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Recipe for a billion-dollar website

Posted on 15 Jul 2008 at 16:49

That said, some websites have done very nicely indeed out of that "eternal hope" - not least YouTube, which Google bought for $1.65 billion back in 2006, even though it has still to show a profit. As Mann sagely suggests: "There's only one answer to funding it all: sell your soul to investors." If you can't afford to fund the explosive growth of your website, you'd better find someone with deeper pockets. "Sadly they are almost always a necessary evil if you are to transform a great idea with a solid but fledgling user subscription to an international phenomenon such as the current Web 2.0 site of the day." On the upside, investors can help take your idea to the next level, if only to protect their own investment. After all, as Mann reminded us: "It's worth considering the value of 100% of nothing."

In order to capitalise on this growth, and at the same time avoid damaging your business, you need to have a platform that can scale when required, accommodating that rapid expansion and guaranteeing your business continuity if the business does take off. "At the end of the day, though," warned Steggles, "no-one wants to be paying up front for anything that isn't needed right away, whether it be servers or office space. In a cash-poor economy, in order to succeed companies should be looking to invest in on-demand services that can be used as and when required."

Planning for lift-off

It's all well and good having a business plan for every conceivable eventuality - but that's nothing more than wasted energy if what you're trying to sell isn't up to scratch. A Google spokesperson rather candidly told us that "many people forget that for Google's first several years it had no business plan. The goal was simply to provide the best search results people could get. Full stop". It was only after people started to understand the value of the search engine that Google began looking for ways to bring targeted, relevant advertisements to people alongside search results. "We learned a lot from that experience, and we still believe that if you focus on the user, everything else will follow," they continued. "Thinking of ways to make money is secondary to us. By focusing on needs rather than the bottom line, we encourage our engineers and product managers to innovate at a rapid pace."

Many a good idea has withered on the vine when it comes to execution, however. Take software as a service, for example, with online office suites being great until you throw a couple of high-res images into a document and they start to crawl. So how do you get past the good idea stage and beyond into billion-dollar territory? Chris Gledhill, managing director of development company PDMS, thinks it's all about recognising that what you're embarking on is an engineering project that has to be designed to scale from the start. "It's amazing how many times a site that was built only as proof of concept actually ends up in use," Gledhill explained. "The boss is pushing for a deliverable, investors are getting anxious and suddenly you find yourself with something that is under-engineered and you flounder." Certainly execution is important, as Pascal Rachenour reminded us when he said that the idea is "only the first step of a long process, and if time is not spent on the execution strategy the idea will be killed quickly". Or worse still "picked up by another entity with better execution skills".

So perhaps the real answer is, once again, to surround yourself with the right people. Mann thinks so, insisting you have developers who understand that scalability is king. "It is something that Google has really got right with its huge arrays of relatively inexpensive servers: good scalability, great redundancy," he said. "It's easy to think exclusively about features and to never consider scalability. It is very dangerous to assume that you will have time to add scalability when your service become popular." You won't and your service will fail.