02.COM: The Case of the Online Business—Part I

Joe Daniels graduated from BYU-I three years ago.  He has been working for Miln Outdoor apparel, and he has been gaining valuable experience in many aspects of the business.  He is very happy there, and the officers at Miln are very happy with him, but he doesn’t want his career path to plateau after three years.

In the meetings Joe has been attending, he has learned that 90% of Miln’s sales come from traditional brick-and-mortar retailers of outdoor equipment, but they have about decided that they need to start selling their products on their own website too.  Joe is hoping to get the job as director of Internet marketing when the company makes the move to sell on their own website.

Miln has been a wonderful place to work.  In fact it has been so wonderful that the upper managers never seem to leave, and growth in the apparel industry has been minimal so Joe has seen very little opportunities for promotion.  Because of his interest in the Web, Joe thinks the Internet marketing position would be perfect for him.  The one problem is that Joe doesn’t have much experience in online businesses.  He hasn’t had time at work to get any experience, and he is afraid that it would take him to long to go back to school to get it.

Last week Joe ran into two of his college friends at a Wedding reception, and they all started talking about wanting to get more experience in Internet businesses.  They left the reception and met at Wingers to discuss their plans. 

They felt the best idea was to create their own online business.  By creating their own business, they thought they would be able to really get in and get involved in all aspects of the business.  They didn’t want be at the mercy of an IT department or of a manager that might limit the areas of the business that they could get involved with.  Sure, if the business, really took off they would need a Web programmer, an accountant, a supply chain manager, and who knows what else, but at the beginning they wanted the whole business experience.

They came up with the following goals for their online business

·         It needed to actually sell goods or services, generate leads for a B2B business or maybe to promote other people's goods or services

·         They wanted their own Website and didn’t just want to have an E-bay store.

Meeting number two took place during a lunch at Applebees.  Trevor and Amy, the two college friends, and Joe wanted to get started—they wanted to leave Applebees with their bellies full, their wallets a little emptier, and with a concrete first step that they needed to accomplish to get this business off the ground. 

Joe was concerned about where they should host their website.  Trevor thought they needed to decide on a company that would handle the credit card transactions.  Amy thought they should first decide on a product or service or a some sort of revenue model.  After much debate, Joe and Trevor agreed with Amy.  They were going to choose a product first—that was great, but their meeting time was about gone.  They all needed to get back to their “day jobs.”  They had actually made a decision and that was a relief.  The decision was made, but they weren’t sure how to choose a business.  Trevor suggested that they should choose the most popular products so they could get the most business.  Amy suggested that they choose a very unpopular product so the competitor wouldn't be overwhelming.  Joe thought both ideas sounded great, but obviously they couldn’t choose both.  He did know that choosing the right product would be key the success of the business, and he didn’t want to waste a lot time on a bad product idea.  How should they decide?

 Joe suggest that they meet on Friday at Bajio's with a list of ideas of how to choose the right product.