Last night I was able to get a newly purchased Buffalo WHR-G300N wifi router ($35 from Newegg.com) to accept a firmware install DD-WRT, the Linux-based open source firmware package for wireless routers.

Why even attempt this perversity? It gives you a very cheap wifi router with the kinds of interface features you might only see built into either commercial or premium units.

Quick notes:

• This wasn’t really what I’d consider a straightforward or user-friendly process. I definitely thought at one point that I’d bricked the unit. Eventually I got it working, but I’m not sure I could say with 100% certainty I could do it again without bricking a unit.
• Before you start, read the DD-WRT wiki page for this router, and the threads linked to it. (I did not.) It will save you some tears, although it won’t make it completely easy.
• All I can say about setup is, keep trying. I finally succeeded by pushing the firmware from my Mac using tftp during the router’s boot sequence, which takes advantage of the device’s built-in recovery method. Once the “put” had finished, it took a while, but the wifi light went on and things were good from there.
• The WHR-G300N only does 2.4Ghz, not 5Ghz. Given that it costs about $35, half the price of a retail 802.11g router, it’s not a huge disappointment.
• The DD-WRT interface is leaps and bounds better than Buffalo’s original software. They should just bite the bullet and sell these routers with DD-WRT pre-installed.
• I’ve had the best results by setting wireless security to WPA2 and TKIP+AES
• Despite some early problems, my iPhone now connects to the router just fine

To give a few examples, the DD-WRT software has built-in support for about a half-dozen dynamic DNS services, QoS management, and you can SSH directly into it if you want a command line. The interface is much more useful and informative than Buffalo’s own firmware, or most routers.

Network performance has generally been great. My MacBook backs up every hour to a USB drive connected to my Mac Mini Media Center, and ever since I upgraded from my old G router to this one, that process is fast and reliable.

It certainly doesn’t give my favorite router - the Apple Airport with its great management interface, Time Machine support and gigabit ethernet - a run for the money. But it’s also about 1/4th the price.

So, it’s a little hairy - but if you can get past the setup trials, it’s a good deal.

(This is a continuation of my series on understanding and analyzing web service and software businesses. If you'd like to start from the beginning, go to part one, "Core Value Proposition.")

Monetization

If you've created a service that has a compelling value proposition, and delivers on that promise for its end users, you've succeeded at the most difficult part of building a growing online business. Turning it into a profitable online business, however, takes more than simply making users happy. You have to find a way to generate revenues from your users that doesn't unnecessarily compromise that core value proposition.

There are two primary ways of generating revenue from an online service:

• Direct service charges
• Advertising revenue

This is an extension of an earlier post, which covered how one goes about calculating customer lifetime value (CLV). In this series, I'll be examining the key levers you use to maximize your business, seen through the perspective of CLV.

In my previous post around customer value, I reduced the CLV equation down to two key components:

• How much profit you make off each transaction with the customer - i.e. monetization
• How many transactions you get with the average customer - essentially, retention

To transition this a bit more to a customer-centric, rather than monetization-centric, view, your typical business has three key components:

1. The core value proposition to customers - what do they expect to get out of interacting with the company, service or product
2. The monetization of that interaction - how does the company make money off of delivering the core value proposition?
3. Customer acquisition - how does the company find and acquire new customers that find its value proposition compelling?

I'd argue that for most web businesses, it's all about these three components. Everything else is a support function. Any successful business will have to necessarily address all three of these, at least implicitly - you may not have an active acquisition strategy, for example, but that just means you're implicitly depending on word of mouth or another passive method. If you don't have a value proposition, well, that's somewhat more troubling.

I'll cover these each in separate posts. I'm going to start with value proposition, because not only is it the heart of the business, but it's also the one component you can't take a passive approach to, whereas there is at least (some) argument that you can leave the mechanics of acquisition or monetization until after you've solved the central value proposition question.

A week ago I posted about trying to jump completely over from client-based email to only using Gmail's web interface. In particular, this was prompted by the recent availability of offline mail reading for that interface, which made it unnecessary to have Thunderbird downloading copies of all my email so I could work on reading and answering messages when not connected to the net.

Exchanges like the one on the right are why I'm really, really wishing the iPhone had a built-in chat application (not just SMS) that could run in the background, even though I don't own an iPhone myself. (I've highlighted the time stamps to make it obvious how little time I had to respond before Marissa dropped offline.) Because folks are using an installed, application to reach their IM logins (most likely Google's own Google Talk app), they're not able to stay connected unless that application is in the foreground, because Apple doesn't allow third-party applications to run in the background. So you get that contant login-message-logout pattern from iPhone users. In an ideal world, Apple would let third-party apps run in the background, but on a mobile device I can understand why they don't. So they should at least provide a "built-in" chat application that can connect to the major IM networks and stay logged in even when in the background, given that instant messaging is as common a method of real-time interaction these days as voice calls or SMS (at least for certain people.)

If Apple is just doing this to force folks to SMS via the AT&T network, they should be ashamed of themselves. There's no reason users should have to be paying on a per-message basis for sending 140 character text clips when they have a TCP/IP connection available for web browsing, etc on an unmetered basis.

Even my Blackberry Curve handles this issue better than the iPhone -- and it's pretty rare that I say that for anything unrelated to its hardware keyboard.