Online Businesses: The power(s) of Anonymity

Exactly what does an online business cycle look like? Traditional bricks and mortar businesses are very much subject to traditional forces such as that outlined in a standard business cycle. You start off, a few people buy your product. These people like your product tell their friends and also come back for some more. You make money, spend it on more promotion, getting more quality customers and your business grows. Simple, straightforward and organic. More growth will occur when people start to recognise you with your goodwill improving considerably the longer you have been around and the more happy people you have served. You serve a local area and this level of goodwill and familiarity are key factors in helping you grow a successful business.

Then came the Internet. For an online business I take the view that there are no set rules and online businesses can’t simply be defined by the rules of yesteryear.You are no longer local. Your goodwill can simply come in the form of a well designed website. You have moved into the world of anonymity.

For example if you were to set up a business selling t-shirts online you may begin making sales immediately through online advertising such as Google Adwords to drive traffic to your site. Now here is the point I’m interested in. People coming to your site have no idea you opened yesterday. They have no idea who bought from you previously or whether they were happy or not. All they can see is your site, your product and a need that can be met if they purchase from you. What if they love your product? Then their testimonial is displayed in large font in your sales letter. What if they don’t like your product? Well then you have one unhappy, anonymous customer. In any traditional business environment, an unhappy customer spreading the word would have dealt a major blow. In the online world, its (usually) relatively insignificant. You have elasticity and an element of customer satisfaction lee-way. This is the extraordinary power of anonymity.

By adopting an online business model, a marketer and entrepreneur can effectively skip a very large portion of the traditional business cycle instantly. It is the catalyst for the multitude of online scams out there as well the many online success stories. It gives people the advantage of starting out with very little yet provide a vehicle of growth for great returns. It allows first time business people to make mistakes and learn without the risk of putting their business into disrepute.

But there is a catch. I believe in the power of anonymity however only to an extent. Used to weed out any flaws in your offering it can be useful especially when adopting a “fire ready aim” approach, not uncommon when your trying to get into a particular market segment quickly. However it can never be used as a unique proposition in itself. I liken it to a “business muzzle”. It does not foster viral promotion, it does not cause excitement and its suffocating if it cloaks your business for too long. A company hiding under anonymity will never provide as much value as a company that is transparent. Anonymous entities will always succumb to competition and alternatives. Interestingly, as I was writing this blog post I received a blog update from Seth Godin which is related to this very topic. I strongly recommend a read of this post as it brings to light some pitfalls of anonymity.

Your online business may well take advantage of the power of anonymity. However if it is used as a means to drive the business forward then it will form a restrictive and negative force. It’s your business muzzle. It’s there to effectively refine the rough edges rather than act as a profound mechanism for online growth.