Back in 1998 we were sure that e-commerce would be the next big thing. The World Wide Web would revolutionise business, and make us technical, entrepreneurial types a hell of a lot more wealthy. This revolution would make us all kings of industry. That was the theory anyway…

In 1998 VC firms were optimistically pumping cash into anything that looked vaguely like a dot-com. Stories of teenage entrepreneurs and instant millionaires spurred us on. We were arrogant and cocksure!

Crazy business ideas that would never have withstood scrutiny in the sober world of old business were being hyped out of all proportion. Companies were prepared to invest in the absurd "" and the utterly meaningless "" .

With hindsight, it all seems so crazy; however at the time we felt like it was a gold rush, and the first to grab land in this lucrative new territory would be the winner. This wasn’t just greed: our optimism seems to have been based on a few silly assumptions:

We underestimated how difficult it would be. On the face of it, e-commerce is simple. Pay some programmers and designers to build you a site… Make a catalogue that can accept credit cards.

What we failed to appreciate was that in simplifying the front-end of the organisation we made the back-end far more complex. Retail Dot-coms soon realised that logistics and customer support were tens of times more expensive than for our bricks and mortar rivals.

Although the front-end of the business had changed dramatically, what we failed to appreciate was the overall business was still the same. Most dot-coms were equipped with the wrong sort of people to run a retail business. Academic minds were poorly suited for hours of technical support and tedious retail management.

We overestimated how much customers would care about the dot-com revolution. Since we were geeks on a techno-high, we assumed that everybody else would be just like us in a couple of years. We assumed that the mere novelty of something being online would be enough to tempt customers away from their life-long shopping habits. We were shocked when users failed to flood onto the net, and surprised to see that two years later, e-commerce has had no significant effect on high street profits.

I think we also misunderstood the media; and because of this we moved too soon. The dot-coms invested millions in website and browser based technology. A system that requires hundreds of dollars worth of personal computer and a good deal of computer know-how to operate. We are only now starting to see genuinely consumer friendly internet access machines for less than $100 – its still going to be a long time before these become commonplace.

We arrogantly assumed that everybody else would find the web just as easy to use as we did. Those who didn’t own an “affordable” home computer would soon be flocking to cyber-cafes, and those who didn’t just did not matter because they were the luddites who were holding back progress.

As with any technological development, a period of hype is always followed by a period of questioning. The Internet has been the single most hyped technology developed in our lifetimes, and now that the dot-com bubble has burst we are going through one of the darkest periods of questioning ever.

Ultimately I am optimistic – one-day e-commerce will take off. Untill then, the people who make money out of this gold-rush are the guys that sell the shovels. On the ‘net this translates as the companies that are building the infrastructure that powers the web. Companies like Cisco and Microsoft have grown consistently despite threats of a technology down-turn.

One day the Internet will be a viable consumer medium. Hopefully by then we will have learnt the lessons of the past two years. The recession (if it comes) will be the slap on our face that sobers us up.