Internet Entrepreneurs Blog

My mom recently had a business question for me regarding the number of her books, Surprised by Prayer, she should purchase from her publisher at wholesale prices. The current printing has been discontinued and a bargain version of the book is expected to be printed in about a year or so. Mom’s plan is to sell the books at speaking engagements she does in the southeast and she estimated that she could sell around 100 books a year at these engagements.

The most interesting thing about this whole situation is this is the first case I’ve been able to apply some of the things I’ve learned at business school to a real world situation to come up with a solution I felt confident in. During my internship I ran into a lot of gray areas and I know this is how things usually are in the world of business. Often the numbers you need to make a decision aren’t available or they’re not as definitive as one would hope. But in this situation, my mom provided me with all the numbers I needed to use to come up with the solution.

I calculated the net present value of the investment in the books based on different proposed retail sales prices (discounted from the cover price) using various discount rates to take into account differing levels of risk for the project. It was also important to consider the time horizon for the book sales; 30 years of speaking engagement sounded a bit daunting but 10 years sounded doable, especially since she enjoys it so much. With all the data, I plugged in the price the publisher was offering and provided my recommendation.

As a part of my recommendation, I suggested attempting to negotiate the wholesale price of the books since the publisher didn’t seem interested into holding on to them. My mom was a bit uncomfortable with the prospect of negotiating so she asked if that was the best price they could offer; the publisher came back with a price 36% lower! When you’re talking thousands of books, that’s quite a large savings.

In the end, one of the most important factors was the sentimental value of the books. Once the books have been sold, they’re all gone, never to be found in new condition again. From a business perspective, it made sense to buy all the books, and this fit perfectly with our desire to maximize the number of books to keep for the family for future generations. Too bad few business problems are this easy to solve!

I’ve just spent the past 10 hours or so working on integrating PHPBB2 into singletracks.com. The installation is a snap, one of the easiest scripts I’ve ever installed. The problem, however, is figuring out how to integrate the thing into my existing user, state, and country tables and my overall navigation. Let me say it has not been easy.

I initially set out to create my own forum scripts (I know, it’s crazy). I had used PHPBB on Safarium before so I knew what a great program it was but I also knew how difficult it is to integrate into existing user schemes. I wanted to be able to use my existing HTML headers and footers, advertisement keys (I have a key for each page to tell the ad script which ad category to show), user data, etc. AND integrate all the forums into my existing content pages. For example, if you’re reading about a mountain bike trail in Alaska, you would be able to click a link on the page to join the discussion in the Alaska trail forum.

But building a (good) forum system from scratch is tough. There are tons of features that users expect from forums that are difficult to build yourself. In the past I’ve built everything from scratch because I have had a difficult time finding scripts that fit my needs exactly: from inventory management systems to data recommendations and sorting, I’ve built it myself. But this is VERY time consuming and I just have too many projects I would like to work on instead. So I decided to give PHPBB another shot.

So far I’ve had a few problems. For one, on singletracks and Safarium we use cookies to keep track of user logins while PHPBB uses sessions. Arguably sessions are the better way to go for logins but it’s nearly impossible to get the two in sync without destroying your current login scripts or modifying the crap out of PHPBB. I chose to modify PHPBB login scripts (and my own), and (for now) everything seems to be working ok. I’ve also spent the better part of my time syncing the singletracks user tables with the ones in PHPBB. So when a new user creates an account, their username and email are saved in two tables; once they update their location, that information is synced as well (and each time they modify their info).

I had also hoped that PHPBB would be using Smarty templates for the HTML output. Instead the latest version uses some strange templating format with .tpl extensions. It looks a little like Smarty but unfortunately BBEdit doesn’t recognize the syntax and all I see is gray text as opposed to the Christmas tree view I get for HTML, PHP, Perl, etc. The templates also make it tough (probably not impossible) to include other scripts. I would love to be able to include the singletracks header file in the PHPBB header template so I can use my existing headers (and not have to worry about 2 header and footer files each time I add a site navigation link).

SEOs (search engine optimizers) are all the rage these days as site operators seek a competitive edge in natural search result rankings. I have always been skeptical of these businesses for a number of reasons: they can’t help you when your competition uses them too, they don’t have any secrets, and they don’t know nearly as much about your business as you do.

First off, hiring an SEO is in a way a game theory response. You know your competitors use SEOs so you feel you need to use them just to keep up. But what if you hired the same SEO as your competitor (say you’re CampMor and your competitor is REI). Who wins then? Many SEOs guarantee top ranking for certain keywords but this can get sticky when your SEO is also helping your competitor. Your SEO will probably use the same tricks on both sites and you’ll both end up poorer and in the same positions relative to one another.

But let’s say you actually have different SEO vendors and both claim the ability to get you top ranking for your keyword(s). All SEO vendors claim to improve your natural search rankings but clearly someone’s SEO has to be second (REI or CampMor). So does this mean that the loser’s SEO is unable to back up its claims? You betcha - so don’t fall for guarantees of top rankings.

SEOs also each claim to have perfected proprietary techniques for improving your natural search rankings, but in the end, no one has any secrets. The big search engines work very hard to improve the accuracy of search results and any “secret” that can be exploited will not last for very long, if at all. The big secrets to search engine optimization, lots of topical content, descriptive title tags, and tons of incoming links, are pretty basic and any reasonable web operator already works to address these factors. So what are you wasting your money on when you’re the one who has to do all the work anyway?

Finally, I’ve also heard complaints from internet marketing managers that often SEOs are unable to make helpful suggestions for sites due to SEOs’ lack of specialized knowledge. For example, how many SEOs know the difference between an internal and external frame backpack or a goose-down sleeping bag and a synthetic bag? The fact is that you know more about your website topic than any SEO and you can probably easily list and focus on 20 descriptive words to concentrate on to maximize your search engine presence. SEOs will give you words like “tent,” “sleeping bag,” and maybe “backpack” if you’re lucky, but is this what your users are really searching for?

Unfortunately the answer isn’t as simple as firing your SEO at this point, however. In order to keep up with the competition, it might be a good idea to hedge your bets by sticking to your SEO efforts, despite the problems I’ve outlined. Just be prepared to do alot of the legwork yourself!

Another recycled school paper… This time I’ve decided to post one of my essays from my Harvard Business School application in 2004. I was able to get an interview with Harvard but alas, they did not admit me (their loss!). I realize that my description in this essay may sound a bit oversimplified but my word limit was tiny (400 or so?). I’ve got some more thoughts on this subject that I’ll put down in a future blog entry.

Starting a new business is an exciting experience, but one fraught with potential risk and opportunities for ethical compromise. The competitive landscape of today’s business world is cutthroat and demands owners take every advantage possible. In starting our by owner vacation rental directory, Safarium.com, my partner and I were faced with an important question: to spam or not to spam?

Most Internet users are familiar with spam, the unwanted advertisements for “amazing new products” and “unbelievable business opportunities.” However, many do not realize that spam comes in many varied forms and flavors. For instance, in promoting our mountain biking trail information website, Singletracks.com, my wife and I took to competing mountain biking websites and sent carefully targeted messages to users asking them to check out our new site. We figured mountain bikers would be glad to know about our site and wouldn’t mind that we had sent them an unsolicited commercial message. This turned out to be correct for a while, until we were reported to the SpamCop.

SpamCop is a website that Internet service providers and individuals can use to report unwanted emails. One of our email recipients notified SpamCop of our transgression, and SpamCop in turn notified our web hosting company. In the end, our hosts told us in no uncertain terms that they would not tolerate spam and they would terminate our account if we spammed again.

Fast forward four years to a new website, Safarium.com, and a new web hosting company. My partner and I were beginning to have doubts about our business and wondered how we could increase traffic to our website. We were offering free one-year listings while other sites charged upwards of $100 and we were confident that property owners would greatly benefit from our service. My partner and I knew that our competition was bombarding property owners with unsolicited messages and we sorely wanted the same exposure. Besides, it was cost effective and we were offering a smoking deal to our customers. But somehow, this all seemed too familiar…

After mulling the issue for several weeks, my partner and I sided against spamming. Today our site boasts almost 100 properties in 19 states and we are proud that we made the ethical decision against questionable business tactics. We’ve even made a name for ourselves through adding features to prevent our property owners from becoming victims of spam. In the end, our decision has given us the pride and resolve to continue running our business with ethical and moral conviction.

Web sites that have horrible content or a complete lack of content have much higher advertisement click through rates (using adsense or affiliate links) than sites with useful, interesting content. Makes perfect sense, right? If an internet user mistakenly wanders onto a site or a page that sucks, he or she will use almost any exit available (a well positioned ad) to find the information he or she was looking for in the first place. It’s why these ad-only sites are able to flourish; just buy a domain that will get a decent google pagerank and plaster the site with ads for related products. If your site isn’t “sticky,” who cares! In fact, this is exactly what you want!

I found this phenomenon to be true on my own website in a couple of instances. In the early days before we had bike trails in all 50 states, several of our state landing pages were blank and we filled the space with affiliate links to guidebooks that covered that state. Lo and behold those pages had the highest conversion rate even though we didn’t have a bit of content! Nice.

More recently I’ve found that the conversion rate on our fairly new gear review section of the site has an above average click-through rate, probably because we don’t have much original content yet. I’m almost dreading the day when our users want to hang out there; how will we ever make any money if no one wants to leave!?

The stickiness curse is real and it’s unfortunate in its effects. Quality content providers don’t make any money and the scammers win. Unfair…