How the West was won…lessons on profitability.

As a consultant to people trying to make money online, I often get asked my views on “the web”.  The WWW (world wide web) in many ways is like it’s other WWW counterpart, the wild, wild west, but not in the ways that you might think. Oftentimes I tell them to spend less on building there site and more effort on marketing it. (Often that gets roundly booed and dismissed for shiny bright objects that attract attention.)

Here are a couple of my observations.

When most folks think of the wild, wild west, they think of a lawless area that is devoid of rules and where “frontier justice” is the often the only kind around. I think of the wild wild west as a large space with lots of room to grow and most importantly, with VERY low barriers to entry. Glenn Kelman of Redfin made some interesting points in a recent blog on real estate websites. In his estimation the table stakes for the real estate listing websites may well be rising.  I still think that the smart money is small savvy sites whose only burn rate is the six pack of Diet Mt. Dew that their creators consume. Think I am kidding? Please consider the following:

In the west, a person could homestead a piece of ground and turn it into a producing livelihood. Costs had to be kept low and profiability MATTERED. The only folks that survived were the hardy souls who worked, saved, invested, and saved more. The savvy ones were the ones who kept their powder dry.

These prinicples have not changed. In today’s WWW, there are a lot of flashy dudes with a lot of “whizbang” technology that comes at a high price. That (stuff) is ex-pen-sive. Then there are the small, low barrier to entry guys. They are the clever MacGyver types who can build an internet marketing vehicle out of chewing gum, a paperclip and a roll of duct tape that would stagger you. And guess what: Those site sell too! Open Source has added many tools that allow bootstrappers access to MANY of the cool toys that only the well heeled used to have. In the hands of the creative, those marketing weapons are DEADLY. Want some examples?

Hugh Hewitt, a radio talk show host and incredible web entrepreneur in his own right, launched www.amaze.fm. He wanted a place to find new and interesting bump music for his show, and a way to find some up and coming independant music makers. The traffic results were STAGGERING given the small investment.

Another friend of mine just closed a real estate deal (three more deals in the pipeline) from a blog/site that cost him a whopping $150 plus his time. Here’s the thing: The buyer is JUST as happy with the property and my friend is JUST as thrilled to cash the commission check. He started earnest effort on the blog a scant few months ago (4 to be exact).

This blog (EricOnSearch) itsself was profitable in its second month of existance. Why? Not because it had tapped some huge spring of new found internet revenue with a great VC funded shiny business plan. Nope. Just a well thought out idea by a guy willing to put the elbow grease into it. The main thing that made it profitable was that I did not spend very much at first in putting it together.

Not having a huge bankroll in today’s WWW has much the same benefits that it did back then. Necessity is the mother of invention (and creativity). And invention and creativity are what profitability on the web is derived from.   

IMO, too much of the VC money is spent on hype, promotion, potential and overly large ideas. If you REALLY want to make some sick returns on internet venture capital, you’d get in the business of micro loans to the rabid workaholics that are savvy, run lean, cn bootstrap with the best of them and most of all who have the innate creativity that comes from NEED. I think the opportunities there are truly staggering…the ROI on a six pack of Diet Mt. Dew is truly pretty sweet.

Have an internet bootstrap success story? PLEASE share it with me! I’d be glad to post it here to help inspire others to out hustle the big dogs.

Thoughts?