Internet Entrepreneurs Blog

I’ve been building hot websites for the last 10 years but this summer I needed to build my first real e-commerce site for unity3. I found researching the choices for e-commerce to be a bit overwhelming and difficult to sort out marketing from objective opinions. It seemed as if every e-commerce comparison site I found was an affiliate marketing scheme or a review by a magazine writer who had no intention (or understanding) of actually building an online store. Here is the perspective of an experienced web designer (read: not interested in your WYSIWIG interface) on the top choices available today. This list is not all inclusive as there are many providers that I did not even consider for various reasons.

One of the most obvious choices for e-commerce is Yahoo! Stores as they seem to power many of the small businesses online. Their prices appear to be reasonable but wait: what’s this about taking a percentage of my online sales?!? Yep, Yahoo! will take a cut for every sale you make, even if you’re paying for their most expensive plan. Awesome, huh? It gets even better: when your customers checkout, the web address they’ll see will start store.yahoo.com. That’s confusing, since the customer thought they started their shopping experience on your website. I would imagine shopping cart abandonment rates are fairly high for most Yahoo! merchants for this very reason. Yahoo! also uses a proprietary markup language for customizing their storefronts so if you already know HTML or ASP you can pretty much throw alot of that out the window. These first two issues were pretty much show stoppers for me (not to mention that I already host one of my sites with their standard web hosting and I’m sorely unimpressed), so I moved on.

Next, for some strange reason, I looked at Pro Stores, an eBay company. Their product seems solid and easy to use but in the end, it seemed a little too easy to use. I talked to a sales person and didn’t get a warm fuzzy with regards to customization (a big deal for our site) and they too charge a percentage of sales in addition to their monthly fees. I know that in the meat world many shopping center leases have similar revenue sharing provisions but it still doesn’t sit well with me. Why should my e-commerce host share in my success?

Moving on: Monster Commerce, owned by Network Solutions. Now I’m not a big Network Solutions guy since they are absolutely the most expensive registrars around but the Monster Commerce model intrigued me. No pesky revenue sharing and really only 1 plan offered at $99 a month. While a hundred bucks a month seemed a little steep starting out I knew I would quickly be paying twice that amount with Yahoo or ProStores so I looked more closely. MonsterCommerce claims a high level of customization though looking through their client list showed me dozens of sites with predictable and similar designs. But perhaps the most troubling thing with MonsterCommerce is the add-on fees you’ll encounter with their service. Want to export your financial or inventory data to Quickbooks? Just pay a one-time fee of $299 and you’re set! How about just exporting your product data to Froogle or an excel spreadsheet? For only $30 a month additional you can do that too! WTF? That is my data, I should be able to access it whenever and however I want! Next…

Next I peeped on Volusion. Volusion had some good reviews and was even a finalist for a “Codie” in 2006 (whatever that is). They offered all the marketing features like coupons and gift certificates across all their plans and even free Quickbooks exporting! Plus, with no revenue sharing and plans starting at $57 a month things looked good. But wait; I only get 50Mb for my webspace and 1Gb of transfer a month? Yup, that’s how they make their money. At least these are things I can (somewhat) control with crafty web design and efficient coding. The client gallery showed some impressive designs (though I later learned that some of the designs had been accomplished using the $10K licensed version of the shopping cart software).

The other solution I considered was osCommerce. While all the solutions above are what is known as “hosted solutions,” osCommerce software can be installed on your own webserver and can be completely customized in terms of design and functionality. Best of all, it’s free! Even though I’m a super bad-ass PHP/MySQL programmer I was still concerned about my ability to build a stable and secure shopping cart on the osCommerce base. There is a huge support community though and there are hundreds of modules to handle everything from shipping to inventory to marketing.

So which solution did I end up picking? You’ll have to wait for the rest of the story I’m afraid (if you haven’t already figured it out.) Let me know about other solutions you considered that I may have missed.

In a previous post I talked about the importance of understanding your business competition but not being scared off by it. Now I want to talk about how this understanding can help shape your strategy for entry and set you on the path to success.

Getting back to our experience in starting singletracks, we first set out to be a mountain biking “portal” offering everything from bicycle auctions to forums to classified ads, e-cards, gear review, and trail information. We even incorporated a good bit of this technology into the site using free, off the shelf perl scripts. But after a year or so certain parts of the site weren’t generating traffic or content, namely those features that required scale (like auctions and forums). We rethought our reasons for building a mountain biking website and realized our main passion was sharing trail information with others.

With a new focus in mind, we stripped all the distracting features and concentrated on making trails easier to find, rate, and manage. Our competition (MTBR specifically) wanted to be all things to all mountain bikers and we saw an opportunity to offer a more useful alternative trail information resource. We added features like training logs tied to trails, trail wishlists, favorite trails, GPS trail data, trail filters, photos, and tons of other features that other mountain biking sites simply didn’t have the time or resources to address (especially since they were also managing hundreds of non-trail related features).

Our focus seems to have served us well as we’re still around after 8 years online. Our content continues to grow and improve and we’ve finally found our niche among mountain bike riders who are searching for quality information on new and exciting trails around the world. They say imitation is the sincerest form of flattery and in the time we have spent focusing on building new trail features, we have seen competitors follow our lead in adding features to their own websites (like Trails.com, among others). But once you choose your direction of differentiation, competitors will always be playing catch-up since you will be in the lead.

So I boasted many months ago that singletracks had never been form-spammed but my installation of BBlog was getting form-spammed every few hours. During this period even my new Word Press blog received its fair share of spam posts (though these were easily deleted and never made it to the live site). Then it happened: singletracks started getting spammed!

The form bots were able to choose the pull down menu on the review page for their location (for some reason all were choosing Austria, which was neither the first nor the last location in the list). Anyway, the posts came about 1 a day and they all seemed to be targeting the same trail page: GMA Trails in Cumming, GA. At first I thought it strange since the GMA Trails are probably one of the least popular trails on the site (in fact they are closed) but then it hit me: the spam bots were looking for Cumming (get it?)!

I noticed the same pattern with my Word Press posts; those with provocative subjects (like Internet business ideas) attracted the most spam while others (like Backpacking in Texas) drew no attention. Boy, those spammers are smart!

In the end I decided to require users to be logged in to post reviews on singletracks, ending 8 years of anonymous posting bliss, but no worries. Almost every forum I’ve ever been a part of required users to be registered and logged in to post so why shouldn’t singletracks be the same? Well played spammers, but I’m afraid you’ll have to find a new way.

It’s as if Overture can read my mind! Just as I try to login to reduce my Overture budget due to a lack of positive results, the system is unvailable. Actually I would estimate I see this message about 20% of the time I try to log in and it’s a bit disconcerting.

The other stupid thing is that there is no message on the home page warning you that the system is unavailable - you are only told this once you have successfully logged in. It’s as if they are hiding the fact they are unreliable from potential advertisers who may not yet have an account. Plus it is a little scary since it appears you are logged in with no way to “log out” of your account - you’re only presented with an image telling you in 6 different languages that they are unavailable. I have been trying for the last hour with the same result. WTF? Maybe I should just ratchet my budget down to zero and throw EVERYTHING to Google?

Funny thing about Internet business ideas: no one is ever the first to come up with a new idea for a website. In fact, this is generally true for most ideas and this concept has been reinforced in writing by successful entrepreneurs like Guy Kawasaki. But what does this mean?

First off, it means that if you have a great idea for a business, it is generally not to your advantage to keep it a secret while you write your business plan. You probably don’t have anything that (many) other people haven’t thought of before and even if it is a great idea, most people are not in a position to take advantage of your idea. In fact, by sharing your idea with others you’ll get useful feedback and may even find potential partners while you build your network of business contacts. I’ve listened to dozens of business ideas while at Duke and I can honestly say none of the ideas I’ve heard have been completely “new.” Most business ideas are at most a new twist on an old idea or an extension of an existing concept into a new area. These are the best types of ideas in my opinion anyway since they involve an established and proven market.

But what about ideas for Internet websites? Since I’m generally known among my network of contacts as the Internet guy, I get alot of people approaching me with ideas for websites. How about a website that allows you to report speeding ticket locations/speedtraps? (speedtraps.org, speedtrap.com, and now my own entry, TripleBlaze Speeding) What about an online DVD trading service? (Peerflix or DVD Exchange) These are just two of the ideas I’ve heard from friends who simply weren’t aware of what already existed online, even though a simple google search quickly revealed these sites. But isn’t there still an opportunity since no one knows about these sites? Yes and no.

The real opportunity lies not in building a better website but in creating a more effective marketing program for your site. It’s what the dot-coms in the late 1990s understood about Super Bowl marketing and blowing tons of cash. But arguably sites like Yahoo!, Amazon, and eBay could not have risen above the clutter without the HUGE marketing investments that were made in the early days of their categories. Today the same lesson holds; if you want to have a successful website operating in a particular category you need to figure out FIRST how to market the idea, (with a good emphasis on offline as well as online marketing) then how to actually execute the website. These days building the website is actually the easiest part with customizable open source software and user-friendly web design packages.

So, before you get excited about that great new concept for a website you just came up with, take a quick look around the search engines. If your idea already exists (or even if your idea actually turns out to be original) the next most important step is to figure out how you will market your idea. Who are the customers, where can you find them (at the DMV, buying DVDs at Best Buy, etc.), and how expensive will it be to reach these consumers? If you can answer these questions then you probably have a great idea you should pursue. If not, you can at least understand why no one has heard of Speedtraps.org or Peerflix (yet).

In version 1.0 of my blog, I spent some time planning out blog topics and even wrote a number of entries ahead of time, assembly line style.  This let me knock out 4 or 5 posts in a single 1-2 hour sitting so I could just release each post every couple days to keep an even output.  In the end, though, this just wasn’t sustainable.

I still feel like planning blog topics is important, especially since I often get ideas for topics precisely at the times when I’m farthest away from my computer (at church, on the trails, driving, etc.).  However, I noticed that I was forgetting to write about interesting things that were happening in real time.  For example, it would have been helpful if I had written about my research and thoughts about the Chipotle IPO in the weeks leading up to my investment rather than trying to recreate the whole story two weeks after the fact as I did yesterday.  I’m also kicking myself for not writing summaries of my MBA courses as I completed each class for my own records as well as for this blog.

My advice to new bloggers is to find a nice balance between pre-planning entries and posting news as it happens.  Planning gives you the benefit of coherent, relevant posts while keeping topics current ensures interesting, accurate content.  How do “professional” bloggers do it?

I just switched my blog over to Word Press from BBlog and I feel like a new blogger. My posts had dropped off under BBlog to around 1 a month and I thought this was just the way things were after blogging for a few months. Then Paul got Word Press and it looked pretty sweet so I tried it. Man, it’s amazing.

Word Press is easily the best and most useful (free) software ever to be written in the PHP language. Not only does the coding seem to be solid but the web design is impeccable. Lots of PHP software I’ve tried has too many features that seem to be crammed in to satisfy as many users as possible making the software a pain in the ass to use. Not only that but all those features often make the software less flexible and constantly buggy. Word Press is none of these.

I certainly don’t want to poo poo BBlog because it is great software and I know the writers worked hard to create it. But with Word Press available for free, it really doesn’t make sense to even bother with any other blogging tool.

I joined the YPN beta a few weeks ago to try out on Singletracks. I set my site to display YPN ads half the time and Google Ads the other half of the time. Anyway, the ads I kept getting for days were for Vonage and golfing on Prince Edward Island, Canada (my site is about Mountain Biking). I also saw an ad for my own website! (I advertise on Overture) After several days of this I contacted Yahoo! and told them I was very disappointed with the targeting of their ads.

The response? You didn’t turn on ad targeting in your account settings. Well duh! I also didn’t add my own website to the list of blocked ads on my account settings. I chose the “Sports” category for my ad target and added my own site to my list of blocked advertisers. So this was pretty annoying but I did it anyway, hoping that the ads would improve dramatically. But they didn’t.

Now the only 2 ads I see are for Wrestling Singlets and (still) golfing on Prince Edward Island. I scaled back the ads to show only 20% of the time and waited a couple more weeks. Same ads, same crappy click-through rate (between 0 and 0.2%). Over the course of my trial (3 weeks or so) I’ve earned around $12. With Google I would have earned $200. So today I finally pulled the plug and stopped showing YPN ads. Hopefully things will improve once the beta is complete but it seems like there is a long way to go.

Maybe this already exists in some blogging software package but I haven’t seen it yet: RSS feeds of posts organized by category. I’ve come across a number of interesting blogs that I’ve wanted to keep track of but only for certain subjects. For example, if you’re reading this blog, perhaps you’re only interested in the outdoors but not too interested in geeky web stuff. Wouldn’t it be nice if you could subscribe to a feed of only those entries relating to outdoors?

I’ve run into this particularly for bloggers who write about mountain bikes. They go through the trouble of identifying which posts pertain to mountain biking but then I can’t read just those posts with my RSS reader. What I really want is to display feeds of the posts on the singletracks news page but no luck. Hopefully blogging software of the future will allow you to filter RSS feeds…

I know the metaphor of the online land grab in the late 1990s has been way overdone to the point of cliche but I think the metaphor can be extended in a more meaningful way. Typically the land grab referred to “cyber-squatters” who purchased domain names in hopes of selling them later to desperate companies establishing online identities. Today I like to think of online entrepreneurs as landlords more than speculative flippers.

I’ve had a fair interest in real estate for quite some time but I’ve always had a hard time reconciling my interest in real estate with my larger interest in e-commerce. Perhaps my interest in real estate came from my civil engineering studies in my undergrad days or from my summer construction jobs in the southeast. Recently, however, I realized what really attracts me to real estate and e-commerce is the ability of both to extract rents.

Real estate investors buy properties so they can take in rental income from renters. Eventually, the hope goes, a real estate investor will have enough properties to live comfortably collecting checks from the properties he has acquired over several years of wise investment. For me, e-commerce offers the same hope. If one can build enough sites bringing in advertising revenues, there is little left to be done but sit back and collect the checks. This oversimplification is, of course, ignoring depreciation, competition, etc. but you get the point.

Speaking of real estate, I highly recommend two home shows on TV these days. One is called Property Ladder and it follows amateur investors buying homes, fixing them up, and hoping to resell them months later for tidy profits. The second show is called Flip this House and it follows Richard Davis, a Charleston, SC real estate investor who has a team that identifies properties, fixes them up in weeks, and then resells the units. Richard seems to be the man and a fun guy to work with, probably my favorite show on television these days. Hey Richard, if you’re looking for an MBA with limited real estate experience (I did take a class called Real Estate Entrepreneurship), give me a call, I would love to work with you when I graduate!