It is not obvious how to make money online

Execution is one aspect of making an idea successful, I would say the other is having a business model.

And the latter is very hard as well. Why? Because it is not obvious how to make money online, especially in India.

The obvious way would be to have freemium models such as Flickr and 37 Signals. IMHO, I believe that this is the only sustainable way.

BUT:

  1. How can you make this successful in a country like India where people are NOT used to paying for things online especially on a subscription basis? For example, how many people do you know are buying things online that does not have a physical aspect to it? i.e. most people buy movie tickets or pay phone bills online, compared to how many non-techie people do you know who are paying for Flickr or for online storage or similar services?
  2. How do you prevent free websites from eating you up? For example, Wufoo did a great job of both execution, including winning awards and having a clear business model. But I am not inclined to using it because Google Forms is free, has no limitations and is a good-enough surveying option. Google doesn’t make money off of this option but they surely have taken away Wufoo’s lunch.
  3. Ideas such as scribd.com, and StockTwits are useful and interesting, but even they don’t know how to make money off of it. Heck, even Google is having a tough time in making money off YouTube.
  4. Ad-based businesses don’t work in Asia, or so is the impression that I get. Is there a single web application site, NOT a content site, for India that is purely making a business out of displaying ads?
  5. I have a feeling that almost all websites that are popular today and that will be popular in the next 2-3 years will have to have a physical component/aspect to it, whether it is payment collection at your doorstep for BharatMatrimony or Zapak running corporate gaming tournaments. This is something that may not be viable for small companies. Perhaps after 2-3 years, things will change.

Bottom line: Without getting funding, and without a clear path to charge for things, how is it possible to make a sustainable web application?

Is this just me or is this the path that every online startup faces?