There are two types of business: Selling Fish, and Selling Software
by Fred Roed on 01/10/07 at 8:38 pm
3 comments
There are two routes you can take when starting a business: the easy way or the hard way. The easy way is take an existing product and sell it. The hard way is to create a product and sell it.
Funny how so many of us choose to take the hard route.
I’ve been shooting the breeze with a fair amount of business owners recently, chatting about small business in South Africa, and been amazed at how many people said ‘I wonder why this is so hard?’ Looking a little closer, I realise that they’ve chosen the second, harder option in entering the minefield of small business.
Here’s an example of the first, easier route. Recently I met a guy who claimed to be a bit ‘slow’ at school. Not the most scholarly guy in the world, he loved to be outdoors. What he really loved to do was fish. When he left school, most of his mates went to university and studied some high-falutin’ degree, seemingly destined to be rich. Instead, this guy went and rented a boat. He got some nets, recruited a couple of guys and started to haul them in. His idea was simple. No one was supplying the Cape Town fish market with fresh fish daily. He would deliver his product, still flipping in the crate, to his eager customers. When I spoke to him, he was turning a million a month with around 35% profit. Nice. He now appears to be doing a lot better than a lot of guys at his old school.
Here’s an example of the hard route. Start a web marketing company like World Wide Creative (my own company, now 5 years old). Begin the long journey of creating, testing and refining your own software and services to create annuity income from SEO, PPC, hosting, leasing, marketing and maintenance. This was my choice, and it’s been a long, challenging voyage. I’ve often pondered my wisdom in choosing this path, even though, in the long run, I know this is what I enjoy doing the most.
Here are some with some pros and cons I’d like to share with you.
The first route, the ’selling fish’ route, is tempting – especially when looking from the other side of the fence. It can be profitable if you find a good product for cheap, and deliver it on time – with a smile on your dial. The negative to this is that there is potentially a low barrier to entry, and you leave yourself open to competition.
The second route, the ‘creating software’ route, is also tempting – especially if you’re a sucker for punishment. This seems to be the road chosen by a lot of South African entrepreneurs, often at the expense of free time, friends and family. The positive to this route is that, because of the time it takes to build your systems and products, it’s difficult for someone to replicate all the innovative bits and bobs that you come up with.
What route have you taken?
Fred Roed is the marketing guy in the Ideate crew. Fred is the CEO of web marketing company World Wide Creative and the co-founder of online learning portal Heavy Chef. Fred loves writing about people out there doing marketing right. Follow Fred on Twitter here. View more articles by Fred Roed.
Andrew
Oct 2nd, 2007
Live Alchemy is selling “fish” online in the form of Bug Zappers, Flags and Kitchen Tools, but because the South African e-commerce market is so immature, we’re having to create a lot of the systems from scratch. For example, courier companies, packaging companies, even the banks, don’t understand e-commerce so they don’t have solutions ready for us. There are certainly no books around called “Starting a South African e-commerce business for Dummies” (which is why we’re busy writing it). Of course, this provides an extra barrier to entry, which is often a good thing.
So I think a third route you need to add is “selling fish in a very young market”. This route has some of the pros and cons from both of the other routes.
Allen Baranov
Oct 2nd, 2007
Actually I think you are selling more along the lines of Ostrich meat.
Its very rare to find someone who hasn’t used the Internet (at least in Urban centres and basically your target market) so people know what the Internet is all about just as they know what fish is all about – you eat it.
You are trying to extend people’s perception of what the Internet is all about and you should be doing this by leveraging off what they already know.
The equivalent in my analogy is : Ostrich meat is just like all those other red meats that you know and enjoy so well but it has a health benefit.
Mike Shraga
Nov 4th, 2007
After 15 years of developing Freight,Courier (Winfreight) and Warehousing software, I found this artical highly amusing!!
We would have been far richer but intelectually poorer if I had gone fishing, http://www.warehouse-it.biz and my book “On Delivery” will still take 6-12 months to finish!