8. Don’t buy the Great Internet Myth
The Great Myth of the Internet is not “You can make a million dollars on the Web!”
The previous line represents the great “lie” of the internet, not the great myth. Lies are black and white. Myths are various shades of gray and 90 true. It is the other 10% that catches people.
i. The Great Myth of the Internet, I believe, is: If you
1. Build a exciting website
2. Promote it vigorously
3. Build a large, dynamic community of followers, (some of whom are prospects or customers, others just like your website and will never be customers).
4. Develop-Extract an email list that lets you communicate with your community, so that when they are ready to buy your products or services, you will be right there to help them.
5. Find some others things to sell to your community or sell your list to someone else
6. AND ONE DAY WHEN YOU GO TO THE BANK, IT WILL ALL MAKE SENSE.
ii. It’s the last thing that disturbs me. Why wait?
1. I do not believe in the idea of get rich quick, am I advocating the same. What I am saying is this. Your WebBusiness, as a whole or as an enterprise unit within your existing business, needs to get to a breakeven point or better as soon as possible, if not immediately. Now maybe that means, only making $100 per day until you can build up to the next level. If so, that’s fine. Long development times are for everybody else. Plus they can be expensive. You need and want to know if your WebBusiness “concept” works and you deserve to know now, not 6 months or a year from now.
2. If you have something worth buying, then sell it. Don’t give it away. I am not talking about promotions, free trials, loss leaders, etc. unless your business is built on people reordering the same product over and over. That’s another conversation.
3. Here’s how to do it:
a. You get your basic WebBusiness set up as quickly and as inexpensively as possible.
b. Test your WebBusiness over a fixed period and see where you stand.
c. One of three things will happen
i. You win. The response is conclusive and positive and results in enough sales or cost savings to pay all your development costs.
ii. You lose. The lack of response is equally conclusive. Check to see if the fatal errors can be identified and corrected. If they can’t. Simply, walk away. At least for a while.
iii. Most often, what happens is somewhere between a win and a loss.
This, if you are not extremely careful is, worst than a loss. When you hear, well we got 75 or 85% of it right and now we need to go get the other 15 or 25%, grab your checkbook and hide it.
1. At this point, you have time and money invested, more importantly and much less thought about is the fact that you also have pride, ego, and politics invested. You do not want to quit because you are not a quitter and you do not want to admit that you were wrong about the WebBusiness and that you have made some mistakes to anybody, especially not yourself.
2. In the meantime, Let the test keep running.
3. More importantly, review the test period and develop a formula that describes mathematically your results. For example, during the test period, clicks (90%)->significant views (60%->inquiries (20%)->orders (5% and $$->gross profit % and $$). Then,
a. Determine the total gross profit (TGP) of those orders you received during the test period.
b. Divide the result by the number of days of the test period.
c. The result is average daily gross profit per day (ADGP) per day.
d. Then subtract the TGP from the total development costs. The result is unrecovered development costs (UDC)
e. Divide UDC by ADGP to determine how many days going forward it will take to generate the UDC. The is the projected days to recover your upfront development costs (PDR).
4. Review your results again and make a graph of orders or gross profit generated each day during the test period. Review this and adjust the PDR based on any trend you may see.
5. Your analysis may have identified some weak areas. You may or may not choose to let someone else review the development process and the results to see if weaknesses can be identified and strengthened.
6. Then think about it and try to make a rational decision about how much more time and money you are willing to invest in your WebBusiness.
The Great Myth of the Internet is not “You can make a million dollars on the Web!”
The previous line represents the great “lie” of the internet, not the great myth. Lies are black and white. Myths are various shades of gray and 90 true. It is the other 10% that catches people.
i. The Great Myth of the Internet, I believe, is: If you
1. Build a exciting website
2. Promote it vigorously
3. Build a large, dynamic community of followers, (some of whom are prospects or customers, others just like your website and will never be customers).
4. Develop-Extract an email list that lets you communicate with your community, so that when they are ready to buy your products or services, you will be right there to help them.
5. Find some others things to sell to your community or sell your list to someone else
6. AND ONE DAY WHEN YOU GO TO THE BANK, IT WILL ALL MAKE SENSE.
ii. It’s the last thing that disturbs me. Why wait?
1. I do not believe in the idea of get rich quick, am I advocating the same. What I am saying is this. Your WebBusiness, as a whole or as an enterprise unit within your existing business, needs to get to a breakeven point or better as soon as possible, if not immediately. Now maybe that means, only making $100 per day until you can build up to the next level. If so, that’s fine. Long development times are for everybody else. Plus they can be expensive. You need and want to know if your WebBusiness “concept” works and you deserve to know now, not 6 months or a year from now.
2. If you have something worth buying, then sell it. Don’t give it away. I am not talking about promotions, free trials, loss leaders, etc. unless your business is built on people reordering the same product over and over. That’s another conversation.
3. Here’s how to do it:
a. You get your basic WebBusiness set up as quickly and as inexpensively as possible.
b. Test your WebBusiness over a fixed period and see where you stand.
c. One of three things will happen
i. You win. The response is conclusive and positive and results in enough sales or cost savings to pay all your development costs.
ii. You lose. The lack of response is equally conclusive. Check to see if the fatal errors can be identified and corrected. If they can’t. Simply, walk away. At least for a while.
iii. Most often, what happens is somewhere between a win and a loss.
This, if you are not extremely careful is, worst than a loss. When you hear, well we got 75 or 85% of it right and now we need to go get the other 15 or 25%, grab your checkbook and hide it.
1. At this point, you have time and money invested, more importantly and much less thought about is the fact that you also have pride, ego, and politics invested. You do not want to quit because you are not a quitter and you do not want to admit that you were wrong about the WebBusiness and that you have made some mistakes to anybody, especially not yourself.
2. In the meantime, Let the test keep running.
3. More importantly, review the test period and develop a formula that describes mathematically your results. For example, during the test period, clicks (90%)->significant views (60%->inquiries (20%)->orders (5% and $$->gross profit % and $$). Then,
a. Determine the total gross profit (TGP) of those orders you received during the test period.
b. Divide the result by the number of days of the test period.
c. The result is average daily gross profit per day (ADGP) per day.
d. Then subtract the TGP from the total development costs. The result is unrecovered development costs (UDC)
e. Divide UDC by ADGP to determine how many days going forward it will take to generate the UDC. The is the projected days to recover your upfront development costs (PDR).
4. Review your results again and make a graph of orders or gross profit generated each day during the test period. Review this and adjust the PDR based on any trend you may see.
5. Your analysis may have identified some weak areas. You may or may not choose to let someone else review the development process and the results to see if weaknesses can be identified and strengthened.
6. Then think about it and try to make a rational decision about how much more time and money you are willing to invest in your WebBusiness.
Upcoming:
The Culture Clash between Business and Facebook
The Culture Clash between Business and Facebook
