Digital Entrepreneurship

Digital Entrepreneurship represents a category of Entrepreneurship that leverages new technologies in novel ways such as the Internet Communications Technology. A digital entrepreneur is an individual who uses the Internet as a tool to create commercial opportunities, disseminate information, and collaborate with clients and partners.

Digital Business Models

* Brokerage - a company that creates markets by bringing buyers and sellers together and facilitating transactions for a fee between them. Those can be business-to-business (B2B), business-to-consumer (B2C), or consumer-to-consumer (C2C) markets.
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* Advertising - a company sells space on their site to 3rd party advertisers who pay on a fixed rate, CPC (cost per click), CPI (cost per impression), or CPA (cost per action). Examples of advertising models include portals, classifieds, user registration, and behavioral marketing (where the banner ads are geared towards the demographic of a site) [http://digitalenterprise.org/models/models.html#Manufacturer] . Popular advertising systems include Google AdSense and AdWords, Yahoo!'s Overture (also known as Yahoo! Search Marketing), and Microsoft AdCenter. Advertising works best especially on high traffic sites.
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* Infomediary - a company that collects, analyzes and sells information on consumers and their buying behavior to other parties who want to reach those consumers. Examples of these are: Recommender System ( [http://www.epinions.com/ Epinions] ), Registration System ( [http://www.nytimes.com New York Times] )
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* Licensing- By holding a patent for a certain type of device, whether it be a music player or coding this allows for selling of such knowledge and can create some significant profit with little to no effort on the creators part. The issue with having or creating new digital tools is the ability to copy or recreate the same tools without gaining the appropriate rights from the original creator. Protection and privacy rights will contribute to this type of money making technique in a vital way.
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*Merchant - a company that sells goods and services through an online store. These "e-tailers" can be traditional 'brick-and-mortar' storefronts with an online presence or completely virtual and do not have a physical storefront. Goods and services sold can be either through listed price or by auction.Digital Opportunities
Digital Development and Virtual Teams

* The digital world has opened up the possibility to have virtual teams where no physical meetings are required. There exist the possibilty to have people all around the world contribute to a specific project. Due to the low starting cost and the easily accessible network of people, starting a digital entreprenurship is quite easy.
*Digital Rights Management & Legal Issues
Costs involved with Digital Entrepreneurship
Costs of starting-up and operating costs are usually lower than those found in a brick-and-mortar business. Costs associated with digital entrepreneurship are lower because of: lower overhead, having no storefront, cheaper customer support, the need for less licenses, one time development for a product/service, lower distribution costs, ease of outsourcing, lower employee compensation (there is no need to have an employee on site anymore, meaning businesses do not have to incur costs such as relocation costs, etc.), and the ability to monitor instant price fluctuations of products/services that competitors are selling/providing.

* Support - Information or assistance may be provided to support use of products or services that are free, provided by other vendors, or both.

Digital Distribution

In digital distribution there is a one time development cost to generate the initial product (high fixed cost) which can then be quickly duplicated with little or no cost (low marginal cost). Digital distribution also allows a company to sell its products directly to customers and reach a larger market through the global reach of the Internet. Versioning is another common concept in digital distribution where small changes are made to an initial product in order to market the product to additional segments.

Digital entrepreneurs often exploit a statistical phenomenon known as the long tail and the "fat belly". Digital businesses can offer customers a far wider array of choices and options than their brick-and-mortar counterparts. Instead of reaping profits from the most popular offerings alone, there is much money to be made in the long tail or the "fat belly".

Digital Market

Digital markets differ from traditional markets in several key ways. In a digital market, prices are easily changed which leads to high price elasticity and lower prices. Digital markets typically have lower entry costs allowing companies to start by bootstrapping. Digital markets also help to eliminate asymmetric information, which leads to a more equal distribution of knowledge among buyers and sellers and makes them each more informed about one another. This generally further lowers prices and makes it harder for companies to practice price discrimination.

Digital Content

The type of content in a digital market differs from that in a typical physical market. Content that is aimed towards specific needs or niche demands is more feasible and successful in a digital environment. This is due to a couple of unique aspects of the digital marketplace. The first is the ability to produce content at a much cheaper cost making it easier for people to service these unique demands. The second is the wide reach of distribution which enables most of the world as a potential consumer for a business, where as traditional physical distribution methods are typically limited to a specific area or region.

Hot trends in content is the idea of social networking, bringing with similar interests or commonalities together. Also, is the idea of globalization, linking with different people all over the world, a key theme of Web 2.0. Web Services such as SOAP and RSS feeds and user interface technologies such as AJAX are whats hot in web development because they support the notion of Web 2.0: that information should be as readily available as possible and everyone everywhere should have access to the information. These web services offer interconnectivity between different sites and databases, linking information from many locations.

References

The [Berkman Center for Internet and Society at the Harvard Law School] has created modules on Development and the Internet, which include a definition of digital entrepreneurship that applies especially for developing countries.

The NCIIA funded a grant in 2006 to study Entrepreneurship in the Digital Arenas. This grant was awarded to the [http://ritdigient.ning.com RIT Digital Entrepreneurship Group] .

Famous Digital Entrepreneurs

* Chad Hurley and Steve Chen (YouTube) - YouTube
* Mark Zuckerberg - Facebook
* Kevin Rose - Digg
* Joshua Schachter - del.icio.us
* Stewart Butterfield -Flickr
* Sergey Brin & Larry Page - Google

External links

* [http://www.nciia.org National Collegiate Inventors and Innovators Alliance (NCIIA)]
* [http://ritdigient.ning.com Rochester Institute of Technology Digital Entrepreneurship Group]
* [http://www.rit.edu/~cehbbu/digitalentrepreneurship.html Digital Entrepreneurship - Dr. Clyde Hull, RIT]