Startups and Web Business
As entrepreneurs, we come across a lot of folks who poke holes in our ideas. We hear a lot of “No – this won’t work.”
So when should we go full steam ahead with our idea even after hearing all the negativity—and when should we pause and evaluate the idea? The answer depends on who the naysayers are.
The idea of ‘filler’ content is nothing new in publishing. Magazines, newspapers, even TV has filler, it’s the stuff that bulks up and fills out your editorial calendar. But online, filler content has the potential for a whole lot more than just plugging gaps, and it all rests on search traffic.
For most online publishers, search traffic makes up a reasonably large bread and butter base of visitors. On our Envato blogs, for example, search traffic generally makes up about 20-30% of visits. That’s a pretty substantial amount of traffic for us, but for some publishing sites those are some really low numbers.
You see there is a way to grow search traffic that has nothing to do with tinkering with the keywords on your articles, or even building link-backs. Instead it’s about publishing masses and masses of content, and that’s where filler content is taken to a whole new level.
A useful classification of online startups is to put them in two groups: Scale-First and Monetize-First. The first type is all about getting as big as possible, as fast as possible and then figuring out how to make money from the market. This Scale-First approach requires an often significant amount of capital to fund until either monetization or acquisition occurs. The other is about producing income as fast as possible and then using that cash flow to grow larger. This Monetize-First approach tends to be slower but comes with far less risk.
In his post Are you a Seesmic or Balsamiq Entrepreneur, blogger Jeremy Chone gives a good roundup of the pros and cons of both these approaches, using two well known startups as examples of each. Of course a brilliant example of the Scale-First approach is Google, who for a long time had a big question mark hanging over them regarding their business model. If you flip back to December 2000, you’ll find BusinessWeek published an article that literally had the words “But how will Google ever make money?”
Personally I fall most definitely in the Monetize-First camp. I like a business to be self-sustaining as soon as possible, and that means you need to have a clear plan from the out-set about how to actually make money. In startup literature this is called a business model and this post is all about finding one! (more…)
One of the best sources of information on startups is the obscenely talented Paul Graham who has written a wealth of essays on the subject. If you read a lot of these though you start wondering if the only route into the world of web startups is to be a developer or computer engineer of some kind. When I think of top web entrepeneurs, people like Mark Zuckerberg of Facebook, Page & Brin of Google, Jeff Bezos of Amazon and Evan WIlliams of Twitter & Blogger all spring to mind. Even less-obvious founders like the internet media personality and Digg founder Kevin Rose actually began in computer science. So it all begs the question, if you’re not from a tech background do you even have a shot at starting a web startup?
The first question to ask is, is your startup idea technology driven? Are you inventing new technical solutions to a problem? In the cases of all the founders I just mentioned the answer was yes. Facebook was a new way to manage social interaction, Google was a new way to search, Amazon was a new way to purchase, both Twitter and Blogger were new ways to communicate, and Digg was a new way to determine the relevance of news. They were all completely new technologies or applications of technologies.
But it would be a mistake to think that that is the only kind of web startup there is! (more…)
The web is saturated with free-ness. In fact some have argued that users have come to expect things to be free, and certainly to some extent that is true. However it’s important to understand that that doesn’t mean people won’t also pay for the same things they can get for free elsewhere.
A year ago I told a couple of programmers we were going to launch a marketplace for people to buy WordPress themes and they looked at me like I’d just said I was going to try selling the oxygen we breathe. Why would anyone pay for WordPress themes when there are so many free ones around? (more…)
