Use Custom Homepages to Build Routines

Jul 22nd

I recently had a useful web based service built but kept forgetting to use it on a daily basis. I set my IE homepage to that tool so I would remember to use it. Since then it has helped up make some great business decisions (as well as add context showing how good or bad some past decisions were).

I recently added support suite software to this site, but am so used to answering everything through the forum and through email that I do not remember to log-in to the support suite section of the site. I set my Firefox homepage to the support suite ticket page today, and presumably I will remember to look at it every day.

With the rise of Widgets and easy to embed RSS feeds it is easy to give ourselves needed reminders.

Patterns can be hard to break and hard to build, but if we give ourselves cues and reminders change is easier. Now I only need to think up a strategy to start using that elliptical machine that I bought a few weeks back!

The Value of a Generic Brand

Jul 1st

I am usually a fan of creating niche sites that are easy to link at and in profitable categories. In some cases generic sites can do well because they allow you to expand wherever the money is.

  • Sites like NexTag can buy mortgage ads on Bankrate because they already have enough volume that it makes it easy for them to quickly build inventory whenever an arbitrage opportunity comes about.
  • From an SEO standpoint generic websites are great for creating top 10 lists and other egobait driven publishing strategies which allow you to tap into link equity from established bloggers and other publishers.
  • A site about coupons or reviews is heavily focused on a traffic stream of people looking to spend money.
  • A site about trivia focuses on a traffic stream of people looking to waste time who will engage in quizes and zip submit offers.

The downside to many generic sites is it is hard to build a loyal following, but as long as SEO is driven by links maybe you don't need a following to make a lot of money.

Free Business Building Advice From Billionaires

Jun 26th

Warren Buffet's quiet partner goes by the name of Charlie Munger. Charlie has a 500+ page book full of gems. Before becoming heavily involved in the investment field, Charlie worked at a law firm, where his top tip for attracting clients was:

It's the work on your desk.... It's the work on your desk. Do well with what you already have and more will come in.

When you look at some of the most successful companies many of them live and die by that. In spite of Microsoft's monopoly position in many markets Bill Gates still views his product through the eyes of consumers.

Gord Hotchkiss recently posted an article about how many of the newer mega-companies (like Google and Apple Computers) are built not just by viewing customers as an asset, but because the founders are customers of their own products and services, who built the service they wanted to use.

The more I think about it, the more I don’t believe customer-centricity is the key. It’s not a goal, it’s a by-product. It comes as part of the package (often unconsciously) with another principle that is a little more concrete: product-centricity. Product-centric leaders, the ones that are obsessive about what gets shipped out the door, are customer-centric by nature. They understand the importance of that magical intersection between product and person, the sheer power of amazing experiences. The iPhone is amazing. Disney classics are amazing. My first search on Google was amazing. Steve, Walt, Larry and Sergey wouldn’t have it any other way.

That strategy of investing in people who build things for themselves has been a guiding thought behind many investments for years. Mike Moritz of Sequoia Capital on how he chooses what companies to invest in:

It’s the idea that the founders are doing something that they think is useful for themselves, And, then, eventually perhaps, coincidentally, perhaps accidentally, they discover that the product or service that they have built because they wanted to use something like this is that of great interest to lots of other people.

When you build for yourself you can build a product for one (ie: no demand), but the cost of failure is low, one of the core ideas in Clay Shirky's Here Comes Everybody. It is so fast and cheap to test things online that if you are passionate and aggressive success often happens accidentally. PageRank was an academic project for finding authoritative citations that just happened to turn into a search engine.

The Value of Small Daily Incremental Improvements

Apr 17th

Building a well known brand and a sustainable business model in a competitive marketplace is challenging, but if you break things down into pieces and do something every day eventually you win marketshare. People who become successful have large goals like "become the leading source in our market" or "increase profits 150% year over year" but most people who actually achieve those types of goals set smaller goals and work toward achieving them every day.

One of my better habits is writing a to do list. When I scratch things off the list there is a sense of accomplishment which drives further activity. Sometimes the accomplishments are moral victories, learning how to create a little bit of code, or improving the graphical interface of something, while other projects are much more complex, like writing a book or hundreds of training modules. As long as growth is sustainable then all is well. If you stop growing in a growing marketplace then you need to evaluate what you are doing wrong.

  • Are you doing too many repetitive tasks that software or a cron job should be able to do?
  • Does your site lack viral marketing components?
  • Does your site do a poor job of prequalifying leads?
  • Are you selling to the wrong market?
  • Are you pricing too cheaply and attracting the wrong clients?
  • Are you doing a poor job building perceived value?
  • Is your conversion process broken?
  • Are you doing a poor job of transferring value?

In nearly every growing business at some point in time the answer to every single one of those questions is yes. Each is an area for improvement.

With employees I can come off as being under-appreciating and/or too demanding, largely because I expect people to work as hard as I do, and maybe 2% of people do. When you have the attitude of making incremental daily improvements it is hard for some people to grasp it until you beat it into their heads. I have found it hard to teach most people - especially if they work remotely.

You really need to find that 10% of people who want to add value...and then you need to find the 30% of those who's loyalty exceeds their greed. It is hard to find good workers. As software gets cheaper I suspect it will only get harder to find and retain quality employees as more of the quality people decide to work for themselves, which means that you need to create ways to get customers to do your marketing for you.

I think the key to smoothing out some of the friction with workers is to teach people to set their own score card. Daily contact off the start is needed to set expectations and keep things progressing. But over time have them ask themselves each day what they did to add value, make a difference, and remove market friction. If you are active in your marketplace, are receptive to feedback, are aggressive with push marketing, give away value, and keep trying to build value each day, eventually the profits roll in. It might take a couple years to work out well, but eventually it does.

How Competitive Will the Web be in 3 Years? 5 Years?

Mar 28th

Introducing Answer Sniper

I just came across AnswerSniper, a $147 software product created to help you find open questions to answer on Yahoo! Answers by keeping you up to date with the latest open questions for keywords you select. Can you imagine paying for software for the privilege of finding questions that need answered, and then trying to be the first person to answer each of them?

If you are committed at that level, why not just create something like or your own forum so you at least build content, brand equity, and a traffic stream you own in the process?

Worse yet, on Yahoo! Answers you are not answering questions in a small community where you can build a strong personal brand, but on a huge network where it would take a serious time investment to build a personal brand. Just doable perhaps, but probably beyond the opportunity cost for most folks.

What is even more absurd about buying such software is that Yahoo! Answers offers RSS feeds of new open questions (open SEO questions), so all you need to do is subscribe to the feed to get notifications of new questions. Want to track multiple keywords? Use Yahoo! Pipes and/or subscribe to multiple feeds.

Maybe there are more features I do not see or some things I am not fully appreciating. Do you think AnswerSniper is an unneeded product or a testament to how saturated the web is becoming? Or both?

The Yahoo! Answers Pollution Problem

About a year ago I answered a few questions just to get to a second level rating and learn what the site was like, but many of the top selected answers are people working inside the same companies who asked the exact same questions. And that pollution is only going to grow, especially as more internet marketers create internet marketing products focused on Yahoo! Answers. Plus the link equity keeps getting spread thinner as more questions are asked AND the average quality of the service drops due to pollution by marketers - those trends do not bode well for the long-term viability of Yahoo! Answers as a traffic source.

The issue in not just an issue of being someone else's user generated content versus becoming a destination, but also an issue of supply and demand. There is a lot of supply of low quality content. And there is a lot of demand for the much more select high quality content. And for Google to keep their market position they need to keep getting better at understanding which is which.

Right now a lot of weight has been put on domain trust, but as more sites add user generated garbage to their sites, site authority driven algorithms will require a lot of algorithmic refinement or manual intervention by the search engines.

As the web gets more competitive the answer to sustainability is not more content, but deeper content. In the time it takes to answer 100 Yahoo! Answer questions you could write 10 blog posts. In the time it takes to write 10 blog posts you could write 1 feature. And 5 years from now, content like the Blogger's Guide to SEO is going to be worth far more than 100 of my average blog posts. In a month you will not remember reading this post.*

It is hard to build a lasting brand that changes with the market if you are a username on a large heavily polluted site.

* If you do, leave a comment one month from today and prove me wrong. ;)

Pricepoints, Cold Leads, & Customer Quality

Mar 11th

It is much easier to get people to impulse purchase a one time $79 product than it is to get people to join a higher value but higher price-point recurring program. When I changed my business model the sales rates changed significantly. Just before changing the model the sales rate for the ebook peaked at an all time high. And just after launch the sales rate for the membership site was even greater than my best sales rate for the ebook, but then sales slowed down a bit. As I refined the some of the marketing strategies, order volume has picked back up again.

The area where sales really dropped off was the areas you would expect to fall most - cold search leads and affiliate traffic. It makes sense too, because when you are selling a membership site you are largely selling trust in your brand, and building trust is a process. It requires more of a presell. Those who are unfamiliar with you will take a lot more to convert than those who have grown to know, like, and trust you over time. Those who have read this site for a long time are much more likely to become members than less qualified prospects who just discovered this site today.

I still have a bunch of ideas for warming up cold leads which I will get to try over the coming months, but some of them requiring sourcing from other providers, and that is a process. The cool thing about changing your business model is that you learn a lot about different sales also shows you the different strategies needed to sell different ideas. And it is a bit of a thrill to one day just pull the plug and switch everything. You can try to predict what will happen, but your predictions will usually be wrong. In the shift there will be hidden good deals and hidden bad deals. Just to highlight a couple, out of dozens of them...

  • Hidden good deal: when setting up the ability for SEO Book buyers to get a free trial my programmer turned that free offer process into something that required setting up a Paypal subscription. That prevented many non-committed people from joining. Which works out nicely for me as I don't spend more time servicing people who were not really interested in the first place.
  • Hidden bad deal: when I emailed affiliates about changing my business model, many affiliates that had no sales or traffic were demanding and rude. A single sentence in that email probably wasted over 10 hours of my life.

I theorized before changing my business model that as a result the customer quality and value of customer interaction would sharply increase while my frustrations with the worst customers from yesteryear would diminish. That turned out better than expected as well.

Some of the people who bought my ebook in the past would buy it but then be lazy, see no results because they did not read the book or do any marketing, and then basically try to get $20,000 worth of consulting out of me for their $79, not listen to my advice when I give it, and then do a reverse charge after sending me a few 15 page emails and wasting hours of my time.

The problem was that there was no recurring opportunity cost to customers, so many of them felt it was their job to abuse me and treat me like a machine. And so then I started thin slicing to guess "is this a person who I can help or a person who will just waste my time?" but that thin slicing turned off some customers. My wife thought I was slow to respond and I sounded a bit like a jerk when we first spoke. :(

The nice thing about my current price point and member registration is that it is just beyond the impulse purchase range, so I am selling to the right customers. And since it is an ongoing training program, it attracts the type of customers who want to do work vs those who want a free ride or a person to outsource the blame upon. The community has been both fun and rewarding. I have been surprised at how well it has worked out. I just wish I would have been a better listener when NFFC gave me so much great advice back in 2005!

One huge disconnect I still have is that many people who reference this site today are still referencing how great the book is (but it no longer exists as an individual entity, only as part of the training program). The domain name, years of content creation and market participation, and all the money spent on advertising all work to make that well remembered, and I need to work on shifting that...which is probably a lot harder that it sounds.

We spend so much time worrying about public relations, link building, and all kinds of external stuff...that we do not set our businesses up to establish and build relationships, and get the most out of what we are already doing. If you do well with the traffic you already have then you can always invest more in public relations, ppc, advertising, and link building.

You Must Build a Destination if You Want to Create a Fully Valued Sustainable Business Worth Buying

Mar 3rd

Recently Google's Kevin Marks was interviewed by cNet, where he said:

OK, stop and think about your application. Do you really need to be a standalone site? Do you really want to write user registration code, or would you be better off taking your application and bringing these other sites where there are lots of users already and where they have already expressed both their personal information and their connections to other people?

The answer to that is of course you want to be your own destination. Writing registration code once means you can re-use it over and over again on various projects. If you can program a successful widget or application then you are not the type who thinks registration code is a roadblock.

Some of the most successful viral applications (like Paypal and YouTube) leveraged other platforms for growth, but a large part of their success was that they also chose to be destinations.

If you create a destination vs exclusively being a platform on another site, you...

  • have more direct contact with your customers (which often creates new revenue streams)
  • have greater organic growth opportunities due to a wider variety of organic distribution channels (rather than being someone else's user generated content)
  • make it easier for reporters to contact you. Public relations is huge for spreading viral stories and growing viral networks (look at how many times Plentyoffish was in the press)
  • create something that is easy to link at, where you control the link equity and attention and use it to profit as you wish (ads, market new related ideas, change your business model, etc.)
  • can extend your offering out into related fields and/or create a premium service
  • are more likely to receive funding if needed and can sell your business for a higher price point (since your business has more of what Warren Buffet considers a moat around it)

Consider some of the add ins that sold for millions or billions of dollars because they chose to become destinations

  • If Paypal was not a destination, eBay could have killed them and/or bought them for a small fraction of their potential value.
  • If or MyBlogLog was just a Firefox extension would Yahoo! have bought them?
  • If Feedburner was a browser plug-in of some sort would Google have paid an estimated $100 million for them?
  • If YouTube was not a destination could they have competed with Google Video and got bought for $1.65 billion?

Overture, which pioneered the paid search field, once had a dominant market-share, but was afraid of becoming a search destination because they thought that it could cost them syndication partnerships. The day AOL signed on to syndicate Google's ads, Overture became irrelevant as a business force. They bought a couple search engines in an attempt to become a destination, but it was too little too late. And Overture was bought by Yahoo! for about 1% of what Google is worth today. The pioneer in the paid search model that drives the current web economy sold for about the same price as a marginally profitable free video hosting site, largely because Overture failed to become a destination. Oops.

Why Google Guidelines Sometimes Depart From Reality

Mar 2nd

The Federal Reserve is somewhat like a market maker, or at the very least a market influence, on the value of currency. Google acts in a similar value, placing value on and evaluating the value of information and collections of information.

Reading this blog post about Ben Bernanke and replace words like credit and inflation with paid links and search spam and you can see (and perhaps even respect) how Google manipulates the press, why Google's guidelines are often forced to be removed from reality, and search engineer editorial action is often harsh beyond reason.

Here is an excerpt from the blog post about Ben Bernanke:

The last time a slowing economy failed to moderate prices was the 1970s. Even as the economy slid into recession, we had major spikes in the prices of energy, food, clothing.

What is particularly worrisome to me is that as we have slashed interest rates 225 basis points, consumer loans -- mortgages and revolving credit -- have actually moved higher.

Gentleman, this is a major problem. And our internal, non-public projections forecast it is only going to get worse for the next 4 quarters . . .

Paying a PR firm is not much different than buying PageRank, other than it perceived by Google as being cleaner.

And if you are big into economic stuff here is some more good stuff...

First, Warren Buffet's Berkshire Hathaway Annual Report [PDF] offers a lot of great business strategies and insights. If you have never read any of his letters, make sure to read from the heading on page 5 or 6 about Business - The Great, the Good and the Gruesome right on through to the end of that section a couple pages later. You can also read Warren's older reports here.

Nouriel Roubini on The Current U.S. Recession & the Risk of Systemic Financial Crisis [PDF] offers a bearish outlook on housing:

This is the worst housing recession in US history, and there is no sign it will bottom out any time soon. At this point it is clear that US home prices will fall between 20% and 30% from their bubbly peak, that would wipe out between $4 trillion and $6 trillion of household wealth. While the subprime meltdown is likely to cause about 2.2 million foreclosures, a 30% fall in home values would imply that over 10 million households would have negative equity in their homes and would have a big incentive to use "jingle mail" (i.e. default, put the home keys in an envelope and send it to their mortgage bank).

Some of the early lending institution losses are being socialized by inflation and other sources

Countrywide - an institution that was more likely insolvent than illiquid - has been bailed out with public money via a $55 billion loan from the FHLB system, a semi-public system of funding of mortgage lenders.

And this is altering the online economy heavily.

A few years ago credit card companies rewrote the bankruptcy laws, but mortgages have not yet been re-written to favor corporate interests. Nouriel Roubini highlights further risks associated with house price depreciation:

What is happening is just the consequences of rational economic behavior. In most US states mortgages are non-recourse loans; thus, if a home owner defaults on its mortgage then banks take over the collateral - the home - via foreclosure but once that happens it cannot go after the borrower for any difference between the value of the original mortgage and the current value of the property.

The Future of Business Process Outsourcing

Mar 2nd

The Disadvantages of Low End Outsourcing

My History of Outsourcing

Last year I lost thousands of dollars multiple times outsourcing projects to people who could "do them no problem" until time for showing the results came in, and that capital was simply wasted. At the lower end, where people will take your money and do nothing for you or offer services not worth paying for, there will always be a market where people are glad to take your money.

That piece of the market creates a market for lemons effect, be it SEO, web design, programming, eBay listings, whatever.

The Cost Advantage of Outsourcing is Quickly Eroding

Not only is there a market for lemons effect, but the cost savings advantage is quickly eroding:

The reality is that wages are rising in India. The cost advantage for offshoring to India used to be at least 1:6. Today, it is at best 1:3. Attrition is scary.

Jobs that are low value-added and easily automatable should and will disappear over the next decade.

That means that if you provide a high value service, there is a greater presumed risk to hiring you, unless you have great brand strength and/or enjoy valuable personal recommendations. Worse yet, if the job is easy to automate eventually a computer will do it.

The Problem With Most Outsourcing Projects

Many people who look to outsource have a marginal business model and are outsourcing rather than improving their business model, in a last ditch attempt to try to keep it surviving after the business model is already in decay, without changing their business model to fit the current marketplace.

High End Business Process Outsourcing

You Can't Outsource Loyalty

At the other end of the market, some of the most talented people are also so ambitious that loyalty or output is limited. When I decided to change the SEO Book business model about 6 months ago I started working with one of the best programmers I have ever met. He did great work and started off faster than lightning, but he wanted to grow his revenues so fast and was so overwhelmed with work that he had a hard time making time for my project. In spite of me sometimes paying him 250% of his original rate, he and I both decided that it would be best if I finished the project with someone else. So then I ended up spending thousands more to have some re-learn some of the stuff he did, and then create custom coding to

  • verify the affiliate program would work and give the proper affiliate credit while changing the tracking method
  • cross reference account status and permissions across 3 databases
  • integrate it all with Paypal subscription data

There are still a couple things with the site that I really need to improve (Drupal FlashVideo conversion and some stuff with the Autoresponder module), and that does not even include additional features I want to add. The second programmer is helping with some of it, I am doing some of it, and a third programmer is helping with some of it.

Freelancing to Pro: Training Your Workforce for Better Jobs

I outsourced the writing of one of my sites to a person who was passionate about the field. I let them be associated with the brand and put their name on it so they would be more passionate about building it up.

I have marketed the site quite aggressively and gave them my ideas for how to create featured content and what topics to write about. That has lead to them getting so much exposure that other people are offering them higher paying jobs.

There is an aspect of outsourcing where if you teach them enough and give them enough exposure they end up being worth more than you can pay them unless you already have a market leading channel.

When Outsourcing Works Great

Pre-made & Self Serve Software Packages & Services

All the above models work so well because they

  • allow a single piece of work to be sold many times
  • use the feedback of many customers to improve the product

Word of Mouth Recommendations

  • All my hosting providers that I recommend were recommended to me by other online friends.
  • I have a guy who makes banners for me who is fast and does great work. He was recommended by a fellow SEO.
  • My designer for this site and other sites came as a recommendation from other friends.
  • Most of my other custom service providers are people who read this site, learned to trust me, and built a relationship from there.

My wife and I have only bought outsourced services via word of mouth recommendation that I ended up regretting on 2 occasions. In both cases, the person giving the word of mouth marketing was recommending themselves. Other than that, I have rarely had a bad experience with word of mouth marketing. And I think this is true for two reasons

  • you first learn to trust the source, and they earn that trust over months and years
  • then you trust what they recommend

Spreading that risk out over stages lowers the chances of making a bad choice.

How to Continue to Profit as an Outsourced Service Provider

Seth mentioned this Gavin Potter quote a couple days ago

The 20th century was about sorting out supply, the 21st is going to be about sorting out demand.

As the cost advantage of outsourcing disappears, the web gets polluted with scams, the web gets saturated with competitors, and more offline conversations influence online transactions, it seems the best ways to make money outsourcing are:

  • work to build some of your own projects so you are not reliant on clients
  • specialize on a niche and own the idea
  • build a brand that demands market leading rates
  • give away a lot of value free to do your marketing for you and qualify your prospects
  • inspire customers and ensure you offer a remarkable valuable service worthy of word of mouth marketing
  • turn your service into a product that is sold as a service, and include customer interaction touch-points where it makes sense to add value

Starting From Scratch in a Fair Market vs Building an Honest Sustainable Competitive Advantage

Feb 28th

Naive Excitement

When you are new to the field of SEO there is a certain excitement in starting a site from scratch and growing it out into a flourishing enterprise. You ask someone to link to you and when they do you get excited. When you get cited without asking for it you get excited. And when the rankings start to show up you get excited. At some point you may even develop an irrational emotional attachment to some of your websites. I know I have.

Fair is Fair

Search engines teach you that there are equitable rules to follow. The rules keep shifting in accordance with the search engine's business models, but somehow they are always fair. You see other people doing things that are "spammy," but refuse to. When you submit your site to 100 directories, donate money for links, attend every conference that will link at you, or when you syndicate your content to dozens of websites it is not spam. Your content is quality, you follow the rules, and one day you will be rewarded for it. One day...

Who Starts From Scratch?

But do you have to start from scratch to be doing SEO?

In Cosmos Carl Sagan said that "to make an apple pie from scratch, you must first create the universe." I tend to think the same way about SEO.

  • Some people who jumped on the web and were immediately successful started when the marketplace was much less competitive.
  • Some companies like lost millions or billions of dollars building their brands.
  • Others carried offline success and relationships online.
  • Some people have jobs or schools that offer them the opportunity to publish content on a trusted domain.
  • Some companies can do whatever they want because they have a big brand and/or a large ad budget.
  • Some people who are better salesmen than you may borrow your ideas, re-package them, and then talk trash about how ignorant you are.
  • And yet another group of people have a large following because they are highly biased and/or lie (ie: Fox News).

What is Fair?

Are any of the above categories unfair? Or is the concept of fair nothing more than bogus self-posturing by profit hungry corporations? Many companies who helped fund the large networks (affiliates, for example) later saw their sites classified as spam or priced out of the same markets they built by quality scores which said their sites are no good as the network got more competitive. Mind you many of these changes were not algorithm related, but were driven by direct human intervention.

The rules keep driving value (and profit) to the networks. They appear fair so long as your interests are aligned with those of the network. But behind the public rules, they fund theft of copyright work hoping it leads to the original publisher giving in and partnering with them to wrap their ads around the content. In other cases, if you get too successful human intervention within the network votes against you while leaving your competition unscathed. Why did Text Link Ads get penalized while Text Link Brokers still ranks?

Leverage Your Assets

Not every strategy works for every person, but if you are starting from scratch thinking that you are following the rules, you are missing out on some fundamental truths of the marketplace. If you are not leveraging and building upon your knowledge, passions, curiosity, and social relationships every day you are losing money (likely to an inferior and/or less honest competitor).

Take the Red Pill

Some of the most effective SEOs buy and sell links, buy and sell websites, buy and sell companies, rent personalities to promote their sites, openly engage is link schemes, use successful positions to promote other similar positions, expand out to other high profit market positions, and do whatever they see fit to profit. It is not our job to create the algorithms, we just satisfy the criteria to rank.

Take the Blue Pill

Others start every project from scratch, hoping that one day the market will be fair and shine a light on them. One day...


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