[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
RUL_net
May-June, 1996, Harvard Business Review. Two related
articles which examine c'punks interests -- proposed
business regulation of the Net; on-line security;
copyright; encryption; authentication; E-cash; electronic
commerce; protected communities to escape "frontier
anarchy," and more.
Executive summaries by HBR:
"Ruling the Net." Debora Spar and Jeffrey J. Bussgang
The Internet promises a radical new world of business. But
for many companies, it has yet to deliver. Although doing
business in cyberspace may be novel and exhilarating, it
can also be frustrating, confusing, and even unprofitable.
Debora Spar and Jeffrey Bussgang argue that the problems
companies face have little to do with a lack of technology
or imagination. Their problems stem instead from a lack of
rules. Without the order that rules create, business cannot
be conducted.
The authors explain why the informal rules that have
developed on the Internet since the 1960s are no longer
sufficient. Businesses thinking of allowing millions of
dollars of transactions to occur on the wide-open Net need
specific assurances. They require clear definitions of
property rights, a safe and useful means of exchange, and
a way to locate and punish violators of on-line rules.
The authors believe that the key to commerce on the
Internet lies in the creation of managed on-line
communities. Such communities can be formed by service
providers -- entities that will restrict on-line options,
fine-tune offerings to match a select group of users, and
provide some means of recourse in cases of fraud or abuse.
Under those conditions, they will draw new companies
on-line and increase the productivity of those already
there. And, say the authors, the rewards for service
providers will be substantial: Companies that make the
rules on the Internet's emerging frontier have the
opportunity to reap the greatest profits. [40 kb]
"The Real Value of On-Line Communities." Arthur Armstrong
and John Hagel III
The notion of community has been at the heart of the
Internet since its early days, when scientists used it to
share data, collaborate on research, and exchange messages.
But how can businesses best use its community-building
capabilities? Not merely by putting their products or
services on-line, the authors contend. Real value will come
from providing people with the ability to interact with one
another -- from satisfying their multiple social needs as
well as their commercial needs. Companies that create
strong on-line communities will command customer loyalty to
a degree hitherto undreamed of and, consequently, will
generate strong economic returns.
The authors present four different types of community:
communities of transaction, interest, fantasy, and
relationship. Examples of each type already can be found on
the Internet or through on-line services, but the
successful community of the future will incorporate all
four -- or as many as possible. As for economic value, the
authors see four ways for a company to generate returns:
through usage fees, content fees, transactions and
advertising, and synergies with other parts of its
business.
In the near future, new business definitions may emerge
around the notion of owning a specific customer segment
across the full range of its interests and needs; owning
specific products and services may no longer be so
important. The authors urge businesses marketing to
consumers to make the small investment required to "buy an
option" on electronic communities in order to understand
both their potential value and the radical changes they may
cause. [33 kb]
RUL_net (for the 2, in 4 parts)
-----
Reprints of "Ruling," No. 96309 and "Real Value," No. 96301
may be ordered from HBR for $5.00 each by email to:
[email protected]