Monday, May 09, 2011
Are you (really) ready to start an internet-based business?
Editor’s Note: Spoke cadet and pixel farmer (literally) Josh Neuroth spins a cautionary yarn to help those who are considering Adventures in Babysitting (ahem, internet start-ups). It’s a stark reminder that with great power comes great responsibility, patience, foresight and intestinal fortitude.
In some ways, the rise of the information age has led to what some have called a 21st century Gold Rush. Unfortunately, the hype can be unwarranted. The internet can be a great business tool but basic business fundamentals still apply. Though many books, blogs, and tweets have been written on creating online businesses, we’ve put together five simple things to consider before launching an online business:
1) The internet values user experience. If an online business is to be sustainable (without continually spending a fortune on advertising), people are going to have to talk about it and spread the word to their friends. Online businesses need to create a user experience worth talking about for sustainability and growth. Mark Zuckerburg, the creator of Facebook, didn’t set out to “create the next Facebook”. Instead he focused on creating something great that he himself wanted to use.
2) The internet doesn’t magically reward great ideas. In one of his most famous quotes, Thomas Edison said, “Genius: one percent inspiration and 99 percent perspiration.” The big idea must be combined with execution to be successful. What the big idea needs does not so much depend on how young, old, or smart the founder is, but how much perseverance and self-education the founder puts in. There are no tools that make a better substitute than putting in the work.
3) Simple ideas with exceptional execution go a long way. eBay was not the first auction site but was the first to do online auctions right. Amazon was not the first online bookstore but was the first one to do it right. This comes back to putting in the hard work and creating an experience worth talking about.
4) A kick-ass half is better than a half-ass whole.* Business owners can get away with a less than stellar brick and mortar business because of physical location. With millions of websites online, users can pick a competitor with a single click. To effectively stand against the competition, it’s far easier and better to focus on being the best in the world at one thing. This increased focus makes you stand out to the rest of the world and makes it harder for competitors to compare against you.
5) Online success can be slow. One of my close friends started an online retail store in 2005 selling high-end consumer goods. It took almost six weeks before the first order rolled in. Today, the business is doing very well with thousands of world-wide customers. For the first few years, he built the business by himself, often working late nights, and relied on outside contractors and firms to help with the search engine marketing and web design. If this slow start is the case with most online businesses, then what about the “overnight” successes we hear about? These accelerated successes usually come in two ways without fail: 1) from people who already have experience building a previous online business 2) from those able to secure venture funding and receiving external experience from an investor.
If there is one thing that trumps all else, it’s starting a business that you’re passionate about, committed to, and willing to do whatever it takes to see it become the best. Evaluate opportunities based on this first. Would you still pursue this business in one year? Three years? Five? Most online entrepreneurs work for the goal of adding value and making the world better, not because they are trying to make money. If you’re trying to start a business solely to make money, it’s probably not enough motivation to create something amazing.
Further Readings:
- *Rework by 37 Signals
- Delivering Happiness: A Path to Profits, Passion, and Purpose by Tony Hsieh
- A Lapsed Anarchist’s Approach to Building a Great Business by Ari Weinzweig
- Sober Entrepreneurship: Why Modern Entrepreneurs Won’t Succeed Under the Influence by Carol Roth. The comments on this page are insightful. And, in case you missed the link to Carol Roth’s e-Pub, it’s here.


