Rohit- You hit the nail.

Alok- Good insight.

Internet businesses cost little in terms of hard tangible assets and revenue models are innumerable. When I started my pet project on starting a online business for information sharing, I studied various sites and what they have to offer. I found out that in online business the positioning was the biggest problem. Differentiating your offerings from your competitors and creating great value for your visitors is the challenge.

An integrated model comprising of b2b and b2c products and services ensures steady and sustainable revenues. We need to always keep in mind that for right informtaion at right time there is a premium. Content is the nectar to which hungry users flock. The organised retail industry has many solutions to the questions that Niraj has asked - when studied in depth you will get the right direction for your revenue and business model.There is no need to reinvent wheel you need to apply the knowledge in different context to be successful.

Can Indians build great online businesses?

Internet consumption per se is crawling. Its user base is not spreading as fast as, say, mobile. Hence the insistence on transactional revenue model. Every moonstruck app developer hacks away dreaming of delivering a Google-sque something. But in the absence of sound commercial signaling, developer enthusiasm hardly drives investor sentiment.

Again, internet or no internet, media businesses are not for the faint-hearted — look at the TV channel sweepstakes!

I’ll present a slightly mutated version of my argument soon as a new post

Also I believe as an entrepreneur it is fine to expect a lot.

I think the problem is the ending. If the ending is silly, like “sell to someone before we run out of cash”, it is not bound to find investment unless there is a visible and established population of greater fools, like there are in the US.

Find a sustainable model, and then either bootstrap it or fund it, and the rest will follow. It’s when you start looking at funding as a revenue item rather than a balance sheet liability that it all comes apart.

Having said that I’ve tried the service/product mix and it just didn’t work for me. Eventually it’s about killing the golden goose and it’s too darn difficult. But then It might work for you, so all the best there.

Basically, instead of complaining, we need to “work it out”. I see the last 2-3 months we spent developing our product (http://apps.facebook.com/aspirations) as the most productive phase of my life.

But then, since it is so very difficult to raise early stage money, precisely because investors here do not appreciate/understand/subscribe -to the model, we must find a way to generate revenue and earn money to go ahead with our lives. We have learnt to do that, and have learnt the hard way. This is what one needs to do, in my opinion:
-Build a small team to do services that generate money. Exercise restraint, so you don’t focus away from your product. It is easy to get off-focus from the product, because services generate money. This is where the strength of the entrepreneur to say NO to something lucrative for the larger picture plays a big role.
-Build your product fast, work night and day, and get users, so you reach “fund-ability” as soon as possible.

The time when you are totally on your own, without any outside money and pressure is also the time when you can try out all your ideas. A few years down the line you might look at this as the most productive period of your life.

New Indian entrepreneurs complaint a lot and expect too much. Giving up your secure job at that Indian outsourcing company, doesn’t make you a martyr who has sacrificed something for the larger good. You did it because you want something very big. So please stop complaining. Be a man (or lady) and put up a good fight.

We have developed prediction model based on self-similarity. We are getting hits and exposure from the eye balls.

Now major issue we are facing?
“Revenue for Funding……or Funding for revenue.”

We look at things with US prespective and copy paste in India. Which would not work at any level. Think over the problems….for small startup with low capital. Really low capital

Problems.
1. Stable Internet through broadband(They can’nt afford Lease Line)
2. When salaries in Infy and Satyams r pushing people for much higher salary standards.
3. Family and parental pressures to perform or atleast live like medicore.
4. Rent, office space, food, travelling or any expenses.
5. It is about struggle with small issues.

Think about eco-system where output is source of input. Those business will always win the race. Rather then invest huge sums to get exposure.

US can play around because they understand model. How many indian investors understand model of facebook or myspace?

Virat