Following last weeks IGAP finale, this is a guest post from IGAP 1 participant Alan O’Rourke of Spoiltchild, creators of the Toddle business newsletter tool. Alan talks candidly about the 10 biggest mistakes he’s made in online business.
The following are all assumptions / mistakes I made over the years.
1. It costs nothing to start a business online.
It is true that infrastructure costs have come way down. With the right technical knowledge you could set up an online shop or simple web application for about €50 and a little time. With no technical knowledge, costs are closer to €10,000 and up. For you reading this, it is probably somewhere in the middle. Compared to setting up a physical business on the high-street it is still a pittance.
But your website only gets you about 10% of the way. Now you need to start building a business. Time, marketing, advertising, sales guy(s), running costs, legal …did I mention time? Without upfront investment to hire the above resources, expect 2-3 years of hard work before your business starts supporting its self. Can you support yourself for that long?
2. Build it and they will come.
Why would they? How do they know you exist out of the trillions of websites out there? If they do happen across your site why will they remember to come back when they actually need what you sell?
3. The website must be perfect / fully featured before you launch.
I wish I learnt this lesson years ago. In some cases I have delayed months on what I believed to be a key feature, only to find out no one was interested in using it. What is the absolute minimum feature(s) you can charge for? That is your first release. (Read more about lean start up and “Minimum viable product”)
4. Your market is the internet.
Unless you have a new browser to compete with Internet Explorer, a new search engine better then Google or a new Facebook with more friends, then your target is NOT the internet. Even Facebook did not target the internet. They targeted students in Harvard University, then spread out to neighboring universities, then universities in one country at a time until eventually opening it up to all. And they spent MANY, MANY MILLIONS to do that.
5. You are unique.
Ok this might be true. You are a unique, beautiful snowflake. But unique doesn’t mean people will use you. Cherry Coke was unique. Didn’t taste nice but it was unique.
6. Bad reviews are bad.
Head over to Amazon and look at how they present reviews. Side by side you will see a good review and a bad review side by side, under the product. Amazon discovered something very interesting about bad product reviews. In most cases they increased sales. There are two things going on here.
First people do not believe in 100% positive reviews. We are a mistrustful bunch. Some bad review means it has some real users. This brings us to the reasons for the bad reviews. They add details on how a product will actually be used in real world situations and help us decide if it will suit us. Someone in Transworld Enterprise Conglomerate INC found one particular marketing book was no use with his blue-chip clients, but Small Business LTD found it helped generate tons of business. If you are a small business you will buy that book.
7. Your business / marketing will be viral.
Viral is a result not a strategy. Companies spend millions, seeding videos and ads on the right sites, at the right times. Hiring creative to come up with the one idea that might be a hit and making it. Paying key influencers to mention it and then cross their fingers and toes that their viral ad will stand out amongst the millions uploaded to YouTube every day. Most go nowhere. If you are sure your ideas will become a viral hit you will make more money than offering your services to these companies.
8. You will get on TechCrunch and you will be huge.
At most you might be on the TechCrunch home page for an hour before newer stories push you off. If your product is selling to other under funded, time-strapped startup entrepreneurs you may get a few hits. However a lot of investors read TechCrunch so it’s not a bad idea to get on their radar.
9. You are connected with some influencers on Twitter. When they tweet about you it will be huge.
Not me personally but a line I heard from a client recently. Two factors you need to realize here. Influencers tend to be influencers because they have built a lot of trust with their followers who know they will not be sold to, or pitched crap to. You need to build a lot of trust with these influencers, and have a damn good product. If you have that then you probably do not need the influencers as people will talk about you anyway. Secondly, Twitter is pretty poor for providing visitors that actually convert to customers. To get any kind of traction you will need to be Tweeted a few times. That’s hard.
10. The idea is worth billions.
In that case save yourself the hassle and years of sweat and heartache and sell the idea. Or realize the idea is worth nothing, how YOU execute on the idea decides on how much the BUSINESS will be worth.