Never appeal to a man’s better nature. He may not have one. Invoking his self-interest gives you more leverage.
Robert A. Heinlein
Although the internet business is like any other business, the rules and logic are often different here. Long-term plans are advisable but they are not compulsory at all. When you start an internet project you should be aware that everything is changing every hour, literally. If you plan to have a strategy, business plan, marketing analyses, and other similar activities, you should know that your data is getting outdated with every passing month and you are drifting away from the set goal. In brief, you start losing money before you have even started.
More and more often on the internet we see the emergence of projects that can be realized literally in a week. They are without a business plan, without prognoses, without investments, without marketing analysis, and without a five-year strategy. This way, violating the good business practices, these young enthusiasts enhance the risk for their projects but at the same time, they minimize the expenses and the time for realization, which gives them a competitive advantage.
In his book The Goal: A Process of Ongoing Improvement, Eliyahu M. Goldratt places emphasis on a very important question, which entrepreneurs rarely give a clear and unambiguous answer to, and namely – what is the purpose of your business?
The purpose of EVERY business is to make money
Over the past few years, during lectures all over the country, I met many skeptics, who claimed that money is not the most important thing or that our major goal should be to offer a high-quality product, solve consumers’ problems, and more of this type. Indeed, they are on the right track but the purpose of the business is to make money by offering a high-quality product and solving consumers’ problems. Either that or we make money because of the fact that we sell a high-quality product and solve the problems of consumers.
However, every company is a commercial entity and it has one single goal – to make money. If this is not your goal, you should not work through a company but rather through a foundation or a non-profit organization. This way you will be able to carry out activities to the benefit of the society without having profit as an end goal.
In this sense, it is important every action you take for your project to bring you one step closer to realizing your goal while launching it within a week, although at higher risk, allows you to take a really big leap towards its realization.
Some time ago I had to hold negotiations with an investor in connection with a project we wanted to realize on the internet. It turned out that he was a foreign national and often our meetings were held in Spain, Austria, or another European country, where the American businessman had some business to do. We started the negotiations and we received a positive answer during the very first meeting.
For the second meeting, we were assigned with numerous abstract problems related to the business that we had to solve. It took us about a month before we organized the second meeting and find the needed solutions to the outlined issues, which subsequently would increase the work we need to complete. Then we started working on the budgets, the budget’s different items, we conducted several studies and analyses on the competition in Bulgaria and around the world. We worked out a five-year plan for the product’s development, using the current information we had. 18 months had passed since the positive answer until the day we really started the work on the project.
While we were busy dealing with diagrams, charts, and calculations, the competition had already changed the business environment which we were supposed to set foot in. Instead of a competition-free market, it turned out that we had to enter into a field already seriously saturated with rival products not only from Bulgaria but also from around the world. Furthermore, we had a one-year deadline to develop our product, which meant that we were two and a half years behind the competition because of some paperwork.
Of course, all the required documents brought confidence to the investor to make an informed decision but the decision he made was based on old information because the internet environment is constantly changing. (Did I say this enough times already?) In this concrete case, there was a need for fast crisis decisions that would make us competitive and would allow us to conquer the market and despite the competition and to our luck – we succeeded. The price was a drastic change of the entire business model, strategy, and budget. In the end, we developed an alternative product, completely different from what we applied with before the investor.