Build it and they will come

Just over 9 years ago the so called 'dot com' bubble burst wiping trillions of dollars off the valuation of NASDAQ listed companies, many of them internet sites without any discernible business model or source of funding other than investment funds. Back then terms like 'cash burn' were employed to describe the rapid eating up of the investment, typically venture capital, consumed by paying programmers, designers and the rest to build and develop the sites, not to mention expensive advertising on prime time TV, newspapers, magazines, bus sides and the Underground. Then many of these companies propelled to prominence and excitedly  discussed in the press started to go bust in a spectacular fashion. Rather like the movie - Field of Dreams where a baseball field was built in  an Iowa cornfield in the belief that build it and people will come - the site would somehow attract visitors. And they did - by the millions, because it was free. Any hint of paying a subscription and the visitors were off to the next new thing. The vague business plan seemed to be to to build the site, build big audiences then leverage this package to advertisers. The truth is not many made this work. Fast forward to the Web 2.0 era and we see social network sites building big audiences and now trying to recoup the huge investment. But changing the site's look to carry advertisements or charging subscriptions and the users object or take their interest to new contenders who are still at the traffic building stage and perceived as cool and new. Co-founder of Twitter Biz Stone is supposed to be announcing how Twitter can generate a revenue stream and turn a profit out of its micro blogging service - or will it be sold? Then there is Facebook and the issues raised over changes in terms of service as a step towards targeted advertising based on user profiles cause a climb down. Typically venture capitalists are interested most in exit strategies rather than long term stake holding. In other words, get the venture going and take a profit from selling the stake. In b-2-b marketing we always start by taking prospective clients back to the business plan so together we can test its robustness, then derive marketing strategies and marketing communications campaigns. Not the other way about of building a brand and product without actual paying customers or advertisers to generate a revenue stream and profit.