The mathematics is interesting and I presume . .
Take the market exchanges which were going to match buyers and sellers and make a friction-free and highly efficient market. These folded up far faster than anyone involved could possibly have expected.
Business inexperienced developers were certain people wanted to buy at the lowes price. This is false. Those who shop the lowest price are losers. What's important is existing business relationships. You only look for new ones when you have to. The established relationship is worth paying a higher price for (within limits, of course) because it provides other forms of efficiency. Businesses were interested in using the Internet to enhance and streamline existing relationships, and they didn't need the exchanges for that.
Another thing so many expected was the death of the middleman - everyone would buy direct. Many still believed that even long after it was obvious the middlemen were the ones most benefitting from the Internet.
Why, for instance, do I buy from Tech Data when I could buy directly from the manufacturers. A few reasons are:
- The price is lower because Tech Data buys by negotiated contracts and they have negotiation power.
- Delivery is way faster, because delivery is Tech Data's specialty. Most manufacturers take days, even weeks to ship rather than about an hour.
- Availability is better because their warehousing smooths out productions runs.
- I only have to establish a business relationship with one company, not 450 companies each with different requirements and credit applications.
- I can make one phone call and order products made by ten, or fifty different manufacturers, not ten or fifty phone calls for one product each.
- I can write one check to cover the purchase of many different items.
- I know what the return policies are and how to apply them - I know who to talk to when there's a problem.
Many other examples of stupid Dot.com thinking can be displayed for our amusement. The funniest though was the concept that you could sell goods at cost and get rich selling advertising on your site. Of couse you needed to build traffic so you could sell advertising so you had to advertise your site to build traffic. This resulted in a big circle jerk where all the Dot.coms were buying advertising with each other in hopes of generating enough traffic to sell advertising to each other. Alas, this perpetual motion machine leaked a lot faster than most due to complete lack of cost controls.
