I Wish I Knew Then What I Know Now

Apr 30th
posted in

What were the things you know now that you wished someone had told you when you started out?

Personally, I wonder whether I would have actually listened had someone told me. Some things I just had to learn by making dumb mistakes.

Sometimes twice!

But if you are starting out on the web, and you want to skip all that hassle and expense, here is my list.

Old-hands may recognize a few mistakes that they have made, too. Please share your words of wisdom in the comments.

1. Business Case Comes First

Don't start by building a website. Start by building a business case.

I wasted time on domains and activities that would never be profitable because I didn't ask and answer some fundamental questions. Web design, SEO, blogging, social media marketing, writing, networking, posting on forums - all these activities can be worthwhile, but if your aim is to make money, they only bear fruit if they support your business case.

Otherwise, they're a waste of your time.

Ask yourself:

  • How will this activity make money?
  • What are the unmet needs in the market, and am I able to fill those needs?
  • How much time/money do I need to put into this, and will it pay back more that the input cost?

2. Don't Be Cheap

Competing on price only works if you can do volume.

Competing on price is ultimately a losers game. There will always be someone else who can undercut you. There are waves of third-world SEOs/E-Commerce Operators/Marketers who can survive each day on a lot less than you can. Where do you go when they undercut your price? You follow them down, until one of you goes broke.

If you can't do enough volume to make small margins worthwhile, then focus on quality and service aspects.

What is that you do that adds more value than the other guy? Do you have something unique to offer? What can you do better than anyone else? Find out if that one thing is in demand and profitable, and do it.

There is another good reason not to compete on price. People tend to value things that are expensive.

It's a curious aspect of human psychology that if we believe something is valuable, then it is. Conversely, if you put a low price tag on something, people perceive it as being junk.

3. Give People Three Options

Say a retailer wants to sell one particular refrigerator. Does she stock only that refrigerator? No, she doesn't. What she does is she carries one low priced refrigerator, one mid-priced refrigerator (the one she sells a lot of), and one expensive refrigerator.

Most people will choose the middle refrigerator, even if the features are similar across all three. The customers price expectation has been set by being able to compare low/mid/high. They tend to go for the middle, "sensible" choice. Not too cheap, not too expensive.

Always structure a deal that creates a basis for comparison. And put the choice you want the customer to take in the middle.

There is a danger in giving too many options, however. People get confused by too many choices, and when people feel confused, their perception of risk increases. When their perception of risk increases, they are more likely to back away.

4. It's Not About You, It's About Them

People don't care about you.

They just don't.

They don't care if your site runs on Linux. They don't care how much you've invested in usability. They don't care if you're the (self-proclaimed) "best".

They care about solving their own problems.

Your language must be their language. Everything you do must be geared towards identifying and solving their problem.

5. Business Is About Human Relationships

Business isn't about Lear jets. It isn't about business cards. It isn't about conferences, lunches or expense accounts.

Business is about the relationships between people.

Business is all about what you can do for someone, and what someone can do for you. If that relationship creates more value that you can do so by yourself, you've got the makings of a business that can grow.

A characteristic common to successful business people is they have large personal networks. They constantly leverage these networks. It really is about who, not what, you know.

Learn to stay in touch with old friends, learn to ask for help, give out before you get back,and understand that everyone you meet is going to know things that you do not.

6. Where Possible, Avoid Intermediaries

When I first used the internet, in 1993, you didn't need to buy domain names. You could get one just by asking for one!

What if I'd known then what I know now? What if I'd seen domain names for what they really were - undeveloped, directly accessible real estate in a gold mining town.

Learn the lesson of domain names. You should take positions where you don't rely too much on the whims of others. SEO, in itself, is a risky business model because your income is susceptible to underlying changes in the search engines sort algorithms. There is an entity between you and the customer, over which you have no control.

MLM? Forget it. You need to be the guy at the top of the chain.

PPC/SEO? Find a way to lock in those customers so you don't re-advertise to the same people.

7. Know The Power Of Compounding Interest

Eh?

What's this topic doing in a web column?

Well, what are you going to do with your web income once you get it?

This is one of those concepts that is so simple, true and fundamental to "living well" in a capitalist society it should be drummed into people the minute they start school. Money literally makes money.

What are you doing with that money you're making on the web? Are you buying stuff? What is the true cost of that thing you're buying? It's not just the price of the thing itself, it's also the opportunity cost of that money had you chosen to invest it.

If you've buying something on credit, chances are you're enslaving yourself to your future self, unless that credit is used for something that can generate further income or capital gain.

8. Invest Money Across Investment Classes

The old "don't put all your eggs in one basket" rule.

The internet can be a difficult place to make money. At times, it can be really easy. But ask anyone who has been in the game a while, and they'll tell you it is always flaky. It is flaky, in terms of generating income, because it moves and changes very quickly. Most business operations find it difficult to move and adapt very quickly and maintain the same income level.

One way to overcome this risk is to have income coming in from different asset classes.

I do this by taking a percentage of my earnings and putting it into rental property and shares. I've done this for many years now. The rental property market, compared to the internet business, is very dull and predictable. But that's a good thing. The steady rental streams cover any down weeks I have in the flaky internet game. The share market returns above all other asset classes over time.

Being dependent on one source of income can be precarious.

9. Live Within Your Means

My share broker recently gave a seminar in which he asked the question "can you take a 50% drop in house price and a 50% drop in income, and still be happy?"

If the answer is yes, you'll survive this recession with a smile on your face. Or any recession, for that matter. Boom and bust cycles are inevitable in market-driven, interventionist economies, so expect them and plan for them.

Living within your means creates a buffer zone.

Is there big income to be had by leveraging? Of course, but the current crash is showing the downside problems that can occur if you're over leveraged. When betting, try not to use your own money, but make sure you can cover that bet if it doesn't go your way.

10. Those Who Have The Most Time Are Rich

Having stuff is easy. If you can get credit, you can get stuff.

But what do people complain about not having most these days?

Invariably, the answer is time.

One of the best things about running your own internet business is that time is your own. Want to go fishing for a few hours? You don't need to ask anyone. To me, that's the most valuable thing in the world. I have stuff, but given a choice between acquiring more stuff, or having more experiences, I choose experiences. And you need to have time for that.

There's a book called "Avoid Retirement And Stay Alive". The idea is that retirement has no place in modern society. If you can make work enjoyable by balancing it against the other things you want to do, then you can live like you've got all the time in the world.

If you could tell your 18 year old self a few things, what would they be?

Published: April 30, 2009

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Comments

April 30, 2009 - 11:11pm

All the old domains I burned out with short term spam techniques earlier this decade could have been valuable authority domains today (...hits self in head hard...)

May 1, 2009 - 1:53am

This is the very, very best blog post I have read from you in the past year Aaron.

Very sound advice. I hope this post finds its way into the big 'ol social media river for others to read.

May 1, 2009 - 3:42am

Hey, hey, hey.

Aaron is the bomb and all, but he didn't write this. Let's give Peter his due.

P.S. Business is definitely all about human relationships and solving someone's need. That will likely never change.

May 1, 2009 - 2:41am

I totally agree with you on the point you made about buying domain names for cheap way back then. However, since domain names are unique and have inherent value that there is still a lot of room for price appreciation if ones buys quality generic keyword .com domain names.

WordPress SEO
May 1, 2009 - 2:42am

I love the point about time.

Isn't it the truth?

One starts in this game for a few chips and soon the game is everything.

I've run into all ten, but would say number two is the most important.

There is no way to make money when losing money. Which is what the bottom of every market does. The only people who made money selling cheap were Wal-Mart - but they destroyed whole towns and created an underclass to staff their stores.

Not part of a world in which I would like to spend much time.

May 1, 2009 - 5:10am

And Wal-Mart hires illegal workers, teaches their employees how to file for food stamps as part of orientation, etc. The prices are so low, in part, because they are subsidized.

May 1, 2009 - 3:12am

Compound interest actually applies to SEO, too! If your site converts 20% better, and your on-site optimization brings in 20% more visitors, that's a 44% increase in total conversions.

This is all great advice, too. Seems like you built it around the idea that, in ten years, you could be doing something completely different without fundamentally changing how you do things. Always a good plan.

May 1, 2009 - 3:32am

#1 for me...

I really like #5...so flippin true.

I'd like to add a #11: it takes experience to get experience. Maybe my first big site will make a few thousand a month, or maybe it will top out at a few hundred a month.

But down the line I won't really care too much because it will lead to bigger and better things.

May 1, 2009 - 5:50am

Great post, Peter! Sometimes, I am not able to judge who wrote the post until I come to the end.

I would stress on #9 (Live Within Your Means). The Capitalist economy has made many of us greedy and we're all always trying to earn more and more money. What we Don't do, however, is control our expenses which is often very easy, less troublesome and gives you a lot more peace of mind.

If we don't learn to control our desires and wants, money is never enough.

May 1, 2009 - 10:09am

Dont blow ur money on gals............ few gals r worth ur money. Also invest in SEO Book membership .... will save u PPC costs down the line and make ur web properties ur assets.

May 1, 2009 - 10:12am

Definitely, I'd like to reiterate the point about not knowing who wrote the post. You have several personalities writing here, on such a personality-driven site, it needs to be obvious who's who.

May 1, 2009 - 1:00pm

Great post Peter. Thanks very much.

I particularly like #3. Very true. Never thought about it that way. Really relevant for something that I'm working on now.

I'm 23 now. One thing I would say to my 18 yr old self is, you really don't know what's around the corner. Things can change dramatically, very quickly. Be ready to roll with the changes - good and bad.

Also, I always say to myself "Listen to everyone. Take advice from no-one."

There's always something to learn from others. But you have to do things your own way. If people object to your ideas, think about the objections carefully - then do what YOU think you should do.

May 1, 2009 - 1:37pm

Some of the best advice I've read on the net!

May 1, 2009 - 3:24pm

Have you heard of this kid in India who created an ebook about parrot care. He's making like $400k per year. That's crazy man!

I'm new to internet marketing but I know this... I gotta get cracking.

Raza Imam
PalmPreReviewer.com

May 1, 2009 - 3:42pm

I think #9 is critical for people if they intend to have a steady career and life. If you are spending too much on things you don't need then you are going to be hurting no matter what you make.

Also the personal relationships point is very true too. The more relationships you build the better your business will do.

Greg
netspray.com/begin

May 1, 2009 - 4:53pm

You've got to love the Rule of 3 (RE: #3 above). I love this rule!

May 1, 2009 - 7:55pm

Since you asked, this is the idea I would add.

Make A Big Jump

Most people need a kick in the butt about once a month. One reason basketball coaches are valuable, besides giving strategy, is getting the team to go, go, go.

It's feels great to be a go-getter, determined to learn something new every day.

If pressed - really pressed - most people within six months could be earning 50% more than they do today. They could be lots better at their jobs in just six months. Not everything you try works out, but many things do.

A guy who did interviews of rock bands for Rolling Stone once said the amazingly successful musicians he interviewed all had a couple of things in common. They were terrible at anything besides music, and they had a crazed look in their eyes that came from having their mind intensely focused on one thing - becoming an incredibly successful rock star.

It's amazing how going balls to the wall for a couple of years can produce remarkable increases in job skills and breath taking career advancement.

In work, it's not so much what you do. It's the accomplishments that make you feel good about who you are.

May 1, 2009 - 8:35pm

Love #3, a little irrational economics reading?

Good list.

May 1, 2009 - 8:48pm

>few gals r worth ur money.<

Boy have you been shopping at the wrong mall! They've ALL been a bargain in my book. Maybe I've just been lucky

massa
professional online promotion outsourcing
techndu

May 1, 2009 - 9:40pm

Nothing can compare to having all the free time in the world to do anything you want at any time.

May 2, 2009 - 4:22am

Buying domains and never doing anything with them; Guilty!

Have few but extremely GREAT clients, Guilty!

And guilty of reading your feeds without visiting your site and posting on some of the most well thought out posts in our industry to show you how much you've impacted my game.

Thanks Aaron your Guilty!

Donovan Roddy

May 2, 2009 - 11:46pm

Peter is the one who wrote this post, so he is the one you should be thanking :)

May 2, 2009 - 6:29am

Freedom is a basic need, but like Vitamin D most of us do not acknowledge it as a necessity, and live with unhealthy levels.

Those unhealthy levels are behind rage, depression, and irrational behaviors, including self-destructive behaviors and community destructive behaviors (gangs, vandalism, crime).

As for "those who have the most time are rich" I'm not sure I can agree. It is not time that makes you rich - it is freedom to spend time as you wish. A prisoner has plenty of time, but is not rich. A self-employed father of 3 healthy, happy and active kids can be very rich, yet have no time (because he lets his kids fill up the calendar with their stuff) ;-)

May 2, 2009 - 11:45pm

Even those who are truly "time rich" tend to chose to fill up their time with people and activities they love, so in that sense I think you are both saying the same thing.

Goes off to buy a few crates of vitamin D ;)

May 2, 2009 - 7:42am

Totally agree re:domains. Ashamed to say that I have only just appreciated the value of an aged domain and I think back to all those domains I bought back in 2001. Wish I had knew this back then!

May 3, 2009 - 3:43am

I don't think there are any shortcuts to SEO. If I had read your awesome blog post when I began this tormented journey, I can't say with any confidence that I'd have understood (or believed) it. The cliche that we learn more from our mistakes holds true, and we pay for it dearly though wasted time. Clearly, becoming skilled at SEO is a journey...and a frequently changing one. Thanks for all your great insight. I wish I'd found your blog earlier!

May 3, 2009 - 5:00am

I started out with too many projects on my plate and ended up neglecting them all. That was a big mistake.

I've found over time that focusing on a small handful of projects (1-2 for part time work, perhaps more if you're full time) is best for quality.

Similarly, you need to monitor cashflow and stay on top of things. Until I did my taxes this year, I freaked out because I didn't know what I had in the bank, wasn't sure if I could cover my taxes and still wanted to buy myself goodies, needed a budget to promote sites, plus wanted to donate to charity. Better cash management would have eliminated that anxiety way earlier. (Happy ending is that I finished the year modestly in the green . Enough to experiment a bit and try to build on what I have. :) )

Besides that, the best investments I've ever made were in educating myself. When I first bought the SEO Book, that was an eye-opener. Andrew Goodman's Winning Results was really helpful too. Most of the other marketing books and trade shows I've paid for have also been quite valuable.

May 4, 2009 - 5:46pm

I don't think reinvesting heavily in growth, education, and networking is a particularly bad thing. You should be quite aggressive with deploying capital to increase your rate of learning and growth. For what it is worth, up until last year I was the same way with aggressively reinvesting profits into growth.

May 3, 2009 - 9:39am

Hear, hear.
There is a reason why there are so few successful business models on the internet, and those that do exist are dominated by big players. And the reason has much to do with the points you cover (and even the big players make the mistakes, witness Google with YouTube)
In fact, I started a group on the subject, as I am convinced that internet business models cannot long term be advertising based only or even primarily, and that content and services will need to be charged for. I do not have all the answers on how all this will develop, however for those interested and wishing to contribute, feel free to join the group and encouraging others to join the group at http://groups.google.com/group/business-models-for-web

May 3, 2009 - 2:50pm

I wish I followed a systematic plan, rather than just hodge podge actions to make sure I was going in the "right direction." I find the more systematic my work, the more I'm able to predict where I'll be in a few months.

That said, has anyone else noticed an algorithm change just now? I just got my main site severely hit ... not ranking for anything, at least the main part of the domain. Individual posts are ranking just as good as ever. What does this mean?

May 4, 2009 - 5:48pm

Hi Shaun
if you are a paying subscriber you can read our guide for what to do if a page gets filtered and put your site up for review in our forums.

May 4, 2009 - 1:20am

You asked for words of wizdom?

Don't copy someone elses site word for word.

Don't keyword stuff your content.

Don't alt keyword stuff your images

Target terms that convert. For example if your selling golf equipment, don't target 'sexy golf babes', because even though it probably (havent checked) has a high search volume, trust me, people arent going to be looking for clubs.

Plan, think about and sleep on your ideas before you put them into action. Don't just jump in to it. Careful forethought is needed.

May 4, 2009 - 4:19pm

Peter / Aaron, this article is great.

Can I translate into Spanish and post in my personal blog? Of course, I will link back to this page and give you the credit.

May 4, 2009 - 5:40pm

Yes. We like to see our best blog posts translated and spread across the web :)

May 19, 2009 - 1:15pm

Excellent post Peter. This post is more about Self Optimisation and Self Improvement rather than SEO. Happy to see such contents on SEOBook.

May 22, 2009 - 3:37am

Peter, I have re-published this post in my personal blog (a translation in Spanish). The link is: http://www.eltiempoyelviento.com/10-importantes-lecciones-de-negocios-pa...

Thanks for your excellent posts. I can learn a lot.

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