What does it take to create the world’s largest online retailer, amass a personal wealth of over $18 billion, and be chosen as Time’s Person of the Year?

Better ask Jeff Bezos.

He’s the founder, chairman, president, and CEO of Amazon.com. But he almost wasn’t. Below, I’ll share Bezos’ amazing story and 15 lessons from his life that you can apply to your own business.

#1 Act

It is only through deliberate action that we can bend the universe to our will.

But there’s a common misunderstanding about action too: that we must know the exact right action to take before doing anything. This way of thinking leads “analysis paralysis” and inaction.

Bezos is not the type to fall into this trap. Though he’s well aware that taking the wrong action will have negative consequences, he doesn’t mind:

In 1994, Jeff Bezos was faced with the biggest decision of his life: should he quit his “well-paying” job as NYC hedge fund manager to create an online bookstore… or should he stay put?

He decided to drive across the country and buy the domain rights to Amazon.com. The rest is history.

As Amazon has grown, Bezos has encouraged his employees to err on the side of action. Sometimes this has resulted in pure brilliance (the development of one-click shopping). Other times it has resulted in total failure (the development of Amazon Auction, which couldn’t compete with Ebay).

Bezos doesn’t mind the occasional misstep:

It’s all part of the Amazon company philosophy. Bezos lists having a “bias for action” as one of Amazon’s six core values.

#2 Minimize Regret

When Bezos was debating whether or not to quit his day job and start Amazon.com, he realized that he lacked an analytical framework for making big life decisions. So he made one up:

In this big-picture perspective, the right decision was clear. He wouldn’t regret losing his job at the age of 80 (surely he would have found another good job by then), but he would still be kicking himself for not cashing in on the online gold rush (at that time, the Internet was growing at a rate of 2300% per year).

Give Bezos’ “regret minimization framework” a shot for yourself. You may be surprised what action it inspires you to take.

#3 Grow Slow

How long should it take before a startup becomes profitable? Maybe six months?

For Jeff Bezos and Amazon.com, it took over six years. Even then, the company made only about $5 million in profit out of revenue of over $1 billion.

That might seem like a long time (and a razor-thin margin), but it all went according to Bezo’s unusually slow-paced business plan. Bezos was in no hurry to rake in a profit because he wanted keep prices low while reinvesting as much revenue as possible back into the company.

This strategy frustrated investors in the short-term but it paid off in a big way when Amazon survived the bursting of the dot-com bubble and started posting bigger profits quarter after quarter.

#4 Encourage Word of Mouth

When Bezos started Amazon he didn’t have a marketing budget. The only way his company would succeed was if it was so good that it spread by word of mouth.

There’s no better way for a business to grow than through positive word of mouth. The only way to achieve that is to deliver a product or service that’s worth talking about. Part of that means providing excellent customer service…

#5 There is Nothing More Important than the Customer

Everybody knows that the customer is always right. But Bezos and Amazon have taken the customer-first philosophy to the extreme. For Bezos, customer satisfaction isn’t just everything, it’s the only thing. It’s the very foundation of his business model:

Bezos considers customer service to be Amazon’s biggest competitive advantage:

The customer experience has never been more important than it is online. Word of mouth spreads quickly on social networks and your competitors are always just one click away. If you want your brand to thrive online, focus like a laser on customer satisfaction.

#6 Charge Less

Some companies are always trying to find ways to charge you more. Just think of all the extra fees that airlines and car dealerships tack on to the advertised price.

Amazon could probably make a killing with this strategy, but they don’t. Instead, Bezos tells his employees to find ways to cut costs and increase efficiency so that they will be able to charge their customers even less.

It’s easy to raise revenue by raising your prices, but it can also lead customer dissatisfaction (which will lower your revenue in the long run).

Before you charge more, do everything possible to make your business model cheaper and more efficient. You’ll help your bottom line and you may even be able to charge your customer less. That’s win-win.

#7 Never Stop Innovating

Normal human beings fear change. Jeff Bezos is more afraid of becoming stagnant.

His tendency to push the envelope has given Amazon.com a reputation as a nimble, always-evolving company.

Amazon started out simply selling books, but it hasn’t stopped expanding since its inception. Today, Amazon sells just about everything – but it also creates its own products, offers a host of web services, and even delivers groceries to your door (if you live in Washington).

#8 Be Flexibly Stubborn

Bezos is a man who understands the value of a good paradox.

It seems impossible to be both stubborn and flexible at the same, but that’s exactly what Amazon is. Bezos explains:

Stubbornness and flexibility are both valuable traits. Like just about anything things in life, the key is finding a middle road between the two.

#9 Be Realistic

One of my favorite quotes is from Will Smith: “Being realistic is the most commonly traveled road to mediocrity.” The idea is that if you never allow yourself to imagine an extraordinary life, there’s no way you’ll ever obtain one.

On the other hand, it’s possible to dream a little bit too wildly – and I think this affliction is particularly common with entrepreneurs. If you expect overnight success with minimal effort, you’re setting yourself up for never-ending frustration and disappointment.

As Bezos points out, being realistic about your business is also a way to ease the pressure of being an entrepreneur:

#10 Imitate

It’s good to be unique. But it’s even better to put a unique twist on something that’s already been proven to work.

Don’t turn a blind eye to your competitors. Chances are they’re doing something you could learn from.

#11 Work Backwards

How do you develop a product that’s guaranteed to sell?

The best advice I’ve heard is to first figure out what your customers truly want and need. Provide that with your product and you’ll have no trouble selling it.

This is a strategy that Amazon has implemented many times, most famously with the Kindle e-book reader. Bezos explains:

In 2006, Amazon was an online retailer – not a maker of handheld electronics. But Bezos recognized that Amazon’s consumers needed a way to read the e-books that they were purchasing from his site. So they worked backwards to meet that need.

When Amazon released the first generation Kindle in November of 2007, it sold out within six hours (and remained out of stock for five months). To this day, Kindle remains the leader in the e-reader category and in November of 2011 they reported sales of “well over” one million sales per week.

#12 It’s Good to be Misunderstood

When you’ve got a business idea that’s destined to change the world (like Jeff Bezos did in 1994) there are bound to be people who just don’t get it. The more revolutionary your thinking, the more likely it is to be misunderstood.

Bezos has particularly thick skin when it comes to this kind of thing:

Amazon never shies away from a good idea because they’re afraid some of their customers won’t like it. According to Bezos, they’ve “always had a lot of skeptics,” but they’re confident in their vision – and confident that they can convert skeptics into believers.

#13 Be Picky About People

One of Amazon’s core values is to have a high hiring bar. That means they only bring on a new employee if he/she is a perfect fit.

Bezos is so particular about who he hires because he realizes that great company culture flows naturally from the people who you bring on board. As of April 2012, Amazon.com employs about 56,000 of the world’s best and brightest people.

#14 Be Far-Sighted

Bezos recognizes that “a lot of people believe that you should live for the now.” But he’s says, “I’m just not one of them.”

He recommends that people “think about the great expanse of time ahead of you and try to make sure that you’re planning for that in a way that’s going to leave you ultimately satisfied.”

The Benefits of Long-Term Business

Amazon is a company that will sacrifice guaranteed profits today in hopes of scoring even bigger profits decades from now. Bezos has said that “sometimes we measure things and see that in the short term they actually hurt sales, and we do it anyway.”

Here’s his reasoning:

#15 Make History

For us, it seems like Bezos has already reached his zenith – the pinnacle of entrepreneurial achievement. But in his mind, he still has miles to go. He’s openly said that he hasn’t yet built “a lasting company” and that “the Internet in general and Amazon.com in particular, is still in Chapter One.”

Bezos is out to make history. And if you want to find similar success, you’ll have to adopt his “go big or go home” attitude. I’ll leave Bezos with the last words:

Now that I am, it’s hard for me to ever imagine going back to a normal job.

There are a lot of reasons why I love being an entrepreneur and I’ve listed my top 30 below.

If you’re thinking about becoming an entrepreneur, I hope reading this inspires you to take the plunge. If you’re already an entrepreneur, I hope it reminds you that you have a lot to be thankful for.

#1 You Can Work in Your Pajamas

When you really want to be comfortable, even business casual isn’t casual enough. Online entrepreneurs get to work while wearing sandals, sweatpants, and even their pajamas.

#2 It’s Low-Risk

“If you start with nothing and end with nothing, then nothing was lost.”

Michael Dunlop

Two decades ago, if you wanted to sell a product, you needed a store. If you wanted to offer a service, then you needed office space. If you wanted a platform to promote yourself with, you would have to pay for advertising space.

Starting a business was expensive and therefore risky.

But the Internet has changed things. Instead of paying tens of thousands of dollars a year for real estate, you can pay less than $100 a year for a domain name and hosting. Instead of paying thousands more on marketing, you can start a social media platform for free.

All of this doesn’t guarantee you’ll succeed, but it does mean that you can’t lose much by trying.

#3 Your Work is Your Own

When you work for someone else, all of your efforts go to helping a business that doesn’t belong to you.

As an entrepreneur, your effort goes to increasing the value of something (a business) that you own outright.

Getting a monthly paycheck is great, but it’s a short-term fix compared to developing an asset that can bring you wealth for years and years to come.

#4 There’s Never a Dull Moment

Companies like to hire people to fill one role. As an employee, you’re generally expected to do one thing and do it very well. This may be efficient, but it’s also boring.

Entrepreneurs just starting out don’t have this problem. Instead of filling one role, they must fill all of the roles for their company. In one day, you’ll work as a designer, writer, coder, salesperson, and maybe even janitor (somebody has to clean up).

Playing so many parts is daunting, but it keeps things interesting.

#5 You Learn Something New Every Day

Here’s another benefit to having the varied duties of an entrepreneur: there’s always more to learn.

Even if one day you were able to learn everything involved in making money online, you would wake up the next day and have more to learn. As an online entrepreneur, the better you’re able to keep up with up-to-date technologies, techniques, and trends, the easier it will be for you to be successful.

Personally, I love the sense of progress I get when I learn a valuable new concept or skill. I also like that I’m always challenging my mind and keeping it sharp.

#6 You Can Find Your True Calling

Most people know what they want to do for the rest of their lives by the time they’re five years old. By the time they’re 25 years old, they usually aren’t so sure.

If you’re looking for some clarity on the subject, then you may want to become an entrepreneur. Since it’s such a diverse and self-guided career path, entrepreneurship is a good way to find your true calling.

#7 You Can Beat the Rush

Driving to work with everybody else during rush hour is a waste of time, gasoline, and your patience.

As an online entrepreneur, your morning commute can be the walk from bedroom to your office. If you choose not to work from home, you can still avoid the rush by going to work an hour earlier or later.

#8 More Home Cooking

Employees don’t do a lot of cooking during their lunch break. It’s more practical to go out to lunch at a restaurant or bring a sack lunch.

But as an entrepreneur, you can spend more days working from home and therefore more lunches in your own kitchen. There’s nothing like home cooking: it’s often healthier, less expensive, and more satisfying.

#9 More Sunshine

I live in Fort Collins, Colorado and this last week has seen some unseasonably warm weather. Unfortunately, when I’m stuck inside working during a beautiful day, I tend to be distracted.

So I took mornings off last week to hike, bike, and play basketball. After getting a couple of hours of Vitamin D, I was ready to buckle down for work.

If I had a regular 9-to-5 job, that wouldn’t be possible. I would probably be stuck looking out the window all day.

#10 It Helps Build Your Network

The difference between achieving your wildest dreams and being left in the dust can be as simple as knowing the right person.

Some occupations are better at building your network than others. But you probably won’t make a ton of connections while working in the same office every day year after year.

Entrepreneurs, on the other hand, are always meeting new people. They have to reach out to potential clients, customers, and partners if they want to keep their business moving forward. All of that turnover helps entrepreneurs to have some of the biggest (and most lucrative) networks around.

#11 The Internet is Still Growing

As of December 2011, only 32.7% of the world’s population had Internet access.

In the next decade, that number will climb steadily as more and more people gain access. Meanwhile, those two billion of us who already connect to the Internet will likely be doing it more often, from more devices, for longer periods of time.

In other words, the Internet is a healthily growing industry. If you start an online business today, it will enjoy the benefits of that growth.

#12 We’re in a Time of Economic Transition

The last two decades have seen the sharp rise of digital technology and globalized trade. This has shaken up the world economy and left many industries depleted.

It has also created brand new business opportunities for entrepreneurs to capitalize on.

While bigger, older companies struggle to adapt to these changes, a startup can be built from the ground-up to solve today’s problems. A great example of this is Green-back Laptops, which turns a profit in a brand-new industry (recycling computers).

#13 It’s an Employer’s Market

Unemployment rates around the world are high. That’s bad news for employees, who are dealing with more competition and lower wages.

But it’s good news for entrepreneurs, who can benefit from hiring an eager, available workforce to help grow their businesses.

#14 You Can Create Jobs

If your business becomes successful, you’ll want to hire a few employees. The larger your business becomes, the more people you’ll need to hire.

Google was started by only two people but it now employs over 30,000. What would those 30,000 people be doing if it weren’t for Google? Maybe they’d working for another search engine, but they might also be out of work.

#15 It Makes Your Internet Habit Productive

If you’re reading this, I’m guessing you spend a fair amount of time online.

When you’re an online entrepreneur, browsing the Internet becomes part of your job: you benefit from reading relevant articles, networking with people in your industry, and sharing parts of your story on Facebook or Twitter.

If you’re going to be spending your time online anyway, you might as well be doing something productive.

#16 You Can Do What You Love

This may be the single best reason to be an entrepreneur.

Instead of fitting into a box designated by an employer, entrepreneurs can effectively create their own dream-job.

#17 You Can Earn Passive Income

Passive income is money that you earn on a regular basis without having to put in much effort to maintain it. One example of passive income would be the monthly rent check a landlord receives.

Just about everyone loves the idea of passive income because it means that you can make money while you sleep – and use the daylight to do whatever you like.

Because a good website can earn money without much maintenance, online entrepreneurs have the fast track to earning passive income. Some of the ways to do it are by hosting advertisements on your sites, selling products, and developing membership programs.

#18 You Don’t Have a Boss

A great boss is a leader, mentor, and a friend.

A bad boss is hell on earth.

If you don’t want having to risk getting a bad boss then you may like becoming an entrepreneur. You’ll still have responsibilities to other people, but you won’t have to be anyone’s personal underling five days a week.

#19 You Can’t Get Fired

One of the worst things about being an employee is that you never know when you could get the axe. Companies are always looking for ways to cut costs and annual salaries are one of their biggest expenses. Any day, you could go to work with a career and come home unemployed.

As an entrepreneur, you can lose clients, visitors, or followers, but you can never lose your job. Your future is in your hands.

#20 You Don’t Have to Quit Your Day Job

Making money online doesn’t usually happen right away. It takes time to develop a website, product, or following. Even the world’s most successful online entrepreneurs (think Mark Zuckerberg and Larry Page) didn’t earn money from their websites for years.

But even though becoming an online entrepreneur is a big time commitment, the time can be spread out over as many days as you like. So, you don’t need to quit your day job. You can keep earning a full-time income and build an online business with your free time.

#21 You Can Quit Your Day Job

At some point, your online business may become so profitable that your 9-to-5 job becomes obsolete. That’s when you put in your two weeks’ notice and become a full-time entrepreneur.

Other than winning the lottery, entrepreneurship may be the best way to never need a “real job” again.

#22 It Teaches You Self-Discipline

Entrepreneurs have to hold themselves accountable. If they don’t, nobody else will.

This is a challenge, but it’s also a great opportunity to flex your willpower. Being your own boss means that you get to practice motivating yourself every day to get things done.

Self-discipline is a rewarding habit. Practicing it daily makes you feel more satisfied and confident in yourself. Of course it’s also the best thing you can do for the success of your business.

#23 You Can Travel the World

When your office is online, you can work from virtually anywhere. As long as you’ve got a power outlet and a connection to the Internet, you’re set.

Some entrepreneurs (like Cody McKibben) take advantage of this and travel the globe year-round. These entrepreneurs are known as ‘digital nomads’. Others just use their location-independence to take the occasional long vacation.

There’s a big, beautiful world out there. Starting an online business gives you a better chance to experience it.

#24 You Can Listen to Your Body Clock

We all have a unique body clock that plays a role in our mood and energy throughout the day.

For me, every night at midnight a switch flicks on in my brain and I become extremely focused, creative, and productive. That time of night is usually when I do my best work.

If I had a typical 9-to-5 job, this productive window would go to waste. One of the big benefits of being an online entrepreneur is that you can listen to your body and work during the times of day when you feel most energized.

#25 You Can Work Four Hours a Week

In “The 4-Hour Workweek”, Timothy Ferriss discusses how to use things like outsourcing, drop-shipping, and Google Adsense to automate your business and work only four hours a week.

This is one of the great entrepreneurial dreams: build a business to the point that it runs without you.

Of course, you can’t start brand-new business, work on it for a few hours per week, and expect to be able to live off of the income. The road to the four-hour workweek is often paved with 50 and 60 hour weeks.

#26 It Encourages Efficiency

Another way to work fewer hours per week is to work more efficiently. The sooner you get today’s project done, the sooner you’ll be able to relax.

The same isn’t true for most jobs. Generally, you get off at the same time regardless of how efficiently you’ve been working. In fact, an hourly wage can actually encourage you to do things slowly because you know you won’t have to work as hard.

Personally, I prefer how entrepreneurship incentivizes efficiency.

#27 It’s Satisfying

It’s hard to define what gives us that sense of satisfaction, but we know it when we feel it. At the end of the day, we either feel happy, content, and satisfied or… we don’t.

In my experience, entrepreneurs are an exceptionally satisfied bunch. This is true even of those who haven’t yet seen very much success.

There’s something about working for yourself, following your own path, and controlling your own destiny that gives a person that happy, contented feeling at the end of the day.

#28 There’s Unlimited Growth Potential

With a traditional job, you move forward by receiving raises and promotions. These are good ways to get ahead, but they’re all incremental forms of growth. You’re not going to be the secretary one week and the CEO the next.

Entrepreneurs, on the other hand, can experience big breakthroughs and sudden leaps in success. You could make $100 one week and $10,000 the next.

The knowledge that your business could explode overnight is part of what makes being an online entrepreneur so exciting.

#29 You Can Influence the World

As an employee, it’s easy to feel like a cog in a machine. You’re producing results for the company, but you’re not making your individual mark.

Entrepreneurs build businesses that reflect their goals and values. Their businesses entertain, inform, and help people, and in doing that they shape the world.

#30 You Can Leave a Legacy

I don’t know the meaning of life, but I do know that we all want for our life to have mattered.

You don’t have to start a business to do that. Raising a family, becoming a teacher, or simply being a good friend are all fine ways of leaving a legacy.

But if you really want to “put a dent in the universe,” then you may want to become an entrepreneur.

That’s what gave Steve Jobs the platform to change the way we think about technology. It’s also what gave Bill Gates the opportunity to dedicate his life to giving back (through The Bill and Melinda Gates Foundation).

Simply put, a business is a powerful thing. When you create one, you create the possibility to provide huge value for people all around the planet. Build your business to last and it will keep making a difference even after you’re gone.

What’s your reason?

Did any of these 30 reasons jump out at you and make you think, “That’s why I decided to become an entrepreneur?”

Or did I neglect to mention your favorite reason?

Either way, illuminate me in the comment section below.

And if you’re not yet an entrepreneur, I’ll give you one more reason become one: you can start right now.

Images Courtesy of

http://www.flickr.com/photos/visualpanic/,

http://www.flickr.com/photos/justinandelise/,

http://www.flickr.com/photos/hlkljgk/,

http://www.flickr.com/photos/superfantastic/,

http://www.flickr.com/photos/schristia/.

Even if your business only requires a computer and an internet connection, you’ll need to know how to get the ball rolling and start generating income.

Here are five tips on where to start making money, plus a word of warning from someone who has experienced the battle of starting a business with an empty wallet. The best place to start is everyone’s least favorite, but ultimately the most effective opportunity:

1. Freelance job boards

Any Google search related to “starting a business” or “freelancing” and “financing” will turn up a plethora of freelance job boards.

Get started signing up for them, and be sure you complete your profile on each one.

Before you start building profiles, you should have a few things ready to go:

-Your business name and online/offline contact information
-A brief description of your business and the services offered
-Either a portfolio or a convincingly-worded description of your skills acquired elsewhere

You should know exactly what you’re offering and be able to convey it concisely. There are plenty of transferable skills learned through school, hobbies, and work that can be applied to satisfying a client’s needs – you just need to make them aware that you’re competent, regardless of whether or not you have a portfolio.

Apply everywhere, and apply for gigs or projects where you can be even remotely helpful.

Until you have a job, this is your job. Be religious about looking for updated project listings and following up on bids you’ve placed.

Remember: pricing doesn’t matter as much as the ability to say you have a client. Don’t lose that chance by getting hung up on the idea that your time is “worth” a certain amount of money.

So, know what you need, and aim for that, only go for more if your pricing can remain competitive.

Odd jobs/ Part time work

Sounds counter-intuitive, right? You’re trying to start your own business, not work for someone else.

But how badly do you want money? How badly does your business need financing?

If money isn’t coming to you easily, you scrape it together.

Look at it this way: if you were told you had six months to live and needed $10,000 for a life-saving operation, what jobs would you take and how many hours would you dedicate to getting that money?

That same urgency can be applied to your business, if you take your goals seriously.

$7 an hour is more than the zero you’re making sitting at home, reading business blogs. Get out and do something, then roll that tiny paycheck into ads, or buying leads, or creating your product.

Spend carefully, take on bit projects or odd jobs, save your change and have a clearly defined goal so that when you’ve done enough, you know it.

Family and Friends

For some businesspeople, this is the first line of defense, but I only recommend asking people you know for money as a next-to-last resort.

Put the time in elsewhere so that they can see your passion, dedication, and level of responsibility.

Talk about your work with your family and friends, share more if they seem interested. In order for someone close to you to feel comfortable investing in you, they’ll need to have a clear understanding of what kind of business person you are.

If they can tell you’re willing to do whatever it takes to become a success, they’re far more likely to help out than if they think you’re a financial gamble.

Creative Networking

I got my break in the business by chatting about work at a Superbowl Party a few years ago. All it takes is one client, one chance, one paycheck to give you an opportunity to get your business underway.

Be knowledgable, be confident, and be curious about other peoples’ lives and work.

Get out into the world, both the real world and the virtual world, and experiment with talking to strangers. The more connections you make, the more likely you are that someone will either a.) want your services for their business or b.) have you in mind for a recommendation when a colleague needs the services you offer.

Know the difference between friendship and a business relationship, and work to cultivate both via social engagements, webinars, meetups, tweetups, and other local business networking events.

VC’s, banks, etc.

I don’t have a lot of experience with these yet, because I was able to grow my business organically via odd jobs and creative networking.

I have researched the options and learned that it’s important for anyone relying on a VC to do their research. Not all loans, and not all financial institutions are created equal.

Just like getting started on freelancer boards, you’ll need to know how to convey your skills and abilities confidently. If you have a portfolio, make sure the information is organized, thorough, and demonstrates your capacity as a businessperson.

Again, you’ll need a presentation of sorts available. It’s better to have some basic financial projections and a business plan on file at all times, whether they’re needed in early phases or not. It would be terrible to get a shot at a short-notice meeting and not have the required documents handy.

Get a clear understanding of what their investment means for you in the long term. If they own a portion of your business, or your profits, determine how long that ownership lasts and whether you’ll be able to work with that down the line.

Word of Warning: Have a Plan

Money may be tight for awhile even after your business finds clients. Have a plan in mind (or written down) for where that money will go once it comes in. You should know the answers to these questions:

-Which financial obligations are the top priorities for your business?
-What specifically does your company need in order to have opportunity for growth?
-What are the minimum and maximum amount of income you will dedicate toward growing your business? (Percentages are easier to guarantee than actual dollar amounts.)

Of course, this isn’t an exhaustive list, so please add any other thoughts on how you can make money right away to the comments below.

My goal today is to show you how ten big companies make money online in weird, outside-the-box ways.

Groupon

Leaping from $30.5 million in year one to $713.4 million in year two, Groupon is the fastest growing company in the history of the world.

How does Groupon Make Money?

Groupon features local daily deals around the world. Companies choose to set up a group coupon that Groupon sells for a day and keeps a percentage of the price of the coupon (usually around 50%).

The reason it works so well is because the deals are 50-95% off, they only last a day, and nobody gets their coupon if they don’t sell a predetermined number of coupons. So when people buy the coupon, they tell their friends to get it too. If they refer three people, they get the Groupon for free.

Airbnb

Started as “Air Mattress, Bed, and Breakfast,” Airbnb is an online service that matches people who want to rent out a room with vacationers who are looking for short-term rentals outside of the traditional hotel.

How does Airbnb Make Money?

Airbnb has been labeled as “among the next generation of multibillion dollar startups” by the New York Times. They charge travelers a 6-12% service fee and require hosts to pay a 3% fee for every booking through their site.

With this business model, Airbnb was valued at $1 billion in July 2011.

Zynga

Zynga is the company behind many of the world’s top social networking games including FarmVille, CityVille, and Mafia Wars. They’re reportedly valued at $15-20 billion.

How does Zynga Make Money?

Zynga makes money through people purchasing credits within their games and through partnership agreements with large companies.

Using FarmVille as an example, players use real money to purchase “Farm Cash” so they can progress in the game. FarmVille also conducted an ad campaign with McDonald’s where people could, for one day only, visit the McDonald’s farm, grow tomato and mustard seed crops, and earn McCafe Consumables so their farms would grow faster.

In March 2010, Zynga also started selling prepaid cards for virtual currency at more than 12,000 stores across the US. I remember seeing FarmVille gift cards at a 7-Eleven in downtown Denver and thinking, “there’s no way anyone would buy that…would they?” I was wrong.

Activision Blizzard

World of Warcraft, more affectionately known as WoW, is an online role-playing game owned by Blizzard Entertainment (now Activision Blizzard) with the world’s largest online gaming userbase: 11.1 million subscribers as of June 2011.

How does World of Warcraft Make Money?

Activision Blizzard makes money with WoW by charging $15 per month to play the game. They also sell physical discs and expansion packs. It’s the bloggers equivalent to a membership site with upgradable accounts.

A neat factor about their game, however, is that people can play the game, collect virtual gold, and sell their gold for real money.

People and companies, yes companies, make a full-time income doing just that. Then they sell their high-ranking profiles to people who want to skip the grunt work of running through the first portion of the game.

Edit: Thanks to Joey’s comment, I found that selling gold and profiles is strictly against WoW’s terms of use. We don’t endorse this practice but it’s interesting how it works.

Dropbox

Dropbox is a Web-based file hosting service that lets people save their documents, photos, etc. to the cloud so they can access them from any internet-connected device. It was started in 2007 by a pair of MIT graduates through the Y Combinator.

How does Dropbox Make Money?

Dropbox operates under a freemium business model where people can get started for free, but pay for more space as they want to host more files.

Dropbox is expected to reach $100 million in revenue by the end of 2011.

99designs

99designs hosts graphic design contests where graphic designers compete to create logos for clients. As a result of these competitions, clients get to choose from an average of over 90 logos and only the winning designer gets paid.

How does 99designs Make Money?

Clients post logo and other design projects and pay upfront. Then designers submit their logos to the client. The client selects his favorite and the designer gets paid, minus a small fee that goes to 99designs.

UserTesting.com

UserTesting.com offers low cost usability testing experiments where you can hire their army of independent usability testers to look at your website and give you a detailed report on what they think.

How does UserTesting.com Make Money?

They typically charge $39 per usability test and they pay their testers $10 per test. So they keep $29 per test for setting up the systems and processes that make this previously daunting task simpler.

The beauty of this company is that they can hire anyone – in fact the less savvy the better – to perform these usability tests.

Woot!

Woot pioneered the one-deal-a-day online business model where they feature one incredible deal every day.

How does Woot Make Money?

Much like Groupon, they use creative copywriting and limited-time offers to sell other company’s products on their homepage. Since they drop-ship these products, they don’t have to offer customer support or manage overhead like traditional companies. As you probably guessed, they get a cut of every sale.

In June 2010, Woot was acquired by Amazon for an undisclosed amount.

QuiBids

QuiBids offers a radical take on the long-established internet auctioning industry. People have reported receiving up to 95% off things like $3.52 Apple iPads and $1.07 Nike putters. The catch is that it costs you $0.60 to place a bid and you have no guarantee of winning the auction.

How does Quibids Make Money?

Some products receive upwards of 1500 bids which means QuiBids is taking home $900 in revenue just from people making the bids. But QuiBids claims that they maintain a 5-10% profit margin as a company because they end up losing money on 50% of the things they sell.

Any Lucky Day

Any Lucky Day is a smaller company that’s run by a young entrepreneur named Giancarlo Massaro. Similar to Woot, they profile a company-of-the-day. But instead of selling the company’s product, they hold a contest where they give the product away.

How does Any Lucky Day Make Money?

It costs a base price of $150 for a company to be featured on Any Lucky Day. They also offer a few upgraded options including publishing rights and a small listing for an extra $50 apiece.

Compared to traditional advertising like magazines and billboards, $150 is an incredible deal with seemingly more engagement because you have to visit the company’s website before you can enter the contest.

The Wrap-Up

The point of this post was to get you to start thinking outside the box on how you make money with the internet. You can continue to place sidebar ads and promote affiliate products, but the internet is your oyster when it comes to all the options you have for monetizing your website.

Remember, making money from a blog is bizarre to most people. So you’re on the right track.

Do you know of any other companies with weird, outside-the-box monetization strategies?

Today I wanted to let you know… I’m a millionaire! Well… sort of.

I’m a millionaire just like Mark Zuckerberg is a billionaire. You see Mark founded Facebook and Facebook is worth billions so technically he’s like a billionaire?!

You see, I own IncomeDiary and a whole bunch of other websites and based on what a broker told me, I’m worth a fair chuck of change.

Websites typically sell for 12 – 18 times monthly revenue. However this isn’t the rule. If your website is an authority website, has a great brand, has real “potential”, is making a significant amount of money (lets say… at least tens of thousands of dollars a month), then well it can be pretty much any amount you money someone is willing to pay for it. In a down economy (or so the broker called it), you should expect 2 – 4 years revenue. But again, let me stress, this isn’t the rule. Some sell for a lot more.

Back to my point, based on that hooharr of a paragraph, yes my business would in fact sell for at least $1,000,000 (I’d hope significantly more), which would make me a millionaire? Right?

It’s a weird world but I wouldn’t ever consider saying that out-loud in a public places around actually people. As far as I’m concerned, you don’t have a million dollars till it’s in your bank. Having said that, I do own a website network worth a lot of money, so let me give you a few ideas on how you can do it yourself.

First however I would just like to make perhaps the most important point in setting up any business:

What is your exit plan? Who is going to buy your business and how much for?

I can’t tell you how often I ask a website owner what their Exit Plan is and they cannot give me a straight answer. Yet so many website owners just make this assumption that somehow it will just all work out fine? To put it another way, lets say today that I want to do a North American road trip from New York City to Los Angeles – do you think I would ever get to Los Angeles if I did not decide in advance that was my destination? My Exit Plan? Of course I wouldn’t make it – and nor will you either with your business if you don’t have an exit plan!

How To Build a Web Business Worth a Million Dollars

Building a massive online business is quite simple. Actually, when I go over it in my head, it seems almost idiot proof, that surely nobody could get it wrong. Of course I don’t believe that to actually be the case but I do believe online entrepreneurs who have made a few bucks online can follow in my footprints and do the exact same thing. The idea is simple, build a great website portfolio with lot’s of great websites. Here’s how:

Here’s my 6 top tips for creating a big, bad-ass, money making online business.

Outsource Everything (Not like those newbes tell you though)

Whoever is going to buy your business, they want to know that they can be relatively hands off and that you have a great team that runs everything. (If the website relies on you alone it will be difficult to sell)

So just hire lot’s of people in India to do everything right? Wrong!

Nothing against Indian Programmers or article writers – (Or indeed any non-native English Speaking teams) there are some fine ones around but my experience has been that I get a better result for some skills – hiring locally. Sure it costs me a lot more but if it gets me a better job done and adds more value to my business, that is what counts.

You will have heard me say before – “You can’t outsource Passion” – and it is true, but you will get closer to it I find with individuals who understand you and your objectives and my experience has been that I stand a better chance of that by hiring locally.

I pay my web team £45 a hour (approx $70 per hour). In the past year I have spent well over £40,000 ($64,000) on my blog network alone with them, getting them to improve sites and build new ones. Every time they do a redesign, I make more money because I learn from the past one.

I pay my brother a decent wage for his age and education. He does a lot of articles for different sites I own and that means I can spend that time I use to spend on writing, on doing other things like managing my team. If I paid $6 for a article on some forum, I would see a article written by someone most likely who’s first language is not English and doesn’t have any interest in what they are writing about. This is obvious to the reader and Google and doesn’t benefit my business in anyway. Bottom line, pay more, get someone better, it’s so worth it!

OK, I will admit there are some excellent overseas outsource teams – I have friends who swear by teams they employ in the Ukraine and also Romania and of course India – but all of them admit they had to go through a lot of teams before they found a team they could rely on. And yes, you can get let down by local teams also – it is just that my personal experience that you can manage local teams easier and while cost will almost certainly be higher the chances of getting what you want, done as you wish and to the standard you require first time is much higher!

Diversify Your Traffic Sources

One thing people buying your site will be looking at is Google Traffic. If I’m getting 1000 visitors a day from Google and that’s 60% of my traffic and then Google decides that they are going to change their algorithm and rank sites differently, then I’m screwed! Thousands of top sites have over night lost over half their traffic from Google because of something just like this. To a potential buyer, this would worry them because you are so reliant on the big G.

Here’s what you do: You drive traffic in more than 1 way. Here’s a quick check list of things you must be doing:

• Social Media
• Social Networking (network with people online so they become your friend and then make them link to you Mwahahahahah).
• Content Directory’s
• Make Your Website Sticky (so people keep coming back).

Invest, Invest, Invest!

Hand on heart, I would not be anywhere near as successful if I didn’t invest so much into my business. If your making money, forget spending it on a nice car (at least not right now) and invest it into your business. Spending $5,000 on getting some software developed could see a $50,000 return in a month. The same for so many other things. I’ve begun investing quite a lot of money into article writers, not cheap ones, but ones that know a lot about the subject that they are writing about! Content means I can get more traffic which means I’m going to make more money. Here’s a few suggestions on what you could invest in:

• New website design
• Article Writers
• Software Development
• Graphics
• Buy Other Peoples Websites
• Invest in Educational Products To Further Your Learning
• Buy Traffic
• Get a Better Computer

The list is endless. I’ve done all this and it makes your business bigger and better. Here’s the simplistic way to show you why you should invest:

Build a website, make $100 a month and do nothing new month after month and keep making $100 a month.

Month 12, your making $100

Or….

Build a website, make $100, invest the $100 into a premium theme, next month you make $120. Keep investing and investing.

Month 12 your making $340

Now imagine the increases when your making $10,000 a month and investing half of it.

Work Hard (At least at the beginning)

Entrepreneurship is about living a few years of your life like most won’t so that you can live the rest of your life like most can’t.

This means, work now, make lots of money and spending years to come in a lovely house watching your neighbor go to work every day while you live your idea of “the dream”.

I’ve always been lazy, it’s so hard to work when you don’t have to. When I lived at my parents, I was young, didn’t have to pay much rent and my lifestyle didn’t require me to earn a lot of money. I moved out, had to make more money, worked hard, got my business up to the level where it could maintain my lifestyle and then got lazy again. This is something I’ve done time after time as I have increased my spending and lifestyle. The importance here is, make sure you have the right team so you aren’t reliant on the success of your business.

Build a Network Of Websites

When you start your online business it’s vital you don’t do the following: Build lot’s of different websites.

It is not best to have 10 small websites, it’s best to have 1 massive one. Once you have achieved that, then you move on and build more sites related to that first website. This is exactly what I have done. A great example of this is TutsPlus network. They started with a blog about Freelancing, then Photoshop Tutorials, then Coding Tutorials and it just kept growing, creating new sites offering what their readers wanted to know more about. In 5 short years they are making millions because they expanded and invested.

Have The End In Mind & Work Towards It

I find this to be really vital to my success. If I didn’t have a clear understanding of where I wanted my business to go, what I wanted it to stand for and what It’s going to look like, then I wouldn’t be as successful as I am. I know that replying to negative emails won’t get me closer to my goal. There are so many things you are probably focusing on that are irrelevant to your end goal and the success of your website. Cut them out and you find you will have a lot more time to focus on the things that are import.

Just make sure you keep working towards an Exit that makes you very wealthy!

I would really love to hear about your exit plans in the comments below? Better still if you have already made a successful exit? Share the experience – and of course if you have any questions or suggestions for even more improved business clarity share that as well.

I will take some of the guess work out of it for you. Here are seven reasons why your membership site probably isn’t as good as it could be.

How To Improve Your Membership Website

You Are Not Accessible

When people join your membership, they want to feel like they have personal access to you. By creating a membership site and then backing yourself out completely from communicating with the members, you are removing one of the biggest factors that could keep your members around for a very long time. Not too long ago, someone told me that “access was the new thud”. The “thud” referred to the added perceived value of your product or service when your customer received a “big box of stuff” in the mail (The “thud” being the sound it made when you dropped the box on your desk). The “thud” or “big box of stuff” used to be something that drove the perceived value of your product or promotion through the roof. These days, giving your members the perception of having personal access to you is the new way to build in that maximum perceived value.

Being active in your forum, personally responding to emails from members, and offering webinars or conference calls can go a long way in making your members feel like they have personal access to you, the expert.

You Are Not Staying In Tune With What Your Members Want

One of the biggest mistakes that people make when they are creating membership sites is that they create content based around what they want to talk about as opposed to creating content based around what your members want to learn. As people with a lot of experience and knowledge in the niches in which we teach, we often forget how much we know and how far we have come to learn the things that we are now teaching. It seems to be a very common mistake that we, as content creators, teach over the heads of our members.

If you want to ensure that your members stay with you for a very long time, it’s important to bring yourself back to their level and remember some of the struggles and stumbling points that you encountered when you were getting started. I find that doing a monthly survey of my list and constantly engaging the members in my forum helps keep me in touch with the content that they want from me and the pace at which I should teach it.

You Are Not Engaging Them Through Multiple Forms of Media

If you really want to build the maximum level of engagement that makes your members feel like you are really taking care of them, you need to avoid relying on only one form of media. We think it’s so simple to just crank out video after video and slap it inside of a membership site. If you’re good at creating videos, that’s a great start… But it’s not going to keep them coming back craving more. Video may be your favorite way to teach or to learn but I would be willing to bet money right now that it’s not ALL of your member’s favorite way to learn.

Experiment with adding written articles to your membership. Make text transcripts and audio versions of your content available. People love the options. Personally, I love audio content because I can listen to it while driving or while out for a walk. If video is not my preferred form of media for receiving content, I guarantee you have some members that have preferences other than video as well. Make sure you stay in tune with these needs by giving them options.

You Are Trying To Drip Feed Your Content

When you really think about it, does drip feeding all of your content really make sense? Let’s say that you have a membership site with drip-fed content that’s been online for six months… If you’re creating content right now that you are really excited about and really passionate about, it’s only going to be seen by a small minority of your members. Members that are getting in to the site today are seeing your oldest (possibly outdated) content while only the few members that have been around since month one are seeing the stuff that you just created and are really excited about… What happens two years from now when you still have a few members hanging around that have been there since the beginning? You’re still creating content that could potentially only be seen by a handful of people.

Drip feeding make sense if you’ve created a six month course or training that has a specific end date. In almost every other case, you should avoid falling in to the trap of making all of your content drip-fed. You will regret it in the future.

You Are Not Setting Milestones For Your Members

While I believe that drip-fed membership sites are a bad move, I believe that milestone-based incentives are an excellent move. If you give your members some sort of bonus to stick around and keep coming back, you will see your retention go through the roof.

I like to offer bonuses to my members once they’ve been a member for sixty days (the refund period), once they’ve been members for six months and once they’ve been members for a year. The bonuses must be worth sticking around for though. I can not stress enough how important it is that you offer some killer bonuses for reaching these milestones. You can offer hour long consulting calls, access to full products that you’ve created outside of your membership, physical versions of your content shipped in the mail, or even be willing to purchase cool toys for them once they reach a full year. Offering up these incentives will definitely keep people encouraged to stick around and pay attention.

Your Barrier To Entry Is Too High

There is nothing wrong with having membership sites that run $97 per month or more per member. In fact, that seems to be a pretty standard price point these days for membership sites. However, $97 is too high of a price to pay today.

If you lower the price that people pay today, you’re much more likely to get them to jump on board. Telling people that they need to pay $97 now and then continue to pay $97 every single month to stay a member is a tough sell. However, telling people that they can take a test drive today for $1 or for $5 is a much easier sell. It gives them the opportunity to get inside and see that you really do offer them a lot of value and that what you deliver is worth much more than the $97 per month that they will eventually pay.

Play around with offering trials of $1 or $5 for the first month just to get them inside. Once they have access to all of the valuable content that you’re offering, they are going to have a real hard time canceling and losing everything you’re providing for them.

You Are Not Reactivating Cancelled Members

It has always been said that the easiest person to sell to is an existing customer. If that’s true, one of the next easiest sells is to someone that was once a customer. While running your membership right now, what do you do with the people who cancel? In almost all cases, you’re letting them walk away and never hear from you again.

What you should be doing is adding them to a list of cancelled customers and then following up with them. Offer them bonuses, discounts, and special access to you for coming back and giving your membership another shot. You will be surprised at how responsive this tactic can be. Over time, I have managed to reactivate about 25% of the members that have cancelled just by offering incentives to come back and give us a second chance. If you’re not doing this, you are leaving money on the table.

Running a membership site can be a very rewarding and profitable endeavor. If you get it right, keep your members engaged, and constantly strive to provide high quality content, you will find yourself running a very successful membership site with customers who absolutely love you. Don’t make the mistakes above and you are practically guaranteed to build a following as well as a satisfying income for years to come.

Matt Wolfe has helped create and build two hugely successful membership sites that currently serve close to 5,000 members combined. He discusses his journey and how to build successful online businesses over at his personal blog, BusinessAndBlogs.com. You can also take a look at Matt’s membership site all about using WordPress to create your websites over at TheWPClassroom.com.

I have tried lot’s of different methods to make more money from my business, I have launched my own product which is now used by tens of thousands of people, sold consulting (briefly) and offered bonuses on product launches. Here are the 11 things that made me money last year:

What Makes My Business Money

1. Interview People With Products

One of the very first interviews of the year was with Adam Horwitz, he had just applied to be one of Yanik Silver’s scholarship winners and before I spoke to him I had seen his sites. Admittedly I thought he was a scammer and was surprised when he applied, after a few nights of talking, I interviewed him for IncomeDiary and since then have sold thousands of dollars worth of his product on autopilot. This worked well because the advise in the interview inspired everyone and wanted them to proceed with what he was teaching, the only way to get a jump on the competition was to buy his product.

2. Launched My Own Product

About a year ago I sat down and tried to calculate if it was worth doing a launch or not. At the time I thought it was a lot of work to give half to affiliates then half of whats left to the tax man. It wasn’t till June when I was talking with my web developers and looking at the results of my lightbox popup that I realized we had a great opportunity to sell this to a lot of people. Spreading my risk, I offered a 50% share to my web development team who would put in the hours and I would put in the knowledge of online marketing. In 3 months we did two launches earning hundreds of thousands of dollars. The best thing about launching the product was the feeling of putting something out there that people respected and loved, looking back, it didn’t matter if I didn’t make any money from this, just have all these marketers I look up to, now come to me for business, that was enough.

3. Launched My Own Service

Early in the year I was doing a service called “Done For You Blogging”, everyone coming to my blog wanted a blog just like me so I once again went into business with a web developer, they would do the blogs and I would do the marketing. This was highly profitable but I found without the right systems in place, it was not worth the money it made. We recently put it back online, working with a new developer, we greatly improved the service to provide customers with a best possible blog for the lowest price possible. A service with a set system is attractive to me because it doesn’t require to much work as long as you have the right team in place.

4. Sold Consulting To Readers

Selling my time for money is something I will most likely never to do again. Although being paid any where between £150 and £200 a hour is “nice”, please don’t judge me but I felt some clients made me dumber, along with my health not being great at times, I felt it wasn’t worth my time.

5. Tried Webinars

I tried a couple of Webinars as I had heard from several good friends that they were very profitable for them. First one made me nothing and only had 40 people turn up, this was mainly down to not promoting it hard enough, you need to email hard to your list and promote it everywhere. I also probably didn’t promote the right product on the webinar. The next webinar was more successful, unfortunately at the time I was having an operation and wasn’t able to be on it, however Lewis Howes had my back and ran the whole thing, it was a lot more successful but for the amount of promotion to my email list, it wasn’t more profitable then doing a directly email promotion, at least that’s what I found. Perhaps if I gave it more time and found more targeted products it would of gone better.

I don’t plan on using this technique again for promoting other peoples products, although do think it will be good for promoting my own products.

6. Bonus Pages

I had never promoted a high price product to my list before when Gideon Shalwick asked me to promote his $1000 video blogging launch. I like Gideon and what he represents so wanted to promote it and help him out. I decided to put together a bonus page which was a short video of me going over the product and what you get if you buy it through my affiliate link. I offered a few free bonuses and it did convert fairly well, this is something I will be trying and testing a lot more in 2011.

7. Reviewed Products

Just over a year ago I was speaking to some marketing friends and wanted to release a review blog on IncomeDiary, Ryan Deiss told me it won’t work because you can’t be always promoting great products and if you do decide to say something bad about one, then they will no longer want to work with you. He was right and I decided against it. I use a lot of different products for my internet businesses and when promoting there site direct in an email, it never converted that well because it didn’t look right. I decided to review some of the products myself, showing them how I use it and why it’s great. This increased conversions greatly and I have seen upwards of $6 a click from a review.

8. Perfected My Guide Posts

I love writing information to show people how to do things, the best thing is when it includes the reader having to buy something. This way, they see the benefits and how to do it and know the importance of it, they naturally want to go and do the same. Unfortunately they have to go buy something, perhaps some software or hire someone, when they do, they purchase through my affiliate link which earns me money.

9. Got Rid Of An Affiliate Promotion <<=== READ THIS ONE

This was great how this worked out. I had made over $7000 promoting a Twitter product on my blog, I had begun promoting it because they were friends of my Dads and had done quite a lot of work for our businesses. They were hired to do some work for me, a long story short it was some software, instead of delivering on there promise they went out and tried to sell it to my competition (all of them) and after getting turned down by everyone (people like me) they decided to launch it as there own product. I didn’t need there money that bad so decided to cancel there promotion and replace it with a different Twitter product which perhaps was better, this doubled my conversions and is earning me twice as much. What can you learn from this? Test lots of different affiliate products and don’t betray your friends.

10. Sold Advertising

If you have read much of my previous posts you would know I have a love/hate relationship with advertising. I think I have found a good model now, small amount of advertisers, privately sold, giving them results so they stay for ever. This is a work in progress and hope to have things set up by the end of March.

11. Email Marketing

I use this in two different ways, the first one is my eCourse, which has been running for over 2 years now and still remains one of my most profitable parts of my business. I provide value and monetize it, simple.

The second part is emailing affiliate promotions to my list. This has been really hit and miss, some promotions making me A LOT of money and some being really bad. I have decided to give this technique a rest for a few months, perhaps I will come back to it, but personally I believe writing more content which is well monetized and emailing my list a link to that will convert better over time. It also makes my readers love me a little more

What Will Make Me The Most Money In 2011?

Something most internet marketers don’t even consider is creating a business which you can sell one day. Most just focus on today, making as much as you can to pay for your lifestyle. I have always had it in the back of my head that I’m building a business which I can sell.

Back in March 2009 one of my earliest posts here on IncomeDiary.com was a list of the the top 30 earning websites in the world

Back then the Top Earning website was not surprisingly Google.com, but I have just done a new Top Earning Websites In The World list based on stats that are now available for 2009 and surprise, surprise, Amazon.com has overtaken Google.com!

Can this really be the case?

Let me be clear – this is a list of some of the Top Earning Websites in the world and as such I don’t claim to have covered every possible website. (but what I wanted to do was give us a comparison of some of the best known websites revenues based on the PER SECOND model)

I don’t know why but there is something amazing about comparing earnings on a per second basis – it almost gives me a shiver up my back (in a good way)

I remember not that long ago being excited about earning just $10 a day, then $50 a day and then the day I first earned $1000 in one day! ($1000 in a day is ONLY 1.157 cents per second by the way)

Imagine what it must be like to be Jeff Bezos, Larry Page or Sergey Brin.

Mind you — one thing I am excited about – my profit margins (net profit) as a percentage is significantly higher than either Amazon or Google

My Father and indeed many other entrepreneurs I know are always telling me:

Turnover is vanity, profit is sanity, but CASH is king

That is something to always be remembered in any business comparison

I look forward to your comments – what names on this list surprised you? Who should be on this list that isn’t?

There is 31536000 seconds in a Year — make all of them count — like Amazon.com

To all our successes

Michael

PS: Quote For Today:

Business without profit is not business any more than a pickle is a candy ~ Charles F Abbott

Today I am very pleased to introduce you to an amazing Internet Entrepreneur that was recently recommended by one of my readers to interview — Eric Borgos

Eric sold of some of his websites and domains including a large portal website called Bored.com for $4,500,000! In this interview he shares with us how he made his fortune and how to go about selling your own website.

If you want to read more about Eric, then I recommend you check out his blog.

Could you describe what you do and how you earn your living Eric?

I run my own Internet company, which I started in 1995. For the first few years I made money by creating web pages for other people, but that was still basically hourly work, and my plan was to get rich, so eventually I phased out doing work for customers and just created sites for myself instead.  I had used much of the money I made from web design to buy domain names (they were $35/year back then), so I focused on creating sites on those domains.

Around 1/3 my income comes from my 9000 unused domain names, which are all parked. Domain parking is where I point my domains to another company and they put search engine type link results on all the pages, and then pay me a percentage of the income.

Approximately 1/3 of my income comes from selling my domains.  Usually I sell them because a potential buyer looks up that I am the owner and then makes me an offer, but I also sell some through brokers and through domain auctions. Some of my sales over the past few months include:

BizRatings.com – $2,500
FindSpecials.com – $1,500
AmericanGuide.com – $1,500
Stenography.com – $15,000
MakeStories.com – $1,000
FantasyCams.com – $1,000

The remaining 1/3 my income comes from 200+ websites I own, such as Dumb.com and Adoptme.com. These sites all make money from the banner ads that I put on them. I also run a big online florist at CheapFlowers.com, which gets 50-100 orders a day.

I understand a little over a year ago, you sold Bored.com and 170 related sites for $4.5 million, why did you decide to sell the site and how did it go?

The main reason I sold was so that I would not just be rich on paper, but instead I would have real money in the bank. Bored.com and those other sites were around half of my total business, so if the Internet keeps doing well I will still make a lot of money, but if everything crashes I will at least have plenty of money to live on.  Also, I sold in January 2008, which was right before the huge stock market/real estate/banking/economic crash, and one of the reasons I sold was that I was worried about something like that happening. It actually has not hurt Internet businesses nearly as much as I had thought it might, but the point is that I was worried at the time that all my paper profits might evaporate.

The sale itself went fairly smoothly. I was originally hoping to sell for big money ($20 million? $50 million) like many of the other Internet company
sales I kept reading about in the newspapers, but I shopped the deal to several possible buyers and in the end had 2 bidding against each other, and $4.5 million was the highest I could get them to go.

Some other reasons I sold were: Bored.com was very Web 1.0 website (like from the 1990s) and it needed somebody to give it a Web 2.0 type makeover.I never did any direct ad sales for Bored.com, but a new owner could make a lot more money by doing that.I used low paying banner ad formats, but somebody else could redesign the site to accommodate higher paying ads.There were tax advantages for me to sell, instead of paying myself the income as a salary. By selling I paid 1/2 the tax rate (as a capital gain).I ran everything myself so if I ever died it would be hard for somebody else to keep things running, which meant much of the value would disappear.

The new owner has not done much with Bored.com, other than have it focus more on video games. Ad rates in general on the Web are down, so his income is down, but traffic to the site is the same as it was when I owned it.

What advice would you give to a Internet entrepreneur thinking about selling their websites?

I would advise them to sell if the offer is good. It is common for a site to get popular and make some money, but it is much more rare to get a site to the stage where it can raise funding (like venture capital) and then expand it to make even more money. More often than not, the site fades away or at least never gets any bigger. Leave that financial risk, time, and effort to whatever big company is offering to buy you out. They probably have much better resources to handle it.

What did you decide to do with the $4.5 million? Did you just go and have fun or invest it into new business ideas?

Out of that $4.5 million, I had to pay a brokerage fee and income taxes, leaving me with around $3 million.  My plan was to put the money in CDs and live off the interest, since CD rates at the time were 5%. One of the reasons I sold for that price is that I calculated it would give me more than enough money to live on, even if I totally stopped working. Then soon after the sale, interest rates plummeted from 5% to 1% (and, that is before income taxes). So, at least until interest rates go back up, I am still under pressure to try to make more money. But, it is at least a lot less pressure than before, when I had no money saved.

I have not used any of the money for “fun”. I am just keeping it in the bank for now (in CDs). To me it is fun just having a lot of money in the bank.  None of my business ideas ever really require much money, so having more money has not changed the way I do business. My business still generates enough income so I can create new websites whenever I want to, plus I can always sell more domains if I need cash for something.

A lot of people who have a huge success go ahead and create another website, sometimes many websites. What advice would you give someone thinking of building a network of websites? Is one really big website better then 20average size websites?

Yes, part of my plan was to focus on a few of my other sites and make them big like I did with Bored.com. In the past year I have done massive site makeovers on Dumb.com and Adotpme.com, but neither one is making anymore money now than before, so I have not had any luck with that. Ideally I think having one or two big sites is much better than many small sites because it is much easier to sell one big site for a lot of money, like I did with Bored.com. There are lots of buyers for big sites, very few that I have ever seen for a bunch of small site. Also, it is usually more complicated to run a network of sites, and your efforts are less focused.  Yes, 20 small sites might make just as much money as one big site, but in my opinion you will have a lot less potential of getting rich.

I understand you have run all your companies and websites from home, why did you decide to do this? How did you go about employing people and running a company if you never go to the office?

I love working from home, and have done so for the past 15 years. I could never go back to working in an office. Aside from my personal preference for it, it is much more efficient because I don’t have to spend time commuting or dressing up.  I usually hire people by email. Most of the time they start by doing one small project for me, like something I post on freelance type job board, and then if that works out well I keep giving them more work and then eventually I pay them a salary. Even after 10 years I have never met any of my workers, and most of them have never even spoken to me on the phone.  I am sure less work gets done this way, because I am not carefully monitoring the work everybody does, but on the other hand there are huge inefficiencies and costs related to having an office, so I think in the end it all pretty much evens out. Also, because I don’t need to hire people in one particular location like an office does, I can hire workers at much lower pay rates. Most are overseas from places like India and Romania, but even US workers are cheaper for me because they are willing to work for less money out of their homes.

I actually did setup an office in 2000 because I wanted to have a business address and try to function like a bigger company, plus I was working on trying to go public at the time and nobody wants to buy stock in a company run from the owner’s house, but after a few years I closed the office and ended up just having those same people work from their homes instead. Even with the office, I still worked from home and never went there (it was 3000 miles from where I lived). I had a friend of mine set it up in an office suite next to his own office and he hired the workers for me and kept an eye on things.

I understand you have worked in a few partnerships over your Internet entrepreneur career, what advice would you give someone thinking of partnering up?

I would strongly recommend against partnerships. In my experience they rarely work out. If you are desperate for money and have nothing to lose, then it might be worthwhile, but in general they just suck up your time and cash.  I have partnered on several ventures such as FindRentals.com and BargainPrinting.com, and every time I spend huge amounts of time getting things launched, and then eventually the site grows to a point where it needs cash or it will go out of business, so to avoid losing all the effort I already put into it, I help finance the site. But, I never ever get paid back. Even though the sites do well and continue to expand, there is never any “extra” money to do this.

The problems are not personality issues with my partners, or that we have different visions, or that they are dishonest. It is always the same exact problem, which is that unless a site gets large enough where it can raise venture capital, there will never be an extra money for me to get paid as a partner. Nowadays it is so cheap to hire people to do all the work for you, that if possible you should try to own the site yourself.

Running an Internet Business gives you choices and freedom to do what you want, when you want. What would you say the Internet Lifestyle is for you?

I like running an Internet company because theoretically you can run it sitting on a beach using your wireless laptop. On the other hand, it has never actually been like that for me. I work 7 days a week, and even on vacation I check my email dozens of times a day. On the beach, I read business magazines (Business 2.0, Fast Company, Inc., etc.) and while looking at the ocean I think of business ideas or worry about my business.

What I like best about the Internet though is that things happen very fast. I do big deals sometimes in a matter of hours, and sometimes think of and then actually launch new websites hours later. No business plans or months of planning or months of wondering if something will work. You get almost instant gratification with the Internet.

What would you say is the biggest single reason for your success?

Getting in early (in the 1990s) was a big help. Another plus was that I created many different types of websites at once, while many other people risk everything on one big site. I have found that many of the ideas I thought would make me millions never made any money, but other small ones (like Bored.com) were big successes. So, you never know what will work, you just have to keep trying.

Is there anyone that you look up to and model yourself on?

No. I like watching tycoons like Donald Trump and Richard Branson on TV, but I am in no way at all like them.  I think the Internet has created a whole new type of business mogul, but back when I started there were few books about people like that.

If you could go back in a time machine to the time when you were just getting started, what advice would you give yourself regarding making money online?

I would have bough many more domains names back when they were still available. For example, I remember choosing between buying MtEverest.com and MountEverest.com. I choose the shorter version, but of course I should have bought both. I spent 14 years working 100 hour weeks creating websites and running them, but the crazy thing is that I would have made more money if I had just bought twice as many domains and done nothing at all with them. I could have done zero work and just waited for the domains to increase in price.  Back then though I had no idea that was the best route to take, just as right now I am not sure what the best way to make money online is. Most of the new sites I create make little money, and I am not sure what the next big thing is going to be.

What is the best advice you have ever been given?

To be skeptical of anything that sounds too good to be true. Things are almost always more complicated than you think they are going to be.

Thanks very much for the interview, Have you any plans (personal or business) that you can share with us about your future plans / goals / lifetime goals?

My goal is to keep creating new websites, in the hopes that some of them will get big and make a lot of money.

Making money online has evolved a lot over the past few years, every day people become millionaires through the internet and they were just like you, searching through the internet for that piece of inspiration that would give them the kick they needed to make it happen. One of the easiest ways to make money and start an internet business today is by creating a blog. Check out my FREE 7 day eCourse on Blogging and give it a go yourself.

Making money is simple, you find a problem, offer the solution and then monetize it, this is exactly what the 30 people below did to make their billions/millions online. This is exactly what I did when I created this website, people were asking me how to create a blog, I offered them the solution with this website and then I monetized it with affiliate offers. To do it yourself, think about your passion or something you know a lot about, find a problem within it, create a blog and offer the solution then monetize it using any of the 100′s of methods I talk about on my blog.

Top Internet Entrepreneurs

Rank	Name	Website	Year Website Launched	Net Worth
1	Larry Page	Google	1998	$18.5 Billion
2	Sergey Brin	Google	1998	$18.5 Billion
3	Jeff Bezos	Amazon	1994	$8.7 Billlion
4	Pierre Omidyar	eBay	1995	$6.3 Billion
5	Eric Schmidt	Google	1998	$5.9 Billion
6	Ronald Burkle	Yahoo	1995	$3.5 Billion
7	Mark Cuban	Broadcast.com	1995	$2.6 Billion
8	Jerry Yang	Yahoo	1995	$2.3 Billion
9	Omid Kordestani	Google	1998	$1.9 Billion
10	David Filo	Yahoo	1995	$1.7 Billion
11	Kavitark Ram Shriram	Google	1998	$1.7 Billion
12	Todd Wagner	Broadcast.com	1995	$1.5 Billion
13	Peter Thiel	PayPal	1998	$1.3 Billion
14	Niklas Zennstrom	Skype	2003	$1.3 Billion
15	Janus Friis	Skype	2003	$1.3 Billion
16	Jack Ma	Alibaba	1999	$1.1 Billion
17	Mark Zuckerberg	Facebook	2004	$700 Million
18	Simon Nixon	MoneySuperMarket	1999	$680 Million
19	Andrew Gower	Runescape	2001	$650 Million
20	Reid Hoffman	LinkedIn	2003	$500 Million
21	Zhang Chaoyang	Sohu	1996	$425 Million
22	Steve Chen	YouTube	2005	$350 Million
23	Elon Musk	PayPal	1998	$328 Million
24	Chad Hurley	YouTube	2005	$300 Million
25	Duncan Cameron	MoneySuperMarket	1999	$280 Million
26	Marc Andreesen	Netscape	1994	$253 Million
27	Reed Hastings	NetFlix	1997	$150 Million
28	Blake Ross	Mozila	1998	$120 Million
29	Andrew Michael	Fasthost	1999	$110 Million
30	Max Levchin	PayPal	1998	$100 Million

To our success in 2009,

Michael Dunlop

PS. Expect me to be up there one day