If I Were Just Getting Started…
This morning it occurred to me that a lot of the readers of this blog are just getting started with the whole art of running web businesses. Many of you probably haven’t even gotten started yet. So here’s a little advice on how to get started, the right way: you’re going to learn from many of my mistakes!.
Getting the basics
I tend to think that there are three basic ways to get started with your own online business. The first option, if you have the money, is to buy an established site. Buying an established site eliminates the need to wait 6-18 months for your site to get established and it provides you reason (instant gratification) to keep on pushing forward. Without that initial boost, the first few months can be quite disillusioning while the traffic trickles in ever so slowly.
The second option is to start from scratch but spend heavily on marketing. Personally, when you’re just starting off, I think this is the weakest option. For one, you have no experience with how to do successful marketing and no one does it right the first time. Second, if you’re going to spend money, spend it on a site that’s already established rather than risking it all on marketing dollars that could result in total failure.
The third option, and the option that I’d actually recommend in conjunction with the first, is to start a site from scratch but pursue slow growth. This option requires a lot of patience, but in my view, there is a lot of money to be made on the web by being patient. Take your time. Do things well. And expect your payoff to come 18+ months down the road.
So starting off I really see 2 good options depending on your situation. No matter, what you should start your own website from scratch just for the experience going forward. Choose a micro-niche that you love, and just treat it as a canvas that you are slowly painting over time. Don’t expect a finished product with monetization from the get-go. If you have the money, you should also buy an established website to use as leverage for you other projects.
Information, Service or Product
If you’ve got a great product idea, then go for it. But to be honest, coming up with great product ideas isn’t very easy. Plus, the startup costs and work load can be intimidating.
The same can go for a service oriented business. Keep in mind that if you are not careful, you can find yourself doing too much for too little, and be selective about the clients that you work with.
I took on a client for web development when I was just starting out who bailed out and demanded his $1000 downpayment back after I had put in over 50 hours of work. I took the hit for the sake of the business, but keep in mind that when you’re dealing with demanding clients who aren’t paying a premium, you may want to look elsewhere.
From the very beginning, I’ve been all about developing informational content. I’ve done other things here and there, but organizing and developing content in unique ways has definitely been my bread and butter.
There are literally billions of ways to provide unique and useful information to your customers. The key here is in the structure not necessarily originality: present information in a unique format, and you’re golden.
The Ultimate Dilemma
At first, most people want to go after the jugular and compete for the highest paying business niches. Not wise. To put it simply, you will not have the resources to leverage yourself against the big-guns.
What you want to do is “dig a small hole deep”. Find a micro-niche that currently isn’t filled. This may seem daunting, but it really isn’t too difficult.
Let’s take one of the highest paying niches on the web, travel. To build a feature-rich and successful world-wide travel site, you’d need the resources of hundreds of writers and affiliate-sales developers.
However, think about the millions of places there are on the earth to travel. That’s how you identify the small hole in which to dig deep. Let’s say you notice that there aren’t many sites providing good tourist information for people in Tijuana, Mexico or Sicily, Italy or maybe even Space Tourism (looking to the future). There you go. That’s your project. Make the best single site on Tijuana, Mexico or Sicily, Italy or Space Tourism. Once you’ve finished one site, you can feel good about your accomplishment and move on to the next project.
So what’s the ultimate dilemma? Well, it’s this: as you start to develop your portfolio of web sites, you’ll realize that you can quickly become overwhelmed. The dilemma is that starting off 1) you’ve got to work in micro-niches to compete in the web space, 2) you may need a lot of micro-niche sites to make good money, but 3) you’ve only go so much time.
Choosing the right micro-niches is the challenging task - and micro-niches that have no market are almost totally worthless. So pick wisely, and do your research. Make sure that people want and will actually use your information. Make sure that you don’t get spread too thin with excessively high-resolution micro-niches… Spreading yourself too thin to the point that all your projects fail is a common mistake that new web entrepreneurs experience (I myself am just now recovering from growth that was too fast, which required me to start hiring staff). Start off with what you can manage well, adapt, and as you grow make sure to realize the value of hiring staff to help you manage your site portfolio… it can make or break or your business.
The Importance of Leverage
When you are just getting started, and if you’re in this for the long haul, then you should constantly be thinking about how to build and leverage your resources. I can’t emphasize enough the importance of networking. Don’t be afraid to ask questions. And once you start building a network of friends, you’ll be amazed at the power of bartering. Friends like to help each other and it really is not a zero sum game. Everyone benefits. Just make it a priority to make contact, and build friends.
Probably the best strategy for jump starting your “resource leveraging” is to buy a good website on SitePoint. A website with solid traffic, good Google PR and good content can be priceless. In fact, you may even consider buying a site for its leveraging value rather than its income generating capacity. Think about it. A good website gives you the ability to offer links for services, to boost both the visibility and PR of your other sites, and to even meet the right people who can help you take the next step.
Patience
In my view, one of the biggest opportunities for money on the web these days lies in taking advantage of other people’s lack of patience. It never fails to amaze me how many good websites get abandoned right as they are starting to make their mark as an authority in web space. On the web, people move from project to project, and abandon smaller projects for bigger ones. You can take advantage of this by betting on the fact that the traffic of a website will tend to increase over time, all else being equal. And as we all know, traffic=income. It’s a very simple formula, but its true. So if traffic=income and if traffic tends to increase over time as a site becomes entrenched in webspace, why do so many people sell off their sites only a 6-18 months into the project? There’s a simple answer: lack of patience. Don’t make the same mistake.
But Patience Isn’t Always a Virtue
A friend once said to me that “patience isn’t a virtue if you’re trying to dig a whole to China from Kansas.” And that’s true. You need to be selective in what you are patient with. Choose good websites with tight, focused micro-niches that will remain relevant for at least 10 years. That’s right 10 years. Expect to see your revenue rise over time. If it doesn’t, then it might be time to bail.
Closing Thoughts: Organized Chaos
Succeeding on the web require a level of dedication and patience that not everyone has in them. Before starting out on the adventure, you should really take a gut check and ask yourself whether you are willing to put in the work now when the biggest rewards are coming down the road 3-5 years from now. Putting in the work now requires that you manage your web presence according to the organized chaos model. For every 20 projects that you try on the web, only 1 will probably turn out to be moderately successful. And if you’re lucky enough to try out 100 projects, then you might have a chance at actually hitting on something big. The key is in maintaining this balance between chaos (trying out several ideas at once) and organization (doing everything you do intentionally, with a goal) and not being afraid to fail several times before you succeed.
In the end, the important thing is to get started and refine your procedure over time. Always work on a plan, but don’t expect to have a perfect plan before you get started. Treat your business like a work of art, something to be improved and developed over time, and pretty soon you’ll be working on something quite beautiful.
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I think you’re right - patience is key. It’s really telling to take a look through, say, the list of ruby on rails projects and see just how many are either dead links, or have cobwebs in the corner of the screen.
Part of it seems to be that people who create businesses on the net are much more passionate about the net than about business.
Another aspect is that people seem to be striving for that meteoric rise to fame for making the next digg, or flickr. But one of the most interesting things for me is to see the stories over at http://uncommonbusiness.blogspot.com/ . People who are working in obscurity, yet have managed to be continuously and quietly successful as so many famous companies failed.