5 Dirty Secrets About Online Business Today
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Most of my students aren’t complete online business newbies. Many of them have tried at least some kind of online business at some point. Some of them are trying to juggle several of them when they come to me, and they are usually very excited to tell me about it.
I admire their enthusiasm, but if they come to me looking to me for validation of what they are already doing, they usually come away disappointed. The idea they breathlessly share with me often times was old news five years ago.
If I try to point that out to them, as gently as possible, they sometimes don’t take it well. They have invested a lot of hope and excitement into their entrepreneurial endeavor. Hearing that they have been spinning their wheels ranges from dispiriting to offensive.
I don’t blame them. There’s a lot of noise out there. Not to contribute to it unnecessarily, but someone needs to cut through the hype and tell some hard truths. The online business environment has changed a lot in the last 10 years. Yes, you can still succeed, but only if you are present and accept the business environment as it is, not what it was.
On that note, here are five dirty secrets about today’s online business environment that must inform every opportunity you consider.
1. Marketing is useless without a great product
The golden age of online marketing is dead. My condolences.
Not to say that digital marketing is useless. Here’s what I mean: It used to be that if you could write good copy, build a funnel, set up an email autoresponder and buy some Facebook ads, you could make money online. Even if the product was garbage.
This was always a bubble. It was never going to last. The market has corrected to the way it used to be, the way it always has been — it’s all about the product.
When I consider clients for my agency, I always vet the product. If the product is terrible, I can’t help them. No amount of traffic I drive to their landing page will result in sales, growth and sustained success.
Many aspiring online entrepreneurs get seduced by the shine of marketing, from veterans of that golden age who still believe that great marketing is all you need. It isn’t, especially in the early going. These entrepreneurs would be better served to forget about fancy sales funnels and focus on making the product the best it can be.
Related: 7 Ways to Correct a Failing Marketing Strategy
2. Competition is for chumps
Most entrepreneurs think they need to “beat the competition,” “differentiate themselves from the competition” or “spend more to acquire a customer than the competition.” The dirty secret is: If you even have competition, you’re fighting a losing battle. Most market battles are zero-sum games. One guy wins 99% of the business, and everyone else fights over the remaining 1%. This is why I advise students to niche down. With a specific-enough niche, you don’t have any competition. You’re out there cleaning up and can name your own price.
For example, there are a million agencies saying, “We help businesses get more leads.” But what about, “We help plumbing and heating companies get more leads?” Better.
“I help plumbing and heating companies in Pennsylvania get more leads.” Even better.
“I help plumbing and heating companies in Pennsylvania get more install jobs.” Now you’re talking.
3. Value trumps fame
Americans live in a fame-saturated culture. No wonder entrepreneurs think they have to be famous to sell anything. If you Google-search how to sell a book, start a blog or launch a YouTube channel, most of the listicles you discover will say something like: Step 1, Get Famous.
So you have entrepreneurs trying to get famous — on YouTube, on Instagram, on TikTok or whatever is the flavor of the month. They figure once they’re famous, the selling will take care of itself.
But the cult of fame is falling apart. The emperor has no clothes and people are starting to see it. Is there a better example than Fyre Fest? The now-incarcerated founder cloaked the event in celebrity but didn’t bother to bring the value.
People get the fame equation backward. Fame is like catching lightning in a bottle; it’s nearly impossible to consciously make it happen. Most people who do make it happen discover that it’s a double-edged sword. Ask anyone who has ever been mobbed by paparazzi at a grocery store.
But you can focus on delivering value. That is very much in your control. Maybe you will go viral, maybe you won’t. But by delivering value, you will at least build a cult following — and a cult following can make you very, very prosperous.
4. Focus trumps diversification
I can’t hate on my students who are trying to juggle 10 businesses when they come to me, because I was the same way. I can’t even fault the strategy — I kept throwing things at the wall until something stuck.
But once I found the business with the most potential, I pulled the plug on everything else I was doing and focused like a laser on scaling it. That’s what made the difference. Finding the idea was maybe 10% of the battle. What really made the difference was quitting everything else I was doing.
“Multiple streams of income” is a cliche that gets misunderstood, and “diversification” is for people who have no idea how to invest their 401k. If you want to create a great product and bring value to the marketplace, you have to pick a thing and focus on it to the exclusion of everything else.
Whatever stage in the journey you are in, that’s the goal — to hone in on the one thing. With focus, the idea is almost an afterthought. With enough focus, you can make almost anything work.
Related: 3 Issues to Consider Before You Introduce Recurring Revenue Streams Into Your Business
5. Most businesses can’t scale
If you want to succeed in online business, don’t start anything you can’t scale. Anything that depends on unique human contributions — including your own — is hard to scale.
I’m guilty of this too. My agency can’t be fully automated or outsourced. I have to have a team, and I can’t just have one person for each job. I try to have two people for each job, minimum. That way, if someone quits, I’m not screwed.
Of course, this runs up payroll costs. What saves me is the fact that our invoice volume is scalable, even if the client volume isn’t. Assuming we do the job well, we can easily scale invoices from $10,000 to $100,000 and beyond. We can afford that payroll.
Whatever you do, begin with the end in mind. Even if you’re doing the work in person now, make a plan to automate, outsource and take unique human input out of the equation when the time is right. That’s the only way to go big online.
Related: Learn How Branding Skills Can Help Your Business Scale
I want all of my students to prosper in online business — to fire their job, discover financial freedom and build the lifestyle they always envisioned.
But the first step for many of them is to wipe the slate clean of misguided and outdated ideas, leaving them tabula rasa. Then they can accept the online business ecosystem as it is. Spilling the beans on this dirty secret will hopefully help you do the same.