How to generate profit from a startup

#1

Post by joag » Tue, Feb 08, 2011, 3:05 AM UTC

Night people, I'd like to understand better how is that someone generate a profit from a new web company, I'd like to know links an ideas from people with experience in this area.

I've try to think about this but I don't get it yet, I see a lot of new startups appearing every day and people financing them, but can't get how those are going to generate a profit.

I go to their sites to see what they do, the about sections, etc with little to no clue at all on how they think the idea will in someway generate something profitable enough to keep them running without spending the money given by investors or angels.

Re: How to generate profit from a startup

#2

Post by Jsarokin » Tue, Feb 08, 2011, 3:21 AM UTC

I think each one has a different model for making money.

A lot of them dont have one at all. The value in their business is having a lot of people using their website (twitter for example). Twitter has a very limited way of making money as of now, yet the company is valued at billions of dollars. Its the ability to reach a massive amount of people that's valuable.

Re: How to generate profit from a startup

#3

Post by mkinnan » Tue, Feb 08, 2011, 4:08 AM UTC

Jsarokin wrote: post #2

I think each one has a different model for making money. A lot of them dont have one at all. The value in their business is having a lot of people using their website (twitter for example). Twitter has a very limited way of making money as of now, yet the company is valued at billions of dollars. Its the ability to reach a massive amount of people that's valuable.

"Its the ability to reach a massive amount of people that's valuable."

... but this isn't necessarily valuable until a company sells, right?

Re: How to generate profit from a startup

#4

Post by Jsarokin » Tue, Feb 08, 2011, 5:22 AM UTC

mkinnan wrote: post #3

Jsarokin wrote: post #2

I think each one has a different model for making money. A lot of them dont have one at all. The value in their business is having a lot of people using their website (twitter for example). Twitter has a very limited way of making money as of now, yet the company is valued at billions of dollars. Its the ability to reach a massive amount of people that's valuable.

"Its the ability to reach a massive amount of people that's valuable." ... but this isn't necessarily valuable until a company sells, right?

Well, I think it is.

If you have 100,000 users on your website, and no way of making money , you're in pretty good position. Some brainstorming and figuring out how to implement ads and you're set.

If you have 1,000 users and a great way of making money, its not that valuable.

Also, users tend to like sites with less ads as opposed to more. Its better to build up your userbase before monetizing it.

Re: How to generate profit from a startup

#5

Post by joag » Tue, Feb 08, 2011, 8:07 PM UTC

Jsarokin wrote: post #4

mkinnan wrote: post #3

Earlier quoted context omitted.

"Its the ability to reach a massive amount of people that's valuable." ... but this isn't necessarily valuable until a company sells, right?

Well, I think it is. If you have 100,000 users on your website, and no way of making money , you're in pretty good position. Some brainstorming and figuring out how to implement ads and you're set. If you have 1,000 users and a great way of making money, its not that valuable. Also, users tend to like sites with less ads as opposed to more. Its better to build up your userbase before monetizing it.

>Also, users tend to like sites with less ads as opposed to more. Its better to build up your userbase before monetizing it.

I think this is one of the keys to success, thank you Jsarokin.