Alex Hochberger

Social networking is amongst the hottest topics of the past few years, but while our US Centric media has focused on Twitter (popular in urban areas) and Facebook (popular throughout the western world), the growth of social media is universal.  Here is a country-by-country map of the dominate Interestingly, Google’s Orkut has a small presence in Latin America, and it is likely that Facebook will overtake it in 2010.  This has the added benefit of destroying anyone who thinks that Google’s web dominance in anyway approaches Microsoft’s desktop dominance in the late 1990s.

Most interesting to me, the map looks increasingly like a Cold War map, with NATO/Facebook squaring off against Warsaw Pact/V Kontakte, although the division is less political and more language based.  Proper Cyrillic support is necessary in Russia and areas with high numbers of Russian speakers.  As communication morphs, increasingly email is the dominate business communication and social media is the dominate personal communication method, making sense of personal communications matching personal friendships while business needs the real time communication for which the academic system was developed for.

As communication increases, the world becomes increasingly similar, and a US-centric view of your potential user base may look myopic as more and more of the world starts to look similar.  If you can sell in the US via Facebook, you can sell across Europe via Facebook, as long as you adapt to the social and language conventions of your target country.

Every year, more and more of retail takes place online.  The recession is pushing toward more direct response advertising, causing an uptick in online advertising between 3% and 5% in an otherwise down year.  Search is expected to perform similarly, and 2010 is predicting an increase in online advertising dollars between 10% and 15%.  For online publishers and advertisers, this means that despite sluggish growth overall, the Internet continues to grow at several times the overall economy.  Although search engine consolidation has caused bid prices to increases, the prevalence of content networks and alternative search networks creates new opportunities for online advertisers to reach customers in a cost effective manner.

Social Media appears to be one of the interesting potential story, as a source of advertising dollars and business, search continues to grow, display ads are relatively stagnant, and alternative campaigns in new medias inches upward.  Despite it’s status as media darling, Twitter remains a small niche play, with popular Facebook game FarmVille having more users than Twitter.  Email newsletters remain big business, but the movement from getting content pushed into your inbox toward networks and feeds continues, creating new opportunities for online advertisement.  2009 looks to have finished as a slight positive in a down economy, and 2010 looks quite promising.

So I routinely get asked by friends for advice on how to get a web business launched with no money.  As I politely steer them away from the idea that I should do it for them, I thought that I should work on a basic guide for getting started.

Step 1: Pick a Good Domain Name

A domain name is your address, what you will hand out, and what you will advertise.  Your goals are short, easy to spell, nothing to trip people up, and keyword friendly.  If you are dealing with cars in Florida, and your name is Jake, then CarsByJake.com would be friendly, start with your keyword, and be easy to spell.  FloridaCarsByJake.com would also be good, but JakesFloridaCars.com gets tricky because without the appostrophy, it sounds like your name is Jakes.  Avoid double consonants (two words, one that ends in a letter and the next work begins with it), and definitely do no “merge” it being clever, people will get confused.  I find dot-com extensions better than alternatives, but it may depend on your industry.  It’s been over 10 years since dot-net was the premium TLD and dot-com a negative one, but dot-net still has cachet in technology sectors.

Step 2: Register with Twitter, Facebook, and LinkedIn

You don’t get to play if you aren’t there.  Twitter is important for the ability to move information out there.  Facebook has a tremendous number of users and viral power, and LinkedIn is where the professionals hang out.  While you may not use all these mediums terribly effectively on Day 1, the sooner you open an account, the sooner you are ready to use it.  If you aren’t going to optimize for all platforms, also register with Ping.fm or HelloTXT for content syndication, that will let you move your messages to all platforms at once.  I would recommend picking a URL shortener for social media (I use Bit.ly) and creating an account with stats, this way you can keep your collection of short links and start to see what drives traffic.  For Facebook, you should also setup a Page for your business so people that like your business can Fan your Page, even if they don’t know you personally.

Step 3: Setup the Website and add Content

If you aren’t ready for a serious commitment, using a free CMS system like WordPress.com, or other environment that let’s you publish and bring your own domain name is important.  Make certain that you can export content later if you move.  Despite my historically building my own CMS platforms for SEO reasons, I’ve been finding WordPress.com a great platform for self-publishing, and I can always export to a WordPress.org (self hosted) system later and work from there into whatever I want.  Good content is key to success.  Learning to write 5+ blog posts a week plus updating the core of the site (Pages in WordPress speak, the static content part of any CMS) of information, adding images, etc., is time consuming.

Step 4: Get in the Social Media World and Blogosphere

You need to participate to get involved.  For Facebook, setup the appropriate privacy policies and participate in comments, Wall Posts and pictures.  Wish people well on their birthday, tell them when they put up cute pictures of children/grandchildren, be friends with your friends.  For Twitter, grab TweetDeck, start finding the appropriate Hashtags for your discussions and start sharing information.  With your blog, find bloggers posting questions that you can answer, and either leave a comment (if short), or answer with a link to their entry with software that will ping them with the answer.  Like any form of networking, participate.  Retweet good posts, share your expertise, and build up an online reputation.

Step 5: Using Content and Social Media, Promote your Site which Promotes your Business

This final step is how you pull it all together.  Write good content for your site on the blog, promote it through your new Social Media channels.  The better the content, the more likely you are to get Retweeted or linked to from other blogs.  The more links you get to your site, the better you will do in search engines.  The more you get Retweeted in Twitter, the more likely you are to get Followers.  The more you get mentions and links on Facebook on news feed, the more likely you are to reconnect with friends or come to the attention of customers.  SEO = keywords + good content + links… the more advanced part of SEO, you can get to that later, when you get traction.  If you need to hire an SEO expert, you will already have new customers from your web site plus a great starting point for the SEO who can see your keyword success to get started.  As you add content and social connections, your traffic will build and build, and if your site’s core information is good, you will successfully launch your business.

This is my first draft of this 5 Step Process.  I expect to come back and revise over time.  Comments, suggestions, etc. are all appreciated.  Feel free to Follow me on Twitter and Tweet this Post!

Three cheers for some smart governmental policy.  Markets do well where there is perfect, or near perfect, information, and limited barriers to entry.  Markets do poorly where there are barriers to entry, particularly if they are information based.  Technology, IT in particularly, has helped shrink businesses by eliminating layers of management because you no longer need a 6:1 reporting ratio because of paper limitation.  Further, Just In Time EVERYTHING, manufacturing, wholesaling, inventory, etc., helps keeps companies lean, just buying things as needed in an open marketplace.

One area where the market failed to make connections was in the manufacturing of products.  Contract manufacturing seemed popular with large companies, but there didn’t ever seem to be options for small businesses.  Strangely, every entrepreneur I know who made a product made it in China, not because of the cost differential (shipping and monitoring eats it up on small lines) but just because they could get it done.

Department of Commerce’s Manufacturing Extension Partnership helped launch Planet Eureka!, the innovation marketplace.  Maybe we’ll be able to get one of my wife’s ideas to market this time around.  Thanks to CNN Money for pointing me in this direction, you can read the artile that I read, “What’s your idea worth?”

In a world of complicated finance, the idea of building a business without capital, raising money from your customers seemed expensive and retro.  Although mentioned as an example in every business text book, in reality, entrepreneurs have focused on debt financing or outside investors rather than looking to their customers.

With the credit crunch and housing collapse eliminating many small business loans and home equity loans as a source of business capital, many entrepreneurs are returning to the historic source of capital, their customers.  Money magazine shares the anecdotes of several business owners, owners who have sold stock, pre-sold gift certificates, and otherwise took action to raise capital from their current or potential customers, both raising capital cheaply and increasing customer loyalty.

In some ways, however, this capital is cheap, and in other ways it is very expensive.  The capital is cheap in that it lacks personal guarantees, protecting the downside, and may not have the warrants and other “teeth” that angels and VCs may want.  However, selling $1,500 in gift certificates for $1,000 to raise money is a 50% rate of return and will likely be redeemed within 3 months, potentially charging you a 200% rate of interest.  If that customer would have spent $1,500 with you anyway, that’s real cost in opportunity cost.  To the restaurant owner, if they run at 50% margins, that $1,500 costs them $750, so from a cash flow point of view, the money is cheap.  As most small business owners will remind you, cash is king, and cash flow matters a lot more than the traditional finance metrics, because cash means survival.  The Fortune 500 finance guy is worried about NPV (Net Present Value), but the local coffee shop needs to pay the rent and cover payroll.

As a rule, I open my business bank account with the first check from a customer.  If I invest in the business, it comes later, but by always opening the account with a customer check, it serves as a reminder that you aren’t in business until you have a paying customer.

After spending so much time in sub-prime finance where most of the SEO/Internet Marketing Industry lives, and helping eCommerce businesses in a race to the bottom of price and service, it’s nice to know that the premium industry is surviving and even thriving in this space.  Fortune Magazine had a great article on the success of Net a Porter, selling high end clothing to wealthy but time strapped women who was a virtual fashion magazine, think of it as Vogue that delivers the clothing to you.  Much of the online fashion buzz has been for companies with rapid fire sales like Rue La La, which lets designers dump excess inventory to those with free time… young professionals who can sit at their office computer waiting for the 15 minute window where the good stuff all goes when a boutique opens.

Net-a-Porter is offering a mobile and web experience, letting a busy professional woman that is on the go have the latest fashions despite an industry that ignores them.  The successful women that I know have more disposable income than time, and the boutique industry still targets the trophy wives of the idle rich.  A female executive working 80 hour weeks as a dealmaker simply doesn’t have the time that the wife of her male counterpart does to go and be waiting on in a fancy boutique, but there is no reason that she’s can’t be properly dressed.

It’s nice to see that in a race to the bottom, a company focused on service found a profitable niche.

I am really concerned by the movement to boycott Whole Foods because of a political position taken by the CEO in an editorial to the Wall Street Journal.  In the editorial, CEO John Mackey expresses his fear of the proposals from Washington, and shares with the readers what Whole Foods has done regarding health care for its employees and urges some common sense reforms to the system, some of which are in the proposal.

Aghast that Whole Foods is a business operation, the upper middle class liberals took to the Internet to punish this company for its CEO being proud of what they did in the company and sharing the experience with the readers of the Wall Street Journal.

Now, Health Care Reform is a pressing issue in America, and has dominated the news and the political cycle for this summer.  Mr. Mackey expressed his opinions and experiences.  He hasn’t used his position at Whole Foods to affect the political debate, he isn’t having the stores he runs promote his agenda.  He, as a private citizen with some knowledge of health care costs as a major employer wrote a well thought out, intelligent editorial, one that some of his customers might disagree with.

As a result, they are calling for his head and a boycott of the firm, putting his livelihood in jeopardy because he disagree with them on a political issue.  Now, this isn’t government censorship directly, but given how much of corporate capital is controlled by pension funds for public employees, for example, that could vote their shares to endanger his job, there is just a wee bit of potential government censorship here.  More importantly, Americans should all be discussing this issue and debating it, and by attacking Whole Foods for the CEO disagreeing with them, it is simply shutting down debate.

If Whole Foods was endorsing his position and broadcasting it in the stores, fine, you have a cause.  But to attack a business because of the CEO’s personal politics, that seems like a way to simple stifle debate in America.  If Whole Foods is neutral, but Mr. Mackey takes a position, Whole Foods should be left alone, and Mr. Mackey should be able to express a position without people going after his livelihood.

With Third Solutions moving rapidly toward launch, and Monetize Network getting off the ground, plus my son’s third birthday party, life has been a little hectic. As a long time Internet marketer that is new to running a personal blog, I now appreciate the need to be always on. I haven’t come close to hitting daily updates, but hopefully they will be more forthcoming in the coming weeks.

So I saw on TweetDeck, “#SEO Tip of the Day — If you service a specific city or state, mention it in your website’s title’s and html text!” from @Jacobstoops, Website: Agent SEO.

That hit me.  The SEO campaigns that I ran were generally 6 figures a year, in the most competitive areas, specializing in sub-prime fiannce: Credit Cards, Debt Consolidation, and Pay Day Loans.  In those areas, I’m not targeting local, and I’m competing with big firms and small firms, hundreds of thousands of people looking for traffic.

One area I never figured out, winning business from local businesses looking for local traffic.  That isn’t about SEO skill, anyone can win those, that’s about hand holding the businesses.  If only one person in a market does the basics of SEO, they’ll probably dominate the term.  Those guys are probably happy with 3-5 customers a month, and would pay $250-$500 a month for that success forever.

What I never figured out is how professional SEOs handle these small accounts, but if your potential accounts are looking for local traffic and don’t think to mention the city, it probably doesn’t take much to win.  A local designer selling websites for $500-$1000 should know this… but they probably don’t, and probably don’t want to spend an hour explaining to the client why they did what they did, better to get paid and moved on…

And that’s why a bunch of locals with limited knowledge can earn a living in SEO, which isn’t a bad thing.

Media Post, looking for content, is running a series of “how I got into this mess” articles.  One caught my eye, Summer Stories: How I Became A Researcher.  So he got into search research in 2003, a little after I started my search research projects on behalf of Creditcards.com.  At the time, there was lots of “general” information out there, and lots of really technical detail from the quasi-tech side of the industry.

At the time, I remember a discussion with my father of all people.  A relative was managing PPC campaigns for people, and he was adamant that the organic side of search that I was doing was a waste of time, that the future was all PPC, and Google was going to have to follow Yahoo/MSN to PPC on top.  Why the up and coming search engine would follow that path that knocked Yahoo from top dog to also ran was unclear to me.  I also saw the economics of PPC, in a competitive market, profits go to zero, because as more people bid on the traffic, eventually the PPC price equals the expected revenue, and there is no margin.

Had I not worried so much about the long run, I would have augmented the organic with a nice PPC business.  Nonetheless, it’s amazing what is available now, off the shelf in 2009, that was impossible in 2001-2003.  Back then, mod_rewrite existed, but no other URL manipulation.  Most designers pushed content way down with embedded tables in the HTML, and other things that nobody would do now.  Our single table based layouts that let us move some content to the top was revolutionary at the time, now easily handled with CSS Layouts.

Every designer now understands usability, back then, they refused to read books on it.  The days of being able to grind out a few dozen pages in a competitive area and grab a top-5 rank for years may be gone, and buying PR 9 links for $50/year are gone, but the new opportunities at the intersection of search and social media are fascinating.

When I entered search in 2002/2003, I was a newcomer, because I hadn’t cut my teach in the Lycos/Altavista days.  Now, I’m watching the learning process for a new round of Internet Marketers, and it’s amazing to see what tools they have that we had to build, but then again, they are up against people with a decade of experience and a pile of custom tools on then.