As they say, location, location, location. I started an ISP in Oklahoma back in the mid 90s. Instead of running a ton of advertising to drive traffic to the phones or website, I opened a store front in an 800 sqft unit attached to the front of the local Best Buy. I did my selling in person, and used some unique branding to help people remember us. This worked because a) dialup ISPs sold to a localized area, and b) the newness of the Internet scared people. I lost count of how many computers passed through our doors getting configured correctly for access.
In a pure online play, I think the equivalent of location is channel strategy. Find partners who are a close fit to your offering, and work hard to form a good relationship with them early on. If you can provide a service to their customers that adds value, it's a win for both sides.
The busy-shopping-street analogy is something I've been thinking about before; what is an online shopping street? It seems to me Max couldn't really find the online equivalent either: both Apple's App Store and Facebook have plenty quiet streets I'm sure, so building a business on those platforms does not equal building on a busy street.
Is there really a way of building my business next-door to yours - in the sense that I'll catch customers walking out your door?
On a shopping street, I don't have to be looking for a book store to run into one. I might not buy anything the first time, but now I know it's there. And every time I walk out the clothing store, I'm reminded the book store is next door.
An example I can think of: Imagine you sell "Webpage designs" online, vs "Wordpress themes". Your wordpress design site will get listed on design sites, you can get added to the theme section of wordpress.org, lots of people will search for your keywords. Wordpress themes is a busy shopping street.
The app store analogy holds - the app store can be thought off as a mall where people are walking about. If your store sucks, nobody will come in, but people are seeing it. If there was no such store, your app could potentially be on the web and you only ever have 10 visitors.
I'm not sure building the delivery first, and then the product is a good idea. Analogously, it's like buying a lot on a busy street, and taking out ads for a shoe store, then only building a store, and buying inventory, after people are coming to buy shoes.
This does not seem to me like a good way to encourage repeat business.
To me, it's more akin to first finding a location for your business before you decide on the type of business. For example, if I want to start a bar, I don't first purchase all the equipment for the bar, and then find an available location - rather, I first ensure there is a good location at a good price, and then I rent the place and then build the bar.
A bar at a bad location is very difficult to keep profitable.
In a pure online play, I think the equivalent of location is channel strategy. Find partners who are a close fit to your offering, and work hard to form a good relationship with them early on. If you can provide a service to their customers that adds value, it's a win for both sides.