To take an online business from conception through to IPO or other eventual exit ....
I'm looking to sound you out on which of the below phases adds most value to the final business.
1. Initial Phases:
- Idea Formation
- Market Research
- Choosing and buying a domain/s, paying for hosting
- Creating a template, commissioning programming/scripts, getting a functional site
- Doing the basic tech jobs on the site ... from logo to SEO
- Creating the basic content pages, product such as ebook or a core membership (if a community site)
2. Mid Phases
- Adding Content / commissioning articles or other material
- Developing Traffic
- Building Links
- Tweaking SEO
- Basic advertising and marketing
- Involving social media to promote the site
- Getting to critical mass on membership
3. The Money Stage
- Monetising the site
- Testing different monetising strategies
- Examining the best uses of advertising money, monitoring ROI of ad campaigns and improving
- Introducing membership subscription
- Consolidating existing traffic and building new sources for traffic
Obviously all three stages need to happen before a project can be sold as a successful business. But I get many sellers approaching me every week who've done a good job on the initial phase and believe that the most difficult work has been done and much of the value has been already created. They believe the idea is the most important. If a lot of time and money has been spent on the execution that's a considerable extra value. That they've put some passion and expertise behind the idea and initial development must count for something too.
Buyers, OTOH, often argue that any idiot can conceive a plan and buy a domain + template; that the difficult job is converting that into a business, that it may not even be a viable business. They continue that the reason the founder is bailing is because he was too dumb to realise before he started that a successful business takes more than a good idea and a template.
For a business that's achieved success, what's your opinion on extent to which each of those phases contributed to the final worth of the business? 10% - 20% - 70% or 33 - 34- 33 or something else? And why?
I hope to use this thread as a reference to point people to when I reply to their emails.