Confidential and Proprietary June 13, 2001

Simple Business Model for
Web Design and Web Hosting Service

“Instant Web*”

(Trade Name for the Purposes of this Plan)

Assumptions

1. Customers and clients are likely to be neophyte computer users.
2. This is a prototype for a small, hobbyist-type business.
3. Ultimately, this could become a scalable business but, initially, it will be a home-based business with low overheads.
4. Customers and clients will visit the home office or a stall-in-the-market type of retail presence.
5. Customers and clients will learn about Instant Web (IW) through flyers distributed to neighborhood homes and local Small and Medium Sized Enterprises (SMEs), through word of mouth, through Instant Web’s own web site, from links with search engines, through the retail presence, and by trading links with other sites that can benefit from such reciprocal linkages. IW will also have some lawn signs ($3.50 each, or so) that clients can put up on their lawns advertising “Instant Personal and Business Web Pages” and a telephone number and IW’s web site. (For more on marketing, see below.)
6. Instant Web will have access to a VISA (or MC or Amex) merchant account.
7. Instant Web will have the following hardware technology- good quality portable PC, scanner, digital camera, video camera, microphone, colour printer and, possibly, CD burner.
8. Instant Web will also have a good quality web design program available to it together with clip art, a sound and music library and flash technology so Instant Web can do some simple animations.
9. Probably about half the clients will be personal web sites for (primarily) families and the other half will be home based businesses and SMEs, all of them first timers as far as cyberspace presence is concerned.

Model

1. IW will tie up with an at-cost domain name registrar.
2. IW will tie up with a low cost but highly dependable web hosting service(or IW can start its own branded web hosting business by going to a wholesaler like www.hostopia.com). The web hosting service (or IW's wholesaler) must do daily or more frequent backups so that clients and customers of IW don’t lose their web sites. Having said that, IW should offer to make backups on diskettes for clients and encourage clients to have paper backups (Attachment 1).

How IW Makes Money

1. Firstly, IW will charge $30 per hour for web mastering personal services. This includes scanning in photos for the client, adding sounds or music, taking some digital photos or doing a bit of videography, doing some writing and editing, inserting existing images, adding existing written material, etc. IW should be able to do a simple web site in about an hour.
2. Secondly, IW will reserve in real time a domain name for their customers. In Canada, domainsatcost will provide names for $25 CDN per year (about half the cost of a service like internic.ca). IW will pay this cost and mark-up the registration to say $40 per annum or maybe $70 for two years.
3. Thirdly, IW will point the domain name to its web hosting service for instant (actually it will take from five minutes to overnight depending on the web hosting and domain name services IW uses and the speed of national internet domain name registration authorities; new TLDs (top level domain names) like dot biz and dot info are promising five mintue type turnarounds while some national authorities do it twice a day others four times a day and others less frequently) posting of the web site to the internet. IW should invoice its clients say around $10 per month as a minimum level of service for a certain number of megabytes (equivalent to about 10 or 15 web pages with fairly low definition family photos, text, a bit of animation and maybe some radio (simply a recording of the family singing or a greeting or some such thing)). Heavy files like video would be charged extra. IW should get a large markup here- IW will pay pennies per month for its web hosting space.
4. IW makes a backup copy to disc, which is given to the client after the session- the backup copy and disc cost another ten bucks or so.
5. IW provides a free (instant forwarding) email general mailbox. This drives traffic to the IW site where IW will have sponsors and advertisers who pay on the basis of the number of hits per month that the IW web site gets.
6. IW runs itself or gets hooked up with a local tech school to offer a course in basic web design. IW makes money from the course either by taking a percentage of the school fees or by offering the course directly.
7. IW also provides changes and updates at 30 bucks an hour.

A Walk Through With a Family Customer

1. A family shows up at the IW market stall. IW rep says: “Hi.”
2. “Emmachisit?” says Elanor, mother of three.
3. “Right. We can fix you up with a basic web site in about an hour for 30 bucks. If you want to go live-to-the-web at the end of the hour, we’ll need to get you fixed up with a domain name and a web hosting service too. You’ll then be broadcasting to the web 24/7 in about 60 minutes! You can call the grandparent in Perth tonight and tell her the web address (URL) and she’ll see that nice photo of Suzie here winning the 100 metre dash on her computer this very evening! ”
4. “No way, mate. What’s the catch?”
5. “Let me show you a few sites we did for folks earlier today and last weekend.”
6. “Looks great. Are there any other costs?”
7. “Well, we can do the site up and I can copy it to a disc for you for an extra ten bucks. If you want to go live today, we’ll reserve a domain name for you- what’s your favourite nickname for Suzie?”
8. “Well, we call her ‘Sizzle’, for short.”
9. “Cool. Let’s look right now and see if we can reserve www.sizzle.com.au for your family. Hey, look over my shoulder for a sec. It’s available. How would you like to reserve it right now?”
10. “Emmachisit?”
11. I can reserve it for you for $40 for one year or $70 for two years then it’s all yours all over the world, no one else can use it. Anytime you want people to have a look, just send them to sizzle.com.au!”
12. “Alright. But what about someone seeing pictures of my family on the web?”
13. “Well, IW does not put any personal street addresses or personal phone numbers on these sites unless you want them on it. We’ll set it up so that they can only email you and if you don’t want that we have another free service, which is that you can use our general mailbox at no charge so the emails come to Instant Web and are automatically forwarded on to you by IW. And no one at IW reads them either! Having said all of this, having a web site for the family is becoming a lot more common. I mean if you're comfortable having your home phone number in the telephone company's white pages, you'll probably be O.K. with a family web site with a bit more info than not. As long as people have a credit card, any type of loan, phone numbers in the white pages or yellow pages, a tax return, a job even, you are already in lots of electronic data bases like the local credit bureau which keeps track of everyone's credit rating!”
14. “Is there anything else I need to know?”
15. “The only other thing is that if you want to go live to the Web today, no problem- I can set you up with our web hosting service for ten bucks a month. By the way, where do you work?”
16. “Actually, I am a teacher in the public school system and my husband is a house painter.”
17. “Does he run his own business?”
18. “Yea. But most of his clients are repeat customers.”
19. “Well, sure but while we’re at it why don’t we put a photo of him on the site and something like: ‘For your free quote, call William at …’ We could add a few photos of work that he has done- his portfolio, if you will. And let’s use his cell number so that we are not publishing any home numbers! He can put his web address on all his flyers and his business cards, everyone will be really impressed!”
20. “What happens if I want to update my site?”
21. “Well, you can do that in two ways. You can come back and see me anytime- I’ll charge you the same rate to add stuff or change stuff for you- 30 bucks for an hour of my time. Or we can give you a password and we can teach you how to update your site yourself! We run a six hour course on basic web design and after that course, we guarantee that you will be able to edit and change your personal web site or your money refunded. You can even have Suzie take the course (it’s only $99) then she will be the family’s webmaster! Would you like that Suzie?”
22. “Yar.”
23. “May I have your credit card please, Elanor.”

Things to Remember

1. Your most important requirement in any business is a steady monthly cashflow. And this comes from your web hosting service. When IW reaches a 500 client count, this amounts to at least $5,000 each month coming in with almost no costs and no work attached; and best yet, it recurs ‘forever’. People don’t change web hosts very often and don’t worry too much about a ten dollar monthly VISA debit.
2. Your other work (web mastering, domain name reservations, doing e-copy backups, etc.) is really a feeder for your web hosting business. So what business are you really in? The web hosting business for personal (and small business) web sites. By aligning IW with a basic web design courseware, you will get your clients to eventually do most of the web design work themselves!
3. Longer term, you can set up the IW web site so that clients can easily and simply be walked through the process so that they can: a) scan in their own photos, b) add clip art, music and sounds, c) reserve a domain name, d) add a recording, e) do some simple animation, f) add some text, g) get some web hosting from IW. This is called reversing out the work to your clients and it is one of the keys to making money in cyberspace- in simple terms, it means that eventually, IW becomes a scalable enterprise instead of a J.O.B. (short for Journey Of the Broke). Scalable means that IW makes money while you are lying on a beach somewhere relaxing. Scalable means that IW has a value that eventually becomes independent of its founder. The Web is all about automation, reversing the work to your clients, empowering your clients and giving them control over their own material, about building long term relationships with your clients and between your clients too.

A Walk Through With a SME Customer

1. A nice chap shows up at the IW market stall. The IW rep says: “Hi.”
2. “Gadday,” says Louie, part owner of LouieNFrieda's Ice Cream Kiosk.
3. “Right. So how can we help you?"
4. "Not sure, Mate. But I'm getting lots of request for ice cream and they want to use a computer."
5. "We can fix you up with a basic web site in about an hour for 30 bucks. If you want to go live-to-the-web at the end of the hour, we’ll need to get you fixed up with a domain name and a web hosting service too. You’ll then be broadcasting your ice cream to the web 24/7 in about 60 minutes! Everyone will know about the yummie ice cream at LouieNFrieda's! ”
6. “No way, mate. What’s the catch?”
7. “Let me show you a few sites we did for other local businesses.”
8. “Looks great. But how would it work for us?”
9. "We'll put your menu on the web site and we'll set up a form people can fill out on the computer. When they hit "Submit", presto, it'll show up on your computer screen. If you can take VISA or another credit card we can set it up so that it is pre-paid too or people can simply pay for it when they stop by your shop on their way home."
10. "Cool."
11. “Let’s look right now and see if we can reserve www.louienfriedas.com.au for your business Hey, look over my shoulder for a sec. It’s available. How would you like to reserve it right now?”
12. “Emmachisit?”
13. I can reserve it for you for $40 for one year or $70 for two years then it’s all yours all over the world, no one else can use it. Anytime you want people to have a look, just send them to the site!”
14. “Alright. Is there anything else I need to know?”
15. “The only other thing is that if you want to go live to the Web today, no problem- I can set you up with our web hosting service for ten bucks a month. You may want to jazz up the site a bit too- why don't we run a poll on your site asking visitors to vote on which of your ice cream flavors they like the best? This way we make the site interactive- people can select from the 50 flavors, submit their vote and then see how everyone else voted! Wouldn't you like to know what everyone's favorites are; let's give them 50 choices and let them rank their top ten then you'll know which ones to change, add more of or drop even!”
16. “What happens if I want to update my site?”
17. “Well, you can do that in two ways. You can come back and see me anytime- I’ll charge you the same rate to add stuff or change stuff for you- 30 bucks for an hour of my time. Or we can give you a password and we can teach you how to update your site yourself! We run a six hour course on basic web design and after that course, we guarantee that you will be able to edit and change your business web site or your money refunded. ”
18. “Yar.”
19. “May I have your credit card please, Louie.”