates a super class in the company because it's this cool, sexy thing -- and the rest of you can go about doing your same old business, by the way. You can't commit to e-commerce in pockets.
Then you have the dotcom startups that forget the discipline of how to become a real company. They want the IPO and once they get there, they lose interest.
How should companies approach the global marketplace?
With internet technology you're global from day one. Whether you're General Motors or a small antiques store in Kentucky, the day you go on the internet, everyone can see you. Your customers are no longer the people in your own community. The internet is the most unforgiving medium on the planet. The customer rules, and if you make a mistake they probably won't come back.
What about setting up foreign divisions?
Pursue partnerships rather than setting up a $10 million division in a new country. For instance, a lot of internet companies want to get into China. Instead of going in and building a whole new Yahoo.com, why not partner with China.com? Partner with the strongest player.
What kind of net businesses will thrive?
If you have a lot of eyeballs, you'll succeed. Community is crucial. Gaming.com is able to aggregate all the people who play games in the world. It's a defined audience and very loyal -- almost cultlike. What won't survive are people who say, "I'll build a great portal for kitchen supplies or food." Why would I go to a food portal? People can only eat so many things. There's no fanaticism about food compared with games.
I might have to disagree with you there.
The most fanatical areas -- research bears this out -- are health, parenting, games and finance. There's no stickiness to a wine.com.
You sure about that?
Buying wine is transactional, and the community of wine lovers is not large.
This story, "Yobie Benjamin" was originally published by CIO.