Escape Velocity
exploring success, freedom and wealth as an internet entrepreneur

This is Flemming Funch's secret weblog about home-based internet business, networking, success, grass-roots generation of wealth, and personal freedom.

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A Quote I like:


 Update
picture The thought behind this blog was originally to explore subjects I considered a bit "dirty", like how to make enough money to feel comfortable, in the most independent way possible. But with the more pervasive underlying theme of how to take off, how to get out of the rat race and do what you want in life. There are other aspects to that than money, even though that's something one has to solve one way or another. And I think, after this long absence, I might concentrate more on some of those other aspects than on Internet Marketing.

I've never gotten very far when I tried to do Internet Marketing. Same whenever I've touched on anything that looked even a little bit like Network Marketing, i.e. any kind of MLM thing where you need to convince all your friends to sign up for buying some hyped-up product so that you can get percentages. Has made me feel disgusted every time. It could potentially work if it actually were network marketing, i.e. in a network topography, rather than a pyramid scheme where you exploit those who are further down.

I don't have any inherent ethical problem with Internet Marketing itself, other than that it is hard to find products I truly can believe in, which also sell well. And it is a continuously moving target, where one constantly has to adapt to changing conditions and obstacles, like knowing exactly what one can get away with without being banned for breaking some rules one didn't know existed. Just from my few experiments with affiliate marketing, I managed to get banned from Google Adwords for ever, without possibility of recourse. Retrospectively, a year after I for two days had ads that pointed to my affiliate account landing page at a certain exercise program, which Google later decided that they didn't like. So they closed all accounts that ever sent traffic there. I should have known not to use an affiliate URL in my ad, but I thought it was an ok way of testing the results for a couple of days. It wasn't.

But, on the success side, let me mention that it has been around 15 years since I've had a job. I live in the south of France, I work out of my house, wake up at noon, and can generally follow whatever schedule I want. About half of my income is residual income, from ads on a website. The other half is me being a freelance software developer.

The residual income part is mainly from becoming 1/2 partner in Opentopia. This was a site I originally had created in an inspired weekend, after seeing a technical opportunity. Some people had found a way of easily identifying IP webcams in a google search, which one could go and look at. I thought that was fun, but too much of a hassle to go and click on each one individually to see what it was. So I made an system that grabbed snapshots from all the cams, and presented them in a gallery, and I added some social features, so that people could help identify them, comment on them, etc. That was the right thing at the right moment, and by Wednesday the site was getting 50000 visitors per day, after appearing on BoingBoing and Slashdot. Server crashed, I optimized it, traffic leveled out at a lower level, but loads of people kept coming. I then put some ads on it. I tried different things, and Google Adsense ads was what consistently worked well. Then, a couple of years later, I got an offer I couldn't refuse for selling the site. I missed the site a lot, as it was fun to tinker with. The new owner was better than I was at monetizing the site, and did very well with it. But it was the same old site, running on automatic. Eventually we agreed that it would be more fun if we became partners in the site. I can tinker with the technical aspects, coming up with new creative ways of making the site more useful and interesting, attracting more visitors. And he can tinker with optimizing our SEO and our add placements, etc. This works well for us. A growing community of people enjoy the site, and a few relatively non-offensive adult webcam links at the bottom of the page pay the bills.

Since this clearly is one of my successes in terms of making money on the Internet, I obviously need to pay close attention to what it is that works there, and how I can do more of it. The strategy is simply: do something cool and interesting that people show up to look at and use, and which is sticky enough so that they'll come back. And put some ads there that somebody's likely to click on, but which don't hinder the experience. And if at least a few thousand people come by every day, it starts looking like real money.
[ | 14 Jun 2013 @ 16:53 | 0 comments | PermaLink ]

 Introduction to the Google Ad Auction

This is an explanation from Google's "Chief Economist" of how the ad auction works when you advertise in AdWords. Essentially an auction happens at every moment when there's an opportunity for displaying an ad. The part I hadn't caught before was how the Quality Score plays a part. The Quality Score depends on the ad's past performance, but also on the content of the landing page that it points to. If Google's algorithms decide that it is relevant to the content of the ad, the score goes up. The better the quality score, the less you pay for ads.
[ / | 3 Jul 2009 @ 20:15 | 0 comments | PermaLink ]

 Exploring PPC
So, I'm trying to understand PPC marketing. I've gotten far enough to make some mistakes, but that's part of learning.

PPC is Pay Per Click. Most commonly that's Google Adwords. You'll pay an amount whenever somebody clicks on your ads, the exact amount depending on a variety of factors, most importantly how many other advertisers want the same keywords. So, you make ads, you pick good keywords that aren't too expensive, and you point your ads to something that will make you money. Most simple choice would be to point ads to a site you're an affiliate of. But not a very good choice, as there very likely would be significant competition and you can't easily improve the conversion rate (the percentage of people who buy). Rather, you should be thinking about creating your own landing pages. The landing page is where people arrive when they click on an ad. If it isn't your own product, it would be a page that somehow pre-sells and then has an affiliate link to the site that actually will sell the product, whatever it is.

A few weeks ago I felt compelled to buy PPC Bully 2, which is a tool for "spying" on the competition by easily seeing which ads are profitable in different niches, for different keywords. There are other programs one could run oneself that would do similar things, but it would take several weeks to see the results after having chosen the keywords. In PPC Bully you can see it right away. You can guess which ads are profitable simply by seeing how long they've been there. If somebody has kept a particular ad for the same keywords for the past 3 or 4 weeks, it would be a very good guess that they're making money on it. Or they for some reason don't mind losing a lot of money. Most likely they know what they're doing, and the ad is working for them. So, the theory is that I could simply copy what they're doing. I can see what the ad is and what the keywords are, and I can see where it is going. So, I could find an ad that links directly to a certain Clickbank vendor who seems to be selling a lot, and I could put up the same ad, pointing to the same place, but with my affiliate link instead of theirs. If you didn't know, Clickbank is the most popular affiliate network among Internet Marketers.

Sounded attractive, albeit not entirely ethical. I had to try it to see if it really was that easy. It wasn't.

OK, I made other stupid mistakes. But I also learned that it isn't likely to work most of the time.

I had picked a Clickbank vendor for some exercise program. I had no real interest in that, but it fit the kind of criteria they showed on the videos. Lots of sales, many affiliates. And I found some ads and some keywords that ought to be profitable. And I copied them and set up my campaign in AdWords.

My first mistake was that I entered socalled "broad matching" keywords. I.e. I just typed in the keywords without quotes around. That would mean that Google would match them, even if they're not in that order, even if only similar words would be used. As opposed to "phrase matching", which is when you put quotes around you search terms, e.g. "lower belly fat", just like when you search in Google. The final option would be exact matching, like [lower belly fat] which would only match if the user enters exactly and only that, with no other words around. Normally, the safest thing to start with in AdWords would be the phrase matching. So, I blew that one, and would have gotten searches for "Lower Slobovia Belly Dancing Fat Cats".

I had also left most of the keywords at the default $1 that Google suggested. Wisely I had set a total daily limit of $10.

I was a bit shocked after the first day as I apparently had spent $100, not $10. I wrote to Google support for that, at I got a credit for the $90, as they basically just had overshot the target. But I didn't sell anything.

I lowered my max bid for keywords to 0.30$ and tried another day. Didn't sell anything there either, but got a lot more clicks out of it. Btw, the ads and the keywords apparently were great and got 2-3% CTR (ClickThrough Rate), which is absolutely excellent. But none of them bought anything.

Then I thought I put the campaign on pause, as I wanted to learn a little more before trying again. I must have been a bit sleepy, because I accidentally left the campaign running for another 3 weeks while I went on vacation. OK, it was with that $10/day spending limit, but that still added up to more than $200. I was a bit dismayed to discover that.

There were two sales, though. The product would pay me $25 per sale. But that was with around 1000 clicks. I had tried two different ads. Each one had had around 500 visitors and one sale. But obviously it cost me $200 to earn $50.

With a 1:500 conversion, I could pay up to 0.05 for the clicks and still have a chance of making money. Of course I paid a lot more than that. It is theoretically possible that if I picked the keywords a little better, and my bid was closer to the 0.05, it could work. But it certainly isn't any automatic goldmine.

1:500 is not a very good conversion rate. I was pretty gullible to expect that it would be something like 1:20. Looking at the Clickbank vendor's site, it would actually have told me that, as he lists some of the numbers for his top affiliates. They only make a sale for every 3-400 visitors. Which makes it kind of unlikely that they do that with PPC.

I'm going to ask for a refund for PPC Bully. There's nothing really wrong with it, other than the hype that preceeded it. To really make money one still needs to know how to research niches, pick keywords, write good ads, write landing pages, and split-test multiple versions of all of it, to find out what works and what doesn't. In doing that, it would of course be useful to see what works for other people, but it takes a lot more than that.
[ | 3 Jul 2009 @ 19:54 | 1 comment | PermaLink ]  More >

 Doing what works
picture I'm beginning to get a sense of it, but not much more. You need to measure your results, so that you can do more of the stuff that works and less of the stuff that doesn't work.

Most of the internet marketing gurus are saying it, at least when they seem to speak honestly. You need to have metrics. If you put ads in AdWords, you need to try different ads, measure how well they do, so that you can get rid of the bad ones and keep the good ones. One word might make all the difference. Same with websites or just about anything else.

Some things work, some things don't work. In terms of selling stuff or getting people to visit a site or click on something. What it is that works or doesn't work usually isn't entirely obvious. Somebody with a lot of experience can give a good guess, but nobody really knows unless they test it.

This is of course abundantly obvious to somebody who has built their success on doing stuff that works. But it isn't a sensibility that most people have. Which probably has to do with why they're not wealthy or successful.

Many people start a business based on an idea of something they'd like to do, they invest a lot of time and money, and then hope for the best. And it is exactly this - blindly hoping for the best, while working hard - which doesn't work, unless one also is lucky. Much better to be pretty sure in advance that you're doing something that people want.

Just recently I've been partner in a company that forgot to find out if its product was wanted. I was just doing the technical part, and the other partners were taking care of the marketing and financial parts, supposedly. But they had really just made something up for the business plan, and nobody had actually gone out and checked if real people wanted this kind of thing. And apparently they didn't. Afterwards I learned more about marketing and I was embarrassed to have gone along with it. It should be inimaginable to launch a company without having done a careful study of the market, and without having a plan of what positioning will work and which won't, knowing what people would pay, etc. If it is just a website that doesn't cost much, one can experiment, but if we're talking a company with financing and offices, etc, it is a particularly bad idea.

At the same time I understand perfectly well how one can miss it, if one makes decision emotionaly, rather than based on numbers. I've never been good at playing the stock market and I've only tried a couple of time. What I would tend to do would be to buy stocks in companies I like and then I'd wish for them to do well. If they don't, I keep hoping. Eventually I might get really disappointed and give up the whole idea and decide that the stock market isn't for me. And, well, it isn't, if that's how I do it. People who do it well do it based on facts and numbers, not based on what they hope will happen.

I think it is a shockingly small percentage of the population who actually follow a strategy of measuring what they do, consistently picking what works, getting rid of what doesn't work. The people who do so tend to be entrepreneurs. All self-made rich people are doing this, of course. But most people aren't. Many more people follow some strategy of hard work and loyalty and entitlement. You know, you've shown up and put in a good effort, so you deserve to be paid well for it. The only reason one can get away with that is that there are entrepreneurs who previoiusly have figured out how to generate value, and they need bodies to fill up positions in their companies. Those filler type of people will develop a certain mythology about what it takes to make money which has nothing to do with what actualy creates value. Writing a good resume, being noticed at meetings, working on being promoted, keeping your desk clean - of course none of that is really what makes the wheels turn.

So, a simple secret is that to be really successful, one probably should measure what works and what doesn't, and how, and when, and how much. And make decisions based on what one learns.
[ | 14 Jun 2009 @ 17:41 | 48 comments | PermaLink ]  More >

 The Entrepreneur
picture
"The entrepreneur shifts economic resources out of an area of lower and into an area of higher productivity and greater yield" -J.B.Say
Jean Baptiste Say was the guy who invented the word "entrepreneur". And that's the basic key there.
[ | 25 May 2009 @ 04:38 | 61 comments | PermaLink ]  More >

 Optimism
picture This transcript of a talk is meant for computer programmers, so there are some technical parts. But the speaker/writer, Reg Braithwaite, does such an excellent job at explaining the mechanics of optimism versus pessimism that it is worth sharing. It is based on a book, "Learned Optimism", by Dr. Martin Seligman. It is all about:

- personal vs. impersonal. What are you taking "personally" or not?

- general vs. specific. What do you take to apply to everything under all conditions, versus what do you take to be an exact, one-of-a-kind isolated event?

- permanent vs. temporary. What is forever, all the time, unchangable, versus what just happens once in a specific moment and then is forgotten?

The simple secret is that for a pessimist anything that looks like failure, criticism or bad news will be interpreted to be about them personally, and it will be total and all inclusive, and forever. Whereas any good news will be something that had nothing to do with them, that only happened once, under very specific conditions.

For the optimist it is simply the opposite. Bad things might happen, briefly, under specific conditions, but it doesn't have much to do with you, and it is quickly forgotten. Whereas good news will say something about you, demonstrating pervasive goodness that will always be available.
[ / | 21 May 2009 @ 04:10 | 33 comments | PermaLink ]  More >

 Vanity Metrics vs. Actionable Metrics
picture I've recently learned how absolutely essential metrics are to doing any kind of web business. I.e. measuring how well you're doing, and, more than that, how well one approach compares to another approach.

Today there's a fantastic article on Tim Ferriss' blog about just that, written by Eric Ries who has become a very successful entrepreneur based on a deep understanding of metrics. Go read it. Here's a brief excerpt:
When you hear companies doing PR about the billions of messages sent using their product, or the total GDP of their economy, think vanity metrics. But there are examples closer to home. Consider the most basic of all reports: the total number of “hits” to your website. Let’s say you have 10,000. Now what? Do you really know what actions you took in the past that drove those visitors to you, and do you really know which actions to take next? In most cases, I don’t think it’s very helpful.

Now consider the case of an Actionable Metric. Imagine you add a new feature to your website, and you do it using an A/B split-test in which 50% of customers see the new feature and the other 50% don’t. A few days later, you take a look at the revenue you’ve earned from each set of customers, noticing that group B has 20% higher revenue per-customer. Think of all the decisions you can make: obviously, roll out the feature to 100% of your customers; continue to experiment with more features like this one; and realize that you’ve probably learned something that’s particular valuable to your customers.

Unfortunately, most analytics packages are configured by default to provide mostly reports on vanity metrics. That makes sense, since they are the easiest to measure and they tend to make you feel good about yourself...

[ / | 20 May 2009 @ 02:25 | 36 comments | PermaLink ]  More >

 Trying again
I had gotten a bit off of the purpose for this blog, which, I suppose, is one of the reasons I didn't post much. I was just working for a living, being really busy, doing ok. And the subject here is really to go beyond that. So, back on track. No big deal.

There's also the ongoing dilemma of whether one writes/talks about something only when one has mastered it, or when one is in the process of figuring it out.

Most of the motivational/entrepeneurial books and seminars you see are naturally done by people who've already figured things out. Or who at least pretend that they have. But the trouble is that, even if it looks great and they try to explain things really clearly, we don't really succeed in grasping how to get from A to B. In part because they're living in a different world than we are. By "we", I mean the "normal" people who would like to move from being workers paid by the hour or month to being entrepreneurs who transcend that world through the projects they create.

Sometimes one can learn better from somebody who currently is finding their way through the maze, at least if we assume that they ultimately get out, which not everybody does.

Anyway, this was just to mention my dilemma of whether I write about stuff I've mastered or about stuff I'm in the process of figuring out. In the past I've found that I write better about stuff while I'm learning it than when I've learned it.

The reason I at all got back into my blog here is that I again am in the mindset of a web entrepreneur. In part because it is a slow period for what I otherwise get paid for, so I have more time. "Hard times" is all the better a reason for being entrepreneurial.

I dusted off my various affiliate accounts I hadn't logged into for a long time. Got some pleasant surprises. For example, I had $1400 waiting in my Google Adsense account, as I had forgotten to change my address, so the checks were returned.

I got embarrassed to notice that I have thousands of daily visitors to various of my websites that I'm not doing much with.

So, now I'm again watching my numbers every day, and working on a few projects that will increase them. I will aim at keeping you more posted.
[ | 19 May 2009 @ 13:59 | 34 comments | PermaLink ]  More >

 Critical Mass
One can say it different ways. In order to get something new going, you usually need critical mass. You need to build up momentum. You need escape velocity. You need a certain amount of kinetic energy before you can take off.

Those are metaphors, but at the same time they are very real phenomena. It is a question of bringing together the energy needed to break free from inertia.

The critical mass metaphor would say that you add a bunch of elements together and that nothing much happens before you have enough. Say it is a radioactive element and you're trying to create nuclear fission. That are other factors involved, but one thing needed is that you have enough material. When you reach the critical mass, things suddenly start happening by themselves. Until then nothing happens.

Same thing if you're launching a new idea. You might mention it to a few people and nothing happens. But if enough people catch on to it, suddenly it takes off. The idea might be great, but it doesn't take off right away. It might be hard work at first to convince people it is a good idea. Only when it has gotten enough attention, when enough people have gotten the point, then it becomes easier. It self-ignites somehow, it starts spreading by itself, people will tell their friends who'll tell their friends, etc.

If you don't achieve critical mass, the energy you put into your project is more or less wasted. Things just go back to normal and you didn't get anywhere.

You might be lucky that you can build upon somebody else's critical mass. Maybe somebody else has already built up the new idea, and you might just provide the little extra needed for it to take off. So, it isn't a bad idea to build on existing trends so you don't have to do all the work yourself.

If you work for somebody else, they hopefully have already reached critical mass. So you might just do your job within their setup, and it works. But somebody has to have made it take off at some point.

I think many entrepreneurs will grossly underestimate how much it takes. How much you need to put together to reach critical mass. How much energy you need to put in motion to reach escape velocity. What is needed might easily be 10 times more than you imagine. And if you give up too soon, it just ain't happening.
[ | 27 Dec 2007 @ 15:37 | 84 comments | PermaLink ]  More >

 For bloggers, on-line ads beckon
picture CNN:
Zach Brooks pocketed $1,000 this month blogging about the cheap lunches he discovers around midtown Manhattan -- $10 or less, preferably greasy, and if he's lucky, served from a truck.


The site, Midtownlunch.com, is just a year and a half old and gets only about 2,000 readers daily, but it's already earning him enough each month for a weekend trip to the Caribbean -- or in his case, more fat-filled culinary escapades in the city.

In the vast and varied world of blogging, Brooks is far from alone.

It's no longer unusual for blogs with just a couple thousand daily readers to earn nearly as many dollars a month. Helping fill the pockets of such bloggers are programs like Google's AdSense and many others that let individuals -- not just major publications -- tap into the rapidly growing pot of advertising dollars with a click of the mouse...

[ | 27 Dec 2007 @ 15:36 | 30 comments | PermaLink ]  More >



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Escape velocity
is defined as the minimum velocity that a body must attain to escape a gravitational field indefinitely. Escape without falling back or going into orbit.




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2007-12-27
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