How To Start A Digital Business In Four Steps In 2020

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How To Start A Digital Business In Four Steps In 2020

To start a digital business with low or no cash, look for a business opportunity within a microniche. Before going all-in, you want to validate your idea cheaply. After validation, you can push on growth and as you grow, you create options to scale your digital business.

1. Find Your Business Opportunity By Starting With A Microniche

In the era of large digital platforms, it’s important to start adding value from a small audience, which can become the backbone for your next digital business. Indeed, that isn’t a single way to start.

However, if you have limited capital or no capital at all, it’s important to start from a narrow space, where you can add a lot of value. As a small player, you’ll be able to break the trade-off between cost and value, which is at the base of a blue ocean strategy.

[image error]A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

In the microniche space, you’ll be able to find the community that will help you build your next digital venture!

[image error]A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
2. Validate Your Idea Before Going All-In

The digital world creates two illusions:

As you can talk to the whole world you end up wanting to talk to everyone
As you can start with little or no money, you’re willing to test anything

These two are indeed facts, but only for those established businesses that have powerful distribution networks, marketing, and R&D budget.

If you’re starting from scratch trying to talk to everyone, or trying to test all the possible options you have might not work.

Thus, you want to look at the key components of the business model you might want to build:

[image error]A business model is a framework for finding a systematic way to unlock long-term value for an organization while delivering value to customers and capturing value through monetization strategies. A business model is a holistic framework to understand, design, and test your business assumptions in the marketplace.
[image error]Where scientists use labs to test their hypotheses through experimentation. Entrepreneurs build business model experiments to test their business ideas in the real world.

At this stage, it’s important to validate your idea, to see if there is a niche market opportunity before going all-in!

If you already have an audience, you can test your idea by, for instance, proposing a product or service.

Let’s say you already have a blog that generates some traffic, and a newsletter, you can organize a workshop and see if people in your newsletter are willing to pay for it.

If so, that opens up the space for producing a digital product out of the workshop, which can help you get started.

Once you got the audience you can to start testing potential revenue streams:

[image error]A revenue stream is one of the foundational building blocks of a business model, and the economic value customers are willing to pay for the products and services offered. While a revenue stream is not a business model, it does influence how a business model works and delivers value.
3. Growth and traction
[image error]Growth hacking is a process of rapid experimentation, coupled with the understanding of the whole funnel, where marketing, product, data analysis, and engineering work together to achieve rapid growth. The growth hacking process goes through four key stages of analyzing, ideating, prioritizing and testing.

You can use the growth hacking framework to accelerate growth once your idea has been validated.

Related: Growth Hacking Complete Guide

4. Create Options To Scale

Once you start from a microniche, you can look at it as the foundation of your business, which will give you options to scale as you dominate that microniche.

Therefore, as you grow you can create options for your digital business! This is at the core of bootstrapping.

As you grow, you tune your business with its key customers, and as you do, your key customers will become the most important stakeholders:

[image error]The general concept of Bootstrapping connects to “a self-starting process that is supposed to proceed without external input.” In business, Bootstrapping means financing the growth of the company from the available cash flows produced by a viable business model.
Some Ideas To Start Generating Cash

Not all entrepreneurs can initially afford to build the business of their dream (at least not in the short-term). Therefore, it might make sense to look at existing opportunities out there that can help you bootstrap:

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