The Internet age is an exciting time for the entrepreneur. In the past 5 years alone, we have witnessed incredible leaps in how businesses find, promote and re-activate customers. Just when we thought the e-commerce model had been established, we are faced with the introduction and monster growth of new categories like Social Networking sites (Facebook), Deal-of–the-Day (GroupOn, LivingSocial), and invitation- only flash sales (Gilt, Rue-La-La). This is just the beginning.
The old paradigm has been shattered, and we have entered a new era that is redefining the next generation for retailers around how they acquire, promote and retain customers. The leaders in e-commerce that have embraced this recent paradigm are building market share at an incredible pace. We already see them siphoning away small chunks from the big players’ market and mindshare. The aggregate and long tail of these startups is adding up to a hugely successful enterprise.
Times are changing. It’s critical that today’s small and large business make the proportionate investment in understanding these new marketing channels. How these channels relate to their own customer acquisition, promotion, and retention is vital to the health of the company, no matter what the size. It was only less than 18 months ago that I sat in a boardroom with senior executives that just did not see the point of Twitter. Well…they do now.
So what are key things e-commerce entrepreneurs are doing that you want to understand and inject into your business?
They Encourage Imagination and Exploration
The strength of any organization lies in the leadership. Today’s new startup has strong leadership and knows where to steer the ship. They have the vision of where they want to be in the future but rather than dictating and regurgitating dogma, they let themselves and empower their staff to think outside of the old paradigm. They do this out of necessity–they have smaller budgets, staff, and resources. For them, thinking beyond any confines is crucial in remaining competitive. Too many large organizations today say they encourage “out of the box” thinking, but do they really? Are they really supporting and encouraging this kind of thinking or just paying it lip service?
They Believe in Recycling
The ideas behind some of the latest e-commerce successes have actually been around for quite some time. One of the oldest professions is the exchange of goods in either trade or with payment. I don’t think that will ever change. It’s the nature of business. But what has changed is the format and the channel in which we do it. The success of Gilt, GroupOn and Rue-La-La is less about the model and more about using these new social channels to acquire new customers more cheaply and effectively. Their genius and the residual success that has followed is due in large part to their ability to look at previous successful business models and resurrect them. Instead of powering them with traditional customer acquisition and promotion, though, they are adapting and turning to social, viral, and new applications. The key to their success has been embracing these applications and finding a way to harness their power, rather than continue to question them.
They Are Not Afraid to Fail
Perhaps the most important lesson for all startups is that calculated risk is always worth taking. This isn’t to say that things are going to go smoothly. In fact, failure is inevitable. Unlike big businesses that are already established, startups aren’t terrified of failing. If anything, they look at it as a learning opportunity. If success doesn’t happen the first time around or even the first few times, startups will examine what DID work and dissect the things that didn’t. Established businesses don’t always have the luxury of learning from failure; they’ve got board members and chairpersons to whom they’re beholden. When you’re an entrepreneur, though, you learn out of necessity. You take risks because you have to in order to move forward. You reassess and realign, and then you move on.
At the end of the day, in order to excel in the current marketplace, today’s leaders have to harness all of these qualities. It really is all or nothing. And if you experience some failures along the way, embrace them, learn from them and move on. The journey is the best part of success.