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.

]]> http://siteboat.com/creating-a-successful-web-20-business/feed/ 2 http://siteboat.com/content-of-an-effectiv-business-plan/ http://siteboat.com/content-of-an-effectiv-business-plan/#comments Tue, 28 Oct 2008 21:20:05 +0000 Erdem OZKAN http://siteboat.com/?p=303

A succesful business plan is a document that conveys the exciting prospects and growth potential of your business idea. A good business plan is a powerful tool for you to use as an effective selling document. For instance, a business …

In this post, we’ll take a look at LinkedIn’ s excellent growth but firstly let’s talk a few about ‘Business Social Networking’ .

Day to day, social networking becomes more important for us. Organizations that want to manage partnerships with their customers, suppliers and other organizations in the same industries start attending ‘Business Social Networks’. These organizations gain more efficient methods of communication, feedback and insight opportunity from their partners.

Succesful businesses recognize the importance of increasing loyalty through active communities for their partners. Smart companies use Web 2.0 technologies to reach their ‘business partners ecosystem’ with a cheaper, faster, more measurable and more efficient way. They use their business social networks as an easy and a powerful tool to reach and listen to their partners.

The value of a business social network is limited by the ability of creating conversations, sharing experiences, answering questions and offering feedback from partners. Briefly, the business professionals have started to see the value of being trasparent to their partners and understand to use social networks as viral marketing tools – called ‘social network marketing’ . ‘Monetizing the value of social networks’ will be a topic of a future post.

LinkedIn is the biggest business social networking site that gives members the ability of creating business contacts, finding potential customers, hiring/seeking jobs. LinkedIn has 30+ million users representing 150+ industries around the world. LinkedIn founded in 2003 and has caught a sustainable growth in years. In 2007, LinkedIn grew more than 300%.  LinkedIn’ s creative platform has changed traditional business card exchange process into spending time on LinkedIn and watching number of connections grow.

Today, LinkedIn CEO Dan NYE is announcing on company blog that LinkedIn has received $22.7 million investments from market leaders in their sectors. SAP Ventures, Goldman Sachs and The McGraw-Hill join the LinkedIn team after this investment. LinkedIn’s D Round of Funding closed at $1 billion valuation. In this volatile economic enviroment, it’s a very precious success to get these important companies as strategic partners. We congratulate LinkedIn …