General Question

cityshark's avatar

Where can I get information and costs about starting an online business?

Asked by cityshark (100points) March 18th, 2008

I need prices for hiring web developers, encoding experts, tips on legal issues and business structures. I know little about domain names and even less about launching a profitable website.

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6 Answers

cwilbur's avatar

Find a business partner you trust who knows these things. Then hire a good accountant and a good lawyer for the business.

If you don’t know these things yourself, you have no way to evaluate the competence of someone you hire. And since there are nine or ten incompetent “web developers” out there for every competent one, without that knowledge, you’re signing up for a 9/10 chance of your business failing because of incompetent employees even before you enter the market. The solution is to find someone who has a stake in the success of the business—thus, a partner—who can accurately evaluate the competence of the employees.

The other option is to have clear contracts that specify performance requirements when you contract with the developers—but again, without someone with a stake in the business who can evaluate the developers’ work, you’re setting yourself up for failure.

(I worked for a startup a couple years back that was five people in your shoes—they knew a lot about business, but nothing about web or software development. They wasted about $5 million before going down in flames; a competent technical person in the partnership probably could have gotten them profitable for about $2 million.)

glial's avatar

@ cwilbur: I just bailed out a start-up for many of the same reasons you just listed. They want to spend $50,000 on a project, but have it making 3–4 million in 12–15 months. Needless to say, I told them to “jog on”. They kept referring to the application as a “web page”. I could have really taken advantage of these guys. I swear the “idea guy” on the project used trademark, copyright, and patent interchangeably.

@cityshark: My advice, stick with what you know or you will get taken to the cleaners. Or…learn the terminology, ideology, and everything else you can about the web business BEFORE you start.

No offense, but using terminology like “encoding expert” as in your question will get you ripped off. Weak developers will smell the newbie in your terminology and take you for a ride.

Be careful.

cwilbur's avatar

@glial: oddly enough, we have an encoding expert here, but that’s largely because we do a lot of CJKV text, and you need an encoding expert for that. It’s probably not what cityshark meant….

Besides that startup I mentioned, I kicked around an idea for another startup with a few other people—one that, handled properly, could have been a license to print money—and I bailed after I asked, at the sixth meeting, what our business plan was and what revenue and expenditure goals we had for the first six months and the first year.

For a successful online business, you need a good idea, technical competence, and business savvy. The only one that it’s vaguely possible to outsource is the last one, and even that’s a horrible idea once you’ve got a prototype built.

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