This Simple Saying May Kill Your Next Business Idea…

“Pfft. That’s been done before.”

If I had to count the phrase that has killed more interesting business ideas than any other, “That’s been done before” would be it.

Ironically, it may also be the phrase that will make your business hugely successful…with one caveat.

Web Hosting–That’s Definitely Been Done Before!

When I started my web hosting company in 2001, I heard a lot of “That’s been done before,” as well as some other scary things. This was 2001, after all, in Silicon Valley…the dot-com bust. Tumbleweeds were blowing through empty datacenters. (Almost literally!) Companies were liquidating equipment at 8 cents on the dollar. “Everyone” was going bankrupt.

Instead of listening to “that’s been done before,” I went headfirst into a “dying” industry.

We provided dedicated servers and colocation. So did thousands of other companies.

We provided hosting in San Jose, CA. So did at least ten other companies (at least five of which were in the same datacenter we were.)

Do Your Customers Ask You to Compete on Price?

In such a commoditized industry, where customers didn’t understand the technical details, they often resorted to price as a qualifier. After all, if you know absolutely nothing about two items, and you have to buy one or the other, and they both look about the same, you’ll probably pick the cheaper one.

We had to find a way to stand out. Price definitely wasn’t it–that was a race to the bottom. I was competing with a guy who made big bucks as a network admin and did hosting in his spare time for fun, and another who ran his “office” out of his house. Neither had employees. Neither had a real profit motive.

I had a real office that cost a few thousand dollars a month, taxes to pay, and employees who depended on my company for their livelihoods.

How To Do the Same Thing As Everyone Else and Succeed Wildly

One of the most important things I learned from my journey is that you can do the same thing as everyone else and still succeed…as long as you have them beat on one option.

Better yet, that option need not be the same for all your customers!

I picked two ways to stand out:

The first, search engine optimization, was a specialty of mine. I had previously worked for a SEO company. At one point, sometime around 1997, I realized I had read every single article on the Internet regarding marketing. (There weren’t too many sites then!) But I knew most of what there was to know about search engine optimization.

With a few hours of work over a couple weeks, I had my site ranking #1 for two keywords people searched for: “bay area colocation” and “san jose colocation”. (Colocation is a type of web hosting.)

Even though those two search terms only accounted for about 100 visitors a month to my site, it was enough. I pulled in one contract that eventually netted my company over $12,000/month in revenue, and many other smaller customers as well.

The second–customer service–was harder. Some customers simply didn’t care about customer service–as long as the network stayed up, they were happy. Since they didn’t form an attachment to our staff, they tended to come and go.

But the customers who did care about our customer service spread the word. They told others that we had a real office where we could meet them face-to-face…where they could work on their equipment or share a pot of coffee with our staff…even an extra little office where they could plug in their laptop and work from our site for an hour or a day.

That we had employees who remembered their name and the names of their staff members; we were flexible and willing to work with them.

Make Referrals A Huge Part of Your Business

One-third of our new customers came in as referrals from other customers, even though we had no affiliate program or any way of compensating those customers. Our customers were just so amazed to find an oasis of real people in a tangled web of of technology and numbers that they spread the word.

Another example of great customer service showed up recently in the TV show “Undercover Boss”. The CEO of 7-Eleven, Joe DePinto, went undercover and masqueraded as a minimum-wage employee in his own company. His first stop was a store in New York that sold more coffee than any other store.

In the store, he met Dolores, the store manager, who had been managing this 7-Eleven for 18 years. Amazingly, she knew every customer by name. Even though the store was packed with customers, she took the time to greet each individual and have a quick chat with them. DePinto is blown away. “She’s like everybody’s mom or grandmother,” he says.

A customer reveals to him that Dolores not only has five children, but is undergoing dialysis twice a week while she waits for a kidney donor. In the meantime, Dolores is happily chatting up the customers, giving no signs that she has any health issues whatsoever.

“That’s why we’re selling 2500 cups of coffee a day,” DePinto concludes. “Not because we have great coffee, but because we have Dolores.”

I was touched by this story. Even in the most commoditized industries, the simplest things stand out: Remembering customers’ names. Unabashedly admitting your mistakes and fixing problems openly. Delivering high customer satisfaction.

Next time someone tells you “That’s been done before,” be proud. Because it’s been done before, a market exists. You can go into that market with a better product or better service and be extremely successful. And remember, you don’t have to have bigger numbers than the next guy, or beat his price. You just have to be better at one thing your customers care strongly about.

Recommended Reading:

• Watch the full episode of Undercover Boss online. I highly recommend watching every episode of this show. It’s a fantastic look into how some of the biggest companies work.
• How To Choose A Business. If you have “too many ideas” and don’t know which one to pursue, this post is for you!
• Beat the Big Corporations by Delivering the Best Customer Experience. Reveals one of the most common mistakes I see when people first start a business.