5. Traffic just happens
Sure. And the Sun rises in the west!

Consider some numbers.

There are a hundred million plus domains registered under just .com, .net, .org, .biz and .info. And you just added one more. Technorati has indexed some 133 million blog records since 2002. There are 900 thousand blog posts made every twenty four hours. And you set up yet another blog and expect people to just flood in!

Most business plans, particularly startups make no provision for traffic generation activities. Like you need to drive footfalls to your brick and mortar business, you need to drive traffic to your web properties. And the methods at your disposal are roughly the same, namely advertising and making your shop / site popular by various means.

And advertising is not the only thing you need to do. You need to do search engine optimization, and you need to ensure that dead URLs are removed and you need to cultivate links from other websites... the list goes on.

6. Search engines will find you easily
This derives from point 5. You set up a site and search engines are waiting to send the whole world to your door step. Unfortunately, reality is completely different.

Major search engines require you to authenticate your site by creating an account with them and putting up a code fragment that they provide at your site. Till that is done, most of them will not server your pages to searchers. You need to also regularly maintain one or more (more as your site gets bigger or more complex) site maps that they download (at their own frequencies) to update their index pool.

After submission and verification, you need to constantly check back to see whether there are problems with your sites listing and indexing. You are also able to define some parameters that search engines use to index your content. As your site develops, you need to change some of them. It is quite possible that there will develop problems with your listing at the search engines that will seriously limit traffic to your site or even stop them completely. And once you get into trouble with a search engine, it is often a frustrating and time consuming experience getting it sorted out.

And I have not even touched upon search engine optimization.

7. You don’t need people to run an online business
During the dotcom boom of the nineties, I had come across those who believed that the icon of those days, ebay, operated from a basement with almost no employees and that all that ebay required was a few servers. And this was at a time when ebay actually had a few thousand employees and operated out of offices and warehouses across continents.

Things have not changed much since those days. Recently I came across another business plan that almost did away with people! It called for software to gather content from other websites and post it up. And then it expected visitors to add value to that content. Another software would deliver ads on those pages. If only business was as simple!

By the way, do you realize what is the biggest problem with this business model? It is not just the absence of people. The content that you scrape from other sites – search engines would mark the other site as source and you as a copy. So, not only they will not send any traffic your way, but also, if you are seen to be regularly doing this, they could black list your site! And of course, there are copyright issues to using content that others own.

Almost every online business plan I have seen seriously underestimates the number of people required!

8. Website visits can be measured exactly
One of the biggest advantages of the Internet is that everything is measurable – or atleast that is the theory. In practice, this too turns out to be different. The easiest way to check this out is to put two analytics solutions to work on your site. You will almost immediately see that the two do not agree on most things.

The difference could be anywhere from 10-20% on most matrices. For sites with large traffic volumes, that may be within manageable (or ignorable) limits. But for sites with smaller traffic levels, the variation could be significant, particularly if you are going to use the information for strategic decision making.

Let us say you are looking at the key words driving search traffic to your site. What if the top keywords currently driving traffic to your site are not the ones with the most relevance for you? You would then want to do some search engine optimization to increase the search traffic for the ‘relevant’ keywords. Now, if analytics tools cannot even agree on the relative strengths of keywords for your site, what are you supposed to do?

Comments (8)

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written by Ashish Kolarkar, December 10, 2009

Thanks for an eye opening article. The myths regarding internet and e-commerce are there from time immorial and they have to be addressed with real facts. You have done the right thing.

Although, I'm in the Banking computerisation catering to Regional Rural Banks and co-operative Banks, I was still not aware of certain facts (I was assuming freewares reduces cost). I wish in future you focus on right strategies of doing internet business especially payment channel econonics for small businesses.

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written by Sumi, December 02, 2009

Very thought provoking article.

I run a leather store and am exploring to go online now. I want to know the complete process involved, and also an appx indication of the cost in setting up an online portal. Can you please help. Where can I get this information?

Regards
Sumi

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Different Views.
written by Vivek Satoskar, July 26, 2009

Sir,

I differ from most of the points given by you. Post working in Hotels and Offline Travel companies I started my first website (online initiative) http://www.BestGoaDeals.com about 4 years back. From first month we broke even and there has been almost 200 % jump in revenues every year on this one website. Besides these we did launch 1 website on Goa tourism aspect every 3 months and each of these sites besides recovering costs have given substantial profits.....guess Online field for Specialist Travel companies there is huge potential and have better chances of growth and survival over the Offline Travel Companies.

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written by Ankur, April 23, 2009

Hello,

I am a regular reader of DARE magazine and regularly I post my comments.
Thanks a lot for wnoderful article.

I have one query, when you said Adsense is not the only way to earn money then what are the other ways that are really helpful?
Please let us know

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Great Article - Some more thoughts!
written by Mohit, April 22, 2009

Awesome article! Gives a lot of insight to anybody (novice or experienced) planning to start an online business.
I would definitely agree that building an online presence and selling online are two different things and they follow each other. To buy-sell online you need to have an online presence and you need to be continuously evaluating it.
From the customers perspective, he needs to have an uninterrupted experience when he comes at your website. He should not feel out of place or out of sync. What I mean here is that there would be negligible number of people who would type in your websites address in their browsers and come to your site. Most of the customers would be coming through some advertising/promotional/social networking channel. Keeping up the content in sync with these channels and managing them adds up to the cost/time/resources that you need to invest. For sure, a good and workable website needs a lot of thought, planning and vision.

Keep up the good work!

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written by Debarshi Datta, April 08, 2009

Sir
I am presently working in a consumer electronics MNC in sales and marketing profile and I do have plan to set up a website about the usability rating of the various consumer electroncs goods its not also on the paper as of now because I am confused about approching the business plan I would be thankful if you kindly guide me over this
regards
debarshi

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Re: Pramod - "when fortune 5m is...."
written by Krishna Kumar, February 04, 2009

Pramod, The article says at the very beginning.."These are for those who are planning to do business – as in sell or buy goods or services, including advertising -and not for those who just want a presence online".

But you do make some interesting points...

How many are looking at being the next big e-commerce site? You will be surprised by the number who are :). I have a folder full of emails from people intend on setting up the next big e-commerce site asking for advice or coverage.

Those with a small product or service -- they probably need paypal. Not many Indian small businesses have paypal integration. Part of the reason is that if you want to use paypal to pay in Indian rupees, you can't. ( https://www.paypal.com/in/cgi-bin/webscr?cmd=p/sell/mc/mc_intro-outside ). So, the transaction will attract foreign currency surcharges on both ends - the buyer and the seller.

Infact payment gateway integration is one of the biggest problems faced by Indian small businesses in doing online commerce

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When fortune 5M is considered - it's best doing online business
written by pramod, February 03, 2009

Dear Sir,

I totally agree to all the points, however my argument is that your points are relevant if one is considering to open the next eBay or homeshop18. Yes we would end up committing all the 19 mistakes. On the other hand how many are actually looking at the next big site or a eCommerce site?

Consider the companies I call Fortune 5 million - they need basic visibility. They have a small product or service to offer. They need some basic stats. They need PayPal (probably) to manage the transactions. Once in a year basic (even a css change) face lift. It's OK to have the site hosted on shared servers. They yet would do more business by a click than by a brick.

While i agree to the 19 points, i feel it's not too practical when it comes to the "Bottom of the Pyramid".

regards,
Pramod

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