Modern internet entrepreneurship in a nutshell

First of all, I am not claiming to be an expert on internet and web entrepreneurship nor web publishing itself. I start with what I’ve got and learn what I need or what I am really interested in as I go. That said, a recent discussion I had with a friend inspired me to write a description of what I see as modern internet entrepreneurship.

An entrepreneur is someone who seeks opportunities for creating value for other people. Most entrepreneurs also seek ways to convert this value that they provide into something of value for themselves as well (like money). An entrepreneur can, just as every other human, make mistakes and see an opportunity where there is none or simply fail to offer the kind of value that people are really looking for. In a free market entrepreneur is actually a default characterization of all people, since in their quest of pursuing maximum value for themselves, they first need to provide some value to others. In an extremely broad sense even wage workers could be considered entrepreneurs.

An internet entrepreneur is all of the above except that (s)he chose the internet, mainly the web, as the means of providing value (because this is what his/her skills or interests fit with best). This means that an internet entrepreneur will look for opportunities which (s)he can pursue by means of the internet, usually starting a web site of some sort (but could also be various other kinds of services instead or in addition to it, such as hosting mail servers, IM or IRC services, etc.).

Typically, internet entrepreneurs start web sites on which they provide some sort of a content or service hoping that enough people would find it valuable enough to visit or use, even if this requires a payment. And this is where a crucial point comes, one greatly related to the above mentioned discussion.

This payment does not necessarily have to be in money going directly from visitors to the web site owner. Most of the time the visitors see various kinds of advertisements placed on the web site and the fact that they have to see them in addition to the actual content they are looking for is their payment. If the content that is on the site is, however, not valuable enough for them to “put up” with those ads they will simply leave and not come back. Otherwise, they wont mind ads enough to leave.

So a web publisher “charges” visitors with this “price” for the content they are offering. At the same time, however, the fact that there is a number of visitors “buying” this content for that “price” of seeing ads is what creates the value that those ads themselves have to people we know as advertisers – people who wish to advertise a particular other site, product or service to our audience. So they pay if the price of those spots is what they consider to be fair given the value they estimate to get from it.

So, in a nutshell, internet entrepreneurs today are in a sense mediators between users of the content they provide and advertisers. What puts them into this position is the fact that they offer valuable content. As soon as no people “buy” the content, no advertiser will buy advertising space and the site will turn into a useless ghost town.

This is why it is extremely important to provide valuable content, and it definitely helps, if it should not actually be required, for one providing content to have a genuine interest in what it is about. An internet entrepreneur should also strive to make the cost the user associates with the displaying of ads to be as low as possible – therefore making ads as non-intrusive as possible while still retaining enough value for the advertiser.

If visitors didn’t see ads on the site they may be paying for the content they are getting in some other way, possibly involving a direct payment to the site owner. I believe, however, the reason why instead of this we see most sites carrying advertisements instead is because this is of greatest convenience to everyone. Not everyone has a paypal account nor does everyone want to use their credit card on too many sites. People would rather see a few ads than shell out real cash.

Those who do not like ads should really think about that. Perhaps there is an opportunity for themselves – in finding a way that keeps this convenience while ridding us of the necessity to display ads. I might give this some thought myself. :)

Cheers.

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This entry was posted on Wednesday, April 30th, 2008 at 1:19 am and is filed under Blog. You can follow any responses to this entry through this RSS 2.0 feed. You're welcome to leave a response, or a trackback from your own site.