So you want to make money on the Internet...
1. Ever since the real gold rush, the best way to make money has been to be a shovel and map salesman
2. Don't cherry pick examples that contradict me -- instead, find the median of a random selection -- cherry picking examples are intentional self-deception, and nothing blinds like greed
3. Making money on the Internet is almost always a scam -- the 419 scam, specifically
4. The 419 is "scam the scammer" -- "I have a bunch of money locked up in some account and I can't get it out because of some situation, but if you give me the fee needed to get it out, I'll give you half" -- it plays on greed
5. Cisco, Sun, IBM, Juniper, Nortel, Microsoft, and various other tech companies actually made money off the dot com boom -- most companies that did supplied the gold prospects themselves -- the odds of being a tech company that made money was insanely greater than a company that tried to provide a service or entertainment, if you count the odds
6. Web development shops made money for a while, taking investment money to code really bad, self-edificing ideas, and VCs made money taking a cut on investment money from over eager investors, willfully ignoring the utter stupidity of the ideas -- again, the map and shovel suppliers are making all the money and the prospects themselves almost none if any, ever
7. Knowledge used to be power, but the map and shovel salesmen have interspersed themselves so throughly that the best you can do is to use your knowledge to steer a course around them -- something not easy to do. Good at finances? The best you can do without your own team and funding is work for Meryl Lynch, and then you're competing with Meryl Lunch -- breaking into the map and shovel business is hard. Your specific knowledge has probably already been commoditized. It doesn't matter if you have knowledge if someone else has TV ads and big buildings supporting the idea that they employ all of the best people with knowledge, and those people are ready and eager to help if you just call the 800 number.
8. Real gold prospects head to the really uncharted area where there are no map and shovel salesmen -- they were selling stuff from EverQuest for a while, before the Chinese gold farmers saturdated the market, then they were doing smaller sites like Kingdom of Loathing. They were doing arbitrage on banner ads for a while but now they aren't. As soon as someone else gets into the same racket, you should be getting out. Where to go next is something I can't answer.
9. The Internet lets you scam everyone at once, the old "a sucker is born every minute" adage is true but no longer encouraging. One other scammer with the scam will ruin your margins. Mob-like turf wars just don't make sense either but other forms of territory do make sense -- music licenses, patents, IP, domain registration, firewalls, antivirus software -- these are the sorts of new "turfs" that people created and defend.
10. Here are the ways to make money on the Internet with any reliability at all: program for other people; run AdWords or the like (very, very little pay) or do paid blogging; sell stuff on eBay and broker in discounted goods from some source; send UBE for existing scams and collect a commission... or basically, work for the map and shovel salesmen and other scammers.
11. There are two basic ways to make money: avoid all of the map and shovel salesmen who would intersperse themselves (which requires knowledge and effort) and become a scammer yourself, or work for the scammers, as in 10.
12. The really, really successful map and shovel salesmen buy large office buildings and sometimes have a hard time keeping up with demand for their services, requiring them to hire people and treat them well -- don't underestimate this.
For 8 years now, I've worked with people who had aspirations of making money off the Internet, and I've thought about it myself, using their failures as a lesson. Obviously, it's hard -- this outlines *why* it's hard. There are a lot of smart and clever people working hard to keep making money off of everyone else, including you, and my bet is that they're pretty damn effective at it.
-scott
As much fun as it might be to have millions of dollars, do you think that it's easier to make a living wage with the Internet? My impression is that you addressed the Really Big Money thoughts.
Re:How *Much* Money?
scrottie on 2007-05-15T02:05:29
Re: the really big money thoughts, yes, except for one point:
"12. The really, really successful map and shovel salesmen buy large office buildings and sometimes have a hard time keeping up with demand for their services, requiring them to hire people and treat them well -- don't underestimate this."
Some of the other points kind of lead up to that -- the bit about buying offices and advertising claiming to employ all of the qualified people in a field (or at least implying). I wrote that hoping the reader would come to the same conclusion -- if it you don't have the skills to make it in IT, your best bet is probably to go get them, and trying to short circuit the process is likely to fail.
The conversation this came out of was with a person who is just starting out in IT and is completely daunted. Many of my friends come to me with get-rich-quick schemes. A dozen different ways I've argued for coding for love and letting the money follow. This is yet another argument for the same purpose. My main objection with this class of people is that they wind up talking about it a lot and doing very little, and this soaks up my time and energy just listening to them, or dispensing advice that indulges their fantasy, accomplishing nothing but entertaining the fantasy itself. Far less often people will come to me looking for ideas of books to read, training or vents to attend, and so on -- this sort of question would be far more productive for me to answer and the benefits could be applied in all sorts of way. Resigning ones self to work one's job is just one step closer to resolving to actually sit down and learn what one needs to know for one's new trade.
-scottRe:How *Much* Money?
parv on 2007-05-15T03:46:14
Far less often people will come to me looking for ideas of books to read, training or vents to attend [...]
Well, if you ever hold a venting session around WV-MD-VA area, I will make plans to attend.
