Tuesday, June 7, 2016

What is a senior engineer and mentoring

I've merged my business and a project I'm doing at school where we are developing an android app to help people with pornography addiction.

As part of that I'm having the opportunity to mentor two beginner/novice software developers in my school class that I'm taking and I'm being confronted with the stark reality of the large gap there is between my experience and someone who may have a year or two of CS experience under the belt. It's been very humbling as I've had to talk through and discuss things I Just take for granted. I started looking out to the internet for some support and came across an article that is very humbling to me, and even motivates me to be an even better senior engineer or as the article mentions a mature engineer.

This is more for my reference but the article is here: http://www.kitchensoap.com/2012/10/25/on-being-a-senior-engineer/

The whole article was very good, and I pulled a large number of things to improve on. While I feel I fit in with many things discussed as a mature engineer or senior engineer but I also see many many areas of improvement. The part about novice vs expert though drew my attention.

The Novice:
  • Rigid adherence to rules or plans
  • Little situational perception
  • No (or limited) discretionary judgment

The Expert:
  • No longer relies on rules, guidelines or maxims
  • Intuitive grasp of situations
  • Analytic approach used only in novel situations

And then:

Novices operate from an explicit rules and knowledge-based perspective. They are deliberate and analytical, and therefore slower to take action, they decide or choose.

Experts operate from a mature, holistic well-tried understanding, intuitively and without conscious deliberation. This is a function of experience. They do not see problems as one thing and solutions as another, they act.

As I find myself pairing with these two I'm working with, I find myself just acting.  I know there is no hard fast rules, I have seen similar situations, and I can figure out the solutions quickly and rapidly even in new contextual environments.  Rarely do I rely on taking an analytical approach to the problem unless it is an extremely new situation.  The rules are flexible and malleable as I adjust and change them based upon the needs of the system that I see.  Yet, to try and mentor and tutor the novice or beginner I can see how this can be mind-boggling and batty.  How can they derive the rules to work with / govern their behavior until they can move out more confident on their own through software systems, when I'm not playing by any hard fast rules?  When I just act instead of thinking through the solutions or explaining them?

I think I'm going to have to figure out how to slow down the process, how to think more conciously about my actions, and how to explain, encourage, and motivate to success.  All in all I relish this experience, despite it's challenge.

Saturday, April 2, 2016

Backlinks, Analytics, and a look to the future

Well it appears that the semester for my class is drawing to an end, but my business is moving forward.  What a blessing I consider the information I have learned and the resources it has provided me.  I know so much more about advertising, search engine optimization, and using my analytics to verify how I can improve.

In keeping with my previous efforts here are the links for me to refer to in the future.  We covered more SEO and generating external backlinks to my site as well as using analytics to measure the performance of my site.

First backlinks:

Intro to Link Building

Advanced Link Building Strategies

Link Building Strategies: Checklist

Google Webmaster Guidelines

SEOmoz.org Beginners Guide to SEO

Then Analytics

Also another tool I used this week was WooRank.com  which I have to say is a really awesome tool for evaluating my site once a week to see what recommendations I can do to make my site better.  It goes through a wide variety of SEO, social media, website performance metrics etc, and gives me a score on how will my site is performing.  I can take their suggestions and improve my site.

I also learned from the link building how to search out my competitors sites and try to get links on the same locations which I found absolutely fascinating.

At the beginning of the week I thought my advertising campaigns were pretty much a bust, I had tons of traffic but no real sales (well I had one sale but the guy requested a refund).  However, after going through the analytics reading I actually figured out that people coming to my relationship test landing page were actually making it to my checkout page (about 10% of them) and then were dropping off.  I also was able to identify that the majority of them were mobile users.  So now I have something I can actually dig into and see why mobile users are exiting the sales cycle as soon as they click the buy button and get to the checkout.  Overall it gives me a lot of excitement and it means that I can continue to tweak my campaign, listen (through analytics) to what my audience is doing, and then make more changes as I try to improve the conversion process.

Overall I feel very satisfied with this class and how much I have learned.  I plan on taking these principles and working on my business until it becomes a successful venture.  I know I still have tons to learn, but I feel like I'm on a much more solid foundation than I have ever been before.

Saturday, March 26, 2016

Social Media and Social Networking

Social Media

So this week we covered more social media and SEO in my business class. I had to write a one page essay covering my long term and short term goals.  Now I won't repost that essay here but I will go through some of the things I've thought about in terms of my social media strategy.

Short term I recognize I need to have more content.  The more interesting and unique content I can post on my website I can also include on my social media accounts.  From my research it looks like facebook will be the very best avenue for me to do my social network accounts due to its ability to micro-target to my audience as well as how people thinking about relationships are actually interacting on facebook.  I also will leverage youtube as I have videos I can reference there.  The nice thing about facebook is that I can also embed some of my quizzes and assessments there and get it going viral.

Long term I need to be aggressive in responding and communicating to the wider community as they talk about me and my products.  Twitter is a good way of leveraging this, but in general I need to spend a portion of my day each day responding to social media.  There's a lot of information here, but I hope to be able to incorporate this more over the long term as I move forward.  The first steps are setting up the facebook account and actively publishing content on it.

Here are the links and there are indeed a lot of them.
 4 Steps to Social Media SEO Success

16 Rules for Social Media Optimization Revisited

 7 Steps for a Successful Social Media Strategy

How to Measure Social Media Traffic with Google Analytics

Developing a Social Media Plan

How to Use Social Media To Effectively Improve SEO

How to Use Facebook for Business

Is Your Website SEO and Social Media Friendly?

Social Media SEO & Analytics Tools Worth Checking Out

Free Tools for Social Media Optimization

Social Media Marketing

Wikipedia’s summary on Social media marketing

Must Watch: 12 Awesome Social Media Tutorials

How Does Social Media Affect Search Marketing?

Omniture / Adobe webcast on Facebook and Twitter marketing

How to Use LinkedIn: Using social networking to further your career

Landing Pages and SEO

Landing Pages

I've decided to change up the format of this and subsequent blog posts.  As I intend this to be a resource for myself to help me review I'm going to start posting the links I find from my class (and my own investigation) on the topics we are studying.  I'll also continue to talk about my reflections.

So we talked about landing pages.  First a few links:

Understanding Landing Page Experience

 Basic Strategies for Optimizing Websites and Landing Pages

Create Better Websites: Introducing Content Experiments

Content Experiments the Benefits

So the first key take away for landing pages is to AVOID POPUPS. No seriously stop using them!  I was happy to find that piece of advice from google that they specifically prohibit landing pages with popups for the advertising policy as I hate them yet I had read (and even blogged) about how people see increases in sales with them.  I'm glad google is starting to penalize people for using them.

The reality is the old way of doing landing pages was to try and keyword spam the page to make it so it was more relevant to google's SEO and advertising algorithms.  Now a days they want you to have content that just flows naturally (so talking about related concepts, synonyms, etc).  If you keyword spam google will penalize and possibly eject you from adwords and their SEO rankings.

I also really liked on the basic strategies link for the tips I had there.  The biggest tip for me on my landing pages was to drive a single call to action.  I thought I was leaving money on the table if I didn't try to throw every possible email signup, product purchase, video watch, etc at people to give them every possible option.  However, focusing on a single thing I want people to do actually increased my conversion rate as well as the time people spend on my pages.  Which was fascinating.

The other element, which I have tried but I am going to when I get a bit more time is the content experiments.  I already do a bit of A/B testing by sending people for the same ad to different landing pages, but with content experiments I can have the SAME landing page and present different tests to see which ones perform better.  I'm really interested in this and I just need to devote more time to it.

Next up SEO.

So here are some links to help remind me about topics of SEO:
 What is Search Engine Optimization/SEO

Perfecting Keyword Targeting & On-Page Optimization 

 Backlinks Checker Tool — Backlink Watch - Check to see how many backlinks (external links) to your site you have.

So I actually worked for an SEO company when I first got back from my LDS mission and it was awful because we went through creating these spam landing pages to generate links back to our website.  Our content writers would create tons of articles and post them out on the internet in all kinds of random obscure places in order to drive up search traffic for our clients.  The days of that working are no longer.  Now Google specifically looks at how you are targeting your keywords and the reputation of the links coming back to you.  Highly reputable sites linking to you?  Higher ranking.  Continuously fresh content?  Higher Ranking.  Spamming articles and websites that all link to each other with no external links?  Likely to be banned from google search.

Overall I recognized I need on my business to have better schema organization of my site, target a few specific keywords I've identified from my best performing adwords campaigns and write a lot more content, frequently.

Monday, March 14, 2016

Google Adwords - Translating clicks and impressions into sales.

This week I've been monitoring my adwords campaign and I would have to say that I'm pretty good at getting clicks and impressions on my ads and not so good at getting sales.

My initial campaign had 5 different running ads with over 60 keywords I was targeting and a daily budget of $9.67 a day.  It had 4000 impressions and 40 clicks on Wednesday when I re-evaluated my campaign.  Astonishingly I found out from Google's search term reports (a report that shows the keywords people are actually searching) that I was receiving a lot of clicks from the wrong audience. People were clicking on my ads looking for relationship advice, tips, teenage dating, etc and it was costing me a lot of money - over $20.00 in clicks for people that I was not even targeting.

I also noticed that a few people were clicking on my ads that were searching for quizzes or tests which is one of my products but no the one I was trying to push people to.  I started an adgroup for tests and targeted some of the keywords people were searching for and I had over 30 clicks in 1 day (compared with 5 days of running and 50 clicks total) also my costs for those keywords were much much lower.  However, my keywords are still not translating into sales.  So I either have the wrong audience still or my landing pages are not functioning as well as I want them to.  I know there's a lot of data and I just have to sift through it to try and identify where things are a problem.  I'm also considering giving a free offering of a portion of my products that people can try out for free and then purchase.  I wonder if people are not wanting to spend the money I'm asking for without actually trying out the product.  However, this will take some time to build so I'm not sure I'll be able to get it done in the context of my class but I can look at it as a future plan for my business.

Overall I am very happy with what I have learned about google adwords.  I've found that by narrowing my focus I have a much higher click through rate.  For example a keyword I was targeting that only has 70 searches a month, has a click through rate of 20%, others with volume under 500 all have much higher click through rate as well.  These people stay on my site longer (as I can see through google analytics) and look at more pages.  Somehow I just have to figure out how to get them to convert (hence my free offering idea).

Again I know now know how to get traffic to my site, I just need to find the right audience / right product fit.  I may find out eventually that my products just aren't wanted / desired but I think based on my click behaviors that there is a market I just to have to refine the message and the product to meet people's true needs.  I'm excited about the journey ahead!

Saturday, March 5, 2016

Google Adwords Relevance and Quality Score

So I think the business highlight of this week has been learning about google adwords quality scores and improving my advertisements because of it.  When you advertise with google adwords they will tell you the quality of your advertising efforts for specific keywords in your campaign.  They look at the keyword, your advertisement text and your advertisement landing page and give it a score.  If your keyword is average or below average it can lower your position on the search pages as well as increase your costs.  It also gives you clues into whether users will actually click on your ads when they see them.  All of my keywords ended up with scores around 6 out of 10 which is considered average.

What I learned from my class and ended up implementing was creating specific landing pages to target each of the groups of keywords for my advertisements.  I created unique and specially crafted keywords to target areas such as relationship problems, another one for how to save your marriage, another for no intimacy in your relationship.  Each one a different experience.  I then customized my ads and had specific text for each ad group.  Originally I had the same ad verbiage and same landing page and that gave me average scores across the board.  I haven't seen the scores update yet so I'm assuming it will take some time but I have a lot more confidence that my relevancy and quality will be much higher.  In turn this should increase the number of sales we have.

I also installed google analytics on the site and experimented with the e-commerce integration.  I've used analytics a lot for technical and functional analysis of the performance of the website but never really for advertising and conversion tracking.  I really enjoyed learning more about goals and setting monetization values for my campaign.  I'm interested in exploring that further although sadly we won't cover it much in the class.  The week has been busy so I'll cut it short at that but I'm feeling really excited to start seeing how adwords will translate to sales!

Saturday, February 27, 2016

Get feedback from others than yourself and the value of mentoring others

This week I'm so grateful that my school work was a bit slower as we just moved and are trying to finalize up our home sale.  What a relief the break has been.  I am grateful though that I've been able to get a lot of great feedback on my ads.  For my business class we had to create our advertisement and post it to our discussion group to get some feedback on it.

What I've learned once again from this experience is how important it is to get other's feedback because you think differently than they do.  No matter what business idea or thought process you might have you need to vet it with other people, the best ones would be actual customers.  Just throwing money at an advertisement without at least getting a few other opinions is just flushing your money down the toilet.  My group helped me identify a way to change a few words in my ad to make it better and more appealing to people.  I also got to see a lot of good examples of ads that were very creative and compelling.  If I ever sell actual inventory products I have a lot more knowledge on using action words such as including the sale or product price in the add (30% off spring sale), recipes for even the pickiest eaters.  I really like how the ads catered to a specific market and communicated clearly.  

We also had a chance to peer review our group's websites and I've come to realize how much I enjoy mentoring people on website design / website building.  I saw a lot of good websites and also was able to give some good feedback to people who are just starting out.  I've come to understand how enjoyable it is to pass on knowledge to people who don't know as much as I do in website development.  I would like no matter where I am at in my businesses in the future to continue to participate in mentoring groups and to be mentored as well.  

This post is shorter than my others, but I expect future weeks to be a bit longer.

Saturday, February 20, 2016

Simplify, Ad Groups, and Keyword Advertising

If I were so sum up the most important point of this week it would be to avoid juggling so many balls when you are starting a business.  To give some background currently I work full time as the principal software engineer for Dynactive Software building online education.  I also am in the middle of selling my primary residence home (hopefully closing on March 1st!) and we just moved into our home that we were renting out.  I also have five children with various needs, school homework that must be done (fortunately which is about building my business), and my business Discover and Change that I am trying to launch with my partner Kevin Skinner.  Realistically if I had thought things through I would have tried to juggle a few less balls at the start of the year.

I sometimes think that business risk is much like that.  On many of my business ventures if I had known how HARD it was going to be when I started the business I don't think I would have taken the risk and moved forward.  If I had known on my first business venture that I would lose 80K trying to launch it I would likely have just passed (since my intent on that business was to actually make money...).  I think on any given business venture or anything in life there has to be a certain amount of unknown, even a bit of unrealistic optimism that allows you to make risks that you wouldn't have taken otherwise.  In all of the things that I have taken major risks in the dividends have been huge.  I may not have been financially successful but the experience and knowledge that I gained both technically and in business is irreplaceable.  None of which I would have taken if I had not gone forward and done some REALLY HARD things.  I would still advise my future self and any others reading this post to thoughtfully consider if you are spreading yourself too thin and change things up if you can.

The other points I would review and summarize is how ad groups function.  Google groups similar keywords into ad groups and you can create specific advertisements for that ad group.  That means you can create a unique landing page and targeted advertising message just for those ad groups.  I really think that's a powerful tool, in addition the ad group has a large number of suggested keywords to include in your campaign that allows me to see keywords I wouldn't have thought to target increasing the number of people I reach out to.  The other thing I found interesting was being able to put in negative keywords so I can exclude people searching for cheap, free, discount etc.  These people would cost me money as they click, but don't actually buy anything.  One point I found interesting was if people have more than 10 words in their search phrase google stops including negative keywords so you could still get a few false positives this way.  However, I think I and a few others are the only ones who put in so many words into a single phrase.

Saturday, February 13, 2016

Website Launch! Business Structure and Taxes

Well here I am one week later and one completely awesome website up and running (with a few minor adjustments being needed).  What a journey this has been since last August (nearly 6 months ago) when my business partner, Kevin Skinner, and I started working on this.  We've had to take a few shortcuts to get a minimum viable product but we actually have it!  How awesome that feels!  We have some tweaks and some changes to make things look, work, and flow better, but we have three product offerings that we can actually sell and the site is setup to sell them!  You can see the site here at https://www.discoverandchange.com/

I feel like I have accomplished so much more than my first startup from 9 years ago (wow how time flies).  I built the site using commodity components and in such a way that I can quickly make changes to both the assessment software I built and to the overall website.  That is one of my key take away messages that I think I touched on briefly before in one of my prior posts.  Do NOT RE-INVENT THE WHEEL.  I know that much of the plugins from wordpress I've chosen to use I'll probably throw away or re-write or find a better (purchased) plugin, but pulling together a bunch of existing functionality we have a minimum viable product that we can test with actual users.  Instead of spending another year building our website I was able to focus on the core business product which is our assessments and spend about 25-30 hours on the wordpress site (compared to the several hundred for the assessment product).

I'd also mention how important it is to have strategic partnerships.  Kevin and I have a partnership with Kevin's other company Bloom for Women and they produced fantastic professional videos for our education series.  They will use the videos on their platform and ours and we saved tens of thousands of dollars on video production with the condition that we will license our assessments to them for use as well.  I've been in startups where they partner over everything and end up making nothing.  Making key limited strategic partnerships have benefitted us in creating the educational components of our product offerings.  For that I am grateful.

This last week we had to look at our legal frameworks and I learned a whole lot more about sales tax and corporate structure than I ever knew about.  When we started Discover and Change I had always run businesses as an LLC and so I was confused when my partner Kevin wanted to do an S-Corp.  I pushed back on it, but finally agreed to it when our accountant said it would make the taxes simpler for us.  After studying the different legal structures for my class I came to realize that I like the advantages of an S-Corp.  I can pay myself a salary as an employee and defer my earnings in the S-Corp to a subsequent year and continue to draw from that as a salary.  This means that I can save myself on taxes rather than having it all pass-through like it does with an LLC.  The other nice thing I really like is being able to sell or transfer my ownership without approval from my business partner.  I've been in an LLC before where I was stuck and partners did not want to disolve it. Things got nasty and I didn't have a good way of getting out.  Having an easy exit strategy without requiring approval from my partner I really like.  On the flipside he could do the same and I could be stuck with someone I don't want to work with so there is that downside.  Now I like my partner Kevin and I don't see myself having the same problems as I did with my other business, but I still want that protection.  The downside of the S-Corp is there is more paperwork I have to file versus if I went with an LLC.

Now if I was running my own business without partners I would probably still go with an LLC.  A lot of my classmates want to go with sole proprietorships, however, I have enough assets (and children that have needs) that if something went wrong I do not want to lose everything because someone gets sue happy.

The other thing I would mention is how much paperwork you have to file when starting a business.  To get my s-corp running I have to file articles of incorporation, get a business name, register with the city, register with the tax commission, with the federal government (to get an EIN).  I have to register for unemployment insurance and workers comp if I want to treat myself as an employee.  I also have to file quarterly sales taxes and earned income taxes.  Just a ton of paperwork.  It makes me appreciate how much using an attorney and an accountant can save you to make sure you've done everything correct.  After going through our business exercises I've realized it's worth the $300-$500 to get things setup with an accountant and a lawyer.

Well It's been a very, very long week and so I'll just summarize with how glad I am to see my dream business launching.  I don't know that I would have pushed through with all the other hectic things in my life right now without my business class pushing me, so for that I am grateful.

Saturday, February 6, 2016

Rapidly prototype with a deadline then change it later, and other minor website details

This week I've been working on building my website https://www.discoverandchange.com/  and it's been an interesting experience.  My partner and I set a deadline to launch around Valentine's day and my school work is requiring me to launch my website on February 15th.  Both deadlines are creating an enormous amount of pressure for me which has been good, but stressful.

The developer in my screams that I'm taking too many shortcuts or that things aren't ready.  The business side of me is saying I need to get this done in time to market it.  Normally I'd be building some of these components from scratch that will work out for me better long term, however, if I went that route I couldn't meet the two week deadline.  Instead I'm using a lot of plugins and once again I'm just so impressed at the versatility that wordpress offers me.  I know from having to write and modify wordpress plugins how absolutely awful the code quality is at times, yet the amount of functionality that is available at the click of a button has just been so wonderful to me.  Even if I stick with the free versions I was able to get a drag and drop pricing table builder, a short code widget embedder, a complete FAQ system.  Now some of these I know I could build a whole lot better and make them look better, yet it works and it looks ok for now.  When the site is making money I can come back and make it an ever better user experience.  That is one of the take away messages for me is rapid prototyping and test the idea out because there just isn't a lot of time to try to make things perfect.

For my assignments I had to go and review competitor websites and it was very interesting to see what they used and their design choices.  One thing I took away from this is how important it is to have a direct prominent Call To Action on my site.  Every site I reviewed had that.  I was also surprised that every site had an FAQ and that it was mentioned as an important point for buyer's confidence to have one.  I find this interesting as I have built dozens of websites for companies and I can only think of one or two where we had an FAQ and that was added more as an afterthought.  I never really use them, so I was surprised to find that a lot of people place value in them.

I think the other thing that took me by surprise is how much my class mates valued and used paypal.  I've always considered paypal to be a poor choice alternative as we have so much customer dropoff when we use paypal.  Yet, most of my class mates from my discussion seemed to like and prefer paypal.  Although from a site aesthetic design they all agreed the yellow buttons were pretty ugly.  I'll have to consider leaving paypal as a payment option for my site because of this experience.

Saturday, January 30, 2016

Hosting and Site Builder selection

This week for my business class I had to research and evaluate a number of site builders and hosting solutions.

I took a look at weebly, wix, and squarespace for site builders and they look like decent options for someone who is going to do a drag and drop.  The Wix and Squarespace options were the most compelling, Squarespace looked the easiest to use, whereas WIX had a much better developer API than Squarespace.  I have to do a lot of custom development for my product line though so these drag and drop solutions just don't cut it.  Perhaps I'll use them in the future and I'll either go with Wix or I'll use Squarespace.  I've also thought about maybe using them for some of my landing page systems because they are a lot easier to use then the wordpress interface so that's a thought for the future.  As far as price goes they are fairly inexpensive at $20 a month for the business package on squarespace and ~12.50 a month for Wix.  However, since I pay nothing for wordpress that's something to consider.

I also had to consider hosting solutions.  If I had gone with a Wix or Squarespace they are the hosting provider and the site builder, but since I chose to use wordpress I had to use something else.  Now I've done a lot of research in this space before, but it was good to look across the landscape again.  I looked at a number of companies but I still didn't find anything that compared with the $5.00 a month option I'm getting from digital ocean for a good virtual private server.  Now as my business grows I'll probably have to spend more money to scale it that I otherwise wouldn't with Squarespace or Wix but I still can have the customization I need for my site.

One other thing I would mention is how important it is to get a good mentor.  I was able to answer a lot of people's technical questions in my business class on hosting and site builders because of my large amount of experience in this regard.  What I would love to find is someone who can mentor me on the business aspects just like I've been able to help people with the technical.  I know most businesses don't succeed on technical merit alone, but they need sales and marketing.  I wonder how much people enjoy sharing their knowledge just like I enjoy sharing my technical knowledge.  It will be interesting to see how I learn from my business class student peers as we get deeper into running our business.

Saturday, January 23, 2016

Quantify, Compare, Eliminate. Now move forward with your business idea!

How important is it to be objective about your business idea?  Very important as I realized this week going through my business class.  We had a very lengthy assignment that involved brainstorming and identifying the viability of a business idea and I greatly enjoyed it.

I'm actually looking forward to going through the same assignment for some business ideas that have a longer time-frame than the 4 month semester that our business ideas were constrained to as some of them I think I will have a greater chance of producing more revenue.  I'll have to get permission to see if I can post the spreadsheet as part of this blog, but I highly recommend it, if I don't get permission go take the Business 250 class at BYU-Idaho for online entrepreneurship.

Anyways what I ended up doing was taking 20 ideas and looking and using google's keyword search to determine the amount of business demand for that idea.  I used google's metrics also to identify the amount of competition and then I had to give a rating from 1-10 on how easy it was to start the business (considering startup costs, time to get it up and running, complexity, suppliers, etc).  I also had to identify the Business Model (see my previous blog post) that the business corresponded to.  This list of 20 business ideas was then narrowed down to 5 viable candidates for me to do a detailed research analysis on.

At that point I continued to use google's keyword tool as my objective measurement and found the top 3 related keywords for each of my business ideas.  Using googles tools you can get a prediction of how many clicks to expect, impressions, and cost per click (as well as where your ad is placed) if you provide google with your established budget.  With my current business plans we are allocating $300 ($150 from a coupon) in advertising which comes out to $7.14 a day for our daily budget.   It was actually amazing to compare because things that I was really interested in such as blogging about living a frugal lifestyle, or marriage and finances, or even how to scale web services had such low amounts of clicks and impressions (time the ad is shown to people), that it was super apparent from the get-go that this was not a money making venture, at least by paying for advertising, even if my site built up traffic over time, it will take a very long time to build up traffic just because people aren't searching for those things I'm interested in.

From this aspect of the business I did come ahead with two business ideas which was blogging on the subject of teaching your kids to program and the business I've been trying to start all along with providing assessments and education on relationship intimacy.  The clicks were still not astronomical with my discover and change business (relationship intimacy) getting 21 clicks a day and the kids programming idea being 17 clicks a day, but it was still better than .01, .29, etc.

The next interesting exercise was to focus on my supplier.  Now this week we had to investigate also how to find suppliers for our affilate system or for doing drop shipping as a broker or merchant business model.   I've come to realize how important it is for a business to find a reputable supplier as well as the fact of how much I hate having to think about and deal with tangible inventory.  I mean I can do it, but sending tangible products to people is just not exciting to me.  I did include selling robot vacuums as a business possibility but I was grateful it didn't make it to my top 5 business ideas, just that I don't like anything to do with selling real products, shipping costs, refunds and damaged products.

Anyways coming back on topic again I had to actually consider my own and others capabilities to function as the supplier (since I'm supplying the product for a blog, as well as for discover and change) and the challenges and issues that I would face.   I then had to give myself, my affiliate networks, my business partner a score on how likely I felt they were to deliver.  The spreadsheet then ranked my business in this fashion.

Next I had to consider startup costs, which for all my blogging ventures was about $20 for hosting and the domain, but for discover and change we are looking to put in at least $700, if not more into the venture during this class. Again the business were ranked based on their startup costs.

Then I ranked the ideas based on the amount of time I would spend on each idea.  Some of the blogs would take more time because the subjects are harder to express or just that I wasn't as familiar with the topics, others like discover and change require actual programming time in addition to content writing, marketing, and manage the digital products.

Next I had to figure out our monthly profit potential.  This one was interesting because I had to figure out my gross profit per unit that we sold.  For the blogging sites I had to actually go out and figure out what my best affiliate networks would be for each blog idea I was using.  For example for living cheap I looked at CJ Affiliates partnering with Motif Investing. I had to do some more hunting and find out that they pay $45 of commission per sale that is made.  For my auto scaling site I looked at rackspace that pays 3 months worth of commission for a client that signs up for a 1 year term.  I considered a minimum 3 server setup which at the time of this writing would be $240 for the commission.  Seems like a lot, but I'll get back to why that actually didn't end up as a good profit.  For my discover and change business it got trickier.  We had to look at our potential three pricing models (and since the prices aren't set in stone yet, I'm not going to mention them.  I looked at 80 people for every 100 purchases buying package 1, 15 buying package 2, and 5 buying package 3.  I took the cumulative revenue for the 100 purchases and divided it by 100 to get my average gross profit per sale. It'd be great if my numbers were off and things were shifted to package 2 or 3 much more, but I was trying to be conservative in the numbers.

At this point is where things were VERY interesting from a business point of view.  Based on my daily clicks for the combined keywords in my ad campaign I then had to choose out of those clicks how much of them could convert.  Well in our class research we learned that 1% or less actually buy on a blog site for an affiliate program so I put 1% for all of those blogs.  So that $240 commission from rackspace per unit sold?  Well since my clicks for that business were only 9!!! per month my monthly profit comes out to being $13.68 (once you include the $0.83 I pay to google for every click on the ad).  My living frugal blog?  $4 a month in potential revenue. My marriage and finance blog, money pit.  My teaching kids to code that I thought would be so very awesome because of the large demand would lose $151.48 every single month!  An interesting aspect to this is that I literally could not find any other affiliate than Udemy, which I don't have much experience with and would only be pointing people there because they pay.  Also they give all first time buyers their first course for $24.00.  So some of their courses which sell for over $300, they give away for $24.00 That makes this idea a loss because if only 1% of people buy from your site through an affiliate program, pretty much nobody does repeat business through your site again.  So that revenue is pretty much it.

So that brings me back to Discover and Change.  My business partner has done a product line that was similar to what we are trying to do and at that time their conversion rate was between 3-7% depending on their prices.  The way our prices are structured we felt that 4% was a good conservative amount for conversion at least at the start (we can always work on improving that).  With that conversion it looks like we will be making a decent profit, not a large one, not enough for me to quit my job and retire in Chile, but a decent profit (I won't reveal this particular number right now).  Something that we are excited to look at additional product lines that can help more people with divorce, betrayals, pornography addictions, and other devastating or debilitating problems.  The profit piece was the thing that was most exciting for me to see.  Before this point for the last 6 months while I've been working on the assessment system I've wondered if this will just be a charitable contribution I give to God to help other people or if this is something I could potentially work on full time and do even greater good. Right now it's looking pretty good.

I don't want to look over the last part of the assignment which was to come up with the recommendation for the business idea (I think you can tell which way I leaned up to this point). By now I have a number of different rankings for the various business ideas and now I had to give each area a weighting of how important that criteria is to me for my business.  I chose 20% for level of demand, 10% for competitors, 5% for suppliers being able to deliver, 25% for the time necessary to start the business (this semester I have so very little time), and 35% for the ability of the business to generate a profit.  I think reading through this post you can see why I weighted each of these this way, if not I'll clarify more at another time, this post is already long enough!

Business Models, Ideas, Demand and Competition comparison

So every blog I suppose must have a first post that explains the purpose of my blog as well as gives something valuable to read.  In this blog I will be chronicling my journey through business.  What I've learned, what I need to learn, what I hope to learn.

I'm currently taking a class in online entrepreneurship and this past week we've covered business models and business ideas as well as demand and competition.  Having worked with a lot of businesses in my career I'm familiar with many of the business models but it was good to review them.  The ones I like the most are the merchant, subscription, and affiliate model.

The nice thought about the affiliate model is that if I focus on writing good content and making my website popular I should be able to generate a profit from it.  The affiliate model pays me anytime someone buys when they click on an advertisement or link on my site. Depending on the company I'm affiliating with I'll collect some form of commission, usually small, although I've seen some give as much as 50%.  You don't have to deal with inventory, refunds, or really customer service at all which is appealing as it lets you focus on the topics you really enjoy.  The downside about this approach is that it usually takes a long time to generate a large enough traffic that you make any meaningful amount of money especially since most sites only 1% of your users to your site ever buy anything and for some sites it's much smaller than that.  So... it's a slow growth model that takes a lot of users.  The other worry I have about it is more and more people are using ad-blockers and so this type of business model just won't work if all of the ads start getting blocked.

The next one I like is merchant and this is the one that is easiest to think of in terms of a physical store converting into a online store.  Your customers come to your store and order products and you fulfill those orders.  You can keep the inventory yourself or use a form of drop-shipping (I'll blog about that in a subsequent post).  You still have to deal with customers and sometimes with inventory, refunds, customer service, and competitors under-cutting your prices.  However, the revenue potential is a lot higher than affiliate.  If you do digital products which I see myself doing as a software developer, you can skip over the inventory piece altogether, although the issue of piracy becomes a problem with digital goods.

The model that I like the most is a subscription service.  I've worked with this a lot in previous business ventures and I like this model the most.  I have a service I am offering, whether that's content, access to a particular product, or something else.  You only have access to that service while you are paying a monthly (could be some other time period) fee.  I like this model as it lets you easily forecast revenue out and if you provide a great service you can get long-term customers and your revenue just continues to grow.  With the merchant model you have to cross-sell, or up-sell, or have a product that expires quickly in order to get the same customer to buy more.  With the subscription model the same person keeps giving you money and can end up paying much more over their subscription period than they would have been willing to pay up front.

Business ideas were something we covered as well but I'll just link to the article as it's a good enough review for me and for you to go through.  Here's the link http://bizthoughts.mikelee.org/brainstorming-business-ideas.html

We also this week talked about demand and competition.  In the class we used google adwords as way to objectively compare different business ideas with different business models.  If we take an idea such as chess or snowboards we can look at google keywords and see what the monthly search volume is for that keyword.  Google also tells us how many other advertisers are competing for that same keyword.  It's not 100% precise but it shows what the demand (number of users wanting that product/service/idea) and the other companies competing in that space.  This was very informative to me and I now have a much better idea of how I can quickly determine if a business idea is even worth pursuing.  If only 300 people are searching for something each month and I think only 1% of them will buy and I make $10 a pop.... well making only $30 a month doesn't seem a very good business idea especially if it costs me $25 or even $40 to get those users to my site to even buy!