Lex Aeterna

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The future of Lex Aeterna

30Aug08

As you might have noticed, updates have been few lately. Business man is busy. I have thought a bit about what I should do with this website. The domainname has some emotional value, and I quite like what I did with this blog so far. But something is missing. It’s not “me” enough. I thought about starting another blog to talk about my personal life more, but you can only have so many blogs.

Then it hit me. I’m quite sure that you people wouldn’t REALLY mind if I talked more about myself here, would you? This could become a place where I write not only about business, altough I would, but also about tech-stuff and my life. After all, I have a good idea for a business post only about once every 2 weeks. But that’s not how a blog works. I can debunk the making money online-scams only so many times. And by now you know how customers should be treated. But you don’t know about how I love a good gin-tonic, why I am thrilled/wary of the HTC dream coming soon and why I think we have not even begun to use the internet.

I am also considering changing the theme here. At http://chris.lexaeterna.net you can see what I’m thinking of using. Altough the giant ad at the right op corner would be more like a picture of me.

I am quite interested in your opinions. How did you like my blog so far? Do you think this would be a good idea? I’m not saying that I will do what you say, I’m saying that you might influence my decision.

Filed under Business. |

Analysis of the “meeting”

27Aug08

Meetings are despised by a lot of people. They are also liked by a lot of people. And there is a very interesting pattern to that. The higher you stand in a hierarchy, the more interesting a meeting becomes. Why? Because the more power you have, the more you can make a decision, the more valuable information becomes, the more involved you are.

Ever seen a meeting with a lot of people, with some of them almost falling asleep, being passive, zoning out or doodling? Maybe I should ask if you have ever seen a meeting with a lot of people, where everybody paid attention… That would be more rare. The cause for this, the mistake, is the method of the meeting.

“The meeting” does not exist. Every meeting is different, but there often is a clear pattern. You have information development where new information is created, based on old information and that result in pieces of information. . You have informationals where information is shared. You have decision committees where the actual decision is made based on the available information. And finally you have the backbone of the system, the interaction between these three key elements.

Often people put all these things in one meeting that is several hours long, and expect everyone to be there, start to finish. That is just plain silly. But it would be equally silly to think that these elements must be kept seperate. They flow into eachother, they are intertwined. And they are not chronological. The decision to start the project usually comes from the decision committee. But often it is based on an idea or information gathered by others (information development. And conflicts in the information or differences in opinion often are only really percieved during the informationals. Then a decision is made to either take sides or do more research. After a decision is made, remarks should be welcomed… The process consists of co-dependant elements, none of them really independant.

Based on this analysis of the process it becomes very obvious that this can be done efficiently. People yawning during meetings are simply not needed during that phase, they are not involved in it. The key to efficiency is involvement.

This also points out an important thing that might not be obvious during meetings. The decisions are taken in the decision committee. It is not a democracy, it is a technocracy, where remarks are welcome.

Filed under Business. |

Ad-supported websites and direct advertising.

15Aug08

So by now I have bashed a lot of ways to make money online because they aren’t really ways to make money online, but scams or penny-payers. Now let’s look at one of the internet-darling ways to make money: internet-advertising. Here we have a system that works, people are making their livelihood of this, companies make profit from it. This is not a scam, but a working businessmodel.

Or is it?

A lot of websites have ads. In fact, I would dare say a majority does. There is a very good reason for that. People like to make a buck. That rarely is the reason for making a website. People tend to make websites and start projects because they like them. A blog about politics, a webcomic, a fun but not monetisable little internet service… People don’t do it for the money. But the money is a little extra, a nice gift. And for most sites, it stays that way. An absolute majority of the sites using some sort of advertising system, make very little of that.

Quite frankly, sites making enough to pay for their own hosting are already part of the elite.

Unless of course, you are a gifted writer, who understands marketing and drawing attention to your writings, you can create an audience of hundreds (or thousands) a day and you keep delivering quality stuff almost daily. Then you might actually make some money from the ads. Especially if your audience is the kind of people that click ads. Let’s face it, when is the last time you guys clicked on ads? Do you even still see them? (looking at my earnings from this website, no :D)

The generic contextual ads will not be much of a money maker for this reason. People just don’t click on ads that much.

There is a difference tough. And that difference is direct advertising. Not only does this usually pay a lot more, often they do a much better job of assessing what ad should be on what site. But you’ll only attract them once you reach thousands of visitors a day.

… Or that was the truth a few years ago. Because recently a project drew my attention that is in effect an automated way of direct advertising, with variable prices. They let you put an area of buttons on your website, and then people can bid on it. They let you auction adspace! Sometimes that makes you 1 cent, sometimes 10 bucks, based on what the advertiser believes your site is worth. It started of as being aimed at webcomics, and is frequently used by webcomicers to attract visitors who read x comic to y comic, but they are opening up and their unique business model is very much to my liking. It’s a wonderfull project, and that might be why they call themselves project wonderfull.

Is this the future of direct advertising? It might! You don’t need to have 100 000 visitors a day to qualify. And advertisers don’t need to spend 1000 to be on your site. A network of auctioned adspace, brilliant. (No I do not have any financial interests in the project) I believe this is what the internet is for, this is what we can do. Combining automatisation with human preferences. Quite a lot better than text link ads.

Filed under makemoneyonline. |

Mturk: not worth your time.

14Aug08

So by now you are getting where I’m going with this. Most affiliate marketing systems are either scams or penny-an hour waste of times. Becoming a reseller will only work when you somehow can reach a vast audience cheaply and your supplier just so happens to be a top quality provider. And those things that will give you money to click on ads that are show on your screen? You will either make pennies, or nothing at all. Scam or waste of time.

Now let us look at something launched by a top level company. Amazon launched Mturk, the online marketplace for work. You can do some internet related jobs there in return for money. Companies and individuals can offer those jobs, along with compensation. And the last part of it is precisely why it won’t work. Most of the offers for small jobs list ridiculously low amounts of money. “Go here, do that, make 1 cent.” Often that’s a 10 minute job. The jobs that bring in 4 bucks or more can actually take longer than an hour. (re-write articles). And quite a bit of the jobs are just unethical. “Go to that blog, leave a comment, put this url in the title” Sometimes it seems like a human powered spam machine. It wouldn’t suprise me to see a “go here, click all the ads, stay on those site for 2 minutes” job. Clickfraud without clicking yourself. (I haven’t seen that ad, I’m just saying it could be there and wouldn’t surprise me) I set up an account and tried it a few months ago to see how the system worked. A not too complicated job could easily be done this way for minimal payment. (no need to offer much more than the other offers…) For companies, this could be rather interesting… But only if you need the input of thousands, without caring whom it is for.

But as a user… Well you won’t make much money. When I checked it out, after two hours, I had made 1.49 USD. So I had “worked” for 75 cents an hour. Payable on a U.S. bank account or an Amazon account. Needless to say I didn’t bother doing any more of those jobs, nor will I request a payout. Profit for Mturk I guess. This is yet another one of those things that isn’t worth your time. And that’s sad because it was a very good idea.

Filed under makemoneyonline. |

Affiliate marketing and reseller programs.

04Aug08

As I mentioned before, neither of these two options are good permanent business models. But that does not mean you should skip them. They can provide a very interesting opportunity to get started in business, make some cash (but not much) and will get you tons and tons of experience. The most important lesson you will learn is that you want to get out of the affiliate system.

But why? What is so bad about it? You rarely have to worry about the technical side of the matter, and can just focus on promotion and brand-creation and selling. Those seem like good arguments, and for the most part they are true. But these advantages are also your limitation.

You don’t have to worry about technical specs, but you also have no control whatsoever. If want or need to change something or the system is outdated or something does not work, your hands are pretty much tied. For example: if you resell website templates, but they are not compatible with a new browser, and your provider does not fix it… Well, goodbye customers.

And you are tied to your provider. Even if you wanted to and found a good new supplier, it is hard to break away, especially if you offer something that needs continuous support and service. You are also but one of dozens or hundreds of resellers/affiliates, there is no way you can force them upgrade or re-negotiate the terms. Take it or leave it. And they know you can’t really leave it.

Now think about quality. What are the chances that your supplier offers the best quality for the best price? What are the chances you can increase the selling price and still have that nice price/quality ratio? At best you can offer something mediocre, something that is okay at a reasonable price. But nothing that is special or exceptional. How will you differentiate yourself then? Not on quality, not on price, not on flexibility. Unless your provider is that rare breed that offers top notch stuff for reasonable prices that even leave you room for profit and has a very willing and helpfull tech support that is reachable 24/7.

I’m willing to bet that you don’t have a lot of money when you start. Else you would probably get your own stuff, unless this is just a learning-thingy. So, investing tons in advertising will rarely be possible. Maybe you won’t even be a legit company and will work in a gray area. Do you think this is a good way to build a brand? Do you think this is going to be your big break? The answer to both questions is no.

Do you know how you will get your customers? They will be your friends, friends of friends, relatives, people you happen to meet that need your services and mention it,… Your customer base will be your network. You will have to be omnipresent at every event and have a smile, and a business card, at the ready. That is a very limited potential, but the customers you get this way often know you well in person and will be loyal, unless your service is truly crap.

It is important that you learn these lessons about affiliate marketing and reselling. But that does not mean you must avoid it at all cost. It might be a good way to start. Especially if you have no starting capital and no VC-able idea. It may be a way for you to get experience, knowledge, and make a little bit of money that you can use in your next venture or to set up your own services. It can be a start and the thing about starts is that nothing happens without them.

That is why you must treat that period as a transitional, the baby-steps before the full fledged marathon. Take each and every opportunity to learn, to expand your knowledge, to see what the market has to offer.

Maybe you are one of those people still waiting for that “one grand idea”. I can tell you know that you are more prone to get ideas while you are entrepreneuring than by sitting on the couch watching Oprah. Many entrepreneurs start because they stumble upon a problem or an opportunity.

The above lessons and insights were not easily acquired. I hope you benefit from them.

Filed under Business and makemoneyonline. |

Making money online: run away from this header. An overview.

24Jul08

My announcement that I would blog about making money online got me some comments and emails. Apparantly a lot of people expect me to divulge a secret, wonderfull idea or tactic that will make them millionaires in months. So let me repeat something I said before: there is no such thing as a free lunch, people! But there are ways of making money online. None of them are easy and guaranteed MillionaireMakers. In fact, most of them require an investment, some time invested on a daily basis and some time before you see any profits, let alone live of it.

But there are people out there that have found a way to in fact make money online and that offer to share this information with you. The thing is, the way they make money is NOT the information they sell. What they have is basically a pyramid system.

The “click ads to make money” sites are no better. You will spend hours on them, making an average of 8 cents, that will go in an account that only pays out at 100 bucks. You will give up before you reach that, and thus they will not have to pay you, or 98% of their other users. Your time is worth more than that. Oh sure you can solicit people to join and get part of what they make. But you’re still getting only cents. And if you reach that magical payout number, who says they will ever pay you out? What if they don’t, as so many did in the past?

Amazon has a service called mturk.com. You do little jobs on the website to make money. An interesting idea, but the people on it all offer the minimum amount of money and many of the deals are asking you to spam something. I tried it out when I prepared for this post. Made 2.13 USD in 2 hours.

Some of these sites are legit, others aren’t. (mturk is legit of course) But none of them are interesting. None of them are what you are looking for. None of them will get you the money you would get working a minimum wage job. Of course you can justify this by the fact that you can do this from your couch, at your own pace, with a cuppa coffee and some biscuits. But then you are fooling yourself. Because this is time that you are taking away from the time you have available to start your own business.

That is why every advertisement to “make money online” should be handled with extreme care. And in most cases it will be either a pyramid scheme, a total waste of time or… something I have not talked about in this article yet… affiliate marketing.

With Affiliate marketing, you sell a product or service created by another company and get a commission. Sometimes you buy from them in bulk and resell it under your own brandname. Both situations actually work and will teach you a lot about doing business online.

The most important thing you will learn is that you should stop using affiliate marketing eventually. And also that since you sell a product that hundreds also sell at the same price, you cannot differentiate on quality or price, so you will learn about networking, inspiring trust in people, customer service and advertising. (Jessica Mah wrote a good post saying the same thing a while ago, her link is to the right of this post!)

With this as an introduction and a warning, we are ready to start the series on making money online. Again, do not expect the brilliant scheme that will make you richer and more famous than <$famous-rich-person>. Those schemes simply do not exist. Instead, I will try to explain to you how the system works and what the possibilities and limitations are. Untill then, don’t fall for schemes!

Filed under biznews and makemoneyonline. |

Starting your own label social network. Niche, niche, niche!

21Jul08

Social networks are featured in magazines and newspapers nowadays. Their founders have made millions and their products are used by many millions. You know all this.

You probably also know that there are thousands more social networks out there. Via ning.com you can even create your own without any effort whasoever. And if you google for whitelabel social network you get dozens of results. Insoshi or phpizabi are but two of the freely downloadable ones you can install on your own server. In short, you can create your own social network if you want to, there is little or nothing stopping you. You can do it free, and only a few hundred bucks are needed to give you tons of extra features and ultimate control.

This is why you should not start your own general social network.

Sure, you can do it. But you might end up with a social network that has 1000 users, needs a server to keep it going and can’t get any other ads than Google adsense. In fact, if you reach this after one year, you may consider yourself one of the better ones. The reason for this is very simple.

Everyone can start a social network nowadays. Some will be more posh than others, most will just use a whitelabel or free solution, but they all forget a simple economic law.

Supply and demand always try to reach equilibrium.

Today supply is huge, demand is saturated. At least for general social networks. Anyone starting a new general social network now will have to offer something spectacularly different, i.e. offer a new supply that will create a new demand and fill the gaps in demand that used to be there.

Thus supply is vast, and most of it is mediocre. You would need to be better than the kings of the game to draw in the early adopters, as you would need to do to start growing. The mediocre ones are not going to make it big. Even the ones clearly better or more feature packed will have immense trouble to stay afloat.

You find the value of any social media project in the people using it. Half a billion people are on Myspace. Myspace is owned by News Corp and has huuuge wads of cash. The typical way to make money of these kinds of projects are ads, thus revenue is determined by the number of people using it a lot.

A new social network would have to be different, and appeal to the user as being “better”. It would also need to have a foolproof way of making money, preferably without ads as the main pillar.

There are plenty of social networks that manage this. They all have one thing in common: they focus on a niche. Niche is the holy word for every new social network.

Niches can be divided in
* the target audience
* the specific theme of the social network
* the method and infrastructure of the social network

For instance, Asmallworld.com differentiates itself by being highly exclusive. You cannot join them just like that. You have to be invited by someone with invitation privileges, and few people actually have this. The result is that they are very, very exclusive and this makes being on the network a social statement. You wear Prada, you drive a Murcielago, you are friends with celebrities, and you have a page on Asmallworld.com. Exclusivity sells. Ads on that site are seen by the rich and famous, the jetset of the world. (I am not a member of Asmallworld.com)

LinkedIn has a specific theme. They are the professionals network, aimed mostly at higher educated, at least middle management kinda people. That is why it is being used more and more as a recruitment pool or a business advice/contact network. (I am on LinkedIn)

The method and infrastructure is another beauty. Who says you need to work the standard way? Isn’t Twitter a social network with the possibilities to add and follow friends, block people, share your life, keep in touch? Mobile social networks like Zingku (now owned by Google) are popping up… It doesn’t need to be a page with a photo and your hobbies anymore.

So. If you want to start in social networking, that will be like starting in hosting. You enter a world of absolute competition, where everyone is a potential customer and there is almost no way of binding your customers to you. You will need to be different. You will need to add value. You will need to find a niche that holds enough people to have a userbase large enough to be profitable, a way of monetizing this and the infrastructure to make it happen.

That means you need people to join it, a niche that will both attract people and keep them active, money to be made from this, and either a white label hosted or a self written and self hosted social network.

And don’t forget people don’t have unlimited time and attention. People may join a few networks. But they won’t join an unlimited number. And even those who join lots will not be as active on each and every one.

The solution to that of course is community building, integration with popular services (like photobucket or imdb.com for isntance), and constantly improving your social network. And even then, it is unsure if you will be profitable.

The gold rush started after some people found gold. But by the time the gold rush had begun, the easy treasure had been found and claimed, with newcomers depending on luck and some expertise to find anything. Quite a few people spent the rest of their days digging trough dust on a small scrap of land, hoping to find the motherload.

And now to conclude: some fun stuff! I have created a social network, just for you! Readers of Lex Aeterna can join at: http://lexaeterna.ning.com/

Filed under Business. |

Investing in wine? Why not! Gary Vaynerchuk and Jim Cramer tell you more!

17Jul08

I am a big fan of winelibrarytv.com Gary Vaynerchuk is a wine-exert with a refreshing approach. No snobby stuff here, no classical reviews “by the book”. This is a show about wine, how it smells, how it tastes, how you can find hidden treasures for 5 bucks from a country you didn’t know made wine, and that describing the scent and taste of a wine is a creative process.

Recently, Gary had Jim Cramer of CNBC’s mad money as a guest and they talked about investing in wine. They actually mentioned what to buy now and sell in 2 years. Nobody else gives away their secrets just like that! This episode is a must!

Filed under Business. |

New category: making money online

17Jul08

Just a quick announcement, I will also blog about making money online. More about the reasons for this in a post about “horizontal streams of income”.

Filed under makemoneyonline. |

Mistakes and hard decisions. What are you waiting for?

15Jul08

Last night I looked back at the last 10 years. It is something I do sometimes, and while it is interesting, it is rather harsh. You see, learning from your mistakes is not just some cheesy good advice, it is the only way to deal with past regrets and mistakes. You learn from it, because you do not wish to repeat it, because it has left an impression on you so profoundly that you are willing to change your behaviour to avoid that situation.

And we all have regrets, don’t we? The past 6 years, my main focus was on something that ended up not being worth it, and the last three years I realised this but held on to it, out of habit and a feeling of responsability. I regret the time I lost and the effort that could have gone into a more worthwile project, like my business. Of course it wasn’t all bad, I met a few good friends, built out a network and had some good times. But I did stick with that project after it had “ended” for me. That is my regret, not the project itself. I kept telling myself that if I reached goal X, it would all be awesome again. I reached goal X, and it wasn’t awesome.

My lesson from this is clear. When the passion is gone, you need to re-evaluate your project. But hanging on is just so easy and comfortable, you don’t lose friends or offend people, you don’t have to go trough a total re-evaluation of your identity. As long as you are passionate and enthousiast, there is no issue, you do what you love. But when that is over, it is time to start cutting the cord. It is better to go trough the little crisis, than to postpone it. It will only become bigger, as will your dread of it. Machiavelli says that you should never postpone an unavoidable war, because you make your opponent stronger.

What are we waiting for? What was I waiting for? Someone to come along and make it all better? A magical solution? The right moment? Those are idle fancies.

If you don’t make that hard decision now, it will only become harder. You owe it to yourself to make it now. The sooner you make it, the sooner you will be trough the crisis. If you wait, it may become so big that you can’t get trough it. And once you are trough it, the world is your oyster again.

I know some people are in a bad marriage, hanging on because of convenience. Some people want to quit their job because they hate it but don’t make that decision, as they don’t have a better one lined up. Some people desperatly try to make something work, but realise that it will never be worth the effort they put in. It is time for you to move on. It is time to face the crisis, conquer it and start over.

Filed under Business. |