1. If we build a community, and get traffic to the site, how are we going to make money from it ?

2. The younger people, gen Y, that will come, don’t have money.

I must say, the above are pretty common comments. I am not saying they are wrong, but they seem conservative, and perhaps short sighted. It is easy for corporates to be short sighted, given fiscal year and shareholder challenges.

After listening to Marc Andreessen, it was clear that the big guys, build the community and business model first. They stick to their guns and don’t sell out to revenue. I guess they are trying to tie up the market, and then build revenue once they are self sustainable and big enough barriers to competitors.

I have written other article talks about Malcolm Gladwell’s Tipping Point, Seth Godin idea’s about marketing, and web2. It talks about if you get it right, you get unlimited free marketing.

I think if you get the eye balls on your content, then the money follows. Its like if you could get free TV airtime – you don’t ask how do you make money out of free TV spots.

I also have another post about eyeballs.   I quoted Donald Trump:
He does make an interesting point :
“sustainable traffic is THE source of competitive advantage on the web.”

It seems planning for traffic and communites would be sufficient in most cases.

I believe Gen Y are more likely to be single, have more disposable income, and more likely to spend online. I’d say they might be the best target in a lot cases anyway.

The book is simple, has simple concepts, and is a reasonable read for those that are starting their first business. Lots of motherhood statements, and bleeding obvious, but we all need to learn the simple lessons some how.

He does make an interesting point :
“sustainable traffic is THE source of competitive advantage on the web.”

Whilst I don’t truly believe its the only advantage, it might well be the most powerful.

Lots of the web 2.0 community success supports the focus on traffic.

I also believe reduced internal cost (and I dont mean price) is also another way to compete. Basically do something similar, but do it cheaper (sort of basic Michael Porter analysis).

I also like his ideas to opportunity models. The pictorial of a lot of ideas into a funnel, a matching criteria, and only a few opportunities out is simple, but well presented. The book positions an idea that fits as an opportunity, some of the fit characteristics included:
- personal fit
- capabilities
- interest/passion
- profitability
- scale

Whist an obvious idea, its simply over looked by many starting their first business. My advice to all new projects/business’/products is simply, if we do reasonably well – how much can we make ? The answer needs to be huge, at least some multiple of a salary.

The book also talks about a ‘money making machine’ – with strategy/operations/revenue. This is how I tend to focus new business ideas, can I mechanise large parts of the business, what are the business systems that need to support the business. I go back to strategy changes to ensure before I start, that the margins are high, and you are building a core business system. This was heavily influenced from my reading of  ‘rich dad, poor dad’ books.

I start with the idea, work out margins, what business systems are needed to support the operations, mechanise, strategy to increase margins and increase automation. Then I work out how to capture the customers, and then go back to strategy, to make sure that there is a fit between margins/strategy/customer capture. Customer capture is clearly the number 1 business system. The rest is your money making machine.

For small business – this doesn’t seem obvious at first.

You need to become successful and profitable NOW, not next year, and definately not ‘one-day’.

You need to make the hard decisions, make the big changes, and have your success now.

If you wait, and go slow, your life will dribble away, and your business will just be wasting your time.

So when you are planning – move the horizon to something closer, make it immediate.

A lot of this depends on the owner of the business to implement, and its the old “work in the business, versus working on the business’. I think you need 30%-60% of your time spent working ‘on the business’ – being planning strategy, marketing, and working with partners etc.

If you are a public company, you have shareholders demanding profit this year, so generally there is a mandate to get things done. If you are privately owned, you can just wonder around, with little or no growth if you don’t get stuck into the changes now.

Google talks about velocity of business.

If its worth doing, is worth planning,
if its worth planning its worth doing,
if its worth doing its worth doing NOW.

Bring those plans sooner and faster. Bring the profit NOW.

In order to achieve sooner and faster you need:
- time – reorganise your time to work on the business (see above)
- skills – for planning growth, marketing, branding, sales – perhaps outsource some of this
- motivation / inspiration

If you need motivation / inspiration, read these :

Think Big – Donald Trump

Think 10x – Michael Hewitt-Gleeson

Be passionate – Charles Kovess

Two of these guys above I wrote about here