Success Stories – When I Fail

The New World – Online Businesses

Christian L — Sat, 11 May 2019 07:58:24 +0000

Building A Business In The Online Space – Online Businesses

The World has changed completely and opened up possibilities that did not exist when I started my entrepreneurial journey.

In this series of articles, I am introducing new ways on the internet to work when your job will get blown away through the disruption announced.

My ideas and statements are driven by real-life experiences, applicable to different situations and industries. They are not just theoretical constructs but lead to empirical theories that can be substantiated by statistics and common methods.

What are the products you could sell? What is your target Market? What is your plan? What is your sales strategy? What actions do you take?

The biggest problem to overcome in my point of view is the production process to get to a good product.

I spent 12 years producing my documentary. When I had it finished, I had no energy, no money, and no working sales strategy established to sell my product successfully.

This is a common problem for any producer and inventor and a reason why many product based startups fail.

What I knew from being a programmer was how to set up a website with a shop component to download the documentary file in 5 language versions and I built on this basis.

When I had the website set up and the trailer was ready so anything could be published I searched for techniques to sell the documentary online. By incident, I found an education, not just addressing the part of the online sales but getting deep into modern marketing strategies and entrepreneurship.

An entirely new world opened up for me.

These guys had rocked the market since 2008, made their millions online and started to teach in 2010.

As a first step, I learned how to promote my documentary on Facebook and Youtube by using the beautiful trailer for marketing purposes. With very little financial effort the trailer went viral on Facebook.

I was not willing to give the documentary away for free, so I charged 35$ for the download. This might have been a stupid thing to do in a era, when movies on Apple TV are sold for 9.50$. I had my reasons to do so, but selling more than 200 copies at a price tag of 35$ was more than expected.

What I just wrote is actually a complete game changer!

I sold a digital product worldwide
There was no work of mine involved in the sales process, once launched
Sales were running 24/7
Social Media Ads initiated the transfer of the clients to my website to trigger the sales process

This process just works and it is the basis for a complete shift in mindset!

I actually had more or less 900 clicks on my website over 2 weeks while organic traffic also started to flow.

At the time I couldn’t handle the potential as I was still experimenting.

Even if the documentary is a historical evergreen piece of work and it keeps its value, I don’t see it as a great product according to my list here. It is just too cheap and this requires selling a big volume of the product to make good and lasting profits.

The second problem I faced was the audience. Most were not willing or able to pay.

As of today, I see the reason why the trailer went viral in one key factor. The documentary addresses the emancipation of the black culture which is quite a big topic.

Even so, it doesn’t solve a real problem and while in production mode and very influenced by the artist environment I was acting in, I did not reflect on this.

Big changes in the online world

In an early stage of the digital economy, there was a lot of try and error as well as spam and fraud involved in online selling.

Clients were burned through security issues when entering their credit cards. Products you ordered have not been delivered and it was all quite new and mystical.

I think we all agree that buying online has changed since the early stages of the digital economy and almost any transaction is made in the online space nowadays up to big amounts of money.

By accepting this reality the following statements are not out of reach anymore!

What if you could sell a completely digital product that provides you with 1000$ commissions per client?

Game changer!

What if you don’t have to produce this digital product but just make the referral to an interested client?

Game changer!

What I am describing is called high ticket sales of digital products as an affiliate.

There is absolutely no argument against selling high priced products online nowadays if they are worth the price.

A Tesla car can be bought online and it costs several 10000$.

You absolutely can produce a very expensive product and sell it online. If it is digital or if it is physical at the end is just a problem of setting up a different form of production and delivery.

If you start up with an online business in today’s world, producing your own product as a first step might not be the best idea. I discuss this at a later stage but it is absolutely possible.

This is the reason for me, why affiliate marketing is such a powerful business model.

Selling products as an affiliate is the equivalent to a classical store, selling retail- or digital products for a producer and earning a commission.

Maybe you have experienced this model already as Amazon is partly built on it and owes a big part of its success to it. If you register at Amazon Associates you can generate a special link to any product on the platform. If you promote the link on any of your channels and one of your referrals buys from Amazon you get a commission of 3-10% directly from Amazon.

This is a completely free strategy and for anybody in the third world, it can make a big difference concerning her/his income.

By registering, networking in social media and just promoting the link it can be the start of a great online career!

If your network would buy things on Amazon anyway you don’t do any harm to anybody by directing them to your website and promoting useful gadgets.

On the buyer side, if you plan to buy a product anyway, why would you not help out somebody who is affiliated to the producer company and gets his commission through you.

I don’t see anything potentially compromising in this online business model.

Thoughts about the marketing side

The early days of affiliate marketing when you could use Google AdWords and Facebook Ads at lowest prices are almost over and social media is getting crowded concerning easy marketing strategies. The first generation of affiliate marketers sells low priced products to a mass of clients. A product may cost 30$ and they make a commission of 5$ where they have to discount the marketing costs.

This is still a valid option but will it be sustainable when Ad costs and competition go up?

When I started with the implementation of my own online business in 2016 there was still a big confusion about online businesses with an affiliate model. Most people thought it was an MLM (Multi-Level Marketing) construct, a Snowball System or Network Marketing.

There is no direct connection between MLM constructs and Affiliate Marketing!

Online Affiliate Marketing is the modern way of Retail Sales. Nothing more and nothing less. Almost all variables of the old economy as written in my introduction are still valid. What changed is the tools and possibilities to become creative over the entire process and profit from all of these possibilities.

In my point of view and as far as my experience people don’t struggle with the limited possibilities anymore. The big challenge is to find the right approach that suits the personality, vision, and mission of a founder of an online business.

Most people around the globe still think in an old world setup and their switch into the digital economy is blocked by limiting beliefs, principals learned in the past and prejudging.

When you understand how the current world works you see that it is not so different from the old world but with so many more opportunities.

What is your experience with the digital economy?

In the next part of this series, I dig into the topic of different income streams online.

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The Business Model of Retail Sales and Franchises

Christian L — Sat, 11 May 2019 07:56:36 +0000

Building A Business In The Online Space – Retail Sales and Franchises

In this series of articles, I am introducing new ways on the internet to work when your job will get blown away through the disruption announced.

I, first of all, write about the current mindset most of us carry around with us and the options we think we have to then dive into the new world setup.

What are the products you could sell? What is your target Market? What is your plan? What is your sales strategy?

Retail Stores

We all know it by now. The classical company model of a reseller with a warehouse and a store is going to die.

Sales have shifted into the online world. Some producers are distributing their products directly through their online shops, others use the infrastructure of Amazon.

Black Friday of 2018 was a turning point of the economy where more sales have been handled online than in the offline world.

Retail stores have to change their strategy completely, shifting from a sales store to a place where the brand can be experienced.

If you wanted to start a store in the past you had to be able to invest quite a big sum of money.

You had to cover the following and maybe a lot more to just start running a store.

Renting a store
Renting space to store the goods you wanted to sell
Travel to meet the producer
Transportation of goods
Workforce
Administration
Infrastructure
Marketing
Lawyers

…

Without an investment or a rich family behind, it was very challenging to just startup.

At the time, importing and exporting goods was a lot riskier and challenging, so most products were produced in the country where they got sold finally. Born in Switzerland and living here in Zürich I dreamt about having access to the US market to sell products when I was in my 20s and finally this is the case. It is even better as the doors are open to any market in the world.

Our entire consumption economy is built on retail stores so there is a big variety of challenges and options to be considered in detail when you wanted to build a store. As I do not have a retail background I will not go into details of this topic but over a long period of time, this business model was very important and worked well for many companies.

A topic I do want to touch is margins.

To pay the operating costs of the retail store business, it had to earn quite high margins on the sale of a product. This made products expensive in the past but also provided work for many people along the entire value chain. It somehow dictated the price and better negotiation in the sourcing process of the product could be a game changer to position against a competitor.

Especially in Switzerland, where costs for space and workforce have always been high, this was a substantial factor of the price.

Franchises

A franchise is a special company form or business model and it never attracted me for several reasons.

A brand like Mc Donalds dictates how any store or restaurant should look like. It is a copy clone.

I never liked the copy character of it as it is against my inner desire for creativity.

The big benefit of a franchise in the past was the lower costs to startup and run the business. As a franchise owner, you profit by not being responsible for certain things that are dictated by the brand. In several cases of restaurants, stores and gas stations, the owner is just responsible for the rent of the location and goods to be sold. In comparison to a retail store, this business model was always a lot more affordable and less challenging to run.

MLM

To complete the picture I add 1 more business model used in the past.

It is the concept of Multi-Level Marketing or MLM and it is actually still around.

MLM constructs have gained a very bad reputation in the past, as they have mostly been misused to build fraudulent constructs by selling hot air.

The construct was/is mostly used in network marketing and by building up teams. In the team structure, a hierarchy of earnings gets established.

The construct has several problems by construction and at a certain critical size, it just implodes.

At its extreme, an MLM construct does not sell any valuable good.

The client pays a fee to be part of a sales team. By paying the fee he generates the salary of the person positioned one level higher and the concept goes on up to the top to mainly make the initiator rich. When it blows up, the last level of individuals who had no chance to sell just lost their money.

At a certain level of fame of these constructs, they tended to grow exponentially. At a certain size and when growing at a certain speed, the education of those selling the product can’t be handled anymore.

What I describe is a fraud by construction and it is not allowed anymore in most countries where regulations exist.

The construct as such survived. Nowadays such network marketing constructs try to justify for not being a network marketing product and in most social media platforms it is prohibited to market them for good reasons, so they keep running coffee parties and bus tours.

Identifying these MLM and network marketing constructs is not so difficult. They tend to provide complicated and mysterious compensation structures and mix several businesses together. They declare it as a win-win situation for everyone (but for the looser) …

Conclusions

These are mainly the business models and constructs available in the old world and I wrote them down because they are the basis for developing new models in the digital economy. There is no need to reinvent the wheel. In the ancient cultures, it was wooden, now it is high tech but it is still a wheel!

Other possibilities to earn money are investment bets like stocks and real estate as well as speculations like bets on horse races. I don’t like bets and I am not attached to gaming so I will not write about this part of our economy, even if I know it is a big market. It actually mostly is nothing else than what happens in a service industry or within digital products in case of online games.

What would you add to the list of business models in the old world? Did I miss an industry or sector that works completely different?

Just leave a comment!

Stepping into a digital world

After writing down this profile of business opportunities in the old world setup I will now unwind the current environment with challenges and possibilities.

Stay tuned …

The post The Business Model of Retail Sales and Franchises appeared first on When I Fail.

The Business Model Of Service Providers And Agencies

Christian L — Sat, 11 May 2019 07:53:18 +0000

Building A Business In The Online Space – Service Providers and Agencies

In this series of articles, I am introducing new ways on the internet to work when your job will get blown away through the disruption announced.

I, first of all, write about the current mindset most of us carry around with us and the options we think we have to then dive into the new world setup.

In this third part, I focus on Service Providers and Agencies in the free market.

In the blog about artists, celebrities, and freelancers, I identified 3 major requirements for building a sustainable business:

Good products with good revenue.
A big market interested in the product, where you can attract your niche.
A plan.

Here I add a SALES STRATEGY.

What are the products you could sell? What is your target market? What is your plan?

After first working for a financial service provider as a programmer while studying Physics I started my first attempt to build a company on my own in 2004. I had no idea about what it takes to establish a brand, provide a service and produce a product. What I had was a niche I believed in, where I could start without a big investment up-front.

At the time, the black culture was not documented at all and was slowly gaining its importance. I bought myself a camera and started filming music and dancing while developing my brand in a 1 room flat I used to live in.

It was my mission to publish videos online of the beautiful and untouched culture I found to provide these artists with a voice.

There was no chance at the time for me to enter any market here in Switzerland with this initiative and I went to work for a private bank where I was introduced to the hardcore financial side of the business. Things went quite well until the financial crisis hit the markets in 2007-8 and caused strong turbulence over the following years.

I had to change the industry as there have just been no jobs around in banking anymore so I started to work for a small service provider, learning IT support for clients from scratch.

Service Provider

Working at a small service provider as an employee was a very different experience than working for big companies. The performance of each employee has a strong implication on the wealth of the company so the productivity of each and everyone is key. The company I worked for was in business for 30 years and had a loyal, quite diversified client base.

From the old generation, I learned the value of loyalty and a service provider mindset.

• The client is always right!

• Costs to find a new client are a lot higher than activating existing clients.

Do these values still apply?

The changes in the quality of Computers, as well as the margins of selling these devices, disrupted the business model at the time.

First steps to cloud infrastructures made small server infrastructures obsolete. To provide hosting services at a scale required a new product structure with a subscription model instead of an offer-based service. This just started to evolve at the time, while it is very common now. At the same time, I think we are entering the next step of disruption in the hosting industry. Even for big data centers, it gets difficult to compete with Amazon AWS and Google on hosting services.

As a service provider, you have to find clients on one side and have employees or freelancers, working for you on the other side. Depending on the sector you’re positioned, the margin between what you sell by providing offers to clients and what you spend for the work done by your employees, administration and other expenses make up your revenue.

Scaling this business model is most probably related to more hiring and a bigger staff to manage.

As an entrepreneur who just loves to work on your craft and offer a service, through this business model you most probably find yourself back as a manager, fighting with your administration, IT systems and infrastructure, and acquisition.

This does apply for cleaning services as well as for an IT consulting service. To optimize the business you have the possibility to negotiate contracts with clients over a longer time, for example, to clean a building month in month out or to maintain an IT infrastructure. This could be charged by an hourly rate or by a recurring monthly fee.

A service provider mainly focuses on stability and basic needs of the client and gets paid without depending on the progress of the business of the client.

There is no rule without exception. As an example, a service provider in the financial services industry could absolutely be financially involved in the performance of a client portfolio. Will this still be a pure service then? I would call it more of a mixed business model.

The main thing I learned in the service industry, providing IT services is to be able to efficiently solve a concrete problem of a client efficiently.

You need a very special mindset and character to do so in my point of view. It is the mindset of serving, where it is all about taking inconvenient tasks off the client’s back. Taking responsibility for a part of the life or business for a client.

Agencies

Agencies are actually sort of a service provider but at least in the old world setup, they had some sort of profit on a campaign and the price of the service was mostly not directly attached to the effort measured in time.

An agency (especially in marketing) in comparison to a service provider is mostly not just operating on the cost side of the clients budgeting but on a growth side as it is closer to the sales and business development side of a client company.

When I started to work for a design agency this was a mind-shift for me, coming from a service provider background. Especially in design, there is no rule how long it takes to establish a design in a creative process. It depends on the idea, the speed of implementation and most of all if it is being liked.

If you program a system or set up a network for a client it is not a question, if a client or the audience likes the visual output! The question in these cases is if the system works! In the case of the design, this is very different as there is subjective interpretation involved. A logo or a flyer could be ugly in the point of view of a graphic designer but it could be exactly what the client wants and likes.

I like to do design work for myself and my brands, even if it is not my main strength. When I had to design a logo and flyer for an event (with 4 other partners involved), stepping into responsibility as 10k were at stake and there was no marketing material available, it was actually the reason for me to burn out. I didn’t want to do it, as I was aware of the problem expressed in the design process and it ended in a disaster. The reason was, that each partner involved had another opinion and background about design and visual preference.

In a marketing or media agency, there are many other sectors involved and most of the work involved is not directly coupled to the value for the client.

This might be:

• Copywriting (Texting)

• Visual promotions as graphics

• Visual promotions as videos

• Campaigns through many different channels

• Providing suitable tools to measure promotions

Most agencies in the old world setup have contracts with promoters as part of their business model, getting a kickback for bringing in clients, maybe at TV stations or newspapers. A business model that might lose relevance in a world of Facebook and Google.

A short copy text might be the most relevant promotion for a client and bring in a huge upside on revenues. It could be created on the toilet without time effort and crush the market. It happened …

On the other side, an agency could massively invest in a video promotion and even trigger a loss of clients. The outcome of campaigns can never be forseen. Between creativity and the client, there is a black hole of a gap.

I am still missing one part of the puzzle, retail sales and franchise businesses will be covered in part four.

Stay tuned …

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The Business Model Of Artists/Celebrities And Freelancers

Christian L — Sat, 11 May 2019 07:27:45 +0000

Building A Business In The Online Space – Artists/Celebrities and Freelancers

In this series of articles, I am introducing new ways on the internet to work when your job will get blown away through the disruption announced.

I, first of all, write about the current mindset most of us carry around with us and the options we think we have to then dive into the new world setup.

In this second part, I focus on Artists/Celebrities and Freelancers as independent individuals acting in the free market.

As written in the first part, building a sustainable business is mainly about 2 things:

Good products with good revenue.
A big market interested in the product, where you can attract your niche.

As a third requirement, I add a PLAN to the list.

What are the products you could sell? What is your plan?

I start with 2 examples also from experience and focused on the old world setup.

1. The Performing Artist or Celebrity

A performing artist fist of all wants to sell her/his art. It is her/his inner desire to put her/himself out there, taking a certain role of leadership.

Some of these artists have a clearly defined message, others don’t really like to speak and define themselves through words.

In the performance world, artists sell their art by engagements at events, by videos, by teaching their art and by being a brand ambassador.

They get normally paid a one time gage.

Online these individuals have a big advantage as they earn certain fame by putting themselves out there to perform and attract a crowd. They mandatorily are polarizing and generating followers and most of the time real fans.

This is the most difficult part for most of us normal people, where we really struggle.

The internet and social media opened up great possibilities to find followers around the globe and create opportunities for engagements to be hired at events, in videos or as brand ambassadors. Without the internet, this was a lot more difficult and could almost exclusively be achieved through a managing company.

While many artists currently start to apply a business model of an influencer, they still rely mostly on a one-time payment for promoting a certain brand and if they manage to get a reoccurring contract they have to go on performing.

The case of a celebrity in my point of view is an extension of a performing artist in theory when the individual gets very famous. In the old world, these individuals almost exclusively had the chance to speak to big crowds and being featured in the media.

To optimize her/his income she/he has to find a way to augment the income of every single contract.

2. The Freelancer

A freelancer or contractor offers her/his services on an hourly/daily rate to accomplish a certain task.

In the online world, this idea changed a bit into the direction where a freelancer is bidding a certain amount of money to get a task done. This is actually almost the form of an agency offer in most cases.

Even so, in both cases, the freelancer is paid a certain amount of money for the hours he works and as we all know, a day has just 24 hours and everyone has to sleep, take vacation and time off.

To optimize her/his income, the same as the artist, he has to augment the hourly rate.

Some insights into my journey as a freelancer:

I am working as a freelancer for more than 5 years until now in an offline world setup. I started in 2014 when the 2 business sectors of IT support and database programming, the company I used to work for, was active in, were sold to 2 different companies.

I kept the clients I worked for in both sectors as a freelancer and maintained them until I went into my burnout in mid-2016. I had one big goal to accomplish, to finish and distribute my documentary, so I cut a professional trailer, worked out the graphics with an artist of a graphic designer and programmed the website of the company including a shop component to make the film available worldwide with subtitles in 5 languages. I did the entire production and distribution on my own, without a publishing company, an achievement I could not have had in the old world.

Producing a product in the old world is another topic I will unveil in another part of this series about building a business …

There is another form of freelancing, also known as contracting where you work almost as an intern but with a contract over a limited time. Some companies are using this option to reduce the cost of the workforce. Through employing contractors they can allocate costs directly to projects instead of allocating it in HR. They limit the risk through being able to deploy a more flexible workforce.

Higher salaries are paid through this option, normally on an hourly or daily basis. I was working for 6 months as a contractor and had the chance to test this option. In my time of recovery, working as a contractor was a good way to make my first step back into working life. Under normal conditions, I can’t recommend it, as a permanent solution. There are no days off or social security included but it can definitely be a way to bridge or to get a side-hustle.

Conclusions from both models of a performing artist and a freelancer

In both examples, the product sold is the individual her/himself and time.

In both cases, this can be very profitable in accordance with the skill of the individual and her/his ability to optimize the prize for the engagements.

How do you optimize your time and effort?

As to my observing, most people who are not working in classical job setups and at the same time have not started and are not running a real business are thinking in these possibilities.
These options are their plan but it still leaves a big question mark to sustainability. What if you become sick and cannot perform anymore? In both cases discussed there is no social insurance from an employer and no retirement plan included …

But we have the internet and it ends many of the limitations from the past while requiring a shift in mindset.

Until now we have 3 requirements for Building A Business In The Online Space:

Good products with good revenue.
A big market interested in the product, where you can attract your niche.
A plan

Next, I will write about the classical idea of a service provider and an agency.
Stay tuned …

#marketing #entrepreneurship #leadership #sales #failure

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Introduction – Struggles In The Old World

Christian L — Thu, 09 May 2019 18:15:08 +0000

I see lots and lots of people in the online space and I doubt most of them have a plan about how to make a business out of posting, engaging and shooting selfies.

The common slogan constantly appearing „work smarter not harder“ is easy said but what is smart in the online space.

Many listen to Garyvee these days and he is without a doubt a genius but I think sometimes he gets way over the head of somebody who is just starting and trying to get a business running in the online space.

It is hard to work smart and I still have no exact formula but I want to bring up some ideas about what does not work and what is proven to work.

What is your plan to make it?

Engaging with the crowd is quite easy these days but what is it worth, if you can’t generate money for yourself to bring food on the table.

Just being patient does not seem like a great answer. Gary is a great salesman and I am sure he nails his deals as this is his main craft.

Let’s face it! Many of us are not great deal closers and sale is not what we learned, so most of his strategies in my point of view are based on this craft he owns.

I started my journey in the online world by promoting great artists and I had a lot of success in building a following on Youtube and Facebook at the time.

What I absolutely underestimated was the willingness and maybe even the possibility of any possible client in this space to hit the button and BUY.

I attracted a crowd without buyer potential!

At the same time, I had no real product to sell and generate revenues out of it! This is the second biggest issue I identify!

I am not alone on this.

Then I had built various services together with my ex-wife.

Organizing trips from Switzerland lacked the potential of returning and paying customers as the market here in Switzerland was too small. We would have had to do an effort to get into the US market to attract customers in this space, looking for cooperations with agencies and other initiatives.

I was not really interested in this business case, so I did not explore it further but I had some major insights.

If the possible customer base is too small, even ads on social media and targeting will not help to build a business.
If the offer is too deep in a niche there is just no business.
The effort during the trips was big and the outcome insecure as providing the service (entire travel arrangements) was hard work and depending very much on people.

Don’t get me wrong about this. We had been able to generate some return but it did not cover our invested time and it was far from a sustainable solution.

My conclusion: The business model did not work.

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