Starting an internet business

Richard saw an opportunity open up thanks to improving technology

Krystena Petrakas: Tell me about your background in IT…

Richard Stephenson: I used to transmit data across different modems between the UK and the Far East, using systems we had back in the 80s. I’ve always been passionate about technology.

KP: What inspired you to start YUDU Media?

RS: Reading the tea leaves. The rapidly increasing availability of broadband, and the falling cost of hosting, enabled a way to provide documents, magazines and newspapers online, in a way that had never been done before.

KP: Did you always see yourself as an entrepreneur?

RS: Yes, I initially saw this opportunity as a business proposition; the internet was just a delivery mechanism. I advise all dotcom entrepreneurs to think in this way; your main concern should be the business idea, the internet is just a medium.

I advise all dotcom entrepreneurs to think in this way; your main concern should be the business idea, the internet is just a medium

KP: How did you grow the business?

RS: Brick-on-brick. There are nine billion web pages and so many a great website for sale, so it’s not a simple matter of having a great idea and getting noticed.

You should lay out your ideas, talk to experts in that field and potential clients, and design what you’re offering to suit their needs.

The way we use internet is constantly developing, so it’s necessary to have belief and guess what’s over the horizon and which way the net, and your online segment, should develop.

You need an element of faith, as most the clients you serve don’t see the same vision you see.

KP: Does that frustrate you?

RS: I think this is common when you’re in the internet business. We can see the light as a blinding light of clarity but some clients, who don’t have the education or internet understanding, can’t see it.

KP: What do you enjoy most about running your own business?

RS: The challenge of creating something that delivers value to customers, getting the recognition and appreciation, and working within a team that you’ve created – it’s a big buzz.

KP: How long are your working hours?

RS: There’s a balance between ‘thinking hours’ and working hours. Thinking is a fundamental part of this game; you don’t stop thinking, even if it’s three o’clock in the morning on a Sunday.

My work can stretch to 60 hours a week. I think you have to be a bit of a compulsive entrepreneur to succeed.

KP: How much can entrepreneurs expect to earn in this sector?

RS: It can be very lucrative, and it doesn’t cost as much money to set up compared to a bricks and mortar business.

Don’t focus on cool ideas to make money; it’s all about whether you solve a client’s problem. If you do that successfully then you will make a lot of money.

Remember, not all businesses have to compete globally – there are untapped opportunities for local services, which is the direction the net is moving towards.

KP: What would you advise someone who’s starting a business for the first time?

RS: Have patience and tenacity. Don’t think your idea and business will take off tomorrow – it takes time.

Start from a position of your specialist knowledge, and if you don’t have any, go and get some! The wonderful thing about the times we live in is we’ve got fabulous research tools to find information, so there’s no excuse.

Have a niche. Understand what problem you’re going to solve and how much potential clients are willing to pay, and put yourself in the mind of the consumer.

Also, do your research. There’s no point starting a business that charges when other people offer the service for free.

KP: Any advice specifically related to starting a web business?

RS: If you wait until you have everything perfect you’ll never have a website. Listen to your client feedback and you can update the website as you build up your business.

Everyone wants to be an internet millionaire overnight, but it can take three to six months before you even get on the first page of a Google search.

Be very clear on your website’s landing page, otherwise your bounce rate will be awful. You only have two or three seconds to make your website clear to visitors. If you have a niche it’s got to be very explicable; highly complicated ideas take much longer to get a loyal following.

KP: What do you suggest in terms of business plans?

RS: Get a book on how to make a business plan, sit down, read it and apply it! This is a good form of discipline and you can start with a proper business planning check list.

KP: And what do you suggest in terms of funding...

RS: I find the biggest judgement call is at the start of your business, before any sales come in. You ask yourself, for example, ‘do I err on the side of caution and spend £10k, or do I take a risk and hope it pays off and spend £20k?’

This is difficult to predict. You don’t know when sales are going to come in and how long it will take, so try and have reserve funding in place.

KP: What are the advantages with starting an internet business?

RS: The low start-up costs, having the option to work from home and the ability to reach a global customer base. There’s never been a better time for people to start an internet business.

KP: So why do so many web businesses still fail?

RS: Because many budding entrepreneurs can’t make their idea into a working business. Entrepreneurs must think hard about what will work, not only today but in a year’s time, because with an online business today is already yesterday.

KP: What are the secrets of your success?

RS: Continuous innovation and recruiting the best people. If you get people who work well and continually challenge themselves you’ll be successful.

I’m in favour of having both left-brain and right-brain people. The right-brain people are highly creative and the left-brain people are detailed and process orientated.

You rarely get the two things together, and you can’t have two of the same type of people running a business.

KP: Do you have a long-term plan for the business?

RS: Five-year plans are for the corporate world; effectively, internet entrepreneurs are dealing with is a constantly changing landscape.

We have a clear road map of where we’re going from a marketing and technology point of view, but our horizon only goes to next year – any longer and we would be trying to second-guess which way the internet goes.