I want to save you money.
I want to save you time, pride, money and your emotional wellbeing.
Which is why this post will take you through the 12 moronic mistakes you will potentially make whilst building your first business, unless…
Unless you read the rest of this post.
But before that…
Why am I qualified to teach this?
Over the past three years I have “wasted” tens of thousands of dollars, thousands of hours and hundreds of sleepless nights making these mistakes.
JUST so I can sit here on a warm Saturday morning afternoon in Split, Croatia and write this post for you.
Each mistake may not make THAT much sense to you right now, but believe me, if you can avoid just a couple of these on the journey that you are about to embark on..
Your next 8 minutes will be a GREAT investment.
1. Thinking people will find you
You should seen my first attempt at an online business LOL!
Possibly the most SEO unfriendly site Google have ever indexed.
A simple page with little java script popups containing text reviewing my favourite self help books.
Though I later learnt that EVEN if the site had been optimised for SEO, when you first launch your online business you should expect the search engines to magically pick you up and place you at the top of the rankings for the most profitable keyword in your industry.
No, that will not happen.
Here’s the Amazon affiliate earnings for the three year period that site was up:
Big revenues hey?
(And incase you were wondering, that 2% conversion was due to me buying other books through my affiliate links.)
2. Not being able to deliver the product/service
Don’t get me wrong, this is a quality problem.
You decide upon a product service to sell, set up a webpage, drive some traffic…
Then someone buys.
The only problem being that you are not yet ready to deliver the product or service.
This is exactly what happened when I started selling a “done for you” Tinder service for $49 per month.
First sale comes in…
Refunded the client as was not yet ready and increased the price to $149 per month…
Again, could not commit the time to deliver the service so had to refund yet again.
This approach is great for validating potential business ideas… but at least have an idea/and be prepared to deliver your product or service once it is sold.
3. Trying to compete on price
Unless you are trying to be the next Amazon and are certain your business can reach massive scale…
Do not compete on price.
If you design your pricing structure to be cheaper than your competitors AND then communicate that in your offer.
Your business will not exist for much longer.
My first online business is an E-commerce store that sells male leggings…
We started out selling them at £15 per pair…
6 months later we increased the price to £25 per pair… and sales increased.
12 months later we increased the price to £35 per pair… and sales increased.
4 days ago I increased the price of a couple of designs to £45 per pair… and we will see what happens.
If you are able to develop a premium brand, which is simply a CHOICE by the way… you will be astounded at the amount you can charge.
4. Offending people
Whenever I release a new product/service I ALWAYS try and make it remarkable:
Worthy of attention; striking
Because it leads to free money.
When something is remarkable, people tell their friends, giving you a better ROI on your marketing spend.
You can take this too far.
A couple of bro’s and I decided to set up a co-working/co-living service in Venezuela called Highlife: Caracas.
Maybe a little too remarkable…
5. Placing too much importance on your idea
Now MUCH has been said about the value of the idea against the value of execution… in fact, I even gave a TEDx talk on the topic 2 years ago:
How nervous do I look?
Let’s make this clear…
If you are raising capital and are looking to build a defensible startup… yes, your investors will probably be looking for an innovative and defensible idea.
When you are starting your first online business, there are a whole host of other factors that will effect your success that are far more important.
Furthermore, the amount of mental energy AND time you will waste with this mental masturbation could be applied much more effectively.
In summary, just START.
6. Spamming people
Ahhhh yes, my favourite marketing channel.
You’ve developed a product/service…
You’ve set up your site and are ready to start helping people/taking money…
And you hear just:
Your friend then explains this new tactic he has discovered…
Guaranteed to bring instant sales.
He sends over the Google Spreadsheet with the list scraped from somewhere on the internet.
You dodge the questions by your autoresponder asking you if/where these people have given you permission to contact them…
Then you click send and waiting eagerly for the sales notifications.
2 hours later, you’re sat there with no money in the bank, just a series of angry spam complaints.
7. Getting conned
Flippa is a great place if you know how to use it. I didn’t.
One of the businesses I purchased cost me around $1,000.
And it made that amount per month, every month (until I sold it for $5,000 a few months back).
The other was Supralinks: an article writing service that had extremely attractive traffic and sales statistics on its Flippa listing.
Maybe too attractive for the age of the domain or the Alexa ranking.
However, I happily handed over $3,200 to a man somewhere in the world only to discover that the traffic and sales stopped abruptly. In fact, it seemed like they never really existed at all.
After a couple of months of hapless marketing, I decided to put the project to rest.
Needless to say, could have potentially saved a significant amount of time, money and emotional wellbeing by verifying the data claimed by the Flippa seller.
8. Bullshitting yourself
Or as 50 Cent says, intense realism:
… is a crucial skill that you will forcibly be required to development when entering into the world of online business.
Here’s a short story about how I learnt this:
I installed and customized a WordPress template on a domain and planned to target the keyword “how to get a girlfriend”. My plan was to build an email list over three months before launching my first product (which would teach guys how to get a girlfriend).
I started pumping out content every day and was getting a little bit of traffic and building a small list. Here is my weekly subscriber growth:
Making some progress right?
As mentioned, I was desperately trying to add value to an audience to build trust and authority.
I would then launch a $197 information course to those that had handed over their email address.
Launch day comes around, I send out the mails to my 200 strong list and land just a single $197 sale.
3 months.. $197.
Clearly here I had been deluding myself…
I thought the value was being provided during those three months, but it clearly wasn’t.
9. Thinking that people care about you
Sorry to say…
But it’s true.
Well actually, 90% of people don’t care about you and the remaining 10% want you to fail.
Though, if all these people are not busy caring about you, who are they caring about?
Therefore, when building your first business, if you don’t maintain an intense focus on how you can improve the lives of your customers (the people that just care about themselves), you will fail.
10. Forgetting to take backups
After setting up a small outsourcing company whilst still working full time in the corporate world with Accenture, I realised when I quit…
That I had just created myself another job.
Thus I decided to build a marketplace that would automate much of what I was doing, would allow me to move above the system an become an entrepreneur.
The only issue is that software can take a while to develop.
5 months later we we almost ready to launch.
And for some reason, I let a freelance developer into my shared hosting account to fix some malware on a separate site.
He then proceeded to backup JUST that site… and deleted the rest.
Our 5 months of coding/arguing/specifying and testing just went down the drain as the account was past the memory limit for standard backups.
11. Thinking you can do it all yourself
As mentioned above…
I left my corporate job, as I managed to create myself another job (my outsourcing company).
I thought I could do everything myself:
- Find the customers
- Sell to the customer
- Serve the customers
And I did, until we reached 6 clients and I had created myself a job.
Here are some quick distinctions:
- Employee: works within a system
- Self employed: is the system
- Entrepreneur: works on the system
- Investor: gives money to people to build systems
To build a successful business, you need to shift as much of your time as possible to the Entrepreneur level.
If you don’t, you may as well stay in your job.
12. Thinking that you will “make it”
One day you will hit that magical stage where you have all the passive income flowing into your system, products are delivered, customers are delighted and you sit there sipping a mojito.
Yes, this is possible.. but I would argue that is it not actually what you want(just what you THINK you want right now).
Whereas the TRUE pleasure will come from becoming the Creator… and not the Creation.
From the journey itself… and the person that you become.
There we have it…
If none of those seem familiar, welcome to the journey my friend, we have a long way to go.
If some of them do then… hello brother! I look forward to walking this path together.
Either way, if you think I have missed any moronic first online business mistakes off this list, don’t just Tweet them to me @tomhuntio, please add them to the comments below…