Think you have a super sweet idea to make money online? Cool. We all love a good entrepreneur. Have any idea how to do it? Didn’t think so. We live in a time where the old rules don’t seem to apply anymore. More and more businesses are starting online and many of the most profitable online enterprises don’t even sell anything. How can you make cash off your online ventures without making a sale? Just follow the two primary rules that I’ve observed.
The first question you have to ask yourself in my formula is: Will large numbers of people become addicted to your site? If the product is anything other than drugs, you’re probably on the right track towards making serious money (without going to prison, that is).
The second question in my evaluation of the startup process should be: Is it free? If it isn’t, you should probably start from the beginning because you already messed up. People who make the most money on the web (the modern day entrepreneurs) don’t do so by selling things to people. They make there money by getting you to stay on their page long enough to be persuaded to buy someone else’s stuff.
Just look at the 10 most successful web startups circa 2007. Notice anything about the top 5? Free, free, free, non-profit, free. Beyond this, many times the main motivation wasn’t money. With YouTube, they wanted to be able to share videos and Facebook’s dirty thief Zuckerberg just wanted to be a dick because he got his heart broken by a cute girl
If the large portion of web users think like me, they don’t want to pay to use a website. It just doesn’t make sense. Facebook considered it(dumb), but realized that it just doesn’t really work that way anymore, even if you already have a built in user base. There are too many other options. Too many sites that serve similar purposes and are alike enough to capitalize on any user frustration.
In this new digital era, money is made by selling access to your existing user pool. Its like if you were to have a huge party and offered to send the partygoers, for a premium price, to certain surrounding clubs, where they’re bound to spend cash.
Facebook is a dominant internet force, but if they were charging, MySpace may never have died out. YouTube is a great video aggregation site, but DailyMotion serves the same purpose and could sweep up disgruntled users should they have to pay for YouTube. The era where money is made by looking to sell some an exclusively online product is gone, if it ever existed at all. As weird and almost counter intuitive as it may sound, charging users for having a good time online, just isn’t good business
Yale Law Tech 