I’m on vacation (er, cleaning out the garage isn’t quite what I wanted to do with my vacation time) so am thinking about such things cause I’m joining a Silicon Valley startup company that got $5.5 million in funding. Now, I am pretty naive, but one thing I’ve learned in my life is that VC’s want their money back. Oh, and they are hoping you’re gonna give them nine more bags of money the same size along with that payback.

Life isn’t easy for entrepreneurs and the pressure is on. What do I do to add value? $30 million worth?

Whew, that’s a challenge. Any ideas?

Hmmm, I can’t pay for ideas. But I do have this little thing called Google PageRank. How about you give me an idea and I’ll link to it? It’s a trade, but it’s the only one I got cause they haven’t given me a corporate credit card yet. Heheh.

Anyway, one myth of creating a Web business is that all that matters is getting a big audience. Absolutely NOT true.

Remember that I talked about my house and it got linked to all over the place? Well, Stan, our realtor, was amazed at the hit rates his pages were seeing. But, Maryam and I were telling ourselves “we don’t care, we just want a buyer.”

That’s a lot like how advertisers look at the world. You think they are paying millions of dollars for WorldCup ads just cause they like football? Heheh. No, they are fishing that giant sea of billions of viewers trying to find enough to pay for the ads.

Now, I would have paid $1,000 to find one buyer. Why? Cause the upside was so large. When you’re selling a house for $450,000 giving up $1,000 isn’t a big deal.

Did you know that mortgage companies are paying $60 everytime you click on their ads? Everytime! Why? Cause they know that if they get one customer it’ll pay that back and more.

So, how do you find buyers? Well, this is why I study Google keywords so much. Buyers tend to use search engines to find things. If you’re looking to buy a camcorder, where are you going to go? How about Google or Yahoo to do a search on “camcorder?”

Here, what’s more profitable? Camcorder or “World peace?” Now, you might be able to intuit that camcorder is worth more, right? But do you do a scientific analysis on that? That’s what tools like Nichebot are for.

Anyway, if you’re in the Web world there’s not too many ways to make money. One is by selling things (houses, books, etc). Another is by providing services (plumbing, lawyering, teaching). Another is by building audiences of buyers and then showing them things that sellers are offering (Google does this, so does eBay).

Hmmm, I almost erased this whole post cause it just is boring to most people to think about business models. But, I enjoy reading about business models. Some of my favorite bloggers, like A VC Fred, writes regularly about business models. There’s lots of blogs out there talking about business models too.

Fun reading while I’m avoiding cleaning out the garage.