Some of us end up becoming entrepreneurs. With the economy how it is, I am starting to think we should be investing in something a bit more secure, like Lottery tickets. (context!)
If you’re reading this it’s a safe bet that at one time or another you’ve traveled the web in search of truth and succor. In search of the grail that will reveal to you how to make your tons and tons of money from your business.
Let’s face it, it’s hard building something that people want to use. Your average person has room in their lives for about half a dozen different services, and most of those slots were filled before 2001.
That’s why you turned to the web. Secretly you were looking for Steve Job’s playbook, the magic combination of hard work, dirty tricks and good old fashioned common sense that would give your new born company a chance to play in the big leagues. What you found out was that no matter how many guides to successful business blah you read, it all came out tasting the same.
Why?
Because I (or anyone else) can’t tell you how to make your company successful, no more than I could explain to someone how to paint the Mona Lisa over the phone. At best, and this is on a good day, I can speak in analogy — iron down advice into talking points and hope some of what I say resonates with the knowledge you already have. The only way I can reach you through a medium like this is if you already know what you need to do and all you need from me is a gentle kick in the right direction.
It’s the little secret that we don’t like to let you in on. Most of what we do around here is spoon feed you the contents of your own brain — Hannibal would be proud.
Unfortunately that means that despite our best efforts, there’s no magic to it, not even a little bit.
With that in mind, let’s turn back to the question at issue.
How do you build a business that people will show up to?
Well first, search the Internet for “15 quick tips to building a killer startup.” If you don’t want to, I probably wrote something like that months ago so feel free to look through my dust bin.
Once you’re finished relearning all the things that you already know with a few extra analogies added for flavor, keep this in mind –
The only surefire (ahem) way to get at all those theoretical Internet dollars is to build well and build often. This isn’t advice, per say, it’s an entrepreneurial fact of nature. It would be as if you asked me how you could learn to do 100 pushups, the answer that matters would be, “do more pushups.” You will get stronger and closer to your goal as you push yourself by tiny increments every day.
Building well means working on projects that touch on points of pain. What’s a “point of pain?” Other than another colorful image, it’s anything that annoys you that you don’t currently have a solution to. The more likely this “thing” is to annoy five of your friends, the better the chance that it is a point of pain and not just a personal gripe (there isn’t too much money in fixing your own problems).
Find something that hurts, annoys or frustrates people and build a product that eases that suffering for them in the simplest way possible. You get bonus points if you’re solving a problem people actually understand that they have, and you win the jackpot if you manage to get your solution out to market before twenty other equally clever people do.
If you can’t cite your product’s point of pain, all the kid-tested, mother approved business advice in the world won’t be able to save you from the fact that you’ve developed something (I won’t call it a product anymore) that is completely unsellable. You can’t hope to sell something that people don’t need to buy, as silly as this might sound a huge number of “startups” come onto the market everyday without being able to pass this simple test.
This is not to say that everything you build needs to cure Cancer or the end world hunger, while I would love if your social network for bird watchers touched on these issues — that sort of thing is not for everyone. If you are going to make a social network for bird watchers though, bird watchers better have a really good reason to come to the site and once they are there, if you ever want to see their smiling faces again, you better provide them with an even better reason why they’re sitting on the Internet, chatting away about bird watching instead of going outside to do the thing that they love.
Moving on . . .
My next point, “build often” can be further summarized as fail a lot. I fail all the time. When I test out a new concept here on the blog, on the web in general, in marketing or in my daily doings I know that the likelihood of it becoming successful is almost zero percent and that’s just my unshakable optimism talking. That’s alright because failure, in that sense, doesn’t bother me. I have a lot of balls in the air at once, and I know there is more than one path to whatever goal that I set out. The result is that my ego is never so tied to one project or one approach that I am afraid to risk it blowing up in my face. Since I’ve given myself other options to fall back on, I can risk something without feeling like I’m risking everything.
The strongest entrepreneurs are a cocktail of bulldog-like tenacity and incurable ADD. When they attack a task, they risk heart and hearth and home to make sure that task is successful but if it fails despite their best efforts they shrug, chock it up to good experience and start chasing the next shiny object. The best of the best are the ones that don’t take every bruised knee personally and recognize that success is a process, a process they will continue to work with until something finally sticks and presents them with an opportunity to make those boatloads of dollars that are always sitting at the end of an entrepreneur’s rainbow.
Oh yea, about making money.
What pearls do I have for Internet entrepreneurs who are asking how they will pay their rent? It goes like this –
Advertising works if you have a sales team that can sell out your inventory to the top 1% of ad agencies. Brand managers (that top 1%) have money that they need to spend on digital, even in bad economies. If you can give them a convincing story and a decent opportunity, they’ll pay your server bills for a long time. The problem is that getting a hold of someone who can make a buying decision is not a task to be taken lightly, the last thing the agency in charge of Big Box Brand X wants is to tell every startup with a website and a dream where to send their annoying deck.
Ad networks work if your costs are nonexistant and you can get a few hundred thousand people to show up to your site every month. The good networks are called rep agencies and they’ll act as a sales team for you in exchange for a cut of your income. The bad ones will pay you $.10 CPMs and will only really serve to keep you in Top Ramen — which for a blogger might not be so bad.
Affiliate advertising (Cost Per Action) works if you have a site that encourages people to buy things. Let’s say you review luxury Yachts or computers or tacos. Chances are good that the people you write for came to your site because they want to purchase one those products. That’s half of the battle right there. All you need to do now is give enough of them the opportunity to make a purchase and next thing you know (ahem) you’ll be rolling in those commission checks. For everyone else, you will need some good luck or some really clever marketing to get this to work.
I know what you’re going to ask. Is there a world outside of advertising? Yea and it’s called your business. If you want a company that will survive economic rough patches or one that can turn a profit without scads of VC funding I would suggest looking long and hard for non-advertising based revenue sources. Until you find one, you’re making a bet you’re not likely to win.
Speaking of bets, I’m going to bet you tune in tomorrow for our next episode. If not, at least you won’t be around to collect.
If you’re reading this it’s a safe bet that at one time or another you’ve traveled the web in search of truth and succor. In search of the grail that will reveal to you how to make your tons and tons of money from your business.
Let’s face it, it’s hard building something that people want to use. Your average person has room in their lives for about half a dozen different services, and most of those slots were filled before 2001.
That’s why you turned to the web. Secretly you were looking for Steve Job’s playbook, the magic combination of hard work, dirty tricks and good old fashioned common sense that would give your new born company a chance to play in the big leagues. What you found out was that no matter how many guides to successful business blah you read, it all came out tasting the same.
Why?
Because I (or anyone else) can’t tell you how to make your company successful, no more than I could explain to someone how to paint the Mona Lisa over the phone. At best, and this is on a good day, I can speak in analogy — iron down advice into talking points and hope some of what I say resonates with the knowledge you already have. The only way I can reach you through a medium like this is if you already know what you need to do and all you need from me is a gentle kick in the right direction.
It’s the little secret that we don’t like to let you in on. Most of what we do around here is spoon feed you the contents of your own brain — Hannibal would be proud.
Unfortunately that means that despite our best efforts, there’s no magic to it, not even a little bit.
With that in mind, let’s turn back to the question at issue.
How do you build a business that people will show up to?
Well first, search the Internet for “15 quick tips to building a killer startup.” If you don’t want to, I probably wrote something like that months ago so feel free to look through my dust bin.
Once you’re finished relearning all the things that you already know with a few extra analogies added for flavor, keep this in mind –
The only surefire (ahem) way to get at all those theoretical Internet dollars is to build well and build often. This isn’t advice, per say, it’s an entrepreneurial fact of nature. It would be as if you asked me how you could learn to do 100 pushups, the answer that matters would be, “do more pushups.” You will get stronger and closer to your goal as you push yourself by tiny increments every day.
Building well means working on projects that touch on points of pain. What’s a “point of pain?” Other than another colorful image, it’s anything that annoys you that you don’t currently have a solution to. The more likely this “thing” is to annoy five of your friends, the better the chance that it is a point of pain and not just a personal gripe (there isn’t too much money in fixing your own problems).
Find something that hurts, annoys or frustrates people and build a product that eases that suffering for them in the simplest way possible. You get bonus points if you’re solving a problem people actually understand that they have, and you win the jackpot if you manage to get your solution out to market before twenty other equally clever people do.
If you can’t cite your product’s point of pain, all the kid-tested, mother approved business advice in the world won’t be able to save you from the fact that you’ve developed something (I won’t call it a product anymore) that is completely unsellable. You can’t hope to sell something that people don’t need to buy, as silly as this might sound a huge number of “startups” come onto the market everyday without being able to pass this simple test.
This is not to say that everything you build needs to cure Cancer or the end world hunger, while I would love if your social network for bird watchers touched on these issues — that sort of thing is not for everyone. If you are going to make a social network for bird watchers though, bird watchers better have a really good reason to come to the site and once they are there, if you ever want to see their smiling faces again, you better provide them with an even better reason why they’re sitting on the Internet, chatting away about bird watching instead of going outside to do the thing that they love.
Moving on . . .
My next point, “build often” can be further summarized as fail a lot. I fail all the time. When I test out a new concept here on the blog, on the web in general, in marketing or in my daily doings I know that the likelihood of it becoming successful is almost zero percent and that’s just my unshakable optimism talking. That’s alright because failure, in that sense, doesn’t bother me. I have a lot of balls in the air at once, and I know there is more than one path to whatever goal that I set out. The result is that my ego is never so tied to one project or one approach that I am afraid to risk it blowing up in my face. Since I’ve given myself other options to fall back on, I can risk something without feeling like I’m risking everything.
The strongest entrepreneurs are a cocktail of bulldog-like tenacity and incurable ADD. When they attack a task, they risk heart and hearth and home to make sure that task is successful but if it fails despite their best efforts they shrug, chock it up to good experience and start chasing the next shiny object. The best of the best are the ones that don’t take every bruised knee personally and recognize that success is a process, a process they will continue to work with until something finally sticks and presents them with an opportunity to make those boatloads of dollars that are always sitting at the end of an entrepreneur’s rainbow.
Oh yea, about making money.
What pearls do I have for Internet entrepreneurs who are asking how they will pay their rent? It goes like this –
Advertising works if you have a sales team that can sell out your inventory to the top 1% of ad agencies. Brand managers (that top 1%) have money that they need to spend on digital, even in bad economies. If you can give them a convincing story and a decent opportunity, they’ll pay your server bills for a long time. The problem is that getting a hold of someone who can make a buying decision is not a task to be taken lightly, the last thing the agency in charge of Big Box Brand X wants is to tell every startup with a website and a dream where to send their annoying deck.
Ad networks work if your costs are nonexistant and you can get a few hundred thousand people to show up to your site every month. The good networks are called rep agencies and they’ll act as a sales team for you in exchange for a cut of your income. The bad ones will pay you $.10 CPMs and will only really serve to keep you in Top Ramen — which for a blogger might not be so bad.
Affiliate advertising (Cost Per Action) works if you have a site that encourages people to buy things. Let’s say you review luxury Yachts or computers or tacos. Chances are good that the people you write for came to your site because they want to purchase one those products. That’s half of the battle right there. All you need to do now is give enough of them the opportunity to make a purchase and next thing you know (ahem) you’ll be rolling in those commission checks. For everyone else, you will need some good luck or some really clever marketing to get this to work.
I know what you’re going to ask. Is there a world outside of advertising? Yea and it’s called your business. If you want a company that will survive economic rough patches or one that can turn a profit without scads of VC funding I would suggest looking long and hard for non-advertising based revenue sources. Until you find one, you’re making a bet you’re not likely to win.
Speaking of bets, I’m going to bet you tune in tomorrow for our next episode. If not, at least you won’t be around to collect.
No comments:
Post a Comment