What is an online business?

It may seem odd to ask, “What is an online business?” in this day and age, but the question popped into my head about a month ago and won’t let go.

Given what I do for a living, It’s not really difficult to understand why this question is following me around however, I’m not one to let a question go unanswered and I am definitely not one to let the reason a question arose to go unexplored.

So, in an effort to get it out of my head and into yours (hehe – I love to share!), I’m going to take a stab at answering the question,”What is an online business?” and explore why this is such a key question.

What’s behind the question?

I’ve always believed that questions don’t just pop out of nowhere so before I get to answering the question, let’s take a look at a few of the reasons why it has moved to the front of my curiosity queue:

1. Everyday, I’m involved with conceiving, starting and running businesses, both my own and those of my clients, family, friends, strangers on the bus, etc.
2. I have seen the rise of new technologies and approaches that have really blurred the lines between the online and offline world.
3. I have noticed that, despite the rise of the World Wide Web, so many traditional business fundamentals continue to hold and exert influence upon success.

OK, so now we know some reasons I am thinking about the question, but what does each of these have to do with answering the question, “What is an online business?”

Conceiving, starting and running businesses

One of the coolest, and most powerful, things about the web is the way it lowers the barriers of entry, and levels the playing field, to starting a business.

From robust and inexpensive software to networking and connectivity that spans the globe, the web allows small businesses to act like big ones by greatly amplifying the amount one person can get done and the effect that his or her work can have.

What this means is that a lot of businesses have moved online to get work done, to transact business, to communicate, to collaborate and so much more.

But is that really “Online Business” as a new business type or is it just a bunch of new tools and a new marketing channel for companies to utilize as they go about the business of getting their work done?

Blurring the lines between the online and offline world

Almost every business is online today, whether that was the result of explicit or implicit efforts.

Explicitly, many companies have created web sites ranging from simple brochures to full-fledged sales and ecommerce engines which allow full interaction with clients and customers from first contact and throughout the entire company/customer relationship. Many companies network and are otherwise active in social media online and a large number participate in advertising and sponsorship activities. Many companies use online software to run their back office, even if they still sell and provide products and services to people in the offline world.

Implicitly, almost every business is online. At the very least, a business listing has been captured, indexed and made available via the local marketing search tools built by sites such as Google and Yahoo!. Many older sites allowed people to list, rate and comment about your business, whether it was online or a brick-and-mortar, and new social media sites such as Yelp and Foursquare have extended that trend to mobile platforms such as the iPhone and the Android.

And, talking about mobile platforms, as I noted in a previous post, the rise of location-based marketing has made it critical for even brick-and-mortar businesses to have an online presence.

So, is “Online Business” really a stand-alone business type or are all businesses truly online whether they want to be or not?

Traditional business fundamentals

The more I work online, the more I realize how similar it is to the offline world.

Yes, the tools it provides are amazing. Yes, the reach it provides tops even the tools.

However, relationships still matter. Integrity still matters. Delivery still matters. Customer service still matters.

All the things that contributed to a pre-web business’ success have not gone away. Yes, it is possible to dial-in and run your business with a four-hour work week, but only because you’ve made sure to outsource the work that needs to be done to people who can do it well while you’re not around.

Business, online or offline, is still about people: connecting to them, earning their trust, filling their needs, easing their pains.

Wrap-up and on to you

So here’s my answer to the question, “What is an online business?”: it’s a business, no more and no less.

It may have a different business model enabled by new tools for communication and delivery (which really effects the costs to produce/source and deliver products), but in the end, you provide a product or service that someone else buys.

Even pure advertising and affiliate sites need to provide something to attract people so that they can click on their links and buy their products. That something is typically content and even if it’s free, it’s your product.

So time for you to weigh-in on my answer. Am I right in saying that there is no “Online Business”, that it’s just business as usual with new tools and reach, or has the Web really created a new business type called, “Online Business” which is different than a pre-web business in some way?

I can’t wait to hear from you below.