Bootstrapping out into open space
Russell's Unproven Yet Seemingly Obvious Number One Rule For Web Based Services: Don't launch without a way of making money.
This dovetails in nicely with my thinking about hosting, and with FeedReactor. I look at nifty services like del.icio.us, BlogLines, and Flickr, and think, “Hey, I have some good ideas, too. I could possibly put together something like this. But how the !@#$% do those guys pay their hosting bills? Let alone make a living?”
I know the answer to this in some cases is that the costs are paid out-of-pocket, and the people behind the sites have day jobs that pay well enough. And sometimes the goodwill and respect earned by such endeavors pays off indirectly. In other cases, I've heard that some venture capital is involved. So that at least informs me as to where short-term means of support come from.
In any case, when I know that I haven't paid a dime for my usage of any of these services-- and I imagine that anything I might do would be targeted toward someone like me (though that's probably part of my problem)-- I have no clue what kind of business model they're following.
What, advertising? I know I personally provide a dismal click-through rate, unless the ads are tuned just so and with the right shiny bits. But then, I consider that if I were to plaster credit card logos and PayPal buttons right up front, I'd turn away users in droves. (Then again, I do appear to shell out at least $50 per month in internet services beyond my bandwidth bill.)
But, see, I haven't a clue about business. I just like to cultivate nifty ideas, and I keep thinking that at least one of them could be the right thing at the right time and in the right place to work out for me. And I have to assume that the people who have done something, and keep doing something, where I haven't done anything know something I don't.
Then again, I thought I'd figured out what was going on during the dot-com boom, and I assumed all those people projectile vomiting money everywhere knew what they were doing too. (Even though they all seemed insane.)
So all I'm left with is that I think I have the occasional good idea, but with no way of know how to run with it. And all these internet entrepreneurs apparently bootstrapping out into open space don't make sense to me either.
Anyway... It all seems like magic to me. Maybe one day I'll figure it out.