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Becoming An Infopreneur
by
Wayne Van Dyck
Entrepreneurs thrive during periods of rapid change, and we are
living in such a time right now. The good news is that the more
rapid the change, the greater the opportunities available to
entrepreneurs.
The explosion of new technologies make this an unprecedented
period in economic history for entrepreneurial opportunities:
cheap computers, new software applications and digital networks -
namely the Internet - are powerful tools available to everyone who
wants to create financial independence and improve his or her
lifestyle.
The Money Game
I've been a student of business since I began my career as a
venture capitalist on Wall Street. Over the years I raised
millions of dollars to finance numerous entrepreneurs and start-up
companies until I decided to become an entrepreneur myself and
financed my own companies in broadcasting, alternative energy,
software, and telecommunications. I was the CEO of the company
that built the first digital network in Moscow, in 1990, and
started one of the first B2B Internet service providers.
It's from this perspective that I see fantastic new
entrepreneurial opportunities unfolding. And nowhere is this more
apparent than in the world of communications and information.
Because information and communication are fundamental
components of every human interaction and business transaction,
each new communication medium - the telegraph, telephone, radio
and television -- has had a successively greater impact on the
world, and created great fortunes for those who rode each wave of
change. The Internet will be the most significant wave of all.
The Internet
The Internet now makes it possible to reach almost any person,
anywhere in the world, in only a few seconds and for only a few
pennies. But what makes it even more significant is that computers
can convert all the traditional analog forms of information (sound
and voice, printed words, pictures and data) into a common digital
medium for transmission over the Internet. This capability is
radically changing existing businesses and creating vast new
entrepreneurial opportunities.
While the Internet is affecting every business in every
industry, its greatest impact will be on the information
industries' products and services. Think of some of the biggest
businesses in the world. Think entertainment (music and movies),
think broadcasting (news, information and entertainment), think
publishing (books and magazines), and biggest of all, think
training and education (books, courses and continuing education).
To see the Internet's potential impact, let's look at one
small, well-established medium: the book.
Analog Economics
A physical book requires harvesting trees to make paper, onto
which a story or information is transferred via a printing press.
Then many hands and lots of energy are required to move the book
from manufacturing plant to retail store and, finally, to the
consumer. This process is resource, labor and capital intensive.
To see how this works in financial terms, let's consider the
author of our book.
In the analog world she writes her book and receives 10 percent
of every sale, or $2.50 on each $25 book sale. The publisher
retains the remaining $22.50 for manufacturing, distribution and
selling expenses. Let's further assume that her publisher pushes
hard and sells 25,000 copies in one year, a decent number in the
offline publishing world. Our author would then earn $62,500
($2.50 x 25,000 copies) for her creative efforts.
Digital Economics
The same book can be produced and packaged in a digital form
known as an 'eBook', and delivered anywhere in the world in
seconds, at 1/100th the cost and with almost no environmental
impact.
So let's assume our author writes that same book, but decides
to become an entrepreneur in the digital world by setting up a
small Web business and selling her eBook online, over the
Internet, to a worldwide market. And for the sake of this example,
let's assume she sells the same number of books at the same price.
Looking at the costs of doing this, over the year she'll spend
about $2,500 to build the Website, $4,000 a month for a half-time
Webmaster, $150 per month to host the Website (that sells and
collects money 24 hours a day, seven days a week), and an
additional $10,000 per month to buy pay-per-click ads on Google to
get traffic to her site.
At the end of one year her expenses ($2,500 for construction,
$48,000 for the Webmaster, $1,800 for hosting and $120,000 for
advertising) would total about $172,300. On the income side, her
revenues ($25 per copy x 25,000 copies) would total $625,000. When
we subtract her expenses from her revenues, she's left with
$452,700. Cheap digital tools and the Internet's reach provide her
with the leverage to do a little more work...but make a lot more
money. She could never enjoy this sort of success in the offline
world.
This simple example shows the amazing leverage of becoming an
entrepreneur and selling information products in the new digital
world. Whereas in the physical world our author earned 10 percent
of the revenues ($62,500), in the digital world she earns more
like 70 percent ($452,700), or seven times more income. The New
Capital
This new digital world shifts the advantage from those with, or
having access to, financial capital, to those with intellectual
capital. And that's exciting.
In the analog world of physical publishing, setting up the
systems to manufacture, store, ship, distribute and retail books
requires lots of financial capital. Plants and offices have to be
built to hold the equipment, people and inventory. Trucks have to
be purchased to transport the books to the stores that have to be
opened to sell them. As a result, entrepreneurs have had to start
almost any venture by first raising a lot of financial capital,
commonly known as venture capital.
Again, the Internet changes all this.
In the digital world, the business infrastructure is embedded
inside computers and networks, and increasingly intelligent
software replaces most of the manual and clerical functions
critical to any business. Setting up a digital business requires
intellectual capital but relatively little financial capital. Thus
the power shifts from the people with the money to the people with
the ideas and intellectual horsepower to recognize, harness, and
leverage the new information technologies.
The Economic Tsunami
Already we've seen 30-year-olds start with little or nothing on
the Internet and become multimillionaires (even some billionaires)
while large companies run to the courts in an effort to hold back
the economic tsunami brought on by these new technologies and
quick-witted entrepreneurs.
We first saw the digital world impact the music industry; now
it's affecting Hollywood's monopoly on film and video
distribution, and soon we'll see it affecting the publishing and
education fields. Much faster, lower cost digital systems are
replacing traditional, slow physical manufacturing and
distribution systems.
As the older physical systems crumble under the economics of
the new technologies, countless jobs and careers are being lost in
the process. We see long-term employment disappearing; pensions
are on the way out; salaries are not what they used to be. And
this comes at a time when the cost of living continues to rise. As
a result, we all need to begin thinking more about becoming
entrepreneurs - to understand and take advantage of these new
digital technologies by creating new information products and
services that will leverage our skills and expertise.
Traditionally, entrepreneurs have not only had to have the
ability to envision something new, they had to raise the capital
and build complex organizations to supply their new product or
service, and then they required the skills to lead, coordinate and
manage them. Infopreneurs
What makes the Internet and information publishing businesses
so exciting is that they don't require the traditional skills of
money raising, organizational development and management to launch
and build. This opens the new financial doors to a much larger
group of potential entrepreneurs.
Entrepreneurs capitalizing on the new areas of digital
information publishing are becoming known as infopreneurs. They
think and work differently.
Infopreneurs are the new entrepreneurs who envision ways to
apply new information technologies and systems to satisfy market
needs and wants. They can see and create new economic models. They
don't need to raise capital; they create it instead. They don't
manage large organizations; they guide small teams. They don't
work in corporate office complexes, but in bedrooms across
America. They don't have onsite employees, they have contractors
spread around cyberspace. And they make a lot of money. This is
the new breed.
The businesses they build are also
different. Virtual Businesses
Infopreneurs are creating a whole new category of opportunity
known as virtual businesses. Virtual businesses exist almost
entirely inside computers and networks. Most of the business
functions that are handled by teams of people in the offline world
are now embedded in software applications. Virtual businesses are
automated collections of hardware and software connected to their
customers via digital networks. They operate 24/7, selling and
delivering information products to worldwide markets, with minimum
human intervention.
Virtual businesses receive their customers over the Internet
and respond with automated product presentations and virtual
salespeople. Automated eCommerce engines process transactions, and
products are shipped and delivered electronically. Software
systems provide supervision, control and management.
Virtual businesses exist today that were started on
shoestrings. Yet they serve the same number of customers and
produce the same level of profits as venture-backed companies
launched with millions of dollars and significant investments in
plants and equipment. There are virtual businesses run from
bedrooms that make more than companies with hundreds of employees.
This is truly an entrepreneurial heyday.
Benefits of Becoming an Infopreneur
If you've often thought about becoming an entrepreneur, or
you've looking at your existing economic world quaking and
shaking, if you no longer see a bright future in a big
organization, if you're worried about your financial outlook, if
you long for something different or more lucrative, consider
becoming an infopreneur.
Becoming an infopreneur offers many significant benefits.
· You get to be your own boss. Working for yourself brings the
freedom to work on what you want, when you want.
· You can work anywhere. Since all your activities take place
via the Net, you can be anywhere in the world...on the beach in
Hawaii, in a mountain cabin in the Alps, or at a Starbucks in
Manhattan.
· You don't need much capital. Info businesses can be launched
on a shoestring and throw off capital instead of consuming it. The
only significant capital you'll need is the intellectual capital
you create by learning how to exploit these new technologies.
· You can start in your spare time and at your own pace. You
can start slowly and maintain your nine-to-five gig while you
learn the ropes and develop the confidence and income to make the
big leap to independence.
· You don't need employees. All the specialized talent,
skills, and help you'll require can be hired over the Net, on a
contract basis. There's no overhead or burn rate to keep you up at
night. You don't even need any real management skills.
· You can make a lot of money. I personally know infopreneurs
that make millions each year and employ only a few outside
contractors. One is making over $8 million, after expenses, with
just nine employees. That's the leverage of virtual companies.
Internet information publishing is the most accessible
entrepreneurial opportunity you will see in your lifetime. It's
the easiest, fastest and least risky way to create financial
independence, or build a fortune. Best of all, you can do it on
your terms, with no venture capitalists or shareholders telling
you what to do.
Maybe you should consider becoming an infopreneur.
About the Author
____________________________________________
Wayne Van Dyck is the CEO of Six Degrees Media Inc. in
Sausalito, CA. His company designs, builds and operates virtual
businesses, including SellersVoice.com and SimpleMoneyMachines.com.
He is the author of Your Path to a Million.
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