Yesterday, 37signals posted an article detailing three ways to make money with your software. Their three were:

1. Advertising-supported
2. Subscription-supported (or single price)
3. Support-supported

Now, 37signals makes some great productivity web apps, so they prefer #2. Their business model allows for #2. When designing a site that relies greatly on community interaction, charging your community to help YOU isn’t always going to fly. You need your visitors just as badly (if not much more) than they probably need you.

Brian Oberkirch has published Beyond Adsense: A Business Model Checklist—a post that has become invaluable to me. He also presents three options, but expands on many approaches within each. His three are:

1. Advertising
2. Make Them Pay
3. Because of, Not With

So, the first two are very similar, although Brian expands on more opportunities within each on his blog. But the third, “Because of, Not With”, took me a second to get. But what it boils down to is indirect revenues that occur because of your site.

For example, I’m working on a “community of practice” site. If that community grew to a certain size, perhaps a “meetup” or small conference could happen. That would be in this third category. Say the contributors to the site released a series of books together. That would be one more way.

So, yet again I am helped along my path of becoming a web-developer-marking-guy-and-god-knows-what-else by a couple bright minds sharing thoughts on EXACTLY what I need to research right now.

Jason Fried is the director of 37signals, a Chicago-based design company that has moved from web site design to the development of web appliactions. 37signals is as much known for their philosophy as their products (though their products are extremely elegant and useful).

First off, I’ve listened to a few interviews with Jason, so I’m going to start with those. I highly recommend listening to them. Most recently, I listened to Jason on MarketingMonger, and that interview really pushed me to get this post up here (been meaning to talk about Jason for quite some time). Another very accessible interview with Jason was on Amber MacArthur’s Inside the Net podcast. The Web 2.0 Show had another great chat with Jason and finally on Vitamin Jason gives an interview titled Web apps, Cash flow and Pricing.

While that gives you enough to listen to for awhile, I’ll let you know some of the things I’ve really taken from 37signals over the past couple months:

• Web-based software is much easier to create and release than standard software. Think about it… if InDesign comes out with a great new feature, Quark has to wait until their next major release to respond. With web-based software, you can just update your site with a similar, if not better approach to solving the problem.
• The current software model begs you to create bloated, overfluffed software.
  With the traditional software model, you release your software and then must add to your software to get customers to purchase an updated copy. Are these additions really needed? Web apps use a monthly subscription-based model, which means there is a constant flow of income without needing to bloat the software to generate money. The software stays clean, fast, and elegant.
• Meetings are toxic. 37signals is a small company and therefore when the members of the company are meeting about various topics, they are not producing. Meetings, if necessary, should be kept extremely short and only involve the people that NEED to be there. How many times have you sat in an hour-long meeting and thought “I don’t need to be here.” Honestly, that’s why I’ve started bringing my laptop to all my meetings.
• Don’t fret too much over the initial design. Don’t wait around for everyone to approve a look and feel for a project. Just make it. Using web standards, the look can evolve easily. Using old Web 1.0 approaches (tables) this was very difficult. But if done correctly, you should just be able to start coding. Sure, sketching your ideas out at the very beginning is still a good thing, but don’t let this process go too long. I’ve let it go just a few days with my current project and I hope to start coding this week.

Well, there we go. There are many more—and maybe I’ll add some later—but those are just the thoughts off the top of my head (without listening to any of those interviews for about a week).