Whenever people talk about the most successful online businesses, there are a few names that always stand out. These are Facebook, Google, eBay, and Amazon. These online companies and the success stories of their founders are already considered a legend in the business world. Some would say that the people behind them were very lucky, being in the right place at the right time to take advantage of a great opportunity. But the truth is that these people chased a dream based on a superior business model they had come up with. Luck is not the only factor that played a major part of their success.
While these online businesses continue to enjoy success, quite a few others such as Yahoo and Netflix are struggling. It is worth digging into the common factors that contributed to the success (or failure) of online businesses.
They offer superior services that people need and want.
Facebook is the most popular social media platform. Its popularity was built by providing a platform for people to share common interests and instant messages all in one site. Google’s popularity is rooted in the superiority of their search engine which is the best there is at the moment. In addition, their Gmail and Google Docs are also gaining popularity as an alternative to office software packages that you have to pay for. Ebay offers a worldwide buy and sell platform unequaled in size, as well as, in reach. While Amazon is the largest online retailer in the world.
They have a good revenue model.
In the case of eBay, it started out as a hobby of its founder, and was prodded into a business when traffic caused its provider to increase the fees it charged. It prompted the site owner to start charging fees that evolved into the complex structure it is now. Facebook and Google don’t charge any fees, but they make tons of money through advertising revenue. The number of their users allows these two firms to charge premium rates for their ad space. Amazon’s revenue comes mainly from sales of almost any product under the sun.
They listen and adapt to the needs of their market.
Facebook is continuing to evolve. It manages to maintain their huge user base by providing more and more services and game applications. In truth, people who use Facebook are almost as interested in playing games as connecting with their family and friends. Because of this, Facebook has responded by making the most interesting games available on their site.
In Google’s case, they realized that people were relying on internet searches to find almost anything under the sun. To take advantage of the situation, they developed their search engine and search ranking system so that it avoids getting ridiculous results that anger web surfers.
Amazon’s founder gave up a VP position at a Wall street firm to find his online retailing firm after reading that web commerce was expected to grow 2600%. He started with just twenty products and built up his company by keeping an ear to the ground and adjusting his inventory and business model to match. The continued success of Amazon seems to validate the strategy.
As for eBay, once they realized that there was money to be made on their website, they expanded its services. As a hobby site, they used to offer their services for free. When people accepted their demand for a monthly fee prompted by increased charges from their provider, it became apparent they had a service that people were willing to pay for. Their fee structure has since adapted to what people would accept. They now charge for product listing, when the product sells and for various options that make the listings more appealing.
Their founders realized a business opportunity and grabbed it.
EBay’s founder was amazed to find out that people are willing to pay for this type of service that they provide so they went on to build a company with more than $16 billion in revenue last year. Google’s founder realized its superior search engine will attract millions of users and built a company that had almost $60 billion in revenue in 2013. Facebook’s founder realized that people needed a better way to socialize online – now it has 1.23 billion monthly active users worldwide. And as for Amazon’s founder, he left a high paying job after seeing a great opportunity in the expanding world of e-commerce; now his company is the biggest online retailer in the world.
So if you have a business model that will provide superior service to its clients go chase it, continue listening and adapting to your clients’ needs and success will not be far behind. If they can build successful online businesses from scratch, so can you!