People often ask me, what is the secret of winning in the online space? Just like every winning recipe has a secret ingredient, the key element that defines success in the online space is speed. Entrepreneurs need to realize that unlike other areas, the contours of the online space are highly dynamic and change quite rapidly. Real time is therefore the buzzword in this sector. But this real time applies to the business as well. We operate in the technology domain and customer preferences change very fast. So you have to be extremely swift and agile.
The other reality of business in the virtual market place is that it is highly competitive and brutal. For example, the category that we operate in allows only two players to successfully do business. Almost every day, you read or hear about online ventures. Success stories, new ideas, growth potential, the possibilities and the league of entrepreneurs it has spawned. However, behind all the noise lie hundreds of ventures in the online space that have either folded up or are struggling to survive.
How many of you remember AltaVista? The digital search engine dominated the market before Yahoo and Google. AltavIsta is not alone. There were a lot of companies between 2001 and 2006 that ruled the online businesses in recent times, had multifold valuations in their domains but they are nowhere to be seen today. You could be in a leadership position today but you could be ousted from the league tomorrow! The key takeaway from this is that innovation of today may be outdated in a year’s time.
That is something you learn from Facebook as well. What is it that pulls 1.5 billion people across the world to become active users of the social networking site? Facebook has tapped into the basic need people have—to connect with each other—and given them a platform where they feel they have the control. It has also made itself platform-agnostic, so that people can connect with each other from wherever they are, whenever they want. What worked the most for Facebook was that the innovation wasn’t in changing the way we communicate, but in understanding how we communicate and creating easy tools to facilitate that.
To be at the top of the game, you have to consistently revisit and reengineer what you do. It could be innovation in the product itself that you are offering, or how a consumer accesses your online presence, or how transactions are done or even in your business model. You have to be a relentless innovator. EBay is another interesting example—and it has spurred a whole set of Indian companies that make it easy for people like you and me to buy and sell stuff. It is also another example of how critical it is for online businesses to see themselves as facilitators that make it easy for consumers to do what they want to do.
Today, online is also the business of screens. Till about two years ago, having an application version of your online store wasn’t really essential for the Indian market. Now, you can’t survive without having one. The online business is thriving on apps today. If you do not have the apps you are obsolete. In addition, you need to continuously think about the next big idea to lead the race. For instance, when Google acquired YouTube, everyone thought it was a bad move. But today, video makes for the largest amount content on the internet. You have to develop that foresight. Finally, to get there you need to not only know how consumers behave in the cyber world, but also in the real world.
Ultimately, the online space is not an alien from a different planet. Startups in online have brilliant ideas but they die soon, why? Because the idea maybe good but they refrain to take those two extra steps to define a clear business model: Maturity of brick and mortar is needed in online too! Your business model has to pass the same rigours of a business—innovate, set new trends, sooth consumer pain points and ensure customer delight. Despite the challenges, the online space hasn’t seen any loss of interest or appetite—quite the opposite, in fact. However, if you are planning to enter this space, just be ready to be on your feet, all the time.