Economically Impossible

Bookmark and ShareThis world is really run by people's need to eat.  The basic needs is what drives most online business into the ground.  For example people blog or produce videos for free.  That may be good and some people just make it.  But for most people making money is extremely important in the long run.  For example a business selling gold at below the market value will eventually experience the market forces that will bring its sales to the exact value.

 This is a truth unless you want your site to be another one that litters the Internet from the so called digital gold rush.  Lets look at a basic online business.

1.  The loan process.  Most people who are trying to make the next YouTube or EBay turn to their banking friends for some cash.  Often lawyers and account types are brought in for idea protection.  This all costs money but for the big idea, that people can really feel they just go all in.  Some of the risk involves a potential dot com crash, or merely a fail in the business.  As a result most companies are charging for a service or utilizing an aggressive ad campaign to pay for the high bandwidth costs that are associated with online business.

2.  Assembling a venture team.  Getting people together in a productive way is extremely difficult.  Even more so is paying them.  In these early stages these folks may get paid in partial ownership of the company.  This can be extremely profitable considering the ability of digital media and content to divide and grow exponentially in its initial phases.

3.  Down sizing when market saturation is reached.  There comes a point when an idea reaches its peak.  For instance the active users on socials sites after awhile increase at a decreasing rate.  At this point improving the service is important.  This is why many major websites are now receiving overhauls.  Their company emerged for instance from the late 90s so many are hitting the same part of the cycle at the same time.  Other older sites are beyond this stage and are really looking to remain relevant.

4.  The end of the cycle.  Sometimes a company or service becomes obsolete.  Actually most ideas, and businesses reach this point.  The old adage goes to enjoy the profits while they are there.  For instance many sites that were huge in the 90s do not even exist today.  Another good example is that I suspect record sales are down a bit.  At some point just cashing out remaining infrastructure is important and moving foreword.  Ethically a company could pay out their holders and call it a day.


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