I posted here about starting an online business in your free time. There are many advantages to this like, no need for outside money, total control on everything, fun, and a terrific learning experience and for advancing technical skills based on real work.
I have seen SO many online services taking in VC or angel money, hiring people and having a ll kinds of expenses and I always ask myself how do these companies make a profit after clearing all the expenses.
And then I hear news like Ning laying off 40% of their workers and discontinuing free offering. Stack Exchange taking VC money and changing their business model. (In SE's case, I am not sure they were profitable or not profitable enough, regardless of Joel's talk about trying to make the Internet a better place)
Making a profit from freemium models seems to get harder as one looks closely at it. Too much competition and there's so much anyone can make payments to all these services.
That's why I get more convinced that I won't quit my day job and start something new with lots of risks. I would HOWEVER my non work time to create an online business. Find people who want to help without getting paid, in the hopes something profitable comes out of it.
Question after this rant: Anyone knows of successful online services based on someone's hobby or not giving it full time attention? Would you start something like this yourself? Don't you think it's great to make money with minimum or even zero risk?