Online Business Startup
Each week, we are asked to share our thoughts on new online business startups that duplicate functionality already in existence such as auction websites, or community and social networking sites. Before we embark on any new project, we like to advise our clients about the basics of building an online business, and possibly direct them into areas where they may be more successful.
MySpace is a hugely popular website with soaring membership and profits. Photography website, Flickr, gave photographers a much needed place to store images, and the site’s success prompted its purchase by Yahoo. TripAdvisor gives confidence to vacation planners. And in probably the earliest and most well known example online business startup, Craigslist offers something for everyone.
Prominent sites like these can be duplicated, and as proof of that, each has its own successful competitors. MySpace, Facebook, and LinkedIn offer social networking. Expedia, Orbits, Travelocity, and TripAdvisor target the vacation goer. Google, Yahoo, MSN and a host of other search engines.
But like any business, before you start any business, you need a good understanding of your target market or industry, and you need a business plan. And for online business startups, you should learn the basics that govern the creation of web-based ventures.
First, target your market by defining your intended user or geographic locale. Rather than aim to “build a social networking site for uploading music and meet new people,” restate your goal to one more narrowly defined, as illustrated by two online community sites we recently created. BirdPeeps.com, an online startup, gives birdwatchers a forum to upload bird photographs, share their insights, and create live migration maps. The National Forensic League’s online portal lets speech and debate devotees expound upon the fine points of their passion. These sites are successful because they were built for those passionate about a specific topic. Their target market is clearly defined.
Next, you need to establish a budget for your online business startup. Your budget will dictate what you can afford to pay for programming and design costs. If you want to build the next TripAdvisor, you must recognize that your funds almost certainly won’t match the budget of your competitor. TripAdvisor’s years of service, millions of users, and loads of functionality, enable them to handsomely profit on advertising, which allows them to channel those profits into building a continuously enhanced user experience