Earlier this week, Alan Sugar appeared on Sky News promoting the new series of The Apprentice gameshow. During the interview Mr. Sugar remarked that you cannot be really successful in business without being ruthless. In other words, you can’t be nice and successful.

The new generation of startups, driven by internet technology, and colloquially tagged Web 2.0, prove this statement to be wrong. A lot of Web 2.0 is about bringing peoples’ lives onto the net, providing communities where people and companies can congregate and exchange information. This demands that you’re not only nice to your customers, but also to your competitors and associates. There are an increasing number of ‘mash-up’ sites, which integrate multiple web services to provide something new. You can’t develop or launch such sites without working with people. And if you don’t play nicely, blogs will ensure that word gets around.

But there are other ways in which the old way of working is fading fast when it comes to internet businesses. Here, in no particular order, are three:

It’s all coming apart

If you’ve ever used Lotus Notes, you’ll know where I’m going here. Lotus Notes tries to bring everything together under one roof: e-mail, collaboration, process. It does none of these well. In my opinion, based on ghastly experiences, it’s worse than that: it does none of these at all.

The new way is to do something small, but to do it really well and to provide a public API so that others can use it.

There are still instances of the old way however: Ntractive is developing what appears to be a web-based Lotus Notes clone. I can’t tell because all their screenshots are zipped and there are a lot of ‘coming soon’ stamps. Notes to Ntractive: don’t label your comparison page with ‘We Have No Real Competition’. It’s either arrogant, lazy or both. It’s also wrong. Having some comparisions on a comparison page may help sell the service too. Have an Investors page that recognises countries outside the US.

Then there’s Zimbra. I’ve looked all over the site and I still don’t know what it does. Okay, it does stuff with e-mails. But that home page needs to make an impact, and it doesn’t.

It’s what we want

In many traditional businesses, success is enabled through providing better quality or by exploiting a niche market. Quality, of course is not absolute, it’s relative, governed by price and performance.

Now, businesses tend to appear and evolve based on what they need for themselves. 37signals perhaps led the way with this when it came to the production of Basecamp, and they’re still following this route today. The open source Ruby on Rails came about during the development of Basecamp.

This philosophy has had a profound effect on our business. We’re changing too, developing things that can help us. Remarkably, it’s helping our customers, because the software we’re developing is being used directly to provide better services to our customers. There’s an old adage when reviewing vendors of software development tools: ask them if they use their tools to develop their software. If they do, it’s a good sign. If they don’t, be very worried.

Per feature, not per user

Salesforce — who also have a home page that says nothing about their products — charge per user. In fact, a lot of serviced products still use this model.

When we were looking around for products to help our business we were immediately turned off by ones that demanded minimum user numbers, or worse, charged per user. These invariably meant that if we wanted to collaborate with more people outside our business, we would have to pay more: If one of our customers asked for another user account, we might have been in the situation of declining their request, which wouldn’t have looked good!

Basecamp has a pricing model broadly based on the number of active projects. This is a great strategy because costs follow the amount of work a company has. It also provides quick and easy ways of upgrading and downgrading, so it suits the ebb and flow of businesses. Whilst it doesn’t provide the wealth of features that Salesforce has, it works very well and is about 25% of the cost for a business of our size. Furthermore, it allows us to collaborate outside of our business at no extra cost.