02 Aug The Myth of Connections
It Doesn’t Matter Who You Know
A common misconception among entrepreneurs is that you need connections to build a successful business. Although this is still true in some cases, there are plenty of opportunities for everyone, regardless of who they know, what family they come from, where they went to school, or where they have worked in the past.
When it comes to starting and growing an online business, it’s not about WHO you know, but it is about WHAT you know, WHAT you’re willing to do, HOW persistent you are, and HOW hard you’re willing to work.
And, of course, the all-important WHY, which is the core of your motivation.
Yes, it’s really great to be able to call up family or friends and raise money for your venture. It’s also great to know talented designers, marketers, and programmers. It’s fabulous to get free press and take advantage of shortcuts because you know the right people. It’s wonderful to have friends in high places who will help you scale your business quickly. Yet, even though connections are nice to have, they are not a requirement for building your business online.
You can start with no experience, no capital, and not knowing anyone. All the tools and resources you need to get started have already been created and are available to you right now on the Internet.
It’s easy to look at wealthy business people and assume they were carried to success on the shoulders of their connections. Stories of famous entrepreneurs such as Bill Gates and Mark Zuckerberg always mention the privilege they were born into, raised by affluent parents, and attending elite private schools and Ivy League colleges. Parents send their children here because these environments are fertile ground for connecting with wealthy and influential people who may someday help propel their children’s businesses and careers.
Most of us are not so fortunate. Perhaps we attended a technical or community college, a state university, or were unable to acquire a post-high school education. Many of us were born and raised in towns so small we had no early opportunity to make high-level professional and business contacts.
But guess what? It just doesn’t matter!
With the Internet and the democratization of technology, there are countless resources and tools available for entrepreneurs that can aid with building a business from nothing but courage, dedication, and persistence, without the advantages of wealthy friends or business connections.
With Shopify, you can quickly and easily set up an e-commerce store for a monthly fee of around $30. With MailChimp, you can set up automated email marketing campaigns for free with under 2,000 contacts.
You can advertise on Facebook or Google for as little as $1 per day.
Project management tools like Trello offer a free service that will keep you organized as your business grows.
If you don’t have connections, don’t worry about it. There are plenty of workarounds in today’s high-tech marketplace.
Once you’ve developed a profitable business, making connections to accelerate your growth will be much easier. In the meantime, here are some tips for building your business with the help and support that is immediately available on the Internet.
Automate Your Work
One possible avenue for going into business is to launch a venture that solves a problem you have experienced yourself. For example, if you have repetitive daily tasks or tasks you simply dislike, you are living proof of the demand for a solution to this nemesis. If you keep running into this challenge, it’s likely many other people do as well.
Using this aggravation to your advantage, you can build a business that solves this specific problem, finding customers by marketing your solution to the “pain points” your product has solved for you.
Before starting MailChimp, co-founder and CEO Ben Chestnut ran a design firm. Many of his clients wanted email newsletters, and Chestnut disliked doing this work. His distaste inspired Chestnut to build a tool to streamline the process. MailChimp was born from this problem-solving idea, a company that now brings in hundreds of millions of dollars a year.
Lynda Weinman started as a web design teacher. In the late ‘90s, she was looking for tools that could help her do a better job instructing her students. The local bookstore didn’t offer the kind of instructional materials she was looking for, so she created her own tutorials and training videos to help her students. This marked the birth of Lynda.com which has since grown into a vast library of tutorials. Lynda.com helped thousands of software developers and designers improve their skill sets. Two decades after starting the company, Lynda sold it to LinkedIn for $1.5 billion. It is now called LinkedIn Learning and offers professionally created video tutorials taught by experts in their fields. If you want expert instruction on business, marketing, design, IT, and other business-related topics, it’s an excellent resource for you!
These are just a few examples, but there are many other businesses that were launched to solve a problem and have made both small and large fortunes for their founders. If you look into the founding stories of many business-to-business software companies, you’ll see how many were built by founders who faced problems that their products and services are now solving for their happy customers.
Solve an Existing Problem by Using an Existing Business Model
You don’t need to invent a new business model … there are plenty to choose from. It’s more important to focus on what makes you different, and what sets you apart from your competition; this is known as your USP or Unique Selling Point. You can identify your USP by focusing on your business’s customer experience.
Consider the example of Shopify. Shopify’s founders started the company after looking for an easy-to-use shopping cart abandonment tool for their e-commerce snowboarding store. They built their product on the then-popular Ruby on Rails framework, an existing technology leveraged by many other startups at the time.
The cart abandonment solution they built for their store turned into a program that many other e-commerce entrepreneurs were also looking for, making this another excellent example of founders finding success by solving their own problems.
After running the company by themselves for over five years, the founders raised money from venture capitalists to scale up, and they eventually IPO-ed with a billion-dollar valuation.
There were lots of other cart abandonment solutions available at the time. Still, by differentiating their solution with a better customer experience, Shopify successfully solved a problem that already had existing solutions, proven demand, and an established market. Shopify did not have to create a new business model because it improved an existing one instead.
Start with a Business Model that is Cash-Efficient
Many entrepreneurs make the mistake of scaling up their business too quickly, resulting in capital-intensive operations that can be harmful to the business. For example, some companies purchase too much inventory before knowing if their product will sell, or they spend too much on advertising before testing different ad copies.
During the early stages of your business, it’s wise to find ways to let your costs scale up as your revenue increases, and not before. One way technology startups accomplish this is through Amazon Web Services, Google Cloud, or Microsoft’s Azure. These platforms charge fees that are based on server storage and bandwidth usage, so you only pay for what you need. This is a much better alternative to purchasing your own servers and spending valuable time managing them, distracting you from focusing on your core mission.
With e-commerce retail, you can ease into your business by leveraging drop shipping services to your advantage during the early stages of your development rather than purchasing excessive inventory that absorbs your cash flow and creates storage headaches. The dropshipping business model allows you to buy inventory as your customers place orders. A great example is print-on-demand (POD) T-shirt services. If you have an online apparel store, once your customer places an order you simply send the information to your dropshipping supplier; they print the shirt and ship it to your customer for you and you never have to touch a shirt or hold inventory. Most of these platforms even handle returns.
This means that your business only spends money as it comes in. Yes, your profit margins will be lower because of the services you are using, but you can test many product ideas without risking any of your own precious capital. Later, when you’ve proven which products sell best, you can commit to ordering and managing your own inventory to increase your profit margins.
The critical item to keep in mind is that in the early stages of your business development, make sure you have more revenue than expenditures!
By operating this way, you can test different marketing channels (i.e., advertising and SEO) on a small scale. This allows you to understand your costs as you find ways to increase your profit margin and become profitable. Once you understand the dynamics, you can then make any necessary adjustments to the business model as you improve your profit margin and expand your business.
Be Stingy with Marketing
Without experience, capital, or connections, it’s essential to choose marketing channels that directly provide prospects and customers. For example, it might not be a good idea to spend your marketing budget on TV ads or highway billboards because these channels support brand-building more than direct sales.
Instead, leveraging Internet channels such as pay-per-click (PPC) advertising, social media, and search engine optimization (SEO) are better alternatives for cash-strapped businesses. These channels allow you to test your marketing on a small scale before committing to a larger marketing investment.
With Facebook and Google ads, you can spend a few dollars per day and run multiple campaigns at once to gather marketing data on your ideas. Once you understand the viability of your ideas, you can make an informed choice based on what the data indicates.
Social media offers many opportunities to monetize the different audience groupings, and SEO is an effective channel when the product solves a specific problem for a topic that’s commonly sought through search engines. This is typically a more long-term strategy but is perfect for entrepreneurs with more time than money.
When it comes to spending time or money on marketing, make sure you’re doing so through a channel that clearly shows a direct correlation between what you put in and what you get out.
Busting the Myth
Because of the low costs of starting an Internet-based business, it is relatively easy to develop your business without professional connections. You don’t need to have rich friends, family members, or establish relationships with investors to build a new business. The tools you need are easily available to develop and grow your business inexpensively. You simply need your own personal drive to learn what you need to know, be willing to accept temporary failure, and possess the mental determination and emotional strength to keep solving the problems that continual obstacles will present. When you remember your WHY, your Dream, nothing will stand in your way. You don’t need experience, capital, or connections. All you truly need is a committed belief in yourself. Frankly, that’s all you ever need!
1. There are hundreds of online resources that can help you start your business without first having connections.
2. Spend some time finding out about the freelance economy, which offers a variety of relevant business services.
3. Focus on the market’s realities, and serve the wants and needs of your customers. Don’t hold on to an idea if it’s not working.