When you’re trying to figure out if new online business will succeed, what are the indicators you should be looking at?
Some of them are obvious – founders with experience, with a strong background in the market that they’re entering, and so on.
But what about some less obvious indicators?
1. When it seems a little too expensive and indulgent
Yep, that’s literally a vase of ferns priced at a hundred dollars. Yet, Floral Magic, the Singaporean venture behind the foliage, has amassed a devoted following. Granted, there are other beautifully crafted options, but most sell above the hundred-dollar mark.
What gives then? Well, believe it or not, there are people willing to dish out ridiculous amounts of money, simply because they can afford it. It helps too, that the products offered are of top quality.
Any online business that thinks it can compete on cost will have to deal with the likes of Amazon, Alibaba, and other low-priced selling giants. Furthermore, the last thing an emerging business wants is a customer base dominated by capricious bargain hunters.
2. When it taps into diversity
Despite the inane complaints of the anti-PC mob, diversity can be of immense economic value. A business that consists or caters to people of various ethnic and gendered backgrounds reflects actual reality.
Take for example, Lush Cosmetics and Nubian Skin. These beauty brands have been consistently popular among a wide range of consumers. Unsurprisingly, it has much to do with their inclusive staff and celebration of diverse beauty standards.
3. When it’s not exactly legal (but not illegal, of course)
The sale of nootropics, e-cigarettes (vaping), and unconventional diet teas typically involve an element of dubious legality. Regulators and many societies continue to treat these products with suspicion, warranted or otherwise.
Ironically, these illicit commodities are projected to be a source of big business and profits in the immediate future. To overcome the regulatory barriers faced by the sale and consumption of smart drugs or vape juices, relevant businesses tend to be innovative and unorthodox.
For instance, Afinil Express, a nootropic supplier, sells its tablets at low prices, provides free shipping, and rewards returning customers.
The success of Afinil and other similar businesses are perhaps, unsurprising. Historically, grey markets, by virtue of their unofficial distribution networks and non-compliant behaviours, can cultivate loyal customer bases—many of which cannot afford or access the provided goods from their original producers.
4. When it has a loyal group of haters
Contrary to popular thought, haters can be good for business. They expose operational weaknesses, are potential customers-in-waiting, and can publicize certain goods.
The contentious practice of CrossFit serves as an interesting case study. Owned and licensed by CrossFit Inc., the exercise regimen has attracted passionate fans, as well as critics.
The latter’s backlash can not only rally a brand’s supporters behind it, but can serve as opportunities for increased customer engagement. Furthermore, if a business has a healthy mix of detractors and followers, there must be something intrinsically compelling about it.
5. When it’s not the only one on the block
As counterintuitive as this sounds, a business doesn’t have to be innovative, ground-breaking, or non-conformist to succeed. How often we forget that Apple didn’t make the first Mp3 player, or the first smartphone.
Similarly then, a business that arrives late to a particular scene doesn’t necessarily have to fail. Instead, it can very well improve existing products and customer relations, and encourage greater competition.
Cosmetic brand ColourPop did just that. The Los Angeles-based business was a latecomer to the velvet world of colorful liquid lipsticks. Prior to ColourPop, brands like Urban Decay and M.A.C dominated the market.
ColourPop subsequently made such lipsticks exceptionally affordable and accessible. And unlike its competitors, the company primarily advertises through social media, specifically Instagram, to the extent that it avoids interviews or big publicity features.
In many ways then, ColourPop proves that a business can still extract profits and fans from an established market.
- Expensive pricing can indicate that a business is of quality and caters to audiences intolerant of mediocrity.
- Diversity isn’t some liberal fantasy, but an actual trait of entrepreneurial excellence.
- Illicit goods can usually guarantee a loyal clientele, and regulatory obstacles can foster innovation.
- Haters are lemons waiting to be turned into delicious lemonade.
- Saturated industries can still be reconfigured with unconventional marketing and pricing.