5 Common Mistakes When Creating Your First Online Business
Being an online entrepreneur is an absolute trend nowadays.
You probably know more than one self-proclaimed CEO and Founder whose biggest achievements have been to come up with a name and creating an account of it on Instagram.
People tend to like this romantic idea of entrepreneurship, but in reality most of them don’t take the step, or do it without really thinking about it, ending up in an immediate crash.
Why has this happened? Probably there are a lot of variables here, but one of the most important –if not the most- is the internet. With it, there has been a revolution in communications, which have expanded life possibilities in ways that were unthinkable in the past. This has opened the door to new business models, opportunities and services, making it easier than ever to create a company and start telling it to everybody in a massive way.
But let’s get real. You can’t call yourself an entrepreneur if you have not really start selling your product or service in the market. So if you are thinking about taking up this challenge, I will try to help you by pointing out five mistakes to avoid which in my opinion are the main reasons why online businesses fail.
1) Picking a niche you are not passionate about
This is the main reason why most of the people abandon when things get complicated. It doesn’t matter if the market is growing, it doesn’t matter if it seems a really profitable idea, if you do not believe in what you are doing, nobody will. This is pure human psychology. Passion is contagious. You can try to fake it, but in the long run, the faker always get caught.
This also has to do with the tremendous amount of work you will be doing. There is going to be months, and sometimes years, before things start working out. During these rough times, you will have to wake up each day to work long hours in something which is completely uncertain, and probably without being paid.
Sounds heavy right?
Well, imagine doing it without loving it.
2. Spend a lot of money before start selling
Don’t get me wrong here. You will certainly have to spend some money in order to get your idea running. The key here is to spend the minimum needed to start selling. For online companies this is really important, as we do not know how the market will react. Imagine creating a great first website, with a really expensive design and features, launching it, and then realising that people do not use half of those features, or hate some parts of the design. A lot of money gone down the drain for nothing.
This is the classic Lean Startup approach. In the case of my company Phant, we launched with a really basic design and features, and started getting feedback from users in order to adapt the website to satisfy their needs. We saved a lot of money, and got an enormous amount of valuable information which we used to make changes and improve the site.
3. Try to do everything on your own
Another big mistake is to think that you are some kind of superhero. Yes, you can be good at sales, marketing, and even know how to code. However, experience tells us that doing all by yourself will end up in having all done in a mediocre way.
Of course it is important to know as much as possible about the service or product you are selling. But in terms of efficiency, you got to know what you do best in order to go all in on that and make it perfect. That is why surrounding yourself with a good heterogeneous team is absolutely essential. Learning to delegate will help you to focus on your main tasks and will make it easier to do them in the best way possible. It will also reduce stress, improving everybody’s health and well-being, and therefore boosting productivity!
4. Forget the legal part
As said: Prevention is always better than cure.
If you are thinking about creating an online company, it is absolutely mandatory to be legally covered. New industries have huge legal voids, due to their quick growth and the impossibility for regulation to keep up with that pace. This fact makes some people forget the importance of be completely safe in legal terms. Be sure to hire a lawyer with experience in the field you are entering before launching.
In our case, being a Spanish crowdfunding platform, we had to make sure everything was perfectly explained in the terms and conditions, and that we were protected in every way possible. This market is still young in Spain, and it is still not regulated for both the rewards and donations-based types of crowdfunding. So we decided, instead of saving money and do it ourselves, to spoke with different lawyers in order to not have any kind of problem and be able to operate in an absolute legal way.
Another important legal part is data protection. With the arrival of new technologies, this matter has become the talk of the town, and governments are starting to look really closely to how companies treat their users’ data. The EU has already started working on this area, with the approval of the General Protection of Data Regulation (GDPR) which will start taking effect in May this year.
Being up to date on this matters as soon as possible will save you from more than one headache.
5. Get scared and not doing it
“Failure is not the worst thing in the world, the very worst is not to try.” Anonymous.
Creating your first company is always scary. It requires exposure, and a lot of pressure from your familiar environment and a crazy amount of hard work. When people ask me what is my biggest achievement with Phant, I always say the same one thing: the simple fact of taking the leap of doing it.
Leading a whole project by yourself, speaking to hundreds people, presenting your idea countless times, giving keynote speeches, taking full responsibility of your work. Your first company will give you the opportunity to get out there and start trying things that most of people never do. And this will give you an utterly priceless life experience.
All new things frighten us in some way, but, as always, practice makes perfect. If you end up failing, you will see how the amount of valuable learning you will have had will be astoundingly bigger than any job you may have experienced before.
But not only will you grow professionally. The most important change you will experience will be inside of you. You will gain in confidence, inner strength and knowledge. So remember: the sooner you start, the better!
About the Author: Antón Jáuregui is 28 year-old guy from Bilbao, Spain. After different experiences that led him to live in France, the Netherlands and Chile, now he resides in Madrid, where he is the CEO and Co-Founder of Phant, a crowdfunding platform for projects with a positive impact on the world.