While it is very clear that Ferrit has failed as a business, I do not believe it is as clear that it should be closed down.
The reasons for the business failure are usability, costs and strategy. All three can be worked on, and from the evidence, I don’t think any have been given a fair chance.
The change required is enormous, and perhaps Telecom doesn’t have the appetite, which as a giant corporate focused on greater things, is probably right.
I do, however, believe that a clean break under new management could make something work. It would mean starting again in a way, and based on much lower traffic, but organic growth.
Here are four things I would change to try to make Ferrit work:
Dramatically lower the cost base
Shut down advertising completely, fire the external developers and marketers and reduce staff numbers from 37 to, oh, about three. Those three should include say 2 developers and one business oriented person. The focus would change to attracting and retaining customers through word of mouth marketing and a great site experience.
Improve site usability
Systematically identify issues, prioritise them and change the site to make it easier to use. Be very open about what you are doing, and ask your visitors for feedback in a forum/blog. There is plenty of work to do here, but nothing that a couple of great programmers couldn’t handle.
Find a strategy that works for suppliers and customers
Lower the commissions payable by retailers so that they don’t feel pain when selling through Ferrit. Meanwhile offer discounts that eat into but never exceed the commission for other products. Keep the retailers happy by being pain free, and by driving results. This is the hardest part to get right, and without seeing the inner numbers I cannot say whether it is even ever possible to achieve.
Move to Wellington
Wellington is the design, usability and web development center in New Zealand. Moving Ferrit means access to the great local talent, great feedback from the community and a complete break with the old culture. The rents are cheaper, the talent is better and the community is simply stunning. If you are in the internet in New Zealand then come to the home of Trade Me, Ponoko, Plan HQ, Big Ears, Silverstripe Xero and many many others. It’s all tied together by several communities, including the internationally acclaimed Webstock.
What do you think – can it ever work?