Day 12: The Importance of Filtering

Why is Google so Valuable?

If you think about what Google is, it is essentially an editorial filter for the web. They organize information & return relevant results, and as a result of that they make a boatload of cash selling ads on commercial keywords.

Using more information can create far better relevancy than better algorithms alone can. But humans have limits that computers do not. Drowning in too much information is inefficient - even deadly. Which is precisely why we rely on tools like Google to find reputable resources.

Online you have access to just about anybody & just about anybody has access to you. I once wrote an email to Tim Berners-Lee, the man who created the WWW, and he replied back!

That accessible from a distance aspect not only offers you great opportunities, but also opens you up to some types of anti-social behavior you would never (or at least rarely) experience in the real world:

How much longer is the media going to milk this beyond tired story?” “These guys are frauds.” “Your idiocy is disturbing.” “We’re just trying to make the world a better place one brainwashed, ignorant idiot at a time.” These are the trollish comments, all from anonymous sources, that you could have found after reading a CNN article on the rescue of the Chilean miners.

Trolling, defined as the act of posting inflammatory, derogatory or provocative messages in public forums, is a problem as old as the Internet itself, although its roots go much farther back. Even in the fourth century B.C., Plato touched upon the subject of anonymity and morality in his parable of the ring of Gyges.

Most keyboard warriors are only warriors from afar, though I did one time have someone challenge me to a dual in the street! I had no intent on challenging them on it though, as with my (lack of) gunsmith skills I would have bet on the other guy. :)

Look Out For Bolts From the Sky!

If statistics hold true, someone who reads this sentence will be struck by lightening. Most likely multiple people will!

And yet, as a business, we only need a few hundred customers to be profitable.

There has to be a balancing act between how you interact with customers and non-customers. Part of that is managing expectations.

In the Business World, All People Are Not Created Equal

In many cases the only distinguishing factor between "spam" and "solid marketing" is who's doing it..

What is Spam?

Some people see obstacles as opportunities, while others look for excuses to fail.

Of course the world isn't fair, but as an entrepreneur you are saying that you are going to succeed in spite of how the odds are stacked against you.

A lot of people in business preach that you should treat everyone as well as you possibly can & try to solve as many problems as you possibly can. Being naive, I actually did that for about 6 years. Over time some people got progressively ruder & then at some point it was clear I could either melt down or start filtering. I then decided that if anyone (who is not a paying customer) was rude and/or condiscending they would simply be ignored. And the net business impact of that level of filtering is essentially 0 impact on sales to new customers, and more free time to improve our business for our paying customers. (I have tried to understand why that is & have sorta concluded that people who are very angry typically lack social skills & lack knowledge of or influence in your market. Thus they generally have limited reach online & even less within your market.)

If people believe in a value system but are also cheap then a certain segment will try to see what they can get away with (thus trying to pull you down). As you filter people you will find that a lot of the people who you thought were your buddies were just at the party for the free beer. Of course that is a bit of an ego hit, but when you are brand new it makes sense to help as many people as you can to create connections, and then as you get more well known you have to anticipate that filtering will bring a lot of negativity into your life.

People do not like being told no, but it is the single most powerful word in business.

When you think of what popularity is, it is an imbalance between the supply and demand for attention. If you become popular then at some point you will have more people contacting you (at the pricepoint of free) than you can possibly service. Thus you have to rely on economics to set your rates. As your popularity grows so must your rates. And if you let the market set your rates, then if you discount your rates all you are doing is pushing yourself to an unbalanced sedintary lifestyle where you work all the time. And that leads to burnout and/or physical illness.

I am not saying that anyone should intentionally go out of their way to be rude, but if someone does it to you then skip them.

Focus on Owning a Niche

In a marketplace as competitive as the web, you can't build a sustainable advantage if you treat everyone the same. You *must* bias your time and effort toward paying customers.

Pick out your market niche, choose who you want your customers to be and focus on making their experience the best it can be.

Due to open source software & all the free content online, a lot of people think that they can simply demand your labors for free. Some of them go so far as to curse you and threaten you in the same email!

Pardon the ignorance and curse word below, but this is the sort of feedback you might get from that sort of person:

... and that is a sharp contrast against what a real prospective customer looks like ...

John Lennon was killed by a fan.

Most of us will never be 0.001% as popular as one of The Beatles, but the more successful you become the more you will have to filter out the bad seeds to maintain sanity & profits.

When you are obscure and hard to find then the people who find you are typically a pretty good fit as the obscurity is a bit of a filter. However, once you become well known you get all stripes of folks. It is thus your job to figure out who you want as a customer, how to attract them, and how to filter out people who are a poor fit.

The 80/20 Rule Revisited

It is easy to create perceived profits if you give your time away / price your time at nothing, but if you want to create a growing business you have to value your time.

When working for customers online I don't think the 80/20 rule is accurate, due to network effects & the leverage of search it is more likely to end up being something like 90/10 or 95/5. Due to reach and newtork effects some people who connect with you will really believe in you and others will view you as slightly more than a commodity. We never fill out an RFP because it means the customer is shopping & is not yet sold on you.

If people are abusive you have to be willing to fire your customers & if a customer is respectful and pays well then look for ways to add more value and keep deepening the relationships.

The media is training consumers to leverage social media to blast businesses. You should always try to be nice to clients off the start, but if someone is simply on fire then there is likely nothing you can do to calm them down. It is better to spend your extra resources making your best customers that much happier to earn more positive word of mouth.

The alternative to filtering is the tragedy of the commons.

Investing in Filters

Software / websites / editors add value by filtering. One way to make yourself remarkable in your industry is by becoming the go-to source for industry news & information. At the same time, not everyone wants to make a career as a writer or editor.

I subscribe to a bunch of sites (free and paid) largely because it is worth investing in understanding the bias or lens of various people & comparing them against each other. Or, in some cases, if I think a market is so polluted I might just want to listen to a limited number of trusted voices to save time.

When considering what you can do for free, make sure you don't set the value of your time to $0, particularly if it is quite valuable. I wish someone would have told me that (and had me be smart enough to listen to it) a couple years ago. :)

Sure I can do tons of things by myself, but should I? At the end of the day, things that save you time ultimately save you money. Operating at a greater scale allows you to operate more strategically and with more leverage.

As long as you hire the right people & buy good software both can provide amazing returns.

A company that hires more people might have a lower profit margin, but the goal is to optimize for overall returns rather than an arbitrary specific percent of return.

Will many investments be losers? Of course! But the most successful business people fail early & often. Only through experience + testing do you gain the insights needed to build a sustainable competitive advantage, and you can't always predict what will work best in advance.

The Importance of Slack

Search is a marketplace with significant collateral damage in it.

Google's Collateral Damage.

As an SEO the single most important business tip I can offer is to diversify your revenue streams. The reasons for this are many-fold

  • Some people who are great at SEO but who are not great at sales may find that being an affiliate or a publisher ends up paying far more than client work. Having multiple revenue streams forces you to value your talents at market rates rather than some arbitrary figure which may be less than your true potential.
  • Some people who are better at sales than SEO might still be able to do well if they sell to corporate clients, but the more you know the easier it is to sell.
  • You don't control Google - you only influence it. Having a business which has a mix of revenues from publishing and client work means that when Google does major shifts you can pour more of your resources into helping your clients take advantage of the opportunities, while when things are fairly steady state you can put more time and effort into growing you own publishing empire.
  • Running your own sites gives you something to test on. If you never go too far you will never know where the limits are, and testing things on a client's site for the first time might be more risk than makes sense (for you or the client).
  • The last reason for the importance of diversity is the above 80/20 rule. By filling up some of your own time working on your own sites it means you can avail yourself to only the best potential client projects, while preventing yourself from taking on any low return (or, worse yet, money losing) client projects.

I hope you found this series helpful! :)

Cheers,
Aaron Wall

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