A Brief History of The Web Design Industry (1999-2015)

In 1999, I set out to create a web site design firm that was client-focused because I am a salesman at heart and I love giving my clients what they want.

By virtue of my age I just barely missed what I consider to be the "first wave" of the internet, which ended with the "Dot Bomb" stock market plunge and rout of the early-arrivers to the world of e-commerce.  After that, the world moved cautiously into the "web design" era - where sellers of goods tried to get something resembling a catalog on the web, and the rest of businesses and organizations paid agencies and freelancers to design informational "brochureware" web sites.  We chose the Microsoft route, so were were building web sites in HTML and ASP (Active Server Pages) if a database was necessary.  It seemed like a good idea to have control over where our web sites lived - so we rented data center space and from day one had our own Windows hosting operation.

Right as this movement was picking up steam, the world was rocked by Sept 11.  Everyone froze and kind of silently acknowledged the end of the kind of post-cold war "peace" we all took for granted.  There was a brief recession, followed by what many believe to be the biggest "fake boom" of a lifetime - where Generation X's got married and started families with the same expectations of prior generations - to live better than their parents - and boy did we.   Artificially low interest rates built us McMansions, tax loopholes bought us Hummers and SUVs and continued enthusiasm for technology created jobs.  In the web design industry we were focused on getting retailers and distributors into full-bore e-commerce web sites, and the "agency model" of making all web site changes on behalf of our customers aggravated everyone, leading to development of Content Management Systems so that more and more people could edit web sites themselves.  Technology was abounding, but you had to know what you were looking for and you had to know how to use it.  And we did.  Real-time credit card processing, broadcast e-mail, custom e-commerce, XML, APIs - it was cool stuff.

It was interesting, retrospectively, to see the wave crest.  In July of 2008 we went live with 22 new web sites in one month and had 16 employees.  And then someone hit the light switch.  I believe it was Lehman Brothers :-)   The Great Recession wiped out small businesses and big business alike and the economy went into a torpor that I'm still not sure we have ever fully emerged from.  Surviving businesses were scraping by and competition on the web hit a fever pitch.  In 1999, 2000, 2001 we would launch an e-commerce web site (specialty light bulbs for instance) with an understanding that there were 7 or 8 serious competitors in that industry with which we had to do battle in the search engine rankings.  By 2008 we were looking at the Google rankings while writing proposals and saying "How can this work?"  How do you put someone on the web for the first time up against 200 "stop-at-nothing" competitors + Amazon?

For a brief period, during the Great Recession, I decided "If you can't beat 'em, join 'em" and I became a high-volume Amazon third party merchant.  We built a "lab store" - where we were our own client.  We sold seed packets and gardening products.  Initially, it looked like a goldmine.  I began to think that maybe the future of e-commerce would be a few mega-malls like Amazon, responsibly curating thousands of third-party sellers who could fulfill the orders for long-tail merchandise more efficiently than Amazon's mega-warehouses.  We started setting our clients up on it, and their initial feelings were the same as mine.  But that's not the way the world works now.  You see, Amazon has a problem showing a profit.  All that free shipping and Amazon Prime is very costly.  And when you're #1, the most successful player in the market, and you can't make money - than that tells you everything you need to know about the paradigm.  Amazon typically takes a 15% commission on the gross order total (merchandise and shipping) from their third-party sellers.  Since Amazon publishes sales rankings of each product right on their pages, any product you do a really good job of merchandising immediately goes on the radar of other seller competitors and Amazon themselves - they use these rankings to determine what products they should start carrying and selling direct with their ubiquitous free shipping!  As you buckle under the increased competition and pressure to reduce your shipping charges, you become unprofitable.  The cash-flow problems are compounded by the consistent long-tail volume Amazon generates.  With a large list of SKUs you find yourself having to reorder frequently from your vendors, which increases your inbound shipping costs and degrades your opportunities to buy less frequently with quantity discounts.  If you slip up, and your on-time delivery and customer service metrics decrease, Amazon shuts you off, and then offers to let you come back online if you "leave the shipping to them" by using their FBA warehouses.  After three years of selling on Amazon I realized that the Pullman town was alive and well -- Amazon is ok with you selling on their site as long as you give them the majority of your net income, you do everything the way they want you to (which changes frequently) and oh, why would you want your own warehouse? - just use ours!  If you sell through Amazon, advertise through Amazon, receive all your money from Amazon with a float and use Amazon's warehouse to store, pick and pack and ship your merchandise are you really a business.  I don't think so.  I yanked the cord.

This began what I call the "WordPress" era - cheap, template web sites - built with just enough pages for the millennial attention span. Every industry has its "technology" and unfortunately the investment banking world has the most dangerous technology around.  Not only did their antics cause the Great Recession, but now they have the ability to pick early winners in every industry with tricks of scale.  If two businesses compete against each other, and one raises $20MIL from VC, hedge funds, IPO whatever - the game is over for the one who didn't.  So now we are seeing "standards" emerge which shouldn't have been standards.  We're seeing the difference between fads and trends blurred. WordPress is crap.  Amazon is evil.  Google is a monopoly.  But there is nothing, for now, that we can do about it.  So in building web sites in 2015/2016, I proceed with a thoughtful opinion on likely outcomes, responsible use of available technology and adequate explanation to the client that

It is true that mobile phones generate a ton of the web traffic in 2015.