A Tale of Two Revolutions - Ecommerce: A Historical Perspective

The World As It Then Was

The dynamic economic growth of the late 19th century placed greater and greater demand on horses to deliver manufactured goods between train and local destinations. Horses pulled stagecoaches, buggies, omnibuses, cabs and even shipping barges in canals. Hitching posts, mounting blocks, and water troughs were everywhere throughout cities in Europe and America. Beautiful carriage houses catered to the wealthy. Horse doctors were highly respected and treated humans as well. Blacksmiths were prominent members of every community.

On the farms, horses pulled wagons laden with supplies, and carried saddled riders throughout the rough terrains. Stronger and larger horses were bred to pull the new plowing and reaping machines. Carriage makers, harness makers, feed merchants, hardware producers, farm equipment manufacturers and the great livestock industry all thrived on the horse.

The World Changing Invention

In 1885 Karl Benz invented the first gasoline-powered automobile, with a lot of help from his wife Bertha. Other makers followed, but the auto was very expensive and generally considered a recreational vehicle for the elite.

The Transportation Revolution

In 1903, Henry Ford incorporated the Ford Motor Company in the United States proclaiming, "I will build a car for the great multitude." By 1908, he was offering the Model T for $950 and by 1914; Ford had invented the first conveyor belt assembly line. He was able to produce a Model T every 93 minutes, which was eventually lowered to every 27 seconds! He reduced the workday to three 8-hour shifts and paid his workers five dollars a day; double what other manufacturers were paying!

Wondrous Freedom

Can you imagine the joy? People could now explore long distances from home and return easily on the same day! Suburbs were created away from work in the cities. National highways were created. Recreational travel became popular as people experienced the unbelievable freedom of affordable automobiles. It must have been amazing to live in such times watching the complete transformation of society from top to bottom.

What Happened to the Blacksmiths?

The Blacksmiths, carriage makers, horse doctors, and horse driven industries would suffer tremendous change and downsizing; a transportation revolution was underway. Mercifully the changes took place over a couple decades. There would be a messy transition period as horses and gasoline powered vehicles shared the same roads.

Another World Changing Invention

In 1969, The Advanced Research Projects Agency of the Defense Department created a system that could transmit information between military installations through a network of geographically separated computers called the ARPAnet. They invented revolutionary new technology to accomplish this success. As the technology grew, this Internet, as it soon would be called, became the domain of scientists, university researchers, government entities and intellectual elites. But if your work wasn't included in this circle, the Internet was a government mystery.

The Information Revolution

Tim Berners-Lee could be considered, "The Henry Ford of the Internet" because like Ford, he brought a fantastic invention, enjoyed by the elite, to the mainstream customer.

In 1989, Tim Berners-Lee proposed a new project at CERN, a research organization out of Geneva where he worked that would build upon a pet project he built for his own computer in 1980. Modeled after how he saw the human brain organize information, it enabled him to link one piece of information in one file to another file, "to keep track of all the random associations one comes across in real life" but that our brains often forget. He called the program, "Enquire" which was short for "Enquire Within Upon Everything", a British encyclopedia he had used in childhood.

The guiding principle of Tim's new project was unlimited expansion. He would design a system with no central control or index and would therefore be infinite in capacity. If it worked, it could dramatically change the nature of the Internet, which most people still had never heard of, much less ever used. Tim would call his new invention WorldWideWeb.

WWW: Information Without Limits

Tim designed an addressing structure so that each web site, would have a specific location called the "Universal Resource Locator" (URL) He put together an easy to learn coding system called HyperText Mark-Up Language (HTML), so that files could be linked to one another allowing people to "jump" from one page to another, across unlimited amounts of files on unlimited numbers of computers. The rules he designed to facilitate this were called the HyperText Transfer Protocol. (HTTP)

The First Browser

By 1990, he created the first browser-editor to employ the new rules and coding; he called it the "WorldWideWeb". In 1991 the World Wide Web debuted bringing order and clarity immediately to the murky and mysterious Internet. Anyone could use Tim's browser and connect to anyone's computer with a URL (web address) jumping from computer to computer through Tim's updated version of Enquire.

A new and vast information system was now coming to the masses of ordinary people. The terms "Internet" and "World Wide Web" are now used synonymously but as you can see, they were once vastly different. Tim Berners-Lee is the inventor of the World Wide Web and within five years of his invention, Internet use grew from 60,000 to 40 million.

As of March 24, 2005, there were 888,681,131 Internet users worldwide or 13.9% of total world population. In North America there were 328,387,059 Internet users or 67.4% of the population. Internet usage grew 146.2% last year alone. There was a whole new class of millionaires created by the dot-com expansion of the 1990's and it's now hard to find a major business without a website. This is a revolution like none other in history and it's happening now.

Business Freedom and E-commerce

With corresponding breakthroughs in digital payment systems, including credit cards and electronic checks, Internet sales systems such as the online shopping cart allow anyone to browse and also purchase goods and services from any computer on the Web. Today there are still a few "blacksmiths" who believe the old ways are better, and maybe for those stalwarts of the brick and mortar economy, the old ways are better. But households are becoming more and more comfortable shopping from hundreds of millions of home computers worldwide. Total e-commerce sales in the United States for 2004 is $69.2 billion, as estimated by the Census Bureau, increasing from 23.5 percent over 2003. Anyone can have a website and sell products online to anyone in the world.

"I Was Born On the Internet"

There is now a whole generation who grew up using the Internet and they have no problem buying or selling products and services online. Shopping is convenient, fast and the delivered directly to home or business.

The Global Economy

The global economy now makes it easy to import and export online worldwide. Flowers are grown in South America, sold in the United States and managed from a company in Holland. Salmon is sold directly from fisherman in Alaska. Prices can be compared to similar products around the world. Merchants no longer need to maintain large stocks of products in buildings. An online store can take an order, process the payment, deposit it into the merchant's bank account, and a different company called a "drop shipper" can fulfill the sale and send out the merchandise.

Encouragement From Uncle Sam

According to the Small Business Administration, "The Internet is proving to be a significant business leveler, allowing small and medium-size companies to compete with the giants on the same global playing field...Whether you are a consumer or a business-to-business resource, some of the most efficient marketing and selling tools are available via the Internet, and the potential of reaching a vast audience is open to you through the World Wide Web."

Conclusion: Are You Part of the Revolution?

In 1905 one might ask, "Are you delivering your products by horse, or have you purchased a Ford motorized delivery wagon? In 2005 people are asking, "Can I buy your products online or do I have to get in my car and come out to your store? What's your web address?" If you haven't jumped in, it's never too late. The Information Revolution has only just begun.

Rick David writes for a Merchant Newsletter @Merchant America. He also writes a humor column called,"Don't Laugh It Could Happen To You" for http://sandiego.merchantamerica.com.