What I Learned from 10 Online Businesses

Everyone has business ideas. Some people quickly forget them, others remember and wonder what could have been, and then there are the crazies who spend 23 hours of the day, working before and after their 9-to-5 jobs (unless they are lucky enough not to have a 9-to-5), breaking their necks implementing their ideas, failing, succeeding, learning, bleeding out of their ears from stress and worry, and ultimately loving it. In this article I want to share with you my experiences of 10 Web companies I have started in the past and what happened to them.

Attempt No. 1: Virtual Socrates

My first attempt at entrepreneurship was a long and winding failure that started during college when I was studying computer science and realized I was really interested in philosophy as well.

[login]Problem I tried to solve: I wanted to make it easy, fun and exciting for others to learn philosophy.

Attempted Solution: Automate Socratic dialogs so software would act as Socrates and the user would try to discuss the topics of the original dialogs. This interactive and simpler way of learning the core concepts in philosophy was going to make people more interested in philosophy.

Failure Points: The usability of this project turned out to be the toughest to implement. I partnered with a very senior, but kind of flaky engineer, and we spent about a year implementing the solution. The complexity of the project grew as we were developing it, business direction was lacking, and the project was never released to the public and collapsed after my partner left the project.

Now I can laugh about it because my current approach to starting projects is to have one person be able to complete the Proof of Concept in less than three months. If it takes longer, a red flag goes off in my head.

Attempt No. 2: Semantic Shopping and Fashion Search

One thing that came out of the philosophy project was the monetization question that would not really be addressed by doing just philosophy. Towards the end of that project I had realigned it to focus on ecommerce, now dealing less with Socratic questions of “What is virtue?” to something more like “What shoes are cool?”

Problem I was trying to solve: Rigid and “unnatural” current online shopping experience where people can’t find items according to their subjective taste.

Attempted Solution: Semantic Web implementation of a search that “understands” subjective concepts like cool, sexy, and a number of styles in order to help people shop in a way that is closer to how they would naturally think of the items they want.

Failure Points: By many counts this project was a success. I put together a great team of real experts, we created the semantic fashion search, and the quality of the search was slowly improving. The project was even making money helping people shop! The problem we ran into was acquiring new shoppers in the hyper competitive apparel market. Plus having a product that was 20% better than something like Amazon search that currently exists was not enough to get people to switch over how they shop.

The technology was also not simple and we spent too many of our resources maintaining and refining the very complex semantic search consisting of NLP and ontology technologies. Plus sales margins were razor thin and there did not seem to be a light at the end of the tunnel in terms of generating enough profit to maintain a 3-5 person team. Ultimately, the project did not survive.

Attempt No. 3: Selling the Semantic Fashion Search to Established E-Commerce Sites (B2B)

We tried to salvage the situation by packaging the search to help bigger companies add an interesting wrinkle to their existing sites. This was quite an uphill battle. Meetings were difficult to get, sales cycles were painfully long and suffocating even in the best cases. After a number of partnerships (not clients) we realized we did not have the resources to see these partnerships through.

What made the sales cycle so difficult in this case was that we did not have a product that was mature enough to really excite the customers. And a big enterprise sale, everything has to go right: scalability, much improved customer experience, etc.

Lesson learned: Understand available resources and make sure the ambitiousness of the project matches the available resources (this was pretty much echoed in every project).

Attempt No. 4: Blogging as a Business

Blogging is a very interesting business. The best bloggers are great at writing great content, SEO, picking the right niche, and being patient, as there is quite a bit of work that goes into creating a well-read blog before it takes off.

My blog was about the Semantic Web community in NYC. It did reasonably well, and an interesting nuance of the blog is that an editor from DevX noticed the blog and invited me to write for DevX. Due to copyright issues I decided to discontinue the blog and focus on my DevX writing.

At DevX I get to have a job where I do what I love: write about startups and technology, so I consider the blog have been a success as it has gotten me here.

Had I continued with my blog, I would have likely found that my topic had been too niche.

Attempt No. 5: Startup Consultancy

Something that occurred naturally during all my startup work was that I was gaining all sorts of very rounded skills and was learning management, developing a business savvy that was complimenting my existing programming skills very nicely. This caused a number of people to come to me for help. As a rule I am always happy to help, but after a while I just got overwhelmed and had to start a small startup consultancy which made a little money, let me do what I loved to do: work with startups and help them grow.

A major problem was that I was helping these entrepreneurs do everything free and fast, and since I preached keeping risk low and spending little, this made my pay pretty low. Plus, I never felt comfortable taking money from people who didn’t have much to begin with. So I did not attempt to grow my practice, but still always offer to help as much I reasonably can.

Attempt No. 6: Personal Case Study with Terrible Branding

When starting a new site there are always questions of what is a good domain name and how to brand the company. Here is my fun personal experiment:

I tried to come up with the worst possible brand for a site, but have the actual site be useful with good content, and try to compare the results with similar well-branded.

So without further ado, I created a digestion health site called red poop and a urinary health site called red urine. I even used the same site layout (I tend to recycle the same one anyhow).

The findings were a mixed bag. Yes, everything was harder: ad click-through rate was lower, visitor skepticism was higher (no surprise with a name like that) and I had to work extra hard to achieve even meager results.

But that was also the great thing about these sites. Because I worked extra hard, I had to give it that extra 110% savvy, intelligence and creativity, which caused me to learn more and improve the overall product more. To me this has become the answer of why there are so many great companies out there with terrible names — because the founders were the type to work extra hard and to overcome those obstacles.

Once I compensated for the terribly branded sites, visitors did not mind it too much and I achieved a very low bounce rate for the home page in the 20%-30% range (this is considered quite good). Furthermore, the sites were extremely easy and low-tech to create. And the ads on the sites were making money from the first month, as I was getting the SEO right (which is something that can’t be said about most startups). Granted, the income from these sites was pretty low, but I got to about a 2% click-through rate on the ads which is not great but could be worse with sites like this.

The bad names did hurt the sites by decreasing the chance of someone posting a link to something that sounds so weird. So I think in the long run, I lose out on the “link love” as it is called in the SEO community, but these sites continue to slowly grow mostly from search engine traffic.

Another important takeaway was that the advertisement space for digestive and urinary health was not competitive. What that meant for me as the publisher was that the ad clicks were not earning much money on average when compared to other verticals like commerce or entertainment.

Attempt No. 7: Health Site Network

I took the lessons learned in SEO and advertising from the badly named brands and created a few sites in much more competitive health spaces such as:

In hindsight, I probably should have narrowed my focus and not created so many different small sites, as this is just a side project for me and every new such site dis-focused my overall effort, but I do have to admit that I have developed a personal affinity for these health sites because they may actually help someone. Plus I have fun and learn a lot when I work on them, and they tend to grow very slowly revenue.

Attempt No. 8: Brokering Models

My current interest is with what I call “brokering models” where a site just serves as a platform for bringing people together (brokering them). Facebook, Meetup.com, and even Twitter are huge brokering platforms. They have large scale and seemingly endless resources to grow. It is very difficult for new companies to catch them. Right now there is a niche brokering phenomenon happening where smaller sites are creating niche communities.

An example would be a site that brings cycling enthusiasts together in California, or a site focused on matching tutors with students in particular geographical areas. I don’t know whether such sites exist, but they can typically do a much better job than the big sites as satisfying their niche audience.

I am currently working on a site that would create a stronger San Francisco women’s community by helping local women find exercise buddies, create mothers groups, and stronger professional female networks.

It isn’t a particularly ambitious project, which I like about it, since I do not have the resources to create big, ambitious projects, and I like that this project has a chance to help people, which is my own big motivation and gives brings me personal satisfaction as well. I am also doing something similar with Hiking San Francisco where I want to create a thriving local hiking community where I bring together people looking for others to hike with.

Attempt No. 9: Virtual Memorial — Case Study in Lead Acquisition Patterns and Business Ethics

I once was walking in a place from which I could see a military cemetery, and I noticed one peculiar thing. There was not a single person visiting any of the thousands of graves at that moment. I thought that the people buried have loved ones who cannot visit their graves as often as they’d like, and could maybe visit a virtual online memorial page with nice comments from others.

After some research I realized that there were already many such websites that enabled people to create online memorials. They easily filled the top 10 search results for a Google search like “online memorial.” I was not going to be able to compete there. Instead, very recently I started a Grief and Bereavement site that helped people cope with loss, and enable people to create a virtual memorial for lost family members or veterans.

The strategy is that there is lots of competition in the virtual memorial space. So I don’t want to compete with those more established sites. Instead, I will help people who are dealing with their bereavement and grief, and let them make a memorial.

This site is still under development because I have not thought through all the ethical issues. I do not feel comfortable making money from people’s death or grief. This is a sensitive space where I should help people for free. But if I do make the site completely non-profit, I won’t be able to devote much time to it since I need to think about making a living.

If anyone has thoughts on this, I’d love to hear, as this is a project I’d like to pursue because it is philanthropic and I feel something that is needed and would help people.

Attempt No. 10: DontWantToWork.com

I think the name speaks for itself here, but it can be a bit misleading. The site is not for people who are lazy, but rather for people who don’t want to work a regular job and are maybe entrepreneurs or have other things in mind.

The site is under development as I am looking to free up some time to work on it. I envision it doing two things: 1) Educate people on personal finance so they can make smarter decisions with the money they have and 2) Help them find partners for whatever their interests or projects may be.

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