This is How Your First Online Business Will Fail & How You Can Save It

Distribution is how your product reaches your end consumers. With first-time entrepreneurs, distribution is always an afterthought - which is why they often fail.
This is How Your First Online Business Will Fail & How You Can Save It

This usually occurs in new businesses. After the first failure, most entrepreneurs quit business once and for all. They convince themselves that it's not something that they're suited for. Few entrepreneurs analyze what went wrong and dare to persist.

I grew up in an age that saw the making of giants like Flipkart, Paytm, Ola, Zomato. It was my second year in engineering. My college acknowledged the growing start-up craze and gave some of us office space - my team was one of them. My team and I would go to the office after our lectures and leave only by midnight - any later and hostel gates would shut.

But there was something off. My team felt out of place. Everyone around us was building some kind of an app. An app that gave cashback, one that allowed you to discover restaurants around, one that allowed peer-to-peer renting for almost everything. This was natural because the news was abuzz with start-ups of this kind. Start-ups meant apps like Flipkart, Paytm, Zomato. Contrary to them I, despite studying Computer Science, wasn't the best student of it. I was more interested in the people part of the business. So I focused on cracking that at scale. My team built an online community of 60+ college campuses across the country, all with the help of social media. Kids from across colleges came together to share news, events, and collaborate for projects and internships. And, since we didn't have an ‘app’ - all this ran on WhatsApp groups, Facebook pages, and Excel sheets.

Times passed and the only people still in business out of all 7 teams in the room was us. Why'd this happen?

In hindsight, we got something right - distribution strategy. While everyone else was product obsessed, we were distribution obsessed.

A snapshot of how all teams performed:

  • Peer-to-peer rental app: Built the app. Failed at acquiring users since students preferred Facebook Groups over the platform.
  • Cashback app: Got the app built by an agency. Burned all their savings by giving cashback.
  • Restaurant deals discovery app: Zomato and Google did a better job. The team survived by giving deals. Couldn't sustain.
  • Community of colleges (my team): I had built a community of over 2000+ students across Delhi, Mumbai, Bengaluru, etc. in the first 9 months. Later, I monetized this network by doing offline events across cities (but tickets sold online). No event required my physical presence - all efforts were community-led.

Every business was selling and scaling online, but only mine sustained. Although I didn't run that business for long after college, the feat taught me unmistakable truths that I've seen play out time and again in my later ventures.

Your business is not a business unless it has sustained users or customers. Make no mistake, your product/business is not an art piece - if you're building it like one, you're not an entrepreneur, you're a hobbyist. Ever so often, entrepreneurs fall in love with what they're building and ignore the distribution. “It will sell itself since we made such a great product” is a famous business fallacy. The users will not come unless you focus on distribution.

Distribution is how your product reaches your end consumers. With first-time entrepreneurs, distribution is always an afterthought - which is why they often fail. Can you build a distribution pre-product launch? Absolutely. How?

Landing your product in the market for the first time is anything but smooth. It crashes, at times. Your user can't make sense of the product. Your assumptions fail. This entire process needs more thinking than it gets. There's a name for it - go-to-market. A go-to-market crash can be devastating for new entrepreneurs - it crushes their confidence. Trust me, you don't ever want to be there. But, the good news is even though you can't ensure a smooth landing, you can always prevent a crash.

1. Find the first niche to attack and focus on them. Narrow down on a small segment of your market for GTM (go-to-market), don't go after everyone. You need to be something for someone before you become everything for everyone.

2. Read your users' minds. What's the #1 way to know your users? Talk to them. Talking to your users will give you more legit data than third-party market research ever will. But it's easier said than done - how will you have access to your users before the product launch? Start an online community. Build an online community around a shared interest and bring together like-minded people. Develop trust with the community members by sharing content or hosting exclusive events or both. Learn about them and align the goals of this community with the goals of your business. Communities are a simple way to read your users’ minds and co-create with them a business they love.

3. You now have a low-risk GTM; your initial distribution. You don't have to start from scratch when it comes to testing or putting your product out there. The best part, since you've been building trust in this online community over a period of time, a small percentage of them might turn into your first users and even brand loyalists.

4. Let the loyalists expand your distribution. There's no better way to scale than getting together a bunch of like-minded folks and let them bring their like-minded friends. Connections will just happen and it'll amaze you how fluid it all is. Put referral systems in place to make it happen - incentivize your online community members in some way when they refer you to more users (eg. free product, thank you note, a leadership position inside of the community, etc.). If done well, it triggers a word-of-mouth loop that gets in more and more users expanding your distribution. They'll all come for the community but end up also associating goodwill with your brand.

If I had to use only one line that would single-handedly help you set a direction on how to go about approaching distribution (and GTM), it's "Start your online community!". That's where the future of successful online businesses lies.

But where? Explore platforms like Reddit, Discord, Telegram, and Scenes by Avalon. These are some of the best (and free) places on the internet where you can create and run your community. Start an online community and control your destiny!


- This article is penned by Abhinav Arora, Co-founder and CMO, Scenes by Avalon.

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