I know this may sound like a dumb question...

But is it true that people still make money in porn online?

When is that business going to dry up? Aren't there 50 bazillion porn sites already? They can't all make money.

I know this is a sample size of one...but I don't pay for porn.

I ran a site once with lots of community content. Moderators worked for free and were just picked from the forums. Site was able to use as much bandwidth as I could get. We even started letting people donate hosting accounts and had a mirroring script they could run to help handle the bandwidth consumption.

So anyway, in my experience, traffic was easy to get and you'd make money if your revenue was greater than your bandwidth costs. Revenue came in from ads, donations, premium memberships with access to restricted areas and status in the forums, etc.. Re ads, pay per click is low, but affiliate stuff pays a lot - getting someone to sign up for a subscription to a high quality porn site nets big $$$ and there are always some people that have plenty of money and will pay more for better quality.

So anyway, if you see any good deals on bandwidth with no adult content restriction, I say go for it! :)

Porn is a $97billion industry worldwide, with the US only making up $13billion of that. The online share of this has been increasing as computers and internet have become far more common - and the privacy factor has helped as well. Depending on the site (single girl, live camera, niche content, adult "dating") they can be highly profitable with a high lifetime value per customer - enough where some of the affiliate programs pay out enough for yet a sub-industry to make a very decent living (I paid for my wedding this way - not ashamed to admit that).

When you say you don't pay for porn, do you torrent it, or do you use any of the "free" sites? If you are using the "free" sites - you are still generating someone revenue, even if it's a very small portion of it.

Firstly, even "free" porn makes money through ads. Lots of traffic x CPM always equals lots of money. Secondly, there is a huge business in high caliber and specialty porn. There are plenty of people out there with money to burn and a desire for something more specialized or higher quality than what you can find for free.

Edit: let me set up an exaggerated thought experiment for clarity. Imagine that the government commissioned a "one tru porn" project, creating a porn video that's a few hours long that is then hosted for free of charge for the world. It has all the normal sex acts anyone would want to witness, it has several very beautiful and very naked people in it, really, it's quite good. So why wouldn't everyone just watch that if they had a desire to watch porn? Quite simply put, because they want something else. They want a different experience, they want a different variety of people to look at, etc. The same phenomenon exists whether there is a small selection of free porn or a very large selection.

If nobody made money on porn, no new porn would be made. But there is tons of new porn being made. That money comes from somewhere.

My impression is that's largely a nickle-and-dime business (at least on the production side), but the lifestyle attracts people.

Direct subscription isn't the only revenue stream. I would imagine that ad revenue is a significant source these days.

There was a story a while back about a university that wanted to do a study on the effects of porn on men. I forget the specific thing they were looking for.

The study was cancelled because they couldn't find enough men who didn't watch porn for the control group.

There's plenty of eyeballs.

You are talking about this: http://www.eurekalert.org/pub_releases/2009-12/uom-ate120109...

    We started our research seeking men in their twenties who had never consumed pornography. We couldn't find any.

But this is a different assertion (many people have consumed pornography once or a few times, but don't actively do it later in life), and this is canada (not USA)

You've hinted about the difficulties with affiliates before[1], can you elaborate on this? I'm starting an affiliate-supported business as a spare-time project and would love your thoughts.

[1] "Don’t look like an affiliate. Google is very ambivalent about affiliates" - http://www.kalzumeus.com/2009/08/06/landing-page-design-tips...

Big Daddy G basically sees most affiliates as bugs which, if fixed, would entitle them to an extra 100%+ on the purchase at issue over what they're getting currently. This results in a frenemy dynamic because affiliates also spend $$$$$$$$ on AdWords.

The space is pretty deep, I suggest reading on it if you care about it. In fact, it is an oversimplification to say there is one affiliate space, because there exist affiliate models which look as different as "startups" or "megacorps" do. Mint is about as different from most CPC arbitrageurs as Heroku is from Airbnb or McDonalds is from IBM.

My accidental knowledge about the space comes from hanging around with SEos for too long. Many of them make their money that way, since it offers a compellign way to monetize marketing skills without needing to have a product/business of one's own to promote.

> I suggest reading on it if you care about it

Suggestions?

I'd be interested in this too. Also what forums are high quality for seo?

try http://www.webmasterworld.com for deep down, in-the-trenches type discussions and http://www.searchengineland.com for more editorially fashioned coverage

I wouldn't consider porn to be lucrative, unless you create the content yourself.. It's one big saturated market, unless you find a micro niche that hasn't been tapped into that much, I wouldn't really bother.

Seconded. I was just asked to project manage a porn affiliate site revamp. They were making $50k+/mo last year, but the niche is so narrow and well, frankly disgusting, that I'm having trouble getting any designer to commit.

Are you looking at designers on the GFY forums (certainly not safe for work for those who aren't familiar with it)? If not look there - they will be used to even the craziest of niches.

Thanks I actually just shot off an email to someone I met there. Totally forgot I had an active username on GFY.

In my, ahem, limited experience, it seems like a well-constructed site is very much needed. Most have only the most rudimentary, earlier-this-decade, styles of filtering.

I wonder if YC would take a porn startup?

Really? I thought porn led the way in many of internet's advances. (i.e. secure billing online, video streaming, security, etc.)

I'm certainly no expert, but the free *Tube sites I've seen are pretty ghetto. Maybe it's better once you start paying, but for instance I'm always seeing stuff I'd rather not in the listings for whatever category. It might be like dating sites, though, where the business model is to keep you on the site irrespective of why you're there, so there's no incentive to make things easy to find.

What is "rebelling fraud"? I'm asking out of purely academic curiosity. Is it rebilling fraud? Scammer charges people additional (usually higher than initial) fees they didn't consent to?

I believe it was meant to say rebills (in affiliate slang), the act of billing your credit card automatically for another service/product term. Frequently used in the Acai berry juice fad where they would send you another scheduled shipment automatically and bill you for it, and in online dating sites where they bill you every month continuosly if you don't explicitly cancel.

While unethical, it is not necessarily fraudulent since many times the rebill clause exists somewhere in the TOS/contract in very fine print or some obscure form.

I wonder if he meant rebilling fraud.

I think he meant rebilling.

Is there a good "algorithm" for discovering these needs?

Is it mostly CRUD software or are there more exciting opportunities? (Much of the draw of the startup dream for me is the chance to work on sexy non-CRUDdy stuff).

See, I think that's the problem. There are tons of opportunities in the boring CRUDdy stuff because the startup minded all flock to the exciting ideas.

And as a result, Joe the plumber doesn't get that app that would automatically tell him the best route to his next stop along with what tools to pull out of the van and SMS the homeowner that he's on the way.

I agree with almost all of what you said. But, I can't believe that time tracking is really that lucrative. Before I was on HN, I was on the JoS boards (I know you were also there).

I can remember a time when someone would debut a new time tracking app every week. I feel like this market is more than saturated.

Talk to Amy Hoy - her time tracking app grosses more than all three of my businesses combined and is growing like something growing very fast.

Is it possible that things like Freckle or even the 37signals stuff are more "fan based" businesses rather than stuff that people really need? More like "heck, I like these guys, why not pay them 20$/month"?

The real work then would be blogging a lot, going to conferences, socializing, to maintain the fan base.

It's not. We got a first surge of signups from people who heard about it because they followed us, but the vast majority of our paying customers have no freaking clue "who we are."

Amy, what is your primary marketing strategy? If you can talk about that of course.

Interesting, thanks!

In case you don't know who she is (I didn't) - http://unicornfree.com/

and the product: http://letsfreckle.com/

And how is that still possible? If there is huge a variety of time-tracking apps, how can you possible acquire a decent amount of customers? Verticals?

The other answers to this are good, but miss some fundamentals. Here are a lot of reasons why almost any SaSS idea you can think of will take off if you can find a way to market it for less than you charge for it.

1. New business are opening all the time. Every. Single. Day.

2. Most businesses go looking for solutions only when something is very painful. Convincing them of the need is something a lot of existing SaSS businesses don't do as there's so much low hanging fruit around still. If you can send a salesperson in, you win by default. You'll be amazed at how much you can charge for something.

3. Lots of businesses (the majority) are 5-10 years behind in the computerization of their business compared to any business you find mentioned here or any business you'll ever speak to at networking events for startups. That's pre-SaSS.

4. There are a lot of businesses where the internal IT dept wrote all the 'apps', they usually suck and are broken. More and more businesses are giving up on this model and buying the app off-the-shelf. A little customisability (logo, maybe colours, even name) goes a long way.

5. A lot of businesses still rely on some crappy Sharepoint or even Lotus or [insert unwieldy enterprise system here]. The internal people hate dealing with them and will switch to your system if you find someone with enough clout to sidestep 'the rules'. A 'department trial' is also a handy way in, some companies have very autonomous departments.

6. There's no such thing as an established SaSS businesses outside of the echo chamber of HN. Many businesses will not have heard of Salesforce, let alone basecamp. There's no such thing as an established time tracking tool for example.

7. Some 'great' apps are far too generic. New to do apps still come out every month

8. Marketing and designing your app for a particular market sector can give you a huge advantage over others. Just knowing the right words, phrases and acronyms to use gives you huge credibility with that market. Compare 'Project Management' to 'Project Management for Architects with full support for Drawing Issues and Revision Tracking'.

Before you embark on doing anything though, you have to accept that any business app you write is going to be incredibly complicated and you're going to have to fight to keep it simple as everyone wants to use it oh so slightly differently.

Just to add to your excellent list, a lot of verticals have an established software company that's stuck in the desktop world (e.g VB6/Access/etc, CD-ROMs, licence keys, etc) and is often clunky to use or old-fashioned looking.

The difficulty with vertical markets is cutting through all the jargon/assumptions and figuring out exactly what the business logic should be. Everyone knows what they want, but very few people can actually explain it to the uninitiated.

1 million times yes to this.

Think Power Builder, etc. Our company has purchased software with a Power Builder front end (mid nineties interface) to an Oracle backend for roughly a million up front and $100,000/yr in licensing.

We've subsequently built a web front end to this app in house.

Sometimes there is no good substitute for clunky software.

I'd add another bullet to your list.

Employees are also potential customers. They're usually expected to track their own time and enter it into the company system on a regular basis.

I don't think the employees are really interested in tracking their own time 'for real' and just fill in their timesheets as they do it every day.

You'd be surprised. I've had many coworkers who carried around dayplanners just to note the time and date they were asked to do something.

If you basically do the same job every day, showing up at 9 and leaving at 5, it wouldn't be for you. If you are working on multiple projects, it's a lot more useful. Especially if your employer has an SAP type time tracking system where the charge numbers are so ridiculously complicated. As a contractor for those kinds of companies, I've always struggled with keeping track of how much time I've spent on any given day among the projects I was responsible for.

Then there are other types of professionals, like lawyers, who have to keep track of multiple tasks on any given day for billing purposes.

Point being, there are still plenty of potential customers for time keeping apps. Maybe not enough to get rich, but enough to help make a living.

Do you have proof? Because I have proof that you're wrong, and the proof itself lines my pockets every month :)

Get 500 people to pay you $30 a month. Now you're making close to $200k a year - most likely a lot more than you would make consulting or playing the startup lotto. That's the basis of Amy's 30x500 course (disclaimer: I gladly paid > $1000 to take it).

Think about it: 500 people. That's fucking nothing. My upcoming niche project management tool has more people than that on the pre-release list (granted - only a percentage of them will turn out to be paying customers), but it's a great start.

Simply find some pain that needs to be solved, build a product around it, create an offer (give me $X and I'll give you Y) and profit. Take Amy's class if you want a kick in the ass to help realize that.

Finding a niche might not be an issue these days. I am interested to know how do you opt for certain niche while it's not your main field either.

Be the first that supports multiple devices (PITA) and multiple browsers (except IE7 and before?).

Beautiful design (niche for those who marvelled at apps by their design).

Figure out SEO.

I think Amy and her husband are quite popular internet celebrity among bloggers. Turn these into your customers. This is important: if you have quite a few readers, think of how to turn them into money (let's not go into argument about purity, don't be evil, and that kind of bull-shitake).

On the flip side: whether her number is for real or not, I cannot say until I see the accounting by my own eyes. When it comes to money, pageviews and whatnot, I don't believe 100% as-presented. I might believe 95%, but definitely not 100%.

You can still strike big even if you're not first. Google and the iPod weren't first. Microsoft & Blackberry had smart phone OSs for years before the iPhone, etc. etc.

I'd guess by having a quality product with good design. Time tracking is definitely over-saturated, but Freckle is a simple, powerful product with great design. That makes it makes it much easier to stand out.

_neil is right. Freckle is simple (you can track time without the hassle of creating a project) and powerful (the multiple ways you can see your data is awesome, especially the "pulse" screen) with great design (its very pretty). That said, there's more features I'd love to see, but they are constantly improving the product, so its only a matter of time.

If you (or, okay, I) can create a new product which has certain selling points, and gain quite a lot of customers, how is the market still considered "over-saturated"?

I make my living exclusively in "over-saturated" or "nobody will pay for that" markets. Which so far has worked out just fantastically.

My first foray into an "over-saturated" market was a Mac news, opinion & tutorial site back in the late 90s. Every single person I talked to said the market was over-saturated, that nobody would read it & more importantly, I wouldn't get any advertisers. They were all wrong.

How CAN'T you acquire a decent amount of customers? The world is so much simpler and easier than you think it is. Maybe that sounds like hand-wavy BS to you, but it's simply the facts. Freckle grows even when we ignore it. We don't "do" verticals.

You're assuming that variety means people are satisfied. But as a rule, people are never satisfied, and rightfully so since most software is crap.

Who? Sorry, I don't mean to be rude, but there's no name recognition there...I had to search and found her to be someone pitching herself as a "product crusader."

Don't worry, you're not the only one.

This is one example. There is one example of almost every niche that is really successful.

Amy would know better than I do, but she says Freckle has at least three larger competitors. It is also something like 2.5 years old (i.e. it achieved success way after I though that market was saturated).

Here are some of the companies making much than us:

Harvest (look at the size of their team; and for web apps, they are old!)

Mite (the last time they posted about revenue, it was more than double ours, presumably that trend has continued)

Freshbooks (they do more than just time tracking, but they are a chief "competitor" if you want to call it that… and they make bank)

I strongly suspect that RescueTime and Intervals have greater revenue than us as well.

…and probably many more… these are just the "cool" ones which I know about. I'm sure there are many tools for specific industries or who are otherwise entrenched who make ridiculous amounts of money.

It is the easiest thing in the world to dismiss something by saying "nobody would pay for that" or "they must be unusual if they're making money" or "it must be because they're famous." None of these things are true. But they sure are easy to believe and even easier to say, discouraging yourself and others.

Also worth noting that time tracking has multiple angles. It can also be used in the context of employee time cards for human resources. A while back I was working with a nonprofit trying to find a legitimate timecard web app or downloadable software and found that most were horrible. Most looked like they hadn't been updated since 1997 and had horrific design/clunky UI.

Most of them were also pretty expensive and charged per user, when this org had less than 15 employees and couldn't afford to pay $100/month just to track timecards.

It seems like there could still be a definite way for someone to get into this and build something really sleek and new, especially when you consider how many ways you could improve on it, like offering nice looking reports to the HR department, exporting of the time data to a variety of HR software, etc.

Time tracking is't by any metrics a solved area yet. There will be even more approaches in the coming years.

Two things promise to keep the area interesting.

1. Time tracking have to be automated. I think I found an way to do that which is actually going to work.

2. Project need to move away from time based projects and more towards deployment tracking. This one won't be solved anytime soon cause of corporate structures.

It's going to be one of the most interesting spaces to watch within the B2B area IMHO

There are a lot of todos apps out there from Thing to RememberTheMilk to Trello (list of lists? more like todos of todos :))

It's a saturated market so you better have some sort of other advantages before marketing such product.

This is a simple logical error: "It seems like lots of people are doing it, therefore the market must be saturated, therefore nobody will make any money."

In the face of credible testimony from somebody you presumably trust (since patio11 has such a sterling reputation), why would you insist that "you can't believe it"?

It staggers me how many people when hearing about my success come up with ways to minimize it, to say it's not possible, it's a fluke, they don't believe it, they can't believe it, etc.