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Sorry, your “cool” webapp is probably not going to make money

paraschopra.com

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Re: Sorry, your “cool” webapp is probably not going to make money

#61

Post by trotsky »

jacquesm wrote: post #48
ido wrote: post #45

Earlier quoted context omitted.

software has been sold to individuals and businesses alike for decades now, the things that have changed the equation here are: - download sites for PC software - open source - massive piracy How are those (except for open source) new? Piracy has always been massive, in the past even more than it is today. Do you know anyone who actually payed for any piece of c64/atari 8-bit software? And for a long time the first p…

The internet has changed the piracy game completely, copying a cassette tape or ROM was time consuming and required some skill. Download.com and Tucows basically destroyed the shareware movement, barring a few exceptions. The upside is that there are now many more people that are using software so the markets are much larger in potential and the area where the app stores shine are convenience. A few clicks to downloa…

The internet has changed the piracy game completely

Eh, were you actually around then? Copying floppy disks was generally just as easy as anything else, and the skill level of the average computer user was much, much higher. Based on my experience I'd say piracy per capita was nearly 100% in the 80's. These days there are large swaths of computer users who simply don't install anything that isn't pushed at them, let alone browse through TPB. Before the Internet became popular in the mid 90's a large number of BBS's were dedicated to piracy.

Keep in mind ASP on software is a fraction of what it once was. In 1983, Lotus 1-2-3 sold for $495. Duplicating the functionality of the $150 Office Home and Student would have been over $1000.

Re: Sorry, your “cool” webapp is probably not going to make money

#62

Post by nadam »

jacquesm wrote: post #24
jpcx01 wrote: post #19

Earlier quoted context omitted.

What do you mean it's "not OK"? Trying to building something new that people use and love is a perfectly acceptable path to building a startup. pg had a great post on this topic: http://paulgraham.com/organic.html So you have an approach to building products that works for you. Great. But scoffing at people who actually want to build the new amazing things that have a real impact on the world is what I call "not OK".…

I think you miss the point entirely and quoting Paul Graham without understanding what he writes is not going to help either. What Paras is getting at here is that if your goal is to make money then you are probably better off building something that has that premise baked in to it from the first moment rather than to just go and make some consumer app that might get traction but that will be hard to monetise. The 'p…

I think Paul Grahams essay IS somewhat contradicting Paras's essay. For example look at this paragraph:

"organic startup ideas usually don't seem like startup ideas at first. We know now that Facebook was very successful, but put yourself back in 2004. Putting undergraduates' profiles online wouldn't have seemed like much of a startup idea. And in fact, it wasn't initially a startup idea. When Mark spoke at a YC dinner this winter he said he wasn't trying to start a company when he wrote the first version of Facebook. It was just a project. So was the Apple I when Woz first started working on it. He didn't think he was starting a company. If these guys had thought they were starting companies, they might have been tempted to do something more "serious," and that would have been a mistake."

I think Paul is suggestinging (at least emotionally) that you shoud follow your creativity and hope for a later opportunity of a great business.

In my opinion Paul is focusing on the kind of businesses which are mostly B2C, very innovative and very very risky.

My taste is somewhere in-between: my idea is that somewhow the joy of creativity should be combined with some seemingly boring old fashioned B2B market's need.

Re: Sorry, your “cool” webapp is probably not going to make money

#63

Post by Simon1979 »

MicahWedemeyer wrote: post #32

Beware the fatigue that sets in with these "boring" money makers. It can be very difficult to keep your motivation high when working on something like this, especially in the beginning where you're not making money and no one takes you seriously. With a funky web app, at least your friends and family might understand it and think it's cool. Doing a startup already takes a lot of motivation. It's significantly harder…

This rings true with me. I started my own startup in 2009 in what could be considered a relatively boring but proven industry. I focused on price and SEO and it is currently making decent money and growing 30% month on month.

I am still very excited and motivated by it all, but I can't help feeling just a little jealous when I see some of the 'cool' webapps that spring up on here.

Re: Sorry, your “cool” webapp is probably not going to make money

#65

Post by raganwald »

jdietrich wrote: post #58
MicahWedemeyer wrote: post #32

Beware the fatigue that sets in with these "boring" money makers. It can be very difficult to keep your motivation high when working on something like this, especially in the beginning where you're not making money and no one takes you seriously. With a funky web app, at least your friends and family might understand it and think it's cool. Doing a startup already takes a lot of motivation. It's significantly harder…

The single most important anecdote I've ever heard about software is this: In the early days of VisiCalc, Dan Bricklin travelled with his Apple II, demonstrating his software to potential customers. The response from 'computer people' was generally fairly muted - they didn't see what spreadsheets did that they couldn't already do in BASIC. People with no experience of computers assumed that computers could do damned…

This is absolutely true. But two things: (1) Dan was already passionate about VisiCalc. It's not like he and Rich Franklin weren't particularly interested in numbers but thought they could save accountants a few bucks a day. And (2) You are describing something that might transform someone's job or disrupt an industry. That's very motivational. But this is not the same thing as "Hey, someone might pay a few bucks for these crud operations."

The ideal business is one where (a) you are already motivated by the subject matter, 2) you will transform somebody else's life or business, and III. they are willing to pay for it.

Re: Sorry, your “cool” webapp is probably not going to make money

#66

Post by jacquesm »

trotsky wrote: post #61
jacquesm wrote: post #48

Earlier quoted context omitted.

The internet has changed the piracy game completely, copying a cassette tape or ROM was time consuming and required some skill. Download.com and Tucows basically destroyed the shareware movement, barring a few exceptions. The upside is that there are now many more people that are using software so the markets are much larger in potential and the area where the app stores shine are convenience. A few clicks to downloa…

The internet has changed the piracy game completely Eh, were you actually around then? Copying floppy disks was generally just as easy as anything else, and the skill level of the average computer user was much, much higher. Based on my experience I'd say piracy per capita was nearly 100% in the 80's. These days there are large swaths of computer users who simply don't install anything that isn't pushed at them, let…

I actually made pretty good money in the early 80's from programming games and later selling licensed software on the net.

Yes, large numbers of BBS's were dedicated to piracy but large numbers of meters of shelf space in retail stores were dedicated to 'boxed' software too.

Re: Sorry, your “cool” webapp is probably not going to make money

#68

Post by ceci »

Paraschopra has written one the secrets to building a low risk/high returns web app which re-echoed here using founding http://www.sharefile.com/blog/seeking-startup-advice-look-no...

In my opinion, those of us who want to build business shouldn't focus a high risk / high return approach of building b2c apps dependent on advertising and large user base. We can easily swing for the fences in our second satrt-up. Two examples of people that took this aaproach are Djarmesh shah of hubspot and Joel spolsky with stackexchange. These were there second start-ups after selling the 1st in the case of Dharmesh and making mony from fogcreek in the case of Joel.

Re: Sorry, your “cool” webapp is probably not going to make money

#69

Post by slide »

Paraschopra has written one of the secrets to building a low risk/high returns web app which is re-echoed here by the founder of sharefile.com. http://www.sharefile.com/blog/seeking-startup-advice-look-no...

In my opinion, those of us who want to build a business from our startup, shouldn't focus on the high risk / high return approach of building b2c apps dependent on advertising and large user base. According to Amy Hoy, we can all easily build a 30 x 500 wep app (http://unicornfree.com/30x500/). That is 500 customers paying $30 per month which gives us $15k monthly and $180,000 annually. With just 500 users and this finances in place, we can then swing for the fences in our second start-up, knowing that we don't have to eat ramen or beg anyone for funding in the beginning. This also ensures we have the power to take investments only from the right kind of investors and more importantly, it put us in a position to retain controlling shares in the new start-up. Two examples of people that took this approach are Dharmesh shah of hubspot and Joel spolsky with stackexchange. These were there second start-ups after selling the 1st in the case of Dharmesh and still making money from fogcreek in the case of Joel.

Re: Sorry, your “cool” webapp is probably not going to make money

#70

Post by jasonlotito »

jpcx01 wrote: post #41
jasonlotito wrote: post #34

Earlier quoted context omitted.

> Saying "if your goal is to make money" is sort of strange to me anyways. Probably because my goal is not to make money, but to build new and interesting things that have an impact. That's sort of the point Paras is making though. If your building a new and interesting things to have impact, but your expecting it to make money and calling it a startup, it's not OK. > Why should the focus just be on making money? He'…

I am expecting to make money. And I am calling what I do a startup. And the my goal of the startup is to build new and interesting things. I guess thats not OK

You're being obtuse on purpose. But I'll bite:

> I am expecting to make money.

Merely expecting to make money doesn't make money. You have to have a plan to make money. You can expect things all you want, but they won't happen.

> And I am calling what I do a startup.

You can call what you do a startup. Calling it a startup doesn't make it so. A rose by any other name and all that jazz.

> And the my goal of the startup is to build new and interesting things.

See, that's your problem. You don't even know what you are building. "New and interesting things"? What is that? You have to be specific.

So, literally, you are expecting to make money from a startup where you build new and interesting things. You don't know what those new and interesting things are, or how you can make money from it, or even if you can make money from it. You don't have a business plan. You don't even know what market you'll be in (the building new and interesting things market?).

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