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Starting a business is True Grit, not The X Factor!

Successful businesses evolve from the same place as unsuccessful businesses, but something happens along the way that makes them pop. On rare occasions, a phenomenal idea will emerge that’s backed by a suitably phenomenal management team then the magic happens, but that’s the stuff of legend. For the rest of us, separating wheat from chaff is a grind.

But the grind is the last thing on the mind of many an entrepreneur. Overnight success stories litter our TV screens, conditioning those who know no better to think that being discovered is more important than working hard. And like pitchy hopefuls on unreality TV, many entrepreneurs mistakenly assume the slippery slope to success is greased by exposure alone. It isn’t. Time spent looking for limelight could be better spent knocking on the doors of potential customers, hunting for feedback and trying to secure distribution for their shiny idea.

Walking the streets and talking to potential customers is busking for entrepreneurs, it probably won’t lead to overnight success, but you get to perfect your pitch and make some money along the way, increasing staying power and the likelihood you will nail an audition if the time is right. Better still, generate enough income to avoid external funding and you negate the allure of instant fame altogether.

US Coupons IPO signals a return of the Online Deals mojo

RetailMeNot today submitted an S-1 filing as a precursor to a $230m float in the US, a clear indication of an upswing ahead for the beleaguered Online Deals market.

Some time back I talked about the diffusion of innovations curve, how deal-hungry consumers had adopted the burgeoning Deals market like a pack of clucky Brangelinas on Safari, driving the growth of the market place to breaking point. What followed was market disillusionment as the half-baked players fell short of their customers’ expectations time and time again. Now that the chaff has been swept away, or in some cases absorbed by the leaders the market is once again satisfying a powerful demand for online deals.

In Australia I expect the market to regain momentum toward a billion dollars in revenue, and $100m or so in EBIT. As a market the EBIT pool isn’t stellar, but given the winner-takes-most nature of the sector each of the 2-3 leaders will likely hold 20% of the market and share more than 80% of total profits, meaning $200m in revenues will yield ~$30m in EBIT, not bad.

Diversification in the Deals model is also apparent, with a clearer division between servicing a basic need versus impulse and discovery. The holiday category is growing with fully packaged vacations on offer turning long-haul travel into a $1,000 impulse purchase, and the utility categories such as wine and home-wares are solid. Ironically the original purpose of Group Buying, to fill every empty seat in your local restaurant, continues to miss the mark with offers appealing more to the price conscious than the culinaraly adventurous, disappointing proprietors and their staff alike.

Although no one has yet nailed the local restaurant marketplace, the prize is huge. I expect one of the leaders will emerge with a model that works and further accelerate the Australian Deals market to $1bn in revenues between now and 2016.

A high price to pay…

After following a link suggested by a LinkedIn contact I visited Open Forum hoping to read about a recent interview with Sir Richard Branson.

When I got there I was given the option to sign in with LinkedIn, easy I thought…Open Forum

Luckily, I paused at the sign in page long enough to read the terms and realised that signing in with LinkedIn meant I would have to pimp out my beloved LinkedIn contacts… WHAT?

In exchange for access to this interview I have to provide Open Forum access to my LinkedIn contacts, worse still, let Open Forum communicate with my contacts as me! AS ME!(Just like my contact obviously had!)

This doesn’t seem like a fair exchange to me, not by any stretch. Unbridled access to over 1,600 contacts that I know personally and getting to masquerade to those contacts as me to spruik your company message, that would surely be worth many thousands of dollars, way more than the value of the content I suspect.

Time to look for another source of inspiration!