Off the Top of My Head

Interview: Starting an Online Business with Little Capital

Our next interview in the series is with Scott Jones (aka sji2671). After building websites for other people for a few years and winning an award from Sir Alan Sugar he decided to branch out and experiment for himself. Scott have always been driven by building his own success, and has always done this on a limited/zero budget which is part of the buzz for him. His best example of success is Tattoos by Design – it has been the thought process more than any single words of wisdom that has enabled that site’s success which can often get 100,000 unique visitors in one day and recently awarded a Hitwise Top 10.

One of the hardest parts about starting a business is initial capital. How do you get your foot in the door initially?
When I started in early 2000 I became involved in the internet out of a genuine interest and desire to make money, it was at that point I decided to make money from the internet with zero capital. I started teaching myself how to build a webpage and re-brand a template, I then sent out leaflets to local businesses offering design for a monthly fee and picked up 3 new customers in the first week, after that it was all about re-investing the money.

I was featured at least 6 times in The Mirror newspaper with half pages features for free after writing to Sir Alan Sugar who ran a column, there are lots of column inches to fill so if you truly believe you have a good idea then spread the word, if you keep banging on doors some of them will open. 

It is cheaper than ever to start a website today, a domain name and some affordable web hosting and then all you need is desire/time/effort. When it comes to the most important aspect of content you may need to think outside the box.

For Tattoos By Design I wanted a gallery of designs, being the subscription area that could offer me financial security of re-occurring billing. – I cannot draw.

Therefore I searched art/tattoo forums looking for talented people who would be willing to draw and add images for free in return for a split of the money from any new members. Just recently we hit 2000 images; most of those images have been added in the last year and its hugely valuable content that cost me nothing.

You also need to look for a good reason for stickiness and people coming back, hence I created the Rate my Tattoo area of the site, this area is the free area and brings back a lot of users, adds a lot of bookmarks and adds user submitted content.

Finally you need to be sure why your site adds to the genre you have entered, what does it do that others don’t, what makes your site better than others. For this I decided to do name, word & phrase translations for tattoos, some sites I had seen offered one language so really I had to better than and took 12 months to find suitable translators to offer Arabic, Hindi, Gujarati, Sanskrit, Hebrew, Chinese & Japanese translations cheaply and delivered by email.

I have used that site as an example of the main points I wanted to address:
1/ Build valuable content – possibly using others – profit share
2/ Free area of user submitted content – stickiness, bookmarks, repeat visitors
3/ Unique service that helps add inbound links, offers e-sales and income

The above way of building that site created a large income/content website with little content/financial investment from me, all the content has been supplied by other people for free, it is the thought process I have applied to my new ventures which will be again be started on a zero/minimal budget.

What is the most common mistake most people make with their first venture?
For choice of startup website genre:
Choosing a topic they have no interest or knowledge about, building websites because of CPC rates and hearsay means you will probably not have the desire and drive 6 months down the line if you ever hit a rocky patch/update, you have to love your website and be prepared for the good/bad.

For rankings:
If we are talking about the new start-ups that we see on the likes of DP then having more back links than pages and gathering large amounts of unrelated links, sometimes a little bit of knowledge can be dangerous.  Funnily enough for the mom/pop website start-ups it is the converse with zero inbound links. The trick is to find the middle ground and go after relative links; I’d rather have one genre related link than 100 non-related.

For overall profitability/success:
A lack of understanding of what their visitors want and how to satisfy them properly while making money and retaining repeat visitors, remember that if you get 1000 visitors per day and manage to get 5% of them to bookmark you and visit again in the same month that’s an extra 1.5 days worth of traffic going through your site next month because you gave them a reason to come back, after a few years that type of layout can make you very stable when it comes to relying on SE traffic, of the 100k visits my main Tattoo site can get, around 22k would be from Google/search engines.

Does the risk vs. reward percentage change for early ventures versus those for more seasoned business people?
It is certainly difficult when you have just started, whatever the venture. Established webmasters have various sites that they can use for links/traffic to aid new ventures, I started 2 websites from traffic from one of my main sites and they have both been very good earners thus offering very good reward for zero risk.

With two new ventures this year I am teaming up with a design company so that we will all be inputting time/effort thus keeping risk again to a minimum, you have to have faith in your own ability and those around you to go into partnership though. I have never spent large amount of money on new ventures so everything I have done has been low risk.

Are there certain industries within the internet umbrella that are better suited for new entrepreneurs?
I don’t have vast experience in different industries so couldn’t really comment, I try and focus on a genre and be the best that I possibly can at it, no matter how long it takes. Anything that can be delivered electronically be it images, content, news, reviews are all great internet industries, whatever industry you choose you either need to have a good knowledge of it yourself or be prepared to quickly surround yourself with people who do know the industry.

If you had $100 in your hand now and no sites, resources, etc., what would you do with it?
I would be $100 richer than when I started in 2000, what would I do with it?

I’d search dmoz, taking a specific genre at a time, clicking on every link and look for sites that were no longer used, still had PR and were obviously listed there so had a few decent back links and possibly quite old, I’d then offer $50 for each one I found until I got had a deal and use $30 for hosting and $20 for 6 articles then build a site on the old domain and earn some AdSense to re-invest.

In truth I sent out 20 emails yesterday using the exact method above, I was offering $100 per domain though and I recently ended up buying a 1998 domain name for $650 which is listed in dmoz & yahoo and gets around 4000 visitors per month in a niche genre. Some of the most rewarding methods like that are extremely boring but finding neglected domains/sites that obviously have potential is quite exciting.

Is failure of your first venture always a negative?
I haven’t failed in any online venture, I did start a business when I was 18 which failed to go anywhere, I took the positive from it and it’s hard to go back into the breach when you have admitted defeat but I guess that is what separates the wheat from the chaff, the boy/girls from the men/women.

What type of personality traits lend themselves to success?
Hunger – that is the one trait that I quoted when a recent local businessman asked why my site did better than site B. Obviously determination, intelligence and some luck go down very well but if you have the genuine hunger then you can learn what you need to know on the fly and your hunger carries you through failure and obstacles to the other side.

Are there any existing business models that you would point someone trying to get a start to?
I have some offline interests as well and there are always two business models that interest me.

1/ Subscriptions
2/ Consumables

I wouldn’t get involved in any venture unless I thought it could bring me income long after I have stopped doing the hard work, it should be sustainable and long term.

How would you compare starting an internet business to a bricks and mortar?
Well I have done both, with the right skills or a small budget you have the ability to be up and running extremely quickly on the internet for a very low cost and compete with the very largest businesses in your genre which you cannot do with bricks/mortar.

The internet also changes so quickly compared to the offline world, any new lessons and facts are almost instantly absorbed into the internet whereas offline everything generally works a lot slower with fewer surprises!

What would be an average time frame to achieve some level of success?
For me today I would say 6-12 months depending on how you rely on your traffic source. I would also judge success in higher digits than I would have a few years ago so everything is relative, for some every extra dollar a day is new ground and I applaud the dogged determination of so many people I see trying to build new lives.

Is there a cut-off time or circumstances for when someone should cut their losses and scrap a project?
I am a poor loser and if I devoted 6-12 months to a project then I would either sell it for a profit to justify my time or put it on the back burner if it’s not going according to plan. Aged sites/domains have their value and maybe you just need to take a break from a project for a few months and then pick it back-up with renewed vigour, in saying that some ideas are just bad!

How do you suggest someone judges their level of success?
Success for your site would be increasing your visitors, earnings and more importantly bringing back previous visitors to your site. Financially, we all have different ways of judging our success, for some it’s leaving their 9-5, for others it’s earning a few hundred/thousand dollars a month, we all have different goals and standards.

Personally I would say if it pays the bills, makes me happy and gives me plenty of time at home with the family to pursue any other hobbies/interests without worrying about life/money then that will do for me. I am a hungry materialistic sod though so I judge my success in terms of material gain – nobody’s perfect and we are all learning everyday!

This entry was posted on Saturday, March 4th, 2006 at 8:23 am and is filed under Interviews. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.