If you can already build you own site, this article isn’t for you. If you have an idea and no way to turn it into reality, though, keep reading.

. . .

There are at least a couple of different ways you can get your business built.

Find a Partner

This is the one that just about everybody thinks of. I know it seems like a good idea, but it’s not.

The reality is that anybody who’s any good already has more opportunity than they can handle. Good developers are easily the biggest bottleneck to new ideas coming to life. Everybody I know has great projects waiting in the wings that they just have no time for. It can be really frustrating sometimes. There are so many ideas I’d like to develop.

So to convince someone who’s good to build your project for equity only, you’re going to have to give up at least 30% and probably much more. (Most will want at least a controlling equity stake.) If you have a vision that can turn into a tiny little $100,000 business, you’re probably going to have to give up $50,000 (or more) just to have it built. On a million-dollar idea, its going to cost you a cool $500,000 or more.

Yes, you’re offloading the risk of paying up-front to have it built, but at severe cost. Now is the time to suck it up and just…

Pay Someone to Build It

Based on your idea, it may cost you as much as $10,000 to have a first version built. Don’t spend any more than that, because you have no idea what the real business will end up being. (In a recent Inc. magazine survey, only 4% of business owners said their business matched the original business plan.) What you want is something good enough to put out there and get some traction so you can see which way to head.

You need:

1. A logo
2. A website design
3. Someone to code the site

For the logo, I’d definitely pony up $500 for a contest on 99designs.

For the website design, I’d try to use one of the many great pre-built WordPress designs. Even if you’re not creating the site with WordPress, many of the designs can be adapted easily to a regular website.

Two out of the three pieces done, and you’re not even close to $1,000 yet. The last piece is the most expensive, but, depending on what you need, it could be less than $1,000 too.

You have a couple of different ways you could go here.

James Altucher likes Elance. As he notes in the answer to one of these questions:

So I outlined ten ideas I thought could be good businesses. Nine of those ideas were bad ideas. Anybody can outline ten business ideas. Anybody can outline nine bad ones.

Then I spec-ed out each business, I put the specs on elance.com, I took in over 100 possible bids from developers who wanted to create the businesses, and then I hired one for each idea, including for Stockpickr.com , which worked out well for me.

I’ve never used Elance personally, but tons of people do.

The other way you could go is with a strong referral from someone you trust. Make sure they know what they’re talking about, though. The Internet is full of people who think they’re great developers.

So maybe $2,000 to get your idea built. Certainly not more than $10,000, or you’re doing it wrong. The idea is to get something out there and see what happens.

What if you don’t have the money? Scrimp, save, use credits cards, borrow money from family, sell some assets. Anything is better than giving up control (and most of the profit) to someone else. You could fail 25 different times on a $100,000 idea before you lost more money than partnering with someone would cost you.

Am I Right?

I know many of you reading this, and I know those of you who have used various routes for bringing your ideas to life.

For you, does this information match up with your experience? Is there anything you would add or change for those who are about to go through this?

Photo by compujeramey.

nibbledish contains around 3,000 recipes and gets around 165k uniques per month, while sparkrecipes contains nearly 170,000 recipes but only gets around 16.3k uniques per month according to quantcast.  Do you have any explanation as to why this is the case?  I would expect sparkrecipes to garner much more traffic since it’s more established and it contains more recipes.

It’s an outstanding question.  Competitive intelligence is so crucial when analyzing any market, so I got Gabriel’s permission to write about the process I would go through to find out the answer.  I’m no expert, though, so feel free to add your own thoughts and/or correct mine.

My first step when researching a particular topic is to look at the sites in that niche and see how much traffic they’re getting.  I always use both Compete.com and Quantcast for that in order to get a more accurate picture, and Aaron’s SEO toolbar puts both of those within easy reach.

Trying to estimate traffic based on just a sample can be highly inaccurate, though, so don’t take information from either of these sites as absolute.  I’ve seen both of them at various times be off by almost an order of magnitude.  Normally I take the Compete.com number and double it, and that usually gets me close enough for what I need.

Sometimes you luck out, though, and find a site that lets Quantcast measure them directly.  That’s the case here with Nibbledish.  Looking at the Quantcast stats, we see that Nibbledish gets 389,000 visits/month from 331,800 unique visitors.  (I have Quantcast on a few of my sites, and they are very accurate when they measure directly.)

SparkRecipes.com doesn’t have direct measuring by Quantcast, though, so all we get is an estimate.  Time to see what Compete.com thinks.

Wow, Quantcast and Compete differ by a stunning amount — maybe more than I’ve ever seen.  Quantcast estimates 11,000 visits/month, while Compete.com estimates 352,879!  Who’s right?

Well, let’s assume that Spark and Nibble have the same types of visitors in general.  If that’s true, then Compete’s estimate of Nibble should be roughly as accurate as their estimate of Spark.  So since we know what Nibble’s stats are, we can use that to extrapolate Spark’s.

And thank you, Compete, for making the math easy for my Auburn friends.  For June they show virtually identical Unique Visitor stats for both sites.  That means that we can estimate that Nibble and Spark get about the same amount of Unique Visitors: somewhere around 325,000/month.

Here’s the really amazing stat, though (at least to me): Compete estimates that Spark gets 2.75X as many visits as Nibble does.  Same number of visitors every month, but Spark visitors come back almost three times as often.  Wow.

Related to that: Nibble gets roughly the same number of visits as visitors.  That tells me that people who visit Nibble usually don’t come back.  I also suspect, because of that 1-to-1 ratio, that most of their traffic comes from somewhere else rather than people going directly to the site.  People end up at Nibble from a Google search or a link somewhere, but no long-term connection is ever established so they never come back.  Spark is different, but possibly only because they have an entire network of sites driving traffic to the other sites in the network.

But back to the original question: why does Nibble get as many uniques as Spark, even though Nibble hasn’t been around nearly as long or have as many recipes?

It looks like the answer is SEO.  Take Compete’s referral stats with a giant grain of salt, but Nibble appears to be getting more traffic from Google than Spark is — both from Compete’s stats and from the 1-to-1 visits-to-visitors ratio.  Nibble’s homepage is a PR6, too, vs. a PR5 for Spark, so Google clearly sees more link love for Nibble.

An in-depth look into exactly how Nibble is winning the search engine battle would take another whole post entirely, but it’s obvious right now that their challenge is turning those one-time visitors into regular visitors.

There are three big things that could be holding you back.

Your Content is Forgettable

Is your site unique and/or better than other sites in the same niche?  If not, you’ll always be swimming upstream — trying to get people to visit your site when there’s really no reason for them to.  It’s a loser’s game (unless you’re just a really strong swimmer with a stubborn streak).

Get a few people who are familiar with your niche to give you an honest opinion.  If your content just isn’t as good as it needs to be, either fix that or do something else that you can be great at.

You’re Ugly on the Outside

Ok, your content is great.  Now what?  Your site has to look good too.  The Craigslists of the world aside, you’re crippling yourself unnecessarily if your site isn’t easy on the eyes and easy to use.  Most people won’t hang around to see your inner beauty — your outer appearance has to match or they’ll just click away.  Good design can have a stunning ROI.

You’re the Great Unknown

If you’re creating great content — and looking good doing it — then your problem is that no one knows about you.  It’s time to start working hard on generating traffic to your website.  If you’ve truly taken care of the first two things, it shouldn’t take long to get that snowball rolling.

Be careful, though: Lots of people think they have a great site that looks good, but they’re fooling themselves.  Compare Campus Squeeze with College Humor or Cracked.com, for instance.  Think they’re all equally good?  Sucker explains why they’re not.

Spend some time getting some honest opinions from your target audience to verify that you’re on the right track — or to discover what you need to do to get there.

Jeremy is a good friend, and someone you should be doing business with, so I wanted to expand on what I said.  He and I may still be on opposite sites when I’m done, but I totally respect and understand his position and want him, and you, to know where I’m coming from.

No Spec

“Spec work” in the web design world is when you ask one or more designers to spend time creating designs for you with no guarantee that they’ll ever get paid.  The problems with that should be obvious.  Why would anyone in their right mind work without knowing if they’ll ever get paid?

The NO!SPEC website goes into much more detail, and I definitely encourage you to spend some time there becoming familiar with the argument against spec work.

Two Different Types of Customers

The other thing that is critical to understand is that I separate web design customers into two basic categories.

70 to 80% of website owners just need a basic design.  That’s it.  The other 20 to 30%, though, need a full brand identity development and execution that extends throughout their entire business, and/or they need something beyond just a basic web design.  The two are very different, and I would never, ever advocate 99designs for anything other than a basic design.  (There are obviously varying degrees within each category, but this is the basic breakdown I use for this particular topic.)

Why 99designs is the Responsible Choice

For most in the 70 to 80% who only need a basic design, I believe 99designs is the only responsible choice.  I don’t say that lightly at all.  It’s an opinion I’ve developed over almost 15 years working online.  I know how deeply personal this issue is for designers (again, understandably so), and the “no spec” argument is very strong.  I also know that I may become a lightning rod for saying it.

However, I think it’s important to see why 99designs is thriving.

99% of Web Designers Aren’t Good

I’ve had zero-dollar budgets, virtually unlimited budgets, and everything in between, but for more than 11 years I had never found a designer who consistently created very good work.  It’s absolutely maddening how many people can make a living doing web design without actually being good at it.  Most of the work that we paid for (often well into five figures) simply wasn’t good.

In 2006, Mark Otto was the first designer I had ever met who could consistently turn out good work.  I’m not sure that I’ve contracted with another designer since then.

These “designers” are absolutely ruining things for true designers like Mark, Wildfire Marketing, Jesse Bennett-Chamberlain and PlainJoe Studios.  (I’ve never worked with the last three, but I’ve seen their work.)  I hear it over and over and over again from everyone I talk to.  They think all designers are bad, because the numbers are just so stacked in that direction.

99designs eliminates this problem by allowing the designs to speak for themselves.

99.9% of Web Designers Live in a Different Time Structure

I’ve never worked with a designer who treated deadlines and schedules with the seriousness that business owners do.  Ever.  Even the good ones.  I can make it absolutely crystal clear that something needs to be done by a specific date, but not only will the designer very often miss the date by a substantial margin, but he’ll also not seem to understand why that’s a big deal.  It’s not intentional or deliberate; it just seems like they truly see time much differently than others do.

This is the number one complaint I hear from business owners who have worked with designers, and it’s actually enough of a problem to have made many of them stop their web plans altogether.

99designs eliminates this problem by forcing designers to stick to a schedule that is absolutely fixed.

Why It Isn’t

Obviously 99designs isn’t perfect, though, and there are cons to go with the pros.  For me, these are definitely outweighed by the positives above.  For others, though, these may be insurmountable hurdles.

Many People Have No Eye for Design

I was in a meeting not too long ago where we showed two different sites — one with a design that hurt to look at and one with a design that instantly inspired confidence in the site.  It would have been hard for the quality to have been more different, yet 2 of the 7 people in the room honestly saw no difference.  I was amazed.

How can you run a design contest when you don’t know what’s good and what’s not?

Even More are not Skilled in Usability

I’ve seen plenty of gorgeous designs that were nevertheless completely inadequate for actually accomplishing the goals of the site.  Hopefully the winning designer will incorporate good usability, but if they don’t and the business owner doesn’t understand usability, it’s money down the drain.

Who Will Actually Code the Design?

Designing a site and converting that design to HTML and CSS are two very different skillsets.  99designs isn’t designed to help with the coding part (though most designers are willing to do the coding, too).

Why “No Spec” Ultimately Will Fail

There are very solid arguments on both sides of this issue, but there are three reasons that I believe they ultimately won’t matter.

Low-End Design is Already Commoditized

Jeremy mentions in his comment that this industry is quickly becoming commoditized.  I think it already has been at the low end, and I don’t think that will ever change.  There are just too many good designers willing to work for too little.  How can designers in high-income countries compete with designers in countries where $1,000 is a very healthy monthly income?  These designers will never hold out for higher wages, and there are way too many of them.

And the Internet makes geography largely irrelevant.  I’ve had high-quality designs done by designers in Malaysia, Croatia and Argentina, and there was very little difference from working with someone in the U.S.

99designs Satisfied a Market, They Didn’t Create It

If 99designs and every other site like it went away today, a new one would spring up tomorrow.  There’s just way too much demand in the market for this way of commissioning designs, and it will never go away.

Fairness Won’t Matter

For me, the number one argument against spec work is that it’s not fair to the designer.  I totally agree.  These designers deserve to get paid.

However, is it fair that the average teacher gets paid a tenth of what the lowest paid NBA player gets?  (The average U.S. teacher makes about $41,000 per year, and the NBA league minimum is $412,718.)  What if we compared that to the average NBA salary of $5,356,000.  A normal person could live a lifetime on just one year of NBA salary.  How is that fair?

And how about firefighters?  Doctors?  Police officers?  Nurses?  How are their incomes fair?  There are any number of professions where you either have to do it for reasons other than money or find some way to differentiate yourself.  I believe web design falls into the same category.

—————————————–

I’ve closed comments on this post to keep this from devolving into a screaming match on both sides, but Jeremy and I will be continuing the discussion in the comments.  You’re also welcome to leave a trackback from a post on your own site.

So if you’re just getting started, I hope this list will be a good resource for helping you select what kind of site to build.  If you have comments or questions, please leave them in the comments below!

Types of Sites

News

This is obviously a very common type of site.  Whether it’s world news, national news, local news or news on a particular topic, most of us visit some sort of news site on a regular basis.

This type of site can be extraordinarily labor intensive, though, and few traditional news sites could be considered true money-making ventures.  However, sites like Coolest Gadgets would also fall into this category, and the revenue opportunities there are much greater.

Commentary

This is another type of site that we’re all pretty familiar with.  Sites like The Huffington Post and The Wall Street Journal’s Opinion Journal are similar to news sites, but have the very important distinction of being commentary on the news rather than having to report the news directly.  That’s important because it eliminates both the need to be first on a story and also the need to be 100% accurate — both of which consume significant amounts of time.

If you can provide compelling commentary, these types of sites can be very viable — though the recent advertising downturn has hit many very hard.

Magazine

A magazine is like a news site as well, but with less reliance on breaking news and longer articles on particular topics (e.g. RELEVANT Magazine).  Just about any offline magazine has an online presence these days, and more and more magazines are even choosing to go online exclusively.  There are numerous high-quality magazine themes for free blogging platforms available inexpensively (or free) from companies like StudioPress.

As with commentary sites, magazines fill a need similar to news sites but without as much labor involved — though the advertising downturn has forced many to find alternate sources of revenue as well, a task that hasn’t been easy for many.

Informational

Many of the sites we visit on a regular basis would fall into this category: sites that provide information on a particular topic.  Some are built on a blogging platform (e.g. Digital Photography School) or some other content management system, while others are are custom built (e.g. Lakes Online).

These sites can be easy to build and can be strong moneymakers if you pick a good topic.

Wiki

Obviously most people think of Wikipedia when they think of wikis, but the software that powers Wikipedia is freely available as MediaWiki and many people have created very compelling websites with it (e.g. WikiCity).

The great thing about wikis is the ability for users to create the content for you.  If you can generate enough interest to get it to become self-sustaining, a wiki can be a great money-maker that also involves a minimal amount of time investment once it’s up and running.

Directory

I have become a huge fan of directories lately.  Think Yellow Pages, but online and customized to a particular topic.  Sites like Fly & Field provide a place for companies to have a very compelling online presence in a place where their customers can find them easily.  There are many pre-built software packages for building a directory, and many directory owners choose to build their own.

Generating enough traffic to the site to make companies interested enough to spend the money to be listed there can be difficult.  Once that has been achieved, though, the site can become almost self-sustaining just like a wiki.

Classifieds

Craigslist obviously seems like the granddaddy of them all here, but sites like Monster.com and AutoTrader.com are essentially just classifieds too — just with a prettier face put on them.

Like directories, classifieds can be a great moneymaker because the product you’re selling doesn’t cost you anything.  The cost to you for one classified ad is the same as the cost for 1,000.  It’s like printing money.  Like with directories too, though, building a compelling amount of traffic can be a real challenge.

Forum

Sites like Nursing Voices provide a place for people to congregate and discuss topics around a particular theme.  There are several good software packages available for powering a forum, and many of them are free.

However, I have heard even very successful forum owners lament how hard it is to make money with a forum — to the point of recommending just about any other type of site.  Money can definitely be made with forums, but it’s a unique challenge.

Community

A community site like Totally Her is like a forum on steroids: more, richer opportunities to interact and more community-related content.

Revenue opportunities are more abundant with communities than they are with simple forums, and getting and keeping members engaged is easier as well because of the many points of interest.  Building the community can be much more difficult, though, if you’re not using an off-the-shelf package.

Social Network

Everyone thinks of MySpace or Facebook when they think about social networks, but there are lots of smaller social networks as well (e.g. WannaNetwork) that are built with software like Ning or BuddyPress.

Hit the tipping point with your network like Facebook has, and traffic skyrockets all on its own.  It can be very difficult to hit that point, though, and even when you do revenue opportunities can be hard to come by.  Even as much as it has changed our lives, Facebook still isn’t turning a profit yet.

Review Site

If you’ve been around affiliate marketing long, you’ve heard review sites mentioned more than once.  Often used merely as thin affiliate plays, reviews sites can also be legitimate, valuable sites (e.g. Award Winning Hosts).

The monetization opportunities here can be great, since many of the products being reviewed also have affiliate opportunities associated with them.  Generating enough traffic to make it worthwhile can be a challenge, though.

Online Store

Well over $100 billion is spent online every year.  Large sites like Amazon get a huge share of that of course, but there are plenty of small sites that do well, too.

Running an online store can be very labor-intensive, though.  Even if you’re just drop-shipping, tracking the orders, staying on top of backorders, and handling customer service take up more time than you would probably imagine.  I’ve done it, and it wasn’t fun.

Try a Combination

It was hard to find examples for some of the types of sites listed above because most successful sites don’t rely on a single type of functionality.  A site like Sprintusers.com, for example, appears at first glance to be nothing more than a forum.  Look closer, though, and you’ll see that it also has elements of a Magazine, a Review Site, and an Online Store.

RADIANT is the same way.  They used to be an offline magazine, but they’ve since moved to be online exclusively, and they’re as much a Community site now as they are a Magazine.

Few sites are successful with just a single model.  The ones who do well use a mix of site types to create a site that perfectly fits their goals (and their target audience) and gives them a mix of revenue and traffic opportunities to provide a solid foundation.

Ignore My Opinion

I’ve tried to be as unbiased as possible, but much of the information above is still my own personal opinion.  I would never want to run a news site, for example, but I have friends who love running news sites.  It’s what they’re passionate about, so it doesn’t feel like work to them at all.  Let me know if you have different opinions!

Also, I’m sure I’ve left out a site type or two and that I’ve been less than clear in some cases.  Let me know and I’ll get that fixed!