Week of September 3rd

I am writing on the reading for last Thursday. I can already tell that the Shuen book is going to be the most challenging for me to read. It is not written as casually as others, therefore making it less interesting. Shuen's book is a little dryer, but it does give some hard facts about the business of the internet.

However, I did find it very interesting to read about how websites like Flickr and Netflix became so successful. I am familiar with both so I was intrigued to know more. After reading through the first two chapters, one lesson stood out the most: happy users make for a successful company. It is all based on the relationship with the user so that those users spread the word, and getting new people to become users. The more people involved, the better the profit. What attracts users? Free membership! Otherwise coined as "Freemium". Yes, Flickr has payable upgrades, but the freemium includes everything that an amateur photographer could want: easy uploading, storage of photos, photo sharing, etc.

There are so many things that Flickr did right to ensure for a successful company. For one, building a good search engine can be extremely expensive. Flickr chose to use its large user base to help build one for free. They created the option to tag photos with descriptive words. With the tagged words, the users build a database that others can search through. This is a huge cost that Flickr dodged by taking full advantage of its users.

Flickr makes its money through a multi-stream model. Money comes in through the upgrade subscription fees, advertising transaction fees, and and sponsorship fees. Flickr may not have been a huge profit from the get-go, but once they invested a lot of money at the start, the return profit was huge!

As boring as I think that this particular book is, I agree that it is important to know the in's and out's of what makes a successful internet business. Learning the history of some of the most successful and long-lasting companies gives me a lot of insight on what are the right steps to be profitable.