There is a misconception that a good site and/or idea will sell itself; which has led to many entrepreneurs putting their cash in to online ventures without adequate knowledge, research or skills to make it a success. What many entrepreneurs who have had business success offline do not realise is that the online market is just as demanding (if not more) than your average brick and mortar business. There are just as many failures, probably far more online than there are offline especially with the increase in Web 2.0 start-ups.

The number one problem is that these investors/entrepreneurs think the internet is the same as traditional offline business, yet for some reason they treat it so differently. These entrepreneurs have (mostly) been in industries where if they have a good idea they follow a series of logical processes as well as overcome many barriers to get the business underway: they do their market research, they do their balance sheets, they consult accountants and business advisors, they go to a lawyer, they write a business plan, they have financial forecasts, they have financial goals, they need permits, leases, contracts ect. They are used to going through the hoops to get a good idea off the ground and a 5 or 10 year wait is nothing in the end. The most important thing, and the thing that they remember is that eventually their idea/s have worked and they have made money from them.

Having this success offline has recently increased with web 2.0 start-ups, such as online websites and businesses. What most entrepreneurs think is that offline business skills can be transferred to online enterprises; they think the internet is the same as any other business. This isn’t where the problem lies, however. The problem is that despite thinking that the internet is the same, they treat it so differently. Rarely do these entrepreneurs do any kind of market research, business plans or financial forecasts for a web site. They spend their lives going through these barriers and seeing success so much that they think it is their ideas that will sell themselves. What they don’t realise is that it was often all the other work that originally made their businesses successful, not just their ideas. Most ideas change a lot in the time from when it is in somebody’s head to when the idea is actually executed in a business sense. Inversely, the internet translates ideas too easily and directly from somebody’s head in to reality without consideration of all the external (normal) business issues that are usually considered with any other business. For most it is a matter of going to a web developer and fronting the funds, and the sad thing is that so many people do just that with faith that their idea will take off, even without consideration for marketing or promotion of the idea.

They think the internet is like any other business (which it is in certain ways), yet they will trust their intuition in putting down $30,000 for a large web development project just because they think they no longer have to go through the same barriers to get their ideas out there.

The internet is different from other industries, but each industry in itself is different anyway. I wouldn’t start a shoe store if I had success starting a mining company without a LOT of research and advice. Same with the internet, just because you may have had success with a shoe store offline doesn’t mean you will have the same success with a shoe store online; they are two very different industries, and entrepreneurs will think the online like the offline; with faith that their ideas will just work. But they will not treat the online like the offline, which is the number one problem with entrepreneurial investors.

An idea is just that, an idea, and if you can execute it without breaking the bank you may have a chance at success. If the idea has a solid business plan to go with it you may even have a greater chance at success. But if you think you can invest in just an idea, you are nearly always destined for failure.

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