As I was writing my last post about expenses and investing back into my business, I found myself thinking a lot about how attempting to start an online business these days is so different from when I started out in 2001.
I owe a lot to timing. I started my first site solely as a hobby and grew it because I wanted to share what little knowledge I had at the time about budget travel while teaching myself HTML and web design at the same time. I didn’t feel like the budget travel websites that were around in 2001 were good enough and I had ambitious plans to fill the gap in the market for hostel reviews (at that point, sites were listing hostels but nobody was reviewing them). The internet was crammed with non-commercial individual sites (Geocities and the gang) and commercial sites from big companies, but it didn’t seem like small site owners were making money… or even really trying to. As far as I knew, the only people making money online were Amazon and I doubted a regular Joe like me would ever be able to make more than a few bucks from the occasional hostel booking. But I plodded along more out of a love for what I was doing than the pursuit of money.
I certainly didn’t see the potential of the internet back then but I continued because I loved what I was doing. By 2005 it all finally clicked and I started to get serious but, by this point, I already had an established website to piggyback off of and had learned what I needed to know about HTML. People starting out now are at a huge disadvantage. First because there’s an arseload of competition out there. Second, because many people have dollar signs in their eyes and will give up if they don’t earn anything in the first few months. And third, (and this one is something I’ve only been thinking about for a short while and is debatable) because these days a business mentality is needed from the start (not a hobby mentality) and that means investing money from the beginning, something that few people are willing to do(?).
I still feel like there’s plenty of room to earn online and I also believe that, with a great idea, hard (and smart) work and patience, you will eventually make it work. But I also think that, with increased competition, internet marketing is becoming more and more like a regular business and the days of having $10 for a domain name and $100 a year for hosting as your only expenses are gone. I wonder if all of the people who are just starting out with their online businesses (travel blogs or whatever) are likely to want to invest in them before making a cent. The barriers to entry in this business are very low but I get the impression that while many people are willing to invest loads of time, few are putting money in from the start.
I think this puts those who are willing and able to invest into their online business in a great position to get way ahead. People like me who are able to work on their sites full time already have a huge advantage over those who can only dedicate evenings and weekends to it. Plus it’s a lot easier to invest in something that you’re already making money on, from both from a financial and psychological standpoint. Then if you end up outsourcing, having people doing work for you suddenly allows you to grow things at a much faster rate. With major companies and internet marketers pumping money into their business, will new arrivals find themselves having to fork out money just to get into the game?
All of these ideas just came to me as I was writing the previous post about my expenses and I’m really curious to hear your thoughts. Are you already investing back into your online business if you have one? Do you feel like a great idea is enough to get things going or are things becoming too crowded? Do you feel like web development is moving towards traditional type businesses where you need to maintain monthly marketing budgets and other expenses? Will the cost of running a portfolio of websites keep rising as the competition heats up? Are the days of a hobby evolving into a business gone?
I’m curious to know what you think!
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