Recipe for a billion-dollar website

Many of us harbour secret dreams of transforming a no-budget website run from the garage or spare bedroom into a multi-billion-pound business empire. Dreaming, of course, is one thing and doing is quite another. But have you ever wondered exactly what’s involved in “doing a Facebook” in the real world? What are the key ingredients for building a hugely successful web business, the factors that separate the online giants from the wannabe websites?

Don’t think for a minute that all the good online business ideas have already been exploited: there’s plenty of room in the market for fresh concepts. Yes, it’s hard to imagine challenging Google, but ten years ago nobody thought anyone could overcome the likes of AltaVista, WebCrawler and Yahoo. We’ve been talking to the people who have been there and done that, industry experts and analysts, web developers and business gurus, to find out exactly what the recipe for a billion-dollar website is.

Show me the money: How to get VC funding

Getting started

There’s a fairly well-worn theory that it’s easier to build a business online than off – but is that actually true? Michael Wilson is the CEO of virtual world There.com and he’s in no doubt that it is. “First and foremost the cost to build in cyberspace is, at least initially, far cheaper than in the real world,” he explained. “It’s also far easier to iterate in cyberspace than in the real world as you’re not dealing with real products, made of real materials, but with arrangements of bits.”

While that might be true for companies such as Betfair, which shook up the gambling market by allowing punters to bet with one another rather than a bookmaker, other web giants such as Amazon still need huge stock and vast warehouses to run their businesses. What they had in common, however, was a core idea that was ripe for online execution. “Both Amazon and Betfair work well because they took a concept that people already understood offline and made it much easier, quicker and more useful online,” said Nick Mann, MD of web design agency Interdirect, whose clients include Lastminute.com.

But with a huge number of ideas competing to attract the attention of that global audience, the challenge becomes one of reaching critical mass and then keeping it. “Internet users are today very accustomed to looking for the ‘next big thing’,” Mann insists, so the real trick is user retention. “I would not say exploiting opportunities is easier online than offline – it just presents different problems!”

Not first, just better

The next big thing doesn’t have to be a new big thing. Neither Google nor Facebook were pioneers. Yet, Google searched better than the rest, and Facebook adopted a friends-only approach to profile viewing that helped the site grow more quickly than open-house competitors. Which is good news, because it means you don’t have to invent the wheel to make it in the web-billionaire stakes, as long as you know how to overturn the established giants.

Usability guru Jakob Nielsen, principal at Nielsen Norman Group, whose clients include Google and the BBC, is in no doubt regarding the secret. “The answer is easy – by being better,” he told us. Of course, it’s not that easy to be better than big companies that have clearly shown they resonate with customers. “There’s always something that the market leaders do poorly, and with careful research, you can find the chink in their armour,” Nielsen insisted, citing the example of everyone’s favourite search engine. “There are many searches where Google gives horrible results, and its two-line summaries of web pages are very difficult to read.”