To start with, it requires little investment. This is very interesting, and although you should not trust yourself because every business has costs associated with it, the initial and fixed costs that digital business requires are much lower than a “traditional” one. Another clear advantage of digital business is its scalability, perhaps one of its most important qualities – and which will also depend on the business model we choose.
The scalability -related to the microeconomic term “economies of scale” – is a concept widely used and desired in the digital economy, especially with the development of startups. A scalable business is one that gives us the possibility to grow without increasing investment in the cost structure. Or put another way, the one whose model will allow us to increase our income more than in proportion to our costs (or even without increasing our costs), a feasible situation thanks to the rise of new technologies and the possibility of accessing them at a relatively low price.
There are those who consider scalability as a basic characteristic to be sure that our business will be a success. Eye to the data.
Another of the virtues of online business is its greater reach. Its potential market covers any part of the world, 24 hours a day, 365 days a year. With digital business, we can reach millions of people regardless of their place of residence or our location. In addition, we will not have to assume establishment costs, and we will have the ability to implement personalized communication strategies and immediate dissemination, being able to monitor the results in real-time.
According to the preferences of investors in Silicon Valley (which we take as a reference), the best opportunities to undertake on the internet could be:
- Ecommerce / Social Commerce
- SaaS applications (Software as a Service)
- E-Learning Education
- Mobile Business and Apps
- Internet of things (wearable and smart things)
- Collaborative consumption
In any case, forecasts suggest that a time will come when the digital environment will be one of the cleanest and most important sources of income, offering companies speed and efficiency to reach a greater number of customers and immediate and immediate customers’ comfort when shopping and hiring their services.
However, despite the great benefits that the online environment offers, many businesses fail year after year (almost 80% according to some studies). Should this discourage us? No way. We just have to be aware that starting a digital business requires a large volume of commitment, effort, and perseverance (as with any business, on the other hand), so if we make the decision to undertake it should be something that we like, let’s control, and have enough market.
Take your time and determine your business model.
We will start from the basis that we already have an identified business idea, because, in reality, the difficult thing is not to have the idea but in knowing how to put it into operation and make it work by finding the right business model and strategy. That is perhaps the most critical aspect for an entrepreneur or a startup, defining its business model, the structure of its strategy.
Use the Business Model Canvas if you already have a traditional company and want to rethink your business model or move it to the Internet. However, I suggest you use the Lean Canvas if you start from scratch. The Lean Canvas, based on the lean startup methodology, places the beginning of any undertaking in the identification of a problem or need for the public and then puts the focus on the product relying on a validation methodology based on uncertainty, learning, and fast iteration. It is also divided into nine blocks, like the Business Model Canvas:
- Customer Segments
- Unique Value Proposition
- The solution to the problem
- Income Stream
- Cost Structure
- Key metrics
- Differential advantage
Of all of them, I suggest you pay attention to the following that we list below, as part of the aspects that you should especially monitor to maximize your success.