Last night, the BBC's TV show "The Apprentice" shed its final candidate through conventional means and next week the budding entrepreneurs' business plans will get their first airing. However, we've already had a taste of what's to come.
Last night's show proved that online is sexy. All of the 3 remaining male candidates, brought back into the boardroom to be fired, wanted to secure Lord Sugar's £250,000 investment in an online something-or-other. Lord Sugar quite rightly blasted one candidate (to the point of reaching) for suggesting that a 'tech startup' was the millionaire businessman's safest investment option. Jordan's so not going to win but let's play with him for a little while longer and, meanwhile, ask ourselves just what would a high risk online something-or-other spend £250,000 on?
There's a generally accepted rule of thumb in business, that companies looking to maintain their current position should spend around 5 percent of their total revenue on marketing and that companies looking to grow or gain greater market share should budget somewhere around 10 percent of revenue. However, online something-or-others turn these traditional numbers upside down because marketing a so-called tech startup is all about working with the economies of scale that the web can open-up; website marketing spend, therefore, needs to be much nearer to 90 percent. Yet for the tech startup it's not even 90 percent of turnover because from day one it's 90 percent of absolutely nothing but pure high-risk investment capital. So, given such high-risks, would you take an opposing point of view Lord Sugar's? Do you still think online something-or-others sound sexy?
When it cones to online something-or-others it's easy to see just where the money goes. Simply look at the ad breaks on TV which the online something-or-others use to carpet-bomb the living rooms of Britain with ads whose sole purpose is just to make us remember a domain name. You know who I'm referring to don't you - the insurance price comparison websites, the hotel comparison websites, the online property portals and the online gambling sites. These websites are the heroic poster children for a new generation of business yet, if starting-up online is so easy and so sexy, why do so few online something-or-others make it?
With 90 percent of Lord Sugar's cash going into marketing that will leave our budding entrepreneur with £25,000 to spend on designing, building, testing, launching, developing and supporting a website as well as integrating the website into the business' everyday business processes. Connecting the website to business processes is critical because it's the business processes that'll deliver the first and most critical of website components: content.
Content is the single biggest point of failure in any website and the online something-or-others that get it right are the businesses that have worked out a way to integrate their business processes right into the website. Once you build a constant supply of fresh and relevant content flowing into your website, Google will love you and promote you for free and only then will the economics of the web begin to work for your website. You see, Google doesn't exist to promote its own pages, YouTube doesn't make its own videos, RightMove doesn't sell houses, Twitter doesn't care if you read its tweets or not, GoCompare doesn't offer you its own insurance policies - smart online businesses attract, share and leverage content.
So, if you've half a mind to follow in the footsteps of the candidates of The Apprentice and jump headlong into a tech startup be mindful that it's all about marketing your website's visibility and driving traffic to your website - through Google SEO, through PR, through organic link-building, through word of mouth and through truly brilliant customer service.
Don't fall into the trap of thinking that if you build it (an E^commerce website) the people will come. Once you have built your website and filled it with truly valuable content you then, first of all, have got to tell your Customers that your website is there in the first place and then give people a real reason to go visit in the second place. Very few companies have the investment capital behind them to strategically carpet-bomb the TV channels with incredibly expensive adverts.
Securing great content is the key to a hit website yet all this content need not come from inside your organisation; if your marketing spend intelligently drives people to your website and your commercial proposition is sufficiently compelling to make people engage with your online something-or-other then you'll have served your apprenticeship and will have set out on the road as a budding entrepreneur.