Making money as a web developer (or, how the web killed the software entrepreneur)
-
Christopher Duncan wrote:
However, in the web world, the moment you launch your service oriented web site that charges X dollars, it's very likely that you'll awake a few weeks later to find several other sites who do the same thing for free.
That do what for free? Securely manage my investments? Calculate airflow through a building? Allow me to specify business rules and procedures for cost calculations? Display pictures of kittens with humorous captions?
Shog9 wrote:
Securely manage my investments? Calculate airflow through a building? Allow me to specify business rules and procedures for cost calculations?
Do you really see a profitable demand for spending time in your garage developing any of these? I'm not talking about the web in the early days when little was out there. I'm talking about today. Kittens. That's where the money is! :)
Christopher Duncan Author of The Career Programmer and Unite the Tribes www.PracticalUSA.com
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
Christopher Duncan wrote:
but before the web it was possible to write an app in your spare time, sell it and build a business.
I've not had any problems building and selling desktop apps since 1996 right up to today and business is better than ever. Here is my advice, follow this advice and you will make a good secure solid living, you may not get rich quick but you'll be happy. It's not rocket science, it's 49% hard work, 49% patience and 2% inspiration. There are always going to be competitors, that's a good sign, it means that there is a large, willing market for your product and half your work is done for you, you don't have to teach people about your product, you just have to differentiate and be better. You don't have to have an original idea, in fact an original idea is a bad idea, everyone has million dollar ideas every day but it takes ten times more work to make money off an original idea than to make money making a non original idea incrementally better than anyone else. To prove this, one of our most minor apps is address book software and it's made money for us year after year. We first put it out as a proof of concept to get the bugs ironed out of our business and development processes and surprisingly it keeps selling because it has a few little features that differentiate it enough. It's not our main application by any means but it pays for all the costs of our hosting and more and if I sat down from scratch I could rewrite it again in a couple of weeks ready for release. You just have to have a decent idea with a potentially large market that fills a real world need and implement it better than most of the others (all of the others is ideal but most will do for starters), provide superior service (that's actually *very* easy these days), be honest, fair and open about everything and most importantly of all be patient and grow the business, don't try to hit a home run or get a big bank loan to hire more staff or any of that other stuff that is designed to build a weak business designed to sell out of quickly. Ideally grow the business only out of it's own profits, start out in your spare time and go from there. In any major endeavor in life it takes about a decade to get good at it, this rule applies to *everything*. Become a master at online marketing and doing it the right way with proper search engine friendly website and learn the proper use of pay per click advertising like Google Adwords.
-
Shog9 wrote:
Securely manage my investments? Calculate airflow through a building? Allow me to specify business rules and procedures for cost calculations?
Do you really see a profitable demand for spending time in your garage developing any of these? I'm not talking about the web in the early days when little was out there. I'm talking about today. Kittens. That's where the money is! :)
Christopher Duncan Author of The Career Programmer and Unite the Tribes www.PracticalUSA.com
Christopher Duncan wrote:
Do you really see a profitable demand for spending time in your garage developing any of these?
There is demand for all of them. I'm aware of 1-2 person groups working on two of them (and an established company working on the third). Time will tell if they are successful; point is, they're niche markets, too small for Google to be interested, requiring too much specialized knowledge for some kid with a text editor and free time to compete. Seems like a pretty good way to make money in an established marketplace...
-
In essence, this is primarily the issue I'm facing. I've been on my own now for over a year and I can't see myself going back to a 9-5 job, I would if I have to but I'd rather not. I've got the skills and the market is out there, but in addition to the reasons that you mentioned, we have to also look at the sheer size of the web. I discover a new tool/idea/site everyday, something that will help me in some way. Its the same way, how could I promote my discovery (and thus my skills) to others. I'm sure I'm not the only one suffering from this. There is a fourth option I believe. That's by introducing a totally new paradigm, something that beats the system, and then eventually becomes the system, Yahoo with the concept of web portal and then google with the search engine, the web has dozens of such stories.
I have very extensive knowledge of ASP.Net and Telerik's rad controls so I can make ASP.Net sites in my sleep. Not too brag too much but a lot of my customers (employees in the co I work for) are amazed with what I produce for them. However, I have found no way to have a comfortable life without a 9-5 job. Every night when I go to bed, I try to think of ideas of something I could create with my skills but so far I haven't come up with anything...
I didn't get any requirements for the signature
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
Christopher Duncan wrote:
offer everything you're doing for free
A couple of comments to this; - offer something that requires at least a small level of labour, so it's less likely to be offered for free - plan a huge list of features, and keep at them, so you're constantly improving. This way, by the time someone actually thinks to copy you, you'll always be 5 steps ahead and they'll struggle to catch up - charge so little, and offer a better product than free alternatives. The less you charge, people will be less likely to think about saving that money, especially if they're really happy with the features. - be the first, become the standard. It's often a time investment to change from something you're using productively and happily to something new, which may not be as good and requires time to get used to. - try and prevent being copied. Harder done than said I think. Patents are hard to enforce. - team up with people who believe in the project, and act fast as a team. For another project to compete, they would need to be a team too, which requires organisation and social skills - raising the bar to entry a bit more. *EDIT: BTW I should have noted that these are from my collection of *untested* theories :doh: :)
"For fifty bucks I'd put my face in their soup and blow." - George Costanza
CP article: SmartPager - a Flickr-style pager control with go-to-page popup layer.
modified on Thursday, March 12, 2009 3:28 AM
-
Chris Maunder wrote:
Same way they always did.
I don't think it's the same world it used to be, so I'm not sure this holds true. The ease with which someone of few skills can copy and paste their way to a web site that does the same thing that you just launched is unprecedented, as is the number of people who do it. And the web is far different today than it was in 1996, when it was just gaining notice. CodeProject is a case in point. You were an early adopter back in the days when CodeGuru was about the only other serious player in town, and the entire planet hadn't yet jumped onto the web. You have a dominant position today through years of growth, but also significantly boosted by the fact that you were in the game early. Had you started CP today, with a mature and flooded market, do you truly believe that you would have achieved the same level of success?
Christopher Duncan Author of The Career Programmer and Unite the Tribes www.PracticalUSA.com
Stackoverflow was late to the game but has rocketed to the top in a very short amount of time. Their initial release ran on a single hosted box which included both the website and the database (gasp I know!).
Todd Smith
-
Stackoverflow was late to the game but has rocketed to the top in a very short amount of time. Their initial release ran on a single hosted box which included both the website and the database (gasp I know!).
Todd Smith
Yeah, but they had name recognition, right (FogBugz)? So essentially they were in the game early, and probably primed their database with stuff from their database. :)
- S 50 cups of coffee and you know it's on! A post a day, keeps the white coats away!
-
Same way they always did. 1. Build a great product that fills a need. (or just 'a product that fills a need). 2. Market it effectively 3. Make it easy to buy Yes, you're competing with the 13 yr olds. But you're touching hundreds of millions of people in a cost effective manner that you would have had no chance in touching before.
cheers, Chris Maunder CodeProject.com : C++ MVP
Take a free product that looks like it works well but sucks when you get deeper in to it, then write something that does that part of it really well and sell your thing to the public. When your thing is really well accepted, sell it to the people who wrote the free stuff, or if they have gone out of business, re-write the free stuff and start selling that too. For example: write joomla and dont net nuke components. Get them addicted and then dependant.
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
Gaming - as in poker, blackjack, roulette, keno, poker (fruit) machines etc - money for old rope. And the punters will probably lose less than they've been doing on the equities and commodity markets of late - unless they've been short selling course.
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
And better tools for use in the visual arts creativity business, games developers, film studios etc spend a fortune on that stuff. Information subscription services - deliver the information sooner, exclusive access to high quality sources, superior communications skills - pitched at a level appropriate to the audience, so timeliness, accuracy and legibility are more important than delivery technology - email or sms messages can be good enough.
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
I think mobile development is where it's at at the moment. With the AppStore and news stores for other device types we are back to the days where one person can write software and have it mass distributed. With a lot of programs costing less than $2 many people barely think twice before buying one - at less than the price of your morning cup of coffee why not? Store takes 30%, say 10,000 people buy your app (a number of programs on the AppStore have sold hundreds of thousands, but let's start low), that's $13,000. If you're lucky 100,000 people will buy it. That's $130,000. Not bad if you ask me if it only takes you a month or two to write part time. Chris Anderson
-
Chris Maunder wrote:
Same way they always did.
I don't think it's the same world it used to be, so I'm not sure this holds true. The ease with which someone of few skills can copy and paste their way to a web site that does the same thing that you just launched is unprecedented, as is the number of people who do it. And the web is far different today than it was in 1996, when it was just gaining notice. CodeProject is a case in point. You were an early adopter back in the days when CodeGuru was about the only other serious player in town, and the entire planet hadn't yet jumped onto the web. You have a dominant position today through years of growth, but also significantly boosted by the fact that you were in the game early. Had you started CP today, with a mature and flooded market, do you truly believe that you would have achieved the same level of success?
Christopher Duncan Author of The Career Programmer and Unite the Tribes www.PracticalUSA.com
While I can't speak from the experience of yet doing it, my take on things would be that these days you have a much larger potential pool of custom, but you must work harder to build relationships with those potential customers. If you're creating something now that can be thrown together in minutes using openly available scripts - something that you (the creator) would consider trivial - then it's unlikely to set the world alight unless it's a true game-changer. In this instance, I think the bar has been raised for execution and quality. The one thing that is very difficult to do now is to simply create something (relatively simple) and then just release it into the world, followed by ... watching money roll in. Salesforce.com is an excellent example of something that is duplicable on the software side, but the part that a free option can't compete with is the fact that they employ account managers for each group of companies - although this means that they are a low margin business compared to first-mover web application sites like Basecamp. So something that matters more than ever now is reputation and support. Particularly if you're selling a service (and thinking "woo, I'll just reap the advertising whirlwind" if you're planning to do anything non-trivial these days is not even being vaguely realistic). If you want to make a retail comparison - the boom times often lead to a lot of stores simply filling the shelves and watching the products sell, when the lean times, the stores that survive (unless you were a huge Walmart/Asda low-price monolith) were those that had some form of relationship with their customers; who make an effort to actually sell and support products. Still, this is just my opinion based on observation - considering start-up businesses always have a very low survival rate, the worst thing you can do is not try to make something work because someone else doesn't believe it will work (particularly if there's no prior evidence of it failing ;).
-
Chris Maunder wrote:
Same way they always did.
I don't think it's the same world it used to be, so I'm not sure this holds true. The ease with which someone of few skills can copy and paste their way to a web site that does the same thing that you just launched is unprecedented, as is the number of people who do it. And the web is far different today than it was in 1996, when it was just gaining notice. CodeProject is a case in point. You were an early adopter back in the days when CodeGuru was about the only other serious player in town, and the entire planet hadn't yet jumped onto the web. You have a dominant position today through years of growth, but also significantly boosted by the fact that you were in the game early. Had you started CP today, with a mature and flooded market, do you truly believe that you would have achieved the same level of success?
Christopher Duncan Author of The Career Programmer and Unite the Tribes www.PracticalUSA.com
Certainly, the ground rules are different now. In the old days, product development cost money, and sales, marketing & distribution cost lots of money. You needed a seriously marked-up product to cover all these costs, and needed to sell thousands of them to make a profit. Nowadays, your product does not need a box, printed manual, shipping, retailers, etc. The means of distribution for software products is, essentially, free. Once you have a web site, the difference in cost between folks downloading 10 copies and 10,000 copies is... nothing much. So the New Rules say: (1) give away a free app, or on-line experience, to attract the maximum number of people possible, with as few barriers to them using your stuff as possible (no sign-in, no account etc). The aim is purely to get people "in the door", who have some interest in your domain. (2) make money from the 1% of those folk (your market) who want extra knobs on. For example, with an account, you can sign in, and see the stuff you left there last time, settings, preferences, favourites, persistent state of some sort, or extra features and facilities. So, instead of selling thousands, you give away millions - and 1% of them is still tens of thousands of folk. They might pay a small amount, or buy somthing, but even at $1 it's still $n0,000 of revenue. And you can still advertise (tastefully!) on top of that, at least to your non-paying customers. The non-paying customers can also inform you of their needs: "Why doen't it do XYZ??", and help you to build the extra features which you know will sell. Well, that's my plan, at least! Cheers, Mike
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
The future holds little hope for writing killer apps(web or not) that won't be duplicated almost instantly. When it take less and less skill and training to create an application there are not going to be a lot of rich programmers. In the late 1920's it was predicted that at the rate the phone system was growing, over 60% of the entire population would have to be employed as a switchboard operator. Then came the auto switch. In the 1980's it the same thing was said about programmers...... Technology is changing faster and faster, to expect to be employed doing one thing for long periods of time is not realistic. The money makers will continue to be the few who are in the right place at the right time with the right stuff. The key to making a steady non extravagant living is flexibility, and adaptability.
When prediction serves as polemic, it nearly always fails. Our prefrontal lobes can probe the future only when they aren’t leashed by dogma. The worst enemy of agile anticipation is our human propensity for comfy self-delusion. David Brin Buddha Dave
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
The issue with making money on the web is the same issue with making money anywhere else. You have to have a product or service that someone else wants to pay you for. The media was one of the first enterprises to sell advertising as well as a product and there were 13 year old kids printing them in a backroom somewhere, trying to make a buck. There were merchantiles and general goods stores that sold physical goods, which were replaced by supermarkets and department stores; however Sam Walton wanted to sell physical goods, so he setup his own store. The question is not "How do I make money on the web?" The question is... "How do I get people to depart from their hard earned money?" Just my 2 cents...
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
I had my own profitable web-based business for two years before I accepted the opportunity to help build a new software company. I was in the health and wellness vertical, which is extremely saturated. In my opinion, the issue is not with making money with web sites. The issue isn't even that so many people are TRYING to make money on the web. The true issue is that people feel like the web somehow negates the need to have a valid business model and actually plug into the processes that make a business successful. Everyone wants to write code, slap it on a page, and then become successful. We're inundated with ads and promises that you can "get rich quick" on the web. The truth is that while the model is different than traditional, conventional business, you still don't get to skip steps. It's a disaster to just throw something together you're passionate about without knowing the market; savvy professionals will find what the market needs and then produce a product to fill the gap. You don't have to enter a completely empty niche, lots of existing products fill a gap but do they do it as well as you can? I found that while there were tons of weight loss sites, the majority were selling quick fixes, pills, and systems, when a decade of personal training taught me people don't fail because of the diet or exercise, they fail from compliance: it's not about what they are doing, but how to motivate them to keep doing it. So I focused on addressing that aspect and improved on the model by addressing not what people thought they needed (the pill or diet) but by educating them to understand what they truly were looking for and then filling that gap. While there are millions of sites about Search Engine Optimization, that in and of itself is an art form you must learn to master to gain hits. The strategy for organic search is completely different than paid advertising and unfortunately the model changes quickly. Having a fancy website doesn't mean you toss customer service out the window ... calling customers and creating a "human touch" interaction can go a long ways. You can consider strategies like affiliate marketing ... again, people say if you have a lucrative deal it will sell itself but the reality is that I spent hours every day researching web sites and contacting website owners to negotiate deals and help raise awareness about my site. While the "dream job" would be me sitting on the hammock playing video games sipping margaritas while my inbox quickly fills with sales receipts, the reality was that I
-
I had my own profitable web-based business for two years before I accepted the opportunity to help build a new software company. I was in the health and wellness vertical, which is extremely saturated. In my opinion, the issue is not with making money with web sites. The issue isn't even that so many people are TRYING to make money on the web. The true issue is that people feel like the web somehow negates the need to have a valid business model and actually plug into the processes that make a business successful. Everyone wants to write code, slap it on a page, and then become successful. We're inundated with ads and promises that you can "get rich quick" on the web. The truth is that while the model is different than traditional, conventional business, you still don't get to skip steps. It's a disaster to just throw something together you're passionate about without knowing the market; savvy professionals will find what the market needs and then produce a product to fill the gap. You don't have to enter a completely empty niche, lots of existing products fill a gap but do they do it as well as you can? I found that while there were tons of weight loss sites, the majority were selling quick fixes, pills, and systems, when a decade of personal training taught me people don't fail because of the diet or exercise, they fail from compliance: it's not about what they are doing, but how to motivate them to keep doing it. So I focused on addressing that aspect and improved on the model by addressing not what people thought they needed (the pill or diet) but by educating them to understand what they truly were looking for and then filling that gap. While there are millions of sites about Search Engine Optimization, that in and of itself is an art form you must learn to master to gain hits. The strategy for organic search is completely different than paid advertising and unfortunately the model changes quickly. Having a fancy website doesn't mean you toss customer service out the window ... calling customers and creating a "human touch" interaction can go a long ways. You can consider strategies like affiliate marketing ... again, people say if you have a lucrative deal it will sell itself but the reality is that I spent hours every day researching web sites and contacting website owners to negotiate deals and help raise awareness about my site. While the "dream job" would be me sitting on the hammock playing video games sipping margaritas while my inbox quickly fills with sales receipts, the reality was that I
Jeremy, I think that's the most productive comment thus far. You don't make money asking everyone to look at your hammer. You make money by first getting detailed blueprints from a consumer or business and then using the hammer to implement the blueprint. Your example of health & wellness is a good one. The job is to learn the health and wellness business well enough to find a niche. The web (hammer) part is peripheral - not the focus.
Gary Randolph
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
It's funny this came up... Just yesterday I read this article about a guy that creates content sites based on adwords that are expensive per click and claims to have made 15k last nov through adsense. I'm not planning on trying it, but it was an interesting read. http://www.blackhatworld.com/blackhat-seo/adsense/42980-how-i-make-15k-month-adsense.html#[^]
-
Christopher Duncan wrote:
So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
I think you missed a fourth possibility : come up with something that enters category 3 and sell it quickly to a blockbuster like Google, MS, ... before it gets free clones. You then sell concepts, and not the product of the concept.
What is happening here is darwinian... I think you are stuck in the same mode of thought that is plaguing the music and movie industry... How to make money the same old way in a rapidly changing market... The answer is, you dont. The way for the small guy to get big is to either get seed money to fund a focused full time effort, or grow slowly while you work elsewhere and figure out how to become the most popular app in your market. With large numbers of eyeballs comes the opportunity for revenue - whether through banner ads or the craigslist targeted pay service model. Sure the 13 year old kid can make a service site... But is he mature enough to read his user base and know how to grow the business? Not without help. The hope of a buyout is a pipe dream and should not be the goal of a business. That is a bit like buying a million dollar home on a $50k/yr salary because you plan to win the lottery in the next year.
-
The question below about Craigslist got me thinking about the problem of making money with service oriented web sites in general, and wondering if others see a solution that escapes me. There seems to be only a few successful models for making money on the web. One is to sell a physical product, ala Amazon. A benefit to this model is that it raises the bar to entry so that only those who can financially and physically manage such an endeavor are able to compete with you, effectively ruling out the 13 year old kid in the back bedroom. Most non product oriented endeavors end up relying in one way or another on advertising for revenue, with a model of building the numbers to the point where ad revenue is meaningful. This is no small feat on either side of the equation in and of itself, and it's not helped by the fact that you're now competing with the entire planet, including the kid in the back bedroom. The market gets flooded, thus making it hard to generate revenue. The third approach is to find some service oriented model (i.e. something that doesn't require the capital of a physical product model) that you can monetize without depending on advertising. That would seem like a viable concept, but once again the barrier to entry is non existent. No matter what you develop for a fee, some Penguin who believes that people shouldn't have to pay for anything will come right up beside you and offer everything you're doing for free. To me, this appears to kill the web for any serious business venture if you're not an Amazon type operation. And in fact, part of the Great Dot Com Crash was that everyone was focusing on getting venture capital but no one had a viable, profitible business model. Deride Microsoft and Windows based client apps all you like, but before the web it was possible to write an app in your spare time, sell it and build a business. Shareware / freeware did exist, but not in the overwhelming numbers now represented by free apps on the web. So, to elaborate on the Craigslist question below, how does an honest, hard working software developer strike out on his own and launch an application he can live on when he's competing on a web flooded with sites who give away everything for free?
Christopher Duncan Author of The Career Programmer and Unite the Tribes
Making money working from home seems to be the theme. There's lots of web development in companies who are not only trying to get useful home websites with information, but are also creating web apps for their customers (software companies) because people want to access their work apps from anywhere. It lends itself to team programming but that's where a lot of web app development is being done.
