Avocados, Massages, and MacBooks
To start a successful small business, look for what the Web does poorly.
It's hard to replicate picking out your own produce on the Internet
Photograph by Joe Raedle/Getty Images.
The Web will improve your life every day in countless ways until one morning, suddenly, it will fail. You’ll try to do something important and you’ll find there’s just no good way to accomplish it online. Or, even if some site promises to let you do it—get passport photos, order groceries, send a greeting card—you’ll find the process much more arduous, and far less satisfying and effective, than just leaving the house and getting it done it the old-fashioned way.
For some of these services, the cause of the Web’s failure is obvious: The thing you need can be performed only by another person, face-to-face. When I asked my followers on Twitter and Facebook to name some of the places where the Web fails, one wiseass chimed in, “Prostitution!” That’s only mostly true—look at the trouble that Craigslist and Backpage.com have stirred—but it is telling. Many times we want products or services that involve intimate human contact, the sort of personal touch that can’t be translated over digital lines.
This turns out to be as true for MacBooks as it is for massages. Given the existence of Amazon.com, there would seem to be no rational reason ever to buy anything at an Apple Store. Getting your Mac from Amazon is usually cheaper (even without counting the significant sales-tax loophole), it involves less human and automobile traffic, and you can do it from practically anywhere. And yet the Apple Store is the top American retailer in both sales per square foot and sales growth per square foot. Why? Who are these crazy people who are going to a store rather than a website to buy a packaged consumer product, and what on earth is drawing them there?
It’s the Geniuses, obviously. For lots of customers, finding the right computer or phone is a daunting task. Maintaining one is even harder. And as efficient as Amazon is, it can’t compare to the kind of thrilling, real-life assistance you find at the Apple Store. A few years ago, my wife’s just-out-of-warranty PowerBook took a turn for the worse, and I took it into the Genius Bar expecting a hefty repair bill. Instead, the guy at the desk offered to fix its busted graphics controller for free, warranty be damned. Later, I interviewed an Apple Genius who told me that staff have free rein in waiving most repair bills, and that they do so routinely. Why? Because customers love it, and they often end up buying something—something expensive—on the way out.
Apple’s success should serve as a lesson to every small business looking to survive in the age of Amazon. There are lots of things the Web does very well, and every year, it gets better. If you build a business that merely replicates one of the Web’s strong suits—selling books or music, making travel arrangements, that kind of thing—you’re obviously gonna be toast. But the Web has blind spots—services it doesn’t reliably perform well now, and services it won’t ever be able to reliably perform well. If you’re starting a small company now, you’ve got to make sure your firm fits in one of these buckets. Find some place where the Web fails, and see if you can create an online service that amends that failure. Failing that, create an offline company that’s Amazon-proof—one whose future can’t be disrupted by a digital service because its very purpose is to offer direct human contact.
A good example of the first sort of business is customized apparel. Last year I raved about Blank Label, J. Hilburn, and Indochino, three sites that make custom-fit men’s shirts for about the price you’d pay at a department store. Each of these sites hit on a way to fix something terrible about the Web: Buying clothes was always dodgy because you couldn’t tell if something would fit you or look good on you. These sites tailor clothes to your exact dimensions, so stuff always fits. What’s more, by allowing you to design your own clothes, they’re almost certain to provide something that’s flattering. I’ve been buying custom shirts from these sites ever since I wrote that article, and a couple of months ago I even bought a suit from Indochino. I’ve loved everything I’ve purchased. Indeed, buying clothes from these stores has been more enjoyable than any other recent retail experience I’ve had.
Are there other such services ripe for improvement online? If you look at where the Web fails you, I’ll bet you’ll find some. For instance, I find the Web is terrible at helping me find gifts. Online companies are collecting mountains of information about you, me and everyone we know. Yet Amazon can’t recommend me anything other than the most generic Mother’s Day gifts for my mom. (Yes, Amazon, I already knew my mom would love a Kindle!) Why isn’t there a company that will reliably offer me suggestions for people I know, either by mining their online profiles or letting me describe them? If you start one, I’ll be your first customer!
The other way to Amazon-proof your business is to build something offline that won’t be improved by being online. If you look at the American retailers whose sales growth ranks near the top, you find Lululemon, Polo, Tiffany, Coach, and Whole Foods. These stores share a couple of common features. They’re all what retailers call “high touch”—they prize rich, personalized customer service. And they all cater to wealthy people. They bank on the fact that there’s a moneyed segment of the population that’s willing to pay for a qualitatively better experience.
Amazon has no good way of fighting these firms. Even though the Web giant is looking to expand its apparel line, it’s not going to steal away customers who trust Lululemon saleswomen to let you know if those pants have no business on your body. Even if Amazon finally hits on a way to reliably deliver groceries online, it can’t replicate the experience of letting you squeeze your own avocados so you get just the right one. The Web is awesome, but it’s not that awesome just yet—and if you want to strike it rich, you’d be wise to look for its weaknesses.
Slate wants to hear from you. Submit your own rule for starting a small business.
Don't forget about free resources at your library.
Experts aren't always as innovative as their sales pitches.