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Did the Internet kill strategy?

Strategy is dead

The field of strategy initially came in for some fierce criticism during the early days of the commercialization of the internet. "New era" theorists claimed that this time was different, that strategy as planning could not keep up with "internet time," that strategy as practiced in corporate settings in the mid-1990s - was at best inapplicable to the internet context and at worst, well, dead.

When the market is going to change in six months to a year, you can't spend two months worrying about a strategy. So you have to compress the time.

Rick Schell, Netscape Director of Engineering, cited in Yoffie, David B., and Michael A. Cusumano. 1999. “Building a Company on Internet Time: Lessons from Netscape.” California Management Review 41 (3): 8–28.

Such rhetorical flourishes did not age well. As it turned out, those arguing for the death of strategy were often "drinking their own Kool Aid," hoping that strategy did not matter because if it did, their firms were the ones who were destined to struggle. In many internet-derived, emerging market segments, strategy was paramount, and winners and losers were sorted not by purity of a firm's commitment to new and magical internet thinking, but by its ability to assemble defensible bundles of resources and deploy those resources effectively in competition with other firms pursuing different strategies.

How was the wireless web built?

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Building the wireless web

AuroraTec (a pseudonym) was initially conceived around an observed business opportunity: cellular (i.e., wireless) phones were gradually acquiring the ability to access web content that had been designed for access via a desktop computer running a web browser. However, the two access windows - initially "web" and "wireless" - were so different from each other that it was not possible to simply push web-formatted data to the wireless window. Web-based content companies needed to figure out how to allow wireless access to their sites, and wireless network providers sought to package wireless content in ways that showcased the potential usefulness of wireless access to online content. Problems ranged from bandwidth (wireless sites needed to be much "lighter" than a typical web-based one) to navigation (without a mouse most early wireless web-enabled phones had limited ability to move around and "click" within a served webpage) to transaction security (beyond "surfing" users wanted to be able to conduct mobile e-commerce, or what some took to calling m-commerce) to ownership and control (whoever managed engagement with the customer would own their data and be best positioned to capture revenue from, for instance, ads).

A Palm V.
Credit: houseofmabel.com

AuroraTec's search for competitive advantage

AuroraTec was principally a service provider to companies seeking to bring web-based content to the wireless customer. For AuroraTec, the challenge was to develop a hybrid product-service offering that created competitive advantage for the firm and also enabled it to streamline the process of getting a client to sign on to having its PC-based web content semi-automatically transformed and served through the AuroraTec system.

Selling “automatic translation” to content companies

The search for a "productized" solution - something AuroraTec could own, market and sell - put the firm on a collision course with the evolving realities of internet strategy.

Slide Presentation


  • AuroraTec Overview
  • Enabling infrastructure for the wireless web
  • All devices (mobile phones, PDA’s, pagers, other) and mark-up languages (HDML, WML, cHTML, MML, tHTML, VoXML, other)
  • Dynamic (transaction based) as well as static content
  • Frames, Javascript, cookies
  • Easily extensible to new devices, MLs
  • Internet, Intranet & Extrannet
  • Patent pending technology

Challenges arose from both the content suppliers and the wireless providers. AuroraTec hoped that their "rendering tool" - a software package that would semi-automatically transform web-based content into a streamlined, wireless version of itself – would offer such a hybrid product-service solution.

Slide Presentation


  • What makes us unique
  • Proprietary technology leverages full functionality of web site
  • Dynamic vs. static content
  • No changes to web site/device are required
  • No tags, additional servers, client software
  • No persistent data stored in content servers
  • Single architecture across multiple devices
  • Very rapid deployment – days not months
  • Web site can change substantially without affecting “mobilized” content – XML fingerprinting
  • Data and voice
  • Future proof – new devices and web site changes based on XML architecture

For AuroraTec, automated rendering of web-based content was a critical capability and something that the firm wanted to claim as a source of strategic advantage. But as is often the case with experimental technology, the capabilities of the tool were limited. Internal communications described “automatic translation” as a “catch all mechanism for rendering” and as a “cheap solution.”

As a practical matter, it did not always work. For instance, not all web content could be automatically translated: notwithstanding the company’s hopeful statements to content partners, the technical team in AuroraTec recognized that they would need to dictate certain changes to partner websites for the tool to successfully complete “automatic translation.” If the customer’s website met certain requirements, the tool could work, but many sites were non-conforming.

Slide Presentation


Automatic translation is the catch-all mechanism we need to add so that we can handle component identification failures. Many customers are willing to change their websites in order to have more reliable component identification. For them, we need to be able to prescribe the changes they can make in their website to bypass our component identification. Then their application changes only for rendering needs. Multi-modal stuff is in the future, but its on the Taxo and Cyborg roadmap, and according to them achievable within the 1 year term.

For AuroraTec, the inability of the company’s technology to automatically translate web-based content into WAP content compromised the profitability of each client relationship by requiring costly content customization. Of course, some support costs associated with the launch of a WAP-enabled service were to be expected, but AuroraTec promised “very rapid deployment – days not months.”

Slide Presentation


  • What makes us unique
  • No changes to web site are required
  • No persistent data stored in our servers
  • Single architecture across multiple devices
  • Very rapid deployment – days not months
  • Web site can change substantially without affecting mobile access

AuroraTec initially targeted small, “emerging” internet companies, but as the reality of the post-bubble economy sank in, the firm abandoned the “small fry” clients and focused exclusively on larger, more established firms. Once a client website was set up for “automatic translation,” AuroraTec was eager to maximize revenue per month per client.

AuroraTec sought to make companies "ready for the Wireless Web," but as hard as it is to fathom from the perspective of the 5G world of the early 2020s, the wireless web was a "tomorrow" problem, and many of AuroraTec's clients had to make payroll that day. For an internet content company trying to weather the storm of the bursting of the Dot Com Bubble in late 2000, standing up a wireless website was a luxury, not a necessity. As a result, companies like AuroraTec - that provided services to these content providers - were squeezed. As was AuroraTec.

“Swimming with sharks”: Partnering with major wireless carriers

AuroraTec's dependency upon the major wireless providers generated different challenges. The carriers needed to balance a classic trade-off. On the one hand, wireless was their future. The transition to all-digital (2G) networks meant that voice and data could now share the same transmission channel. Demand for and use of wireless bandwidth rose dramatically – 100,000x (!) from 2000-2005 alone. However, in 2000 and 2001, the typical carrier was struggling to modernize their network. A mobile service provider needed to be able to demonstrate that the wireless web worked, that web content could be accessed via its digital pipes, but from a network use and stability perspective, voice was still the predominant service they provided.

Mobile Data Traffic, 2000-2005: Almost 100,000-fold growth

Source: "2000-2005, call me" graphic from https://blogs.cisco.com/sp/mobile-vni-major-mobile-milestones-the-last-15-years-and-the-next-five used with permission of Cisco.

Strategic opportunity or mirage?

AuroraTec offered a crosswalk, a temporary pathway that allowed a wireless provider to expand its wireless services without having to build out its internal capabilities ahead of demand. AuroraTec bought time for the wireless providers, but if AuroraTec's "transformation" service was too good, wireless usage may have grown too quickly, putting pressure on wireless networks that were already struggling to keep up with digitization and increasing subscriber growth and usage.

Maybe the very wireless companies that were experimenting with outsourced “mobilization" didn’t want the service to work too well, lest it destabilize their other established, taken-for-granted, revenue-generating operations?

Pushing on a strategic string?

Urgency was a critical feature of many start-ups’ business pitches. Internet consulting firms – once called i-builders because they were hired to build Internet sites for new and existing companies – would promote “internet time” as a critical concern: move quickly, they would say, or you will lose the race to “Get Big Fast.”

You have more money than time!

Source: Scient, Inc. 2000. Reproduced by permission of Scient bankruptcy trustee.

Revenge of strategy: Whose clock was really ticking?

For AuroraTec – as for many other internet start-ups seeking to partner with large, established companies like the mobile wireless providers – the urgency to execute was a construct. Startups like AuroraTec needed the mobile wireless providers to believe in the need for urgent strategic action so that they could land new clients and expand their fledgling businesses. But in practice, especially after the peak of the bubble in March 2000, it was the startups that were running out of time. The large telecom companies whom AuroraTec sought to serve had other priorities and could afford to move more deliberately into the wireless web.