How to really make money online...

I pulled this from the other thread because I thought it warranted it's own thread.

Awesome video on how to really make money online. He does an excellent job of getting down to the nuts of bolts, misconceptions, and that you don't need to be the next Facebook to make millions.

David Heinemeier Hansson at Startup School 08 | Omnisio

1. Create a great application
2. Ask people for money
3. Make profit

He hits on some great points! The video almost felt like it was made for me!

Some important points:

Work fewer hours per day, but very efficient hours
Niche service business
After launch, it's never going to be less work
At the high end you need to be there when your customer calls 24/7, at the lower end it's not "as" important.
Mom & Pop store isn't bad
Target businesses not consumer
Target the Fortune 5,000,000
No need to dominate market
No VC needed, run at your own pace

You make better notes than I do.

I felt the same way too. I am on the right track.

One other notes. Many companies start seeing the result after one year or even longer. So don't give up too early.

That's kinda how I felt; the other video (By Graham) was more respective to hitting the home run on a massive scale while this guy, was about hitting a home run in your own way and in a niche.

very good post!

what's the rationale for targeting businesses not consumers?

Thanks MJ! His advice was very helpful to clarify my thinking and better narrow down the business model for the website business I'm developing.

I have been wrestling with the amount of free content vs. subscription content. I want to strike the right balance. At the moment I think it makes sense to build the business so that the bulk of the income is subscriptions and the advertising revenue is just gravy. Like he said, it doesn't take a lot of customers, as a percentage of the target market, to make a substantial income.

A friend of mine believes that the subscription business model is dead since so much content is available for free now. I tend to disagree. If you are offering something of value, people will pay for it.

Yikes, I'll be sure to tell my friend with the $1.5 Million Veyron next time I see him that his revenue model is F*CKED.

Because they take emotion out of the equation. For the most part, they do not care what you are charging them or what you are making...as long as they are making a nice return on their time and/or money. Many less headaches too, businesses go off numbers, not emotions.
On the other hand, many businesses would probably have no problem moving to your competitor if they can get the same product or service at a better price. Many "consumers" may decide to stay with you because they feel comfortable dealing you or just plain like you and your company. Emotion>logic

I agree with you and MJ.
What if the info was organized and all in 1 place. Meaning you spend much less time searching for that info. Doesn't that time savings have a value to you? I'm sure it would.

I guess another reason why B2B is often times the way to go. Logic>emotion

I guess that's why my friend is working in the slowlane.

I had (50% of) a subscription-based business 10 years ago. It was a great business. We were successful, but never took it to the level it might have been. I couldn't imagine why that concept wouldn't still work, but that was his position.

Depending on the way you look at it, or really who you are will determine whether you deem his content "premium" or not haha.

Great video! Thanks!

Curious as to what kind of conference/convention this is with the 'F' bombs he is dropping. Also, 500 customers x $40/mth is $20,000/mth.....where did $125K come from???

Startup School is put on for free by Y Combinator, Paul Graham's seed-stage fund.

The rest of the talks are here: Startup School 08 | Omnisio

And for those interested in angel investing, they held Angelconf. Videos are here: http://www.justin.tv/angelconf

His slide was 400 X $40/mo = $200,000 yr

He had a slide where he was talking about server costs, towards the end after talking about Zappos and scaling problems. He said if you have 500 customers on one server paying $40/mth you're making $125K/mth.

"Do you care what that server cost? You can have the most expensive server in the world and it wouldn't matter."

I'm just pointing it out, no big deal, not trying to argue anything. I just find it interesting whoever put the slides together didn't catch that.

I guess someone took that 75K for commission.

I am interested in knowing what exactly the profit is after all the expenses. I would imagine a huge cost on the marketing, customer services, new development and human resources etc.

LOL, you're right. If you watch it with comments turned on you'll see a bunch pop up on that slide.

I was wondering what that tag was all about saying "put comments here". It's pretty hilarious to watch with the anonymous comments on actually and read them, there are some pretty random ones LOL.

Love it. I think he has a great point that your new business does not have to be revolutionary. It does not have to be scalable to make a bn $ from the very beginning. Focus on providing value and solutions instead.

It was pretty interesting to see that a product may work with businesses but not with consumers. I guess you have to simply test some things and see what sticks.