I believe that you have to understand the economics of a business before you have a strategy, and you have to understand your strategy before you have a structure. If you get these in the wrong order, you will probably fail.
Another lesson we've learned is that you can't follow the other guys. If you take the approach of saying, «Competitor X has a good business, let's be just like them,» that's not going to create a lot of value...It doesn't mean that we won't borrow good ideas from other companies when we see them, but we're not held to convention and we're not striving to be like other companies...We are building our own path.
One of the struggles many companies face is overcoming the desire to invent everything themselves. Even today, you see a lot of companies falling back on the idea that «my baby's the most beautiful in the world and I'm not going to accept anybody else's.» This can get in the way of logical business thinking.
If you limit a company by its structure or by the people in the company, you will, by definition, limit the full potential of that business. It sounds basic, but a lot of companies don't follow the idea that the structure should be last and not first.
We're fast approaching the point at which there is really no distinction between the .com companies and traditional businesses. The only distinction will be between the winners and losers, and of course, the pace of change at which companies become winners or losers.
Instead of vertical integration, we have a kind of virtual integration that is taking hold. It shows up in the efficiency of companies. Our company, for example, has a return on invested capital of roughly 290 per cent which... is significantly above our cost of capital... This says there is a fair bit of competitive power in a model like this.
A business' flexibility in adapting to change and market dynamics will mark the winners and losers in this fast-changing Internet Age. Flexibility is a tight pairing of speed and agility. Linking businesses together using information is at the center of value creation in the Internet Age.