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WEB/DIGITAL What is a reasonable cost to launch a site?

yveskleinsky

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Lately I have come across the stories of two different sites that have launched. The first was theknot.com and the second was a site similar to Youtube, but for skating videos (don't remember the site). The founders of the theknot borrowed millions to launch, the second, the guys were going through VCs to fund- and it sounded like the were trying to borrow around the same.

My questions are:

1. How much money should one have to launch a site?

2. What determines the cost, (especially if there is no tangible product involved)?

3. Is it possible to develop a site that would service a lot of people on a shoestring budget? ...Did Craigslist and Ebay start off with millions to launch?

Thank you for your time!
 

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Jonleehacker

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1. It totally depends on your concept and target market. Some audiences will flock to a plain jane, barebones site (plentyoffish.com for example, although he has upgraded it since the launch and craiglist is another example.) and some, like a site for designers would never fly if it wasn't fancy.

2. Primarily the time (labor) to implement your idea. This depends on complexity and quality level desired.

3. Absolutely...just keep it simple. Focus on one thing and do it well. Craigslist is a excellent example. Ebay is more complex, I don't know their history, but the auction format with money management included is several degrees of complexity up from a simple online classified page.
 

Jorge

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I made a thread about this, search the forum, you should be able to found it, it was an article from guy kawasaki's blog
 

PurEnergy

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I'm the wrong person to ask but in the book I'm reading (Internet Riches) the author says there's nothing wrong with starting out using a templete. If the site is successful then upgrade when the business can afford to do so. It's how I'm going to do my first site. I can't see getting started any other way to get the ball rolling.

Despite the name of the book, it's a pretty good read so far. The author says the techies will tell you different because they already have the skills. If you don't have the skills you have the option to pay the techies, learn the skills, or use a templete.
 

LamboMP

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It really all depends. If you go and read MJ's story .. he started with $900.00. For the hosting component, it depends on the content of your website. Another cost is employees, do you really need to hire anyone at start up?

My advice, start small, and plan to grow. You can always upgrade your hosting.


Lately I have come across the stories of two different sites that have launched. The first was theknot.com and the second was a site similar to Youtube, but for skating videos (don't remember the site). The founders of the theknot borrowed millions to launch, the second, the guys were going through VCs to fund- and it sounded like the were trying to borrow around the same.

My questions are:

1. How much money should one have to launch a site?

2. What determines the cost, (especially if there is no tangible product involved)?

3. Is it possible to develop a site that would service a lot of people on a shoestring budget? ...Did Craigslist and Ebay start off with millions to launch?

Thank you for your time!
 

Z5 FILMS

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3. Is it possible to develop a site that would service a lot of people on a shoestring budget? ...Did Craigslist and Ebay start off with millions to launch?

Bandwidth is pretty cheap these days. Your main cost is going to be building and marketing. I think I read an article several years ago that Pierre Omidyar put up something like $200K of his money to start Ebay. I could be wrong.
 

Jonleehacker

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Last edited:

MJ DeMarco

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1. How much money should one have to launch a site?
It could be done with ZERO dollars. There are some powerful opensource CMS's out there that can be customized with many functions, including ecommerce. Two that immediately come to mind: Drupal (Drupal.org) and Joomla (Joomla.org) ... both FREE to downloand and install on your local machine. Here's a video/overview of Drupal ... http://ftp.drupal.org/files/videocasts/5-tour.mov

The cost of development will be your time in educating yourself on the products and perhaps CSS. The learning curve can be steep ... but the resources to learn are out there. Both products have extensive tutorials, handbooks and now, screencasts that show you exactly how administer.
2. What determines the cost, (especially if there is no tangible product involved)?
If you do the above, your cost will be hosting and bandwidth. This is god-awful cheap to start ... once you get momentum, you can always upgrade. I started on a $19/mo shared box ... eventually moved up to 3 dedicated servers.
3. Is it possible to develop a site that would service a lot of people on a shoestring budget?
Yes, but you need to be innovative about it. Your marketing needs to be viral and social. Some sites can get 1,000's of users in traffic by just being viral and good at what you do. A great example is Andrew's website (Andrew63) who's gotten articles Dugg and StumbledUpon ... cost? Nothing.

So to answer your question, you can start with $150.
 

AndrewG

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Hey,

I'll be honest with you and everyone on here. It cost me $14.14 to launch my website. I had some left over hosting from a previous website but it only costs about $6.95. My site has received over 66,000 visitors without me spending a dime in advertising. So after only a few days of placing ads on my site, it's already profitable.

I know digg.com one of the biggest sites on the internet was started with $1,000 and now it's worth hundreds of millions. This is the internet, anything is possible.
 

Z5 FILMS

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Something does not add up. The articles say it cost him $200 to have made.

The Business Week article says Rose had given every last piece of himself to the project -- all his time, all his cash, and even his girlfriend, who fought with him after he poured his savings into Digg instead of a downpayment on a house


He lived in San Fransico. $200 won't even pay for a utility deposit on a a house in the badlands of Montana, let alone a deposit on a house in San Franciso. $10K won't even get you a deposit in San Fran.

Someone is not telling the truth.
 

MJ DeMarco

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Something does not add up. The articles say it cost him $200 to have made.

The Business Week article says Rose had given every last piece of himself to the project -- all his time, all his cash, and even his girlfriend, who fought with him after he poured his savings into Digg instead of a downpayment on a house


He lived in San Fransico. $200 won't even pay for a utility deposit on a a house in the badlands of Montana, let alone a deposit on a house in San Franciso. $10K won't even get you a deposit in San Fran.

Someone is not telling the truth.
This is probably after the site started growing. To start, probably was $200 ... but as users and traffic increases, the cost of bandwidth, servers, and admin costs increase. I think I read somewhere that during YouTube's growth spurt, they were gobbling up $1000's in bandwidth costs every month ... this is before they "hit it big".
 

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yveskleinsky

yveskleinsky

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Thank you everyone for such great feedback! I never thought in a million years that I would be entering the world of ecommerce/websites. I have so much to learn- hell, I'm just trying to figure out the right questions to ask at this point!

Apto is designing our site, so we have that cost- which is fine, as he's doing a great job...and I didn't know I could do it for free. :) ...This is how our site will work, (in my mind at least- I don't know if this can really be done) as we grow we will have a large variety of users that will all have user names and passwords (ala ebay) and they wil be able to update certain data on our site- but only the data that pertains to them. We need a site that will allow for this- as well as allow for rapid growth among the amount of users. We will also be using full automation with some sort of payment gateway and autogenerated emails.

Our current site has had over 10k unique visitors (is that the correct term?) since April, and we currently only advertise on one site- which costs us $200/year.

...We will have our BP done by the end of Feb. and are hoping to have our site finalized by then as well. The next step is to test how user friendly it is with a test group- then we will start door knocking to our target market. I'm really hoping to have most all of this done by the time we have our meetup so I can run it past you guys to get some more feedback.

...Is there a company out there that will help mentor/coach people like me (people with very little web knowledge) to get started- and then help us grow. ...I would be willing to pay for a service like this.
 
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yveskleinsky

yveskleinsky

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This is probably after the site started growing. To start, probably was $200 ... but as users and traffic increases, the cost of bandwidth, servers, and admin costs increase. I think I read somewhere that during YouTube's growth spurt, they were gobbling up $1000's in bandwidth costs every month ... this is before they "hit it big".
What is bandwidth- and is it the same as hosting?
 
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yveskleinsky

yveskleinsky

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Hey,
My site has received over 66,000 visitors without me spending a dime in advertising. So after only a few days of placing ads on my site, it's already profitable.
Andrew- your site is great. I will add it to my list! As for receiving over 66k visitors, how are you doing this without spending a dime in advertising? ...I always that that it was expensive to get web traffic, and that you had to optimize your site which could get expensive. ...How are you profitable just through your visitors?
 

JScott

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What is bandwidth- and is it the same as hosting?
Bandwidth is usually bundled (in price) with hosting. It's related to the amount of traffic that hits your site. If a lot of visitors come to your site, you need lots of bandwidth to serve all those visitors. Likewise, audio and video content take more bandwidth than just plain text and graphics, so sites like YouTube require a lot of bandwidth.

In general, the more visitors and the more multimedia enabled your site is, the more bandwidth you need.

Most hosting providers will provide a good amount of bandwidth to handle thousands of visitors per day, but if you start getting millions of visitors (and/or have lot of multimedia content), your hosting provider will charge you more to cover his costs.
 

AndrewG

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Andrew- your site is great. I will add it to my list! As for receiving over 66k visitors, how are you doing this without spending a dime in advertising? ...I always that that it was expensive to get web traffic, and that you had to optimize your site which could get expensive. ...How are you profitable just through your visitors?
Well it really depends on what type of site you have. I'm getting all my traffic from social sites and blogs. Lyved is the type of website that works well with digg, stumble upon, and other social media outlets. I get all my traffic from over 400 different sites and blogs. Eventually I will spend money on advertising. If you had an e-commerce site it would be very difficult to harness the power of social media.

As for my profits, I earn money from ads. I earn a small amount of money each time someone clicks on an ad and per 1,000 visitors.
 

Analyzer

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Stats of a site I started for about ~$50, took me about a week to install the scripts and design a template (it was the first site I started on my own). Since then I put in about 5 hours/week, site doesn't make much money though :nonod:

My only expenses were a domain and cheap hosting. My advice is to focus on the essential (what people visiting the site want), there are thousand of sites with great technology and design that never had more than 1000 visitors/month :tiphat:


 

AlwaysCurious

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Until now I tried to avoid ads for example with Firefox adblocker plugin, but I see it´s essential for this kind of business.

What is a reasonable ratio of ad-clicks per unique visitor? 1:100 or more like 1:1000? I have no idea. Next question, is it better to concentrate on one advertising partner like Googles Adsense or is it better to spread?
 
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yveskleinsky

yveskleinsky

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Bandwidth is usually bundled (in price) with hosting. It's related to the amount of traffic that hits your site. If a lot of visitors come to your site, you need lots of bandwidth to serve all those visitors. Likewise, audio and video content take more bandwidth than just plain text and graphics, so sites like YouTube require a lot of bandwidth.

In general, the more visitors and the more multimedia enabled your site is, the more bandwidth you need.

Most hosting providers will provide a good amount of bandwidth to handle thousands of visitors per day, but if you start getting millions of visitors (and/or have lot of multimedia content), your hosting provider will charge you more to cover his costs.
We would probably grow to the point where we had 1000's or maybe even in the high 100's of 1000's of visitors a day- but for the time being, we would probably clock under 100/day. We would however have lots of people logging into our site (to start, maybe 10, growing to maybe 100 in the first year)- so would that necessitate more bandwidth?
 
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Creating a web site is very easy. Creating an engaging web site is a bit harder. Creating a web site that generates a few hundred dollars a month in ad clicks a little harder still, and a web site that generates a train load of cash is the hardest thing of all. In terms of gameplan, I recommend buying the domain name through godaddy.com, then signing up with a web hosting company like bluehost.com. The can help you set up a template-type site, which is very easy to do. If you want it to be moderately more engaging than what is available through a template, then hire a teenager for $100. Heck, you can even build a pretty page in Microsoft Word and then save it as html. Search Engine Positioning is difficult, as the browsers look primarily for interconnectedness as a litmus test of meaningfulness. If you want to include a blog or wiki, you can download Moodle which is free. Best of luck to you!
 

mackpt

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magicmax suggested getting a domain from godaddy.com, but if you are emailing people from that domain, and you happen to have a spam complaint against you, be advised that godaddy.com will suspend your account, and won't even let you access it to change DNS's.

My suggestion is to get a domain from domaincheap.com, as they are about the same price as godaddy.

Also I suggest getting hosting from dreamhost.com - I use them to host all my websites and they were flawless up to now. If you are interested I can even get you a discount because I'm a current client (don't know what conditions apply though, but I'll look it up).

Anyway, with any hosting and registrars, it's always good to compare them, and do a bit of research and costumer opinion-seeking before committing to buy.

As for web design, I believe from what I read so far, that your main concern is not the design per se, but more the programming part of it. Once you have the back end in order, you can concentrate on the front end. Don't get me wrong, I am a designer and I do prefer "fancy" websites to plain ugly ones, but usability is always key and will make or break any good idea. I.E. an ugly website that can be used to 100% with a short learning curve always prevail over a beautiful website that require you get a PhD before you can even login.

So, to wrap it up, and regarding the question you made on your first post:

1. It's a simple formula: domain + hosting + programming + design + Advertising + staff costs...
Let's say

Domain: around $10 / year
Hosting: around $150 / year (until you need a private server)
Programming: you need to estimate this to suit your project, but be sure you will need modifications/revisions over time, and year-round maintenance
Design: As programming, you'll need to adapt around your platform and/or market. Good web design costs around $1500, but you can start much cheaper and build on it as you grow.
Advertising: Typically, you need no more than $50/month to get tangible results. Of course, upgrading as you grow.
Staff costs: you need to account for this. If you put yourself into such a time-consuming project, remember you still need to eat and pay mortgage.

Of course you can use different approaches and cut down expenses, but this is a sample rundown of the costs involved in launching a full-fledged site.

2. I think I laid it out above. ;)

3. Cutting on what is not essential will dramatically reduce costs:

you'll need no more than

domain + hosting + open source CMS

to start. And there are monthly, pay-as-you-go hosts out there, so you can even start for under $50

hope you got a little clarified. I wish you luck on your endeavors, keep us posted!
 

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yveskleinsky

yveskleinsky

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Domain: around $10 / year
Hosting: around $150 / year (until you need a private server)
Programming: you need to estimate this to suit your project, but be sure you will need modifications/revisions over time, and year-round maintenance
Design: As programming, you'll need to adapt around your platform and/or market. Good web design costs around $1500, but you can start much cheaper and build on it as you grow.
Advertising: Typically, you need no more than $50/month to get tangible results. Of course, upgrading as you grow.
Staff costs: you need to account for this. If you put yourself into such a time-consuming project, remember you still need to eat and pay mortgage.
Great answer, ++rep.

At what point would we need to begin accounting for more bandwidth and hosting? If we are anticipating having no more than 1000 users signing into our site to begin with, are our numbers (of under $100/month) reasonable?
 

mackpt

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Well, take for instance the dreamhost.com hosting plan (this is starting to sound like an advertisement) you'll have 50 TB bandwidth... more than enough for your initial needs. And for around $120 for 12 months, which makes it around $10/month.

The issue with bandwidth and dedicated servers is when there are too many simultaneous accesses and/or server-side code calls. That's what really stresses regular, shared servers.

My oppinion: start with regular, inexpensive shared hosting until the needs of your website require that you change to a dedicated server (i.e. slow load times, low data transfer rates, etc...). Hopefully then you'll make enough money from the website for that not to be an issue.
 

aptohosting

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Yves,

You can host with us which plans start at $6.95 per month and we give you the space you need. Dream host loves to overload their servers with shared clients and pray that they don't use the space that was promised to them. Apto Hosting limits each server to 50 clients, and you can easily see this by going to www.aptohosting.com/speedtest. Go ahead and download that file you will see speeds between 400-600 kbps (depending if its peak time).

Yes the member above is correct, we would recommend you start with shared hosting, and as you grow buy into a dedicated box that would be able to grow with you!. Since you said you had 1000 members already expected than you may be better off going dedicated, which depending on the setup you choose can run $250-$500 per month.

If you need hosting, contact me directly at 1-866-404-9090 or email me at tom@aptohosting.com. I will PERSONALLY guarantee that you get what you need and won't try to up-sell you on a million services.

Thanks,
Tom C.
www.aptohosting.com
 

mackpt

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Tom,

Since you run a web host, maybe you can give us some insight on what is the necessary setup to host a membership site, say with 200-250 simultaneous people online. (emphasis on downloading fairly large files, around 50 - 100 megs in size).

I'm setting up a membership site and I will start growing my subscribers on my dreamhost account, since I host a couple of blogs/general simple websites there, and I just paid for another full year of hosting. (I had never heard of aptohosting before)

Anyway, this membership will be my flagship product in 2008 and I'm really going to stay on top of the user experience, so a more "reliable" host might come in hand sometime soon.

thanks in advance.
 

aptohosting

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Tom,

Since you run a web host, maybe you can give us some insight on what is the necessary setup to host a membership site, say with 200-250 simultaneous people online. (emphasis on downloading fairly large files, around 50 - 100 megs in size).

I'm setting up a membership site and I will start growing my subscribers on my dreamhost account, since I host a couple of blogs/general simple websites there, and I just paid for another full year of hosting. (I had never heard of aptohosting before)

Anyway, this membership will be my flagship product in 2008 and I'm really going to stay on top of the user experience, so a more "reliable" host might come in hand sometime soon.

thanks in advance.
Hi,

To start I would highly recommend NOT going with shared hosting if you plan on having that kind of activity on your site. First of all 250 people downloading 100 meg files simultaneously will probably cause Dream Host to suspend your account for "Account Abuse". You would probably be best off with a VPS (virtual private server) which we offer for $75-$105 per month. The different between VPS and Shared hosting is that VPS is a virtual private server. You will have your own partition on a dedicated server and you will have much more control of your website. As opposed to shared hosting where you are just another folder on a hard drive.

If you want to get your membership site set up properly just give me a call 24/7 at 1-866-404-9090 or email me at tom@aptohosting.com. I guarantee that you will have a MUCH more reliable experience for you and your users when you host with us.


Thanks,
Tom C.
www.aptohosting.com
 

April

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This has been very educational and inspiring as well but I have a question. So after you buy your domain and hosting then you can design your own website, right? Will the hosting company help you if you don't know how to do things like how to have a membership based site or if you want paypal on your site?
 

Jorge

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Apto, while I havent tried your service yet, I think it's very good and would recommend you over dreamhost specially for someone who needs perfect customer support. But I think that dreamhost wouldnt have a problem handling that kind of traffic. At least what they offer in their home page (and on the panel it shows the same) is 5 TB Monthly Bandwidth. That would give a lot more users downloading 100mb...
 

aptohosting

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Apto, while I havent tried your service yet, I think it's very good and would recommend you over dreamhost specially for someone who needs perfect customer support. But I think that dreamhost wouldnt have a problem handling that kind of traffic. At least what they offer in their home page (and on the panel it shows the same) is 5 TB Monthly Bandwidth. That would give a lot more users downloading 100mb...

Jorge,

I challenge you to attempt to do what he is asking on a Dream Host account. What they do is "oversell" their resources! For example their basic plan offers 500 gigs of web hosting space. This means that if this were true every client that they host have an allotted 500 gig hard drive for themselves. Which by my figures means 500 gigs x 300,000 hosted domain = 1500000000 gigs of storage. Which honestly I don't think DreamHost has that type of storage over at their facilities. They do the same thing with bandwidth, they say you have 5 TB which is 5000 gigs by the way because they know the average user WONT use more than 5-10 gigs per month.

Now go to Dream Host and attempt to host those files and have 250 people at the same time try and download a 100 meg file. I can assure you that within an hour you will have "ACCOUNT SUSPENDED- BANDWIDTH/RESOURCE ABUSE CITED". I am not putting down Dream Host because lots of other hosts do that, I am just letting everyone know how the business works ;-)

Tom C.
 

aptohosting

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This has been very educational and inspiring as well but I have a question. So after you buy your domain and hosting then you can design your own website, right? Will the hosting company help you if you don't know how to do things like how to have a membership based site or if you want paypal on your site?
We will provide the domain and web hosting. We also have in-house design and coding staff that can help develop your website.

Shoot me an email with specifics to tom@aptohosting.com or call me at 1-866-404-9090 (24/7/365)

Thanks
Tom
 

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