9 Things You Need to Know about Starting a Profitable Online Community
Using float is a great way to create cash flow out of the gate. Float is one of the entrepreneur’s favorite words. It means using the customers’ payments for a while before delivering the product or service, and it negates the need for venture capital. The best ways for online community entrepreneurs to generate float is by asking subscribers to pay subscription fees in advance of your providing a service and by asking content owners to swap you their content for access to your mobs of users.
Excerpted from “Smart Start-Ups: How Entrepreneurs and Corporations Can Profit by Starting Online Communities” (Wiley, 2007, $24.95) by David Silver, founder of the angel capital firm Santa Fe Capital Group. He has authored 30 books on entrepreneurship and finance. For the past three decades, he has been funding high-tech start-up companies.