I’ve just read this AMA by Bryan O’Neil, a serial entrepreneur, and he was giving some very sensible advice for anyone trying to get a small business going.
He answered almost every single question, too, which is unusually nice in an AMA.
Here are some of the highlights:
Q: If you’re starting over tomorrow with only $500 and your knowledge (no contact list), what’s your plan to start generating revenue?
A: I’d pick one of the many ideas that I’ve jotted down but haven’t had time to execute, throw together a landing page for validation purposes, run $100 worth of AdWords traffic to it to validate the idea, and assuming the market accepts it, spend a week working full time on building buzz around it.
If the idea involves something that I’m personally not overly experienced in and I don’t have the budget to hire help then I’d also look for a partner to join me in building the venture. With no existing contacts, I’d turn to startup communities to find one.
- Put together a landing page (use tools like Leadpages or Instapage)
- Create an AdWords campaign and send some traffic to your newly created landing page
- See if it converts
What many people don’t get is that for a test like this you don’t need either a product/service (your landing page can just lead to a “sorry, we’re not open yet” message after the payment link), nor a massive budget, as a $100 test campaign will already give you a whole bunch of information on whether your idea is likely going to get traction.
Q: How do you measure conversions? By seeing what percentage of people leaves their email address to be notified of the launch?
A: Never. A “free” conversion is not a conversion.
What I usually do is I build an ACTUAL landing page, with a dollar figure, and see how many people are ready to proceed to the payment page. The payment page, however, doesn’t exist – it just forwards them to an email signup apologising and saying your product isn’t yet available.
This is the ONLY way to properly measure conversion, as regardless of what people say, things get very difference once you ask them to pull out their wallet and type in their credit card number.
Q: How would you define “building buzz around it”?
A: The reason why most people are vague about “building buzz” is that it’s extremely different depending on the industry that you operate in.
With all that said – whilst “buzz” is good and gets you some much needed attention and feedback, I personally prefer paid advertising any time of the day. A product that requires “free traffic” to get sales is typically operating on a flawed business model.
Q: What is the best way to cut through the BS and get a site to be generating actual revenue?
A: Direct sales, affiliate marketing, product sales, service sales, etc are monetisation methods / business models, and typically have little to do with whether your site will generate or not. It would be like asking “if I want my business to start making money should I build a laundromat or a petrol station?” – there’s no correct answer.
You can generate revenue with any business model so long as what you’re offering is on demand and you’re good enough in getting it in front of people. There’s no magic pill, and whoever says there is, is quite frankly full of it.
Q: What can I do today to take a blank slate site and make it sellable?
A: One of the biggest myths in the online acquisitions industry is that content, clicks, traffic, design, backend software is worth something — in 99.99% of cases it isn’t.
The one and only thing that buyers look like when buying a business (online or offline) is its revenue. If your site doesn’t make any money then no-one cares how much traffic it gets or how much of original content there is on the site – if it was worth something then in all likelihood you’d already be monetising it. There’s a couple of exceptions to this, of course:
One is very low-end (<$5k) sites – these do tend to sell based on non-revenue metrics from time to time, as a buyer may want to pick one up simply for the sake of the ‘idea’ and to save time and money that developing a similar site from scratch would take.
Another exception is potential, e.g. cases where a site does have what it takes to generate revenue but for one reason or another it hasn’t yet been (properly) monetised, however don’t expect anybody to pay a premium in this situation as buyers will be very careful dealing with you, with most of them asking the “if it has such a good potential to make money then why isn’t it making it already” question.
Q: Do you manage all of the creative and copy yourself?
A: First iteration – always myself. It’s meant to be a “quick and dirty” job where the primary (and only) focus is on time. It takes me less time to write up a simple landing page than it would take me to hire external help.
Once your idea is validated though, it of course makes sense to turn to professionals and get everything done properly.
Q: How do you make landing pages to test an idea such that it complies with Google’s “Information Harvesting” terms?
It’s also worth looking towards Bing, by the way. They’re capable of providing quite a bit of traffic but their policies are much more relaxed.
Q: What are your most used tools?
- Trello – for organising nearly anything, from meeting agendas to product pipelines to ideas. You need to become a “power-user” though – there are so many hidden features that are incredibly useful.
- GoodTodo – the best ToDo list ever. Doesn’t look like much but it has two bits of functionality that no other ToDo list app that I know of has. Watch the video on their site to understand.
- Gmail Multiple Inbox + Custom hack – this changed my life!
- Notepad – not the Windows app, but the real thing. There’s something in writing things down the old fashioned way. Plus research has shown that you’re far more likely to remember things that you’ve written down on paper.
- Macbook Pro, two 24″ screens and a mobile WiFi dongle with support for international roaming.
Q: What kind on knowledge do you think is most useful to learn for a beginning online entrepreneur?
A: Personally I’ve always learned as I go along, i.e. if I get stuck with something then I educate myself enough to overcome the issue. This applies to practical things.
In terms of theory, the most important thing to master is the ability to execute quickly (read The 7 Day Startup: You Don’t Learn Until You Launch by Dan Norris) – as the speed at which you get your ideas into a stage where you can accept payments will often define your long term success. I hate famous quotes but … as Reid Hoffman put it: “If you are not embarrassed by the first version of your product, you’ve launched too late.”
Think about it: if it takes John 60 days in average to get from the idea stage to the launch stage and Andy a year to do the same, then in 10 years John will have launched 60 ventures whereas Andy has launched 10. Now, if 10% of their ventures actually succeed (probably a fairly accurate figure in the online business scene), John will have 6 revenue-generating businesses by the end of the decade and Andy will have 1.
In hindsight, I wasted many good years in the past on “trying to make it perfect”. It was only when I decided to get rid of my perfectionism and concentrating on launching quickly when things started taking shape.
There are several other questions, although most of those are related to selling a website and how much you can get from it. Take a look at the complete AMA post for more.