Ninging Up A Storm (For Peanuts)

Combine Ning and Wordpress and I'll essentially have my social media empire for less than a cup of coffee (assuming I have a computer and broadband connection, which I do. A good graphic designer would bump that a tad if the templates aren't cutting it.)

Throw in a few cool T-shirts and Google AdSense and I'm ready to roll in the bucks. (I hope you can tell when I'm being facetious.)

So where do you think the true barrier to entry is? (Hint: It's not tech.)

I found Ning's explanation of their business model intriguing. Basically Ning's saying they'll figure out the revenue model as they go along, beginning with the ubiquitous ad revenue model:

Our goal is to make enough money from advertising and a set of premium services to support a free Playground for the foreseeable future.

Currently, we are exploring:

• Simple, targeted advertising on all apps running on Ning free accounts, including ones we've created.
• The ability for developers to upgrade to larger content quotas.
• Completely optional fee-based features for developers such as turning off View Source or Clone This App, hiding or tailoring the Sidebar, and domain name mapping.
• Helping companies interested in offering their own social apps get up and running quickly and easily.
• Providing a simple, secure transactions engine for apps that want one in their quest for beer money.

These are just a few of the routes to self-sufficiency we'll evaluate. As we experiment with exactly how we'll make money, we know one thing for sure: annoying our users is the quickest way for us to end up out of business and begging for a job at Google. - from Ning FAQ

Bonus: "Rocketboom serves at least 60,000 downloads a day. Compare that with Crossfire’s audience on CNN: 150,000...  [I]n this new small-is-the-new-big you no longer have to be No. 1 (or 2 or 3) to survive. You can be No. 3000 or 30,000 and be big enough to succeed." - "Whither the Networks", Jeff Jarvis

p.s. I am tempted to use Wordpress (plus Ning) for a new blog with one (minor) revenue stream being ads. Something surreal about having ridden the dot-com boom where we weren't sure 1.5M in seed money was enough to do anything with and where we stand today. Anyway, how well does Wordpress support ad networks besides AdSense?

Update: Based on great comment fodder.... I'm totally serious about my own foray into a social media venture. But it's small - not an empire - and what I would have dirisively termed a lifestyle business myself five years ago. No IPO. No VCs. No acquisition. I simply wanna do this.

Talking to a friend last night he said folks in SV that have a pile of cash turn around to make another pile of cash. They don't organically build a Craigslist. I don't know, but we doubted that Craig Newmark's motivations were the same as ours during the heady days of late 90s. He could have sold for a pretty penny at the peak.

Oh, and five minutes after click on PUBLISH (isn't it always this way) I too learn WeblogsInc is bought by AOL. But I'm with Nick Denton (gotta love this quote):

Whether we’re for sale? No. Fucking. Way. And I can still say “Fucking”. Because we’re not part of some soul-stifling media conglomerate.

Tom's referring to advertising is dead meme. Hmm, one year PR is nearly dead and the next Eastwick Communications is representing nearly all the companies at Web 2.0.

It's all in flux.

Web 2.0 services lean heavily on advertising. Give it away for free with advertising. Then layer on premium services (i.e. no advertising) is almost defacto revenue model. Tom, the conversation schtick is true for some companies - regardless of whether they also advertise or not - and just a bandwagon for others. It's not just Web 2.0 using this ad model:

MetroFi of Mountain View, which already runs muni wireless networks in Cupertino and Santa Clara, says it's willing to provide free service in San Francisco at 1 megabit per second -- more than three times faster than Google's free 300-kilobit proposal -- in exchange for putting a small ad window on the screen. People paying $14.95 a month in the first year and $19.95 a month thereafter would escape the ad window and could get tech support from live human beings. - "No tears for the monster Google is about to behead", San Jose Mercury News, October 4, 2005

business model web2.0 long tail web2con Web2.1BrainJam

Comments

[Niti Bhan]

Build the empire and have an exit strategy, call me to the Yacht under the southern french sun. :)

see this
http://www.gapingvoid.com/Moveable_Type/archives/001969.html

[Evelyn Rodriguez]

No exit strategy in my plans - it's kind of why doesn't Craig Newmark cash in? I'm joking about the media empire, but I'm not joking about the barrier to entry is not in the technology, or even capital it seems when you have free tool like Ning and Wordpress and many more.

[Niti Bhan]

Valid points both. I was being more than a little flippant in my previous comment, but you bring up an valid point with Craig's example. Though I wonder how much of his approach to CL is due to the rumors we've heard that he's already made his pile, and CL is just his "self actualization" retirement hobby ?

As for barriers to entry, Ning, seems to be a precursor for something I don't have all the words to articulate yet, but on the topic of "AI and IA" as per the AC2005 theme. That is, technology will assist and amplify human intelligence, like water level rising.

[Tom Asacker]

I LOVE it! Wasn't it the tech folks who were slamming advertising as manipulative b.s.? "The marketplace is a conversation. Keep you crap out of our dialogue." Ha!