About This Transition

Trantor started looking to develop its own website in 1995. After several years of experimenting with the state of design at that time, we shelved the project.

In 1997, we felt that it was imperative for a serious computer related company to have its own website and we went looking again. We found that there was simply no appropriate product available whose cost could be justified by a small company like ours.

We felt it important enough to establish our web presence, that we spent the money to set up a web design and hosting operation ourselves. We did so in 1998.

Trantor has always done business by either word of mouth referrals or repeat business. We feel that our strength has been in offering real value for money and developing good long-term relationships with our clients. Since this was the foundation of our success in the past, this is how we decided to do business on the web as well.

• What is the value of a website?

• What is its cost?

• Does advertising on the web, as such, have a direct payback greater than the cost of the advertising itself?

• How important is a website as a service to your customers?

• How useful is a website to yourself or your business?

The answers to these questions vary according to many factors. We felt that before we could ethically offer our sites at a profit to ourselves, we needed to establish answers to these questions for the various types of websites that clients would use.

We did some preliminary research on the web and found that websites fell into a number of different categories:

Examples:

• Portals: Yahoo, Altavista, etc.

• Web-based companies: Amazon, webvan, etc.

• Web Design and Hosting firms.

• Major corporate presence sites.

• Small Business Presence Sites

• Small Business Retail (e-commerce) Sites

• Professional Sites (Doctors, Lawyers, Engineers)

• News or information sites

• Specialty News or information sites

• Personal 'vanity' sites

We were actually active during the dotcom boom, but did not 'catch the wave'. We have always been self-funded and since we are a small company, we had to concentrate on doing our research on a tight budget. We did not seek venture capital, nor did we vigorously promote ourselves to clients. Why? We were not convinced of the payback for any of the above and would neither bilk investors nor clients.

Although we were not convinced of the immediate (or huge) paybacks that our competition was, we were and are convinced that the web will evolve into a very important arena where payback is quite possible both for our clients and ourselves.

Amazon was losing money (are they still?). Yahoo was barely making a go of it and grossly overvalued on the stock market. Webvan (they spent $500,000,000.00 dollars) was losing huge sums of money and going out of business. While that was happening, we set about losing a smaller amount of money doing pilot sites and gathering information. We looked at what pays, what costs are really involved and how best to build and maintain a site that offers value for money.

One of the most compelling promises of the Internet was the prospect of an increase in sales for traditional 'bricks and mortar' businesses. We concentrated in a local community and while our competition offered the moon to our prospective clients, we concentrated on researching both the costs and payback involved in a small business e-commerce site. Our results were disappointing, but held some promise. Sales were made, but few and the nature of them surprised us and made it more difficult to fulfill orders.

We found that Internet advertising did indeed increase sales. However, we also found that the cost of the advertising exceeded the profits from the sales.

It had been our hope from our pilot to be able to demonstrate that money spent on a modest e-commerce site would return a profit to our client. This was simply not the case. Common sense would tell you that from our other research. At the time (perhaps still?) a well-funded huge site like Amazon.com who sell in the billions was unable to turn a profit. They have virtually captured online sales of books, but are hard-pressed to turn a profit. I expect they will, but overall, the GROUP of competitors put more money in than they took out. This includes ourselves, but rather than losing HUGE sums of other peoples money, we decided to lose small sums of our own while we built our knowledge and expertise as the web matured.

Our small e-commerce pilot was our major effort and expense, since if it had shown profits, it would be an immediate moneymaker for us. However, we also wanted to develop long-term service relationships with all types of small businesses. We therefore undertook to pilot other types of sites as well. We hoped to gain some economies of scale by making a single system work for all types of sites.

During our research period, and even now, we have been confounded by the fact that our competition has routinely offered their services 'below cost'. This, of course, is not a sustainable business model, but while they are operating, it is very difficult to compete with them and make a profit. We had neither the money nor the morality to offer a product below cost. This either means that investors ultimately lose money (you've just cheated people out of their investment money) or you are hoping to corner your client into some type of 'lock-in' and recover your costs later by selling ABOVE a fair price once they are locked in. We have never done business that way and it is our observation that well-known businesses that have been viable over the long term also do not do business that way.

If this has been a money-loser, then why are we still here?

We will not offer all of our secrets, but we have knowledge of some things that we feel will make our company viable over the long term, pay back our initial investment and offer true value to our customers.

One of the ways that we hope to improve our prospects in the future is by reducing our costs to the point that we can sell at a profit and still offer good business value to our clients.

This is a long game. We have anticipated and been correct that real costs would come down in this marketplace as the web matured. In a sense, Moore's law is operating on the hard cost structure of the Internet. That means that if a site costs $400 today, it will cost $100 three years from now. A site that is not economically viable at $400 just might be at $100.

We initially paid $365.00 per month to host our company site and a couple of pilots. These sites had limitations and required a $200 software product to maintain and a $50.00 annual fee for a domain name. For us to make a profit -- a client would have to pay $50.00 per month for site hosting and do the development work themselves. That would also require that they have a computer and an Internet connection. All-in, a client would be looking at an outlay of about $100 per month for hard costs and perhaps double that for development amortized over years. This would be for a modest site. At about $300 per month, It was clearly just not worth the money.

We anticipated that costs would come down and they have. Domains that used to cost $50 now cost less than $20.00. In fact, we ourselves sell to resellers for under $10USD. Similarly, hosting has matured to the point where a domain may be hosted for under $10.00 per month.

For us, the real barrier had been development of sites. They were very labour intensive, even with a suite of tools and several years of practice using them. Even though we had always targeted 'cookie cutter' websites, each new type of site had its own peculiarities and each client would ask for something we had not anticipated in our designs or that our tools would not support.

During a very active period of change on the net, low-cost hosting arrived due to the advent of reliable and feature rich virtual hosting coupled with the economies of scale brought by very large data centers dedicated to hosting.

That active period brought a lot of competition from all sides and we again found ourselves confounded by our competition selling below cost to capture market share.

This time, we had anticipated the environment. We had a strategy to turn that competitive disadvantage into an advantage. Rather than competing on price and features directly with the hosting companies, what we decided to do instead is shift our offering towards the development of our sites and customer care model. That allowed us to offer the same prices as the competition. We would just pass through the hard costs at a tiny margin. We would make our money on the consulting and site development side where we always have.

Two final problems remained and one caught us out. We anticipated that since our (now) suppliers were selling below cost, they were not economically viable. Eventually, we would be obliged to move hosts. Our strategy was to maintain multiple hosting sites. However, we ran into trouble when one of our vendors, hosting sites for us at two separate locations suddenly went out of business. We had a primary and a backup for our pilot sites and new sites, a separate primary for our own corporate site and were in the process of creating backup servers with a third company when this happened. I would not do anything different. We did the appropriate and conservative thing; we just got unlucky.

All of the sites were funded by our company. The majority of sites were owned by our company. All were low-traffic sites. We decided to concentrate on bringing up the client sites that were critical to our clients, our own sites which were critical to our own mission and to allow the other sites to lie dormant. We used this time to develop our new site software.

Our major stumbling block at this time is that sites are still too labour intensive to turn a profit. Our new site development software addresses that concern. This site takes several hours for us to develop by hand and it can not be maintained except by a skilled web developer that knows our system.

Our new site development software will allow clients to quickly develop their own sites with a little help from us. Hosting for low-traffic sites with a single page can be as little as about $25.00 per year. At that price level, we believe that price/value becomes removed from the equation. At that point, it all becomes 'who do you trust'?

You can look at our company and its philosophy by clicking on the menu on the side.

You can get an idea of the look and feel of our sites from this one; some client sites and some of our own sites:

HushVote

HushFinance

Peter Trower

Bob Trower

YDDM

Psychological and Psychoeducational Services

DER Engineering

HushWebs

Our new site code makes it easy to quickly put up very feature-rich sites quickly, easily and at a cost that allows them to pay for themselves. They also address security concerns appropriately, allow for simple updates and even automated updates and allow full site backup and transfer to new hosts with a minimum of fuss. You will like them. Please stay tuned.