Venture capitalist, Paul Graham has written another excellent piece on web startups. His message is that there will be more and more of them.

So my first prediction about the future of web startups is pretty straightforward: there will be a lot of them. When starting a startup was expensive, you had to get the permission of investors to do it. Now the only threshold you have to get over is whether you have the courage to. Even that threshold is getting lower, as people watch others take the plunge and survive. In the last batch of startups we funded, we had several founders who said they’d thought of applying before, but weren’t sure and got jobs instead. It was only after hearing reports of friends who’d done it that they decided to try it themselves.

He believes that, although, starting a web business is difficult, it’s nothing like as soul-destroying as a 9-5 job.

In a startup you have lots of worries, but you don’t have that feeling that your life is flying by like you do in a big company. Plus in a startup you could make orders of magnitude more money. If the number of startups increases dramatically, then the people whose job is to judge startups are going to have to get better at it. I’m thinking particularly of investors and acquirers. We now get on the order of 1000 applications a year. What are we going to do if we get 10,000?

It’s hard to imagine the internet ever getting full up, so the prospects are there for anyone with a good idea, technical know-how and the initiative to carry it through.

Read the whole of the article.

Ever dreamed of quitting the day job to forge a new business online? It sounds simple enough : working from the comfort of your own home, low costs and master of your own time?

But what about the complications? The technical side, for example. The long lead-ins to a sustainable income. And, of course, the intense competition for a large, but limited pot of money on the internet.

John Evans, who founded Syntagma Media — an internet content provider — has given an interview about the trials of creating an online business to Gerry Reynolds, business consultant and retail analyst.

Here’s a sneak preview :

Gerry : What are the economics of an online income stream? […]

John : If you set no upper limits, you’re really at the mercy of events. It’s no good having a $10m business if your costs are $11m. Mr Micawber defined that problem 150 years ago.

The trick is to set an upper boundary that gives you the best split between receipts and obligations, building in the vagaries of the tax system, of course, and depending on the amount of effort you can comfortably provide. Everyone will reach a different conclusion, but it has to be within your comfort zone. You are, after all, in this for the long haul.

Read both posts here : #

The question of the ideal age to start a business is bouncing round the blogosphere today.

Venture capitalist Fred Wilson started it, and his view is that most entrepreneurs form their companies in their thirties. There are a few who are older, but many are younger. Matt Mullenweg is a good example. He started WordPress at the tender age of just 19.

Nick Denton at Valleywag speculates, “My guess: older entrepreneurs fail less often, but succeed less stunningly.” He goes on, “Even if there were evidence that young entrepreneurs are more likely to strike out, risk-hungry investors will still fall for youth”.

As Fred Wilson says, “… only one of the entrepreneurs in our current portfolio is older than 45. And he’ll probably be starting companies until he dies. It’s what he does”.

Anyone over 40 it seems should consider bootstrapping their startup. In their thirties? Ditto, unless there are pressing reasons not to.

Below 30, the world is your oyster, it would seem. Like everything else, it all comes down to the individual involved.

If you thought you could make money online without declaring it to the taxman, think again.

Austria, Denmark, Britain, Canada, The Netherlands and Sweden have teamed up for the “Xenon” program, which was started in The Netherlands in 2004 by the Dutch equivalent of the IRS, Belastingdienst.

Wired Digital reports, “Xenon is primarily a spider: a program that downloads a web page, then traverses its links and downloads those as well, ad infinitum. In this manner spiders can create huge datasets of web material, while preserving the relationships between pages at the moment they were spidered — something that can reveal a lot about the people that made the pages.”

The program aims to crack down on suspected internet tax cheats, using a sophisticated web crawling program to monitor transactions on auction sites, and track operators of online shops, poker and porn sites.

Once the web pages are screen-scraped, Xenon’s Identity Information Extraction Module interfaces with national databases containing information like street and city names. It uses that data to automatically identify mailing addresses and other identity information present on the websites it has crawled, which it puts into a database that can be matched in bulk with national tax records.

Canada’s tax authorities declined to state what its Xenon data retention policies are, as did Simon Bird, head of the “Web Robot Team” at the British HM Revenue and Customs office.

In the United States, the IRS is not a part of the Xenon project, but would neither confirm nor deny that it uses spidering software in its investigations.