"How do I get started in such a venture?"

Last night, I received an email from Bob in Illinois. Bob asks a question that I get often - "how do I get started?". So, with his permission, I am posting the original email and my response here. I hope it is helpful.

On Feb 6, 2008 8:20 PM, <p......b@c...t.net> wrote:

Travis,

I read your blog entry regarding StubHub.

I was interested to see you mentioned vacation spots as an example of a possible application. I've thought about that aspect for a while. My idea focuses on Timeshare. It seems there are numerous sites that ask for fees up-front without delivering. As a timeshare owner myself, I'd love a place that is well publicized where I could post my timeshare, like I've done with my Chicago Bears tix on StubHub.

Trouble is, I haven't the first idea how to get started. Where can I learn about the basics of starting such a venture?

Thanks,

Bob M....

Plainfield, Illinois

Hi Bob,

Thanks for the note!

I think to get a venture like this off the ground you need three primary skills.

The first is the easiest to acquire, and that is basic Internet technology implementation. You'll need to know about programmers and designers and online marketing options.

The second is market research. You need to know if people with timeshares (or looking for them) are willing to engage you and build a relationship. You need to know if there is a pain point that you can address and solve. For this, I must recommend Glenn Livingston's survey model. It is extremely thorough - it will give you the data on your market you need to succeed. I have used it several times now - and if you can handle the intensity, you are WAAAAY ahead of the game.

http://www.howtodoubleyourbusiness.com

The third is the less tangible, which is basic business sense. I just finished reading a book called "Jump Start Your Business Brain" by Doug Hall that goes into great detail about crafting a business idea that can succeed. I highly recommend it!

http://www.amazon.com/Jump-Start-Your-Business-Brain/dp/1558706070

In addition to these skills, you need a whole lot of determination and fortitude. When I first got into e-business I was looking for the silver bullet. And I sometimes still find myself trying to take the easy way out. But the thing is - that never works. It takes years to build a successful business online, just like it does offline. If you're not committed and "in love" then you're not likely to succeed!

Hope this is helpful.

Travis

Cool Internet Business Model: PayPerPost.com

- How does it work

PayPerPost connects people who want to promote their web site and want links pointing to their web site with bloggers who will provide that service. The webmaster describes what page they want linked, the text that should be used, the tone of content they want and the price they're willing to pay for each link. If a blogger is interested in the subject they can write a piece of unique content, put a link or two in it, and get paid for it.

- Why I like it

This is a purely digital play that connects two hungry markets. It is a very creative idea that's easily implemented. A web site, and some promotion is all that is needed to make it work. It is a novel idea that (currently) serves a low competition niche.

I have personally used PayPerPost for one of my web sites. the bloggers generated good content with exactly the links I wanted. But, I had issues with the site's ease of use, implementation, and pricing structure. Overall, it's a great idea that needs to be evolved.

Apparently I'm not the only fan of PayPerPost. They landed a $3 Million venture round this month (10/2006) from several VC firms. Draper Fisher Jurvetson was among them - and these guys know what they're doing! DFJ has invested in web monsters like Overture, Technorati, TagWorld, Feedburner, and Skype.

- Market

The PayPerPost market is people trying to SEO their site. Their secondary market is people who want to get paid to write in their blogs.

SEO'ers are accustomed to paying for performance. They are trained that links from blogs are good for SEO. They are easy to find.

A blogger that wants to make money off of their blog? Never heard of that! The viral nature of blogging easily gets the PayPerPost name out to the blogging world. These types are also easy to find!

- Where's the beef

PayPerPost makes their money when webmasters publish their "opportunity" for bloggers to write about. They charge a one time $5.00 posting fee (that price was recently redued from $10, which was reduced from $25). Then, they charge a 25% transaction fee for each posting made.

It's difficult to ascertain a ball-park figure for how much money PayPerPost is actually making. This is because their revenue model is not straight forward. Each advertiser will pay $5 to post the opportunity and vary the number of possible posts, and the price per post. This in turn varies the amount of money PayPerPost makes from each advertiser conversion. Also, They have a lot of blogger traffic going to the site that does not give them money.

But, it's safe to say that when you can get away with charging an inital fee, plus a transaction fee as high as 25% - and then combine that with a 7,317 Alexa rating (approx. 20,000 visitors per day) - you're making some cashola. Although they specialize in user generated content, they don't have a lot of it on their site. That means their Alexa rating is created by people using the service - not reading about it.

- Marketing

Blogosphere!? Duh.

When you combine the blogoshpere and a tranche of venture capital, you attract traditional media. As I'm writing this blog in my home office, I received a promotional email from PayPerPost stating that they are being interviewed for an article in the magazine Business 2.0. Oh, sometimes timing is perfect...

- Dangers

Barriers to entry are low. This is an idea that could easily be knocked off. There is no secret sauce here. They are merely connecting two hungry groups of people. This is perhaps why they acted so quickly to land venture capital money. It will allow them to grow quickly and become the undisputed king of user generated content. Anybody that wants to get into the game must deal with a 500 pound gorilla.

- Summary

PayPerPost is a creative Internet business model. It is completely web-based. It is "at the right place, at the right time, with the right platform" as Tim Draper of DFJ puts it. They've found a way to separate people from their money, and make them downright happy to do it. I'd say - that's a winner!

Cool Internet Business Model: OneShare.com

The Internet is all about finding opportunities to make money by doing things that nobody else thought about. You find a niche that’s proven to spend money, and then exploit it. OneShare.com is a great example of creative thinking in Internet models.

OneShare.com buys large quantities of stocks, and then allows people to purchase shares (usually a single share), with a certificate, framed, for anyone they want. It’s a great gift to give a newborn or graduate. It’s been done a long time by direct marketing companies, but you’ve never been able to pick out which share you want, the frame you want, and how it’s all going to look together.

I'll call it the break-apart business. Buy large chunks of a product, and break it apart, wrap it individually, and sell it. This particular product has the advantage of appreciating (during good times) after you've bought it...

Where's the beef?

As of this writing, OneShare has an Alexa ranking of 42,165. According to my non-science, this means around 5,000 daily visitors. At 2.5% average e-commerce conversion rate, they're closing 125 people per day. If those 125 people are all buying a frame ($44) and the transfer fee ($39), they're making an average of $10,375 per day. This site is well put together, with a tight niche, highly customized, so I'd guess that they're closing more like 5% of their daily traffic. That pushes the daily revenue number to $20,750 per day. I can only imagine that a company like oneshare gets a big chunk of their yearly revenue around Christmas time, repeat customers, and stock appreciation (buying chunks of good stocks low and selling them high), but we'll just keep it simple.

If you take $20,750 per day, times 365 days a year (internet businesses run all the time), you come up with $7,573,750 of annual revenue. Seven million isn't chump change. It's not Fortune 500 money, but after expenses, it's enough to buy someone a nice mansion, and a Ferrari to go in the garage! In fact, someone at Oneshare is not doing too badly... They've offered $100,000 for Barry Bond's 715th homerun.


Reasons for Success

The only form of advertising OneShare does that I can discuss intelligently is adwords. I know they buy a few keywords that are directly associated with their product, like "buy one share of stock", "one share", "buy disney stock", "stock certificates", "buy apple com". They are the top advertiser on google for each of those keywords. They also buy several other more general keywords like "buy shares online", "buy and sell stock", "perfect gift", "stock to buy", but they don't rank near the top for those keywords.

By the way, if you ever want to find out what keywords a company is paying for, this is a really cool tool. Check out Googspy.com.

Another trick I use to find out where a company advertises is to look on their checkout page for a "How did you find out about us" drop down box... companies don't even know all the information they give away for free...

Using this trick for OneShare gives us the following options:

• Return Buyer - as we discussed earlier, they probably get a lot of repeat business
  
• Email from OneShare - Direct email campaign? Renting a list?
  
• Disney Magazine - An obvious good market for them - adults that would be interested in purchasing a framed share of Disney
  
• From a Friend - Word of mouth
  
• From a Broker - Kickback?
  
• Google - PPC, as discussed above
  
• Yahoo!
  
• Other Search Engine
  
• Banner Ad - Banners are making a comeback!!
  
• Newsgroup/Web Board - More word of mouth - perhaps a guerilla marketing tactic?
  
• Local Newspaper - If they're advertising in the local paper, they're onto a big secret...
  
• Radio - A lot of internet companies are moving onto the radio, with 60 second spots, and sponsored blurbs.
  
• Television - TV is big timing it, but I doubt they're using this widely, or it would be closer to the top of the list
  
• USA Today - More newspaper advertising. The fact that they mention USA Today in particular means that they were running a test campaign in this particular newspaper...
  
• Other
  

How to Steal This Idea

Any item that can be bought in bulk and split into smaller pieces and sold as a gift or novelty can be used. My favorite is EducationalCoin.com. Gary Halbert, the best direct marketing copywriter in the world, buys one yen coins from them and attaches them to letters that go out to Joe America (in order to get their attention when opening the letter).

EducationalCoin.com obtains large quantities of coins from around the world, and sells them in massive quantities. For $19.50 you can buy 100 Japanese yen coins. These coins can be used for educational purposes, gifts, or more likely, direct marketing campaigns.


Standard Disclaimer

The data and analysis in this blog are complete guesses, not remotely researched, and should not be taken seriously. This is meant only to show the basic business model of the site, and why I think its special (to be loved and admired). If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.

Cool Internet Business Model – Match.com

Anyone who has been in the dating game in this century knows about online dating. Aside from pathetic long-termers like myself, that means pretty much everybody…

Not everybody knows what a great business model it is. Not everyone knows how much money it makes. About 11% of all online users have a profile on an online dating site, according to research by Jupiter Media. Not very many people at all cruise match.com without any interest in the content – but I do. I am envious of match.com. I am truly in awe of the business that has been created out of little 1's and 0's. Match.com is the ultimate Internet business model. Here's why I like it:

1. It's sticky – you could cruise all over the place for free until you find something that catches your eye. I have a mentor that was interested in the business model and was cruising through the site to see how it worked. He signed up to show his staff the interactivity, someone caught his eye, and ended up finding his wife. They're still married 5 years later.

2. It's tempting. Everyone has heard an Internet dating success story from a friend or a family member. Everyone has heard a horror story, too – but they're not as powerful. Friends say that only 1 in 10 dates are worth their time. But that doesn't stop 'em! If you're looking for love, you know about Internet dating sites.

3. They're simple. 3 step process: a. browse b. create free profile c. signup and get some dates

4. Powerful upsell opportunity. Not long after you sign up and post your profile, you'll start getting little notes saying – somebody really good looking wants to talk to you! Or – Aren't you lonely? Well you don't have to be – this hot dude or gal wants to talk to you!

5. 100% web based. No product fulfillment, no warehouses, no widgets. Just a few machines on a rack, a few programmers, a few designers and a few marketers.

6. CHA-CHING! Oh yeah, and a whole bunch of people to carry all your cash to the bank. Last year (2005) Match.com made $249 million in revenue, with 26% growth over the previous year. In that previous year, they were already a mature company… Personals.Yahoo.com made around $170 million. Lavalife made $72 million. Major private companies include eHarmony.com, AmericanSingles.com, Date.com and uDate.com, which all must have made close to or more than Lavalife (according to similar amounts of traffic). Jupiter Research estimated that the segment would make around $516 million last year.

7. Major niches to fill This product has niches galore. Major niche fillers include jdate.com (alexa = 1,193), ChristianCafe.com (7,431), BigChurch.com (10,513), CatholicMatch.com (5,002), and many many more.

8. Easy to find customer This customer looks for you. It's a need that's being fulfilled through technology. On the web, it's easy to present your site to someone who's looking for you.

Where's the beef?
Online dating is flush with major players, and minor niche fillers (see section 6 above to find out why).

Match.com $$ breakdown
Alexa rating: 85
Approximate monthly visitors: 15,000,000
Monthly revenue: ~$20,800,000
Revenue per visitor: $1.38
Number of ferraris you could buy per month: 104

The revenue per visitor number is key to understanding what kind of marketing you can do. Match.com probably doesn't do that much marketing, because they're the market leader, and brand recognition and word of mouth drives most of their traffic. But, for the smaller niche players, they need to understand what they can pay for each visitor and still be profitable.

How to steal this idea
Online dating is very much a mature market, with not much space left for traditional players. Even the niches have been exploited and fulfilled. But, the point of this assignment is to understand the basic business model so it can be adapted to other areas. So – what other areas can the ideas of online dating be applied?

Basic principles:
1. Browse the content
2. Create a free profile
3. Pay to play

Similar services:
1. Social networking – MySpace is all the rage… they don't make money off of monthly memberships like Match.com, but they make plenty off of selling advertising to their sizable traffic supply.
2. Gambling – Big gambling sites these days offer a free zone where you can play with fake money before you sign up to lose your real money.
3. Forums – Same premise as the social networking – get the traffic from the content, sell them advertising.
4. Vacation rentals – Provide a place to upload your vacation rental for free – then send the owner emails saying that people are interested in contacting her to rent out the place. Force the membership fee in order to see the requests. This model could be applied to any recurring service.

Summary
Online dating is a killer Internet business model. Take a program and make millions. No fulfillment. No warehouses. You can take the basic premise of providing a service people want and automating it with a program, and apply it to other markets.

Cool Internet Business Model: LendingTree.com

Overview

LendingTree.com is a souped-up, glorified affiliate site. Ironically, they did not start by lending money (although they do currently offer this). I'm not sure what the "tree" is about, either. But, when you've got as big of a marketing budget as LendingTree, you pretty much name your company whatever you want, and people will accept it… Traditionally, their main business was making money for every qualified lead they referred a to a partner lending company. For our purposes, I'm going to focus on this "affiliate model" of collecting leads and receiving a referral fee.

According to their latest press release "LendingTree has facilitated more than 16 million loan requests." The revenue generated by LendingTree is amazing – $101 million in Q4 2005 (versus $45 million in Q4 2004). We'll talk more about the math in a minute – but my calculator may melt!

When someone comes to LendingTree, they fill out a series of web forms for the type of loan they desire, and are presented with a couple of offers from qualified lenders. You choose one you want, and LT gets paid! And how… From their terms of use: "For its services, LendingTree receives a real estate brokerage referral fee of up to 35% of the local broker's commission. Your use of this Web site constitutes your agreement with this compensation arrangement."

Where's the beef?

The numbers speak for themselves. This is a highly lucrative business, in the "my yacht should be more than 200 feet long, with a helicopter pad" sense of the word.

Working backwards here since I have the numbers of a public company:

• $101 million revenue in Q4 2005 = $1,122,222/day
• Approx 30,000 visitors per day = $37.40 per site visitor!
• $37.40 / ~5% loan closing rate (Total guess – I'm being generous because of the nature of the service) = $748 per loan closed

Reasons for success

• Big market, free service – They've found a way to offer a free service, which is of value, to a very large market, and get paid for it. This is a no-brainer.
• Aggressive advertising – national commercial campaigns ensure plenty of site visitors.
• Customer Service – they offer their 800 number for live customer support very clearly on every page. They want you to call because their call center reps are trained to close close close.

How to steal this idea

This one seems pretty obvious to me. Find a large market looking for an expensive product (see Legalzoom), service related industry, and offer them a free service, which you in turn get paid for. Duh! There aren't too many of these types of markets to start with, and there's probably very few left that aren't already exploited. But, one of the best ways to make dinero on the net seems to be to find something someone has already done, and figure out a way to do it a little different/better. Be creative!

Some possibilities might be:

• Autos – I've looked into this model for motorcycles (scheduling test rides in exchange for a referral fee), but the dealers are very resistant to change their current offline mode of operations.
• Landscaping/Home Improvement – Big market, big ticket item, contractors willing to pay.
• Accountants – in the spirit of tax season!
• Computer services – how many people do you think have problems with their home computers? How many private consultants are out there looking for a little extra work?

Standard disclaimer

The data and analysis in this blog are complete guesses, researched very little, and should not be taken seriously. This is meant only to show the basic business model of the site, and why I think it rocks. If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.

 

Cool Internet Business Model: LegalZoom.com

Overview

Legalzoom.com – online legal documents, reviewed by lawyers, without lawyer prices.   When you need an incorporation, last will, copyright, even a divorce, LegalZoom has you covered!

 

The basic idea is that a lawyer (a famous one – Robert Shapiro) had an illegitimate child with a brilliant nerd programmer, and LegalZoom was born.   You go online and fill out a bunch of easy questions on web forms and wait for your documents to arrive in the mail (or come back from the state, if LZ sends them for you).   They charge a healthy fee for these documents, but much less than a lawyer would charge you for the same thing.

 

Love it!  No product fulfillment (except legal document packages), endless room for expansion (there are more legal documents in this world than there are numbers to count that high), minimal man-power required (all the work is done up-front when creating the document template).

 

The company isn't positioned in so much of a niche as it is a first mover in an enormous industry – with no major competitors.   In fact, if you think about it, there are no big names in the legal space at all! Online, or off.  Perhaps pre-paid legal comes to mind – but that's a totally different type of service.   Seriously, is there any huge legal company that springs to the average Joe's mind when you mention the industry?

 

They're positioned to service legal needs worldwide.  I don't know anything about the legal industry in America, much less the rest of the world, but it seems to me that if you can do it here… you can do it there!

 

Where's the beef?

It's a beef-steak!  Lots of people – an Alexa rating of 10,387 mean an approximate 20,000 visitors a day.  At the average 2.5% conversion rate (total guess, it's probably higher), and a high average package price of more than $100 (educated guess, but again, probably higher), they're making mucho mooola!   That's Spanish for "I'm looking at several Carribean islands that are for sale right now… but they must have a private airstrip because I don't do the helicopter thing anymore."

 

Reasons for success

• First mover in enormous industry.  There's just not really anyone to compete directly with them.   There are plenty of other places that will form an incorporation for you.  There are plenty of places to get your will.   They have a direct competitor in CompleteCase that will help you to get a divorce.  But, there is absolutely nobody that does all of this stuff under one roof like LegalZoom.
• Celebrity connection with Robert Shapiro (of OJ Simpson fame) brings credibility and exposure (just see the list of news outlets they've been featured on).  For my money, when he goes on TV he's one of the best interviewees in the world…
• Big brains, and big connections.  Have a look at their 'about us' page.  Not a big deal (…yawn…), but they've got one celebrity, one former member of the Supreme Court of California, 2 Harvard MBA's, a Yale grad, couple UCLA Law grads, blah blah blah.   I think some of these guys' pets might have prestigious degrees…
• Easy process.  It's a no-brainer to fill out one of their questionnaires.   I've done it a few times, so it must be easy!
• Customer service.  They really push their customer service from their site, which makes sense when you're selling a complicated product like they are.
• Smart marketing

 

What kind of marketing do they do?

• PPC – they're pretty much at the top of the pile for any search relating to the products they sell.
• Traditional press – Robert Shapiro is a draw for television interviews.
• Radio – They're sponsored by morning drive programs.
• SEO – The google query "site:legalzoom.com" shows 27,400 pages returned.   They've obviously got a robust content publishing system in place.

 

How to steal this idea

I think the keys to this type of business are:

1. Big market
2. Complicated service, made easy
3. Undercut traditional service model pricing
4. No real need to be face-to-face

 

Some of the traditional service industries that might be right for this type of business are:

• Insurance – being done by individual companies… but is there an insurance aggregator out there?
• Real estate – Zillow.com just rolled out… I'm very excited to see how these guys plan to cut out real estate agents for good.   This site looks very cool, but due to the demand on their servers today, I've been unable to check it out!
• Employment – Why is there not a company that runs a prospective employee through a questionnaire and standardizes the results for the prospective employers???   Every time I hire someone, I spend hours and hours of time trying to evaluate the resumes.
• Advertising – It seems to me that a company could fill out a questionnaire about their products/services, and get published in multiple offline sources for one low package price.
• Transportation booking – see my company RideOnTime.com .  The process of getting a limo or taxi in a new town WAS very complicated and hit-or-miss.  Not anymore!

 

Standard disclaimer

The data and analysis in this blog are complete guesses, not remotely researched, and should not be taken seriously.   This is meant only to show the basic business model of the site, and why I think it rocks.  If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.

Cool Internet Business Model - StubHub.com

Stubhub.com is, at first glance, just a glorified and more flexible ebay that focuses on only ticket sales. They facilitate the sale of tickets for any event – sports, concerts, events, etc… but – dig a little deeper and you find what's seemingly a monster money maker – in a very large niche, with consumers willing to spend money – and actively seeking you out!

The business is completely information based. No hard product, but they do receive the tickets from the seller and forward them to the buyer.

They charge both the seller and the buyer a small fee based upon the sales price of the tickets – and end up making 25% on every dollar that goes through the site. When the average ticket price seems to be around $100 – and an alexa ranking of 3,309 – they're making some serious cash!

Where's the beef? Plenty of beef here – this is a double-quarter pounder with cheese…

• 10% charge to buyers of tickets, in addition to the ticket price and shipping
• 15% fee to sellers of tickets, only charged if the tickets sell

After browsing the site for a while, I don't think it's conservative to say that there is higher than $100 average sales price for each ticket. With an Alexa ranking of 3,309 (very roughly estimated 30,000 daily visitors) and an online average 2.5% conversion… here's the (fuzzy) math:

$$ Breakdown
30,000 daily visitors
x 2.5% average e-commerce conversion rate
= 750 daily ticket purchasers

750
x 2 nobody ever goes to a concert or game alone…
x $100 average ticket price
= $150,000 daily revenue

$150,000
x 25% stubhub take
= $37,500 total daily gross

= $13,350,000 yearly gross

Reasons for success

• proven niche with affluent consumers
• listing your tickets for sale is free – pay nothing unless you get your price
• very flexible sales terms
  • set price – seller determines the price they want, and that's it
  • declining price – seller sets the amount they'd like to get for the tickets, and then the minimum they'll accept. Stubhub slowly reduces the price of the tickets from the high end to the low end.
  • auction – seller sets a minimum bid amount and a reserve price, and let's the auction determine how much they go for
• good marketing!

What kind of marketing do they do?

• PPC - they're #1 on a google, yahoo or msn search for "sports tickets"
• Radio – I hear their ads on AM radio sports stations very often
• SEO - the google query "site:www.stubhub.com" returns a whopping 340,000 results! They've published a quality textual based page for every major sporting team in every major league. They've published a page for every arena, every concert hall, and every band. Every state, major city, and Canadian province. They've even got pages for overseas locations.

How to steal this idea
I think the keys to this type of business are threefold:
1. big niche – everybody knows about it/goes to it
2. absolute expiration date
3. something you can't easily get

• vacation rentals – lots of vacationers, a set vacation time frame, nobody knows about places to stay away from their home
• cigars – proven consumer, expiration date, cigar shops sell only major brands
• ???

The data and analysis in this blog are complete guesses, not remotely researched, and should not be taken seriously.  This is meant only to show the basic business model of the site, and why I think it rocks.  If I've royally screwed the pooch, feel free to let me know, and I'll acknowledge my stupidity in a future post.

 

 

Why Info-based Internet Business Models?

I am going to try to routinely review an internet business model that's based purely on delivering information, or digital services. I am deeply interested in learning about these types of businesses, and what makes them so valuable to their customers – and in return – profitable for their owners. I will learn so much from my research that I may someday build my own successful endeavor.

What is an info-based internet business model? What is the source of profit?

• By my definition, an info-based internet business model is a web site that sells information, or community, or digital services.
• The source of profit is dicated by the type of service that's provided. If it's software, it might be a recurring monthly fee (Sales Force, Basecamp ). If it's services, it might be a transaction fee (E-trade, Legal Zoom). If it's pure data it might be subscription based (porn, Wall Street Journal) or affiliate based. Other cool models have no apparent money aspirations (Delicious, Wikipedia), other than to be bought out by a huge company. I'm intrigued by these more for the buzziness and traffic generating aspect – perhaps I'll figure out how to mash their coolness up with some path to profitability.

Why do I have such a passion for Internet business models that operate only on information, or digital services?

• Because they're new and shiny and creative. And I have shiny object syndrome, and I'm jealous of creative people. By their very newness, the undiscovered potential is immeasureable. The ability to be creative and start something that nobody else has done is very exciting!
• They're often automatable – you can set up a digital process that runs itself.
• They're global – data goes places boxes don't (very quickly). It doesn't cost nearly as much to set up a web site in French as it does to put a building there!
• They're cheap to operate, and easy to get started. You can set up a new info-based business in your spare time with a web-host, a little creativity and some brain-grease. —> not money, investors, contracts, lawyers, or commitments —> This is not to say that you shouldn't utilize traditional resources when setting up your online business – but you don't have to!
• When you put up a web site – you get the same amount of space as Wal-mart. You get the same real estate as IBM. Your ability to start something that people want, and that nobody else has done before will drive visitors, and customers. Google might step in and build it bigger and better than you – or buy you out – but either one would be an honor for me!
• They're measurable. Every 1 and 0 that passes across your servers can be stored for later analyzing. You can do this with an online retail store as well – but definitely not with a brick and mortar operation. I can track and A/B test my advertising ROI, my conversion rates, my visitor location/language, click paths, blah blah blah. There's too much measuring available to mention. The most important thing to know is that I can test advertising on a small scale and then roll it out big once I prove the ROI. A newspaper ad or television commercial doesn't do that.
• The marketing buzz available on the Internet is very powerful, and growing each day. Bloggers are a powerful army. A mention on the del.icio.us popular page or digg front page can bring down a server, it can drive news, it can replace PR —> or it could kill you if negative. The blogger attention directly results in search engine exposure, to reach a much bigger audience, and can also drive traditional news to explode the cycle bigger and bigger.
• It's got a long-tail. Links, search engines, press releases, articles, etc… all last a long time. I have sites from 1997 that no longer exist that still have links pointing to them!

Why don't I want to sell hard goods via the internet?

• Warehouses have been around for a long time – and I have no desire to do fulfillment.
• Drop shipping is now an option – but you should always control your product. If you're drop shipping, not only do you not have control of the product, but there are probably 97 other places on the Internet selling the same thing.
• Selling hard goods just doesn't seem as creative, or as fun as delivering value with information that people are willing to pay for. A wise man once told me that money won was twice as sweet as money earned – and I feel like shipping boxes is earning it, and being smart enough to have people paying me for data is like winning it.

Why am I writing about the coolest Internet biz models I can find? Being a programmer by trade, and an entrepreneur by passion, I always look to blatantly rip someone else off before I try to be creative enough to come up with something new myself. Now, this might be viewed by some as a cowardly way out of thinking very hard – but I have always programmed faster when using someone else's code snippet, and made more money by emulating something that I already know works. By learning how companies are currently successful by selling information, and digital services, I can also learn how to be successful at it myself. Who knows – maybe I'll be able to come up with something that no-one else yet has… an automatic uber information delivering, buzz-worthy, value-delivering, self-sustaining money tree!

is that too much to ask?

Where are Internet business models going? I'd love to hear feedback about where everyone thinks internet business models are headed. 5 years ago people knew the internet would be big – but how many people predicted that community sites like Wikipedia and My Space would rule the roost? Who really thought that search (Google) would be redefined as the most amazing money maker on the planet? What comes in the next 5 years – or – what kind of site are you going to start?