They were right. The sci-fi crowd flocked to Fictionwise online, and less than a year later, it's one of the largest independent e-publishers (according to eBookNet.com), with sales of more than 10,000 stories each month. But even more remarkable than the site's debut was how deftly the brothers identified a second, more lucrative market and quickly turned that information into a new revenue opportunity--all by making the most of Web technology.
After six months in business, Steve ran a summary of data gathered with their custom-built shopping cart to adjust upcoming author advances. Although the brothers had been adding trilogies of e-stories and some longer pieces since the launch, neither expected to find that US$7 novels were selling as briskly as under-a-dollar short stories.
"That information gave us the clue that we needed to expand our business model," says Scott. In April they launched eBookwise.com which sells full-length e-novels of all kinds--not just science fiction--at higher prices.
Cracking new markets on the Web is one part technology, one part creativity, and one part risk taking. And although no single approach fits all, common threads emerged among the companies we spoke to that had successfully navigated into new Net territory. Perhaps the most essential: Find a natural extension for your business. Or as Richard Johnson, founder and CEO of HotJobs.com, puts it, "I don't want all the land in the Web world, I just want the land next to mine."
Analysts also recommend organic expansions--finding traction from within an existing customer base. Ill-conceived expansions have doomed many dot-coms. Priceline.com--famous for name-your-own-price airline tickets--tried the same model with gas and groceries and burned through $363 million in one year before shutting those businesses down. The company had been accustomed to bigger margins selling airline tickets, and it could eke out only cents on the dollar for food and gas.
Even when a new market seems a perfect fit, a positive outcome is anything but guaranteed--especially in the competitive e-commerce environment. So to provide some direction, we've identified several of the best Web-based strategies that companies have used successfully to crack new markets.
