The other day I googled the phrase “How to start an online business.” I was presented with a mere 7.15 billion results to choose from, and all of this is in 0.81 seconds. Let’s take a minute to digest that number. In a world with an estimated total population of 7.7 billion people, a search on how to start an online business, returned 7.1 billion results.
Is it any wonder that we have so many confused, frustrated, and anxiety ridden entrepreneurs these days? They’re all following the latest advice from “experts” on how to create an online business.
Call me stupid but can you name even one business that is entirely online? I can’t. Amazon? Tell that to all the cities that lost out on the bidding competition for new Amazon facilities? Telling Jeff Bezos that Amazon is an Online Business is like telling Elon Musk that Tesla is a transportation company. Microsoft, Facebook, Tiktok? All of these companies conduct a great deal of business activity online. That’s not the same as saying that they are online businesses. When you think about it, unless the business was actually created by and run entirely by a machine (no doubt something we’ll see soon enough with advances in Artificial Intelligence), there is no such thing as an online business.
Now at this point you may be tempted to break into laughter and assume that I’m either bat shit crazy or a disgruntled boomer whose time has passed them by. The former is a possibility but I’m far from disgruntled. In fact the inglorious mob of “experts” who haven’t got the foggiest clue what a real business is have created infinite opportunities for those that do. That doesn’t mean there isn’t a downside to all the misinformation that is floating around in cyberspace.
Scotty Schindler, my guest on Episode 114 of Screw the Naysayers put it this way.
“Everyone is looking for an overnight success like Facebook or Instagram. And if people don’t get that, they sorta think they’re a failure. And it’s not true. There’s a lot of small to medium enterprises you can create and put your hard yards in and create a perfect lifestyle. And a perfect wealth creation system for you and have a really good journey with your staff and your clients and your product without having to be this massive Facebook animal, this massive Instagram or Whatsapp or any of those other things that seem to have made it big”.
Scotty knows a thing or two about building a business that many would say was one of those mythical “online businesses,” although better referred to as a Software as a Service (SAS) company. As Founder and CEO of ReNet, Scotty presided over the growth of a start up business that began in 2000 with just 1 single property listing advertised. When Scotty moved on in 2017 ReNet managed over $1.125 Trillion Dollars ($1,125,771,059,045) in real estate across Australia and New Zealand, represented by 5,000 real estate offices and some 15,000 real estate salespeople.
The thing is when Scotty and I spoke about the process he used to start and scale his business, he never once mentioned technology. Software and the internet was a means of delivering his service, but Scotty’s focus was on creating a business that solved a customer problem and aligned with the things he wanted in life. Scotty told me that he chose to start a software company because he had that vision of the lifestyle he wanted to create. Having spent 10 years selling insurance he understood the value of recurring revenue. For Scotty that meant that he didn’t want to just sell something. He wanted to have clients that were going to be with him for 10, 15, 20 years of a journey.
In his words “I had this clarity among those sorts of critical elements as to how I saw myself in 10 years time”.
My story is not all that different although it’s fair to say that in the early days my focus was more on creating a businesses that would pay the bills and allow my wife and I to live where we wanted to live. Mostly because unlike Scotty I didn’t have a clarity on what my business was going to look like. In truth I spent a couple of years just trying to find educational software that I thought I could sell. My search was product based. I got by, partly because I knew how to evaluate educational software (I could tell products that would work and identify flaws in the ones that likely would provide results for my client). I paid the bills but not much more.
Looking back the reason for my early struggles are obvious to me. I didn’t know anything about starting a business. For example, if you want to create a sustainable, scalable business, you need to start by identifying the specific problem you’re going to solve for your customers. Such a simple concept, and yet so frequently ignored. And that’s just step one.
The financial performance of my software business pales in comparison to Scotty’s. My profits were measured in 6 figures. But our journeys are similar in many other ways. We both found a problem that needed solving. We both utilized technology to solve customer problems. We were both obsessed with building long term client relationships. We both had clarity on what we wanted to achieve in the long term. And we both were able to create sustainable, scalable businesses.
In some ways Scotty and I were both pioneers in the world of software as a service. I guess I should feel old, but I don’t. Neither one of us are tech wizards. Neither one of us set out to create an “online business.” We set out to create a business that solved an important problem using technology. Focus on the problem you want to solve before you worry about how you will use technology to serve your customers or even to attract customers. And whatever you do, stop telling yourself your goal is to create an online business. You’ll thank me. Until next time, remember, Screw the Naysayers…They Suck Anyways. Tim…