It's considered "HIP" to say that at the moment. That doesn't make it right though. In the same way it's hip to hate Java right now. That doesn't mean that Java isn't good at solving a set of problems in a good way - it clearly is.
There's millions to be made from advertising revenue. If you can get people to pay for something, great, but not every product is the type where paying would make any sense at all. By charging consumers directly, you massively reduce your audience to a small subset of users.
It's quite funny to see people imply that advertising revenue isn't "real" revenue, or is in some way less valuable than getting customers to pay directly.
You know what the most powerful marketing word in the world is? "FREE".
The clever thing is using that to your advantage and still making money. Tons of industries do that though, loss leaders work, 'free cellphone (with contract) works' etc etc.
> It's quite funny to see people imply that advertising revenue isn't "real" revenue, or is in some way less valuable than getting customers to pay directly.
As long as numbers like these hold true: "At the $1 RPM (CPM/CPA/CPC) level achieved by most general sites, you need 4 billion page views/month ... to [reach] $50M in revenue per year" (http://www.thealarmclock.com/mt/archives/2007/03/a_vcs_view_...), charging money for a product that creates value is going to be a more viable way of starting a successful company online
The value of traffic rises very sharply when it becomes more targeted though. The value of traffic on http://bountii.com is worth orders of magnitude more than on a random Facebook page, because it's all people who are just about to buy something.
But targeted content and user generated content are two different things. Digg's Gaming category is more targeted than a random Facebook page, but that still doesn't mean a company wants to attach their brand to any random topic a user might come up with (something like, say, "[advertised game on this page] sucks").
Getting big and targeted is a lot more expensive (and highly competitive, see gadgets, etc.) than getting big and general, since it usually means non-user generated content.
Don't be short sighted. Advertising on the web can be highly targeted and very effective. It's also measurable. Advertising on TV is dying, in papers, it's dying too. Ads on the web are the future, and though it may not seem like an excellent way for now, it's not going to get worse in the future. Compare 5 years ago to now. More companies can survive on ads than 5 years ago.
That an unlikely scenario. Pop-up ad blockers became popular because they eliminated a genuinely obtrusive method of advertising. Current online advertising is a pretty good compromise of unobtrusive vs. self supportive.
If a company like firefox implemented ad blocking by default, they'd be doing the web a huge favor. Unlike pop-up blocking, firefox would be killing the only revenue sources for the majority of today's popular websites. Sure, it's easy to say that more companies should focus on getting 'real' business models, but a web in which _every_ professional web site required a subscription fee would be totally impractical.
It will be very cool, however, to see how the micropayments industry challenges advertising. While it's unlikely CNN will every jump on it, what if some of the more adventurous sites ditched advertising in favor of a donation box model?
I agree it's unlikely, especially as that would likely kill firefox's revenue stream. I have often thought that a plugin like trackmenot that clicks random ads would be another thing that could destroy advertising.
The thing is, people thought ad-skipping technology was unlikely until tivo came out and made it usable. I don't imagine it will be too long before someone comes out and does this, and if they execute well, it would be devastating to the industry.
AdBlock blocks some adverts. It's useless blocking a large amount of adverts.
If it comes installed, adverts will all just change and it'll be rendered useless.
You can't draw parallels with TiVo. Video adverts prevent you getting to see the content you want. You have to wait.
Internet advertising does not do this. It's just additional information.
So you are saying it's impossible?
I don't see it. There are always methods to block ads, e.g. user-classification, preloading of content, alteration of flash, domain tracing...
Edit: This could be thought of like an analogy to spyware detectors, i.e. ad-aware. They have a ton of custom detectors, which are continually updated to classify spyware. I would certainly pay for a commercial free web.
Sorry. I disagree entirely [assuming you think advertisers would win]. It would be like spyware vs spyware blocking, viruses vs virus scanners. Except that legit businesses couldn't do anything illegal, and thus far easier to manage.
User generated content. Users classify links as ads after getting fooled, preventing other users from seeing it.
You could also scan all outbound links and check to see if content (actual content) is the same without the parameters (e.g. my.affiliate.com/?affid=134 == my.affiliate.com or aff123.affiliate.com == www.affiliate.com) simply based on a few heuristics.
I am thinking something like a combination of opendns + adblock + digg would work in a nice slick package so that grandmas can use it.
Make something people want. People don't really care if someone gets commission. In fact they often go out of their way to make the website commission if they like what the website does.
I'm not saying I would do it :) You said it couldn't be done, I disagree.
I do think it's something people want too. Distraction is a huge problem on the web. I know it's not what you want being an ad supported business, but I do believe someone will do it at some point.
It depends entirely on who you're trying to sell to. If you're selling to businesses, then it's an easier job getting them to pay you directly.
Personally though in my experience of consumer based websites, making money from advertising is 'easy'. Orders of magnitude easier than getting someone to reach for their wallet.
Ad revenue is real revenue. A dollar is a dollar whether it comes from a user or an advertiser.
That being said, for every (EDIT:ok, most) struggling consumer startup you show me, I can show you a way they can apply their technology in different fields and charge customers.
We just have to stop being afraid to say "Pay Me Please".
Right, but I think for that to happen widely, there needs to be a better payment system for the web.
ISPs should have micropayment systems that add charges to your bill - just like when you SMS a shortcode, it gets added to your cellphone bill.
This would massively change things on the web.
At the moment though, the hurdle is just way too high for consumers. The effort required to get someone to pay you $10 isn't even in the same ballpark as the effort required to make $10 from advertising.
Most of the really successful ideas started without a "pricing" link - google, skype, wikipedia, youtube, facebook, myspace, craigslist, plentyoffish, instant messaging etc.
And what the people want is free - torrents, muxtape, tvlinks, etc.
I'm not saying it's wrong to charge money, but not charging money has been a successful strategy for a good number of startups.
All the companies named above are the exception in their categories. I do not know another successful Google, Skype, Craigslist....
By the way Youtube, Facebook and Skype are not profitable yet (at least not to my knowledge so excuses it if I am wrong).
Let me give you a good example of "Pricing".
Take a company such as ClickCare. They provide a web based environment for home care providers to remotely ask questions to doctors, and share photos & videos of patients. The doctors can review the information from anywhere and make the proper suggestions. That is what they do, well they are also HIPPA compliant to ensure the privacy/security of the patient information. Now this video, photo, wiki company charges doctors 20,000 USD a year.
I am not saying that is all to their enterprise, but whatever effort two guys in a garage are going through to build the next Flickr, they could apply their technology in less sexy field and have a significantly higher chance at being successful.
But not everyone wants to build a profitable, not famous business. They want to be rockstars.
Yet some companies surge every now and then to offer premium video conferencing services, or offer custom search services to companies with millions of documents across their network and they charge a nice fee for it.
You have companies such as Webex dominating web conference, yet you have startups such as MeetCast with a promising technology (although I have only seen a short screencast once) and I am confident they can make a good amount of money from this technology.
> Most of the really successful ideas started without a "pricing" link
If you define "success" to mean "lots of traffic" and not "profitable and growing". Clearly this is the case, because half of the companies you listed aren't profitable.
There are -lots- of internet companies who charge and are very successful. I'm not talking 37 Signals and Fog Creek - literally drops in the bucket. I'm talking about Amazon, Salesforce, and Google AdWords. Oh and how does Craigslist make money? Charging users.
> not charging money has been a successful strategy for a good number of startups.
No offense, but you're blowing both the "successful" and "good number" part of this way out of proportion.
To some extent, yes. But it can be dangerous to go too far down that road. You're saying in effect you're going to give them what you think they should want, instead of what they do want. You have to be extra careful when doing that. Historically it has been responsible for a lot of bad things.
Finally, someone is saying it. The ideas in silicon valley that are being produced now are just so boring. I can't remember the last time I said : wow, or even just thought - well, that's different.
Sure, it's great to make a better database examiner, but if you're young and you have nothing to lose, why not try something really fresh. Something brand new? That webcam figure is fresh, for example.
Occam's razor suggests that the reason the current ideas seem boring is that you don't understand yet which ones have big potential. Microprocessors seem a great idea in retrospect, because we've seen now what they turned into, but initially hardly anyone cared about them, even within Intel.
It may not be possible to understand what they can become, but one can look at the industry and know roughly what will happen. Let's say some guy comes up with some really great hubcaps.He can grow to become the best hubcap maker in the world. But he's still just making hubcaps, and most people don't care about them.
But the people who do stuff in media, for example music or tv, always have potential to change the industry. Same with anything communication related. These are core industries that are fundamental to human beings - so startups in those areas always have huge potential. Like muxtape for example, or justin.tv, those startups can change the world. They are not changing the world yet, but I can see that with the right things in place, they can change the world. It's the same with microprocessors, anyone who was in the field knew that if size went down, price went down and so on, microprocessors would make a huge difference. They did not predict the apps that would be enabled because of them.
Why did they not? Microprocessors created a platform, and a platform opens a brand new field for new people to create ideas within. When a startup works on something that creates a new type of platform, then breakout ideas can happen on the platform. Hubcaps are not a platform that others can build on. They're the end of a line.
truly innovative ideas are almost impossible to make money with, so people settle for doing things that they know will sell(either to users or another company)
From the Wikipedia article on Silicon Valley "It was in Silicon Valley that the integrated circuit, the microprocessor, the microcomputer, among other key technologies, were developed, and has been the site of electronic innovation for over four decades"
These were all truly innovative ideas, and they made enough money to give Silicon Valley it's name.
The problem with truly innovative ideas is not that they are impossible to make money with. The problem is that it's a homerun business where a few succeed and most fail. VC's have known this for ages, which is why they invest in innovation.
This seems to be a very unpopular opinion around here. There have been few web businesses I think of as "wow" as well. This era isn't about the technological innovation (there has been little really in the last few years of software), it's about usability innovation. Mainly making things simpler and putting a framework around marketing your wares. This is great, and needed, but not so interesting.
My favourite startup (if you could still call it that) is Telnic (British). I think the .tel TLD will be revolutionary, but has so far received surprisingly little attention from tech/entrepreneurial communities like this one and TechCrunch - perhaps because it's not in the Valley? I guess this might change when it launches next week, or on March 24th when general availability begins..
If you want to get into a discussion then let me know and I'll pitch some thoughts at you, but wanted to introduce you to the subject first, in case you hadn't already looked into it.
It's awesome technology, but I'm disturbed by the seeming purpose of it. There's a whole section of the video devoted to molesting, and taking clothes off of, the teenage girl figure until she's crying in a corner...and then giving her a teddy bear to make her happy again.
The Japanese sexual culture is deeply disturbing is what I'm trying to say here.
I just don't understand what kind of person gets their jollies by molesting a virtual child until they are crying in a corner. I'm not suggesting there ought to be a law against molesting virtual children.
From what I understand of Japanese culture, there are few sexual taboos. People are much more open and honest about sex than they are here.
In America, anything beyond missionary position is considered weird. Anal sex is a little edgy. BDSM and roleplaying are considered weird and freaky by pretty much everybody. Which is odd, because sex really should be one of the most individual, unique things for people. Each person has different standards for what they find hot. Why shouldn't that play out during sex?
Those fantasies go far and wide. I'm sure every single person reading this has had bizarre sexual thoughts and ideas. Perhaps not for long, perhaps you've denied the thoughts to yourself as wrong, but the thoughts have crossed your mind. So the concept of a robot like this is, why not let people indulge in these fantasies? Some things you cannot achieve unless you do it virtually. That means either you suppress those fantasies, which is unhealthy, or you find some other outlet - virtual, which is fine, or real, which is certainly not.
My opinion is that having a sexual fantasy about beating and molesting a child is perfectly natural. That's not my personal perverted fantasy, but if it's somebody else's I'm not going to call that strange. So if they've found a way to have that fantasy that doesn't involve harming a child, then props to them! If America had such an open nature to sex, we'd have fewer cultural problems than we do (and we have a lot).
In America, anything beyond missionary position is considered weird. Anal sex is a little edgy. BDSM and roleplaying are considered weird and freaky by pretty much everybody.
Really? I guess living in or near large cities all these years has warped my perspective of what "in America" means. None of these things seems particularly weird or taboo amongst my social set.
If America had such an open nature to sex, we'd have fewer cultural problems than we do (and we have a lot).
And Japan doesn't have problems? I think you're giving the culture a huge pass. If you wanted to hold up the Netherlands as an example of a very healthy and very open sexual culture (including a societal understanding that teenagers have an interest in sex, and will have sex), then I'd be on board with you. But, we're talking about Japan here...The land of "Christmas cake", "kawaii", etc. Infantilization of women is the norm. That's not healthy or merely open...that's just broken in a different direction than America's protestant zeal.
I wasn't trying to suggest that America has a healthy approach to sex. We, on the whole, don't, particularly with regard to teenagers and sex (some of our child protection laws are bizarre and have horrific consequences, like labeling a 17 year old that has sex with a consenting 15 year old as a sexual predator and a child abuser). But I said nothing about America in my comments. This wasn't a "Go USA! Japan sucks!" conversation, and I don't think there's really anything interesting about such a conversation.
Again, I'm not suggesting it should be illegal...just that I'm rather stunned that the market for a "molest a child" game is large enough such that that is how they market this product. It is, to me, a disturbing indicator of the way a reasonably large segment of Japanese men feel about women (large enough to be the market they've chosen to target with this really clever new toy).
Again, I'm not suggesting it should be illegal...just that I'm rather stunned that the market for a "molest a child" game is large enough such that that is how they market this product.
Phrased like that, it seems more bizarre than it did when I first thought about it.
Really? I guess living in or near large cities all these years has warped my perspective of what "in America" means. None of these things seems particularly weird or taboo amongst my social set.
Possibly this is just youth speaking. Those things are absolutely viewed as freak attitudes in college.
max is a marketing GENIUS. searching for someone's name and it inevitably turns up x*results of advertisements for his company ;)
i say this is a predictor of success. if you search someone's full name, count how many times you see their shirt with their company logo. until i have enough money as max to throw around, i'll pose with a 8.5x11 sheet of paper with my logo written or printed on it.
