10 Steps to a Hugely Successful Web 2.0 Company

Do you want to make money in your own home?

Forget real estate scams, tupperware, or becoming a spammer.

Create your own Web 2.0 company NOW!!

Its easy.  Just follow these 10 simple steps and you, too, can be seen in fine dining establishments like Jamba Juice and speaking on panels for conferences like Distribucate 2.0, Fred, Bloggerstock and Elfdex.

1. Solve the smallest possible problem (that is still big enough to matter) for the user and know exactly what problem you're trying to solve. Google's first and primary job was very simple:  Help people find stuff.  They didn't start layering on everything else until much later.  Brad calls this the "narrow point of the wedge."  Its the easiest, simplest version of what you're trying to do... the smallest bite your users will ever have to chew--small enough to get hooked on very easily.

2. Get a responsive and chatty audience using the product.  The del.icio.us community eats new features like piranhas.  They pour over the service, discuss it, promote it, and complain when they don't like stuff.  You couldn't have hired a better, more thorough, or more passionate group of alpha testers.  Don't rush to get the service so easy that my dad can use it, because he's not going to really be helpful to you in the early days when you need really hardcore Beta testing.

3.  Launch.  Now.  Tomorrow.  Every day.   Don't wait until its perfect to put it out in the open.  No more closed invite-only betas.  Your idea of perfect may not jive with your users' ideas of perfect.  Put whatever you can out there and get people using it as soon as possible.  Feed them daily with new features to keep them interested and coming back.  No one likes waiting six years for new releases.

4.  Distribute.  Distribute.  Distribute.    Don't force your users to play on your site in a walled garden.  Let them take the service and use it wherever they want.  (See Flickr badges, Google Ads, Amazon affiliates, Indeed jobrolls, del.icio.us linkrolls, moblogging, RSS, e-mail alerts, etc., etc....)  Instead of building it so they will come, go out and get them by placing little bits of your service everywhere on the web.  Be where they are.

5.  Don't hold users against their will.  If they want to leave, let them pick up with all of the content they created while they were on your site and leave... for free.  Charging $0.29 to get back each of the hi rez photos you uploaded to the site (See my upcoming Snapfish post) is thievery.  You have to let the barn door open and focus on keeping your customers fed, so they want to come back, instead of coming back because they're stuck.

6.  Be mindnumbingly simple.  Extra clicks are deadly.  People just won't do it.  Indeed:  One search, all jobs.  Two boxes:  What job and where.  You can't get any easier than that and all it takes is for someone to put one search in for people to go, "Wait...what's this... links to Monster AND Careerbuilder??" 

7.  Get people hooked on free.  Craigslist wouldn't have become Craigslist if it wasn't free for so much for so long.  Even now, they're very profitable and they're only charging for just a few small pieces of their service in just a handful of their 120 markets.  The world is changing.  Service is cheaper to provide now than ever and users are expecting to get more for free than ever before.  Its hard for a lot of big companies to accept that.  I just had lunch recently with a couple of friends from a music publisher.  They were signing some bands to "incubator" deals for just a couple of songs to test the market with them.  I said, "And you're giving those songs away for free, right?"  They nearly choked on their food.  :)    Well, why the heck wouldn't they?  Give a few songs away for free, generate buzz, get lots more people to buy future albums.  Seth Godin did that with his books, releasing e-books that generated buzz around hardcover sales.  Free sells.  Do you think the Facebook would be the Facebook if you had to pay for your smooches  like you do on Match?

8. Don't waste any money on marketing.   Word of mouth has never ever been easier or less expensive in the history of human communication.  Things go viral in a hurry... when they're good.  Ever see a Skype superbowl commercial?  No, but they've had 146 million people download it.  If you don't have the service and the quality to back it up, no amount of fancy marketing is going to help... and people are so quick to share cool stuff, because they want to be the person "in the know".  When they're satisfied, they'll blog about it and e-mail everyone they know.  And they'll tag it furiously on del.icio.us, too.

9.  Don't overfund.  Do you know how many times a day I see companies get funded on Private Equity Week and I'm like, "What the heck are they going to do with all that money??"  Underfunding a company can be a problem, too, but thinking that more money makes you better is a fallacy.  It probably makes you a bit sloppy and fuzzies your focus.  When you raise $2 million, you're much more likely to have a clear sense of exactly where that money is going to go than if you raised $20 million.

10.  No one sucks.  I hate it when someone says that a whole service sucks.  Now, I say it myself, I'll admit, but what that does is it teaches you to discount and generalize, and probably miss a lot of small opportunities that add up.  Now, I think Ofoto sucks versus Flickr, but people still use it.  Why?  There's got to be something there.  AOL sucks... or does it?  They still have 20 million users, so it can't entirely suck.  You should look at every competitor and take the best of what they do right and do it yourself, even if that's only one thing and the rest of their service sucks.