Supply, Demand & On-line business.

 

On Wednesday, I spent the day at the Summer Networking Bash in Toronto to help man the Public Speakers Association table.

It was an adventure, the first time I had been in Toronto for a long time. Traffic on the highway was horrific, road works were apparently the reason for the usual sub two-hour journey taking over three and a half hours even though we left Woodstock at 10:00 am. That alone made me appreciate the advantages of working from home as I do.

The last time I went to a trade show was back in my corporate days in South Africa when I worked in the food products industry. The majority of exhibitors would promote tangible products, ingredients, production equipment, packaging and other types of machinery. Few service providers. Mainly products that visitors could get their hands on, touch, feel, see. Hear and smell some too. It was easy to believe that the products being exhibited would do the job that was promised, easy to decide which would have a benefit for a visitor’s business.

Wednesday’s was quite different, almost all the exhibitors were selling services and hope. Some were doing a better job than others. Too many were promoting features instead of benefits and solutions.

With four of us to man a small table, we each had time to visit the other exhibitors, attend some presentations and mingle with the crowd. I met many interesting people and made some good connections.

In line with the “6 degrees of separation” theory, I met a recent arrival from my old country, Zimbabwe. We recognised each other’s accents and enjoyed a few minutes reminiscing about our old country without getting too homesick.

One factor that emerged from many of the people I spoke to at our table and in general, was the number of people still in the about to get started, or just getting started, mode that I wrote about in The Quicksand of The Getting Started Trap on July 25 th. Some were in regular jobs and wanting to start a, speaking, writing, coaching, on-line marketing or similar type of business. Some had taken action, started getting results. Others had left full-time regular employment either by choice or circumstance and were attempting to get started.

Then there were those, exhibitors and visitors, who by their confident presence, indicated that they had taken action, had “real” businesses and were successful.

Which reminded me that the lower the barrier to entry to any given industry, the more entrants it will attract. The more entrants, the more casualties, the greater the number that will fail or never get started. That’s not all bad. Failure is important for learning and a necessary condition in a free market society.

My concern is that, with the exception of on-line marketing and e-commerce by established businesses, a giant bubble of on-line business is being promoted and built that cannot be sustained. It’s not the same as the dot.com bubble that burst leaving investors in the lurch. This time around it is individual incomes that never materialise and livelihoods that are affected..

There was and still is a parallel in network marketing, many are attracted, few succeed.

Why is the success rate of franchises so much higher than that of network marketers or internet entrepreneurs? Because the barrier to entry is so much higher. Putting hundreds of thousands of dollars on the line to start a franchise operation excludes most and ensures a lot more commitment and determination than a few bucks to start a website and print some business cards.

The market decides how many off-line business succeed in a given area. How many restaurants, fast food outlets, banks or car mechanics a suburb or town can support. The internet provides on-line businesses with a global market, but the same rules of supply and demand exist. The world market can only support so many life coaches, content creators, social media experts or any of the other new professions the internet has spawned.

I am not knocking the idea that the Internet allows any one to launch a business with almost no capital investment. It is a wonderful opportunity which many do succeed at, but it can also be heartbreaking for the huge numbers that don’t.

Recently I have read other’s thoughts on this subject. James Clear writes about the importance of building skills over a long period as opposed to seeking instant success. Scott DInsmore outlines 12 reasons why some people should not be entrepreneurs.

Either there are fewer cowboys and cowgirls out there promising instant success with their latest systems or I am getting more selective in what I let attract my attention. The on-line business market does seem to be maturing, players becoming more responsible, but there are still too many seductive traps for the unwary.

Those who will succeed are those who go in with their eyes open, who take a long-term view and have the commitment and determination to make it happen. Those who steadily improve their skills, have the resilience to ride out the tough times and accept that success does not happen overnight for most of us.

Like in any business, the secrets for success are simple, but not easy.

One expert who does not make it sound too easy and does give good practical advice is Chris Brogan in his courses. He is offering a 50% discount on his “Owners” courses including The Owners Path until 15 September.(affiliate link)

I leave you with two questions.

If you are selling the promise of on-line success to others are you promoting your opportunity responsibly?

If you are building your own on-line business, do you have the determination and commitment to succeed?

I would like to hear your thoughts. Leave a comment.