Saturday, April 11, 2009

What is the Lemonade Stand of the Internet?

Everyone has done a lemonade stand or gotten a drink from one. It is the definative small business example and it is a cultural icon for the entrepreneur. So much so, that it is used in schools to teach business issues. But thinking in terms of current business reality, it makes me wonder:

What is the online equivilent for the lemonade stand?

If I look thru my list of Online Revenue Models I see that some are easier to implement. Some things which can generate revenue quickly as a small one person shop. These are different from those things that take some other large component to make it work quickly:

Short term opportunity or easier to do:

As opposed to Longer term harder to do things:


The great things about the lemondade stand is that the goals are clear, the process is clear and it ends up being all about execution.

Looking even closer at the list, it seems that ads and donations are the quickets and easiest.

Easiest:
  • 4. Ads -> Set up a Blog and turn on ads
  • 15. Donations - Ala NPR / Public Radio -> Put up a donate button

A little more work:
  • 5. Sell a product directly -> Requires fullfillment
  • 6. Sell a product Indirectly -> Sign up with Vendor to resell product
  • 7. Subscription -> set up a subscription, membership


While both Ads and Donations require you to create content that is valuable to the reader and then to attract an audience, it seems that ads generate more revenue for the level of work.

This Suggests that suggests that the Lemonade stand of the Internet is to create a Blog and put up ads on it.

The steps to this would be:
  1. Set up a bank account to keep all the revenue in, keeping money separate from the personal money.
  2. Sign up for Blog software - Let's use Google Blogspot - http://www.blogspot.com
  3. Sign up with Ad provider - this is a part of blogspot by clicking on monitize. Ads will be inserted into the blog.
  4. Write content that is valuable to an audience.
  5. Spread the word that you are writing and build an audience.

Does this seem like the simplest revenue and business model on the internet? Would this be the canidate for the "Online Lemonade Stand"?

What would your choice be?


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How to make money on the Internet or What is you Revenue Model or Monetizing your web app business models.


What are the different meta models for generating revenue from a web page or an online business? I have been collecting a list. I have been planning to write about it in detail, but I just saw a post that makes it clear that I should just get the list out and then work on the additions later.

I was sent a link for this article:

http://www.boxuk.com/blog/monetizing-your-web-app-business-models


Which is interesting, but more complex than I was working on. In double checking the list and comparing it to the list I was working on, I did not find any new models. They seperate out on other axises , and go into more details. For example, I consider "Licensing Content" to be "Selling Something directly". However, I am still looking for more large scale models to add to the list.

Here is the list of all the meta catagories that I have been able to identify:

When looking at various sites that are generating revenue, I think that each has a specific primary model for revenue, and several have secondary models. Some event get to three different pathways that generate revenue:

Company examples to understand the business model:

What websites do you go to and how are they generating revenue? What makes them sustainable in the long run?
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Monday, March 2, 2009

[SeattleTech] Heading to Portland

Today, I saw a note on the Seattle Tech Startups email list about someone heading down to Portland, looking to make contacts. Here is what I sent him, it is an initial set of ideas off the top of my head, but Buzz suggested that I get it posted on a website. I am sure there are many more things worth putting on this list. Perhaps you have a suggestion?

I sent :
(remember this is from a Seattle to Portland point of view)

There are a lot of interesting things happening in Portland.

One of the things that Portland has which Seattle does not seem to have is funded incubators. I suggest that you take a moment to talk to Steve Morris at the Oregon Technology Business Center http://www.otbc.org
And to talk to Carol Mason at the PSU accelerator http://www.psba.pdx.edu/

The Equivilent of the NWEN is the OEN. Linda Weston at http://www.oen.org is a good person to touch base with.

One of the projects that I find very interesting is the Calagator project. It is an open source effort to build an calendar agregator http://www.calagator.org

the Calagator folks can help you find many of the technical Gathering places. Things like the Perl Users group, or the MYSQL users group or the Android programer gathering or .... The list is huge.

In addition, something that I see in Portland that I don't see in Seattle is the Legion of Tech folks http://www.legionoftech.org
They run the Portland BarCamp and the Portland Ignite.
Getting time to visit with Todd Kenefsky or with Dawn Foster would be useful.

Todd ran a Startupalooza last year http://www.startupalooza.org
It was very good. I hope they do it again this year. The website has not been updated for this year.

You might want to track down some of the folks who are part of Starve Ups - http://www.starveups.org

They are a collection of folks who are working to help entrepreneurs, in a more focused way.

In addtion the folks at the POSSE - http://www.possepdx.org/
They are a bunch of Open Source Entrepreneurs.

Brian Jameson at Open Sourcery might be an interesting person to visit with.
http://www.opensourcery.com

The local Software Association of Oregon is a good gathering place for people doing different kinds of businesses. You might talk to Harvey Matthews or Bryce Yonkers at http://www.sao.org

I hope this gives you a starting place for what you are looking for.
If you follow Dawn Foster on http://www.shizzow.com , You will find that Beer and Blog - http://www.beerandblog.org  tends to happen at the Green Dragon  and you will see that the Linux Users Group tends to meet at the Lucky Lab

If there is any specific introduction that I can help with, please drop me a note.





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Thursday, February 5, 2009

IPFUT - What it takes for an entrepreneur


A brand spanking new entrepeneur comes to the Business Facilitation meeting, looking for feedback and for investment from the potential investors in the room. As the investors look on the process, what things are they looking for? Certainly they are looking for information about the business and the potential plan. They are also looking for ways to evaluate the presenter. In early angel investing, the investment is as much (or more) in the founders as it is in the idea.

What traits of the founders are the investors looking for evidence of? As I have thought about this, I have come up with the following , in order. If these are not evident, the chances of angel investors engaging are greatly reduced:

I - Integrity
P - Passion
F - Focus
U - Urgency
T - Team

Without each of these, getting to the next part of the conversation will be hard. When presentations do not clearly represent a crisp picture of the business and a crips picture of the entrepreneur, it makes the next step difficult.


I have found that my mentoring conversations with entrepreneurs end up devolving into some kind of conversation about one of these topics.

These are the things that are important before the idea is going to get moving.

Are there other things that are common places that need attention for entrepreneurs?


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Sunday, December 14, 2008

Business Stage: KittyHawke

After the Popcorn Business Stage, startups start to get a bit of wind under their wings. They are still not focused, taking whatever opportunities for revenue that they can find. But they are starting to get clusters of customers. Enough customers to have a notion of revenue flow. This is one of the most exciting times in a very early startup. You have a group starting to pay attention to you.

It is also a very dangerous time for a startup. It is easy to be pulled one way or another into projects that generate revenue, but which do not have a long term market for the company. This is the point for clarity. Who exactly are the people who are the best market for your company? Often the early adopters who help you get you to the KittyHawke stage of a little flow are not the ones who will ultimately support the company.

Clarity about the company's market and the direction are often very hard to get at this point in the business. So this is a time of experimentation to try to find pathways to the next flight. If you are successful, you will end up taking several short flights that lead you into the next Business stage.

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The Theory of OOMAAT - One Order of Magnitude at a time


        Every day, entrepreneurs dream that they can create the next
        big company. They have a dream of putting the right project
        together which will grow to be the next Google, Facebook or
        Myspace.  And every day, many potential entrepreneurs work
        hard on their project, but make less progress than they need
        to succeed.

        Let's go run a marathon tomorrow! For most of us, running a
        marathon would take preparation and planning. Not doing
        that preparation only leads to pain and trouble. Potentially
        serious trouble.

        In the same way, starting a new company can be like running a
        marathon. A successful company is a complicated coordination
        of many different components. The creation of a winning team
        is something that takes some skill and experience. Most
        investors want to fund teams with a full compliment of
        experience. Most business don't get big without external
        funding. So for you to engage external funding, you need to
        have experience. How do you get experience getting funded, if
        you have not been funded before?


        As many technologists, marketing and finance people are being
        given an opportunity to leave big companies and find something
        else to do, some are thinking that they will do a startup.
        Because they come from a big company context, they jump right
        back into that context not realizing that at a small company,
        you don't have teams of other people to rely on. You get to do
        everything.

        Rather than jumping into the next $1B opportunity of our
        dreams with one big bite, let's explore the question of how we
        can take small pieces of the process and build the skills
        incrementally.

        I am calling this idea OOMAAT: One Order of
        Magnitude At A Time.  Instead of trying to create a huge
        company when you have $100 in your pocket, look at an effort
        that will allow you to grow that $100 to $1000 in, say, 30
        days. What would you need to do in order to accomplish this?

        By thinking out how to start smaller companies that are
        bite-sized efforts, you gain several advantages. First, you
        reduce the risk of failure. By starting many small companies
        with smaller amounts of effort, you waste less time and
        resources on your failed companies and the experience you gain
        will be very helpful to you on the next business. If you
        structure your efforts in the same area, the clients that you
        gather for one business will be interested in the next
        business. Thirdly, the efforts to start the smaller businesses
        will give you more ability to connect with others who are
        starting businesses and help you see the potential partners
        you will need for your next business.

        So... How much money can you put on the table today that you
        can afford to loose in order to start a business? Cut it in a
        third as a way to keep your powder dry. Now, Given that amount of
        money, what could you do in a fixed amount of time to increase
        it:

                   Amount                 Time             Target
              $100                      1 month                 $1K
              $1K                       3 months               $10K
              $10K                      6 months              $100K
              $50K                      1 year                  $500K
              $100K                     1.5 years               $1M
              $500K                     3 years                 $5M
              $1M                        2 years                 $10M
              $5M                        5 years                 $50M

        In this Blog, I will explore a collection of ideas
        to create OOMAAT-style startups. We will look at:
   characteristics of investors,
   skills that make a difference to the success of entrepreneurs, and
   experiments in trying to build businesses in the OOMAAT Model.

        Come join the experiments and let me know how things fare for you.

   

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Sunday, December 7, 2008

Business Stage: Popcorn


In the business life cycle, there is a beginning stage of the company, where there is no flow. There is revenue.... From time to time. but there is no flow. I want to call this stage of the company the "Popcorn" stage. It is like you are waiting for popcorn to pop. You are not sure how hot the fire is. But you have seen one kernel pop. But here you are waiting for the next one to pop.

This is a stage of searching, trying to find a way to catch some momentum. Often this is the stage where people will try anything that produces revenue. And that can be a way to kill a company. On one hand, you want to search around to find things that people are willing to pay for. On the other hand, you want to have a business focus that does not get distracted by contracts and projects which pull away from the core of the business. Some where between those two is the answer.



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