What It Takes for an Internet-Based Startup to Succeed

Pretty much everyone is wanting an internet-based business due to lower overhead (usually), location independence or grabbing onto the dream of being the next Mark Zuckerberg or Mark Cuban. Of course, since the internet is an enigmatic beast to tackle, many of us just give up on our business ideas for a more traditional lifestyle.

As someone who has found relative success starting 100% internet-based businesses in the past decade, here are a few obvious (or not-so-obvious) tips that newbies need to keep in mind:

Realize the Niche You Need to Fullfill—and Be Realistic

There are endless business ideas out there, and a majority of them fail within their first year. Even if you have something hip and unique, it needs to turn enough profit to be worth your time. This is why every business strategy needs a defined niche in mind, and every niche has a market cap.

In fact, 42% of startups fail because they don’t know what they’re doing. You may have noticed them before: companies that have nice branding, marketing, and a social media presence but are completely impractical.

You need to be sure that the product or service you offer solves real world problems, even if it seems narrow. Although a plumber doesn’t really have the most desired job in the world, his niche is defined and income has a linear progression.

Receiving Outside Funding

Ideas can make billions, but may never come into fruition without starting capital. Sure, you may get lucky on social media and generates lots of sales without needing much investment. Realistically speaking, most startup success stories involve someone lending a decent chunk of capital.

Pitching your idea to Angels will never hurt, as these high-net-worth investors might see the long-term potential of your project and want to scale it to a level beyond your expectations. Partnering with investors also enables connections with others that may fill the technical gaps in your startup, albeit at the cost of handing over stakes in the company.

Crowdfunding is another hot strategy as it allows a more decentralized approach to asking for money. People from all wealth levels may give micro-transactions in exchange for early product access, extended features or other non-monetary incentives.

Startup accelerators to look for seed capital exist specifically to take early-stage startups to an enterprise level, assuming you have ground-breaking ideas.

A One-Man Show May Not Be Enough

Let’s say you have an amazing business idea and you don’t want to share it with anyone. While you feel you can handle the workload, from coding to marketing, you need to think about how your business is going to scale.

Employees are expensive, and partnering with another company or individual can steer your enterprise in a direction you don’t really want. At the same time, these are essential parts of growing a business, which requires some financial risk or compromise.

When you realize your workload is too much to handle and you need to free up time for more critical functions, that’s the first sign you need to hire someone. You may opt for an experienced contractor, freelancers or full-time employees, keeping in mind the local labor laws and costs regarding hiring an employee.

Burning a Hole in Your Pocket

Just like any other form of shopping addiction, you may end up in the endless void of spending for business related products. This may include paying for eBooks, internet domains, spammy social media boosting services, coaching and other redundant garbage typically sold by “influencers.”

Not saying that all expenses are useless, but there are many online products created for the sheer purpose of taking advantage of your desperation or ignorance. It is even harder to keep tabs of expenditures if you have venture capital, or spending money that’s not yours, in your company.

Think critically about the profit potential for every expense you make for your business, although it sometimes requires trial and error. If a product or service seems too good to be true, it probably is.

Final Thoughts…

The internet is the craziest market to get into, so you have to be quite resilient to not get rejected by it. If you have a plan, a tangible goal and adequate funds, you may stay afloat and avoid having to go back to the corporate office.