There are several different kinds of “failure” when it comes to online businesses. Posterous is one example, but not the kind I’m going to focus on today. They had a great blogging platform that was bought by Twitter and subsequently shut down, disappointing thousands of bloggers. MySpace is also considered a failure by most because they didn’t adapt to the ever-changing competitive landscape.
While these and other well known failures are interesting, they’re not what most early stage entrepreneurs care about. If you’re starting your first website, or if you’ve failed once or twice already, your challenges are different than a company who sells out or fades away.
Most online businesses fail for one or both of the following two reasons. Even though each of these reasons can have multiple contributing factors, these are the root causes.
1. You build it, but no one comes.
The number one challenge facing a new website is how to drive traffic to it. You may be an optimistic entrepreneur, full of high hopes and intoxicated by the awesomeness of your idea. Then you launch your website to a resounding orchestra of…crickets.
On day one, the only visits to the website are your own (to monitor the nonexistent traffic stats). By week two, the website has plateaued at 10 to 20 visits per day, mostly from robots or close friends and family. After several months of no traffic, you give up and shutdown the website.
Now, the question you need to ask yourself in order to avoid this horrible demise in the future is, “Why aren’t people coming to my website?”
Here are some answers to this question:
- You built an Edsel: A masterpiece with no market. Before you build it, do your market research. Make sure there is a demand for it, not just a need. Get out there in the real world. Talk to people you don’t know. Ask for their honest opinions. Enlist a mentor with experience in your field for help and advice. If no one wants what you’re selling, they won’t search for it and they won’t find your website.
- Your SEO (Search Engine Optimization) stinks for reasons that are difficult to understand for an online business newbie. Poor SEO means search engines won’t rank your website, which means no one will find it. Hire an SEO professional on Elance or through a referral to do an analysis of your website. My website had a critical SEO flaw that isn’t widely understood, but it was fixed with a simple configuration change once my SEO guy pointed it out.
- You forgot to market it. Don’t feel bad. This is the single biggest reason most websites fail. You may love your website and your idea, but nothing sells itself. You have to market it, and I mean BIG TIME! Marketing is hard work. It’s time consuming. It takes awhile to show results. You have to constantly test and adapt your message until it resonates with your audience. The only quick fix for the marketing challenge is to get the attention of an influencer with an audience and connections. Reddit gained the favor of Paul Graham who sent 1,000 visitors from his blog to Reddit before it was officially launched. Of course, gaining the favor of an influencer also takes time.
That brings us to the second reason most websites fail…
2. You build it, they come, but no one buys anything.
There is a cost of doing business. You have to pay for web hosting, development, marketing, salaries, etc. Without cash flow, your website will circle the drain.
That means you need to convert your traffic into customers. If you have lots of visitors on your site, but they aren’t buying anything, the question you need to ask yourself is, “Why isn’t my stuff selling?”
Here are some answers to this question:
- You built an Edsel that people like to look at, but not buy. This goes back to market research discussed above.
- Your pricing strategy is off. It may be too high, or it may be too low. Your instinct might be to lower the price, but that could be the wrong decision. Brad DeGraw and I talk about this conundrum in Episode 2 of my Smart Energized Entrepreneurs Podcast.
- You’re marketing to the wrong audience. That means the traffic on your website isn’t your target market. Either change your marketing message or change your offering to suit your audience.
- Your website isn’t optimized for conversions. That means your visitors don’t know what you want them to do so they don’t do anything. Or they read your amazing content and then leave without giving you any means of staying in touch. Put a simple call-to-action on your homepage above-the-fold and in your sidebars offering them something for free in exchange for their contact information. Then continue marketing to them through your email newsletter. Checkout my homepage, ChrisDucker.com and GetHarvest for examples of simple calls-to-action that convert visitors into customers.
If you have people looking at your website but not buying, these are the basic reasons why.
No one wants to pour their heart and soul into an online business only to watch it die on the vine. Your idea may be the next big thing, but only if people find your website and then do something once they’re on it.
Focus your energy on driving traffic to your website and then converting those wonderful visitors into customers.
Agree? Disagree? Share your thoughts below!