Have you ever pondered over starting your online business?
Well. If yes, it is not surprising. Starting an online business has many advantages:
- You can be your own boss.
- You can travel.
- You can do what you like while making a decent living.
- You can interact with people from across the world – a world-wide audience at your fingertips.
Starting an online business can be very lucrative as it usually requires little investment of time and money.
Having started a successful online business, myself, I am able to judge common mistakes that people make when starting an online business.
So, that the purpose of this article – I’ll summarise the learnings from my 10-years’ experience of running an online business so that your journey of creating an online business can have fewer challenges along the way. I hope to save your time and 1000s of dollars (that I wasted along the way) and shorten your learning curve.
First thing first – what is my experience?
- I have been in the online business since 2009.
- I have created an online business that has profits in the 6-digit figure.
- I have created 2 successful websites – Chess Academy and Key to Victory.
- I have created 2 failed websites.
All in all, I have had a roller-coaster of a journey – with highs and lows. Therefore, I would like to share my experience with you, with the hope of making you avoid the costly mistakes I made.
The First Step
Idea. A business idea.
Often times, people spend a lot of time coming up with an “innovative” idea that is drastically different from that of a potential competitor.
Seems logical, right?
Well, here is an interesting fact. On 15 May 1990, Van Gogh's “The Portrait of Doctor Gachet” was sold for $82.5 million!
The only problem is – when Gogh was alive, nobody wanted to buy his painting! He died broke. Even though Gogh was very creative and innovative, he didn't manage to profit from it within his lifetime!
In contrast, when Pavel Durov, a Russian entrepreneur (best known for being the founder of the social networking site VKontakte, and later the Telegram Messenger), started his business, he simply created a replica of FaceBook for the Russian market. There was 0 creativity involved. Yet, his company was valued of $3 billion! In 2014, he founded another company – Telegram. This time, it was a replica of What’s App. In 2018, Telegram reached 200 million monthly active users.
So, what’s the moral of the above 2 examples?
It is not necessary that only an “original” and “innovative” idea will make your business a success. In fact, 80-90% of the Apps on PlayStore are not used more than once. If your idea has a novelty factor, it should make sense, have a clear benefit and satisfy an existing need. So, don't spend too much time thinking about how your idea needs to “be different from the rest,” when it’s not necessary.
Here is another analogy to further drive the point -
In music, what differentiates a classic from that of an improvisation?
Well. The difference is that the one who is able to improvise has already mastered the classics. It is only because of this that they are able to improvise.
It is the same thing with business – you need to master the classic business model (something that already works) in order to be able ‘innovate new ideas.’
Now, you may be thinking – “If I just copy someone, why would they buy from me and not from the market leader?!”
Well. Let’s learn the story of, Kōnosuke Matsushita, the founder of Panasonic - the largest Japanese consumer electronics company.
The idea behind Panasonic was simple – he’d take existing electronics and recreate them such that they are 30% less expensive and 30% more efficient. The simple idea made him one of the richest people on the planet.
Here is a trick question –
If you want to build the tallest skyscraper in the city – how tall should it be?
The answer is - just 1 floor taller than the existing tallest building. This is called the ‘skyscraper’ marketing technique. You do not need to re-invent the wheel, you just need to build something upon an existing product.
Henry Ford is known for introducing the assembly line – one of the greatest innovations in history that changed how industries are run. However, it is less widely known that Henry created the ‘assembly line’ after seeing slaughterhouse in Chicago and its “disassembly line”. He too took an existing idea and only improved the same.
Did you know that MySpace came before Facebook and Hipstamatic are older than Instagram? Ideas are a dime a dozen – it all depends on the execution.
Therefore, don't get discouraged if your online business idea is not “original.”
How do you do take an existing business idea and make it a little bit better?
The answer is: You need to study your competitors.
It may be hard for you to study your competitors as you are enthused about quickly launching your business. However, studying your competitors will definitely reap results and avoid you from making costly mistakes.
For example, Sam Walton, the founder of one of the biggest supermarket chains in the world, was known to spend more time in competitor supermarkets than his own. He knew the importance of learning from his competitors and leveraging their experience.
So, how deeply do you study your competitors?
Well. Pretty deeply.
Study their reviews.
Understand the problems that the customers have with them.
Learn their marketing techniques. For example, are they active on Instagram? Do they use SEO? What channel works and doesn't work for them?
Studying your competitors will allow you to build your business on top of their success. It’s almost like running a marathon –would you rather join from the start-line or from the position of the person who is ahead of everyone?
At this moment, you may have a few doubts and apprehensions–
Is it possible to start your online business with no money?
69% of U.S. entrepreneurs start their businesses at home, having limited to zero capital to start with.
In fact, when I started, I was 21 years old with no money to spare. My first online business idea was to fail. I pursued a second one which in turn proved to be a hit.
So yes, I have started with 0 capital investment and have managed to grow the business to a 6-digit-figure valuation. That is the beauty of creating an online business – all that is required is YOU and a computer. You can use several free resources to grow your business (for example, social media and Google are free!).
Here is another probable apprehension –
Am I too old to start an online business?
Well. Let me answer this question with some statistics.
Age of small business owners:
- 51%are 50-88 years old,
- 33% are 35-49 years’ old
- 16% are 35 years old and under.
These stats go to show that ‘start-ups are started by the younger generation’ is actually a myth.
Here is the final tip – Do not overthink your business idea. You need to launch.
The following saying from Chess can be applied to the business field – ‘No openings are winnings and no openings are losings.’
Even though the first step is important, it is seldom the case that a wrong first step will lead to a detrimental final result. There will be many wins and losses along the way.
It is hard to fully plan your journey when you are starting. The good news is – you can correct yourself along the way. For example, Apple initially started as a computer company. However, today, 80% of their income comes from the sales of phones. This just goes to show that Apple too had to pivot along the way (according to the market).
Therefore, do not overthink. Just launch your online business.
“To me, ideas are worth nothing unless executed. They are just a multiplier. Execution is worth millions.”
– Steve Jobs
To sum up:
- Find an existing online business model that works.
- Figure out, how you can improve the same. Can you make it better, cheaper or more convenient
- Do your homework and study your competitors thoroughly.
- Do not over think the idea – just launch it.
“Ideas with great potential cannot fly high if no one will put it up for a fight.”
- Elon Musk