This is the second article in the series about managing an online business. It will focus on what you actually do in an online business, how can you measure it, the various stages of each project and how you can monetize your work. If you came here directly you can go back to the summary of the whole series or you can start with the first article which deals with starting your own business.
Please keep in mind that this post is rather long, more than 3000 words, so make sure you are away from interruptions when start reading it. If you can’t read it now, you can bookmark it and come back later.
More than in any other business, in the online universe, a product (i.e. a website) is more like a process and not like an object.
If you are in the furniture business, you’re selling objects. A chair, a table, a couch. Every once in a while you change a little the design, but you are largely selling objects.
In the online field, you sell things which are continuously shaping. An online service is by definition dynamic. Your websites need continuous upgrade, otherwise they will fade as importance and eventually lose their audience.
The online has a high availability, which means your potential audience is huge. But the online has also a high volatility degree, which means that the potential huge audience is very easy to be moved toward your competitors.
Online Projects Metrics
You need a way to quantify the behavior of your websites in order to measure their success. Otherwise you’ll be lost in the jungle of millions of other websites, portals, forums, blogs or online shops. I worked with only three main online project metrics:
– traffic, the total number of users that accessed that website in a given time interval
– money, the total amount of money that website produced in a given time interval
– resource consumption, how many resources (people, money, assets) that website consumed in a given interval.
Although it seems pretty straightforward, the way in which those three metrics can combine is infinite. You can have projects with minimal traffic but with good money flow in. You can have websites with little or no money in, but with huge traffic (I guess the most famous example is YouTube in this area). Or you can have websites with zero resource consumption (auto-pilot websites) with no money in and just a decent traffic. but still consider them as successes. Each combination of those factors can play a role in the bigger picture and you must not overlook any possible outcome.
Now, let’s take each metric and see how you can interpret it.