Web 2.0 Entrepreneur

How to build your Startup in 16-steps

• Posted by Tengku Zahasman on October 27th, 2007 filed in Entrepreneurship, Financing/funding, Startup


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While I was browsing through my collection of downloaded e-books earlier today, I came across one titled “How to Build A Bulletproof Startup” which I found on Business 2.0 magazine somewhere last year.

What’s really interesting about this e-book is the use of illustrative pictures with easily understandable English to explain the processes of how Startups are found and built. It throws you the big picture straight into your face without digressing so much. The e-book lists down 16-steps guide in chronological order of how you can create your own startup from as early as establishing your company to developing your idea to funding strategies to launching your app to marketing your product.

While I noticed that most of the financial requirements stated in the e-book seems to be exagerrated A LOT (I mean hey… $500K needed to build a prototype and $1 million to build the beta app?? Come on….), but they did raised some major important points that needs to be considered for establishing a professional startup such as staffing considerations and how your end-product might evolve and change from your initial idea.

So go ahead, download the e-book and read it. Just remember to turn a blind eye for any financial figures found in it, because you want to create a bulletproof startup, not shooting a bullet through your startup.

Talk about being a busy entrepreneur…

• Posted by Tengku Zahasman on August 2nd, 2007 filed in Ramblings, Entrepreneurship


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This was me at 8PM yesterday, happily playing squash at the Cyberjaya’s Community Club with an unknown guy from MMU who dared to challenge me for a match when suddenly I received an SMS message from one of my users who’s complaining about my site being inaccessible. I wasn’t playing happily anymore the rest of the game because I knew I have hundreds of users unable to access the site at that moment and I’m in the middle of a match! (no, I’m not talking about this website. This is just a blog.. come on.. )

So because my mood have been sapped, 20 minutes later I had to cut the match short, went looking around for a wi-fi enabled hotspot area around Cyberjaya and ended up squatting on the stairs of TMNet’s front door (a Malaysian broadband provider) to get access to their office’s wireless Internet to solve the problem. I just had to get online quickly!

Apparently my whole dedicated server was down. And it took more than 4 hours for my provider to actually get the server back up and running. That was the third time in a row my server went unaccessible and when you had to pay RM840 (USD250) every month for the server, you’ll expect a much better service than that. It was found out later that they had problem with the network cables and switches which were unfortunately connected to my server. So they sent some men all the way down to the datacenter (which was funnily at the same place I was squatting at) to fix the problem.

This is just one of the challenges you had to face of being an entrepreneur. Your sweet time can suddenly be interrupted by unexpected (and unwelcomed) circumstances. It can happen anytime and anywhere; while you’re having your dinner, while you’re in the cinema enjoying your long-awaited movie, even while doing your “business” in the toilet. Suddenly a problem creeps in and you had to immediately change your mindset from whatever-ur-doing-at-the-moment to having the problem fixed, unless if its not an urgent one.

And I haven’t yet talked about how I had to deal with users’ complaints afterwards.

Sometimes it can be tiring… but that’s what keeps entrepreneurship interesting…

How to monetize your Web 2.0 application?

• Posted by Tengku Zahasman on July 29th, 2007 filed in Entrepreneurship, Web2.0, Business Model


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A lot of people will be wondering the same thing the first time they hear about building businesses around Web 2.0, “After creating a Web App.. what happens next? How do we generate money out of it?”

Its nothing complex, really. As long as you can build an interesting or useful app, there comes the quality traffic. Quality traffic always comes with quality users. And when there are quality users, guess what? There’s money… lots of `em too. Look at Friendster and Myspace. Their founders are now millionaires.. how do you think they pull money out of those apps?

You need to have some kind of business model before you build that app… or at least an idea of how to generate money out of it

We’re all in the business of making money here. Depending on what type of services your web application offer, there can be many different ways to monetize it. A lot of these have been practiced in the offline business world for ages, but the fact that we’re doing it “the web way” makes some new people in this industry a bit confused.

1. SUBSCRIPTION BASED MODEL

This is one of the widely used business model in the industry of Web 2.0, specifically for those web apps that provide “uniquely” useful services and don’t have so many scary competitors. Usually those that uses this approach will also provide FREE subscription plan but with limited functionalities. This strategy is implemented just so that the users will be able to try out their services before deciding later on whether they want to upgrade to a paid subscription if they need the extra functionalities. Some people upgrade because they want to remove ads and other types of annoyances in their account. According to Ryan Carson, in most cases 98% of the users will be on the FREE plan and only 1-2% will actually upgrade. However, if you have a REALLY huge user base, 1-2% may actually be worth it. Basecamp, Freshbooks, DropSend and Shoutmix (a Malaysian shoutbox provider) are some of the famous Web 2.0 startups that uses this approach.

2. ADVERTISING MODEL

Reserve some space on your web app for advertisers to put their advertisements on. This can be done in many creative ways depending on your application’s behavior and not necessarily just by putting banner ads on the webpage. Take for example Revver, an alternative online video sharing service like YouTube. They append short video advertisements at the end of each uploaded videos. Some widget-based web companies will put small ads on their widgets too. Feedburner allows putting ads in their user’s RSS feeds. This type of business model is mostly used by apps that has massive amount of target audience or users. Most of them usually provide absolutely FREE service/accounts to attract that number of traffic.

3. SELL STUFFS ONLINE..

Although selling stuffs sounds a bit traditional but it still is very practical and web2.0-ish if you do it the right way. Check out CafePress for instance… the company that actually allows you to design t-shirts online (and also caps, mugs, etc), and buy it without any minimum order. To make it better, they would even allow you to open up your own e-store with those designs you just created and get commissions out of it, shippings handled 100% by them. Isn’t that idea just plain brilliant? I think I should create an app like that someday…

4. REVENUE SHARING MODEL

This is also a type of “advertising model” with the exception that instead of taking all the advertisement revenues for yourself, you also share a few percentage of it with your users who help spread the ads across the web. Such examples are Google AdSense, PayPerPost, Text-Link-Ads, Advertlets and ImageFly. By giving some percentage to your users, you’ll instantly create the buzz and attract lots of participants very quickly. This will exponentially increase your advertising network and thus giving you the extra credibility to attract bigger advertisers. This is a business model with a marketing influence injected to it. The disadvantage about this approach however is that keeping up with your publisher’s payouts could be very troublesome and time consuming. You need to constantly make your publishers happy cuz one mistake might get you into lots of trouble in terms of reputation.

5. REVENUE THROUGH PPC PROGRAMS

PPC stands for Pay-Per-Click. This is one of the easiet way to generate money out of your web app because you only need to place some non-intrusive ads around your application and get paid for every valid clicks made on those ads. It can actually be implemented in almost any web app of any types and combined with other main business models. Google AdSense, Yahoo Publisher Network (YPN) and Bidvertiser are some of the PPC programs out there widely used by many apps to generate revenues. Example apps that uses this monetization method are Friendster and Flickr. Possibly worth it for high traffic apps.

6. SELL YOUR WEB APP

A lot of web startups out there dreams of getting acquired or bought off by the giant web companies out there like Yahoo and Google. While this is not really a business model, it does give you the monster-bucks (we’re talking [b][m]illions here ppl ) very quickly. Basically it is selling off your business so that you can stop managing your web app and just enjoy the money. Few months ago YouTube and Feedburner was sold off to Google for about 1.65 billion and a hundred million bucks respectively. Now their founders are living in heaven. You need to be very good in statistics to attract these buyers tho, because you need to prove to them giants that your app is really worth that much.

OTHER MODELS.. THINK.. THINK..

I can’t possibly list all business models here. What I have stated up there are some of the major business models used by many Web 2.0 companies. Companies like Paypal and E-Gold for example have their own business model on the base of electronic-currencies which I haven’t yet stated in the 6 points above. Ebay, Amazon and Alibaba also have their own unique business models. The point is that by being a little bit creative, you can turn money out of almost any ideas you can think of. The most important part now is to start building upon that idea!