Archive for the ‘marketing’ Category

Who Are My Readers?

Wednesday, December 5th, 2007

ConfusedGood question. Apart from MyBlogLog users, I have no idea who reads my blog. Having said that, I am very keen on getting to know my readers. I truly appreciate all the comments, trackbacks, links, and e-mails. Nevertheless, there are still those who like to hang around the periphery and watch from a distance. I have no problem with that, but for this one post…

I would like all regular readers, as well as new visitors, to introduce themselves with a simple comment below. Just mention your name, how long you’ve been reading the blog, and what you do for a living. Heck, you can even mention your company or your pet’s name.

This is simple experiment to help us all get to know one another. It may also provide some added exposure for yourself or your company. So please be sure to drop a comment - even if it is very short. Thanks guys.

To NDA Or Not To NDA?

Tuesday, December 4th, 2007

ContractsThat IS the question…

When ‘exposing’ your business plan to colleagues or known business acquaintances, is it always necessary to get them to sign an NDA? The fickle readers will tell me yes. The less cautious readers will say no. Here’s the dilemma:

We all know what an NDA is and what it is supposed to accomplish. But can trusted business contacts actually be trusted? Paperwork aside, the biggest downfall of an NDA may be the loss of respect and trust. Let me explain…

If I get a colleague to sign an NDA, I’m basically alluding to the fact that I don’t trust them. I either think they are going to talk to someone about the idea, or they might steal it for themselves. Bear with me here… I know it’s a long shot, but that might be the thought process of your colleague. In other words, they believe that you don’t trust them. Consequently, they begin to question your business (and perhaps, personal) relationship.

Don’t get me wrong, any understanding party should have no problem signing an NDA. However, some may question your intentions and self-assess your judgment whether you like it or not.

One key argument for NOT signing an NDA falls around execution. Sure, someone may know your business plan top to bottom, but the execution is where 99% of challenge lies. Most people don’t have the time, patience, expertise, or determination to take it to the next level.

Obviously, when exposing such a document to lesser known business contacts or potential investors, an NDA is essential. A certain level of trust has not yet been established. Therefore, such a request should go without saying. But when dealing with known individuals, the rules change. A level of trust has already been established to some extent. The question now becomes… does that level exceed your willingness for them to sign an NDA?

So basically, I keep jumping back and forth over the fence on this one (although I am leaning toward “don’t be a fickle bum”)…

What is your take on the situation? Do you think that everyone should sign an NDA before viewing a business plan? Do you think it may ruin or put strain on a relationship?

Advertising Isn’t a Revenue Model

Monday, November 26th, 2007

I know it’s a bold statement that isn’t entirely true, but let me explain. Obviously, a large number of successful companies can call advertising their revenue model, but this is only after siginificant traffic growth. The number of new start-ups that launch with an advertising model in mind, compared with the number that can actually sustain such a model is minimal. I would consider it a generous estimate to say 1% or so can do it.

Let’s do a little math experiment (using some basic assumptions)…

Company XYZ has 3 full-time employees. Let’s also say that they have no other expenses as they run out of a makeshift basement office. Assuming an extremely modest salary of $50,000 a year each, the company needs to generate revenues of $150,000 a year just to break even. Keep in mind that we are assuming no other expenses exist, even though hosting, bandwidth, and other factors should (in theory) play into the equation.

So, in order to break even, the company needs to generate $150,000, or $12,500 a month, or $417 a day. That doesn’t seem too unrealistic. Now, let’s assume that the website can achieve a $5 CPM, which is relatively good for a small company. The company would need to generate 83,000 page views per day just to break even. This is where many begin to realize that monetizing via advertising is much harder than it seems. From a monthly perspective, that’s 2.5 million page views per month. That’s a significant number. Once again, keep in mind that this is assuming no other expenses and doesn’t include a lifestyle of luxury.

[Please feel free to rip apart my math, point out any inaccuracies, or add any relevant commentary.]

On the whole, what I’m trying to say is that an advertising model is possible to sustain, but it’s rare. Other forms of monetization are much more effective and attainable. With such high levels of competition in every area of the Internet, your ability to capitalize on ads has been greatly diminished. 

As we all know though, many of these companies never intended on monetizing via advertising like they say. Their sole intention was to build traffic and sell off to a major player (Google, Yahoo, Microsoft). This is the typical web 2.0 revenue model. This “hope for the best” strategy is risky, but has paid dividends for a small minority. I wouldn’t recommend it though.

4 Rules for Choosing a Domain

Friday, November 23rd, 2007

At some point in time, many of us are forced to choose a domain for a specific need - whether it be for an online company, a blog, or a web application. Some domains are clever and remarkable, while others languish. I’ve chosen several domains over the years and I’ve come to some important conclusions. Here is a list of the 4 rules I abide by (and advise others to abide by) when choosing a domain name:

1. Must be a .com - Forget what everyone says about .net or .tv or whatever. If you are truly looking to make an impact on the web, a .com is a must. Exceptions can be made for non-profits (a .org is a better choice) and for localized companies/services, where a country specific domain may be chosen.

2. Must be relatively short - I understand that 5 and 6 letter domains are hard to come by nowadays, but that’s not what I’m talking about. As a rule of thumb, I wouldn’t choose a domain longer than 15 letters or so. It may be hard for others to remember. You must also keep in mind that the longer the URL, the more likely it may be misspelled. In other words, if your URL is, you may want to rethink your choice.

3. Must NOT contain dashes - Simply put, dashes are no-no in the world of top-level domains. Unless you’re creating mindless SEO-tailored landing pages, domains containing dashes should be nixed. In all likelihood, you will be driving traffic to the domain without the dashes. Moreover, I find that they take away from the professionalism of the site and/or service.

4. Must be memorable - Generic domain names are not only boring, but also dangerous. Their brand recognition is minimal and customer loyalty isn’t likely to be as strong. Generating a more remarkable, memorable domain name that can be branded is key. The loss in SEO juice will be more than compensated by an increase in brand equity and perception. After all, who’s going to remember a site called Not me… would you?

I hope this facilitates your quest for the ultimate domain name. If your choice fits all 4 criteria listed above, congratulations.

How do you choose a domain? What criteria do you use when searching for the perfect name?

SmartHippo: A Better Way To Do Mortgages

Thursday, November 22nd, 2007

SmartHippo logoHistorically, if you’re looking for a mortgage, you head to your local bank to get the best available rate. Next you may visit several other competitor banks to find out their rates. Some people even make use of a mortgage broker. In any case, the purchase of a home is usually the single biggest purchase in a given individual’s life. For that very reason, the research and due diligence leading up to the decision cannot be taken mildly. In many cases, people don’t put enough time and effort toward the cause and end up with an inflated rate that puts a severe damper on their finances for years to come.

SmartHippo wants to change the way we think about and deal with mortgages. The goal of the company is to bring transparency to the financial services industry by providing an unbiased look at mortgage rates. How so? Essentially, the site is powered by users. These individuals post rates depending on their profile and geographic location. Banks and mortgage companies can also post rates (SmartHippo becomes a marketing outlet for them). When a user wants to ‘compare rates’, a snapshot of current conditions is generated based on the user’s geography, credit score, equity, etc…

So how does one know if a rate is accurate? Rates receive votes and comments by the community, akin to Digg submissions. Assuming a community-controlled system works, the bad rates will be weeded out and the good rates will rise to the top.

Users can also ‘get a quote’. This is different from comparing rates. In this case, a user enters their criteria and contact information, and instantly gets matched with up to four lenders who will contact them with a personalized offer. Strict security and privacy policies are present site-wide. This allows users to remain anonymous at all times if preferred.

Because the site is geographically-sensitive, users can discuss their experiences with other local mortgage hunters. A forum provides a great place for vent or recommend a given financial service company.

I had the pleasure of chatting briefly with the CEO, upon which I had one issue in particular. It went something along the lines of this: for the most part, people only buy one house during their lifetime. Assuming they use SmartHippo to capitalize on rates and the purchase has been completed, why would they want to come back to the site? In other words, SmartHippo no longer serves a purpose to that individual. “Not so fast…”, he tells me. The company is planning to diversify in other financial services areas, including insurance, stocks, mutual funds, etc… This helped answer my question concerning repeat visitors and site “stickiness”.

Interestingly, the service is free to use. If I’m not mistaken, revenues will be generated via targeted advertising. In addition, SmartHippo is only available to US consumers at this point in time. Ironically, the company is based out of Montreal. Plans have been made to enter the Canadian market in the near future, although the US provides a much larger base at the present time.

I think SmartHippo is a great idea that merits further scrutiny. I look forward to a time when it available in the Canadian market and I can make use of the service. The concept and basis are very new and fresh. It will be interesting to follow adoption and acceptance of the service as the industry progresses from a traditional model to a more current, innovative one.