I realize I am not going to create the next eBay, but I want to create an online business and work on it full time. What career should I consider after graduation?
Everyone sitting in class probably dreams about being an Internet mogul, since they get all the media attention and make the most money. You already know that working online requires a general skill set that is offered in college. Coursework in computers and programming, marketing, accounting, etc. all prepare you to enter the industry. Which course reveals an idea for a new website? You learned in college how to pursue a good idea, not get one. That process can take years or your whole career. We will discuss a commonsense way to approach your goal.
Have you heard of digital disruption? An existing industry is supplanted by an online platform that far surpasses the current marketplace. Often, the website does not create a new product or service, just a more efficient marketplace.
The most popular and widespread model of digital disruption is the free model. This works on the premise that if you are not paying for the product then you are the product. By offering a free product that captures the public’s attention, whether it is a blog or directory, it can harvest a wealth of personal data and advertising eyeballs that can be sold to the highest bidder.
Closely linked to this ideal is the freemium model which offers basic services in the hope that users will pay to upgrade to premium ones. The payment for the basic free service is in personal data and web traffic, the money comes in when people decide to upgrade.
A subscription model takes a product which is usually purchased on an as-needed basis and locks in customers by charging them for continued access to the service. News and media websites also take this route if they cannot generate enough revenue from traditional advertising.
Similar to subscriptions is advance sales, where customers can purchase or book far in advance, locking in sales and preempting competitors. We sample customer response online for next season’s costumes without any financial outlay, with superhero costumes looking to be most popular so far, explains an e-tailer. This has particular value when selling children’s merchandise, since the market can be fickle.
Using the marketplace as a model disrupts traditional brick-and-mortar shops and services by providing a more efficient online market for the product. It brings together buyers and sellers and takes a commission on each transaction. Many of the most popular e-commerce sites employ this basic business model. Access to potential buyers grows exponentially, reports a webmaster who created a marketplace allowing users to buy used boats online. Most existing industries have been changed and challenged by websites offering more efficient online transactions.
A pyramid model of digital disruption involves the use of affiliates and resellers to move the product for a small commission. Some of the most successful online companies out there have simply adopted one of these models and made things more accessible, none has reinvented the wheel.
Innovation distinguishes between a leader and a follower… Steve Jobs.
Written by Jacob Maslow, founder and editor of Legal Scoops.