This is it. There’s no denying it. The coronavirus pandemic is here, making Bill Gates look like a psychic.
Global markets are in freefall. Layoffs are just beginning. Restaurants, gyms, and bars are shuttered.
This morning, I joined a surreal line of beleaguered shoppers that wrapped around the H-E-B supermarket parking lot. It’s getting real.
You may find yourself without a job, with reduced hours, or occupying some weird quasi-unemployed limbo in-between.
But even now, you don’t have to panic.
I’m not saying it’s going to be easy, but times like these also open potentially huge opportunities for the people who keep their heads up.
Right off the bat, you can take this time to:
- Grow your freelance business
- Teach online
- Double down on content marketing
- Explore a new entertainment model
- Build a better remote work system
- Take a hard look at your finances
But let’s say you were curious about using this as an opportunity to build a thriving online business.
If necessity is the mother of invention, then this mother of viral outbreaks might just be calling your name.
A Word to the Wise
Your best ideas won’t come out of a place of panic and worry. Eventually, you’ll need to curtail the panicked scrolling. Every time you refresh the WHO outbreak maps, it’s +1 for your anxiety level.
Take a breath. We’re all in the same boat here. This is a deeply scary time.
But if you can, take a moment to let a little light in. It is possible to reframe your perspective to opt-out of a recession mindset.
Instead, make the conscious choice to look for opportunities around you. If you do this, you’ll be light years ahead of almost everyone else on the planet in terms of mental clarity.
Ok, seriously go wash your hands one more time—then let’s do this.
Building an Online Business in Quarantine
1. Brainstorm Online Business Ideas
In general, there are 5 types of online businesses:
Digital service providers
This could be freelancers or agencies, offering a near-endless variety of services: copywriting, SEO/SEM, marketing, virtual assistance, journalism, consulting, growth hacking, accounting, software development, design—across every niche and vertical imaginable.
Educators and affiliate marketers
This includes membership sites, digital downloads, paid newsletters, and paid online courses.
Affiliate marketers often include bloggers, YouTubers, influencers, podcasters, and content creators who use affiliate links to make commissions on online purchases from third-party sites with affiliate programs. (P.S. AppSumo has one.) It’s worth noting these types of online professionals can also earn traditional ad revenue as well.
Any sort of business that sells DTC consumer goods, resellers, or a marketplace of third-party products
Apps or any kind of software
Some combination of the above
For instance, a finite done-with-you or done-for-you service of getting you set up with automation, white-labeled software, or some other vital business process
2. Explore Potential Problems
This is your time to shine. Take your skills, training, and interests—and choose an area that you know well. Then, start listening for places you can add value.
Do your research on social media
Right now, the whole world is freaking out on social media. Use the search bars in Twitter, LinkedIn, Reddit, and Facebook to start looking for posts “worried about” + “industry keyword.” (Also try “concerned” or “nervous”). Sort results for what comes up in 2020.
Look for industries and demographics that need help NOW
For instance, we know that certain groups need extra services and help immediately.
Keep your ear to the ground locally to see what new problems and needs arise around you. (Note: Just don’t be like this Tennessee man who got caught illegally selling price-gouged hand sanitizer.)
Who needs help now?
- Anyone 65+
- Industries that need quick digital innovation: travel, hospitality, retail, health & fitness, food service
- Anyone who makes their living by traveling
- Grocery stores and pharmacies
- Stressed healthcare workers
- Rich germaphobes
- Local storefronts looking to start selling gift cards or products online fast
- Restaurants who want rapidly expand takeout orders (where legal)
- Artists who need to sell online
- Bored millennials
- Professionals who want to learn a new skill while social distancing
- Companies forced to cancel events
As business is disrupted, companies are trying to pivot quickly to continue making money remotely through this time.
To put it simply, how can you assist businesses in increasing their orders/order sizes or retaining existing customers—while following state and local regulations? If you can help your ideal customer make more money, you’re already paying your own fee.
Taco test case
Ok, let’s get concrete.
Say your favorite taco trailer is in danger of going out of business due to city-wide restaurant closures.
The only way they’re currently generating revenue is basic curbside pickup, and taking orders on food apps like Postmates, DoorDash, etc. But truth be told, those orders just aren’t coming in.
But let’s also say you have some expertise in digital marketing.
So you start to brainstorm possible money-making solutions:
- How could we make virtual Taco Tuesdays?
- What if our amazing chef sold online cooking classes?
- How could we combine delivery or curbside pickup with some sort of virtual community or educational event?
- What sort of digital infrastructure and marketing would my favorite taco trailer need to make this a success?
Let’s taco-bout it.
3. Test Your Assumptions
For any business idea, you should start by making sure there’s a market for what you’re selling. In Austin, I already have a good idea that there are some taco-lovers out there.
Let’s start with some quantitative research methods:
Facebook Ads Manager
Anyone with a Facebook account can use Facebook Ads Manager to see if there might be a potential audience for the product or service you want to sell.
You can also use Google Trends to sort by location, time period, category, and search type. (Note that there’s a Google Shopping and a YouTube search option.)
Whoa…we’re really not the only ones in Austin who love tacos.
Other helpful tools include:
You can use the Total Available Market (TAM) formula to see if you might have a viable business idea on your hands.
TAM = (number of available customers) x (value of each customer)
1,200,000 (Potential people in the Austin area who love tacos) x $40 (the cost of a Taco Tuesday Fiesta Package) = $48M
Would 100% of potential customers buy our taco package? Of course not. (Their loss.)
But as Noah Kagan has written in the past, if your TAM is over $1M, you likely have a winning idea.
So in theory, there’s plenty of money to be made online in the taco business in Austin. But there’s still some more validation that needs to happen.
I start by getting an idea of what the tool can actually do. Then I pick 2-3 features to test to see if a certain business problem is truly a pain point: costing businesses pain, money, or time. If they have one of those pain points, then I have something that I could validate using the tool and that service to impact their business.
For me, my business ideas are a mixture of the software and a service. If I actually did the work for them, with this tool, how would it make their life better?
Alright, so back to tacos.
Say you decide to try offering trailer-side pickup “Taco Tuesday Fiesta Packs”: tortillas, marinated al pastor meat, tomatoes, jalapeños, onions, cilantro, limes, salt, tequila, margarita mix, etc. (…is it lunchtime yet?).
Tuesday night at 7pm, the chef goes live, teaching isolated Austin foodies how to make delicious tacos, salsa, and margs. If they refer a friend for next week, they get a 20% off digital coupon to spend once the physical stand re-opens. Or perhaps you show the chef how to set up a MeetFox so he can start giving private culinary lessons.
If each package costs $25 to assemble and you sell them for $40—that would give you a cushy 37.5% profit margin.
Now if you can approach the trailer and offer a done-for-you Digital Taco Tuesday Fiesta service:
- They assemble the food, do curbside pickup, and provide the chef for live streaming.
- You run all the digital marketing, advertising, and infrastructure-building needed to get taco-crazy Austinites in on the fiesta.
Your fee could be set or a % of each sale.
4. Validate, Validate, Validate
Business validation is one of the BIGGEST things we emphasize here at AppSumo.
Your only goal here is to spend the minimum amount of time and money necessary to see if you can actually make even $1.
Here’s your challenge. Give yourself 3 days and less than $20. And see if you can make sh*t happen.
One of Doc’s main tactics for validating business offerings is creating a short video for social media to gauge the response.
Doc explains his process:
I make a really short video explaining the tool to a very specific audience. For instance, I recently made a video about “Finding That Lead” and put it on LinkedIn to start having an open conversation in the comments.
If people start commenting with information about the type of leads they need AND they’re tagging people they know in the thread, I can see I have some kind of traction. Then the next step is to reply in real time with a call-to-action, letting them know I’m going live that night to talk about the tool.
If they say they want to attend the livestream, then we’re off to the races.
So perhaps you record a video pitch, post it on social media, and tag your favorite food trailer. (You could also just email it to them.)
If they say no, try again with 4-5 of your other favorite restaurants or taco trailers in town. If no one bites, then it’s back to the taco-drawing board.
But… if they say yes, suddenly you have the validation you need to go ahead with your idea.
5. Ship It
Now it’s time to go live. Again, how can you spend the least amount of time and money to get a functioning minimal viable product (MVP) or service out into the world? I’m talking shoestrings, baby.
Maybe you even use a few (limited time) AppSumo deals to make it happen:
- RelayThat for digital ads and creative
- WPOnePager for a landing page
- Social Animal to optimize your Facebook content engagement
If your validated business idea is more robust, use this as an opportunity to connect with a team of remote freelancers who can help you get an MVP up and running ASAP.
And just maybe, if your digital taco idea works, after this coronavirus pandemic subsides, you could provide this kind of service to grocery stores who want to collaborate with influencers to sell more groceries. Or you could also expand into other verticals (i.e. arts & crafts) or partner with meal prep services (i.e. Blue Apron).
Wrapping It All Up (in a Tortilla)
Most of all, let’s keep reminding each other that crises like these always make us stronger. As hard as it is, this global crisis is helping us appreciate what truly matters, see the good in others, and truly get a glimpse of the power of our shared humanity.
Good luck, Sumo-lings! Stay safe, don’t touch your face—and please keep being maniacal about your hygiene out there.
Pssssst. Has all this work from home gotten you stir-crazy yet?
Have you heard about AppSumo’s NEW Remote Work Academy?
If not, tune in on March 26th, 2020 for “Launching a Side Hustle When You’re Strapped For Cash,” a talk by Chris Guillebeau, best-selling author of The $100 Startup and The Money Tree.
The best part? It’s totally free. Sign up now.