Supernatural Agency: Online business tales

“Economic uncertainty. The best place to be when revenue is hard to generate is a pre-revenue company. Whether or not we are headed into (or are already in) an economic downturn, and whether or not that will impact advertising expenditures, many in the market are already exercising caution. In times like that, big companies start acting more defensively and give up more white space to start-ups. This is good for start-ups.”

Dave Morgan offers five more reasons for starting an Internet company now and they’re all good ones.

This list covers just about everything I’ve ever heard of or thought about for raising cash to get started. If anything it shows the degree of commitment and risk you need to have to get out there and succeed.

This is not an endorsement of all of these techniques!

I like to tell people that we run a business with no employees and no customers. You can watch the wheels turn as they chew on that one. If they are business owners themselves they almost always have a wistful response that includes a ‘I hope that works for you’ look.  ;-|

The fact is there are very successful businesses that are profitable without employees or customers- they’re called investment or trading firms. In many cases they may be an individual or partners that only trade on their own account (they don’t manage money). Taking some capital and growing it via investing or speculation is an age-old business that is not reliant on customers or dependent on employees.

The domain world is simply the latest incarnation of this business model. Of course you can hire employees but you don’t necessarily have to. And you could provide domain services like development to customers but why would you make money for them that you could be making for yourselves? Domaining can liberate you from these responsibilities if you don’t want to deal with them. It might take longer to grow but the upside potential is still huge- after all how many businesses can you start with an $8 name and a hosting account?

It’s been a good week for interesting blog posts and Evhead has a great piece on evaluating a business you’re thinking of starting or investing in. They look at these criteria:

• Tractability: How hard will it be to build and bring to market
• Obviousness: Will people ‘get it’ easily?
• Deepness: How much value will you deliver?
• Wideness: How many people will ultimately use it?
• Discoverability: How will people hear about it?
• Monetizability: How will you make money?

and finally,

• Personally Compelling: Do you really want to do it? (whatever you do, don’t skip this one!)

I ran a business plan contest for several years and read hundreds of executive summary plans in the process. Very few (less than 5%) answered even one of these questions. I doubt a single plan would positively address all of them. That’s OK because business planning is the process of learning what business you’re in and whether you want to be in it. We started out thinking we were affiliate marketers and found out that we were domain investors/developers. We changed our focus because domaining was more interesting and broader in potential, a more strategic business.