The Entrepreneurial Web [Paperback]

Peter Small (Author)

Book Description

Publication Date: January 15, 2000 | Series: FT.com

Overwhelming evidence is that the conventional corporate mind is not up to the problem of mastering the world of e-commerce. They have had sufficient time to demonstrate that their know-how can result in success. They haven't come up with the goods. The corporate mind formed in the twentieth century is inappropriate for dealing with the Internet in the twenty-first. In the complex, fast-changing world of the web, sudden and dramatic change cannot be predicted. The Entrepreneurial Web looks at how ideas should be allowed to evolve and respond to changes in order to succeed in this environment - something which large corporate concerns have so far ignored to their cost. About The Author Originally a systems design engineer, trained to link scientists and engineers at the Royal Radar Establishment at Great Malvern Worcestershire, Peter Small, opted out of a conventional career to engage in a variety of interesting entrepreneurial ventures. He opened one of the first discotheques in the UK, and one of the first gaming clubs, when gaming was made legal in 1960's. He was the first to run a computer dating agency and at one time was a professional poker player. He was part of the Carnaby Street scene in the 1970's owning the then famous "Flea Market". In the 1980's he was part of the London fashion scene with a design studio in Berwick Street; shops in Kensington, Chelsea and Oxford Street. After writing a training course on investment strategy, he became interested in game theory and evolutionary biology. These were the subjects of the cult, classic CD-ROM "How God Makes God" which he produced after becoming interested in multimedia in 1990's. This led to the writing of two ground breaking, computer programming books on object oriented design for multimedia: "Lingo Sorcery" and "Magical A-Life Avatars". His current interested in e-commerce is a culmination of his combined experiences in technology and entrepreneurial activities.

Editorial Reviews

From the Inside Flap

When the spreadsheet had to go In 1979, I bought an Apple II computer and a VisiCalc spreadsheet program. I'd bought them on the advice of my accountant to enable me to create a business plan: a business plan that was to get me a $150,000 loan. My first impression had been that this system appeared to be some kind of elaborate calculator that could make calculations and lay out all the results in neat, orderly tables. But I hadn't been working on the business plan for very long before I realized that a computer, with a spreadsheet program, had the potential to be something far more sophisticated than a calculator: it could provide a modelling environment for any kind of business idea I could come up with. I also learned - by losing all of the $150,000 loan - that spreadsheet modelling is fallible. It can handle situations where conditions are reasonably stable and predictable, but a model can be rendered totally useless by unknowns or unexpected turns of events. Despite this serious limitation, spreadsheets can still provide an invaluable aid to business planning as long as care is taken to keep away from situations that are totally unpredictable. For nearly 15 years, a computer and a spreadsheet program became an indispensable part of my business life; more than just tools, they became an extension to my brain. Whatever business ideas came into my mind, I could model them on the spreadsheet, try out different possibilities, test the risks, manipulate the cash flows. In 1993, I discovered the Internet. At first, it seemed no more than a social recreation, but as I began to explore the various news groups and list serve discussion forums it became apparent that this was far more than simply a social environment: it was a rich source of valuable information and business contacts. This had no real impact on me until the advent of the World Wide Web, then it dawned upon me that this was the start of a completely new way of doing business - with virtually limitless possibilities. There was only one snag. This new environment was totally unpredictable: full of unknowns, unknowables and unexpected changes. In short, it tendered my spreadsheet program completely and utterly useless. For a businessman, this is on a par with suddenly becoming blind. Business is about planning and thinking ahead, yet here was a business environment that precluded the use of any predictive modelling. How then, with the obvious potential of the Internet and the World Wide Web, would it be possible to create a sensible business strategy in order to become a successful competitor in this new communication environment? It was an intriguing challenge. A totally new world Until I entered the digital world of electronic communications, I thought I'd learned to become a fairly shrewd and capable businessman. I'd joined the very first rush into the new technological revolution when CD-ROMs first came out. I got badly burned. The world of computers and digital communications was like nothing else I'd ever encountered before. There was too much change and too much information to deal with. I seemed to be back to square one, where I'd have to start learning how to do business all over again - from scratch. As fast as I'd buy a piece of hardware, or a software application program, something new would come along and cause it to become out of date or redundant altogether. It wasn't simply the cost in money that was the problem, it was the time needed to get my head around the new dimensions that each new change introduced. Before very long I became totally confused because the amount I was needing to know and learn was spinning out of control. What I felt I had to do was to get off of the giddy roundabout of continuous change, step back and start from basics. Fortunately, my educational background had been science and technology so I could get to grips with the theoretical issues. My specialities were electronic control mechanisms and systems theory; to these I'd added game theory and evolutionary biology. Mixed with a professional knowledge of marketing, finance and investment, these had seen me through many varied and exotic entrepreneurial adventures. I figured that this background was about as good as any for trying to find out what this new world of digital technology was really all about. First I had to get at the very core of computer technology. This led to a five-year flirtation with the arcane world of computer programming. At the end of this time I began to get a glimmer of what this whole technological revolution was about and how it integrated with the everyday world of people. In those five years, I produced two books that were a reflection of my learning process. The first explained the essence and power of computer programming: Lingo Sorcery - the magic of lists, objects and intelligent agents. The second book, Magical A-Life Avatars - a new paradigm for the Internet, expanded on the first, to explore how a programming environment in a computer memory could be used almost like an extension to the human brain - allowing humans to communicate more efficiently with each other. By the time I'd got to grips with the fundamental concepts of computer and digital communication technology, the World Wide Web had exploded into being. For me this was especially exciting because I could combine my 20 years of entrepreneurial experience with the ten years I'd spent on the technological issues. As I started to look around at what other people were doing, none of it was making any sense. I found a world being run by technologists, who were creating all kinds of clever and amusing tricks, but hardly any of it relating to the fundamental principles of business and commerce. It was as if the whole world of digital communication had been given over to artists and programmers to play games - impressing each other with their cleverness. This wasn't so surprising really because the people with the expertise to create this new technological environment had spent so much time acquiring the necessary knowledge and skills that they simply hadn't spent enough time in the real world of commerce to learn how to apply it efficiently. Usually, commercial guidance for technological advance is provided by astute entrepreneurs and professional managers who have the knowledge, experience and business acumen to prevent effort being wasted on impractical solutions. Unfortunately, most hard headed business people were so completely lost in the technology that they were either ignoring it altogether or handing over the reins to technologists who were, in the main, commercially naive. Most perplexing of all was the gold rush mentality of investors. As I'd spent some time in the City of London writing a correspondence course in investment finance, I had a fair understanding of the basics of investments and what I observed was not investment in any sense of the word; it was out and out speculation with values being placed upon Internet-based, start-up businesses without any regard for fundamental values. Investment valuations seemed to be anticipating the most wildly optimistic scenarios with no attempt at all to discount any of the downside risks or the emergence of competition. It is at such times, when fools rush in, that vast fortunes can be made and lost. I read everything I could lay my hands on. I subscribed to dozens of Internet discussion forums and newsletter services. I studied multimedia techniques, Web site design technology, server side hardware and software solutions, back-end technology. At every turn, I ran into new chasms of information and `essential to know' knowledge. I looked at thousands of Web sites, studied many emerging Internet business strategies. For two years I ran around like a headless chicken, climbing one learning curve after another, drowning in a sea of information and getting nowhere. Then the penny dropped. It wasn't about learning and technology at all. Neither was it about planning. It was about communication and game playing. It wasn't necessary to know everything because that was impossible. It was about being able to cope with the uncertainties and the complexities better than others. This needed a radically different way of thinking from the spreadsheet mentality I'd acquired in the world of bricks and mortar. What the book is about and who it is for When I first started to write this book, the publisher and the readers of the draft chapters would ask me: `What is the target audience? Who are you writing this book for?' They were always a bit disappointed when I told them that the target audience was me and I was writing the book for myself. But it was perfectly true. Writing this book gave me the opportunity to gather together all my thoughts from the experiences and knowledge I'd gained over the previous ten years of trying to understand what the digital world was all about. What made my approach different from many others though is that the ten years I'd spent in the digital world came on top of over 20 years of experience I'd had as a pragmatic entrepreneur. Contrary to the stereotyped image, the entrepreneur is just as much a skilled practitioner as any technical expert and like any specialty profession the expertise is acquired as a result of much practical experience. Unlike conventional specialists and technicians though, an entrepreneur has to avoid most technicalities and detail in order to be able to concentrate on more abstract issues - those involved with the higher levels of system functioning and organization. This is a woolly world where there are no logical answers to problems, no boiler plate solutions. It is a world of change and competition; where success isn't about knowing all the right answers but about making more intelligent guesses than others. There are innumerable magazine articles and books written about digital technology, e-business and e-commerce. This published information is dwarfed by the amount of information available on the Web. It's impossible to even estimate the extent of all this knowledge let alone absorb it. What makes things even worse is that so much of the information is contradictory. Seemingly, there are few general agreements on any issues. As if that isn't bad enough, technology, techniques and recommended business strategies are changing so fast that whatever is read is almost always certain to be out of date by the time anyone gets around to understanding and applying it. To my entrepreneurial mind, it seemed common sense that nobody could .ever hope to understand what the world of digital communication is about by delving into this morass of unstable information. The only route to understanding would have to come through creating a practical working model in your mind that could be used to rise above the detail. Only in this way would it be possible to make pragmatic decisions. Every successful entrepreneur I've ever known has worked this way. They rise above the detail which they leave to hired helpers - in order to concentrate on a broader issues. From this high-level view of the world, they create simple, rule of thumb formulae that can be used as the basis for decision making. These loose strategies then become the engines for their success. This book is about trying to create such an engine: an abstract model that can be used to guide decision making in the seemingly incomprehensible world of digital technology. This book is about concepts and strategies Entrepreneurs never use books and published information as step-by-step guides to success. They are more interested in looking for abstract ideas and concepts they can apply in novel ways. 'How to' books are of little value because if a technique has been published it means somebody else has done it before. To do the same as someone else is to play catch up, a game for technologists not entrepreneurs. Entrepreneurs leave the studying of instructional knowledge to their manager, while they concentrate on adapting and developing concepts in new and unexplored territories. Developing ideas is seldom something that can be done in isolation. The human mind is not omniscient, there are very large gaps in anyone's knowledge and nobody can avoid having biases or limitations due to things they do not know very well or are not aware of at all. This is particularly true with anything involving the digital world of e-business and e-commerce, where the horizon is continuously expanding at breakneck speed in all directions. Entrepreneurs can offset their lack of knowledge and counteract their biases by sharing ideas with others (it is usually the mark of a novice when they want to keep ideas to themselves). This airing of ideas can expose fallacies, reveal lack of knowledge, prompt additional information and promote fresh thinking. In the world of bricks and mortar, I'd often used cafes, restaurants, wine bars, pubs and clubs for this purpose. It is surprising how effectively informal discussions in a relaxing, social environment can help to develop and refine new ideas. It seemed sensible then that I should use such a method to write this book. If I could gather together a suitably representative group of experts and specialists who were involved in all kinds of different aspects of the digital world, perhaps I could get them to look over my shoulder as I was writing. Better still, if I could get them all together in a cafe, and get them to read each chapter as I wrote it, they could then discuss the content between them and come up with all kinds of comment, criticism and suggestions. Being all together, they could bounce ideas off of each other, create a synergy that would be inspirational. Fortunately, the technical programming books I'd written had been modestly successful. The spin-off from this had been that it had brought me into personal contact with very many people from all over the world who in various ways had become involved in different aspects of e-business and e-commerce. It occurred to me that this might be an ideal pool of knowledge to draw upon to help me with the writing of the book. The trick would be to bring them all together to sit in a cafe with me, to read and discuss every chapter as I wrote it. In the physical world this would be impossible, but in the magical world of the Internet this ideal scenario was a practical reality. First I emailed about 400 of my contacts. I explained I was writing a book on e-commerce and asked if they would like to read and comment on the chapters. About 50 of them responded positively. Here is the email I sent to each of them:

Thank you for offering to read and comment on the chapters of my new book on e-commerce. In the book, I shall be discussing various conceptual tools to help deal with the complexity of the Internet. One of these is a virtual cafe, where 48 of your special colleagues or contacts are present: sitting around the cafe at tables. The conceptualization is that you can go and sit with any of these contacts to have a discussion with them (by email), or invite a selected group of them to sit with you at a table for a group discussion (by email). In this way, the socializing aspects of a cafe can be simulated, even though the people in the virtual cafe are actually located in many different parts of the world. Sounds silly, but in fact this idea can help create some very interesting communication strategies. Since I'm covering this in the book I thought I might use it now to see how it works. I'll be describing it in more detail in the book, so I'll explain it here just enough for you to see how it is being used for this book review process. The cafe of reviewers starts with about 48 people. Most are people I've had correspondence with at various times on a variety of subjects, some I've contacted recently specifically to ask for help with this review. The 48 represent a very wide range of people - although in one way or another, each has some connection with e-commerce or digital communication technology. They come from all over the world. Some are well-known experts in their fields; some run large companies; some are students; some are teachers. There are programmers, designers, artists, writers, hackers and entrepreneurs. Some run servers, some host Web sites. There is an extraordinary mix of different people here, most of whom I've met through the writing of my previous books or on Internet discussion forums. I shall be randomly dividing the 48 people into six groups of seven to nine people (tables in the virtual cafe). So, when I send out the draft chapters, I shall be sending them separately to each group with the names and email addresses of all the people at the table in the 'To:' header. What I should like you to do, if you have any comments, is to send them not just to me but to all the people in your group. In other words this acts like a mini list serve where everyone is responsible for serving their own posts to their own small list of people at their table. It is as if you are making comments to a table full of people in a cafe. Unlike regular lists, these lists are temporary and last for two weeks only. For each new chapter there will be a random rearrangement of the tables so that the groups consist of a different mix of people each time. Not only might this random mixing of people generate some interesting discussion, it will give everyone a chance to meet a wide variety of very interesting people whom they might otherwise never have had an opportunity to meet. Of course, I have no idea whether this will work (although I've experimented with this technique already with some quite remarkable results). It is an experiment and I'll include the results (for better or for worse) in the book. I'm very curious to see how such an arrangement might generate different kinds of discussion. There is of course no obligation to comment. As in a real-life situation, some people just listen, others are prompted into discussion while others simply add a few apt remarks. I would appreciate, however, everyone adding at least some small comment on each chapter, so that I know they are keeping up and ready to receive the next. Thanks again for offering to take part and I hope I can provide you with some interesting and informative reading.

The first two chapters produced a variety of responses. Unlike conventional books, I hadn't specifically stated what was going to be in the book. I had a good idea what I wanted to be in it, but I couldn't know how it was going to turn out because I was going to let the feedback from the discussions determine the exact nature of the book. This upset a lot of the readers who wanted to see a conventional table of contents and the conclusions stated right at the beginning. I explained that I was looking at the book like a detective story: where we start with bloodstains on the carpet; find a body; discover clues; work out the motives - and then draw appropriate conclusions at the end to come up with the name of the murderer. Or, in this case, a viable way to think about e-commerce. My bloodstains on the carpet were the difficulties many large companies are having in making any progress in the world of e-commerce. It seemed as good a starting place as any because it is a mystery. Why are many large companies having difficulties? By the third chapter, the conclusion was drawn that the traditional structures and techniques of large corporations weren't suitable for e-commerce because it is not a stable environment. This requires a way of thinking that is quite foreign to most corporate trained managers and executives. The environment was likened to that of a complex dynamic system: a popular subject of current research, which can be described and analyzed in terms of chaos theory. This approach suggests dealing with complex environments by growing solutions rather than planning them. I lost a few of the review readers at this point because it seemed to them to be too esoteric. They couldn't see how it was possible to build a business without a structured plan that could be closely monitored and controlled. Those that did see the logic of growing a solution began to discuss the implications and the table discussions roared into life, with some people anticipating the contents of the next chapters even before I'd finished writing them. Up until this point, I'd been assigning the readers to tables randomly, but it became obvious that the range of different viewpoints was too wide for discussions to make any real progress without excessive disruptive discord. I began to group people at tables according to how they'd responded at previous tables. I put those who were appreciating the idea of growing solutions into groups together, separating them from those who were fixed upon the idea of having plans and managed teams. Some people weren't into the strategic aspect at all and were more concerned with technical detail; these I separated out to their own special table. I also had a table from hell: those who simply wanted to be critical and make no positive contribution to where the book was heading. To obtain the maximum of interaction, I used a rule that if there was no response from somebody over two chapters they were deemed to have left the cafe. This had the result of reducing the number in the cafe to only those who maintained a constant interest. This also put me under pressure to try to deliver interesting chapters otherwise I'd have ended up with an empty cafe before I'd finished the book. Altogether, the cafe produced more than 1,000 emails. A whole variety of views were put forward at each chapter. Some were critical, some helpful. The readers were adding information, introducing fresh ideas and viewpoints. I was quickly corrected when somebody disagreed with what I'd written and I was given numerable real-life examples to back up some of the theory. It was truly inspirational. Having feedback at each chapter while I was writing the next allowed me to fill in more detail where necessary, provide extra explanation, and most importantly be able to appear to anticipate readers' thoughts. The only problem was the wide diversity of people who were reading the chapters. Some were narrow niche technologists, others were not technologically oriented at all. This has resulted in many of the explanations being repeated in several different ways in order to cater for different types of people. The biggest problem was the explanation of the more abstract concepts.Chapters 6 and 7 were problematic as well, when I dealt with object-oriented thinking. Several of the readers dropped out at these chapters. Perhaps the most controversial area was explaining the idea of working without plans and letting solutions evolve. Some readers couldn't accept this at all. The problem was compounded when this approach exposed the weakness of using managed teams for the Internet side of an e-business operation. Even I was surprised at this outcome and it took an extra chapter of explanation to convince most people that this really was a rational approach. Bringing it all together for a conclusion was the biggest challenge. Until I reached that point I didn't even know myself how everything could be tied together. Happily, it produced just the kind of result I'd been looking for when I started the book: a simple conceptual framework that could be used as a basis to confront the complexity of the Web and provide a foundation for a competitive approach to e-business and e-commerce. Peter Small January 2000

From the Back Cover

The rapid advance of computers and communications technology is generating so many changes that the thinking of yesterday is likely to be irrelevant today. Those with the right mindset and understanding, together with the necessary conceptual tools, can ride this current wave of change successfully. Those able to realize that it is about strategy and communication rather than the technology alone will be able to run rings around the pure technologists. The environment is fast-moving, where early successes and innovations are richly rewarded.

Incomplete knowledge is a fact of life in e-business. No one can possibly have all the 'essential' knowledge in this unpredictable, changing environment. Game theory strategies allow for such 'knowledge gaps', using a type of thinking that is outside conventional business models. Solutions cannot be planned or designed in unpredictable competitive environments, they have to be grown from the bottom up. Success isn't about prediction and structural design, it is about being able to cope with the uncertainties and the complexities of this new medium better than others.

The Entrepreneurial Web is about understanding the implications of the Internet and the World Wide Web for business and commerce. It is about imaginative, people-to-people communication strategies that are likely to change all the rules for competing in highly competitive markets. It looks at how ideas should be allowed to evolve and respond to changes in order to succeed - something that many large corporate concerns have ignored - to their cost.

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Product Details

• Paperback: 361 pages
• Publisher: Financial Times Management; 1st edition (January 15, 2000)
• Language: English
• ISBN-10: 027365036X
• ISBN-13: 978-0273650362
• Product Dimensions: 9.1 x 6.7 x 1 inches
• Shipping Weight: 1.5 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (4 customer reviews)
• Amazon Best Sellers Rank: #4,602,924 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

2 of 2 people found the following review helpful:

5.0 out of 5 stars Stimulated excellent ideas!, May 1, 2001

By 

Stacy E. Burrell "stacyburrell.blogspot.com" (Detroit, MI USA) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: The Entrepreneurial Web (Paperback)

This is one of the better books I have read on e-Business and Entrepreneurship. Two of the previous reviews lament the lack of practical ideas. However, the author states that this is not a "how-to" book, but a book on ideas. If your purpose is to find specific strategies and to be walked through the implementation, then you will be disappointed. If you are looking for new ways to think about business in order to create your own ideas, then the book will serve its purpose.

Some key take aways were the concepts of growing solutions, cooperative game theory(which is validated in Coopetition), communication strategy and new venture probability. I am using the concept of growing solutions via listserves and virtual teams to create a strategy for a deregulated electric utility. In trying to start my own company, I have been stumped on how to get started. The author addresses this problem by using the Hilbert Space/Green Frog concept to get started, which is half the battle in itself. It's been said that the definition of an entrepreneur is a person who brings together resources. This book discusses ways to do this utilizing the Internet.

The book is not without it's drawbacks. The reading tends to get bogged down as you get into the latter half of the book, though the author summarizes everything in the last chapter. Some of the explanations do get academic(Hilbert Space and Game Theory). Finally, better examples and cases would have been nice.

Overall, the ideas sparked by this book was worth the price and the 5 star rating.

3.0 out of 5 stars Promises, promises, November 30, 2000

By A Customer

This review is from: The Entrepreneurial Web (Paperback)

I found this book disappointing and self regarding. Although promising to look at the 'new world', set aside from 'bricks and mortar', without concrete examples of his strategy, it remains wistful thinking. Connections and collaboration are fine - up to a point. When real money is involved one has to be much more certain of the pedigree of one's collaborators. I for one need a great deal more convincing.Until he has a successful business built upon his ideals, they remain ideals and should be regarded as fodder not fact.

2.0 out of 5 stars Very clever, but how practical?, August 6, 2000

By A Customer

This review is from: The Entrepreneurial Web (Paperback)

There is no doubt that Peter is a genius and a unique thinker in the digital age. However, this book requires some huge leaps of faith as it is based on unsubstantiated assumptions.
One also has to question Peters credentials for writing this book - what is his relevant hands on experience? He is an academic, a great thinker, but with little experience.
A great book if you are the sort of person who can ask why and question the assumptions, as you will be capable of sifting the dross from the gems (which are there!)
To summarise, if you want your ideas deeply challenged, and want to discover new outlooks on the new economy, this is a great book. If you want to actually create a viable business, be prepared to take a leap of faith.