Here's what the generic Web 2.0 business plan looks like: 1) devise cool free web toy 2) get users 3) get funding 4) get more users 5) get more funding 6) repeat. The trouble is that most of these business plans don't have a revenue generating model. It's true. Even Facebook has acknowledged that they're still on the hunt for a viable business plan and model. While the hope of all Web 2.0 is that one day they'll be able to generate profits through advertising, so far no one has devised an effective way to do that. Compound that with the reality that advertising is one of the sectors that tends to struggle most during a down economy, and you can see why some venture capital firms are encouraging their Web 2.0 start-ups to get profitable—fast.

Here's an interesting and different idea, though from Slate magazine's The Big Money: Don't rely on advertising to bring home the bacon. And forget the model where users get a service for free. Make them pay:

"In the absence of ads, an IPO market, venture capital funding, and guaranteed acquisition, how can startups make any money?

Allow me to propose something crazy. Tech companies should start charging people to use their services. No, seriously."

The article goes on to use social networking site Facebook as an example of how charging users for the service could generate the kind of cash that makes VCs salivate and start-ups seriously profitable. Slate argues:

"Let's imagine that Facebook became a tiered service. A free plan would limit you to 200 friends, one status update per day, or some other non-Draconian combination of restrictions. But for $5 a month, the limits would be lifted. Certainly, many users would balk; tens of thousands would join Facebook groups to protest the new pay model. Let's assume that 95 percent of users will refuse to pay a dime. That still leaves 5 percent, or 5 million people, to pay $60 a year. That's $300 million in the bank."

Of course, the question is whether any users would actually pay for such a service. Ask yourself: would you plunk down cash for access to Twitter, Facebook, or MySpace? And the other consideration is how a business that started charging for its service would compete with similar free web services? If Facebook started collecting membership fees, wouldn't all its users simply over to MySpace if that service remained gratis? What do you think?