Building a Web 2.0 Business From Scratch

Tuesday, June 5, 2007 at 8:00pm by Site Administrator

On Guy Kawasaki’s How to Change the World blog, he offers a lot of practical advice, much of which is relating to entpreneurship.  In By the numbers, Guy breaks down the amount of time and the cost of the components he used to build his recently launched Trumors web 2.0 site. The site allows you to leave either a nugget of truth or a rumor – via phone, text message, email, or posting on the site via web browser.

Since the Trumors site needed custom software, I can understand how paying $4500 for software development is justified. But nearly $5K for legal fees sounds like a lot. I suppose it all depends on what you’re expecting. If you’re expecting quick success, it might be worth it to be prepared, to have some good business legal advice in advance. If you’re a bootstrapping entrepreneur, on the other hand, you may not have this kind of money to throw around upfront.

The $400 spent on the site’s logo could be cut in half. There are many logo design sites out there that charge under $200 for a quality design. (In fact, one such is a client of mine.) But if you want stationary, cards, etc., then expect to pay more. Full corporate packages that include website setup and design adds several hundred more. It really depends on what you can do yourself or thanks to partners.

But the numbers that surprise me are the $1100+ spent on registering 55 domain names – variations of trumors. So alternate TLDs (Top Level Domains) such as .de, .biz, etc., were registered. Guy admits that he “was too stupid and lazy” to have used a domain registrar service such as GoDaddy to have saved some of that cost. So he paid about $20 per domain, on average. He could have cut that to $6.50 for some TLDs, even $0.99 for .info at GoDaddy.

However, 55 domains, not the domain cost, seems like overkill. I’m not saying it’s wrong for what Guy is doing, just that not every web business needs to do that. Unless you have serious reasons to own pretty much every TLD variation, I’d say stick to .com, .biz, .net, .info. Maybes include .org, .us (if applicable) or possibly a .tv, etc.

Where you may want to get some variation is in the domain name itself. Is your domain name easily mispelled? Does it “look” different than it sounds? Register some .com variations.

You are not going to build websites on every single domain you register. Just build one and redirect the rest to it. Though some companies are starting to use the .info variation to provide company information, and .org for non-profit projects. That means building additional sites, and the average bootstrapper may the intent, but it will come later, when funds permit.

Now, Guy expresses surprise in how many page views his Trumors site had in just 11 days, and that surprises me. His blog is extremely popular, and has many loyal readers. Plus he got “press” at a number of key websites.

This just goes to show you that even if you don’t want to earn revenue from writing a blog, it can be a strategic branding tool for your later entrepreneurial endeavors.

If you don’t have time to go through Guy’s article completely just now (since I’ve babbled at length), his final bullet point lists the four lessons he learned (as well as a little slideshow). I’ve paraphrased them here in bold, with some commentary.

  1. Bad PR can be good.
    On the Internet, bad PR can bring you traffic from the curious. Some may then realize that they disagree with the bad PR, and these visitors may become loyal to you.

  2. $12,000 goes a long way.
    Yes it does. So does $5,000. If you’re bootstrapping and trying to produce a web-based business, don’t skimp on the essentials. Do, however, defer other costs until they’re (almost) necessary, with the revenue that comes in.

  3. You can work with a virtual team.
    This is one of the best aspects of working online. I collaborate with people all over the world on a daily basis. This is especially important if you’re a mobile digital entrepreneur.

  4. Life is good for entrepreneurs these days.
    Yes, yes it is. I’d dare say it’s easier to build a brand online than offline, and you have the option of a shorter work week or many mini-vacations while remaining connected to your team.

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