HomeBusinessOnline businesses also have barriers to entry

Online businesses also have barriers to entry


The online world is a great place for entrepreneurship. There is little doubt about that. If it weren’t, there wouldn’t be so many million-dollar businesses and there wouldn’t be so many people making a lot of money working from home.

But is it for everyone? Today, we talk about the barriers to entry for entrepreneurship in the online world.

As we explained in this article, the barriers to entry for entrepreneurship in the online world seem minimal, but they are not. Although it may seem that anyone can become an entrepreneur in any area, the truth is that this is not the case. You have to be very careful!

Knowledge barriers

Creating a digital business has a high barrier to entry when it comes to knowledge.
If you’re not willing to learn how to do it yourself, you’re going to have to spend more (yes, more) money than you would need to start the same business offline.

Taking a business online is very complicated

The first problem with online entrepreneurship is that you need to have a set of skills that are totally unrelated to the business you may be thinking of developing on the Internet.

For example, let’s say you have dedicated your whole life to leather goods, and you want to sell your products through the Internet. It certainly seems like a good option. And I’m sure you have read many guides that have told you about the low costs of starting an online business and the possibility of accessing the global market.

And that’s true, but… Do you know SEO, email marketing, do you know how to set up an online store, do you know how to optimize the code so that it loads fast, and do you know how to do the latter without affecting your search engine rankings? And here could be a long list of questions.

The problem is this: either you start learning a lot of things about online marketing and development that you don’t know, or you have to hire people to take care of it and pay what they ask for. Because, otherwise, nobody is going to know that you are selling leather bags online. And if no one knows, no one buys from you.

Creating an online business is also very complicated

Many people’s eyes light up when they hear about the benefits of online entrepreneurship and want to replicate the models they’ve been told about.

A YouTube channel? A website monetized with Amazon? A podcast? That’s all well and good, but do you know video editing? Affiliate marketing? Copywriting? Sound editing?

If you want to start an online business based entirely on digital assets, you have to know how they work. Otherwise, you’re simply not going to be able to.

Economic barriers

Forget about “start your online business with no money and become a millionaire in a few years”. Sorry, but that’s a myth. It’s true that, without money and with head (and a lot of work) you can achieve amazing things. But it is not the norm.

Low economic barriers? Yes, but for everyone

Another important point to understand is that, although the economic barriers are low (not so others, as we have already seen), this is not always positive. It means that they are low for everyone. Also for your competitors.

From an economic point of view this can be good, because it allows for a lot of competition and a better service for the end customer. But while entry costs are low for everyone, that doesn’t mean that the one who has less money competes on equal terms with the one who has more.

The normal thing is that if, for example, you find a good niche to monetize with Amazon Affiliates, someone with more experience and money finds it, copies it, invests twice as much as you, and makes your website stop receiving traffic and, therefore, money.

This is a reality that cannot be ignored. Whoever has money can invest more in marketing. The only way to combat that is with a lot (a lot) of ingenuity. And even this is not always possible.

And, besides, all this has a corollary: if you start a business on the Internet and it starts to make you money, you will have to reinvest it all. That is to say, you will not be able to enjoy the fruits of your work and your investments for a long time, because you will have to reinvest almost everything you generate in order to keep growing and not be eaten by your competitors.

Highly changing environment

Finally, we must mention a key aspect in the online world: everything changes. And it changes very fast. In the offline world there are certain truths that are maintained over time and certain businesses that are very difficult to disappear in the coming years.

But in the online world, both business models and ways of communicating with potential consumers are constantly changing. Think about search engine optimization, for example: every year there are dozens of changes in Google’s algorithm. This instability is not for everyone.

If you want to start an online business, you must have a very particular mentality, able to adapt to all kinds of changes and, moreover, to do it quickly and resolutely. Because in the time in which you are adapting, the competition can take your place… And never get it back.


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