Comment Look at traditional media (Score 2) 77
Well well well, an Ask
I work for a "free" newspaper for a good sized city in Florida. "Free" is only applicable to our business in terms of what our consumers think...they can pick up the paper and read it without paying for it, so we offer a service -- providing content for readers to enjoy -- for free. (okay, it could be service or it could be a product...but you get my point)
However, the paper itself is not free. On top of my salary (the most important check cut here, I do believe!), there is the salary of six other employees and the very expensive printing costs. The company itself does over $1 million a year -- not huge, but respectable for a small business. And every penny of our operating budget is paid for by our advertisers.
The lesson here is that advertising CAN support a "free service." I'm not going to blanket this example to cover Web services (there are plenty of horror stories out there), but just because an media is new does not mean it is not effective. What you need is a business loan to start with and a couple of reputable sales people on your staff. Then start talking numbers -- do research into recent studies concerning people's online habits, do marketing samples, do it all.
If this paper had just started printing one day with the hopes that advertisers would see how great we are and then pay us for ad space, it would have folded in a week. A lot of market research went into this, plus a fair number of financial backers. The upshot: the paper is free, and my paycheck clears the bank.
I think many people involved in the Web/Internet industry are too swift in disregarding the business lessons of the past. Stop thinking in terms of "new, unknown, untrusted high-tech commodity" and all the economic mystery that goes with that vision and go back to square one: it's just a service you are providing. Someone has to pay for it. Period. Look around you at any -- ANY -- company in your town providing a free service, and analyze how they do it without folding.
And then go from there! Good luck.....Pax....
