Yes you read it correctly – you should not open an online panel company – BUT WHY!! – If you are thinking of investing USD 300-500 on a website and start aggregating – STOP reading this article. For others I will share with you the pitfalls of entering this industry. Not everyone have the will power and means to succeed in this cut throat competition. By the time you will get a hang of what is happening around you – BOOM!!! – YOU are BROKE!! Don’t let this happen with you. The article illustrates 5 reasons why opening an online panel company is so difficult today.
Reason 1: Too late!!
5 years ago you will have made a killing by opening an online panel company – but today – you are too late!!
The bigger players are well entrenched in the market with deep pockets. Medium size companies too have stable clients and no way are they going to let them go.
Then there is a HUGE crowd of ‘ME TOO’ online panel companies – feeding over the scraps falling from above.
The biggest problem is that there are LIMITED numbers of clients who have adopted online data collection methodology. If the bigger panel players have failed to convince traditional mindset – why do you think – you will make a dent??
Being a “ME TOO” online panel company is difficult – can you match their stupidity?? – Trust Me – NO!!
The Market is CROWDED – unfortunately – you are late!!
If you are thinking of making quick bucks – buddy this isn’t what you are looking for.
Reason 2: Need Loads of Cash!!
If someone says – you don’t need too much capital to start an online panel company – he is LYING!!
Building your Panel Base – Needs CASH!
Hiring the right staff – Needs CASH!
Marketing your services – Needs CASH!
Investing in technology – Needs CASH!
There isn’t any aspect of this business which doesn’t need cash!
Even if somehow you get the requisite capital to kick start – from where – and I ask again – from where – you are going to get the clients.
You aren’t NOAH – “If you build it they will come”!
Let us take a small example – suppose you build a very good respondent base in India – and now – you start marketing it – but wait a minute – why will anybody buy from you?? – you are a new player – why will a researcher risk working with you – when they have established players like Research Now or Toluna to go to!!
So one fine day you wake up and realize – SHIT!! – I AM BROKE!! – No Clients – Cash wasted!!
Save your cash – invest it wisely – starting something which many have already perfected! – isn’t a GREAT IDEA!!
Reason 3: Too much crowd!!
Recently a Delhi based company has been claiming to have built “the largest healthcare panel in the world” – with no information about the owner – will you trust such an online panel company??
Welcome to Online Panel Industry!!
This is sadly the true picture of the industry – every failed employee thinks – let me start an online panel company – do you want to join such a club of FRAUDSTERS – if yes – I will pray for your soul!
What really intrigues me is that most of these fraud companies are based out of India – it is sad because we Indians as a society have strong principles – we never raise our kids in such a manner to grow up and start a Ponzi scheme!! – Something terribly wrong has crept inside our value system.
Being a part of the crowd is painful – your 100% hard work probably will provide 10% of benefit – that too if it provides any kind of benefit!
Don’t be a part of the crowd – be different – think different!
Reason 4: Margins are diminishing!!
Recruiting a respondent has got a cost attached to it – let us assume USD 2 – now the bigger players and even the mid size companies have made money out of their initial investment. They won’t mind selling panels for few cents – but can you afford that??
You cannot afford to compete with the established players – as you still have to recover initial investment.
Unfortunately no matter how much MR companies SHOUT about “QUALITY” the final driving factor is – COST!
Many young entrepreneurs have been FOOLED by the sweet word of clients: “we are looking only for quality” – NO it isn’t the truth – it is all – COST COST COST & COST.
I have handled BIG Research Giants haggling for few dollars – so mark my word – if you cannot sell cheap – no one is buying from you!
With diminishing margins and increased operational cost – you are my friend – cooking a recipe for disaster!
Reason 5: Too many Fake Players!!
The BIGGEST question for you is – “How are you going to differentiate yourself from other players?”
And most of the budding entrepreneurs have NO CONCRETE ANSWER!
If you have built quality panels so have many others and that too earlier than you.
Why will a client risk working with a newbie when there are established players offering quality & cost effective panels???
Every day a new fake panel aggregator is POPPING UP – clients have become scared of working with new players – no one wants to jeopardize their research projects.
More and more clients are being pushed towards the BIGGER players because of the stupidity of these fake panel aggregators.
Right left and center intro mails are being shot – now when you will send an intro mail – it is like many others which the client is receiving.
All your hard work is going to go down the drain!
Is it the end of road for all young budding entrepreneurs who want to start an online panel company??
I believe not all is lost!
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