Bad Internet Businesses

photo credit: sergis blogI’ve been thinking a bit about some of the projects I’ve worked on in the last year or so since the “big successful site” and most have been failures. Certainly some have failed because I didn’t give them what they needed but some are I think inherently bad business models.

Selling Scripts

I own two sites that sell scripts (small programs to install on a website) to webmasters. Both are sites I purchased with the scripts they were selling. One has been moderately successful but I think the niche is dying. With the other I failed to do enough checking and the software is lacking in features vs its competitors and probably not worth updating. Overall however I think this is a bad business model for a few reasons.

1. The buyers tend to be “poor” webmasters who have little desire/ability to spend a lot
2. There’s a relatively small pool of potential buyers
3. There are free or cheaper alternatives available for at least some of the scripts I sell
4. People steal the scripts and the really brazen will resell them

Overall for the cheap prices I’m able to demand I’m not able to provide a lot of customer support even though some of the buyers demand quite a bit of support. I don’t enjoy having unsatisfied customers so I do provide some support but it’s not worth the time and effort spent. The fact that people steal and redistribute the scripts really shouldn’t be too much of a surprise. There are ways to at least deter people from doing so but they’re expensive to implement and make it difficult for the buyer to customize the script so they’re not really for me. Overall I think any business model that relies on selling something that can be copied and distributed for free is going to face the issues of theft.

The Me-Too Site

While I was looking for sites to purchase I noticed that there were a lot of sites making decent money in the “weird auctions” on eBay space. These sites tracked the odd/funny things being sold on eBay. I missed out on a couple auctions for established sites in the space but decided to build my own. I found a site with a good domain name that was abandoned and contacted the owner and was able to purchase it. I then slapped up a Word Press install and began tracking funny auctions. So what’s the problem with this business model? Well nothing really except look again at the first sentence in this paragraph: “there were a lot of sites” in the niche. The site I put together had really nothing new to offer and while it was amusing at first to maintain I quickly lost interest and the updates came infrequently. Oddly enough someone else contacted me to buy the site and I sold it at probably break even though I had made a few dollars along the way. Last thing I know is that the new owner too started strong and lost interest and had placed the site for sale. It’s hard to get passionate about a site that really adds nothing new and stands little chance of catching the leaders in a crowded space.

The Cheap eBook Site

Along the lines of the script site I had a site that sold (or attempted to sell) eBooks about “making money on eBay”. I bought the site thinking it would complement my weird auctions site. It was a cheap turnkey site that had no traffic and sold eBooks that were duplicated a million times around the net. I’m not even sure the creator of the site had permission to resell them. At any rate I did very little promotion and never sold a thing. I attempted to sell the site after I sold the weird auctions site but no one was interested and I let it expire.

The Common Thread

The common thread with these failures is that they’re niches I don’t really care about and sites which add nothing new to the web. That meant that I didn’t work hard at them and they never went anywhere. It’s hard to commit yourself to something that you don’t like doing when you’re not forced to do it by some external power (a boss or other authority figure). Some of these sites would have worked for a different person - someone who had a passion for the niche and was willing to do the work to promote and support them. You’ve heard it before - if you’re working for yourself you have to work at something you love.

I’m sure some of the Internet entrepreneurs out that have other stories of businesses they tried that failed and I’d love to hear them and the lessons learned. Or if you made one of these businesses work let me know how you did it.