REALITY CHECK: Not every business begets a cult

Anderson: There is a huge myth out there that anyone can build an on-line community. Take my bank. I've been doing on-line banking since before the Web was the Web. Now, all of a sudden, my bank wants to become my portal. It wants to load up the page with news and sports. Everybody is trying to be a portal, but not all are destined to succeed.

Johnson: It's easy to see the appeal in building a community. When you talk about communities, the three or four sites that come to mind are AOL, GeoCities, Angelfire, and Tripod, all of which have created great riches. Lots of people want a feeling of belonging, and the Web has given that to them, through personal home pages and chats.

Randall: About a year ago there was a huge thing being made about building communities, and it is still big. But there are a lot of customers who are very functionally driven, who simply want to go to a merchant and buy something. They don't want a community.

Rich: It really comes down to being smart about your users and your core business. Adding a community to a site that doesn't meet customer needs or that offers a shoddy product won't help. Also, building a community is a very complex and costly proposition. It requires a well-thought-out strategy, not just a lot of technology and money. You can end up damaging your company and your brand if you don't implement it properly.


To help us deconstruct the myths of the Web, we turned to expert observers of the Internet phenomenon. Their comments can be found after each of the case studies we presented. Here are their credentials:

Martin Anderson , management professor at Babson College, in Wellesley, Mass., advises executives who are transforming their traditional companies into "click and mortar" businesses.

James J. Cramer is the brash cofounder of and columnist at He has built successful careers as both a journalist/pundit and a hedge-fund manager.

Kathleen Eisenhardt is a professor specializing in competitive strategy at Stanford's School of Engineering. She recently coauthored Competing on the Edge: Strategy as Structured Chaos.

Chip Hazard is a general partner and E-commerce specialist at the venture powerhouse Greylock, in Boston. He helped launch the e-Steel exchange.

Tod Johnson , chairman and CEO of Media Metrix Inc., based in New York City, is a widely recognized expert on brand loyalty.

Ted Leonsis is president of AOL Interactive Properties Group. In his first three years at America Online (starting in 1994), it grew from about $100 million in revenues to $1.5 billion.

Kelly Mooney is director of intelligence at Resource Marketing Inc., a technology-marketing firm in Columbus, Ohio. She has helped companies such as Victoria's Secret develop their on-line strategies.

Allen Morgan is a general partner at Mayfield Fund, in Menlo Park, Calif. He has been involved in more than 350 venture-capital investments and public offerings.

Bo Peabody is a cofounder of Tripod Inc. and vice-president of network strategy at Lycos Inc. When he was still in college, Peabody founded Tripod, which helps people build their own home pages. In 1998 he sold the company to Lycos.

Scott Randall is founder and CEO of Internet-auction hosting service FairMarket Inc. Randall has been involved in E-commerce since 1995, when he launched an on-line store. He has been president of the Internet Shopping Network and Yahoo Marketplace.

David Rich is vice-president of marketing and brand guru at, which provides on-line services to small businesses. He previously orchestrated brand campaigns for Walt Disney, Pepsi, and Jamba Juice.


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Published on: Feb 1, 2000