Startup – How To Build A Web 2.0 Business: The Risks

If you have been reading along, I probably sound like a broken record, talking about how I quit my job over a year ago and decided to go solo (here and here).  It has been a tough but fun ride so far and I have made a few mistakes and learned a lot on the way.  I would like to share some of these experiences with you, so hopefully you won’t make the same mistakes.  I say that even though I know that you will still make them, but at least I warned you.

Initially, I thought I should turn this into an eBook and sell it for a few bucks then I thought my target audience are probably not willing to spend money even it were only 5 bucks.  I finally settled on making it into a series of blog posts and also incorporating your comments along the way.


First, let’s set the stage.  My situation is probably different than yours; so if you have lots of money saved up, rich parents or potential investors and have no debt then some of these questions/pointers might not apply to you.  I started off with zero savings, high credit card debt and managed to establish business credit score.  So, among money of the risks you will be taking, ask yourself if you are willing to end up with bad credit.  A year+ later, I am short selling my condo, have a lot more debt than before and I don’t even want to know my credit score.

I was telling my sister about my situation and she said “you are taking this surprisingly well.  You used to be very conscious of your credit score”.  Well, I told her it’s not the end of the world and I will just have to learn to live within my means for the next few years until banks agree to lend me again.  Can you imagine living in a world where you only buy the car you can afford?  The computer you can afford?  The house you can afford?  So again, are you willing to take this risk and take it “surprisingly well” if things go bad?


So far we have “Are you willing to end up with bad credit?”, this of course is one of many more questions you should ask yourself to assess your readiness to take the leap:

  • Can you handle a foreclosure?
  • Can you live without a car if it breaks down and you can’t fix it or if it gets repossessed?
  • Can your significant other handle it?
  • Can you handle living without some “relative luxuries”: eating out, drinking, partying, vacation, gadgets, toys and so on?

In the above questions, when I say “handle”, I mean “can you mentally, psychologically and physically handle it?”.  It is really hard for me to walk into Best Buy or stumble on and come out empty handed.  It is very difficult for me to go out with some friends and just order a couple of beers all night.  All I am saying is: prepare yourself.

One more thing and then I will move on.  A friend once told me about how brave I was for doing this and that he could never do the same thing in a million years.  I asked him what was his biggest fear and his answer shocked me: “… that my wife would leave me”.  I am sorry, but personally I think if you are thinking this way then you probably married the wrong person.  And, honestly if she leaves you because you are broke, then good riddance.  What happens to “until death do us apart”, it’s not “until your credit score do us apart”.  Luckily, my fiancé is still around and we are getting married in the next few months.  Off topic: weddings are a big, expensive, waste-of-money one-night party that no one will remember.  And if anyone remembers your wedding 3 months later it is because it was really good or really bad.


There are many things to offset the risk while you are starting your company.  The most obvious one is to not quit your job.  I personally couldn’t do that.  You can’t spend 10 hours at work and then come back home and be able to fully focus and commit to your startup.  If you can do that then you should.  But say goodbye to your social life and probably health and mental well being.

Again there are a hundred ways to offset the risk and generate some money on the side if not to cover all your bills at least it will cover your food and Internet bill.  I don’t know you and I don’t know what you can do to make some money but I will tell you some of the things I did and an estimate on how income they generated.

  • Consulting gigs (web development and social media consulting) – $30k
  • Online ad Revenue from my websites – $2k
  • Startup/yonkly – revenue (I know!  Can you believe that?  It is already generating revenue) – ~$10k.  Most of the money was a side effect of the startup e.g. custom development.
  • Book writing – I don’t think I am allowed to disclose the amount but let’s just say it’s enough money to pay your bills for 2 or 3 months.
  • Article writing – depends on the magazine but should be between $500 and $1000 per article.
  • Sell your junk on amazon, ebay and craigslist.  I sold a ton of books, dvds and electronics that I didn’t use anymore – $1k.  It won’t make you reach but it will be enough money to feed the dog for a few months.
  • Raise money – $0.  Hey, don’t sound surprised, it’s a tough market.
  • Not selling your organs on the black market – priceless.


The important thing is that you need to find the right balance.  If you do too much consulting then you won’t have time for your startup.  But if you get lucky and find a contract that lasts a couple of months and pays a lot of money then take it.  That should keep you going for a few more months.

Coming Up

I don’t want to make this post too long.  I talked about the risks and how to offset.  It is important to understand that you are minimizing risk – not eliminating it.

I am going to focus this series on an web startup or do I dare say a web 2.0 startup.  Not everything will apply to everyone (or to anyone for that matter) but hopefully it will be helpful and entertaining.  I would like to cover the following topics in future posts:

  • Building The Website (multiple posts)
    • Development (Programming)
    • Hosting and scaling
    • Payment integration (PayPal)
  • Marketing & PR (here is a good book)
  • Tools & Services (I will expand on my previous post)
  • Resources & References
  • [insert your suggestion here]

Help me expand the previous list.  Leave a comment and tell me what you would like me to discuss.

Also published on Medium.