Before I co-founded HubPages.com, I came up with a framework to help me work through various online business ideas. If the business idea passed the framework checklist, I’d consider doing it.
Here are a few of the questions in the framework -If I could only find the original spreadsheet:)
1. Can traffic be acquired inexpensively? Either by natural SEO, or viral signups. Yes is required to move forward
2. Does it require inventory risk? For example, if I was going to sell something did I have to carry inventory. If I did, it failed the test.
3. Were there established competitors? If the answer to this is yes, was my idea substantially different/better. If there were more than 5, then it failed.
4. Is content created professionally or by users? If it requires professional content, it fails. Professional content implies a high cost of content.
5. Is the market fragmented and can it be aggregated? For example, HubPages is a content site, but the content can be rolled up under one site. Not only can all the entertainment content be organized, but so can all the health and pet content.
6. Is there a clear business model that lines up under online advertising, affiliate marketing, subscription services, lead generation, eccommerce, saas, support (open source) or other successful categories like dating and jobs? My thinking is there are actually just a few ways to really make money. You have to sell something at some level and there are only a few categories where there are enough dollars available online to make a big business. To get those dollars, you have to have what I call business model fit to product and scale (especially for an ad supported business).
Excellent post. Can you write about how you got things started once you found something that had the potential to work? For example, did you start coding yourself as a one man show in the beginning or were you primarily the brains behind it and had an engineer working alongside you. How long did you have to go before making any kind of money?
I appreciate your tips. I just purchased an expensive online business model, which they guarantee a lot of things in it, they have given me websites and everything. Will keep your ideas in mind to getting me started on the right track online.
Cheers