Should I start a web portal, and how do I make money from it?
Starting a web portal can be a good idea if you know an industry and can create something that really helps people find the right suppliers. But don’t assume it’s just about building a website and waiting for businesses to register and the money to arrive. Creating and maintaining a good directory involves a huge amount of work.
I’m sitting here in July 2010 answering the big pile of emails I normally tackle on Fridays. It’s often around a hundred to a hundred and fifty, including questions needing longer answers. An email about a niche portal prompted this video so others can benefit from the answer too.
Starting a web portal within a niche
The guy writing knows a particular field really well and wants to build a supplier portal. A directory of tradespeople or businesses in that particular segment. He wants to know whether it can be done and how to make money from it.
I won’t go into the details of his specific idea. But I often get questions like that: Can you create a new Jubii, just within one industry or niche? It could be stamps or something else entirely.
Expectations vary greatly. Some think it’s easy. Others sense it’ll be difficult. First, remember there are already many business directories and services such as Krak. Perhaps you can still find an area where something is missing. That’s fine, but it doesn’t make the work small.
The technical platform needs to be sound
You need a platform search engines can access and that can handle traffic. Find people who can help build both a proper directory and a proper technical solution.
In the video, I mention amounts around 50,000 kroner to get something built if you’re good at it. I know someone will say they can do it in Joomla for 847 kroner. I don’t believe in that as a solution for the business we’re discussing.
You shouldn’t build an enormous palace from the start. But what I mean by a portal isn’t just a very basic website either. Later in the video, I use 25,000 to 50,000 kroner as a rough starting budget. Those are my estimates in 2010, not quotes I’ve obtained or a fixed price.
Suppliers won’t simply turn up by themselves
Once you’ve spent the money on technology, the portal needs filling. Don’t count on businesses coming and registering themselves.
Even when Jubii was big relative to the market, we found and added a very large share of the links ourselves. I mention around 80 per cent in the video but also stress that I don’t remember the precise share. The point is that we did the work.
Let’s take a thousand businesses as an example. You need to find them, categorise them and gather their information. If you want logos, you also need permission to use them.
You need to write original descriptions. You can’t simply copy from the companies’ websites. In the video, I warn both about rights and the problems of building your entire directory on copied content. You need to find web addresses, contact details and what the businesses actually do.
Expect to contact many of them. I also clearly say you shouldn’t simply start spamming businesses. In the video, I mention 100 kroner per email as my warning at the time about the consequences. That’s a historical remark, not a review of the legal rules.
A business directory is a living organism
So you’ve added a thousand businesses. Is the work finished? No. While you’ve been working, some may have gone bankrupt. Others have a new phone number, a new web address or changed their activities.
I use examples of 20 bankruptcies, 50 new phone numbers and 25 changed web addresses to show the problem. It’s not a count from a particular portal. It’s a way to show you’re working with a constantly moving target.
During the Jubii years, we spent lots of time updating information. And when your portal is new and unknown, don’t expect businesses to contact you every time something changes. You need to find your own way to keep the information current.
My guess in the video is that around 20 per cent of entries could change significantly in a year. It could be 15 or 25 per cent; I don’t know the precise number. But you need to factor maintenance in, otherwise your directory quickly becomes less useful.
Who will pay for a portal with no traffic?
Then comes the money question. Who wants to pay to be in a directory without visitors? I wouldn’t expect income from ordinary listings at the start. Perhaps you can consider that after three or four years, when you’ve hopefully built good traffic.
Nor would I base the beginning on users paying to search. Why would they pay for something resembling a Yellow Pages search? You’d need something very special for that.
A skilled telemarketing salesperson might call through the businesses and sell a plus subscription where they pay an annual amount for more visibility. But without decent traffic, it’s hard to build a real business on it.
So my advice is to keep your day job and start the project in your spare time.
Sponsorships can be an option
If you have a thousand listings and perhaps a hundred visits a day, media agencies won’t be queuing up to buy banners. Nor would I expect others simply to sell the adverts for you. In the market I see in 2010, it’s difficult with so little traffic.
I also mention Google’s automated adverts, but personally I think they can make the site look unprofessional and drive some readers away. That’s my view of that kind of advertising.
A sponsorship may be more realistic. Call a company in the industry and ask whether it would pay, say, 5,000 kroner a year to sponsor a particular section. That takes a skilled salesperson, and it’s still difficult without traffic figures.
In that case, sell the specific sponsorship slot for a year. Don’t promise a number of clicks or impressions you don’t know you can deliver. I wouldn’t start by selling per click or impression.
Affiliate marketing can bring in a little income along the way
Another option is affiliate marketing: referring people to products or services that suit the different segments. If you don’t know the term, you can look it up on Amino.
It might bring in a little revenue, initially enough for a prawn sandwich in Tivoli once a month, as I rather bluntly put it. If you do really well, it can become more. But that also takes time to build.
Do you have the patience for three to five years?
I’d expect three to five years without earning much, an initial amount of around 25,000 to 50,000 kroner and perhaps a thousand hours or more. Those are my rough assessments of the effort the project may require.
You might end up leaning back after a few years and making good money. Perhaps you’ve done really well, gained a strong position in the niche, worked with the industry and developed new products around the portal.
But if you don’t have the time, the money, a job alongside it and a unique angle, I think you should think very carefully. A portal isn’t a quick route to easy money. It’s a business you need to be willing to build and maintain over a long period. I share my own experiences of building a business in Iværksætter til jeg dør.
Lots of people have an idea that Denmark is missing business portals. But is there money in it, and what does it take? I’ll give you a little idea of what’s required, and it’s ONLY a small part. Best wishes, Martin P.S. Remember to fill your calendar with all the exciting entrepreneur events this autumn, such as this one
Helt enig i vurderingen.
Da jeg var studerende lavede en webportal for et meget specifikt emne. Jeg brugte ca. 2-3 år på dels opbygningen og indeks men især også at få andre til at linke til siden. Det gav stort set intet overskud under studie-tiden, men da Adwords kom frem lagde jeg det på og det har givet mig ca. 1.000 kr om måneden siden da. Siden har nu passet sig selv i 6 år og jeg har stort set ikke opdateret, da jeg ikke har tiden til det. Trafikken er faldet lidt, men jeg tror efterhånden at jeg kan regne en nogenlunde anstendig løn ud på de timer jeg lagde i opbygning af portalen den gang.
Jeg var ikke klar over at jeg skulle vente så længe på afkastet, men glæder mig da over det nu hvor google stadig sender penge hver måned :o)