How do you start a dotcom business? Why, just like any other business, selling a product like software or providing some services like movie download services. So why do some online business crash after burning through millions of dollars?
One main reason is because they were started by technological whiz kid who has no idea what business is about, nor how to run one properly. Of course the internet bubble burst, and people are much wiser nowadays.
The scary thing is, with a new techno-jargon, Web 2.0, the whole internet bubble thing may be coming back. I therefore feels obliged to remind those aspiring dotcom entrepreneurs what and how to start a dotcom business.
“What is business?”
Business has always stayed the same; buy and sell, buy and sell. Customers buy, and you sell. The money used to buy the goods are called cost, the money gained from selling them are called revenue, and the difference between revenue and cost are your profits.
“How to start an online business?”
The simple precept of making making a profit is the most basic of all principle to business. After finding a product or a service you can sell, all you need to do is find a webhost, build a website to showcase your product or services, add a snazzy online purchasing module, and you’re halfway done.
The next thing to do is marketing, and this is where it vastly differ from brick and mortar business. The techniques of acquiring customers or colloquially called marketing are varied. Some are insidious like Multi Level Marketing while others are targetted for growth speed like Viral Marketing.
The advantage that an online business has in terms of marketing is that its market covers the whole world. The potential to convert traffic to customer is much, much greater than opening a shop and waiting for people to come in and buy stuffs.
The biggest problem though is pitching your sales to potential customers. Web surfers are a fickle lot, and any sales pitch that takes more than 15 seconds will make them lose interest.
And there you have it, the gist of online business. Always remember, an online business needs to make Profit, and Profit = Revenue – Cost.
July 13th, 2010 at 7:29 am
“The next thing to do is marketing, and this is where it vastly differ from brick and mortar business. The techniques of acquiring customers or colloquially called marketing are varied. Some are insidious like Multi Level Marketing while others are targetted for growth speed like Viral Marketing.”
How about SEO and Inbound Marketing? They are important too.
July 14th, 2010 at 6:25 am
Good point! SEO is definitely important with search engine being the first tool a web surfer uses to find things online. I’m not familiar with Inbound Marketing though, can you elaborate on what it is? Thanks. :)
July 16th, 2010 at 5:24 am
Inbound marketing is the latest marketing trend popularized by http://www.hubspot.com and Guy Kawasaki.
SEO is important, but it is slowly being replaced by inbound marketing…. well, SEO is part of Inbound marketing anyway.
“If you got more money than brain, then focus on Outbound marketing, if you got more brain than money, then focus on Inbound marketing.” — Guy Kawasaki.
Dude, you got to enable your blog audience to get reply via email if you want to drive more traffic. Otherwise, people tend to forget about your website due to busy life,etc.
July 16th, 2010 at 10:32 am
Hey,
What an interesting read. This post caught my attention because I was thinking about buying a domain and subscribe to a hosting as soon as I can but apparently there are a lot of hosting companies out there who seem to give out a whole lot of unlimited stuff for a very cheap price. Being someone who wants to start a dot com business but so new to it all, I just don’t want to be cheated of which hosting company to choose from. Can you advice? I found one called Inmotion Hosting and they seem to have got a really good review. What do you think?
July 18th, 2010 at 7:24 am
Hi Mich, thanks for dropping by. To tell the truth, choosing a host is quite tricky. It is like buying a second hand car; you don’t know if the car is ok, or if the car has a bunch of problems.
If you read my Hostgator experience (http://www.dotcomsmarties.com/2010/06/review-hostgator/) you will find that even though Hostgator has multiple awards and review, I still ran into problems with them. My advice is to just try Inmotion, and if it they screw you over, switch to another host. Just make sure it’s not Hostgator.
December 16th, 2010 at 11:23 am
Thanks a lot for the posting, We are linking to it within my next email newsletter to my personal college students, in fact (although somewhat off subject, I confess) the future of small business and lucrative business will be the capacity of organizations to adapt to the internets commercial infrastructure in a manner that is without a doubt approved by their clients and prospects… Retail space will most likely be swapped out more often by server room and cpu processing cycles…. My personal own via the internet jewellery company has proven that time and time again… Whatever the case fantastic write-up, keep writing and make your voice heard