Entries Tagged 'Entreprenuership' ↓

If you’ve decided to try your hand at making money online you’ll soon find that one option you have is to purchase an existing website. Between auction sites, webmaster sites and marketplaces dedicated to sites for sale you’ll see that there are a lot of websites available for purchase. At times purchasing a site can give you a great head start to making money online but there are a number of things you need to consider before you buy an existing site.

Know the Niche Trends

photo credit: jvreeIf you see a site that looks interesting you’ll want to be sure you understand the current trends in that site’s niche. If you don’t already know the niche well be sure to do some research first. You want to particularly look for a niche where market forces have recently changed. One recent example is web directories. These lists of sites are very popular locations where webmasters can add their site - sometimes for free and sometimes for a fee. Aside from the very large and well know directories however, the primary advantage of being listed in a directory was for backlinks in the search engine. You’ll notice that I said was. The search engines - and Google in particular - recently made some changes that diminishes the value of links from a directory. While this may not have affected traffic and listings in directories yet it is likely that these types of sites will continue to diminish in value over time. When you’re buying a site - or building one - in a niche that’s new to you, you’ll want to be sure that the niche is growing or stable and not contracting.

Look for a Site with a Unique Advantage

If you’re going to buy a site instead of building it yourself you’ll want to be sure that the site you’re buying has some sort of unique advantage. That advantage can take many forms - perhaps you’re not a great designer and the site you’re considering has a fantastic design. Maybe the site has some well established traffic - this is vital for community sites where building initial traffic is the most difficult. Sometimes the site has a great domain name or ranks well in the search engines. Ideally you’ll want to buy a site with a well established market position. As an individual, it’s unlikely that you can buy a site like Facebook that has a huge established position but a site that’s considered one of the best its own small niche will still have an advantage over a newcomer.

Be Sure You Can Grow the Site

If you follow some of the “purchase a site” discussion on a webmaster’s forum you’ll see lots of questions like “how much time does it take to run the site”. Those people are setting themselves up for failure because they’re only concerned with “can I maintain the site”. If you’re buying a site you need to ask yourself “can I grow the site”. If you can’t add content, improve the design, fix the SEO, drive traffic or improve the monetization of a site then it’s not for you. It’s tempting to buy a site for 5x its monthly income and expect you’ll be profitable in month 6 and in some cases that does work but the truth is that most sites that aren’t growing are declining. Even if the current owner claims they spend only a few hours a week on the site. This doesn’t mean that you need to be an expert in the content, SEO, design and monetization - it may just be enough that you’re willing to learn these things or hire outside help. More important however is that you have at least some initial ideas on things that you can do to improve the site.

Beware Buying the Wrong Part of a Site

photo credit: wheneverWhenever you buy a site, regardless of what you might think, you’re only getting part of it. That’s because part of the assets of a site is the site creator. For some sites the creator is inconsequential - no one really cares who’s behind a site like Flickr. But for other sites the creator is practically the only asset of the site. This is the case if the primary draw to the site is the identity of the creator or if the creator is an important part of a community site. If the creator of a site is famous (even if just within the niche) or a good portion of the site’s traffic is made up of friends and family of the creator it’s safe to assume that much of the site’s traffic will be lost when the creator leaves. A blog with a single author is very difficult to take over as is a forum where most of the questions are directed to or answered by the site’s creator. While the site may otherwise look good chances are the you won’t be able to recover from the loss of the key asset.

Is Buying Right?

While there are a number of pitfalls to avoid, buying a site can be a great way to start making money online or grow your money earning assets. With a bit of research, an honest assessment of your own abilities and a willingness to work after the purchase, buying may let you own something you could never build on your own or merely give you a months or years headstart toward building your own market leading property.

I titled this blog Solo Programmer because for the last several years I’ve been on my own. My big successful site was something where I wrote 98% of the code and did 90% of the admin work (I did eventually hire some part time admin assistance). So what’s it like being on your own? There are a few advantages.

photo credit: *L*u*z*a*You decide the agenda. I’d keep a running list of projects that I wanted to get done, bugs that required fixes and user suggestions but when it came time to decide what to do next (then and now) it’s all up to me. That means if I didn’t feel like working on a feature at the moment I didn’t have to and if a great new idea springs to mind I can crank it out right away. One interesting tactic (that I’d like to replicate) that I employed was dividing up my work week into different types of work. Mondays I’d focus on SEO, monetization, building partnerships, Tuesday through Thursday I’d work on big features that would often take from several days to several weeks to get done and Fridays I’d crank out a couple minor updates or bug fixes. This allowed me to always have that sense of immediate accomplishment that generating a new feature brings while making sure the long term website and business development wasn’t ignored.

You decide the technology. Programmers are pretty much all geeks by nature who enjoy new technology. When you’re working on a large existing project or even working with a smaller team you’re often limited in introducing new technology either for reasons of backward compatibility or because it’s hard to do a new project in Java when the rest of the team only knows C++. When you’re solo you can pick a new technology because it’s cool and apply it to the next project. There may be costs in longer development time as you pick up new techniques or a new programming language but that stuff keeps it fun and interesting and helps to keep the true geek motivated.

photo credit: Mr.Thomas

Increased efficiency due to lack of communication overhead.One of the great classic books on computer project planning is the Mythical Man Month. The book explains how two programmers can’t necessarily do twice as much work as one and as teams get larger you get increasingly little more productivity out of additional members of the team. This is largely due to the fact that each member of the team needs to spend a certain amount of time communicating with other team members. This overhead typically grows linearly with the size of the team. When you’re solo you don’t have to communicate with other developers and so your programming time can be dedicated entirely to programming. Without the big business overhead of meetings and filling out various forms and reports and communications overhead I’d guess that a solo programmer can generate at least twice the amount of code as a programmer in a typical big office that’s part of a 7 or 8 person team.

You don’t have to take outside funding. There are so many advantages to not having to take outside funding that I can’t even begin to cover them here but that’s not really an option that a most startups have. When you’re solo however it’s much easier to boot strap a company by initially working on it part-time and it becomes much more viable to dedicate yourself to a project much sooner when you don’t have the big overhead that comes with maintaining a staff and offices. One thing we learned in the dot com bubble (the first on in the 90s) is that it’s not really a good thing for a company to go public or take too much funding at an early stage. Besides that fact that so many of the bubble companies spent at a ridiculous rate outside funding for a company that comes too early can put pressure on a company to preform immediately when it would be better for the company to take a long term approach. And the ultimate benefit of bootstrapping a company without outside funding is that when the exit comes all of the proceeds are your.

So there are a few of the benefits of being solo but don’t go thinking that it’s all good. There are a lot of disadvantages to being solo which I will address in a later post.

It seems like a lot of the make money online type blogs have been talking about motivations lately. I’m not sure if it’s coincidence or just a meme that’s going around. The common idea seems to be “do what you love” and while that’s much better than “do what you think will earn money” it’s not really the greatest reason to start a site. What are some of the common motivations for launching a new internet venture?

Build a site you think will make money. Have you heard about mesothelioma? It’s a nasty type of lung cancer most often related to asbestos exposure. There were tons of class action lawsuits around asbestos and lawyers found that they could make good money from people with the disease and eventually they found Google Adwords. Since it was a lucrative area the advertisers were paying $10, $20 and at some point over $100 per click. So what followed is tons of webmasters creating sites to try to drive traffic to those ads. But of course none of them really knew anything about mesothelioma and the competition in the search engines for the term was out of the world. These webmasters had no real interest in the topic, nothing value to add to the topic and little chance of actually getting any traffic or making any money.

Build a site around a topic you love. This seems to be the most recommended idea being tossed around and it’s certainly better than trying to build a mesothelioma site. There are a few problems still lurking here however. Say you love the TV show Lost. While you could start a website about it there are about a billion others that already exist. Unless you have something unique to bring to the table there’s little chance that your site will succeed. Another problem is if the thing you love is not of interest to very many (or any) people. As much as I love my kids the only people who would want to read about their daily exploits are their grand parents. Now you may find that you really do want to start a site in a crowded field where you have nothing original to add or you may wish to serve the grandparents up some day to day stories but realize that such a site is never going to be a money making venture.

Build a site around an under-served need. Is there something that you really wish existed on the net? A resource for some topic that you know a bunch about but don’t see anyone else addressing? These are where the winning ideas come from. Lets say you want a quick an easy way to tell your friends what you’re up to and find out what they’re up to. You look around and no one is doing it. Voila! Twitter is made. Or maybe you really want a way to communicate with the parents of your kids little league team. If you search for a solution and can’t find one or can’t find one that works the way you like chances are you’ve found and under-served need. It’s something you’re interested in so you won’t give up or get burned out quickly and you have an idea about how the need should be served so you’re adding value to the net.

Now every in reality not everything you come up with is really going to be an under-served need. There may be a solution out there that you’re not aware of. Or the need may be limited to so few people that its really not worth serving. But ask around to a few friends who would be in your target demographic and see if they also experience the need and are unaware of a solution.

Finding and meeting an under-served need is not easy. The obvious ideas all seem to be taken. But if you’re looking for an idea for starting a new website spend some time thinking about what it is you’d like to see that isn’t yet out there. If you can find a need and fill it you’ll have a recipe for a site that can keep you interested for a long time and potentially provide a significant amount of income.