Advice on web business models

There’s a great post by Fred Wilson, a New York-based VC, who writes about internet business models. He says the obsession with revenue isn’t the only – or even the best – way for internet start ups to build success. Focussing on costs can be more rewarding, since valuations are based on future profit streams. He cites Craig’s List as a great case of lean business with great margins – perhaps $100m of revenue and only 30 employees. The risk always is that firms become tempted to grow ever larger and this is what causes the real problems.

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One thought on “Advice on web business models”

  1. Fred Wilson was one of the early investors in The Industry Standard, which had lots of revenue and then not very miuch revenue but still lots of costs. I think it’s eventual demise might have taught him something.

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