It seems like everyone has an Internet startup these days. The cost of entry is so low – you can create a web site for almost nothing - and you are on your way to riches with e-commerce, your latest invention, or personal services. But the low cost also means that your competition will also be there in force. Mashable claims there are 150,000 new web sites created per day.
In addition, every business has operating costs, like customer acquisition, fulfillment, inventory, and customer service. Without a sustainable strategy, these challenges lead to the terrifying statistic that nine out of ten online businesses will fail, and lead to the current ratio of Internet failures to millionaires being thousands to one.
So what are the key strategies that can improve the success odds for your online startup? In the latest book by business guru Joe Wozny, “The Digital Dollar: Sustainable Strategies for Online Success,” I found a good summary of some great strategies, with some practical advice on how to implement them:
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Understand what’s in a name on the Internet. In the online world, you need a solid connection between your domain name and your product, brand, or business. In addition, you must reserve consistent names in key online channels like Twitter, Facebook, and others. Failure can stall business strategies, and bring digital momentum to a halt.
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Content is king of the road. Having a web site is necessary, but not sufficient. The site must have more and better content (information presented) than your competitor. Digital content includes text, graphics, sound, and video, with presentation style, currency, and appeal. The best content gets attention and keeps momentum growing.
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Beware of no-cost and low-cost marketing. Marketing requires content, and nothing is “free.” Social media activities require professional effort and time, so beware the hidden costs. No-cost efforts usually have no value. Content that does not change loses its value quickly. Assess cost versus value with analytics and measurement tools.
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You have to be found and favored by search engines. Search engines like Google are still the primary method for finding information on the Internet. If your web site is not optimized for search engines (SEO), all your online content and marketing efforts are wasted. “Paid search” will mitigate this to some extent, but is not a sustainable strategy.
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Engage your audience with social media. Social media is more than the “Big 4” of Facebook, YouTube, LinkedIn, and Twitter. It’s sharing features built into your web site content like social bookmarking, emailing, or auto posting and interactive features like comments and voting. It is integrated features for smart phones and tablets. Do them all.
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There is still a place for paid advertising. Online advertising is the promotion of your site and content on other sites such as pay-per-click contextual ads, banner ads, rich media ads, and ads in newsletters. Key measurements should always include return on investment, and visibility to the targeted audience.
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The route to success is not a random walk. From a strategic perspective, all the above should start with an overall digital roadmap, where you define your goals, outline the steps required, and articulate your success measurements. Plan to update this roadmap at least once a month, based on results, new information, and competition.
For sustainability against competitors, every startup needs to practice strategic business decision making, rather than managing the crisis and the opportunity of the moment. That means continual focus and change based on the existing customer base and existing competitors, as well as new opportunities for growth.
“Pivoting” is another name for a strategic change decision, or for changing your strategy, your business model, target customers, or direction, and this is an integral part of evolving a company. According to Steve Blank, research has shown that a typical successful Internet startup experiences up to three pivots in their evolution. If four or more pivots occur (or none), then the chance of success goes down.
So while the cost in dollars of entry to an online business is low, that doesn’t prevent a failure from hurting badly. Don’t let the low entry cost lure you into a false sense of security, or convince you that you don’t need to make strategic plans to be sustainable. How many of these key strategies are in your plan, or already implemented?
Marty Zwilling
Disclosure: This blog entry sponsored by Visa Business and I received compensation for my time from Visa for sharing my views in this post, but the views expressed here are solely mine, not Visa's. Visit http://facebook.com/visasmallbiz to take a look at the reinvented Facebook Page: Well Sourced by Visa Business.
