Get rich quickly, no money down?
Unless you have been living under a rock for the last couple of days, you will probably have heard about
Google App Engine. Its launch sparked a lot of discussion: is it the greatest thing since sliced bread, or just another lame hosting platform? The first couple of days created a lot of controversy, like any great and revolutionary idea will.
One of the many comments sparked my interest. In this article referencing the HuddleChat situation, the author writes:
Like Campfire, any Web 2.0 app can be easily replicated by a developer(s) in his/her spare time.
Any app? Really? Another post on a different discussion thread takes it even further: to paraphrase, this person claimed that with all this free technology out there, a student with too much free time on his hands could simply go out, rip off established web applications, and thus render us hard working developers completely useless ;-)
That got me thinking -- how big of a threat would this platform really be? Obviously, there are very gifted youngsters out there. Heck, I recently witnessed an incredibly well done Google talk by a twelve year old. So, could this unknown poster really be on to something?
That's when I decided to do a little experiment: I wanted to build a hosted business from the ground up with little or no money at all. I will use whatever is available, as long as it is legal and ethically sound, but I will not spend any money on it, unless an average high-school kid could do the same thing. I will track all my expenses and all money I make from this site and publish it openly. I will accept advice from others on monetization and how to make the business work, but I will not use any resources an average kid would not have access to. Can I make this work and turn a nice profit? I guess we'll find out...
The game begins
Let me first start with a disclaimer: I am not a student any more. I work as a software engineer for Google. I have not been part of the core team that brought you App Engine, but I have worked with them and am familiar with the APIs. So, how can I do this experiment as realistically as possible? Let's talk about the rules.
Rule #1: The job comes first!
I love working at Google. I will do nothing to jeopardize my work or bring me into an ethically difficult situation. In particular, this means
- I will not work on this experiment on the job. I will also not use company resources to get things done.
- I will not use insider information to make this a better site or to make the programs on this site work better.
- If my employer thinks an app created by me creates a conflict of interest, I will take it down. No questions asked. This is not a matter of censorship or oppression, it is simply being professional. Google is providing me with an environment in which I can grow personally and professionally; and I would be an ungrateful bastard to do anything that hurts the company goals!
How does this translate into "student/highschool kid" terms? Well, there is classes, homework, chores, SAT, extracurricular stuff, earning extra money at a fast food chain. Just because those guys do not work full time for money does not mean they have nothing to do but writing code.
Rule #2: No fancy equipment
Kids these days have a lot of stuff. The days of my good ole Atari 600 XL are definitely over for good. Why having to choose between a Wii and an Xbox if Junior can have both?
All ranting aside, defining what equipment to permit was actually a difficult task. Here is what I settled for:
- An almost four year old Dell Laptop with a weak Celeron Processor, 768M of main memory and Linux Operating system
- A monitor that can do roughly 1400x900 resolution
- A second computer that has Internet Explorer on it (not used for development but for testing browser compatibility; in real life, the kid could always ask a friend)
- A 35 Dollar hp printer from Wal-Mart
- Internet connectivity (DSL, smallest tier)
It seemed fair to assume that someone who wanted to develop software for the Internet would have access to these kind of things, be it through school, parents or personal possession (many kids have even better, since it doesn't play the latest video games). Anything beyond that however would be a pure luxury that I do not want to take for granted.
Rule #3: Free Software rules!
I am not opposed to paying money for good software, but for this experiment, I am just a kid on pocket allowance. Software Piracy is not an option, so I will stick to things that I can either use online or on my little machine. My starting equipment is:
Wow -- come to think of it, there really
is such a thing as a free lunch, isn't it?
Rule #4: My only equity is sweat equity
In the real world employees cost money. Good employees often cost even more money. Heck, I sure as hell couldn't afford myself ;-) Good thing we do not live in the real world here.
The great thing about being a college geek with a computer is that there is time. One's regular occupation (being a student or living at home with Mom and Dad) pays the bills, and there is no mortage to worry about or alimony payments. So, for the sake of this experiment, it is assumed that I can sink as much time into software development as I want. It does not cost me a single cent, so I do not need to account for it on this page. In return, I will not account for time spent as accrued equity; there is no such thing creative accounting. Which brings me to my final rule:
Rule #5: There is no such thing as virtual money
Unless I put the check into my bank account, I will not count any earnings I make. By the same reasoning, I will not count any expense until I actually spend the money. When I
do spend the money however, it will immediately be reflected on my balance sheet. In other words, I am accounting on a cash basis.
My business plan? Don't be like the Underpants Gnomes!
The good thing about being in the "kid - from - next - door - builds - super - app - and - becomes - overnight - millionaire" business is that we are not going out for venture capital. So far, our investment has only been 10 bucks for the domain, which would roughly be the equivalent of mowing our neighbor's lawn once. We can be a little bit sloppy about the specifics of how to make money (hey -- if I believed that this would actually become profitable, I wouldn't need to do the experiment!). Then again -- do I
really want to be like the gnomes from South Park and just expect the money to magically flow in? Shouldn't I at least have a basic plan?
Since this whole site heavily relies on Google technology, we might as well take a page out of their book:
Focus on the user and all else will follow. In other words, we will focus on providing a site that a lot of users are going to be interested in and hope that we can monetize that well. So what does this mean in detail?
- First, we will build up a site. We will provide free applications and content that people will want to use.
- We will connect our site to AdSense and place advertisement at strategic places.
- We hope that within our quota enough people will click on the adds that we create a stream of income.
Why using ads? Well, first of all, I am lazy ;-) Second however, think about it: what young software builder without significant capital will have the time to walk around and sell paid subscriptions or services to people out there? Where does the marketing budget come from? Who pays the sales commissions? We might need to revisit this approach in the future, but for now it's the easiest way to get us started.
So, what's next?
Well, I guess I am going to spend the weekend setting up my site, putting an application together and bringing it live. Revisit this blog in a couple of days to see how it is going...