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E-Commerce: What Works & What Doesn't By February 8, 2002 With the economy falling on hard times e-commerce seems to have run out of workable formulas for reaping in consumer dollars - or has it? When online grocer Webvan went for broke it seemed to herald the end of the idea of buying groceries online. Similarly, the demise of Napster appeared to herald the end of online peer-to-peer service networks. With suppliers reluctant to climb on board and integration hassles still largely unresolved even B2B marketplaces seem to have fallen into disrepute. The question therefore remains as to whether the Net still offers any viable niches that could be tapped by new e-entrepreneurs. "Many ideas have failed online simply because they tried to fill a niche that wasn't there, or they failed to fill it profitably," noted Gartner analyst David Schehr. That said, Schehr acknowledged that some of these failed ideas would likely resurface as new e-commerce niches sometime in the future - when the market is again ripe for new potential. "Some of the failed models had some real logic behind them," concurred Giga e-business analyst Andrew Bartels. "Variations of these models could take off in the future ... if they are exploited efficiently." According to Bartels, the present climate on the Web isn't exactly conducive to new ideas. "Venture capital has pretty much dried up and the market is keen on seeing tangible results quickly," he averred. "We're in an environment right now where even if a great idea came along, it wouldn't get funding." Most analysts seem to agree that at this stage of the Web's development it's better to stick with what works and advise against rushing headlong into new and unexplored territory. "At this stage of the Web's development it's going to be tough to find significant growth opportunities," cautioned Schehr. As for what works, both Schehr and Bartels pointed to Amazon's success in the book market, eBay's achievements in the auctioning arena and many content and travel sites that have proven themselves to be ardent e-survivors. Even some failures, such as Webvan and their tinkering in the arena of home grocery delivery had some merit admitted Bartels. "The Webvan model still has a lot of logic behind it," he opined, "its failure wasn't so much lack of demand as it was internal cash problems." Other models that didn't make the grade could be equally viable in the near future, continued Bartels. "Take Napster's concept of peer-to-peer entertainment services," he ventured, "some variation of that model could still take off in the future ... once such systems have passed their evolutionary phase." Right now, however, seems like a bad time to try out anything that hasn't been tried and tested by the dot-com downturn. New ideas, it would seem, had better wait for brighter economic climes.