The following is a guest post written by Chris Lema.
I know, it sounds horrible. But I’m not saying I wouldn’t get into the industry anymore. I’m also not saying that I wouldn’t build web sites anymore. So what am I saying?
I’m saying that the world no longer needs people whose sole goal is to work on the technical details of production.
Do you remember, if you ever had this experience, back when you wanted a silk-screened t-shirt? I remember in high school some friends set up a silk-screening t-shirt shop and you could go in, pick a design (or bring in a photo) and they could create your t-shirt.
Guess what? We don’t talk about or think about those shops anymore, do we? Instead, we focus on going to online stores to find cool designs or funny slogans or old retro logos and we simply order the shirt. Then it arrives — and we never stop to think about the means of production.
That’s what web development shops are — they’re means.
When Was the Last Time You Bought a Domain Name?
It doesn’t matter whether you go to GoDaddy or NameCheap; you’ll be offered much more than just a registrar would typically offer.
For $4/month, NameCheap sells a single page solution that supports e-commerce, has forms, supports out-bound email newsletters, includes SEO, works on a mobile phone and more.
GoDaddy has just introduced their new website builder which provides a 5 page website, 1 email address, access to over 8,000 photos and a free domain. For one dollar a month.
These solutions don’t charge extra for responsive design. They don’t rage against sliders. They don’t tell users that drag and drop theme frameworks suck. In essence, the solutions are nice to people, give them a ton of features, charge them virtually nothing, and help them look good — even on smart phones.
Oh, and did I mention that they post their phone numbers on their web site and invite you to call them? Free support — just a phone call away.
Do you see what they’ve done?
Less for Less and The Upmarket Climb
If you’ve read much literature about innovation you will know Clayton Christensen’s work on innovation and disruption. He is a Harvard Business School Professor who has researched and written extensively about disruptive innovation.
He suggests that companies tend to innovate features faster than customers need them. The result is that we build products that are too complicated for our own customers. If you’ve used Word, you know it’s far more than a word processor. It has frustrated more than one person when they have tried to insert an image and discovered that they’re suddenly doing page layout work.
The result of these sustaining innovations is that they produce more features — and companies charge more for them — and naturally move upmarket. After all, that’s where you find the customers who are willing to pay for all those features.
But what that does is leave you open to disruptive innovators far downmarket offering less features for less cost (less for less).
Have you been to a retail medical clinic recently? They’ve disrupted traditional doctor’s offices. I may not know the doctor serving me, but I don’t care. I get in faster (same day), pay less, and get out faster.
That’s an example of less for less. Those retail clinics don’t do everything. But they do enough.
But here’s where it gets interesting: eventually those players who created the disruptive innovation start moving upwards (the upmarket climb).
Initially no one cares. After all, they’re taking the worst, cheapest and most frustrating customers. So the dominant player is thrilled.
Sound familiar? Have customers that you wish would just leave? They’re cheap and don’t want to pay you what you’re worth. Plus they want to talk all the time. Would you be upset if they left? I doubt it.
Then One Day It’s Time to Worry
Mainframe and mini computers were disrupted by personal computers. Personal computers are starting to get replaced by tablets where software is downloaded (for $1.99).
Four-year colleges were disrupted by community colleges. Now online offerings are doing it to everyone.
Discount retailers disrupted full-service department stores. And now Amazon (and its Prime program) plans to destroy them all.
Which Brings Us Back to GoDaddy
Come on, you and I can both agree that we’ve slammed those guys. They were doing way less for way less. All while we were making our way upmarket.
We started building sites for $500. Then $5,000. And maybe now $50,000. But we’ve been pulled upmarket where people can afford to pay us. And while we’ve done this, disruptors have been at work providing less for less ($1/month).
While we were charging for responsive design we missed the moment when barbers, mechanics, and dentists were buying domain names and suddenly buying everything else too.
Which is Why I Wouldn’t Start a Web Development Company
If I were going to start a web development company today, I would start a company that figured out how to deliver strategic value to those tiny customers.
I’d pay the $1/month and I’d give them GoDaddy’s phone number for support.
They need help with leads, so I’d focus on being a conversion expert. Not an SEO expert. Not a web development expert. Not a support expert.
I’d create an extension off of GoDaddy and play arbitrage.
What would you do?
Chris Lema is the Vice President of Software Engineering for Emphasys Software and the author of Building & Managing Virtual Teams and Creating a Done Done Culture.
You have covered the topic so well. Wow, the topic “If I Were Starting a Web Development Company Today” is really helpful. Especially, your explanation under the headings of “Less for Less and The Upmarket Climb” and “Which is Why I Wouldn’t Start a Web Development Company” are just quite on point. A well-covered article. Keep sharing info and stay blessed 🙂
>For $4/month, NameCheap sells a single page solution that supports e-commerce, has forms, supports out-bound email newsletters, includes SEO, works on a mobile phone and more.
Umm… well, that’s true, but you’re going to get $4 worth of those things, if you catch my drift.
A real web developer will always do a better job than that. I think there will always be a place for web devs.
WOW! amazing blog you share i like it and it is very useful.
Funny, I always assumed being a web development company nowadays included optimizing the site for SEO/conversions/etc by default. But I guess maybe back in the day when you had to code websites by hand there probably were companies that purely handled the actual development of the site, and so perhaps when some people hear “web development” that’s all they think of.
I do not agree. Web development company is much more than provide sloppy $1 solution web page.
We build Complex and Custom solution, Mobile app, Cloud services.. and trust me people do need these services, so do not get demotivated and go for it. Do what you love to do and do it best. !
This article is brilliant, one of those you read and find being so obvious. Thank you for that!
Interesting article as well good idea also. We have to adapt changes. I love to read this post quality writing.
I appreciate you, Thanks for sharing your views.
How many $4/mo websites do you see competing in their markets compared to professionally built ones? How many business owners understand why and where to put elements, colors, and typography hierarchy, etc.? This article is nothing more than a biased rant.
Man, This post just demotivated me from starting my own Web Dev Agency.
I am a student and have been doing some freelancing work.
Now I am thinking about starting a Web Deve Agency and this kind of demotivated me.
Keep in mind, this post was written when $1 websites were still new. It’s three years later and I think it’s been proven that the bottom has not fallen out of the market.
If you like building websites, then build websites.
If you like SEO, then optimize the hell out of websites.
The main thing to take away from this article TODAY is that there are so many more opportunities in this industry than just “building websites.” Find your niche and enjoy it!
Hmm, while the topic and content is informative, I’m not sure I agree. Especially considering I recently completed a redesign for a business who used godaddy web building services for their initial website (it looked horrendous). All it did was generate business for my freelance web dev business. And of course, I’m grateful lol.
Spa Green Creative Studio
Really nice and useful topic.be continue and best of luck….
Whatever !!! But a sound Web designer and developer is father of all innovative upcoming web . godaddy kind of things can’t beat him/her
This is an old post but it got me thinking nonetheless; a web development company is useful to companies that are looking to develop their website. This is what the post titles says, the post content on the other hand while very interesting to read is not about web development for companies BUT web presence for small companies, individuals and wannabe bloggers.
Many of my clients do use GD but they pay far less than $1 per month for their sites services while on top of that they come to me to develop them even further.
GD in my opinion is doing great work for us with their $1/mo clients because they created a new market, made ordinary people enter it and educate them so they will be ready for the next step. That’s where a Web Development Company comes and offers clients like the ones you described in your article a more advanced service that will make their business stand out.
thank you and good suggection
Thats you build large dynamic web apps that require consistent maintenance, new features, etc… Not just 5 page sit n go websites
Thank you a ton. You certainly gave some meal to my brain to chew on. I am working in the department of Business Development for 2 years (approximately) now. I was planning to start my own web development company. But now you enlightened me of the cons. I would definitely need to learn more before I venture out single-handedly into the world of business. I would request you to keep on writing. Young to-be entrepreneurs like me need you for some thought-igniting fuel, which would definitely help us reach the zenith we are striving for.
Great article! Very thought provoking, Thanks!
It is a very nice post with a very important information because most us don’t know the use and requirement of website. during website designing we must our requirement. then it is useful to know is website is cost effective or not.Website Development Miami
I think you miss the point, even in the year 2020 people can still build web development companies. why? the internet is an involving place, and as long as you are innovative, you can survive.
With more and more small businesses getting online, it is becoming more competitive there. I would still build a web development company because we all know the limitations of the DIY platform and we know it is not enough to just have a website.
Your concern hits me every time I see the Godaddy ad on TV, but I also feel they are just attracting a lot of non-internet people to the web, which is good for professional web developers (and clients and everyone else in general). Also, Godaddy is primarily a hosting and domain name provider, which is why they are offering cheap website building tools to attract people. Website building $1, but domain name and hosting renewal $$$?
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This is interesting and good topic.
Thank you for sharing.
The cost of raw material (hosting) is a buck a month. But I feel it takes a bit of talent to polish a website to the point where it’s marketable.
I believe that Google’s got a good take on the state of the internet. When they say it’s all about the content.
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This is very nice idea.. i like it and thanks for sharing.
I agree with one of the previous speakers – Could you please make some adaptations for mobile devices as it’s a touch deal to read anything on a smartphone?
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Thanks for sharing your views. Great blog here If I Were Starting a Web Development Company Today….. It’s hard to find quality writing like yours these days. I really appreciate people like you. I would like to thank for the efforts you have put in writing this blog. I am hoping the same high-grade blog post from you in the upcoming days as well. A web designer must be very knowledgeable.
I want to talk about web development company in allahabad.
Good and thought provoking post. Thank you, Chris! I’ve read the post and the comments and here’s what I’m leaving with (not leaving managewp :):
1. Things get cheaper and it’s the fact
2. Disruptive thinking rules!
3. Web development is not dead
4. Small business starts w/ GD and SQS, then needing more (usually having spent tonnes of money and nerves), move to WP and Drupal and on…
5. Developers and marketers starting up need to focus more on customer service than on their programming capabilities
6. Weebly and Wix (GD and SQS) are just packaged deals that satisfy needs of a particular audience. At the same time there’s also an audience that requires unique set of skills and capabilities. Therefore quality web development with a strong customer service orientation is not dead at all and is worth pursuing.
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Thanks. Some great information here keeps up the good work. I cannot really leave a more constructive comment as I’m abit out of my deph but i will be checking back here for further updates .Useful information..I am very happy to read this article…Thanks for giving us this useful information. Fantastic walk-through. I appreciate this post.
A client just asked me to help her switch from WordPress to SquareSpace. OK, that’s fine, oh well. I keep hearing about SquareSpace, but hadn’t really checked it out. I watched their demo and looked through the features. Maybe this is the next step up from the $1 GoDaddy option.
But then the client wanted a more complex form (that Gravity Forms can do easily) and I’m going to bet the GoDaddy and SquareSpace options can’t do that.
If they didn’t need the fancy form, they’d be fine on SQS. Probably even GD. But once they need something that the cheapy offering can’t provide, they’ll need to move up to the next level. Not a problem, but just so they realize what they’re getting for their dollar(s).
I am not sure, and yes Its my own experience like yours. I agree with you in some terms like there is great disconnection between business and technology.
I don’t say your strategy is completely un-effective, but when you see from user prospective, the buying cycle has been changed, at most of the time it follow the cycle of – educate->Engage->Convert
Yes its the time to fill the gap between business and technology and utilizing it for getting maximum outcomes.
Great read and good food for thought. I don’t know why some people say it is the worst article since what said in the article is happening for a while. We just have to adapt for the changes.
I have to say there is some truth about this article and we need face the facts. Yes, the small business are more online savy now and DIY platforms are only getting better. So there is a need to diversify and look at all the different ways you could add value that isn’t found in a DIY standard solution.
The scenario described is coming at us already, but I have to agree with Simon Rimmington above,
“…in fact a customer who has been through the battle of working with cheap solutions, is often likely to be happy to pay for a professional solution because they have a better appreciation for the skills it takes to produce a great website.”
That’s where many clients start and end up being referred to us.
I Agree, I Disagree, it still depends entirely on the niche each one has managed to carve out for themselves. Things are getting very interesting though and the proliferation of new tools, young cheap and highly skilled talent, extremely low cost super easy DIY alternatives has completely changed client perceptions and expectations.
I agree not enough people in this space are able to offer that all important conversion enhancing solution, but then not enough clients are purposely interested enough in conversion to spend on it, all generalisations and there’s enough proof that the opposite is true.
Disruption is definitely needed in all the spaces associated with online communications and business.
Great read. I’m starting a web development company and its not that easy. Thanks to you, now I know what to consider.
Couldn’t disagree more. In fact quite the opposite. These “less for less” providers make us look good. When a customer has battled trying to get some of the tosh offered out there to work, its a breath of fresh air to them to talk with a professional company that know how to deliver a solution tailored to their needs. And in fact a customer who has been through the battle of working with cheap solutions, is often likely to be happy to pay for a professional solution because they have a better appreciation for the skills it takes to produce a great website.
write a book?
a domain name is like a name and address in the white pages ….
a website is more like the yellow pages …. and display ads and color attract more attention …
words however mean something when they are unique … the name john is not unique but the word Adobe is … but words also can have multiple meanings ….
websites are like words ….. in fact they ARE words …..
so cats.com is cats online …
not JohnsCat.com which very few if any peeps could care about …
what justifies investment of time(which is money) in a website is the name .. it could be cats or it could be an established brand.
anyone spending one dollar monthly on anything would be better off purchasing a lottery ticket.
Would you pay one dollar a month for a line in the white pages?
Worst article i’ve read so far on manage wp.
Good article. Stop scaring us all! I think there is plenty left in it.
Its always been very cheap and easy to cut your own hair but we don’t all do it because lets face it… its just not the same level of satisfaction and you always wonder what it would be like if you got someone else to do it and then eventually you do anyway.
This may be true for the masses who want a simple web presence and who “need” it yesterday. But for the organizations that put time and thought into their online homes, and, more importantly, those which actually require more than simple social sharing options, these website builders are non-starters. They just don’t afford real organizations with credible options.
As long as there is a web, there will always be a need for real designers and developers.
Great words of wisdom. I’m going back to doing contract software development for corporate clients.
This is interesting and good topic.
Thank you for sharing.
Thought provoking post. Ironic, however, that it was barely readable on my mobile phone (responsive design?), and that you missed a conversion opportunity because the “subscribe” floater prevented me from clicking the link to your book. When less for less prevents your ability to reach your target, then you need a little more.