Okay, so yesterday I made a pretty hefty promise: 30 business ideas in 30 days.

For the next month, I’ll post a daily message, brainstorming some new business ideas, knocking around the strengths and weaknesses of each idea. Some of the ideas will suck. A lot. Hopefully at least one idea will really stand out as a clear winner, from a marketing perspective as well as a development perspective.

At the end of 30 days (or shortly thereafter), I’ll pick an idea and run with it. Over the following six months, I’ll develop the software and the marketing strategy. I’ll launch a website and maybe write a few bullshit press releases. And then people will give me actual cash money to purchase my software.

Obviously a foolproof plan.

With all that in mind, I was poised today to present to you my first software idea and get started with the 30-day project.

But instead, I’m going to backpedal slightly and waste a day thinking about a few overarching principles that will be important to keep in mind as I think through these 30 ideas.

Principle #1: Ad Revenue can be Tricky

I’ve hosted several discussion forums over the last couple of years, and I’ve earned a few thousand dollars in click revenue. It’s not much, but in the process, I’ve learned a few important lessons about ad-funded websites:

1. An ad-funded website must have a community of loyal users, regularly contributing interesting content. These people will rarely click on ads. But their presence is vital to the ongoing flow of content.
2. The site also needs a constant stream of anonymous, transient users. These people will rarely contribute any new content. They’ll find the website through a search engine, browse briefly through some of the content, and then 1% of them will click on an ad and be gone forever. This crowd needs to account for at least 95% of the website’s daily traffic.
3. The content has to be somehow product-related.

This last bit is the most important part. This is how the people in Group 2 find the website. Someone googles for ‘rock climbing’ and winds up on your website, where one of your users has written an article about climbing shoes. The transient user reads part of the article (which recommends a pair of Five-Ten Coyotes) and then she clicks on an ad from REI. When that happens, you make ten cents.

If any of those steps fail, you don’t make ten cents. If you don’t have a user contributing articles about climbing shoes, then the transient user will never find your website, and will never click on your ads.

Anyhow, I could go on and on about this forever, but I’ll stop now. The point is that it’s difficult to build an entire business around phpBB and AdSense.

Principle #2: There’s Nothing Special About Web Software

Building webapps is a pain in the ass.

Developing a responsive, attractive user interface out of HTML/CSS that works correctly in all the major browsers is far more difficult than it should be. And the predominant web-frameworks don’t make life any easier by pretending that it’s actually possible to build a true MVC architecture on top of the request-response model of HTTP.

Often, a browser interface is exactly the right kind of environment for an application. But a web-ified, ajax-icated spreadsheet is still…just a spreadsheet.

For me to justify the headaches of building (and hosting) a webapp, the software needs to meet at least one of these criteria:

1. The software needs to be fundamentally social, facilitating some sort of communication between a large group of scattered users. (forums, blogs, email clients, bugzilla)
2. Or the software needs to have access to some enormous centralized repository of information. (google, wikipedia, youtube, mapquest)

If it doesn’t fulfill either of those criteria, then it’s not going to be a webapp.

Principle #3: I Like Writing Tricky Software

I’d like to take a moment to introduce you to a guy I admire. His name is Andy Brice, and he developed a piece of software called Perfect Table Plan.

PTP uses a genetic algorithm to optimize a really difficult combinatorial problem: planning an event (like a wedding) so that the seating arrangements of the guests complies with some set of (potentially conflicting) criteria. Aunts and uncles usually want to sit together. Families with seven kids need to sit at tables with at least nine chairs. Girlfriends should sit close to their boyfriends, but far far away from their boyfriends’ ex-girlfriends.

What impresses me most is that Andy uses some really sophisticated algorithms under-the-covers to solve a problem that vexes ordinary people. Probably very few people who use Andy’s software understand the underlying technology. And yet it happily solves their problems, crunching numbers until it finds an optimum solution.

I want to develop something like that.

Good on ya, Andy.

Principle #4: I’m Just One Guy

I’ve got some pretty grandiose ideas about software, and there are some very large systems that I’d love to develop.

The temptation for me is very strong to focus on an overly complex, research-y kind of project.

But I’m just one dude, with limited time and limited resources. My focus needs to be on producing a ‘product’, rather than simply working on a ‘project’. I need to keep that in mind as I evaluate these 30 business ideas to identify which of them will fit comfortably within a six month time-frame.

…

Okay, now that I’ve got that out of the way, I should be ready to start exploring the first actual product idea tomorrow.

The next 30 days should be very interesting.

This entry was posted on Friday, June 9th, 2006 at 1:10 am and is filed under biz. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.