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I’m in Forbes today!

Sramana Mitra published an article today at Forbes.com, and included a huge write-up about me.  Years ago I was mentioned in the Wall Street Journal, but this is the biggest publication I’ve been in otherwise and it’s an honor to receive the recognition.

The article talks about self-funding a business, without taking on venture capital or other debt, and mentions my opinion on the issue:

“What surprises him still is how much money he sees sloshing around in start-ups. “I look at some of these sites that have received $10 million in funding and I wonder what they are doing with all of that money. I don’t need it. I do it slower. For me, being an entrepreneur is so much trial and error that I would rather make the mistakes in the lower dollar range than at the Super Bowl advertising level.” (Read my interview with Scott Wainner here.) …

…Both Wainner and Yalamanchi have created great businesses–great for their customers, their employees and for the economy. The world needs these kinds of boostrappers. Let’s hope the next U.S. president knows how much we need them, too.”

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6 Things Google Won’t Tell You

Part of being a successful business owner and running five large sites means that I don’t  blog for a living, hence the infrequent posts, though I do enjoy sharing what I’ve learned and hearing from you all as well.  Stay subscribed and every now and then I’ll try to make it worth your while!

1) Embedding adsense ads within a content list on a page is a no-no (but often a profitable no-no). If you’re doing it, stop doing it and play nice if they give you a wrist slap.  Don’t make Google mad.

2) Chitika Premium ad units might outperform Adsense, so test them.

3) Matt Cutts has no poker face and answers questions with his facial expressions.  Go to conferences and ask him anything; he’s very nice and approachable.  He won’t give you an answer verbally, but you’ll still get a decent answer nonetheless.  Don’t get me wrong, Matt is a great guy, but us Internet entrepreneurs have to latch onto any helpful tidbits we can get!

4) Adsense placements with pretty, colorful backgrounds don’t work!  They look too much like annoying banner ads! #0000FF links, #FFFFFF backgrounds, no borders, people!  A/B test red links though.

5) There are out of the box ways to implement great SEO techniques without paying expensive consultants or trying to keep up with all the latest SEO techniques yourself. vBSEO is a great SEO product for vbulletin forums.  After implementing it at TechIMO.com, our traffic doubled within 3 months and continues to grow rapidly.  Also implement their Google sitemap tool.

6) Google.com’s new search suggestion is a great SEO keyword research tool.  Type a keyword, and a box will appear with suggestions - the keywords are ranked from most to least searched.

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U.S. Lagging World in Highspeed Rail

I’m in France this week, and took the TGV train from Paris to Lyon today. That’s a distance of 290 miles, covered in 2 hours, at an average speed of 144 mph. If you want to see what it’s like to go 144 mph in a train, check out my video below. It’s so smooth, you can’t even feel the train start and stop and it feels like you are riding on a cushion of air. It’s extremely quiet, and you can sleep like a baby - the only thing that will wake you is the conductor announcing, “tickets please”. I think if more Americans experienced this, we’d all demand that the TGV be brought to the U.S. and soon. Being able to hop on a rocket between cities without hassling with the airlines is oh so refreshing.

Since 1981, the TGV has carried 1.8 Billion people without a single fatality.

TGV Paris to Lyon, 144+mph (note the cars doing 70+ on the highway):

As a business traveler, I want to get from A to B cheaply and quickly. Flying from San Francisco to Los Angeles takes about 2 hours when you factor in airport delays. Now, if you dropped France’s TGV into California, it would take 2.5 hours, probably cost less, pollute far less / less energy / cost less to operate (the TGV is electric!), I wouldn’t have to deal with major security/weather/ATC delays, and I’d be able to work from the train with my laptop and EVDO Internet access. I still can’t believe that in 2008, we can’t get Internet access on airlines (though it has been tried on a small scale).

Highspeed rail has been tried on the east coast with Amtrak’s Acela, but that train has had its share of problems, plus it’s slow (75mph-150mph) compared to Europe trains like the TGV (200mph+). The engineers of Acela botched the design, creating the trains too wide, limiting their top speed. California is planning high speed rail and finalized a high speed route this month, but again, they’re planning to design the system from scratch. Why reinvent the wheel and create a buggy new system (e.g. like Acela) when a tried and true design exists in Europe that carries thousands of daily commuters around Europe, on-time, and very efficiently?

With gas prices being what they are, airlines raising prices and having financial troubles, and climate change at its worst, it’s time to look at this energy efficient alternative that other countries have embraced for years.

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However Tempting, Don’t Burn Your Bridge

Building a new business into a success takes time, effort, and dedication.  Those words, by themselves, don’t begin do justice to the level of hardship that nearly all successful entrepreneurs must endure along the way (including myself).  There are setbacks, people do say “no”, and you run into a lot of roadblocks along the way, all of which can leave you frustrated.  But what you definitely don’t want to ever do is to vent those frustrations onto your peers or onto those people who could end up being business allies and partners some day.

I received an email tonight from James Wilcox of portfolio.wilcox-studios.com, asking me to donate a prize for a contest on his blog.  Being the open minded guy that I am, I thought I’d check out his blog and consider sponsoring his contest.  Lo and behold, the first post on his blog talks about how he wrote the “biggest bloggers on the planet” asking them to donate prizes which “amounts to little more than peanuts in their pocketbook”.

He goes on to say, “In short, these Mega Bloggers both said they didn’t have it in their budget to donate anything. I mean nothing. Not an ad spot on their blog…nada…zip. I guess the 14,000 visits from 4230 unique visitors isn’t worth the time of day for these guys (one who’s real name I still don’t know, even though he sent me $400 paypal for my iPod Touch, which Incidentally wasn’t Free…I had to pay $99 USD for.) I never mentioned that to him, but since he is now apparently too cheap to donate any kind of prize, I felt obliged to mention.”

And my favorite, “I don’t think there is any credence to what either of these blogging juggernauts has to say anymore because, unless I am serving their interest, they could care less about me or any other fledgling blogger. They do what they do because it continues to make them money. For the most part it’s the same tired song and dance every day and I just don’t buy it anymore.”

I’m not sure if he didn’t think “these blogging juggernauts” would bother to read his post or what, but I did, and I think I’ll pass.  First off, James, your concept of wealth is warped and you have an inflated sense of self importance.  If someone like John Chow who earns six figures from their blog declines to sponsor you, thank them for their time and walk away.  Don’t (publicly or otherwise) blast them as being cheap, or as being too dumb to see what a great opportunity sponsoring your blog would have been.  They’re not dumb, or they wouldn’t be earning six figures, so clearly they had the good sense to analyze the opportunity and decided to pass.  As for the donation “amounting to little more than peanuts in their pocketbook”, that’s not a call for you to make.  Every entrepreneur, successful or not, has to decide where to spend money and how much to spend.  If they spent all their money, they’d have nothing left.  If they gave money to every guy like yourself who asked for it 24/7, they’d have nothing left.  They have to make choices.

This may be a bold example, but I see this kind of thing all the time where someone will be angry, they’ll blast someone out of frustration, and then end up burning their bridge with that person forever! Some day, John Chow might read an interesting post on James’ blog and consider linking to it, but then he’ll think back, “oh that was the guy that called me cheap - forget him”. The key to success is to bite your tongue and don’t assume that you won’t ever need anything from that person again in the future.

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Web Hosting Fees Drop Over Time, Take Advantage

If you started leasing a dedicated server a year or more ago and have just been paying the bill at the same monthly rate, you’re overpaying.   Your server is now based on old technology, and I virtually guarantee you that your host charges less per month now for that same hardware than it did when you began leasing the server.  The trick here is simple: ask your host to adjust your monthly rate down to the current fee!  I have done this dozens of times and it always works.  Most hosts would rather keep you as a customer at a lower rate, than have you leave to find a cheaper solution.  Plus, they realize that you could always just cancel your current server, sign up with a new server, and move your data over, to take advantage of the new lower rates.

If your host doesn’t comply with this request, consider a different host.  The Planet has always been good about this and they are a solid host.

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With AdSense, Less Can Be More

When you add an AdSense block to your site, and it starts making money, there’s a temptation to plaster your pages with as many ad blocks as you can.  But there’s a catch that most people, including myself until recently, are guilty of overlooking.

The top most AdSense block will contain the highest paying ads, period.  This is top most in your HTML code, mind you, not necessarily top most on the displayed page.  So that’s caveat #1: if the top most AdSense code in your HTML doesn’t actually get displayed at the top of the page, e.g. it appears in a side bar or even below another AdSense block, then you’re throwing money away by displaying lower CPC ads in a more prominent location.

More importantly, though, is that you may actually make more overall money by removing ad blocks from the page.  Let’s say you have a 728×90 at the very top of the page, a 728×90 embedded in your content where your readers eyes are primarily focused, and a 160×600 in the right sidebar.   If the content-embedded 728×90 has a higher click through ratio than the top banner (and it probably does, since banners at the top of the page tend to get ignored due to banner blindness), then you’re getting lots of clicks on lower paying ads, since the top-most block contains the highest paying ads and the content-embedded block contains lower paying ads.

By removing the top most ad block, you’re shifting those high-paying ads into the 2nd space, the content-embedded ad, and generating more $ per click.  This is counter intuitive and is very much worth testing, since it yielded several times more revenue on one of our very popular pages.

I’ve also had good luck stacking 468×60 ad blocks, which can even outperform a single 728×90.  I believe this is because Google serves a CPM ad in one of the 468×60 blocks, and CPC ads in the other block, combining the best of both worlds.

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Sramana Mitra on Strategy, Monetization Tips

I had the opportunity to be interviewed by Sramana Mitra today, about the story of how I built multiple successful businesses out of a high school hobby and with no formal business training. She now has my whole, untold story! If she writes about me, I’ll link to her post or article.

Sramana is a well known blogger, author, entrepreneur, and business consultant.  She writes for Forbes, GigaOm, and other publications.  One of the things we spoke about today was monetization strategies, and she has posted about some of her best monetization tips to maximize revenue and CPM’s.

Sramana founded 3 companies, and sold two of them.  After reading her bio, you’ll see what an accomplished entrepreneur she is.  Her advice via her blog should prove very valuable to W Revenue readers.

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A 10,000 Word, 17 Page Traveler Review

Cruise Critic is a great site to read traveler reviews of cruise ships.  It’s one of many sites that offer travel user reviews, like Trip Advisor and others.  I have seen some long winded reviews in my day but I found one that is the king of all reviews.  I have read thousands of reviews on hundreds of sites including my own, ResellerRatings.com (featuring consumer reviews of online retailers), but I have never run into such a monster.  At a typing speed of 75 words per minute, this review took “jrbeccles” 2.4 hours to write at full speed with no pauses.

Sorry but what a waste of time for both the user who wrote it and everyone who tries to read it.  I get that the person loved their trip, but please, boil down your experience to a few paragraphs and spare us!  Reviews are supposed to save us time - I feel like it would have taken me less time to actually go on that cruise and experience it than to read the review.  If you run a user reviews site, keep in mind that more is not better - cruise critic would be well to cap the length of their reviews, forcing users to focus on the important stuff.

Update 5/21: Fixed review link.

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Obama Clueless on Taxation and Entrepreneurship

Back in April in a televised debate with Hillary Clinton, Obama revealed details about why he will seek to increase long term capital gains rates from 15% to 28%, affecting anyone who owns stock.  We all think of taxes as a revenue generator needed to run our country, but Obama thinks of taxes as a fairness axe, meant to cut down anyone who is more successful than he is.

During the debate, moderator Charlie Gibson pointed out that twice in history, increases in capital gains rates have decreased tax revenues, and decreases in capital gains rates (under Bill Clinton and Bush) increased tax revenues.  Obama acknowledged this, but insisted that tax rates must be raised to ensure fairness (regardless of revenues generated), and to enact revenge upon the 30 hedge fund managers who earned billions of dollars (and supposedly paid lower tax percentages than their secretaries)– no joke, watch the debate.

If Obama’s plan only affected those 30 hedge fund managers who are the target of his animosity, that would be the end of it and no one else would be affected nor would they much care.  Indeed, Obama pledged not to raise taxes for those with incomes below $200,000.  But in reality, there are 100 Million people in the U.S. who own stock, and in 2005, 47% of all tax returns reporting capital gains were from households with incomes below $50,000 (79% were from households below $100,000!).

Here’s the real kicker, and this revelation is the reason I’m revisiting this issue from April: average every day investors like you or I who are sitting on unrealized capital gains may do well to cash out at 15%, before Obama is elected and indeed perhaps 6 months before (since tax rate changes can be retroactive as we saw under Bill Clinton), wait out the capital gains 31 day wash sale period and/or wait for the stocks to bottom out, and buy back in, to avoid Obama’s 28% hit.  Imagine what will happen to our economy if everyone did that - if everyone sold, and no one bought stocks back because the market kept falling.  That would give “market crash” a whole new meaning.  The only catalyst needed for this to become a reality is an article in Money magazine or the WSJ advising people to do it.

Obama wants to punish success.  Pure and simple.  His view is beyond hard-left, it’s downright Marxist.  And for as smart as he’s supposed to be, it’s not too bright of him to associate capital gains and investing only with billionaires, given that 79% of investors with capital gains earn under $100k. If he wants to punish billionaires a bit, go right ahead if it really will increase tax revenues, but he is also planning to punish 100 Million average every day investors.  Low capital gains rates are what keep people in the market and low taxes encourage entrepreneurs to innovate, knowing that their hard work and all of the risks that they take to become successful will be rewarded with cash in the bank.  Higher taxes will snuff out entrepreneur growth and innovation, eroding the profits of successful business owners.

I’m a liberal on almost every issue, except when it comes to liberal views on taxation.  But even liberal views on taxation can’t touch Obama’s illogical and downright scary views on this issue, views that have the potential to both destabilize our economy further, and dampen the risk taking and future investments needed to propel our country forward.

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What Paypal Won’t Tell You

There is a very well-hidden setting in Paypal that can save you a lot of money in Paypal fees depending upon the volume of Paypal payments that you receive. This is particularly important for merchants selling goods, or big sites that accept subscriptions, but it’s important for ebay sellers and anyone selling more than $3k/mo via Paypal. It’s called Merchant Rate pricing, and it’s something you have to opt-in to, on this page at Paypal (must be logged into Paypal, then visit that link - yes it’s a real Paypal link and no I’m not a phisher).

When I decided to write this post, it took me half an hour to find that page so don’t bother to look for it, they’ve hidden it well. No doubt, their requirement to opt-in to qualify for the discounted tiered pricing is probably buried in some legal agreement, too.

If you earn more than $3,000/mo in Paypal payments, the Merchant Rate switches your transaction fees from 2.9% to 2.5%, and again to 2.2% (>$10k/mo) and 1.9% ($100k/mo) saving you potentially hundreds or even thousands per month. I just assumed that Paypal’s tiered fees adjusted automatically to take my order volume into account but not so, you have to manually choose the lower tier if your sales volume qualifies.

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