The dying frenzy of the dot com mania may lead some people to think that the Internet is best forgotten as a business opportunity. With the benefit of hindsight we may curse we weren't there when all that paper money was being made and give sighs of relief that we weren't there when all those paper losses were being suffered. The most sensible approach is to work out what went wrong and what went right and start planning now for the real business developments that the Internet offers.

The first question to ask is: where did the problem lie behind the dot com frenzy?

Was it the technology? There was no one high technology development that convinced me that the dot com frenzy would not last. Like everyone else I looked, for example, at the huge sums being spent on so-called customer relationship management systems, which actually looked more like order tracking, and knew there was something wrong. Yet it wasn't a technology issue, surprisingly enough, that was wrong.

Multiples of 60 for equity prices to revenue were indications of the absurdity of the dot com mania on the stock markets of the world, but that was not the key indicator that this was a bubble that would have to burst. Yet the problem was not with the stock market analysts - and it is not often you can say that.

In fact it was a low technology development - almost the lowest technology you can imagine - that first made me think seriously that there was something inherently wrong in the business development and market strategies that were being developed for the Internet. One of the intellectual thought leaders in information technology in the US had come up with Webvan.

The premise was simple. This new age of Internet commerce would require fulfilment services. If people were going to buy white goods, brown goods, coal, paper, food and drink over the Internet it had to be delivered. A network of people with vans would be required. Distribution was the name of the game. You could have all the high technology in the world, but if you couldn't get the goods to the people you were a looser. Therefore, Webvan was a winner.

My first thoughts were that this was a mistake but I didn't immediately grasp what the mistake was. I thought the problem was that there were existing delivery services, like post offices, logistics operations, and people already there with vans and distribution centres. Webvan didn't seem to have a unique service proposition. I couldn't see that there was a real need for a duplicate service just because the Internet existed. The digital highway was dependent to some extent on real highways, but not on new services on those highways.

You could have all the high technology in the world, but if you couldn't get the goods to the people you were a looser.

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