Step 1: Profit.

A running joke on Fark.com and other sites goes something like:

1. Learn to Fly (or some other obligatory phrase)
2. ???
3. Profit.

Unfortunately, too many Internet start ups and entrepreneurs think that this:

1. Build a website (or application)
2. ???
3. Profit.

Is a legitimate business plan!

You want some sage advice? Start with:

1. Profit.

Figure out exactly how you are going to make money and work backwards from there. Don’t think “oh, maybe I should write a Facebook application that . . . ” or “A website about [insert random topic] . . . would be pretty interesting.”

No. That’s not a business.

Start with how to make money.

Start with “We want our customers to buy the pro version of this software we are going to build” or “This sector generates $200 per lead in revenue” or “We’re going to make money by charging for service X.”

Then, once you know how you’re going to make money, work backwards to figure out how best to drive revenue through your efforts. Make sure you spend less than you get in revenue.

This is so ridiculously obvious that you wouldn’t think that it even warrants writing about. But every day you see a new website, new software application, or new Internet startup that has nothing but the flimsiest way to, you know, actually make money.

Start with how you are going to profit and work from backwards from there. If you’re not spending less than you’re making, then you’re doing it wrong.

Sincerely,

Captain Obvious

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4 Responses to “Step 1: Profit.”

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  2. ruug says:

    the joke was started by the underpants gnomes on southpark
    http://www.niallkennedy.com/blog/uploads/sp_gnomes.mov

  3. [...] Quadszilla has beaten me to the sucker punch with a basic primer for web startups: Start with how you are going to profit and work from backwards from there. If you’re not spending less than you’re making, then you’re doing it wrong. [...]

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