By Axel Kuhn, Principal and Co-founder at eCommerce Consulting
Opportunities and Frustrations. Snakes and Ladders.
Being “online” is a cornerstone of every startup today. Whether your business is “clicks only” or “bricks & clicks”, whether you are looking to build a community, impress potential investors, drive sales leads, or transact directly online. B2B, B2C, and even B2G.
Hopefully no one needs to convince you about the scale of the online opportunity.
The Internet economy in the developed markets will continue to grow at an annual rate of 8% over the next five years, delivering impressive wealth and jobs, and far outpacing just about every traditional industry and business sector. In developing markets, the Internet economy is growing at an even faster 15 to 25% a year. Canada is ranked one of the top 10 E-commerce markets globally, online retail sales are expected to reach almost 50 billion dollars by 2019.
The Frustration? Although it is still relatively easy to start an online business, the online competitive environment has become brutal, making it exceptionally difficult for online startups to “break through” the noise and position themselves for success.
For most entrepreneurs the online world it is a frustrating game of “snakes & ladders”, making slow forward progress only to find that you made some costly mistakes along the way, and suddenly having to start over.
The top 5 Strategies for Online Success
First, let me clarify that a startup needs some core ingredients like a great idea, passionate leadership, and a viable business model. I’m assuming you already have those. Armed with those, what can you do to improve the odds of your business model’s success online?
Seeing the struggles of hundreds of online startups over the past few years, I’ve found common missed opportunities and mistakes time and time again. Avoiding these common pitfalls prevents wasting time and money. And your business model gains traction faster.
Strategy #1: Deep Mine the Internet for Market Insight. Entrepreneurs don’t realize the tremendous market insight that is available online, including strength and location of market demand, opportunities and gaps in the market, and strengths and weaknesses of competitors, substitutors, and complimentors. Why fly blind when you can use freely available tools and techniques to get the insight you need for better strategic decisions?
Strategy #2: Micro-position your Online Business. The internet has become incredibly noisy, making it nearly impossible for a small startup to break above the noise. For success, startups need a laser focus on their online target market, including well-defined target personas, high-value “10x” content strategies, and long-tail keyword targeting (SEM).
Strategy #3: Avoid Custom Development. Unless you have coding talent on your in-house team, custom development is a slow, costly and often very, very painful process. Thankfully, the growth of off-the-shelf platforms like WordPress and Shopify make it easy and relatively inexpensive to test out your business model, allowing you to spend your sparse financial resources (and frustrations) elsewhere.
Strategy #4: Make better Business Decisions with Analytics. Every visitor, every potential client on your website leaves a digital footprint. Properly set-up, Google Analytics can show you at a glance what’s working and what’s not working with your online business model. Predictive analytics allow you to run some quick “what-if” scenarios, and will pinpoint the low-hanging fruit for improved ROI decisions.
Strategy #5: Scale Smart. Get your conversion rates (to transaction, to leads, to sign-up, etc.) to reasonable levels BEFORE you spend money driving clicks to your site, otherwise you are just wasting money. Use freely available tools to find the right channel(s) – Unpaid Search, Paid Search, Referral, Social – that will drive the highest-quality, lowest-cost prospects to your site.
Over the next few months, I’ll jump into each of these strategies in detail, sharing tools and techniques, sprinkle in some stories, and hopefully give you the insights you need to prevent these common pitfalls. If you can’t wait, check out this E-commerce for Entrepreneurs presentation and “tips for entrepreneurs” video at MaRS.
A shameless plug for the University of Toronto’s E-commerce courses.
One of the biggest myths is that you, as online Entrepreneur, can delegate most of the online strategies to someone more “wired in”. That’s a big mistake. No one knows your target audience, your market, and your business as well as you. Outsiders can quickly lead you astray.
At the University of Toronto’s School of Continuing Studies we teach business professionals and entrepreneurs like you the tools and techniques of managing an online business. You can take the entire 3-course certificate program, or just focus on SCS 2811: Tools and Techniques of eCommerce/ eBusiness Management. As one recent entrepreneur stated: “The money invested in this training was one of the best Return-on-Investment decision ever”.
Next up: Tools & Techniques to Mine the Internet for Market Insight
Check back next month for a deeper look into the tools and techniques of deep mining the Internet for exceptional market insight. Or get a heads-up by following @RICCentre or me at @eBizzProf on Twitter.
The author: Award-winning instructor Axel Kuhn teaches courses as part of the School’s eCommerce/eBusiness Management certificate program. Axel is also the co-founder and principle of ePath, an E-commerce consulting firm, and is a volunteer advisor for the RIC Centre.
Want to learn more? Attend RIC Centre’s Expert Speaker Series with Axel Kuhn on Monday, August 22. Find out more details and register here.