VIRTUAL COMPANIES

Who, What and Why?

VIRTUAL COMPANIES

INTRODUCTION AND DEFINITION

Introduction to virtual businesses What is a virtual business?

Definition ○ Multiple meanings

When did virtual business begin? Evolution 1970s Email Discussion lists Libraries Delphi 1992 Offer internet service to subscribers to view database of info. 1995 Government contract end Explosion of websites and ISP services.

VIRTUAL COMPANIES

THE PROS AND THE CONS OF

The Pros

Lower overhead Flexible scheduling for employee No commute time Improvement in the team’s quality of life

The Cons Difficult to express & read emotions Tougher to post job listings Communication problems Time zone management Less bonding time

VIRTUAL COMPANIES

An Example

www.craigslist.com

How Craigslist.org Works? Classifieds (jobs, buy, sell, or just rant) You write it, you post it and you monitor it No paid advertisements

How Craigslist.org Makes Money? Charges some of the cites it services a

small fee to post for rentals and/or jobs Otherwise everything else is free

What makes it Virtual Started with no office

only communication thru email

They have no “Office” now, only a small house that is considered “Corporate Headquarters”

Cont… Although their employees are welcome

to come to work, most work from home“Employees aren’t really told what to do, or

when to do it, or when to come to work, or what they can wear… there are no cubicles and no dress code” Jim Buckmaster CEO

More then 90% of the Administration and 100% of the service is done “virtually”

Benefits of Craigslist “Virtual” Business Model They have kept overhead down in a

number of waysLess EmployeesNo rent

Very small operating expensesLess Employees means less office suppliesLess Employees less insurance paymentsNo rent of office space is less expense on

maintenance and furnishing

The Out Come… The Good

Business Insider estimates that Craigslist makes $80 million revenue a year!

Total worth of $5 billion plus The Bad

Anyone that has used craigslist and had a problem knows how difficult it is to get a resolution from Craigslist…

The Out Come Cont… And the Ugly

Because of Craigslist hands off approach to its service it has received a bit of criticism○ Craigslist killer

"What Craigslist does is basically provide services and these prostitutes have been providing services for years. And if it’s not the Yellow Pages, it's going be Craigslist. They find a means to advertise their services," according to Joe Moura, a Boston-based private investigator

○ The Wal-Mart of the internet

The Guy with the red paperclip…○ http://oneredpaperclip.blogspot.com/2010/11/one-red-

paperclip.html

VIRTUAL COMPANIES

THE USE OF DIFFERENT ASPECTS

Examples of Virtual Use Virtual Assistants Newspapers Utilities and Bill Payments Bank Services Restaurant Delivery Travel Plans Insurance Social Media

VIRTUAL COMPANIES

TO INFINITY AND BEYOND! THE FUTURE

Is This Our Future??

The Future How does Virtual Business grow from

today?Will growth be good?

○ Positives○ Negatives

Will everything become a virtual business in the future? PositivesNegatives

References:Monroy, C., & Vilana Art, J. (2010). Strategic positioning of global manufacturing virtual networks in the

aeronautical industry. Technology Analysis & Strategic Management, 22(5), 631-647. doi:10.1080/09537325.2010.488071

Feng, L., Papagiannidis, S., & Bourlakis, M. (2010). Living in 'multiple spaces': extending our socioeconomic environment through virtual worlds. Environment & Planning D: Society & Space, 28(3), 425-446. doi:10.1068/d14708

Bill Snyder, BS. (2003). Teams That Span Time Zones Face New Work Rules. Unpublished manuscript, Graduate School of Business, Stanford, California. Retrieved from http://www.gsb.stanford.edu/news/bmag/sbsm0305/feature_virtual_teams.shtml

Campbell, AC. (2006, October 19). New growth trend: businesses that serve virtual businesses. Retrieved

from http://smallbiztrends.com/2006/10/new-growth-trend-businesses-that-serve-virtual-businesses.html

McMasters, J. (2010, April 12). The Pros & Cons of Working Virtually: Inside Tips From The Largest Virtual Team in The World. Free Business Classifieds: Local Business Classifieds, Small Business Classifieds and Business Opportunity Classifieds. Retrieved May 19, 2011, from http://www.purchase.com/blog/work-environment/10-tips-for-leading-a-virtual-business

Rogers, K., & Lamary, N. (2010). Pros and cons of a ”virtual” business. Catalysts Limited. Retrieved May 19, 2011, from http://www.catalysts-ltd.com/catltdnews/164-the-pros-and-cons-of-a-virtual-business