In the October 1994 Issue of Wired, Gary Wolfe said in an article, article about Mosiac (the worlds first GUI web browser) and the coming internet revolution.
Startup blog asks this:
What kind of pleasure is your startup bringing to its people?
This guest post by Michael Fox. Michael is a co-founder of the design your own women’s shoe business Shoes of Prey. He blogs about the adventures of running a startup at www.22michaels.com.
5 reasons why retail startups are rad
Prior to starting Shoes of Prey, Mike Knapp and I were working at Google and were brainstorming industries that would be good for an online startup. We settled for online retail and here are the 5 reasons why:
1. There is so much room for innovation
Retail is an industry that’s 1000’s of years old and while there have been innovations, there hasn’t been an enormous industry changing event in that time. Online retail has the potential to change the industry more than anything else in it’s history.
Whether it’s offering products in a way that has never been possible before, like Pandora do with music, the brilliant use of customer and sales data at Amazon to suggest highly relevant products to customers, a new retail model like offering only 1 product (Woot) or deal (Groupon) per day, or tearing up old business models as Alice is attempting to do with grocery and Apple did with music retailing, online retail has enormous potential for innovation and there are so many ideas out there waiting to be executed.
2. Online retail is a growing industry
Figures can vary depending on exactly what is classified as ‘retail’, however online retail still makes up only a small percentage of total retail sales, in the order of 5%-6% in the US and less in countries like Australia. This is only going to grow.
3. An online retail business is easy to monetise
In addition to the difficulty of getting people to use your product, many online startups face the problem of how to make money from their business. Take Twitter and FourSquare. They’ve each built a fantastic user base, but they now face the challenge of working out how to make money from their product.
Like countless retail businesses for 1000’s of years, an online retail business sells a physical product so there is no need to develop a whole new business model for the business to be profitable.
4. There’s not a great deal of competition
The lure of getting rich quick by hitting on a winner in Apple’s Appstore or building the next Google or Facebook draws most top developers into those spaces resulting in a huge amount of competition. Most good web developers, when brainstorming what sort of business they want to start will avoid anything that involves a physical product like the plague.
If you and your team have the skill set to build a great website, and manage physical operations like sourcing physical goods and a physical supply chain, then you’ll face a lot less competition in the online retail space.
Of course you’ll potentially face some competition from traditional retailers moving into the online space, but particularly in Australia, that’s happening at a very slow pace. To help minimise that risk, but an innovative spin on your product and odds are you’ll stay well ahead of most traditional retailers.
5. The industry is small enough that you can have an impact early on
Online retail, particularly in Australia, is only just starting to develop. There are a number of industry groups and websites that have only recently started like Internet Retailing, Inside Retailing and Power Retail. Because these sites are relatively new it’s not too difficult to get coverage from them. It’s a similar story with conferences and industry awards. If you do something new and interesting in the online retail space you’ll soon be presenting at conferences and find your startup a finalist amongst some fantastic industry players.
If you’re thinking of doing an online startup I’d recommend considering online retail or applying a similar thought process to the industry you’re thinking of launching in.
Click here to follow Michael on twitter.
Guest Post from Mick Liubinskas from Pollenizer.
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Department of Startups – Community Announcement
Unsynergy – where the whole is less than the sum of the parts. Often caused through too many features aimed at too many people with too much information.
86.3% of startups are injured or killed each day due to Unsynergy. Please help us stamp it out once and for all.
The worse thing about Unsynergy is that the person who is inflicted with it is unable to see the symptoms. They keep adding more things to their startup – more features, more content, more options – whilst they are slowly (or often quickly) committing suicide.
Most people on the outside, looking in (e.g. customers) can see Unsynergy for what it is. Though sadly, they rarely care enough to let the founders know. (Or can’t find the feedback button amongst the 100 other options.)
Founders, please understand, more is less. Less is more. Less is great.
To bastardise a great quote, “Great products are finished not when there is nothing more to add, but when there is nothing more to remove.”
Fight Unsynergy, Remove a Feature Today!
Thanks, Mick Liubinskas.
You may be aware that I recently ran my annual Startup School in Melbourne.
During the event we ran a tweet stream of the ideas and soundbites coming from the forum. A lot of people followed the hashtag #melsus and said they got some great stuff from it. One person in particular Josh Moore, took it to the next level and pulled together a great PDF of the event via what appeared on line from it. Entirely his idea and work.
We both thought it was worth sharing here as a small entrepreneurs e-book made up of tweets and links in different categories.
PS: there are some pictures of me in it *red face*, which Josh saw fit to include…. and who am I to moderate his work?
You can follow Josh on Twitter here. And see his blog here.
I’ve decided to run a few guests posts on startup blog.
I’ve never done this before and on the surface it my seem to lack purity. But here’s what I think.
The blog isn’t about me, it never has been. It’s about providing valuable information to those interested in the topic (startups, entrepreneurship, marketing). Which the guests posts will do. Heck, it might even facilitate spreading the startup blog word a little further and connect a few people…. Yep, that would be cool.
It’s what we create for the people who care. The truth is we never know how hard it was to deliver the right product, at the right place at the right time. We only care that it was.
What we (the entrepreneurs, producers, marketers) had to go through is not part of the consideration set. It isn’t charity, it’s about them. So if we nail it and deliver the project quickly, we needn’t feel guilty or less deserving. Likewise, if it took us 5 years of hard working weekends and nights, that’s also no reason to feel a level of entitlement. We need to feel what they feel – underwhelmed or overwhelmed with what we deliver, how we got there is far less important.
There is more good than bad in these hilarious Ali G pitches to Venture Capitalists.
What to look for:
[youtube=http://www.youtube.com/watch?v=48TR0vUPQCs]
I’d seriously recommend this video on how to pitch versus most other examples we see on the web so long as we understand the context.