Being a Business — With a Business Model

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We have been influenced by the folks over at 37signals. We read their book: Getting Real a while back and loved it. This week we both watched a presentation that David Heinemeier Hansson did at Startup School 08. (If you, too, are starting a business, go watch it. I’ll wait… Ok, now that you’re back, let’s continue)

The content was great. I read the 37signal’s blog all the time, but I hadn’t seen David speak. I like his style. But, more than that, it was nice to get some validation of some of the principles that we both agreed on when we started Bscopes. There were many things, but the most important to us was starting up a business that would replace the salaries we get from our day jobs. So that we could then continue to do the little things in life: pay our mortgages, send our kids to college, perhaps even afford to eat 3 meals a day. You know… the little things. And David’s remark about how having only a few hours on a given day, or a few days a week, to work on the project causes you to focus on the important things — that really rang true for me.

Both of us have worked for many business before — ones both large and small. And, at each company, we were both directly responsible for making sure that the business made a profit. So now we are doing this for ourselves. And David’s calculations are right in line with the modest goal (YES, they are written down) we had as just two guys in their home offices. Neither one of us is trying to be the next Google or Facebook. Not that we would mind if Bscopes became that popular, mind you. But we’d be happy just having a company with enough revenue for two guys.

So early on we decided that Bscopes would have to produce a revenue stream and a profit. For Web 2.0 sites, there seem to be two common approaches in use: (1) entirely Google AdSense supported and (2) the Freemium model where we charge for premium Bscopes products. Currently, as you can see on each page of the Bscopes site we’ve got AdSense running on the sidebar. One of our next short term releases, in May, will add user specific capabilities to the Bscopes site. Letting people register so we can associate Bscopes and RSS feeds with each person will enable a number of new features to be added to the site. It will also enable us to go to a Freemium model.

But we still have a number of questions that we are debating. One of them is whether or not to continue running AdSense on the site. Paying customers don’t want to see advertisements, and we agree! Should we continue to use ads to offset the cost for the free features? Or, could the revenue from premium customers pay for enough servers and bandwidth to fund the cost of the other users? Without knowing exactly how many customers will sign up and the exact price points, it seems like we need to keep the ads running for now and only turn them off when we have the revenue to cover the costs. If you disagree, let us know in the comments or on your blog.

Or we could just put up a Paypal donate now button like the one Mark Evanier has over at NewsFromMe. Or what about a “Buy us a cup of coffee” button like the HT Guys have on their website (What a good podcast! Go subscribe to it in iTunes)? Or not… Hey, Steve, it was just a thought. Really. Put down that rock. Hey…. Ow…

Okay, okay… fine… back to writing code…

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