In recent events, the popular high quality video sharing site that is Stage6, has announced that they will be shutting down the site on February 28th ‘08. It’s a shame that they would even consider an option such as this one, since they have built throughout the years a very supportive and passionate user-base. In my opinion, a smart business should never have to go through something like this, but they didn’t anticipate the worst possible outcome, and unfortunately didn’t prepare for it accordingly.

I’ve been a web consultant and entrepreneur for several years now, and I’ve seen my share of bad business decisions. And although I’ve seen worse, shutting down a site as well-known as this one, definitely ranks among one of the top 10 on my list of “Bad Decisions”. So I would suggest to weigh your options a bit further before ever having to pull the plug on your own website.

Here are a couple alternatives to carefully consider before taking action:

1. Charging a fair Membership Fee
After you’ve been up for a couple of years, the majority of users will always be inclined to pay for your services. This is mainly due to the fact that they have gotten to know your company and have made it part of their lives. Although this action should be taken in as a last resort, since nothing beats free service. A suggestion would be to provide a paid premium account and a free basic account for your users. This will level off the users and keep it free for those who don’t require too much, so you don’t lose users, but gain paying ones.

2. License the website’s Software
There are several ways to achieve this without losing the hold on your intellectual property. Depending on your particular circumstances, you may be able to separate your IP from your website, allowing you to package the site and it’s features into a stand-alone CMS software, licensed under a GNU license. While your IP is provided as required companion to the CMS and distributed under a different license. This would allow your users to set up a similar version of your site, and in return create public awareness and demand for your particular IP. Leading the way for paid licensing of your intellectual property, either as an upgrade or for additional components. Another way is to simply charge for licensing your IP to other companies from the beginning, it’s just a matter of knowing how to manage your marketing campaign correctly.

3. Find a Hosting Company to Sponsor your Website
Although this may come with strings attached, it will allow for your company not to incur the full amount of attention and expenses it would usually require. Some hosting companies would be very happy to discuss an appropriate arrangement in many cases, even free hosting as long as you let them advertise themselves as your provider. Another alternative is to find other third-party companies to sponsor your site in return for a little spotlight advertisement on the site.

4. Get funded by a Venture Capitalist Firm
First make sure to form the site into its own business entity, then contact several willing firms to participate in funding your site. This will allow you to receive enough capital to grow the user-base successfully with the right marketing. Venture capitalists will usually give you 3-5 years to make the site extremely popular and profitable before you are required to liquidate it. If managed correctly, you can make your site the number one place on the web or in your particular field, and if not, the funding firm(s) will help you sell it. It’s a win-win situation either way.

5. Fire your web consultant or business adviser(s)
In my opinion, if you’re reading this because you are not in a favorable position, then the person(s) currently appointed to assist you is not helping to solve the situation. Unless this is a marketing campaign set up to gain publicity (which is making your entire business structure seem weak, and not trust-worthy), it’s still not going to positively affect your company.

In the end, there are many different alternatives to consider before giving up on your website. All you need is a little business creativity, and a fresh new perspective on your current situation. Remember that there are no such things as problems without solutions, only lack of courage to solve them.