PRELUDE: We are running multiple paid campaigns via LinkedIn. One of them is called “Evaluate Your Website Today”. This is for SMEs, Startups and Brick-Mortar businesses turned online recently. Our team analyzes their website positioning on multiple parameters including: Technical features, Search positioning, User experience, Market Insights and comprehensive details to help these businesses take necessary steps to leverage the powerful online opportunity!
We are seeing a big chunk (over 30%) of businesses, connecting with us through this campaign, that are online directory services, listing portals or specialty aggregators. After talking to most of them, we are seeing common insights and issues including:
- Bootstrapping: Most of them are bootstrapped. i.e. founders are the funders. Hence, cost of failure is high
- Speed: Most of them need to position themselves as specialty portals FAST due to growing competition, disrupting tech and limited funds
- Positioning: It gets difficult to establish if positioning has be niche or generic, based on various factors of vision and business dynamics.
- Content: This is a major impediment for most businesses but more so for online portals to keep growing their viewership and engagement.
- Outsource vs Inhouse vs Co-Partnering for Process: This is a huge dilemma for these businesses. Each one has its pros and cons which we will check below separately.
- Key Metrics: Traffic or Subscriptions? Key question to be answered since approach will vary in a big way.
This set us thinking and led us to create this article to help these start-ups to evaluate their plan carefully before going, as they say, the full monty.
Would like to give you an example case in this regard.
Back in 2013, VM from an emerging listing website based company met us in Pune. He had launched a business listing website couple of years prior to that and was managing its growth through his bootstrapped company. His team was building the website, developing content and using SEO to promote the website with the following objectives:
- Build traffic to the portal through SEO, Social and digital promotion
- Use this traction to attract advertisers to buy ad space or become paid subscribers.
- Help advertisers generate relevant leads for their business
- Continually grow the subscriber base year on year
Sounds like a neat plan?
He was expecting to break even in 2 years and start generating profits after that period with a paid user base of around 5000.
The problem? – some key elements of his vision were either missed out or overlooked or ignored. Competition, Technology Disruption and Market Adaptation based on these changes were severely underestimated or not planned. Increasing costs of all fronts added to problems too. Hence, he was leaking money on keeping the website up, promotion and worst of all – poor conversions for paid services. He needed a solution to make this work for him.
After 3 rounds of discussion and understanding his vision better, we created a 3 POINT plan for him:
A. CLARITY: ZYT undertook a 360 degree review of his business model, the market dynamics (past, present and future 3 years), technology and online user behavior. e.g. one of our analysis showed that would take seven times his estimated cost and time to develop a customer base of 5000 subscribers! Forget break even, it was a back breaking.
B. STAGED GROWTH: Since, he was bootstrapping finances, scaling up real quick was out of question. We planned a 3 stage plan so that business would sustain as well as grow organically but steadily to a point when a JUMP could be taken.
C. THE JUMP: This was the inorganic growth stage when certain metrics and milestones were hit. At this point, investments would be brought in to give in the desired thrust.
Currently, in Stage B, we’re happy they are already looking to pre-pone the estimated JUMP by almost 6 month. Isn’t that a winning situation?
Hence, we really urge budding listing based companies to plan their venture very carefully defining short-term (monthly, quarterly) and long-term (yearly, bi-yearly) evaluation goals and observe them closely on key metrics of costs vs revenue vs value vs market relevancy.
Hope this helps!
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