Efficient Market

For the entrepreneur, an "efficient" market is a market where all information is known and buyers can find out anything and everything in the market place unencumbered by intermediaries.

Whenever one group or person provides value such that people are enabled to do things they couldn't feasibly do without going "through" that person or group, inefficiency results. Take the travel industry, for example.

You used to have to go to a travel agency to get information about flights because the travel agency controlled access to the data through special software. Consumers could get the data, but the search costs were so high it was simply easier and cheaper to use a travel agent. That's where the value was added, and the inefficiency.

The Internet has created a more efficient market for travel. Search costs have moved toward free, so voila--few travel agencies left. Creating inefficiency is a little like kicking the legs out from under a table.

This added efficiency is what's causing entrepreneurs problems monetizing, or making money from, business concepts. "Yeah, but how are you going to monetize it?" is the question. Intermediaries, such as travel agents, who used to create inefficiencies by controlling access to information about flights, have been eliminated or removed to a significant extent.

In the age of the Internet, they no longer add value, except in certain situations. A travel agency that has specialized knowledge about cruises, for example. Or an in-house travel agency which contracts with a given company because it's easier for the company to control the flights their employees can be reimbursed for.

In this environment, entrepreneurs can make money if they create an inefficiency in the market that adds value to a customer's information search. Once this is found, the entrepreneur has to be very agile because change can come quickly and eliminate the advantage the entrepreneur has built for him or herself.

What do you think about this? Post a comment.

Entrepreneurship informs all of my professional activities. For entrepreneurial real estate, go to www.yourstopforrealestate.com./blog and for entrepreneurial writing, go to www.kearneymusicschoolmurders.blogspot.com

Internet Marketing

Internet marketing is a must for entrepreneurs to know about. It's the way things are done. Wikipedia, the free, on-line encyclopedia, has a great article on internet marketing, so I'll just quote it verbatim below, editing out nonessential info. But if you think you know everything there is to know, you don't. The field is so complex, so wide, so deep, and evolving so fast, it has changed since the last seminar you went to, even if that seminar was last week.

Internet marketing, also referred to as online marketing, Internet advertising, or eMarketing, is the marketing of products or services over the Internet...Internet marketing is commonly referred to as Web advertising (also Webvertising) and Web marketing.The Internet has brought many unique benefits to marketing, one of which being lower costs for the distribution of information and media to a global audience. The interactive nature of Internet marketing, both in terms of providing instant response and eliciting responses, is a unique quality of the medium. Internet marketing is sometimes considered to have a broader scope because it refers to digital media such as the Internet, e-mail, and wireless media; however, Internet marketing also includes management of digital customer data and electronic customer relationship management (ECRM) systems.

Internet marketing ties together creative and technical aspects of the Internet, including design, development, advertising, and sales. Internet marketing does not simply entail building or promoting a website, nor does it mean placing a banner ad on another website. Effective Internet marketing requires a comprehensive strategy that synergizes a given company's business model and sales goals with its website function and appearance, focusing on its target market through proper choice of advertising type, media, and design.

Internet marketing also refers to the placement of media along different stages of the customer engagement cycle through search engine marketing (SEM), search engine optimization (SEO), banner ads on specific websites, e-mail marketing, and Web 2.0 strategies. In 2008 The New York Times working with comScore published an initial estimate to quantify the user data collected by large Internet-based companies. Counting four types of interactions with company websites in addition to the hits from advertisements served from advertising networks, the authors found the potential for collecting upward of 2,500 pieces of data on average per user per month.Here's a hint though.

Go read the whole Wikipedia article and follow the references. And google other stuff, also. There's a lot out there.

Everything I do is entrepreneurial. If you liked what I say here, post a comment. For real estate go to www.yourstopforrealestate.com/blog and for writing go to www.kearneymusicschoolmurders.blogspot.com. You can read the book on-line, print it out, or order a copy directly from the blog.