21 April 2000 - The auditorium was packed as the lights dimmed and Barry Diller, USA Networks' chief executive, sauntered, hand in pants pocket, across the Jacob Javits Center platform to the microphone at center stage. He gave the obligatory expressions of gratitude to his host and the usual greetings to his Internet & Electronic Commerce Expo audience - a packed room of New York movers and shakers.
Then he started to speak. But he didn't just speak; he did something totally different, something few corporate titans are willing, or able, to do these days. He said something - something revealing, something that, if the e-commerce managers in attendance were listening, could help them avoid making costly and embarrassing mistakes.
While most conference keynote speakers - the Bill Gateses and John Chambers of the world - tend to waste their audience's time with "Where do you want to go today?" and "Are you ready?" marketing pitches, Diller wove a riveting tale of a Home Shopping Network Internet project gone awry.
Not too long ago, Diller said, his company wanted to launch a new site to sell jewelry. The company thought it saw an avenue of opportunity and fast-tracked the site. The project began just before spring and the company budgeted $30 million to get it up and running before that year's Christmas selling season. However, the project quickly went bad. "We did everything wrong you possibly could," Diller said. By summer, the project's estimated cost was $60 million and, Diller said, "We knew it would be more."
The site was never made into a business.
Diller shared his company's missteps for - one can only assume - the greater good. And, to enable others to avoid the mistakes Diller and his HSN team made, he outlined a bunch of hard-learned lessons. Let me share with you the 10 that I thought most relevant. Yes, Diller's operation is a business-to-consumer shop, but the lessons apply just as easily to any business-to-business project.
- Don't sell your soul to an integrator, he said. Use contractors wisely. Many can lead you astray.
- Don't fund a system that will take more then nine months to complete - it will be obsolete before it's done.
- Don't let any one person be in a position where he or she possesses more than 50 percent of the resident knowledge about any one system. People leave. Spread the wealth around.
- Don't scrimp in the planning.
- Work with open business systems that can be modified easily.
- Re-educate managers. Make sure they understand the mission and make sure they're on board.
- Scale is king. "Every problem we've had is because the systems didn't scale," he said. "They couldn't be integrated with the systems we had in place."
- A follow to No. 7: Don't try to work e-commerce systems on top of systems that are old and dilapidated.
- Work with adults. "Don't count on 25-year-old managers on their first jobs," he said. Most e-commerce implementations are complex and require a certain level of technological and managerial expertise.
- In any project, start small. "Course correct as you get bloodied," he said. "Let it teach you."
Let me add one of my own items to Diller's list. Whenever possible, learn from others' mistakes. Let them teach you.
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