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.