"How do I get started in such a venture?"

Last night, I received an email from Bob in Illinois. Bob asks a question that I get often - "how do I get started?". So, with his permission, I am posting the original email and my response here. I hope it is helpful.

On Feb 6, 2008 8:20 PM, <p......b@c...t.net> wrote:

Travis,

I read your blog entry regarding StubHub.

I was interested to see you mentioned vacation spots as an example of a possible application. I've thought about that aspect for a while. My idea focuses on Timeshare. It seems there are numerous sites that ask for fees up-front without delivering. As a timeshare owner myself, I'd love a place that is well publicized where I could post my timeshare, like I've done with my Chicago Bears tix on StubHub.

Trouble is, I haven't the first idea how to get started. Where can I learn about the basics of starting such a venture?

Thanks,

Bob M....

Plainfield, Illinois

Hi Bob,

Thanks for the note!

I think to get a venture like this off the ground you need three primary skills.

The first is the easiest to acquire, and that is basic Internet technology implementation. You'll need to know about programmers and designers and online marketing options.

The second is market research. You need to know if people with timeshares (or looking for them) are willing to engage you and build a relationship. You need to know if there is a pain point that you can address and solve. For this, I must recommend Glenn Livingston's survey model. It is extremely thorough - it will give you the data on your market you need to succeed. I have used it several times now - and if you can handle the intensity, you are WAAAAY ahead of the game.

http://www.howtodoubleyourbusiness.com

The third is the less tangible, which is basic business sense. I just finished reading a book called "Jump Start Your Business Brain" by Doug Hall that goes into great detail about crafting a business idea that can succeed. I highly recommend it!

http://www.amazon.com/Jump-Start-Your-Business-Brain/dp/1558706070

In addition to these skills, you need a whole lot of determination and fortitude. When I first got into e-business I was looking for the silver bullet. And I sometimes still find myself trying to take the easy way out. But the thing is - that never works. It takes years to build a successful business online, just like it does offline. If you're not committed and "in love" then you're not likely to succeed!

Hope this is helpful.

Travis

Influence: The Principle of Liking

"Influence: The Psychology of Persuasion" by Robert Cialdini

Liking

• As a rule, we most prefer to say yes to the requests of someone we know and like. This simple rule is used in hundreds of ways by total strangers to get us to comply with their requests.
• By providing the hostess with a % of the take, the Tupperware Corporation arranges for its customers to buy from and for a friend rather than an unknown sales person. In this way, the attraction, the warmth, the security, and the obligation of friendship are brought to bear on the sales setting.
• They understand perfectly how much more difficult it is for us to turn down a charity request when it comes from a friend or a neighbor. The friend doesn't even have to be present to be effective; often just the mention of the friends name is enough.
• The key to the success of this method is that each new prospect is visited by a salesperson armed with the name of a friend "who suggested I call on you." Turning the salesperson away under those circumstances is difficult; its almost like rejecting the friend.
• Shaklee sales manual: "It would be impossible to over-estimate it's value. Phoning or calling on a prospect and being able to say that Mr. So-and-so, a friend of his, felt he would benefit by giving you a few moments of his time is virtually as a sale 50% made before you enter."
• There seems to be a click, whirr response to attractive people. Research has shown that we automatically assign to good-looking individuals such favorable traits as talent, kindness, honesty, and intelligence. Furthermore, we make these judgements without being aware that physical attractiveness plays a role in the process.
• It is apparent that good-looking people enjoy an enormous social advantage in our culture. They are better liked, more persuasive, more frequently helped, and seen as possessing better personality traits and intellectual capacities.
• We like people who are similar to us. This fact seems to hold true whether the similarity is in the area of opinions, personality traits, background or lifestyle. Consequently, those who wish to be liked in order to increase our compliance can accomplish that purpose by appearing similar to us in any of a wide variety of ways.
• Even small similarities can be effective in producing a positive response to another and because a veneer of similarity can be so easily manufactured, I would advise special caution in the presence of requestors who claim to be "just-like-you".
• Many sales training programs now urge trainees to "mirror and match" the customer's body posture, mood, and verbal style, as similarities along each of these dimensions have been shown to lead to positive results.
• The information that someone fancies us can be a bewitchingly effective device for producing return liking and willing compliance.
• We tend, as a rule, to believe praise and to like those who provide it, oftentimes when it is clearly false.
• Apparently we have such an automatically positive reaction to compliments that we can fall victim to someone who uses them in an obvious attempt to win our favor. Click, whirr.
• Although the familiarity produced by contact usually leads to greater liking, the opposite occurs if the contact carries distasteful experiences with it.
• Compliance professionals are forever attempting to establish that we and they are working for the same goals, that we must "pull together" for mutual benefit, that they are, in essence, our teammates.
• "The nature of bad news infects the teller." There is a natural human tendency to dislike a person who brings us unpleasant information, even when that person did not cause the bad news.
• Compliance professionals are incessantly trying to connect themselves or their products with the things we like. The advertiser is betting that we will respond to the product in the same ways we respond to the attractive models merely associated with it.
• Using what he termed "the luncheon technique," he found that his subjects became fonder of the people and things they experienced while they were eating.
• All kinds of desirable things can substitute for food in lending their likable qualities to the ideas, products, and people artificially linked to them. In the final analysis, then, that is why those good looking models are standing around in the magazine ads. And that is why radio programmers are instructed to insert the station's call letters jingle immediately before a hit song is played.
• The students had previously learned that, to be liked, they should connect themselves to good news but not bad news.
• The relationship between sport and the earnest fan is anything but game like. It is serious, intense, and highly personal.
• Isaac Asimov: "All things being equal, you root for your own sex, your own culture, your own locality... and what you want to prove is that you are better than the other person. Whomever you root for represents you; and when he wins, you win.
• Persia's messengers did not have to cause the news, my weatherman did not have to cause the weather and Pavlov's bell did not have to cause the food for powerful effects to occur. The association was enough.
• The results showed that many more home-school shirts were worn if the football team had won its game on the prior Saturday. What's more, the larger the margin of victory, the more such shirts appeared.
• Whenever our public image is damaged, we will experience an increased desire to restore that image by trumpeting our ties to successful others. At the same time, we will most scrupulously avoid publicizing our ties to failing others.

INFLUENCE: The Principle of Scarcity

"Influence, The Psychology of Persuasion" by Robert Cialdini.

Scarcity

• Something that, on its own merits, held little appeal for me had become decidedly more attractive merely because it would soon become unavailable.
• People seem to be more motivated by the thought of losing something than by the thought of gaining something of equal value. Homeowners told how much money they could lose from inadequate insulation are more likely to insulate their homes than those told how much they could save.
• Pamphlets urging young women to check for breast cancer through self-examination are significantly more successful if they state their case in terms of what stands to be lost (e.g. "You can lose several potential health benefits...") rather than gained (e.g. "You can gain several potential health benefits...")
• As a rule, if it is rare or becoming rare, it is more valuable.
• "I see you're interested in this model here, and I can understand why; it's a great machine at a great price. But, unfortunately, I sold it to another couple not more than 20 minutes ago. And, if I'm not mistaken, it was the last one we had. ......then...... Do I understand that this is the model you want and if I can get it for you at this price, you'll take it? (Another unit would then magically be left in the back)
• One theatre owner, with remarkable singleness of purpose, had managed to invode the scarcity principle 3 separate times in just 5 words: "Exclusive, limited engagement ends soon!"
• A variant of the deadline tactic is much favored by some face-to-face, high pressure sellers because it carries the purest form of decision deadline: right now. Customers are often told that unless they make an immediate decision to buy, they will have to purchase the item at a higher price or they will be unable to purchase it at all.
• Can't come back tactic: It is to "keep the prospects from taking the time to think the deal over by scaring them into believing they can't have it later, which makes them want it now."
• Because we know that the things that are difficult to possess are typically better than the things that are easy to possess, we can often use an item's availability to help us quickly and correctly decide on its quality.
• Secondary source of power: As opportunities become less available , we lose freedoms and we hate to lose freedoms we already have.
• According to the theory, whenever free choice is limited or threatened, the need to retain our freedoms makes us desire them (as well as the goods and services associated with them) significantly more than previously. So when increasing scarcity - or anything else - interferes with our prior access to some item, we will react against the interference by wanting and trying to possess the item more than before.
• We show the strong tendency to react against restrictions on our freedoms of action throughout our lives.
• When our freedom to have something is limited, the item becomes less available and we experience an increased desire for it. However, we rarely recognize that psychological reactance has caused us to want the item more; all we know is that we want it. Still, we need to make sense of our desire for the item, so we begin to assign it positive qualities to justify the desire.
• Almost invariably, our response to the banning of information is a greater desire to receive that information and a more favorable attitude toward it than before the ban.
• Possibility that especially clever individuals holding a weak or unpopular position can get us to agree with that position by arranging to have their message restricted. The most effective strategy may not be to publicize their unpopular views, but to get those views officially censored, and to publicize the cencorship.
• 50% of students received "a book for adults only, restricted to those 21 and over." 50% received the same book with no such restriction. Those who learned of the age restriction: 1. Wanted to read the book more. 2. Believed that they would like the book more.
• Censoring & Banning: People involved came to want the restricted item more and, as a result, came to feel more favorable toward it.
• Compared to the customers who got only the standard sales appeal, those who were also told about the future scarcity of beef bought more than twice as much. But the real boost in sales occurred among the customers who heard of the impending scarcity via "exclusive information." They purchased six times the amount that the customers who received only the standard sales pitch did.
• The fact that the news carrying the scarcity of information was itself scarce made it especially persuasive.
• When the cookie was one of the only two available, it was rated more favorably than when it was one of ten. The cookie in short supply was rated as more desirable to eat in the future, more attractive as a consumer item, and more costly than the identical cookie in abundant supply.
• Department stores holding a bargain sale toss out a few especially good deals on prominently advertised items called loss leaders. If the bait has done its job, a large and eager crowd forms to snap it up. Soon, in the rush to score, the group becomes agitated, nearly blinded, by the adversarial nature of the situation. Humans and fish alike lose perspective on what they want and begin striking at whatever is being contested.
• Extreme caution is advised whenever we encounter the devilish construction of scarcity plus rivalry.
• Do we value more those things that have recently become less available to us, or those things that have always been scarce? In the cookie experiment the answer was plain. The drop from abundance to scarcity produced a decidedly more positive reaction to the cookies than did constant scarcity.
• This pattern offers a valuable lesson for would-be rulers: When it comes to freedoms, it is more dangerous to have given for a while than never to have given at all. And should these now established freedoms become less available, there will be an especially hot variety of hell to pay.
• And when these now-established freedoms were threatened, the people lashed out the way a dog would if someone tried to take a fresh bone from its mouth.
• Freedoms once granted will not be relinquished without a fight.
• The parent who grants privileges or enforces rules erratically invites rebelliousness by unwittingly establishing freedoms for the child.
• People see a thing as more desirable when it has recently become less available than when it has been scarce all along.
• The cookies made less available through social demand were rated the most desirable in the study. --> No only do we want the same item more when it is scarce, we want it most when we are in competition for it.
• The feeling of being in competition for scarce resources has powerfully motivating properties.
• "Goosing 'em of the fence can work devastatingly well. The thought of losing out to a rival frequently turns a buyer from hesitant to zealous.
• Barry Diller: Even the "miracle mogul" was no match for the right mix of competition and scarcity.
• Our typical reaction to scarcity hinders our ability to think. When we watch something we want become less available, a physical agitation sets in. Especially in those cases involving direct competition, the blood comes up, the focus narrows, and emotions rise. As this visceral current advances, the cognitive, rational side retreats. In the rush of arousal, it is difficult to be calm and studied in our approach.
• Cognitive processes are suppressed by our emotional reaction to scarcity. In fact, this may be the reason for the great effectiveness of scarcity tactics. When they are employed properly, our first line of defense against foolish behavior - a thoughtful analysis of the situation - becomes less likely.
• The joy is not in experiencing a scarce commodity, but in possessing it. It is important that we not confuse the two.
• Each prospect who was interested enough to want to see the car was given an appointment time - the same appointment time. This little device of simultaneous scheduling paved the way for later compliance because it created an atmosphere of competition for a limited resource.
• Re selling a car: The trap snapped surely shut as soon as the 3rd two o'clock appointment arrived on the scene. According to Richard, stacked-up competition was usually too much for the first prospect to bear. He would end the pressure quickly by either agreeing to Richards price or by leaving abruptly. In the latter instance, the second arrival would strike at the chance to buy out of a sense of relief coupled with a new feeling of rivalry with that... that... lurking newcomer over there.

Epilogue

• Where we are rushed, stressed, uncertain, indifferent, distracted, or fatigued, we tend to focus on less of the information available to us. When making decisions under these circumstances, we often revert to the rather primitive but necessary single-piece-of-good-evidence approach.
• With the sophisticated mental apparatus we have used to build world eminence as a species, we have created an environment so complex, fast-paced, and information-laden that we must increasingly deal with it in the fashion of the animals we long ago transcended.

Using Co-registrations to sell impulse products

A hot method of advertising your product is appearing to web marketers recently. Two guys named Brock Felt and Buck Rizvi demonstrate in video format how to explode your list sign ups using co-registration. Co-registration is traditionally the playground of huge companies like GM and Netflix, but little guys are discovering the possibilities.

The opportunity is quite large, and apparently you can get 10's of thousands of list sign ups per day. This could mean massive profits (if you know how to convert them into buyers) or it could mean massive cash hemorrhage (if you don't know how to convert a buyer).

If you type in "coregistration" into Google, you'll find a hundred companies selling the service. But, according to Buck and Brock, there are only a few that matter. In their video series, they've yet to disclose who they are, but I'm staying tuned in hopes of catching the info!

They impart three solid pieces of advice:

1. Use only real-time co-regs. This is an impulse buy and if you're receiving your leads in a batch a day late, they're worthless.
   
2. Put a tag line at the bottom of your co-reg sign up blurb that says something like "Check your email immediately to get your free information!" Once again, this is an impulse buy, and these folks are in the heat of the moment - take advantage!
   
3. Have back-up products to sell so that you can make extra profit (or any profit if your list doesn't like your initial offer). This also acts as long term cash flow insurance.
   

To see the videos and come up to speed on the high-level overview go to http://www.pipeline-profits.com/blog.

Michael Robertson Interview

I work closely with an outstanding man named Rod Underhill.  Rod was a co-founder of MP3.com, the early dotcom rocketship that IPO'd for over $2 billion and ended up selling for $450 million.  Rod often talks of the business prowess of Michael Robertson, the founder of MP3.com.  Because of this high praise, when I can take something from Michael's brain, I jump at the opportunity.

I just read an interview of Michael Robertson about his new startup SIPphone.  The interview itself is very informative.  Michael talks about business models, he talks about open standards, and why MP3.com was such a big hit.  He justified my theory of digital business models being the best businesses to start.  A little creativity can go a long way.

"I like businesses that are purely digital, which can really change the whole economic structure. What I mean by pure digital is things you can digitize and shoot around on the Internet, such as news, music, videos, and phone calls. You can't shoot a pair of shoes, or a loaf of bread, or physical goods like that. If you can digitize it by moving to the Internet, it's going to happen. And with that change, it knocks out old incumbents and makes new room at the table for new leaders. You get a seat at the table with adults and make some money during that transition period. The businesses I do are pretty obvious to me because they are all about digitizing an industry that previously was more offline, and moving those industries 100 percent online."

Read the Michael Robertson interview here.

One last quote for your reading pleasure. I love the way this guy thinks!


"As an entrepreneur, stop talking about it, go do it!" ... "If you don't have a URL, I don't want to talk about it. I don't want to read about your vaporware plans in the paper. You have to be different, and you have to move and move quickly."

RideOnTime gets a facelift

Today we rolled out the new facelift for RideOnTime.com. I think it's a home run... but then again, I helped to design it - so why wouldn't I? We've incorporated a lot of newer design elements of (don't say it!) Web 2.0 sites. Damn, I said it - now I have to roll with it.

Yes, we've web2'd our site. Simple layout, bright colors, plenty of white space, big text, rounded corners, and a sweet little icon thrown in here and there. These elements are typical of the latest and greatest on the web, and RoT is no exception. This design is hot.

Old logo, circa 2004 (gasp!)


New logo, Web2 applied


Many thanks go out to Dave Martinez at Futurefront.com. If you want the best of cutting edge design - he's your man.

Thanks to our customers who have given us the feedback to continue making RideOnTime a solid solution to booking online ground transporation.

Tips for startup companies

Good article on tips to a successful startup. I've heard and read a lot of "reasons" that you should start your own business, but never one quite like this.

The tip that he concentrates on the most is "3. You have a better understanding of one kind of customer than anyone else." The premise is solid - you need to solve a problem for someone before you can run a successful business. If you don't know the customer, how can you solve their problems?

How do you make money on the Net? just be creative!

EricB is very creative, and he's collecting a little extra cash over at FerraiChat. He's not making "Ferrari Enzo in Red" kind of money, but it's some nice extra change. Just by staying in tune with interesting things that are going on, and having the capability to talk directly to people that are interested in them you can make things happen. Makes me wonder if his approach couldn't be made into a process and performed serially.



The catalyst is a red Ferrari Enzo (very expensive and rare Ferrari) that crashed in Malibu. It's a strange story involving a driver that fled the scene, and an owner that might be in the Swedish mafia. And it just keeps getting weirder every day.

When you start reading Ferrarichat, it doesn't take very long to figure out that it is a vibrant community full of very opinionated and outspoken people. I imagine this is true of all successful forums and online communities. You need the colorful, unpredictable personalities to keep everyone else coming back. If they like something, they go on about it for weeks, compiling several hundred posts, spanning pages of reading. Every good forum is like that...

In an environment like FerrariChat, a greedy capitalist will be sniffed out very quickly. If all you're interested in is making a buck off the members of the forum, you're toast - burned by everyone.

On March 4, EricB shows up in the Southern California section of the forum. He says he's never posted to the forum before, but he's been reading it for a long time. Then he says that he's got an idea for a t-shirt based around the strange Enzo story, and he's interested in how many people would be interested in owning one. The community loves it and jumps on it immediately. EricB even works with the community on the final design of the t-shirt, and asks whether he should order 24 or 48 of them... he orders 48, and sells them for $15 each. He accepts money orders to his office, or through a paypal account. He has limited quantities and is concerned about how to refund money to people that don't pick up their shirt before they run out.

For a grand total of 6 posts, and a little creative design, EricB makes $720 (minus his shirt printing costs). Because he's smart? He noticed an opportunity and jumped on it, so that makes him smart. I don't think he's a serial forum crasher - but isn't that an idea? Could you make money by posting a thread saying you're a long-time lurker and have an idea for something and want to see if anyone is interested? ABSOLUTELY - I think it's a great idea, if you're creative enough to sniff out the catalyst and the market.

Here's the process.

1. Stay tuned to the news. Focus on strange stories where nobody gets hurt (a key part of EricB's inital post). Stick to wide interest, and massive distribution. Ongoing sagas, where people have been talking for some time about it. One that I could think of right off the bat would be Brad Pitt-Angelina Jolie. How about the tunnels that keep appearing under the Mexican border?
   
2. Come up with a simple T-shirt design based on the story. Don't break any laws! Don't infringe on any copyrights!
   
3. Identify where the community congregates. Forums, newsgroups, social networking sites. In the Brangelina story, it might be the alt.gossip.celebrities newsgroup. In the Mexican border story it might be a pro-legalization group.
   
4. Approach the community with an "idea" to see if anyone is interested. If you receive any feedback, flow with it and mold it into something that they like.
   
5. Collect checks. Collect paypal payments. Collect cold hard green.
   
6. Repeat!
   

EricB - my hat is off to you!


PostScript - I've come to find out that low quantities of original design shirts aren't that cheap. The cheapest price I could find for 48 shirts is $12/ea. That makes EricB's profits a grand total of about $3 per shirt - and he's probably spending that on shipping to the people that are getting one. After reading the FerrariChat post though, I'm sure he could have sold the shirt for more $$. At $20, if you could find a drop shipper for the shirts - it might be worth it.

One time offer -or- The value of an email address

I've been aware of a growing trend in the online marketing industry called "The One Time Offer".  I was first exposed to it on Mark Joyner's site Simpleology.  You're promised (and should be given) a great free info product that really excites you.  Upon your first login, you're offered - one time only - an upsell of incredible value.  The offer will never be valid again, you only get one chance at this.  Buy it now, or forever suffer the consequences.  I listened in on a call with Merlin & Harris about this very topic.

Interesting, I thought.  It's worth a try - hell - I'll try anything once.

So I converted one of my ebooks from pdf format into html and put it in a password protected folder.  Now, instead of paying $29.95 for the book, I was giving it away for FREE.  That's right folks, you get this ebook that hundreds of people have paid $29.95 for absolutely free.  All you need to do is give me your name and email.

This particular ebook is out of season, and doesn't sell very well right now anyway.  I'm launching an e-store in about a month that should make a nice splash in the same industry, so getting email addresses (for the site launch) is more important than selling a few ebooks anyway.

Once the person gives me their name and email, I take them to the one time offer page.  Here's the sales pitch:  Buy this ebook that you're about to read for FREE for $9.90, which is 66% off the original price that everyone else has purchased it for.  If you don't purchase the ebook at this special price NOW, you'll never be able to get it for this price again.  If you want the book in the future, you'll have to pay the full $29.95 for it.

Pretty weak sales pitch, if you ask me, but in all fairness the pdf version allows you to print it out, and perhaps reads a little easier than the html version.

So, what are the results?  The first round of ballots are in.  I track every visitor that comes to every one of my sites, so I have pretty good stats reporting.  The number of visitors to the new offer are still low, so don't put too much stock in this.

Sales Letter Version	Splash	Scroll Down	Scroll Down %	First Chapter or Signup	First Chapter or Signup %	Sale	Sale %
12	461	234	50.76%	42	9.11%	4	0.87%
11	3459	1547	44.72%	342	9.89%	13	0.38%

Here are the columns in the above table explained:
Sales Letter Version: This was the 11th and 12th time I'd modified the sales letter in greedy attempts at grabbing more money from people.  This is sorta my test bed for new ideas...  Version 11 is the traditional long sales letter to buy the ebook.  Version 12 is the free ebook in html format, with one time offer to buy it in pdf format.
Splash: How many people landed on the front page, the sales letter page?
Scroll Down: How many people actually read the sales letter?  I have a javascript file that tracks the mouse.  If it gets down past a certain point of the sales letter, I submit a form in an iframe that tells the database this person scrolled down.  Pretty cool, huh?
Scroll Down %: What percentage of the splash viewers scrolled down and read the sales letter?
First Chapter or Signup: This is the only confusing part of the numbers.  Before I converted the book into html, I had a few images of the first chapter of the book for people to read.  Total rip-off of the amazon book "preview" service.  Now, I'm using the same columns to show me how many people actually gave me their name and email to view the html version of the ebook.
Sale: Number of people that actually purchased the book.
Sale %: Percentage of people that bought the book.

This book is in a highly competitive, but niche market.  There is a lot of free information available on the Internet.  It's quality information, though, compiled by a real guru in the field, so it's sellable.  It's in the off-season right now, so the conversion numbers suck - I don't want any comments about my general crappy conversion rates!  Focus on the change between pre and post one-time-offer conversion rates.

As you can see, although still low, the one time offer has more than doubled the sales conversion.  Yes, people are actually buying something that they're one click away from getting for free.  ha!

How to promote an upcoming site

Somewhere out there is someone that's looking for the functionality that you just built. Someone is desperately seeking exactly the technology that you just put live on the Internet. After all, it's a good idea! And that's why you built it in the first place!

But, now that it's up, or getting close to being up, you're wondering where you're going to get traffic for it??? I mean, you know your fans are out there, but how do you get them here?

Here are some ideas.

Put up a promotional site as soon as you can. Have a screenshot, and some enticing text or a small story to tell. Include a text box where someone can get an email notification when they can access your site.

Start a blog. Tell people about your service, but also post some helpful information that will be of interest to people using your up-coming service. Continue posting to it – make it fresh and up-to-date so people know that the lights are on.

Contact some people that are important in the blogging community your site is going to be part of. The leaders of the pack. The big names. Stroke their ego, give them something, make them feel warm and fuzzy because they're the ones that will cause the massive flood of traffic your way. They need to feel good enough about you to write about you. You don't need to choose someone with an Alexa ranking under 10,000, you just need to choose the right person. Give them access to your site, give them a free subscription, give them a bottle of wine – just get on their good side!

Once this person (people) has written something about your site, you'll start to get a little trickle of traffic (or a lot, if it's the right person). If you've done your job properly on your site, people will start to put their email in to be notified of the launch. Their curiosity will be triggered. They'll write about you on their own blogs, and the cycle will continue.

If you don't have enough traffic from this cycle, keep going after the bloggers – they all want to be the person to discover the next big thing. Once a couple of high profile bloggers writes about something, it trickles through the blog ranks, down into traditional media.

A few weeks before you roll out, put some more info about your product online. Get some screenshots or tours up. Explain more about why you're doing it. Share some stories about how this will help them solve a problem. Let a select few people start using the app if it's usable. Always push the email signup – one simple text box saying "Let me know when I can use this!" You want to have as many emails as you can by the time you go live.

When you launch the site, send out the emails. Get some testimonials from the beta testers. Get on as many blogs as you can. Put out a press release. Keep your home page updated: how many people signed up? How many successes can you count?

Set up a forum where people using the site can ask questions and quickly receive answers. People that are researching the product will see this and get an idea of how well you respond to your customer.

All sites should, if possible, offer free access. Offer a low-end free subscription and a high-end paid subscription. Get people in the door – let them tinker with the site and see if it's for them. If they need it bad enough to upgrade, they will.

I've recently read some excellent material that goes over this exact topic and much more. I can highly recommend the Getting Real ebook by 37Signals. It is both inspirational to the small Internet business start-up, and every section makes perfect sense.

You should also check out the recent speech by Seth Godin given at the Googleplex. He goes over a couple of the above topics (and much more) and agrees on the power of using bloggers to market your web site.

Good luck and happy coding!

TG

Internet Profits - zero risk

Here's an excellent example of some people that used creativity to find a way to make plenty of money on the Internet.  This isn't "ferrari in yellow" kind of money, but it is "quit your job and live it up while working only a few hours a day" kind of money.

A risk-free recipe for success on eBay

Niche market, good sales channel, a lot of trial and error and most of all, a little creativity.

TG

Why Info-based Internet Business Models?

I am going to try to routinely review an internet business model that's based purely on delivering information, or digital services. I am deeply interested in learning about these types of businesses, and what makes them so valuable to their customers – and in return – profitable for their owners. I will learn so much from my research that I may someday build my own successful endeavor.

What is an info-based internet business model? What is the source of profit?

• By my definition, an info-based internet business model is a web site that sells information, or community, or digital services.
• The source of profit is dicated by the type of service that's provided. If it's software, it might be a recurring monthly fee (Sales Force, Basecamp ). If it's services, it might be a transaction fee (E-trade, Legal Zoom). If it's pure data it might be subscription based (porn, Wall Street Journal) or affiliate based. Other cool models have no apparent money aspirations (Delicious, Wikipedia), other than to be bought out by a huge company. I'm intrigued by these more for the buzziness and traffic generating aspect – perhaps I'll figure out how to mash their coolness up with some path to profitability.

Why do I have such a passion for Internet business models that operate only on information, or digital services?

• Because they're new and shiny and creative. And I have shiny object syndrome, and I'm jealous of creative people. By their very newness, the undiscovered potential is immeasureable. The ability to be creative and start something that nobody else has done is very exciting!
• They're often automatable – you can set up a digital process that runs itself.
• They're global – data goes places boxes don't (very quickly). It doesn't cost nearly as much to set up a web site in French as it does to put a building there!
• They're cheap to operate, and easy to get started. You can set up a new info-based business in your spare time with a web-host, a little creativity and some brain-grease. —> not money, investors, contracts, lawyers, or commitments —> This is not to say that you shouldn't utilize traditional resources when setting up your online business – but you don't have to!
• When you put up a web site – you get the same amount of space as Wal-mart. You get the same real estate as IBM. Your ability to start something that people want, and that nobody else has done before will drive visitors, and customers. Google might step in and build it bigger and better than you – or buy you out – but either one would be an honor for me!
• They're measurable. Every 1 and 0 that passes across your servers can be stored for later analyzing. You can do this with an online retail store as well – but definitely not with a brick and mortar operation. I can track and A/B test my advertising ROI, my conversion rates, my visitor location/language, click paths, blah blah blah. There's too much measuring available to mention. The most important thing to know is that I can test advertising on a small scale and then roll it out big once I prove the ROI. A newspaper ad or television commercial doesn't do that.
• The marketing buzz available on the Internet is very powerful, and growing each day. Bloggers are a powerful army. A mention on the del.icio.us popular page or digg front page can bring down a server, it can drive news, it can replace PR —> or it could kill you if negative. The blogger attention directly results in search engine exposure, to reach a much bigger audience, and can also drive traditional news to explode the cycle bigger and bigger.
• It's got a long-tail. Links, search engines, press releases, articles, etc… all last a long time. I have sites from 1997 that no longer exist that still have links pointing to them!

Why don't I want to sell hard goods via the internet?

• Warehouses have been around for a long time – and I have no desire to do fulfillment.
• Drop shipping is now an option – but you should always control your product. If you're drop shipping, not only do you not have control of the product, but there are probably 97 other places on the Internet selling the same thing.
• Selling hard goods just doesn't seem as creative, or as fun as delivering value with information that people are willing to pay for. A wise man once told me that money won was twice as sweet as money earned – and I feel like shipping boxes is earning it, and being smart enough to have people paying me for data is like winning it.

Why am I writing about the coolest Internet biz models I can find? Being a programmer by trade, and an entrepreneur by passion, I always look to blatantly rip someone else off before I try to be creative enough to come up with something new myself. Now, this might be viewed by some as a cowardly way out of thinking very hard – but I have always programmed faster when using someone else's code snippet, and made more money by emulating something that I already know works. By learning how companies are currently successful by selling information, and digital services, I can also learn how to be successful at it myself. Who knows – maybe I'll be able to come up with something that no-one else yet has… an automatic uber information delivering, buzz-worthy, value-delivering, self-sustaining money tree!

is that too much to ask?

Where are Internet business models going? I'd love to hear feedback about where everyone thinks internet business models are headed. 5 years ago people knew the internet would be big – but how many people predicted that community sites like Wikipedia and My Space would rule the roost? Who really thought that search (Google) would be redefined as the most amazing money maker on the planet? What comes in the next 5 years – or – what kind of site are you going to start?

Buy and sell domain names

This is a great resource for buying and selling domain names: http://www.sedo.com

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>> There are only 10 kinds of people in the world - those that know binary and those that don't.

Domainers

I just read a great article on the Business 2.0 web site about people making money on domain name speculation.  In the past, this was mostly about buying a good domain name, and then reselling it.  These days, it's about finding names that people directly type into the browser URL bar.

 

I know - you're thinking "these days everybody uses google or yahoo to find web sites."  Not exactly true, it appears...  Although google and yahoo won't discuss it, apparently somewhere in the range of 10-15% of all internet search traffic comes from people that type exactly what they're looking for into the url bar of the browser.  Crazy!  So, if I was looking for information on Iraq, I would type in http://www.iraq.com.  Iraq.com happens to be a very good example - because it's some domainer with links to things about Iraq!  Wonder how much money he's making... (according to the Overture inventory tool, the term "iraq" got 324,245 searches last month, which is a VERY big market)

 

The trick to this market is purely finding a good domain name, or landing a newly minted term, (like "avian bird flu") before anyone else.  Or, alternatively, snapping them up via automated programs as soon as someone that doesn't know what they're worth lets them expire...

 

Interesting stuff - domain names are the new real estate!  The article is worth the read, they're covering a few people that are making millions per year off of this income stream generation method.

 

TG

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>> There are only 10 kinds of people in the world - those that know binary and those that don't.

Measuring Conversion

Everyone these days talks so much about advertising, PPC, SEO, pop this and blog that.  I guess everyone is just realizing that you can pay to send people to your site... woo hoo!  Big deal - you've always been able to do this, it's just becoming available to the masses now.

 

The real question, as far as I'm concerned, is how many of those people buy something!  Or, in some cases, how many perform the desired action (filling out a form to become a lead, for instance.)  You can send a lot of traffic to your site, but the only way to know whether it's effective traffic is to measure, measure, tweak, and measure.

 

On nearly all of my e-commerce sites that sell an item with a sales copy letter, I measure the following items.

1. Number of people that landed on the sales page, and where they came from

2. Number (and %) of people that actually scrolled down to near the bottom of the sales page

3. Number (and %) of people that clicked through to the checkout page

4. Number (and %) of people that purchase

 

From these numbers I can tweak my sales letter constantly and monitor the resulting customer actions.  If the % goes up, the change becomes permanent, if it goes down, it's rolled back.  This allows me to send a small amount of traffic to the site and tweak the copy until I know that my larger (more $$, more risk) advertising campaign will not be wasted.

 

Sales copy doesn't come naturally to me the way it does to some people, but my ability to be patient and measure the success of each mod ensures my eventual success.

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>> There are only 10 kinds of people in the world - those that know binary and those that don't.