Constantly Changing Paradigms

We live in a world were paradigms are constantly changing, I still remember when I was 5 and my parents moved from Germany to a farm in northern British Columbia 30km away from the nearest town of 500 people.  We had no running water and electricy and it was -40 for much of the winter.  We would do things like collect the freshly fallen snow to melt for water.  Going to kindergarten and not speaking a word of English, and no one speaking a word of german  was another paradigm shift.   Its going through different paradigms like this that allow you to build the ability adapt and to think outside of the box and give you drive and determination to succeed.    I find that many people who are successful are those that can adapt to new paradigms the quickest, or they are the ones who realize there is a new on coming.

When it comes to sites like myspace, it isn’t really a new paradigm, its just a better version of geocities.  I still remember the excitement of adding my first bit of HTML and midi to my geocities page and creating a page that looked even worse then many myspace profiles.   The fact that myspace forces you to make a lot of pageviews to surf anywhere is part of the reason for success.   As a kid its like finding a whole new world to explore and learn.  Every time you login you have a new profile to find,  with cool HTML to rip off  etc.  The downfall of myspace will be the fact that 13-19 year olds are all on the site learning and exploring it at the same time.   There will come a point were people have found all the HTML they want,  or all the cool new things to add to your profile and when those 13 year olds become 15  they won’t think myspace is cool anymore.  But at the same time,  things like pimp my profile, and friend trains are keeping the whole thing going by adding new dimensions to msypace.  But there is a point where users will switch from endlessly surfing to find cool stuff to surfing for information that is useful and relevant to them, ie surf like an adult.

The problem now is that the some of the tech industry is moving into the  web hippie/free love/ web 2.0 paradigm where things like Ajax rule.  Ajax dramatically reduces the number of pageviews needed to do anything, and at the same time reduces the amount of money you can generate from advertising by a similar amount.    Now when trying to compete against myspace  creating something like tagged is just plain stupid.   First you kill your pageviews so you can’t generate revenues and then you take away the very thing that kids want, which is to aimlessly surf for cool stuff.  When kids surf for cool stuff its like playing a slot machine,  at some random time they are going to get a reward and they never know how big it is.

To tie it all together, if you are starting a company you need people who can understand or have been through multipul paradigms.  The more your CEO can think outside of the box the more successful the company will be, if you are designing something for users in another paradigm. 

Advertising networks love comscore.

Seems every advertising network under the sun has tried to get in contact with me in the last few weeks.   Since I unblocked comscore from tracking my site I’ve gone from 20 million pageviews a month in March to 201 million for the month of May in the US Market according to the Advertising networks contacting me.  In terms of pageviews on a single site that puts me in 3rd place behind yahoo and match.com  If I throw in my largest market which is Canada I am #1 north america wide according to comscore or pretty close to it.

So since my pageviews have skyrocketed in comscore, my CPM sales via adsense have gone way up.  This is because a lot of media people use the comscore numbers as a bible.   Now if only adwords would allow advertisers to start bidding on specific adsense publisher channels I could make a lot more.

 So whats the moral of the story?  If you want to make money from advertising online you need to rank high on comscore, and if you want places to advertise you subscribe to their data like the other lemmings

Its all about getting more eyeballs and Avoiding VC’s

The sale of Ivillage last year for $600 million following the sale of myspace set off another round of get more eyeballs.  Ivillage had ad sales of $91.5 million with net income of $9.5 million on around 400 million pageviews a month.

Facebook is currently wishing for a sale of $2 billion with its viewership of 3 million uniques which generate around  6 billion pageviews a month.

To date ivillage has been the only company that has been able to extract some really big revenue per visitor numbers.   I expect that once google or some other company builds out their adsense clone taking into account registration data all these mass traffic sites can see a 3 to 7 fold increase in revenues per visitor.

I think the next 3 years will be an exciting time one in which we see a dramatic rise in advertising dollars flowing to large sites.   Given how cheap it is to run a website these days there is really no harm in building a site for the sole purpose of getting as many people to visit you as possible.   My total costs of operations are only around 20k/month  and I can make half of that amount go away by getting ride of my Instant messenger.  Thats not bad for a site with 500 million pageviews a month and no employees.

Now i’m sure that many self appointed web 2.0 experts will say that building a site just to get traffic is crazy.  But you have to ask yourself, since when has anyone got rich listening to the majority?   When you have traffic you have options and there are always many many ways to monitize that traffic.  This works unless you are doing something completely crazy like spending a million a month on streaming free videos like youtube.com.

What all this comes down to is VC’s And professional executives have no future in building/funding most of the new internet companies.  These days you can create a site and launch it with virtually no costs,  assuming you are a programmer and you build it in your spare time.   If you are someone who can’t program you need to hire 2 or 3 people and before you know it you already have a hundred thousand in costs.  The way I see it,  there are going to be 20 to thirty 1-2 person programmer startups wanting to do what 1 VC funded firm wants to do.   A VC funded company has no way of competing when it comes to keeping costs low.

The blogosphere is the same old thing…. Just the interface is different.

The supposed top blog is http://boingboing.net/, which is just a clone of ebaumsworld.com and a hundred other joke/time waster sites like it.  I do find it amusing that because the authors of these other sites don't sell conferences their sites are not considered "blogs".

The next most popular "blogs"  are what I call product review sites.  engadget.com, paidcontent and Techcrunch would be the biggest examples of this in the tech world.  engadget.com/Techcrunch are fast growing product review sites that have a huge part of their distribution in RSS.  Now what makes these sites so extremely popular?  In my opinion they are popular for the same reason that news alerts are popular.  NEW up to the date Information can be found extremely quickly and its very to the point.  The only downside is these sites don't have a very good search so you can find old information.  So in summary these sites aren't blogs, they are just product review sites with a far far better interface/distribution system.

Next you have corporate blogs,  or people associated with a company.  Scoble and Tara hunt,  Om Malik etc all got big not because of what they had to say but of who was behind them.   Each of these "bloggers" represents a corporation.  I can draw comparisons to my blog here.  No one who actually uses my site comes here to read this.  This blog is read by SEO's, CEO's/Executives and the Media.    I would sum it up as saying, in the old world you would release press releases and try and get publicity.  Now if you have a blog and its widely read it doesn't matter what you say people automatically think its important.   Blog popularity acts in the same way as google pagerank, the more readers you have the more publicity anything you say gets.

I think of blogs as nothing more then a distributed forum.   Each blog represents a forum thread, and what sites like DIGG.com,  Techmeme and bloglines etc are trying to do is recombine these separate threads into a forum again.  The Digg.com model has no chance of winning, as less then 60 people out of 800,000 supposed daily users decide what everyone reads.    The winner in this game will be the company that creates a personalized view of the "blogosphere".   As i said before this would be accomplished by allowing users to filter out articles about games, graphics, movies etc etc etc.

So at the end of the day if you want to create a popular consumer facing website based on information/educating users you need to constantly display NEW up to the date Information and be very to the point with little to no advertising/distractions.

The New Social Networking Revenue Model.

Google has released CPA ads this week and I believe that this is just 1 step in a process that will lead to a killer model for social networks and dating sites.

I expect at some point sites will be able to feed Adsense  or a clone from Yahoo and MSN  user data such as  Age, Gender, Sex, Zipcode etc of the user viewing an ad.   In adwords advertisers can then bid on keywords as well as demographic information such as age, gender, sex etc.    Currently companies like ford come in and do a run of the site campaign.  Maybe they just want to display girly cars to girls, and guy cars to guys?   Paid dating sites are willing to Pay $12.00 a member for Females  instead of the $4.00 on average they pay now.   There are hundreds of examples about certain demographics being far more valuable then others.  

WTF are google, Yahoo and MSN waiting for?

San Fran….

So what is there to see in San fran? I’m getting on a airplane in a few hours and heading off to Supernova Conference. I’ve been down there once, but didn’t really get a chance to see the city as i got detoured to speak at google.

Anyone else going to the conference, and anything interesting happening there I should know about?

The Rule of 3 or 1

In business there is a theory that says all markets will eventually become a market of 3 major players  or a monopoly.  The internet definitely follows this theory.   There are 3 big search engines.   Ebay is a virtual monopoly as is craigslist.   

The question these days is Social networking going to be a monopoly  or a pie split by 3 players?  I suppose it comes down to trying to how you broadly you define social networking.  Myspace is virtually unchallenged as is facebook in their respective markets.  It would therefor seem the only way new players to succeed is to create a new market as social networking will be a collection of monopolies, although they may be a series of successive short lived ones.

Looking at the long list of this and that clone being reviewed on techcrunch.com it amazes me how many people forget this simple "theory".  It is simply not possible for another calender App, RSS reader etc to exist when there are already 20 competitors only 1 or 3 will ever live even if they had a business model.

Social Networking Cash Cows & Supernova Conference.

I'm heading to the Supernova conference next week if anyone else is going say hi…

So myspace is earning upwards of 18 million a month,   bebo  certainly earns far more per user then myspace and its rising fast.  It seems that everyone and their dog wants to create a social network now that Online dating is facing negative growth.    Dating sites like lavalife want to build a social network around interests,  match.com experimented a few times and many others like tiny free sites are trying to bring in blogs, forums etc.

Half the dating sites are trying to become "social networks"  unfortunately that doesn't work if your focus is dating you have to be one or the other.    The other half are trying to become Niche players,   but niche dating sites like black singles etc will just get overrun by the social networks once they get their infrastructure stable enough to upgrade their searches. 

Seems yahoo offered facebook  $1.4 billion and they turned it down because they wanted 2 Billion,  They were making over a million a month less then a year after launch.  These companies don't have much in the way of revenues but have HUGE valuations, I wonder how many big buyouts are going to happen as big media players want to buy their way into the market.

Digg sucks, Netscape digg clone not much better.

I've been creating user voted systems before there was a digg and they all have a fatal flaw.   There are a extreme group of hardcore users that end up controlling the voting system.     People think that digg is democratic but it is the furthest thing from it.   As this blog post here shows,  66% of all stories posted on digg that make it to the homepage and pushed there by the same 60 people.   Digg is essentially a community of 60 unpaid editors, and eventually the only new hardcore editors to join digg will be those with agendas and interests like the core group. This is because people with different interests will leave as they are pissed when their stories don't show up.

Now the netscape digg clone at beta.netscape.com has human editors to balance out the "user editors".  This in theory should keep netscape grounded in the mainstream and stop cliques from forming that push agendas.  The new digg clone is headed by Jason Calacanis at AOL and judging from the lack of rants on his blog the past few months they must be working hard to find ways of giving this thing some traction.

Appearing on the Shoemoney Show.

I'll be appearing with the king of linkbaiting :)  Shoemoney on his show net income on June 27th.  Users can call in and ask questions etc.

I'll preempt the most common question asked here.  How do I start a dating site, how do I make it successful etc.

If you are starting a dating site now you have no chance.  Currently Match.com, eharmony, yahoo and lavalife are spending between 5-10 million a month which effectively drowns out everyone elses advertising message.  When I started my site the industry was growing at 80% a year,  the industry has declined over 20% in the last year in terms of traffic and is on course to do even more this year.   Publically traded companies like americansingles.com are losing 20% of their paying membership per quarter.   Myspace is killing the dating industry.   Free dating sites are going to try and morph into social networks, to try and get away from having a 30% turn over in the membership on the monthly basis and paid dating sites will go out of business's and some will specialize like eharmony.com.