Starting out with your own online business is much like beginning any other new venture. One of the first things you need to establish to ensure that your business is going to be viable. Is there a demand for what you are thinking of doing? Can you tap into it easily? And how easy is it going to be to take hold of some market share?
Whatever you sell, there is likely to be competition, and you have to think very carefully about whether or not it is feasible that you will be able to attract business either away from the competition, or have newcomers to the market choose you instead.
Whether you are selling material products or information products like software, site subscriptions or e-books, weighing up the market online is as important as if you were launching something in “the real world”. To demonstrate how this works, let’s take a look at the tablet computer market.
We all know how popular the iPad is. And there are a lot of competitors. But there are not a lot of successful competitors. The Samsung Galaxy hung in there at first, but RIM failed miserably with their Playbook. The only non-iPad tablet that seems to have any momentum is the Kindle, but even its sales are much lower than than the Apple version.
Launching a new tablet in a market that is already dominated by one product, and where other serious players are failing, would be something to think long and hard about. This is probably why not all the major computer brands have tried to enter this particular marketplace.
So really what we have is quite an analogous situation, where there’s a product out there that might be in your marketplace. And you want to come in and you want to grab some market share. You basically want to have a product and build a business. And so you really have to be thinking and asking yourself some very difficult questions.
If you use this analogy, the question then becomes, why would a skeptical consumer buy your new tablet instead of the iPad? Of course, you’re probably not going to be developing and selling tablets, but why would a skeptical consumer go to whatever marketplace that you’re in, whether you’re going to be selling information, whether you’re going to be selling products, whether you’re going to be selling services – whatever your area – and choose you over an established and trusted competitor?
Why would these consumers who may have never heard of you, don’t have a lot of background about you, who are generally very skeptical online, choose to do business with you?
It’s a very difficult question to face, but one that must be in the back of your mind at all times when you are putting together a business, product or offering, whether it’s your first product or whether it’s your tenth product.
Everything new that you bring to market, you have to make sure that you have a really good reason for its existence in your business, and indeed your business’ existence in your marketplace. If you do not, it’s probably not wise to run with that particular idea. Others will come.
In some cases, your product may be unique. You may be offering something like an ebook or a smartphone app that you have developed, which is the only one of its kind. Even in these cases, you still have to consider whether that product first of all has a market online, and secondly, makes sense in it.
You may not have any direct competitors in terms of your actual offering, but you are still likely to be entering a very busy market where you are competing for consumer attention before you can even begin to make a sale.
This is not about looking at your idea negatively or pessimistically, but about considering its place in your planned market with an objective and realistic eye. Make sure you believe in the idea and its chance of success before you do anything else.
The exercise of considering your idea’s place in the market can also be powerful in helping you plan your next steps. If you know your market exists online, you must therefore know who they are, and where. Knowing that, you can plan out the best strategy to reach them and make them aware of what you’re offering.
If you know that competition exists in that market, you can hone your offering to make it a good choice, even the best choice, when compared with what they are bringing. You can make sensible decisions about your price points, and you can see where you have any advantages over the competition, which will basically help you establish where your own key selling points are.
This involves market research as well as being able to step back and critically analyze your own ideas. Luckily, for online businesses this is very easy to do, because there is a lot of transparency around what and where other people are promoting.
Simple Google searches and looking at some social media content on any rivals you can find will give you an idea of how well they are faring, and what their strengths and weaknesses are. You can also see how much interest there is in a given topic, service or idea very easily by looking at things like Twitter and people’s blogs.
When you know that your idea is sound, and understand your market and competition, you are in a very good position to be able to launch a successful internet business.
You will probably also have picked up a few ideas about marketing and promotion targeting that market along the course of your research and analysis. This will put you in the right place as you begin to make money on the Internet.[Join Matt Smith, Yanik Silver, and Craig Ballantyne at the Underground Online Seminar where all three will be showing you how to build your own profitable web-based business from home – or from anywhere in the world. But hurry, today is your LAST chance to get in on the Early Bird Registration and Bonuses – NO extensions.]