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Thread: How long do you think internet businesses "last"?

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    How long do you think internet businesses "last"?

    I've been running some numbers calculating return on investment %s when looking at stock market gains, real estate, brick and mortar businessses vs online businesses (what I consider to be my main investment choices).

    My question to you is how long do you expect your website to "last"? I mean to say, do you expect it to last into perpetuity, continuing on, producing income at similar levels past a 10 year horizon. Or are you more skeptical in your valuation and you jump for joy every time a site you purchase reaches its (hopefully) 1-3 year payback cycle.

    I have a theory I'd like to share but I wanted to see what the general thoughts were here.

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    You're talking about 'my' website, so about a business over which I have control. If I want it to go on for ever, I shall need to update what it offers from time to time - more frequently for high tech or fashionable hard goods than for services, and pretty continuously for some information sites. So I reckon you're really asking 'how long before you expect to get bored with it and turn to something else?' Yes, I can outsource all the work, but I still have to monitor it to make sure it isn't drifting into obscurity.

    So, in principle, an online business is no different from a B&M one, and its expected lifespan will depend on the sort of person its owner is. Some thrive on starting new things, others prefer operations management and the challenges of optimising the return on an established business. I fit better into the first category, but I'm lucky enough to be Mr10% in a business where Mr90% copes well with operations management, so I'm expecting the business to last as long as he is alive & kicking.

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    Moderator Kay is a Premium Member
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    Quote Originally Posted by TBV
    I've been running some numbers calculating return on investment %s when looking at stock market gains, real estate, brick and mortar businessses vs online businesses...
    Given the OP, this seems like a financial question about valuing online businesses and trying to forecast the future.

    My question to you is how long do you expect your website to "last"?
    One can certainly hope it will last but the rate of change is so rapid on the Internet that you can pretty much assume that nothing will be the same even a couple of years down the track. Even if you can keep your head above the water despite the changes, you still have to evolve and adapt - or die.

    If I were considering the purchase of an online business, I might take a longer-term view. But if that business relied solely on the performance of a website, then I'd probably want to recoup my investment within a year or two.

    Unlike Chabrenas, I don't really think it has too much to do with the owner's personality. You can always outsource the stuff you don't want to do. For me the value of the business depends on the financials and not on the personality traits of the present or previous owner(s).

    Edit:
    Afterthought about 'control'. With an online business, your control is limited, depending on how you're operating. People who depended on traffic from G got hit by the algo updates. People who built their business outreach using FB in some cases had the rug pulled from under them. We've seen on other threads here how Amazon gathers your sales data and uses it to undercut your price. These are only a few examples of how you do not control your own business, unless you take very specific actions not to rely on the usual influencers.
    British Expat - helping people to live and work abroad since the year 2000.

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    If I understand your question, it is the same I have been thinking lately.

    I think you ask, "is it really worth the effort all of this, or should we invest our time somewhere else"?

    From my perspective, I think the website must be in an industry with regular news/updates (like technology, mobile etc) in order to last longer, because you will have more stuff to say and sell. In other industries, it probably has a deadline. However, we are getting an expertise in Internet business/Internet marketing, which we might want to apply later on, on something bigger and go for the big $$. I am still 24 and new to this so I can't answer from an authority position, but this is what I am going after. First a desent income and a field of expertise. Then either stick with it and improve or go for something bigger.

    I read about a study that said entrepreneurs and self-employed people are happier than employees, whether they are successful or not. This is huge! It gives them a mirage of control as Kay said, whether it is real or not. Someone might be dependent on google, but he still has control. If google slaps him, he may turn to cpc advertisement or whatever else. He has options and that gives happiness, which is probably more important than % return.

    For example, the base salary here in Greece at the moment is around 480 euros (yeah it is a joke). If I make let's say 480 per month as a website owner, even if I work the same hours as my counterparts, I will stil be happier and not hate my everyday life, till weekend. This is very important. Also, after an amount is reached and we have a solid business model, we then have options to scale it and make more money, or use our newly gained expertise for something else more profitable. The key here is control.

    I don't downgrade employees, but as an employee you have no control. One fine day, the boss might drop off and hand you the paper of your firing + the daily commute/traffic/stress + a misserable week for a Saturday and a Sunday. Also, we can't ask our bosses for a huge raise, but in websites or other forms of investment it's up to us to make them happen.

    As for the other investment options, I think it is about tastes and barrier of entry. I would hate to do stocks and stuff like that (+ no control) and for real estate, the barrier of entry is much higher than the Internet.

    but please, do share this theory of yours. I would love to hear it

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    I agree with what other posters have said - that it really depends on what your subject matter is, as it would with an offline store as well. At an extreme, a store selling Y2K prep work or Millennium celebration materials would all be out of business in 2001. Same with websites promoting a specific event or version of a video game. But a business that isn't time bound in its subject matter can last as long as an offline store for all of the same reasons.

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    Top Contributor crabfoot is a Premium Member
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    This hurts, so pardon me if get emotional. I wanted to make a business out of transcribing historic recordings from the distant past. When I got the equipment and software assembled and ready to start I went back to the house where the collection of recordings was stored and it had been burgled. What hurt most of all was that they threw the discs on the floor and trampled on them. They didn't want the records, they stole the specialised shelving racks I hand-built to store the record archive I had been building up since I was a teenager.

    I knew from my work as a courier (which involved contact with a couple of people already in the business) that there was never more than a poor living in that biz, but it was something I wanted to do, for posterity. I know from a friend who works for the BBC record library that some of what they destroyed was probably unique, the last remaining copies known on Earth. One disc was Dan Leno's "Spiritualism", because it was broken that makes the BBC's copy unique, and that is the oldest record they have ...

    The point I'm making is that what you sell on the web defines the business to a large extent, and how accessible it is to others defines your competition. My collection of recordings is unique to me. I know that very few people have access to some of the stuff I still have (send me a PM if you want to hear the original of Ravel's Bolero, conducted by Ravel himself). I also know that very few people have access to transcription decks capable of reproducing 78s properly, and if anyone wants to go a step better than my apparatus the entry price is 8k for the machinery.

    I'm not doing it right now, but I could be selling stuff that is a hundred years old, and the competition would be from another ball park - you want to listen to Puff Daddy or Enrico Caruso? So I've got copyright issues with Puff Daddy. OK I'll sell Caruso.

    You might develop an effective assessment if the material is ephemeral, news based, whatever. No way of knowing what the future holds if you're looking at something with real material value. Puff Daddy? I don't like that stuff, but 70 years after he dies it is "free to register". Lord only knows what future taste will be like. Mike Oldfield's stuff, I can see that being sellable in 2113 ...

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