emaven estrategy partners 1 reprinted with permission of emaven, inc. copyright © 2000 emaven, inc....

eMaven eStrategy partners 1

Reprinted with permission of eMaven, Inc.Copyright © 2000 eMaven, Inc. All rights reserved

Internet UseInternet UseGreat Triumphs and Blunders of F1000Great Triumphs and Blunders of F1000

Linda RossettiFounder, eMaven, [email protected]



Triumphs and BlundersTriumphs and BlundersWho is winning? Extend Existing BusinessWho is winning? Extend Existing Business



Triumphs and BlundersTriumphs and BlundersWho is winning? New Business ModelsWho is winning? New Business Models

Federated

Fingerhut

Macys, Bloomingdale’s, Lazarus, Bon Marche,

Burdines,Rich’s Goldsmiths, Sterns, Fingerhut

Ordertrust

Wedding Channel.com

$1.7 Billion1999 investment

$200M annually1999, 2000

$33M

N/A

Backend Operations

Frontend Revenue Generation



Triumphs and BlundersTriumphs and BlundersWho is winning? New Business ModelsWho is winning? New Business Models



Triumphs and BlundersTriumphs and BlundersWho is winning? Performance DriversWho is winning? Performance Drivers

Delphi Automotive Systems• $29 Bn Auto-parts manufacturer• $360 MM purchases through online

auctions in 1999• Saved $58 MM or 16% of normal

cost of goods purchased• Only 3% of total annual purchasing

volume being transacted online• Potential savings of $2.4 Bn if total

annual purchasing volume shifted online

• Purchasing process time reduced from 2-16 weeks to 2-5 weeks

Source: Reuters 3/6/00; eMaven analysis



Triumphs and BlundersTriumphs and BlundersWho is winning? Extend Existing BusinessWho is winning? Extend Existing Business



Triumphs and BlundersTriumphs and BlunderseCommerce ProjectionseCommerce Projections

$184$144$101$64$39$20$8

$2,696

$43 $109

$406

$716

$1,167

$1,823

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

1998 1999 2000 2001 2002 2003 2004

Bill

ion

s

B2B RevenueB2C Revenue

Source: Forrester Research 10/99; Forrester Research 2/00

B2B CAGR = 99% B2C CAGR = 69%



Triumphs and BlundersTriumphs and BlundersB2C ProjectionsB2C Projections

$0

$5

$10

$15

$20

$25

$30

$35

2000 2004

Bil

lio

ns

AutomobilesHousehold GoodsEvent TicketsGifts & FlowersHousewareFood & Bev.Health & BeautyMiscellaneousRecreationApparelMediaElectronicsLeisure Travel

US Online Retail Revenue by Category

Source: Forrester Research 1/00

Total = $39 Bn 1% of Total Retail Revenue

Total = $184 Bn 7% of Total Retail Revenue



Triumphs and BlundersTriumphs and BlundersB2B ProjectionsB2B Projections

$0

$100

$200

$300

$400

$500

$600

2000 2004

Bil

lio

ns

Heavy IndustriesAerospaceShippingIndustrial EquipmentPharmaceuticalsConstructionFood & AgricultureConsumer GoodsPaper & OfficeUtilitiesPetrochemicalsMotor VehiclesComputing & Electronics

Source: Forrester Research 2/00

U.S. B2B Growth by Industry

Total = $406 Bn 3% of Total Business Trade

Total = $2.7 Tn 17% of Total Business Trade



Triumphs and BlundersTriumphs and BlundersChannel Shift - Who stands to win?Channel Shift - Who stands to win?

$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

$100

$110

1999 2000 2001 2002

Billions

Incremental Sales

Total Online Sales

Source: Jupiter Communications 6/99

1.2

20

2.4

39

4

64

6.6

101



Triumphs and BlundersTriumphs and BlundersUse: Business vs. HomeUse: Business vs. Home

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Households Businesses

Not Online

Online

Source: Goldman Sachs 11/99

Total: 100.2 MM

Total: 6.23 MM

2000 U.S. Internet Penetration: Business vs. Residential



Triumphs and BlundersTriumphs and BlundersBusiness’ Internet Activity Business’ Internet Activity

Source: Morgan Stanley, 8/11/99

28%

52%

97%

20%

55%

92%

2%12%

38%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Access Web Site eCommerce

Small (1-99)

Medium (100-999)Large (1,000+)

Internet Activities by Company Size: 1999

By ‘04Business with web

siteswill include

70%of small, 95% of

medium and 98% of large.



$350

$1,000

$2,000

$0

$400

$800

$1,200

$1,600

$2,000

Low Average High

79%

11%

10% LaborRelated

Hardware

Software

Reported Cost of eCommerce Site Development(in thousands)

Spending During Site Establishment

(n = 20 midsize to large corporations that were launching first phase e-commerceSource: Gartner Group May 1999

Triumphs and BlundersTriumphs and BlundersBusiness’ Investment Business’ Investment



Triumphs and BlundersTriumphs and BlundersBusiness’ Internet ActivityBusiness’ Internet Activity

$182,000

$252,500

$307,100

$0

$80,000

$160,000

$240,000

$320,000

Maintain Develop Site DevelopeCommerce Site

Source: Association of National Advertisers 1999

1999 Averages Among Fortune 1000 Companies



Triumphs and BlundersTriumphs and BlundersHow is value generated?How is value generated?

Information Dialogue Transaction

Internet – collection of functionality that together communicates a value proposition to a user

customer



Triumphs and BlundersTriumphs and BlundersInformationInformation

Post vs. Enable



Triumphs and BlundersTriumphs and BlundersInformationInformation



Source: Iconocast 7/29/99, Customers.comhttp://www.aa.com

Triumphs and BlundersTriumphs and BlundersDialogueDialogue

•1.7M opted-in to weekly NetSAAver email•Estimates of click thru 5% to view online offer at site (estimated at 20% of site traffic)




Opt-in E-mail List Servs




Source: Informationweek 1/31/00; Busimess Wire 6/15/99

Autobytel• 600,000 cars sales projected in 2000• 6.5 MM registered users• 89% of registered users have not purchased

• “Garage” your vehicle – Autobytel provides e-mail service reminders, recall info & a lease watch to track mileage



Triumphs and BlundersTriumphs and BlundersTransaction Transaction



Entry Strategies Entry Strategies Information-Dialogue-Transaction Information-Dialogue-Transaction



Entry Strategies Entry Strategies Information-Dialogue-TransactionInformation-Dialogue-Transaction




Source:



Triumphs and BlundersTriumphs and BlundersHow is value generated?How is value generated?

Information Dialogue Transaction

“It is not a revolution in technology, machinery, techniques, or software. It is a revolution in CONCEPTS” Peter F.

Drucker ASAP 8/24/98



Internet UseInternet UseGreat Triumphs and Blunders of F1000Great Triumphs and Blunders of F1000

Linda RossettiFounder, eMaven, [email protected]

emaven estrategy partners 1 reprinted with permission of emaven, inc. copyright © 2000 emaven, inc....

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