Making money as a web developer (or, how the web killed the software entrepreneur)
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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#[^]
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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.
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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.
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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 whatever path you take, support is the key. Most free stuff you can't count on technical support or change requirement. And if you are developing an application that the user or company might depend on, the differential is the support they will get from a paid product. Bottom line: Customer / Supplier relation is crucial.
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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#[^]
That was a great read, not so much for the business model but for what I learned on the SEO side of the street. Good stuff, man!
Christopher Duncan Author of The Career Programmer and Unite the Tribes www.PracticalUSA.com
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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.
Well said, John. For about four years (1991-1995) after a layoff in '91, I made a go of it on my own writing tightly-focused custom applications for mostly small business. One was a large pharmaceutical company but most were small outfits. I didn't make a lot of money during that time but I sure did learn a lot about how a number of businesses worked and I made some really happy customers. The stuff I wrote for them would not compete against a large software outfit's flagship accounting application for features but to those businesses it completely automated processes they were doing manually IN THEIR OWN WAY. Some of the operations I wrote applications for were still using the software 10 YEARS LATER with no problems. If I could afford to do that again without losing my shirt I'd probably do it. However I think the business model has changed now - it might not be quite as easy to do this today, however if I were to go at it again as a "cottage business" in my retirement years I'd do it in the manner you outline. That's exactly the way I think about it. No, you won't "get rich" doing one-off work like that but, OTOH, you might enjoy making a decent living at it. -CB :)
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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
I know exactly how you feel. Sadly, I have a killer ambition.
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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
Fall back on the tried and true; 1) Sell Porn / Sex 2) Sell Religon to those that feel guilty after 1) 3) Sell patent cures for disease(s) caught from 1) 4) Sell Chocolate for those frustrated by 1) 5) Sell unavailabilium (hydrogen powered cars) for traveling to the post office to retrieve 1) - 4) All of these are perfect for web applications!
Melting Away www.innovative--concepts.com
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I know exactly how you feel. Sadly, I have a killer ambition.
Mustafa Ismail Mustafa wrote:
Sadly, I have a killer ambition.
That is a good thing, not something to be sad about. I'm not ambitious at all. I have too many hobbies. My goal is to work as little as possible so I can do the fun stuff I really enjoy.
I didn't get any requirements for the signature
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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
And I have some interesting ideas but I'm too lazy and have only mediocre skills to implement them.
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Mustafa Ismail Mustafa wrote:
Sadly, I have a killer ambition.
That is a good thing, not something to be sad about. I'm not ambitious at all. I have too many hobbies. My goal is to work as little as possible so I can do the fun stuff I really enjoy.
I didn't get any requirements for the signature
You have no idea. It keeps me up at night.
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Mustafa Ismail Mustafa wrote:
Sadly, I have a killer ambition.
That is a good thing, not something to be sad about. I'm not ambitious at all. I have too many hobbies. My goal is to work as little as possible so I can do the fun stuff I really enjoy.
I didn't get any requirements for the signature
I think you need to find a good idea, something that does not already exist and make it work the best you can. Or find an existing product, web or otherwise and improve the idea and the user experience. I am studying MVC.Net right now and the latest sample application that was published was about NerdDiner (seen yesterday in the CodeProject mailing list). As weird as it may sound, it might work and generate some traffic. No advertising please. There are too much of them and hopefully nobody reads them anymore. For revenue, you could offer a free options with limited functionalities and payed subscriptions for the complete package. I am sure there are ways to do business again. I understand and respect what you said about too many hobbies and work as little as possible. But we will need to log long hours and be always ahead of the competition, even against the free ones in order to keep up doing business. Its a choice. I personally dreams of being my own boss, by I too have too many hobbies. So I do 9 to 5, and enjoy my work and my hobbies.
Pierre Boucher "The greatest tragedy in mankind's entire history may be the hijacking of morality by religion" Arthur C Clarke
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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
You forgot the 4th approach, build a site that draws eyeballs and once you have enough of them, sell it for millions to Microsoft or Google :) Actually, it is all about long term and what are your goals. If you only want to get rich quick, it is time to build the next potty flushing or beer tipping iPhone app and hope you make it dumb enought the populas eat it up. But, if you are serious, there are many avenues you could take. I do not remember where I heard it, but it is something like "If you help someone to increase, you will not lack" (really mucked up translation, but it is the point that matters). If you can find a way that a business can increase their profitability or easy their load, you will do well. But, in today's market, there is still a lot of Gold out there in advertising if you can get the eyeballs.
Rocky <>< Recent Blog Post: Life on Mars! Thinking about Silverlight? www.SilverlightCity.com
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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 you are mixing something: The business a software is for and the business of creating such software. A classical software entrepreneur, who created e.g. a word processor system, didn't do it because he wanted to write a bestseller but because he wanted to sell it to writers. I think, a web developer should do the business of building web applications, not doing the business his applications are for. IMHO software development is a kind of craft. You can start your own craft business or work in a job in this craft. In either way, you have customers, who want to have individual software, that can't be found in the offers of the other side of the business: the software industry. In furniture it is the same: If you just want a cupboard, you buy an industrial made cupboard. If you want an fancy cupboard or one that fits special needs, you go to a carpenter to have him build it for you. There are still many carpenters, despite of the fact that DIY books and websites exist. As in other trades you can start your craft business and if you are good and lucky it will grow until it becomes industrial; Microsoft for example has gone this way. If you have an idea and the time to implement it, do it, and may be you are lucky and you can manage to get it the needed attention to be a financial success. But this is a lottery and no one should rely on this to pay the living. But the bread and butter job of a developer (desktop or web) is either to have customers on his own or in a company he works in, who have special needs and build software for them, or to work in industrial software development and work on standard applications. There are at least just a few software entrepeneurs in past, who got a real success by only one or two products, the majority is working in projects the customer had the idea for.
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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
At one time, just after the Wright Brothers became well known, there were dozens of companies that went into the aircraft business. Hundreds actually. But as the requirements for larger planes and greater reliability grew, the number of companies that produced aircraft shrank. Ryan Aircraft built the Spirit of St. Louis but they are not around any more. The DC-3 was the most successful airliner ever but Douglas is no longer a company on its own. Ford used to build airplanes. North American built the T-6 Texan trainer, the P-51 Mustang fighter, the B-25 Mitchell bomber, the F-86 Sabre jet fighter, and the X-15 rocket plane, as well as Apollo Command and Service Module, the second stage of the Saturn V rocket, the Space Shuttle orbiter and the B-1 Lancer. Now they are part of Boeing. The barrier to entry into the aircraft manufacturing business has gotten higher and higher as the technology advanced, margins deminished and the chance of making a living building airplanes has gone to close to zero for the individual. The same thing happened to automobiles. No more Dussenburges, Stutz, Packards, or Ramblers. Most people have never heard of a Rio. Every field of human endevour goes through the same cycle. Local farmers in my area can no longer sell to the local supermarkets. That is the domain of the big suppliers. Farming isn't new but it there is a trend towards consolidation and thinner margins that are pushing out the individual producer. The same thing is happening in Software. When the PC came out, the environment was simple and the tools were afordable. Now the tools are complex and the user interface requirements and the environment make building applications far more complicated and costly. Security is far more important now than when communication was with an accoustic coupler at 1200 Baud. Thats just life.:rose: It is possible to build a faulty system with perfect parts but it isn't possible to build a perfect system with defective parts.