I like the idea of of being closer to the transaction.

I guess i don’t love the business of selling advertising as a publisher or platform.

People that poo-poo the ad world for not being effective are simply not using it the right way. Advertising is extremely effective if done correctly and digital advertising is revolutionizing the entire landscape. It’s a fascinating time for advertising.

When building startups, I always say that you want to be as close to the transaction as possible. This is a good rule of thumb. The reason why you want to be as close to the transaction as possible is because it a) rules out middlemen and b) makes sure you do not have to rely on anyone else but yourself to complete the transaction. How can this be leveraged in the digital sense? Amazon, Zappos, Busted Tees, Huffington Post, Playspan, The Daily Beast, Gilte Group, etc. All companies that do well.

A system like hotornot.com, with very basic functionality, can generate millions of dollars without selling hardly any physical goods to track, produce, or ship (ie. almost all profit!)…that’s the kind of thing we need to be gearing any innovative or great new digital products and ideas towards.

Aside from that, it’s been my experience that b2b subscription is the next best way to go…find something business are willing to pay a reasonable reoccurring fee for and you’ll be all set (they are more willing to accept paying for things and they generally have more money to pay for it…both of which means you need to make less sales, and it’s generally easier sales to make and maintain).

Advertising has been a fallback plan for the internet since the early 90s…but it’s always felt a little more like the lottery to me than a real plan…everyone plays it, but only a select few really ever cash in on it (and I even question how many who cash in on it ever really come out with all that much money in their own pockets long term).

For me personally, I’m always trying to ask myself the questions “what would I pay for online?” and “what would my business pay for online?”…but the problem is, when I’m being honest with my answers, it’s almost always “not much” (or the answer is generally something that would take a serious upfront investment to build … like a system like Netflix watch instantly which I do already pay for)

Great stuff to be thinking about though…if you crack it, please make sure you let me in on the secret!