A lot of entrepreneurs start their business with a grand idea and the goal to create a global empire. This is mostly true for founders of web companies. Most “Startupreneurs” want to build the next Google or Amazon. The web gives anyone access to a wide audience, and technology makes it easy to go from concept to product with very little upfront investment. So when companies like Facebook go from dorm room to a 10 Billion dollar valuation in less than 5 years, it is easy to see why founders believe they, too, can do it.
Rarely do you come across a mechanic who talks about how he is going to build the next Ford or Bentley Motors. They understand the metrics are different and building a large scale automobile manufacturing company requires a significant amount of upfront investment. Meanwhile they usually start their own repair shops, and go from there. Only a low startup capital is required and reaching profitability is not as hard. Some shops only change tires/oil and are able to grow their business steadily without requiring additional investments.
If the same model was applied to web companies, more enterprises would be able to generate money and quickly become profitable. A good example is the new wave of, what we could call, Affiliates 2.0. These are websites that harness the inventory of much larger companies and offer internauts a user friendly interface to find and purchase goods. They usually take a small transaction fee. Although tiny, the referral stipends quickly add up and could mean the difference between shutting down a business, or being able to work on it full time and not have to worry about making rent.
Take TicketStumbler, the event ticket comparison engine, for instance. It scans databases from distributors such as Razogator and Stubhub and lets users compare prices for the perfect seat at sport games, concerts and other local events. Another company is FrugalMechanic. They allow users to compare used or new auto parts prices from different suppliers. Instead of calling 40 vendors or junk yards, users let FrugalMechanic do it instantly, hence saving them time and money. Both companies are profitable. These are just 2 random examples, there are several more. These companies may not necessarily turn into a Google or a Yahoo, but they do not envy those with 600 employees and 4 international offices.
Not every company needs to become the next Big Thing. While waiting for the next game changing concept to magically happen upon us, we can build profitable web enterprises by serving niche markets. Affiliates 2.0 are not necessarily disruptive companies, but their founders are 1)providing services others are willing to pay, 2)doing what they love, and 3) building profitable businesses in the process.