Questions About Web 2.0 Startups

I got the following email:

Mr. Boyd,

I am a reporter for the University of Maryland's Diamondback newspaper with a circulation of 17,000. I am writing a story about Web 2.0 start-up companies, and I have a couple basic questions below. From my research, I see you should have the experise to answer them.

1. What are some common ways for Web start-ups to make revenue?
2. What is the primary business model of Web start-up companies?
3. What qualifications might a person need if they want to start their online business?
4. Is a college major in computer science enough to get involved with Web start-ups?
5. Could someone with nothing more than a good idea start a Web 2.0 business?

I look forward to your response.

Thank you,
Mark Milian

Here's my responses, Mark:

1. Most web apps make money either from advertising, subscriptions, or a mix of both. An app like Blinksale -- an invoice management tool -- is free for a small number of invoices sent monthly, and then charges a fee when you pass some threshold, like the fourth invoice. This is called the "freemium" business model.
2. The most common business model is freemium for business-oriented apps, and ad revenue from consumer oriented services.
3. I don't know what qualifications are needed to be the founder of a web business, except a keen appreciation of what makes web apps successful.
4. A degree is CS is not needed, except as a helpful experience for developers. Other experience -- marketing and finance -- might be just as important.
5. A lot of people start web companies and don't even have a good idea. (wink). I think having an innovative idea is a good start, a necessary precondition for success. But there is a lot of luck involved, too. How would you know that six other people are about to launch a competitor to your good idea? The best advice I can give for would-be web app developers is to go where other companies aren't: move into the white space where there are no competitors. The world does not need yet another social bookmarketing app, another social event site (I just was invited to Involver, for example), or another screen sharing tool (see Yugma).

tags: web+2.0, startups, yugma, involver, words+of+advice+for+young+people

Comments

[David]

For 5): don't forget execution. There's a lot of work in making a page interact well with a user. And it takes a LOT of experience to do this correctly.

[Sanjay Kumar]

I echo the other commenter's point on execution. Ideas are a dime a dozen. It takes know-how, focus on usability, perseverance, the right contacts and a fair amount of luck to pull something like this off.