Nassim Khadem Reporter

Nassim covers the accounting and tax rounds for BRW, as well as general business news. She previously worked for The Age newspaper covering general news, state politics and economics.

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Lessons for digital start-ups

Published 20 December 2012 05:18, Updated 21 December 2012 05:36

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Lessons for digital start-ups

Lessons learned ... Spend modestly on setting up your website, but spend big on marketing your new product or service. Photo: Andrew Quilty

The co-founder of financial product comparison website, Fred Schebesta, confesses that when he started his website, it was “one of the nastiest looking sites on the internet”.

But it still worked, he says, because the service they were offering fulfilled a need in the market, so they spent most of their money on marketing rather than website design.

Schebesta set up the parent company, Hive Empire, in 2009 and built the website, which allows consumers to compare credit cards, home loans and mobile phones before a purchase. If a customer uses the website to select a new bank or mobile phone product, the company earns a fee from the bank/mobile phone provider that acquires the customer.

Since founding the business he and co-founder Frank Restuccia, have built up over 250,000 visitors a month to the website. He says now that they’ve got a profile, the business has the money to invest in designing a better looking site.

His tips for start-ups and businesses looking to go digital are:

  1. Spend modestly on setting up your website, but spend big on marketing your new product or service – Schebesta says businesses that invest a majority of their budget on elaborate website design are “wasting money”. “Just keep adding new features and additions instead of building a monster from the beginning,” he says. “Business owners need to invest in marketing the product to bring traffic to the website if they want to make profit. Marketing efforts should be focused on search engines, conversion improvements and making the actual product better.”
  2. Have a reason for people to visit your website other than brand promotion or sales – Schebesta says most websites look like an “overgrown business card with no other reasons for customers to visit the website apart from buying something”. “You need to give visitors more than a good buying experience these days, they want to be entertained or learn something from you,” he says.
  3. Have a social media strategy – In the rush to be online, businesses are creating Facebook and Twitter pages without any idea why they are doing it. “Most businesses shouldn’t bother with social media until they have fully established their online marketing channels that bring in actual sales,” Schebesta says. “The best thing you can do before jumping on any kind of social media is assess your product. Some questions to ask yourself are: Is my product actually social? How will my audience engage with my page? Could I get more customers somewhere else? “Social media is mainly about branding and drumming up awareness for your products or services. Most companies are throwing money away investing in Facebook advertising and hoping to make some sales. Instead they need to concentrate on channels which actually deliver customers, such as Google.”