Turning projects into revenue generating businesses

Panelists: Tara Hunt (horsepigcow.com), Ted Rheningold (dogster.com), Gabe Rivera (techmeme.com), Shanalyn Victor, Ryan Carson (DropSend).

(These are raw notes, not direct quotes)

Ted Rhenigold: The closest business model to dogster.com is a magazine. Online business models are more like real world business.

1. Advertising and sponsorship: If you have lots of traffic, it works great. If you have a passionate audience, you can make money through advertising. Selling your own advertising inventory is a hard job. “I’m a big fan of sponsorships. Not as concerned with impression, but with long-term presence.” Techmeme has “sponsored blog posts.”

2. Affiliate programs: I can’t find one good example of it working. (Later, the eBay affiliate guy says that eBay pays $100 million a year in affiliate fees, so “someone is making money on affiliates.”)

3. Selling goods: If you sell software, it works good if you have a popular software. Showed example of someone who sells music, ringtones. Other examples (deviantART) sells art from one member to another. PixleGirlShop sales goods.

4. Selling services: Laughing squid web hosting is an example. DropSend is selling service. Tara Hunt sells consulting services on her blog – “Get in Touch.” Ryan sells conferences.

5. Subscriptions, virtual currencies and virtual gifts. deviantART is a subscription service. Hot or Not sells “virtual flowers.” On dogster, you can give away stars and ribons and hearts and post messages.

6, Micro-Sponsors, Donations: ZeFrank’s ducky program. You can buy a ducky. Connects the person who appreciates the content with the content itself. Jonathan Coulton’s “gimme some candy.” This is a way for those who appreciate your service to sponsor it (something better than a donation).

Did you start your online project with an expectation of making money?

Gabe: When I started, there was a range of possibilities. I was comfortable with it. Good resume builder.

Did anyone study business?

None did. But they are now interested.

Carson: You’ve got to figure out how to make money.

How much of information about running a business can you find on the web, or do you need mentors?

Hunt: We seek mentors. Thinking of hiring a CEO.

Gabe: Friends and accountants.

Victor: Have to be willing to invest in marketing.

Rhengold: Good advice from co-founders father: “Unless you are spending 50% of your time selling, you are going to fail.”

Hunt: Every thing we do is selling (like blogging, Flickr posts, etc.)

Gabe: I’m at a phase where selling is not that important.

Victor: Before you’re popular, you’ve got to do things to get your name out there. Have to invest in marketing.

Hunt: I don’t find advertising creates connects. We preach, “Be a part of the community you serve.” That doesn’t come natural to everyone. Find ways to get involved. Not in a “let’s go start selling stuff, but in being peers.” That’s when you’ll be top of mind.

Victor: I did it backwards from that.

Rhengold: How did you determine pricing?

Rhengold: At first, we priced based on what we needed to pay rent.

Carson: We price based on what people will pay.

Rhengold: We were never able to make money on classifieds. If we’d known before, we would have never started it.

What about an exit plan?

Carson: Our business plan: “How much money do we need to quit our day job — that’s a business plan.”

Hunt: It’s cheap to fail, so fail often.

Carson: The beauty of a “life-style” business is you can do it for ever. There’s a big tax advantage to selling your company, so you should build a company to sell. But we don’t wish to do that for a long time.

Hunt: I want to do this for as long as I enjoy doing it. The day I dread doing it is the day I’ll let it vanish.

Gabe: I’m not seeking a sell. I’ll meet with anyone who is interested, but they don’t seem to see the value in what I’m doing. I don’t see me fitting in well with them. That may change down the road. I don’t have an exit strategy in mind without taking it a month at a time.

Victor: I started this as a hobby, so the idea of “selling it”

Rhengold: Everyone on the panel is involved in a “sustainable” business.

Carson: The “e-myth” is the one book that is must reading.

Question from audience about “sacrifices” the panelists have made.

Carson: We work four days a week, which I’m proud of. We decided we were going to pay people full time and make them work four days a week. We take pride in the fact we work as little as possible. Sometimes it’s scary because there’s no money coming in.

Hunt: At first we did a lot of sacrificing of our personal lives. Then we decided we were losing why we are good at what we’re doing. Don’t sacrafice what’s important in life.

Gabe: I spent two years without a salary and I work all the time on my business.

Victor: I am online all the time and work all the time, but I DO love it. I don’t like not doing stuff. I took my laptop on my honeymoon. There is a sacrifice of being alone. Not lonely, but alone.

Rhengold: Don’t spend more money than you can afford to lose — so you can do the next thing.

How did you ‘poopularize’ your site?

Rhengold: Make something people like using. Dogster is so silly, it’s hard to sound serious about this.Carson: Gabe made something that really works. Have to be willing to put in an extended period of time making something really good. You have to expect people to come.

Technorati Tags: ,