Don't sell your audience - Create for them.

Advertising is one of the top business models of the first-time entrepreneur.

The plan is to build a killer web or mobile app that generates millions of pageviews from millions of users in the first few months.

Conservatively speaking, the startup should do more than a hundred thousand in advertising revenue in the first year.

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So what’s wrong with this model?

1. Advertisements are a great way to make other people money.

2. Entrepreneurs underestimate the longterm benefits of having a good product.

3. You know the customers best.

4. Nothing Lasts Forever

Don’t sell your audience – Create for them.

So what’s wrong with this model?

Actually, there isn’t anything wrong with it per-say. A lot of consumer-facing companies and content creation companies monetize through ads.

Also, you can build a web app that generates millions of pageviews per month. I have friends who have done so in under a year, even before they turned 21!

The main reason I don’t like this model is because it basically means other entrepreneurs have found a way to monetize your audience better than you can (this assumes there is a ROI on their ads).

4 Things to Consider

1. Advertisements are a great way to make other people money.

Your customers are your advertisers. Your job is to make them money. In this situation, at best, you might get a good reputation among potential advertisers for having a site that drives good amounts of relevant traffic.

All the while, your advertisers are getting more testimonials for their products, locking in long-term customers, growing their team, and re-investing in new products.

2. Entrepreneurs underestimate the longterm benefits of having a good product.

It’s about way more than the money. It’s the entire ecosystem that begins to form around your website and the reputation that spreads about your products. It’s the people who decide they want to work with you because of how you do business. It’s having customers remember your name because of the positive experience they had with your company.

There is nothing more valuable than these benefits in an increasingly crowded internet marketplace.

3. You know the customers best.

Like every other tech entrepreneur now a days, I’m a firm believer in Lean Startup Methodology, Rapid Prototyping, and testing everything.

However, it’s also no secret that some of the largest websites to date were built by developers who were building a product that they themselves wanted to use. They didn’t always have to test. They knew the customer intimately because they were the ideal customer.

If you have already built a website or produced content that resonates with your audience, you have a jumpstart on any business out there because you know your audience better than anyone else ever would. You understand their problems, aspirations, and desires.

4. Nothing Lasts Forever

Let’s be honest. Nothing lasts forever. Fads come and go. Usage patterns change. The traffic to your website or web app may be climbing, but at some point you will have to re-invent yourself.

Over the lifecycle of Facebook, the company changed drastically. They weren’t always as focused on photos and there wasn’t always a messaging app that pretty much killed apps like AIM and MSN messenger. Most recently they are reinventing themselves on mobile, which is quickly surpassing desktop usage.

The great thing is that, although a lot can change on the web, people will remain. What I mean by this is that your audience may lose interest in a particular movement, game, or application. However, they still exist in the world.

You can still create applications and products that solve other problems they have and since you already have a relationship with them, you are a huge leg up on any competition.