The High Cost of Lost Opportunity
The High Cost of Lost Opportunity
When it comes to opportunity, hindsight is 20-20. Imagine for just a moment what your life would have been like if you had purchased 1,000 shares of Apple stock in 1981 for $1.41 and later sold it at $199 per share in 2007. The initial $1,410 investment would have grown to a cool $200,000…not a bad days work by any means. If you had splurged and purchased 10,000 shares in the original IPO, you would be sitting on $2million. It is exactly that type of excitement which creates a major media frenzy surrounding the upcoming Facebook IPO. Shares are expected to begin selling as early as April with hundreds of employees becoming overnight millionaires. Whether you are already setting aside funding to invest in Facebook or plan to take a “wait and see” approach to purchasing stock, there is yet another way every small business owner can profit from the upcoming Facebook IPO; early positioning.
Opportunity Cost 101
Every business school graduate is familiar with the concept of “opportunity cost”; it is the sacrificed profit created when one decision is selected above another. For example, to invest in Facebook you may be forced to forego some other form of investment such as putting that money into real estate or bonds. Since either of those options would also generate (presumably) a profit, there is a cost associated with the decision to invest in Facebook.
Lost Opportunities 101
Like the concept of opportunity cost, a lost opportunity is also associated with a cost. Imagine for just a moment having been one of the forward thinkers that purchased any of the top ten most expensive domain names back in the day when they could be bought for less than the price of a pizza. Insure.com ($16 million), Sex.com ($12 million), Fund.com ($9.9 million)…you get the idea. The ROI on a strategic domain name could lead to instant wealth for almost zero risk. All it required was some foresight, a bit of luck and a valid credit card. That is where things get interesting. Most IPO’s involve big investment banks, connections, brokerage accounts, margin calls and risk. But technology is a great equalizer. Since the inception of the Internet, more millionaires have been created than the entire history of the United States…often with much less risk.
That Once in a Lifetime Opportunity is NOW
Today we are seeing a continuation of that trend with the Facebook IPO. It is truly a once in a lifetime opportunity which does not require deep pockets, favored connections or even a crystal ball…only the will to make things happen. Unlike most well-publicized IPO offerings in the past, the current Facebook offering will have profound implications – and profit potential – for investors and non-investors alike. This is due to the unique structure of Facebook.
You see, according to Zuckerberg, Facebook did not begin as a business so it didn’t follow the same rules. Instead, it began as a social meeting place with an emphasis on connectivity and relationships. Now, make no mistake…millionaires will be created via this IPO and the resulting investments. However, the story doesn’t end there. The “perfect storm” of profit is about to hit!
Four distinct characteristics make the Facebook IPO unlike any other in history:
- The social structure of Facebook as a new business model
- The upcoming infusion of (even more) cash and liquidity
- Facebook’s emerging global, mobile and social influence
- Low entry point for participation and positioning in the social media sphere
You see, the IPO will have a rebound effect that reverberates throughout the marketing and advertising industry for several years to come. While investors may stake a claim via the IPO, small business owners have a unique opportunity to gain a strategic advantage via proper positioning – NOW. It’s akin to the opportunity to purchase one of those ultra profitable domain names that simply drive traffic by being there. The name alone is a gold-mine. Today, the same applies to those that dominate their field, industry or location in the social media sphere. In short, those that are positioned properly will ride the growing wave of social media influence and phenomenal Facebook growth.
Social media consulting firms specialize in obtaining top results for clients while growing their sphere of influence; without a doubt, Facebook is by far the most influential portion of that strategy so it is important to understand the long term implications of the IPO for small business owners.
1. Competition. Facebook is hot but things are going to get a LOT hotter. Even the most conservative estimates show Facebook continuing to dominate an ever expanding portion of the domestic and global advertising market. Meanwhile, standard television and print media are rapidly losing ground. With more publicity comes more competition. Those that dominate the field early will continue to reap the reward while those that comes late will be forced to invest heavily while playing “catch up”.
2. Influence. For those that are old enough to remember the rise of Walmart, it is a great example of how much influence a growing corporation can exert…especially one that changes the dynamics of an industry. Walmart changed shopping in this nation and brought about the rapid rise of discounted, convenience shopping…and the demise of many traditional stores. Amazon.com has changed the way American’s shop for books, music and movies. Facebook is about to change the way advertising and marketing works…forever. At each juncture of change, the old industries scramble just to stay alive while the new ones call the shots. As each business partner either adapts or dies, Facebook will increasingly exert greater influence into business advertising. Small business owners can choose to become early adopters, adapt later or fight the rising tide…at their own peril.
3. Comprehensive. Last but not least, Facebook has big plans…and with the IPO, sufficient cash to carry those plans out. Social media is not merely a networking site nor just another way to advertise. It represents a comprehensive reassessment of relationships, sales and the future of business including an ever-growing amount of data about the largest combined cohort of persons in the United States (and soon to be third largest entity in the world). The information is vast – and valuable – to those business owners that take the time to tap into it.
Bottom line…a veritable gold mine is waiting. The only question is will you participate or allow one more missed opportunity to pass?