Tonight I heard people talking about how they are hoping to make some big, easy money on the internet. “We will be setting up a dot com business so we can make some passive income” they say.
Their perception of an internet based business is that it’s almost a forgone conclusion that it’s a synch to make millions with little effort. It seemed to them that an internet based business couldn’t fail.
I have a very different opinion. I see the massive potential to run a business online however I also see that it’s far from easy.
Imagine you want to open a coffee shop. You need a good location, good staff and good coffee. You need to be better than every coffee shop in the street.
On the internet, your “coffee shop” is less than 2 minutes from every other coffee shop in the world.
In just a few clicks, your customer is in another store. Effectively you are on the same street as every coffee shop in the world.
It gets worse. Imagine that you are on the same street as every other coffee shop in the world AND each shop has an infinite number of seats available. Your competition don’t get too busy and make people cue up, they can serve all the customers in lightning quick speed no matter how many people show up.
Finally, add to the mix the fact that your competition have raised so much money that they can give away free coffee for 5 years, while the figure out how to make money in other ways. Now, if you charge for your coffee you’re going to look bad!
… That’s the internet and that’s why it’s not easy.
So here’s some tips when thinking about your presence online:
1. Have both a global reach and a local fan base. The internet still can’t compete with the “local touch”. My company Triumphant Events has products sent out all over the world but our local fan base is what keeps us growing.
2. Get clear on your “Micro-Niche”… On the internet, it’s painfully small niches that tend to get traction. Michelle Phan has had over 500,000,000 people watch her videos for “Asian girls, aged 15-25 to put on makeup in new unique ways”.
3. Make it remarkable and interactive for people to share. Over the last year, more than 150,000 people have started “planking” (basically you take a photo of yourself lying flat like a plank in a strange place). It’s a craze that’s happened because its super easy for people to do it and share it.
4. Understand your product strategy. There’s no point having 20,000 fans if you haven’t got a great value proposition for them. You also need to have more than just one product, you need a chain of them if you want your business to thrive. Apple have free products like iTunes, low cost products like iPod Nano’s and then before you know it you’re looking at a MacBook Pro for $2000!
Be smart on the internet. It’s the place where dreams are both made and broken.