THE BLOG
04/02/2009 05:12 am ET | Updated May 25, 2011

So You Wanna Start a Website?

Over the last few months, I've received at least a phone call a week from someone offering to take me out for a meal in exchange for some advice. I always accept because: so many people have been kind enough to do the same for me; I always learn something when I hear what others are up to; hey, it's a boost to the ego to have your counsel sought, and I've enjoyed sampling the city's cuisine (thank you very much!) In the process, I've witnessed a phenomenon of our current economy: everyone wants to start a website.

So many people are out of work right now in New York, with no reasonable prospects of getting another job in banking/magazines/restaurants/law, that they've basically given up. For folks fortunate enough to be financially supported by their significant other/spouse/parents for at least the time being, what better way to keep busy, the thinking goes, than to turn an unfortunate situation into an opportunity to explore what they've always dreamed of doing but never had the guts to try?

Often, that means starting a web-based business. The thinking goes like this:

1) I love X (ie. mommy time/tee-ball/fly fishing/cooking fat free Indian food/exploring the city on the cheap during my free time).

2) I consider myself an expert on X (especially on the later, given my current employment situation and all).

3) There must be other people out there like me who are as obsessed with X as I am.

4) To my knowledge, there isn't a site out there that addresses X, at least certainly not as well as I could. Therefore, those people would like to come to my site.

5) It's pretty inexpensive to start a website: I can work out of my apartment; I'll hire a good tech guy; and I won't have to hold inventory or rent space, so my upfront costs will be low.

6) All of those people who are longing for my information about X will flock to my site. All of my friends will tell all of their friends about it. I'll be a semi-celebrity (so you're the guy who runs...I love that site!) . My site will get huge. I won't really worry about revenue or a business model. I'll just sell it for millions. Facebook has never made a cent, and look at how rich those Harvard punks got.

There's a theory that the best time to start a business is during a bad economy: Benefits include lower costs -- suppliers will negotiate, rents are less expensive, and employees are willing to take lower salaries, so you can hire smart people on the cheap -- and less competition. And it's true that it's always the right time for an out-of-the-ballpark idea. If you've been the victim of layoffs or downsizing and can't find other work easily, there may be no downside in taking the leap you've always dreamed of.

But just because starting a web-based business seems like the easiest (and most enjoyable) way to follow your dreams, it doesn't mean that it's a good business idea. Trust me, I know. I followed steps 1 through 5 flawlessly, coming up with an idea, researching it, raising money and working harder than I ever have in my life. Step 6 is a different story: although Store Adore has been moderately successful, it has not come close becoming the cash cow my business partner and I thought it would be. And these changing times have made trying to make money online more difficult than ever. I'm grateful to the investors who believed in my partner and me enough to let us take a shot at this. I'm also grateful for all that I've learned in these past 2+ years.

So if I can help someone else avoid the heartache of a reality that's usually a lot less fabulous than your dreams, I'd like to offer a few tips:

1. There's No Such Thing as a Focus Group of One
Just because you think it's a great idea doesn't mean that it is. Talk to as many people as possible at your idea -- your potential users, customers, competitors, whatever. Don't worry about someone stealing your idea. If it's really that good, someone has thought of it already. You just have to do it better. (This is true of all business ideas -- not just web-based ones.)

2. It's Not Easy To Get a Good Tech Guy
People will tell you that the internet is a commodity product and that developers are a dime a dozen. Not true! I've been screwed. Twice. If you're going to go for it, don't just get a great developer to work for you. Make sure you have one as a partner on your team who is as invested in the business as you are. Your site is your product. Don't outsource it.

3. If you Build It, They Won't Come
You may have the best site in the world. But guess what -- there are hundreds of millions of sites out there. Only a relative handful ever get read. The problem isn't just that individuals only have so many hours in the day to spend surfing. More importantly, traffic is a science -- it involves a whole (not inexpensive) strategy around getting your site to the top of search engines, which is really where most sites get found to begin with. If you don't know what SEO and SEM stand for, put down your business plan and go find out.

PS: It's not about P.R., either. One woman I met with told me that she'd just get all of her reporter friends to write about her site, and then it would take off. It's not that easy. Trust me, I was on Oprah. You may get a spike or two, but it's your online marketing strategy that matters.

4. Traffic Isn't King
It used to be. (See Facebook.) And you do have to have a lot of traffic to get anyone to pay attention to you. But in 2009, unless you've found a way to monetize your site and bring in revenue, no one will take a second look when it comes to your eventual goal of selling out for big bucks.

5. Content Isn't King, Either
I come from a magazine editorial background. I always believed that like the best magazines, the sites with the best writing and most polished ideas would win. It just ain't true on the web. The reality is that many of the most successful sites (present company excluded, of course) boast terrible writing and a hideous design. It's all about arbitraging the amount you pay for people to get to your site against the amount of revenue those people bring in. For every user that comes to your site, you need to earn more than you paid to get them there in the first place.

6. Advertising Isn't the Answer
First of all, unless you have a lot of traffic (at least one million hits per month) then no advertiser will even give you the time of day. So what if advertising with your site (and your super targeted audience) is so much cheaper than with the bigger sites? If your site doesn't provide enough impressions, it's just not worth the time. Second, the advertising market is dead right now. Dead! If the big guys can't pull it in, then you can't either. You'll need to think of another way. (Don't try getting your users to pay, either. They can get the same stuff for free somewhere else.)

All of this is to say that web-based businesses are a lot harder than they seem. They require money, people, expertise and lots of time, just like anything else. For every hit site (like this one), there are millions of disappointments. You just don't hear about them.

The good news is that the worst things about the internet--its vastness, its reach, the low barriers to entry--are also the best. As a means of creative expression, it couldn't be better. So if you really want to show the world what an expert you are, start a blog. (It takes five minutes to set one up.) If you want to make money, on the other hand, then get a job--or at least look for one. And if you're just looking for something to keep you from getting bored, then get a puppy. That's what I did.