A conversation with a cyberspace expert looking
to make a buck with an old-fashioned book

Larry Edwards is the perfect poster boy for career consultants who tell us that workers today must be quick to change, to adapt their talents and knowledge to constantly emerging new technologies. He has been a teacher, a reporter covering sailing and high-technology beats, a consultant and Web site designer whose shining achievement was the award-winning America's Cup Web page. He's now an author, telling businesses how to make the most of the Internet.

    So of course, his book is not just a book. "The Official Netscape Internet Business Starter Kit: Eight Essential Steps to Launching Your Business on the Net" includes a CD-ROM with checklists, worksheets, software, templates and sample scripts. The 544-page book, published by Netscape Press/Ventana Communications Group, is being delivered to bookstores nationwide this month. It sells for $39.95.

    Edwards says that 20 to 30 million American adults use the Internet and World Wide Web regularly, which presents an awesome business opportunity. But it’s an ever-shifting, ever-challenging medium. Demographics are a case in point. In the past, the typical Internet voyager was about 40 years old and male. The age is gradually getting younger, averaging around 35, and the gender is moving to more and more women. It is estimated that about 40 percent of those online today are female.

    Edwards says there is a lot of hype and misinformation about doing business online, and it was his goal to help readers cut through the obfuscation. I talked to Edwards about his new book.

Metro: We’ve seen the wildly popular but financially struggling Amazon.com bookstore, and suspect that there are hundreds of businesses that get zip from being online. What kind of businesses benefit most from being on the Internet?

Edwards: Amazon is facing a battle against Barnes & Noble and Borders that is anybody's to lose at this point. Amazon was a pioneer online for nearly three years and it paved the way. As the Internet matures, we’re going to see larger real-world competitors learning and taking advantage of what companies preceding them learned. The larger companies have more money to throw at an online venture. They can put a squeeze play on smaller start-ups like Amazon.

    But who benefits? Not to be flippant, but pornographers. Those using the Internet to sell adult-oriented material have been very successful, certainly. But also, travel related businesses, software sales and distribution. Companies like Amazon.com. It is a Seattle-based bookstore, but it can sell books anywhere in the world via the Internet.

Metro: Can you give us other specific companies?

Edwards: Pierette Van Cleve, the Art Seller Exchange in San Diego, went online in early 1995. She is a broker for fine art. She does something like 70 percent of her business over the Internet.

    In some ways it is the same business model as mail order. Instead of a catalog on paper, it is put online. It works for those who can benefit from a broad national or international reach in terms of marketing their products and getting into an area of this country or the world that would be cost prohibitive to reach in a more traditional sense - sending in people to open a store or office.

Metro: So businesses that sell something that shows well on a computer screen?

Edwards: I believe most companies can benefit from being online, even if the emphasis is on e-mail, because the majority of companies benefit in saving money. At the same time they can generate sales and leads. West Marine is a good example. West Marine is the largest catalog sales company in the boating industry. It is based in the Santa Cruz area, but could be in Iowa for all practical purposes. It has some percentage of its catalog online, but its Web site is really not to sell products, but to get more people on its mailing list so it can send them a catalog.

Metro: Why don’t they emphasize sales?

Edwards: The problem with sales right now is that people really aren’t comfortable about making purchases online. It has to do with security, giving credit card numbers. The other aspect is that you are missing the human element. A lot of times, closing a sale is dependent on having human interaction, a sales person convincing the consumer to buy something. In terms of transactions, we’re seeing the most activity in business to business, in most cases not dealing with payments, just credit and invoicing. This is a way of improving the paper flow. Some companies reduce their operating costs by 20 percent or more by ordering products online. Another big value to a business right now is marketing - a Web site where people can view marketing material at their own convenience, 24 hours a day.

Metro: How can I tell if my business can cash in? What questions can I ask myself?

Edwards: Ask yourself, can I reduce costs by being online? Can I extend the reach of my company - take a regional company and make it national? I was talking to a local caterer a couple of weeks ago about going online. How can he benefit? Obviously not by catering events in Iowa. But he is trying to get more convention and meetings business here. Most of the meeting planners are not in San Diego. He can put his brochures online. By using e-mail, he can reduce telephone charges. The downside to all this is that when you go online, businesses that were not your competitors become competitors. Sometimes you are competing with companies in New York, Seattle or Dallas.

Metro: How do I pick a consultant, such as a Web site designer, to help me?

Edwards: The main thing is to find someone who is experienced and seems to understand what marketing is all about. You need technically competent people who know that marketing, not technology, drives this. When people decide to go online, they must develop a specific business plan for going online that incorporates their strategies and budget, and is totally integrated with their existing marketing program. That's where you start. You don’t start with building a Web site.

Metro: What services should be integrated into my Web site?

Edwards: It’s critical to have a way to get feedback from those who visit the Web site. I’m looking for places to stay when we go away over the holidays. I visited Web sites of bed and breakfast inns. Some don’t have pictures of the place. Half of them don’t even have an e-mail address, no 800 number. Those that had pictures and e-mail addresses where I could inquire about availability and make a reservation got my attention.

    It helps to have an interactive forum - if you want more information about this product or service, click here. But you need to have people ready to respond to those who contact you. Otherwise it’s like having a telephone in your office and not answering when it rings. Someone has to be assigned responsibility and given time to respond.

Metro: How much "after service" or follow-up work will my Web site require?

Edwards: That depends on your objectives. You can just put your company information up there and let it collect dust. If people want to know more, they e-mail or call your company. That's the very lowest level of Web site development, but it still can be valuable.

    I manage a Web site that I work on a couple of hours a day and could do more if (the company) had a bigger budget.

    Also, I devote one whole chapter of my book to analyzing web site traffic. If anyone is looking for a software development niche it would be monitoring and analyzing Web site activity. There are at least 60 products and services that promise to do this, but they're still not good enough. This is imperative for a company to do. Also, every company I talk to soon realizes that it has to advertise its Web site. Pierette Van Cleve advertises in art-oriented specialty magazines. If people don’t know it is there, they won’t come.

Metro: Speaking of advertising, my e-mail is bombarded with spam - unsolicited advertising, mostly from pornographers or get-rich-quick schemes. How effective is unsolicited e-mail advertising, and does this type of messaging have a tainted name because of its intrusiveness?

Edwards: I’ve heard that the response rate is well under 1 percent, compared to traditional direct marketing, which gets a 1.5 to 3 percent response rate. But even the low response rate may be effective because costs are so cheap. All efforts at getting these people to regulate their own behavior has failed. Legislation is pending, and I think we’ll see something similar to commercial fax regulation. It is illegal to send an unsolicited sales pitch by fax. How easy that will be to enforce is another issue. I advise legitimate businesses to hold off and see how the pending legislation turns out, because unsolicited, commercial e-mail does have a tainted reputation.

Metro: How long should it take to get my business online?

Edwards: This depends on how complex the site is. An e-mail address is very quick. Typically, however, two to three months is normal.

Metro: How much does it cost - ballpark range of figures - to get online?

Edwards: I don’t want to sound flippant, but anywhere from $300 to $3 million. Estimates vary, but a small business should expect to spend from $2,000 to $20,000 in the first year. In my book I have three sample budgets for different programs. You and I could retire on what The Disney Co. has wasted in the last two years on Web sites. And I understand it is going to redesign it again. But it’s just part of the overall marketing and advertising program. It’s a pittance compared to TV advertising campaigns.

Metro: Thanks Larry, for an enlightening conversation.

Janet Lowe is author of several investment books, including "Value Investing Made Easy" (McGraw Hill) and "Warren Buffett Speaks" (John Wiley & Sons).