Writing just at the onset of the dot.com era, prognosticators Hagel and Armstrong gazed into their crystal ball to divine the future of e-commerce and Web communities. As beneficiaries of historical hindsight, today we can clearly see which of these early ideas worked, which worked well, and which worked not at all. The results are impressive.

Born as a best guess, Hagel's and Armstrong's book serves as a veritable manifesto to help you gain a better understanding of today's online economy. It also offers invaluable guidance for building your own successful virtual network and creatively leveraging this unprecedented change in the market space. Hagel and Armstrong show you how, as a professional networker and business builder, you cannot afford not to target and organize your own version of an online community.

Since we went online, the authors explain, there has been a profound change in the balance of power in commerce: power has shifted from the producers and vendors to the customers. Online networks are all about establishing and reinforcing connections between people. By adapting to this culture and giving customers the possibility to interact which each other as well as with the company, businesses can build closer relationships with customers and better serve their needs.

Who benefits from virtual communities? Both the customer and the vendor: online communities provide customers with a distinctive focus of information and member-generated content, as well as commercial orientation and access to competing vendors. Virtual communities help vendors expand their markets by aggregating all kinds of information profiles about the members' use of the network, thereby providing a better understanding of their needs. In short, vendor and customer can find each other more easily. Power to the customer means profit to the vendor.

The key to exploiting this new market opportunity in online networks lies in combining content and communication with your services and goods. A good starting point is being able to articulate and communicate the value of your community. Which benefits does the online medium add to the offline alternative? Remember, networks are about people, so community must come before commerce. Your goal is to aggregate member connections and establish loyalty. The best indicator of future loyalty is the degree to which your community lends itself to meeting relationship needs.

If you are a dyed-in-the-wool believer in the power of "belly-to-belly" interaction, why should you, as a provider of content and goods, be concerned with this new marketplace dynamic? Hagel's and Armstrong's answer is simple: "If you don't convert your customers to virtual communities, someone else will do it for you."

Here is how they summarize the purpose of their message: "This book is intended to drive to action, first by persuading readers that virtual communities represent a powerful new vehicle for value creation, second by relating the general principles that will lead to success, and third by convincing readers that rewards will most likely accrue to those who move first and fast." This was back in 1997--but it's never too late to hit the ground running. Perhaps this book is the wake-up call you were waiting for.

Paperback, 239 pages; $24.95; Harvard Business School Press, 1997.