The best recipe for creating a profitable web app in a 2.0 era
Posted by Massimo Sgrelli in
Got Things Done -
Ruby on Rails -
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We, as many other startups, are keep doing ourself the same question: which is the best recipe to create a profitable web app nowadays?
It’s a tough question. I think a good web app, something making money, has many simple characteristics. One of the best and also funny video I found on the Net, talking about this, is the speech that David Heinemeier Hansson gave to the last Start Up School 08 (watch it after having read this article)
In short, David recipe to create a (Internet) profitable company:
- Make a product, price it and sell it!
It has been working in this way from time immemorial, so don’t think that the web is different. It’s not. The best way to see if you really have something groovy to sell, is make it and trying to sell it - Don’t try to set up 1 billion company! The odds are against you.
He’s right, between your current income (typically below 100k a year) and 1 billion dollars, there are a wide range of acceptable revenues. One million company is definitely a good target (isn’t it?), a target you can probably manage without anyone financing you (no VC). BTW… making one million a year is not simple, definitely not easy, but it’s immensely much simpler, than try to making 1 billion a year. - Target: business is better than consumer.
Convincing consumers to spend their money is not so easy, even if your application is useful and well designed. Companies, on the other side, are always looking for tools or services enabling cost cutting or easy management or knowledge management or what so ever. So try with them first. - Keep it simple.
This is a mantra for all of us and Rails helps us a lot following this direction. It’s fundamental that people could understand quickly why they need you.
I’d like to integrate David recipe with some small ingredients of mine:
- Your product must have a barrier to the entrance.
I don’t know if this is the right term in English, but I mean you must avoid that someone can copy you in a fraction of a second. The elements part of your barrier can be many: good design, idea, time to market, technology, smartness (why not?), etc. And there’s a postulate to this theorem… - (postulate) Whatever your barrier is, remember that it won’t last forever.
Feed your idea day by day. - The fact that you caught a good product once, it doesn’t mean you are like Mida king.
Every time is a new challenge; no one will buy your product because of your once famous hit. - Making a good product is an art.
It requires time and patience. If you don’t earn 50,000 dollars the first day you’re out, don’t be too angry. Pace yourself and wait. In the meantime think about how to improve it. - Ask yourself: would I spend 50 bucks a month to buy my product?
It’s better to ask you this question before start coding. In any case, it’s important to repeat it every time your expectations are above your results. BTW, if you are not using what you’ve built, then probably it’s not so useful, aren’t you?
Don’t be so sever with you. Even Evan William who built Blogger.com forgot this truth when he founded Odeo. Then he understood and created Twitter

A couple of years ago I bought a copy of TextMate, the preferred and “exclusive” text editor of Ruby on Rails community. Two years ago I was a newcomer to Ruby language and Rails framework and TextMate helped me to enter quickly in this marvelous world. Coming back to then I chose this editor because on Rails official web site there weren’t others good suggested tools.







