The Easy Money in Dot-coms

In my earlier avatar as a full-time journalist with a daily newspaper, one of the things I was responsible for was bringing out a weekly management supplement. An interview with a management guru was a regular part of this supplement. One of the standard questions that I put to these management gurus was what their definition of a business model is. Usually, I got very long answers which were half baked and full of management jargon. One day I got lucky and one management guru told me that the business model is how a company hopes to make money one day, some day. After the interview got over he asked me to edit that out, telling me that he had said it in jest. Nevertheless, that is the best and the simplest definition of a business model that I have come across over the years, even though it was said in jest. Typically, the best way to judge a new company which is currently not profitable is to look at how it expects to make money some day. And that some day can't be very far in the future. Take the case of the dot-com companies in India. They are currently bleeding and losing a lot of money. The situation is similar to what happened with the dot-com companies in the United States in the late 1990s and the e

This article was originally published on May 15, 2015.