The truth about the business model

This article, by Jeffrey Rayport even though being dated back in 1999 still has a lot of valid points.

"... the magic word these days is "monetize." The monetizing concept argues that on-line businesses must first capture large audiences of users or shoppers, and then later monetize those audiences through subscription fees, advertising and e-commerce...", "The idea is to encourage investors to supply what we used to call in the 1980's "patient capital," by suggesting that we are in a long-term investment phase in Web businesses. The investment is in customer relationships, and harvest time is yet to come."
"There is hardly an airline that runs a frequent flyer program or a credit card issuer that depends on card use for profits that does not know, and explicitly recognize, the profit potential of an enterprise of retained, and increasingly loyal, target-market customers. 


And the conclusion: "Business models themselves do not offer solutions; rather, how each business is run determines its success. So the success of e-commerce businesses will hinge largely on the art of management even as it is enabled by the science of technology. The scarce resource will be, as it is in practically all of business, the building block of free enterprise: entrepreneurial, and increasingly managerial, talent. "