“Make something people want”
What an amazing phrase! It really captures the essence of entrepreneurship and business. It is at the core of any business idea that has any chance of long lasting success. If you fail to create something that people want, the demand for your product will not last. You may get lucky and make some money in the short term, but it will ultimately crumble and cease to work. Does that mean it failed? Not at all. You may do quite well if you identify a temporary hole in the market. But it means it will not last and stand the true test of time as you would have built something that no-body wants …. so where will the long term demand come from? To be able to supply (do business) you need to have a demand! Or do you? – Let me tell you about a recent venture I had that was very successfull with very little demand. I built something nobody wanted…yet I consider it a very successful venture.
Just to back up for a moment, I came accross this phrase while checking out the people behind Hacker News (HN), which is a very popular social sharing platform. The people behind HN are Y Combinator who created a new model for funding early stage startups. In their footer, they close off thier page with plain text stating “Make something people want.”
As simple and elegant as this phrase may sound, I actually did very much the opposite in one of my ventures and created something that was quite successful on a revenue standpoint, that no-one really wanted in the long term. The venture did not last but it did do very well for 4 years. I developed exact match long tail domain names acquired cheaply on the secondary market and developed them into websites for the purpose of generating revenues through pay-per-click advertising. Now this may sound like a mounth full to many that do not understand the online marketing industry, but it’s actually very common language these days for 1000’s of marketers that make a living through domaining, SEO and content marketing.
If you want to see what I mean by secondary market domain names, check out domain sales platforms like www.dropping.com, www.freshdrop.com, www.namejet.com …. there are tones of these platforms…they allow you to buy domain names that the previouse owners do not renew.
I (well actually as we were a team of about a dozen), developed thin “low quality” websites on relatively valuable domain names that we were able to rank well in search engines through SEO, which I know a lot about. Basically, for a small investment of about 50 USD, we were able to acquire, develop and rank website to page one of search engines like Google, Yahoo & Bing and get visibility and attention to the websites. This attention resulted in visitors coming to the websites and clicking on ads but also resulted in individuals and companies making offers to buy the domain and website out-right for their own use at 4-5 figure prices, making a very nice return on investment.
It was an activity that easily drove mid to high 6-figure yearly revenues for my venture and it lasted up untill September 2012 when Google updated their algorithm to not favour EMD domains (Exact Match Domains) as a primary ranking factor in their algorithm.
From the MOZ.com Google algorithmic calender:
An EMD can still be very valuable in ranking a website, but that value now kicks in later down the road instead of upfront as use to be the case. So the upfront investment hurdle became steeper, meaning a higher investment was needed to get EMD domain websites to page 1 of Google (eg. more higher quality content, links and social signals).
So, my team and I were able to make a few million dollars in a short few years just by acquiring domain names and developing them into websites (cheaply) and then profiting from ads and eventually reselling the websites to buyers. Now you could arguably say that we built assets that others wanted to buy. And that is true for the properties that we did sell. But this was less than 5% of all the websites we built so 95% were built for the purpose of capturing traffic from search engines and converting clicks into dollars. Not really the poster child business model that captures the essence of “make something people want”. 🙂 But it did well never-the-less.
Pre-2012, good EMDs were in “relative” solid demand for their ability to rank well in search engines. However, post 2012, that demand dropped significantly, leaving us with assets that nobody wanted which mostly earn their keep through pay-per-click advertisement and the occational sale. Even 3-4 years later, the reminent portfolio still ticks away passively at a mid 5 figure a year turnover for an investment in the low 4 figures yearly. Not bad when you compare it to stock market returns of recent years and bank interest rates.
More recently, I have been focusing my efforts on offering something people want. Right now that happens to be what I know. My knowledge and experience in online marketing and SEO is something I can sell and others are willing to buy. I am making something people want! I am creating better performing websites in search engines that drive more visitors and revenues for the websites I work on for the business I work for. It’s not a tangible product per-se, but it is a channeling of my knowledge and experience into a service that drives value and growth for a business. And voila! for now, I have found something I can offer that people want.
If you are an entrepreneur reading this article, or a business owner looking at expanding on your offerings, just ask yourself this question every time you consider a new idea: Am I making something people want?