The No.1 reason why most businesses fail on the Internet

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 Alright! So you have this HOT product or service idea to make your millions on the Net. Not only is the product great (it’s something you love), but you also design an incredible site, have excellent customer care, solid logistic partners, and the whole kaboodle required to launch your business on the Net.

And then you sit back and wait for the virtual cash registers to start ringing. Nothing happens. Google Analytics or any of the stats tracking software available to track hits on your site tell you that infact, nobody is coming to your site. What happened?

Trying to sell what you consider is a hot product, is the number one reason so many people fail on the web. Sounds contradictory? Let me explain.

Say you find the cure for common cold. Now, isn’t that a great new product? You bet! You could probably make millions selling it through a worldwide brick and mortar distribution pharma chain – but you would be hardpressed to build an online business out of it. And that’s because people do not congregate online looking for a solution to the common cold.

According to Derek Gehl at the Internet Marketing Centre – to build a successful online business you should:

1. Look for an existing market / group of people with a common problem they are trying to solve.

2. Look for a market that has something in common with you and your interests. You MUST be able to relate to your audience.

3. Focus, focus, focus that market till you have a very defined niche that your business can cater too. Large markets are extremely cluttered with competition.

I was reading this piece by Derek and I thought about the Dotcom boom and subsequent bust of the late ’90s. Too many entrepreneurs rushed online with ideas they had fallen in love with confident that customers would lap them up as well, once launched online. Also based on the ‘eyeball’ strategy linked to an advertising revenue model, their online fortunes were linked to driving traffic on their sites.

But nothing of that sort happened – at that point in time users were just getting used to the web, and were hesistant to buy online. Many online ventures went belly-up whilst  some of the largest ones just managed to stay afloat.

The Internet resurgence today is quieter, and more well reseached in terms of consumer marketing, product design and development and robust business plans. Venture capitalists reject more than 95% of cases presented to them on the basis of the above points, before selecting one to fund, thus drastically improving its chances of long term success.

 To wrap up this post – look for a niche market to target; not a hot product to sell. Later this week, we look at what are online niche markets, and how do you select them.

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