Creating A Successful Web 2.0 Business
Web 2.0 started as a revolution that uses the web to link people together. Web 2.0 means communicating, sharing, discussing and trading online in very useful ways never possible before. Web 2.0 simplifies collaboration and information exchange. We get used to Web 2.0 services as a part of our daily lives and these services are being more popular day by day.
Web 2.0 makes headlines, but how is it possible to make money by starting a Web 2.0 business? We are sure that there are very successful Web 2.0 companies. Google makes money based on “free” search, Facebook and other social networks grow so quickly and their content is created by their users.
This concise list is prepared to explain what’s different about Web 2.0 and to help you about how to create a successful Web 2.0 business.
1. A Simple Business Idea: Every succesful business requires a business idea. The main problem abot business ideas is that people think a complex idea means more success. Most succesful Web businesses focus on simple problems and solve them perfectly. There were search giants before Google but Google improved search results, localized its services with a very-simple interface and for free. Don’t forget, complexity is the enemy of Web 2.0 . Think simple!
2. Create and Release as Early as Possible: The development velocity is important when you start a Web 2.0 business. Investors want to see working prototypes before they invest in your projects and don’t forget the competitors; some of them are experts about getting others valuable ideas and transform into businesses.
3. Use The Network Effect: Web 2.0 World is people-centric and there are countless free ways of collaboration with people who may become your users, investors or team-mates. Social networks and social bookmarking sites likes Digg are the best places to find volunteers for testing your products or advertising your business for free. Listen to your customers and let their feedback shape your product.Try to develop a community around your web business and hire a community manager as soon as possible. Motivated fans will be the best and the cheapest marketing staff of your company. The network effect is the main reason why leading Internet companies got so big, so fast.
4. Use Web 2.0 Tools To Cut Costs & Save Time:The simple rule to calculate how much money you need for a startup is; ”If you plan to develop in a year, it’s going to take two; if you think it’s going to take $100K, it’s going to take $200K”. So you must find a way to cut your costs and finish your project in due time. Web 2.0 tools help you to complete your tasks in a fast and mostly for free (or at a small charge) way. For example FreshBooks offers a simple invoicing and time tracking services that help you manage your business and lets you . Google Voice gives you anumber for all your phones, voicemail and sms. Especially in the startup phase, online services save you time and money, be available 24/7 and make you look professional.
When developing your products; don’t re-create what you can source from elsewhere. Another website’s API or Google App Engine may reduce your development time. Try to source it from elsewhere before you build something up. If you’re lucky it can be for free but sometimes it’s worth buying a ready solution; your time is priceless.
5. Monetize Every Chance: Advertising can often seem overly commercial especially in the startup stage but a sponsorship or small advertising sections are good for your business to make some money. Every pageview of your web business has potential as an earning point. You can also find innovative ways.
6. Track Your Users & Rankings: Success of your web 2.0 business depends on your business’ statistics. More users mean more money. You must track how man users visit your site, how much time they spend on your site, the most popular and the least popular parts of your site, how much registered users you have and etc… There are plenty of web 2.0 services to track your user analytics and I think Google Analytics or a similar service is adequate for this purpose. You must also track and evaluate the demographics of your users to understand their needs and level of interests. User registration and polls are good options.
Tracking you site’s ratings is another important thing. Google’s PageRank, Alexa’s Traffic Rank and other rankings show how popular your site is and enables benchmarking of your site’s performance to your competitors’. You must know who’s talking about your company and in what way,too.
7. Don’t Forget Marketing: If developing a good web service is 50% of your business; the other 50% is marketing. Most of the creative & innovative solutions become trash because they can’t become brands. New users mean new markets; having a well-planned market strategy can save your business’ life. Instead of diving into a crowded market like a red ocean full of sharks, look for emerging areas on the web and try to find niche markets. You should read something about Blue Ocean Strategy to learn niche marketing better. Marketing and brand positioning are two important points that you can need a professional’s help.
8. Read About Successful & Unsuccessful Internet Companies: Experience means money and time. A web entrepreneur must read the success stories of Amazon, Google, Youtube, Yahoo, Digg, Facebook, Myspace, LinkedIn, PlentyofFish and the others, once. But an internet entrepreneur must read the stories of unsuccessful Internet companies that entered the deadpool, twice.
9. Have a Revenue Model: You can have 10 million pageviews, your users can spend several hours in a day on your site but it’s possible that you earn nothing. Every business needs a revenue model. You can sell physical goods, just run ads or sell your online services. It’s your business and you will make a decision. Don’t forget without a revenue model, starting a web business is a business suicide.
10. Continually Improve Your Business and Develop Improvement Metrics: Continuous improvement is the key factor to stay alive in Web 2.0 World; without continuous improvement, Web 2.0 itself can’t stay alive. Experience is important and failure breeds success. You must learn from your mistakes and not repeat them.
You should define your targets and the KPIs (Key Performance Indicators) to reach your targets. For example, ROI rate is very important if you have investors. Define your metrics and check them often and improve your strategies to improve your business.
This post is a brief of personal experience and inspired by Dion Hinchcliffe’s “50 Essential Strategies For Creating A Successful Web 2.0 Product” article.
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