March 22, 2005

Overall, rougly 20 percent of public B2B companies and firms in the technology sector disappeared in the post 2000 "dot com bust" and in the 2001 recession.

AMR recently asked 140 of the survivors and conducted its own study, in order to extrapolate the lessons learned, if any.

In brief, AMR's findings were that "debt kills," "technology focus is a critical success factor, sales and marketing investments are questionable," partnerships help companies recover faster, and "cost cutting only goes so far."

These are more in the nature of business verities than specific lessons, but it seems that every generation has to learn anew from the bursting of its own particular bubbles.

Something specific about the most recent recession, as AMR noted, was that "the real killer was the lack of a viable business model."

Venture capitalists long ago responded and corrected their investing strategy, so the model shortcomings that plagued the pre-Y2K generation of technology startups have not been allowed to incubate today.

Source: Line 56