Entries from April 2008 ↓

Like pretty much everyone in the Internet world I’ve been following along somewhat with the long drawn out Microsoft/Yahoo merger attempt. It would be laughable if there wasn’t so much money involved. Mostly I find it funny that Yahoo seems to be reacting emotionally - “Microsoft is evil. Anything would be better than Microsoft.” - rather than making rational business decisions. Yahoo’s latest move - exploring outsourcing their search marketing to Google - is Yahoo practically saying they’d rather die than merge with Microsoft.

Yahoo’s Powerful Brand

Yahoo has an amazingly powerful brand due to their history on the net. I first started using Yahoo when it was simply a directory of websites hosted on Yang’s Stanford student account. I actually remember the shock of Yahoo getting their own dot com domain name. From those early days until recently I’ve been an admirer of the company and a regular user of their tools. Recently however the bloom has faded and my Yahoo use is becoming increasingly rare. My search activity has moved almost entirely to Google - mostly via Firefox search. My home page has moved from My Yahoo to Google Reader. My bookmarks have moved out of Yahoo into Google again courtesy of the GMarks Firefox plugin. I still have a Yahoo e-mail address but I’m moving away from that as well into GMail.

Why Yahoo is Fading

So why am I moving away from Yahoo? I like the brand clearly. I actually have a rooting interest in the company - I’d like to see them succeed. And I even own a few shares of Yahoo stock (bought at it’s peak). The two biggest driving factors are Firefox and blogs. When I moved to Firefox it suddenly because so easy to do Google search via the browser that the primary reason for visiting the Yahoo home page disappeared - I also very rarely go to the Google home page but Google really doesn’t miss me there. When I started to move more into consuming blogs it quickly became apparent that Google Reader was far superior to My Yahoo for following blog feeds. These two major factors are essentially industry changes. It’s not that someone built a better competitor to Yahoo’s products (though in the case of search Google clearly did) but rather that my needs and behaviors changed and Google tools better served those new needs and behaviors.

The Industry is Always Changing

All this leads to the question I posed in the title - Are tech businesses inherently temporal? Google appears to be king now but remember that Yahoo was king and before it AltaVista. The most interesting thing in the Microsoft/Yahoo deal was the analysis that Microsoft’s business might be dying. People have been predicting the demise of desktop computing for a long time but in recent months it’s starting to become more likely. Increasingly the browser is the operating system. In such a world Microsoft’s operating system business goes away. If the office applications - word processing, spreadsheets, presentations - successfully migrate to web based versions then Microsoft will be left with very little business indeed.

Innovate or Die

In the rapidly changing world of tech companies clearly cannot rest on their existing products if they wish to survive. It’s long been a criticism of Microsoft that they’ve created very little that’s new. They allow others to innovate and buy up companies. It’s probably a good business strategy but I wonder if it can sustain a company through a complete paradigm shift such as the world moving from desktop to webtop computing. You have to wonder if Microsoft can thrive even if they do manage to buy Yahoo. Perhaps the tech industry is just one where companies will always just come and go - making way for the next generation.

So you want to be a millionaire and think the Internet is the way to get there. The dot com world has certainly made a lot of millionaires over the previous years. But rather than focus on what it takes to get there, let’s look at the end result. What will your lifestyle be if you do make it? I can’t say for sure, but I have made millions and I can let you know what it’s like for me.

Lifestyles of the Rich and Famous

photo credit: EuroMagicIt’s nothing like “Lifestyles of the Rich and Famous”. First of all I have almost no fame associated with my site. There were probably a couple hundred people who knew my name at one point (heavy users of the site) but I suspect most have forgotten me over the last few years. And while it may surprise you, being a millionaire doesn’t make you rich. Externally I look like any moderately successful businessman - I live in a nice house, own two nice cars but don’t take extravagant vacations or spend lavishly. My kids do go to a fairly expensive private school but we don’t belong to a country club or any of that. Partially that’s because it’s not who we are (and the money thankfully, hasn’t changed us) and partially it’s because a couple million dollars just doesn’t go as far as it used to. You’d probably be surprised to find that you very likely know some millionaires and would never be able to tell it from how they live - that’s part of how the get to have and keep their money.

Investment Income

The vast majority of our household income for the past few years has come from investing the money I made from selling the business. The money is invested somewhat conservatively and managed by a financial planner. It’s a bit odd not having a regular paycheck. When we need money we just write a check out of our investment accounts. It also takes a bit of getting used to when on an average day you can make or lose $100,000. You pretty quickly learn that it’s pretty meaningless though and watching daily fluctuations in your investment portfolio gets pretty boring.

The 5% Rule

If you want to get a feel for how you can live when you make your millions consider the 5% rule of thumb. I think the historic average gains of the stock market are something like 10% but of course there are fluctuations. So as a conservative approach and if you want your wealth to continue to grow you can plan to draw 5% of your money for spending. If you make $2 million from your business and live off of your investment income you’d have a lifestyle equivalent to someone earning $100,000 a year. While that’s certainly a nice income you can see that you’re not exactly flying first class to Paris for the weekend.

Don’t Forget The Taxman

photo credit: numberstumperYour tax burden will vary based on how your business is structured and how aggressive your account is but you can expect to lose at least 20% of what you make in selling your business. It’s actually sort of amusing at first to write a six figure check to the Treasury but trust me that amusement goes away quickly.

What Do You Miss

As an entrepreneur and later if you’re living off of your investments you miss out on some of the benefits of being an employee. The biggest is of course health insurance. I won’t get into a political debate but suffice it to say that obtaining decent health insurance (even if you’re willing and able to pay) is not easy. There are other less tangible things that you’ll miss too - things like co-workers to go out to lunch with and chat with around the water cooler.

What Do You Gain

In a word the biggest thing you gain as a millionaire is freedom. Freedom in its many forms - I can vacation when I want, work on what I want and (within reason) buy what I want. There’s also a certain freedom from the stress of “making ends meet”. While there are the occasional concerns about stock market crashes for the most part we’re very financially secure and free from money worries. That freedom does have a downside though. Oddly enough one of the things I miss most is having a full ToDo list. While it’s often nice to have the freedom to work on whatever you want that wide open freedom means it’s hard to figure out what to work on. And without the pressure of needing to make money it can become far too easy to be non-productive for long periods.

Do I Recommend It?

Certainly. Building something into a success by yourself (or with a small team) is one of the greatest feelings you can have. And the financial windfall is great. Unless you happen upon the right startup it’s unlikely that you’ll become a millionaire working for someone else. And while a few million dollars won’t have you living like a rock star it’s certainly a nice place to be and I’m extremely grateful for the life I have.

I’m a semi-regular reader of some of the websites for sale marketplaces and the vast majority of the listings there are sites I wouldn’t even consider buying. While you might think that’s a bad thing I think it’s actually pretty useful since figuring out the common links between what I don’t want helps me focus in on what it is I do want.

You can’t really go to a “sites for sale” forum looking to buy a specific type of site. Well I guess you can but you’ll be waiting for a long time before it comes along. If you know exactly what you want to buy it’s probably better to look for sites in that area and see if any of them will accept an unsolicited offer. If you’re just browsing around looking for something good to strike your fancy it helps to figure out what you don’t want.

Proxies and Free Image Hosts

You’ll find a lot of proxy sites and free image hosting sites for sale. Most of these sites are essentially turnkey. That is they use a commonly available script and have very little that’s unique about them - typically only a little of the design. These sites also suffer from a major problem - they consume a lot of bandwidth (cost) and are very hard to monetize well (revenue). You might be able to squeak out a small profit from these kinds of sites but the margins will be extremely thin. In the image hosting arena you also need to be on constant guard against copyright images and porn images.

Funny Video Sites

These seem to pop up pretty much daily. Besides that fact that they’re trying to compete with established funny video sites like break.com and user uploaded video sites like YouTube there’s again the problem of being heavy bandwidth users and hard to monetize. There’s also the little issue of copyright and the fact that most of these sites violate copyright on a regular basis. Some will even provide you with scripts that automatically scrape content from other sites. If stealing content is a key part of your business model I suggest coming up with a different business altogether.

GPT Sites

You might not be familiar with the term “GPT” or get-paid-to but you’ve certainly seen the sites advertised around the net. These are sites that offer free iPods or free Xboxs if you sign up, refer some friends and complete some offers. These sites came under attack in recent times because there’s some contention that while you don’t pay for the iPod it’s not really “free” if you have to pay to sign up for offers in order to get it. While some of these sites do offer entirely free ways to get the prize there’s enough legal uncertainty and ill feelings in the press to make me want to avoid this are entirely.

Static Content Sites

They’re so web 1.0. Actually there’s nothing wrong with static content sites. The major issue is that you’ll need to update the content at the site in order to grow (or even maintain) traffic. That means it has to be an area where you can write good content and if it is then why not just start a blog on that area instead? This isn’t a complete non-starter for me but the site would need good, original content in a area where I could add more content and come with good traffic and decent monetization. 99% of these sites that are up for sale don’t meet those criteria.

What’s the Point

If you’re in the market for buying a site you might wonder what’s the point in figuring out what kinds of sites you don’t want to buy. First having a list like this will help you quickly scan over the dozens of new listings for those that you might find interesting. Second if you can identify the qualities of a site that make you want to avoid certain niches you can see if those same qualities are also present in other niches. If you’re in the market for a site consider what you want to avoid and see if that helps you figure out what it is you do want.

Scoble explains his size gains after
just a month of bloggingIf you’re worried about an untimely death due to your blogging habits you should know that scientists have recently discovered some previously unknown benefits to blogging. To put it delicately, it seems that blogging can make you more of a man.

Top “make money online” blogger John Chow apparently needs to have his pants custom tailored for comfort. Don’t worry though - the pants are corporate purchases that go into a holding company for tax purposes. Robert Scoble didn’t respond to requests for comment but according to a source who wished to remain unnamed “they don’t call him tripod because of his photography skills”.

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You’re right, it’s a bit late for an April fools joke. I was just thinking about the New York Times piece about blogging being deadly. John Chow seems to think that this is an example of shoddy journalism. Perhaps it’s a case of old line media lashing out at new media out of fear. But maybe, just maybe, the Old Gray Lady has figured out how to use that new-fangled-interweb-thing-a-ma-jig to it’s advantage and discovered the nifty little term that we bloggers call “linkbait”.

Sorry all - when I saw that pic of Scoble I just couldn’t resist. And besides I’m sure I can attract tons of splog trackbacks with this story.

The New York Times continues its tradition of groundbreaking journalism by pointing out that workaholics have stressful lives. Not content with that startling revelation they manage to tie the stress that workaholic bloggers face to deadly consequences.

All joking aside, NYT points out some indisputable facts about working at some of the big name blogs:

• a 24/7/365 news cycle
• intense competition where being first with a story is a huge advantage
• long hours and (relatively) low pay for many employees

But lets be clear about what kind of blogging they’re talking about here. This is stuff that applies to big boys like Mashable and TechCrunch with their focus on tech news and multiple writers. There are maybe a couple dozen “blogs” that fit this mold and even famous bloggers like Scoble and John Chow don’t really fit this mold.

Can you even call a site like TechCrunch or Engadget a blog at this point? I don’t really think so. They’re online news organizations that have a much closer resemblance to old fashioned news media than they do to what any of us would call a blog. Even bloggers who seek to make money with their blog don’t really fit this mold - their blogs tend to more personal stories that aren’t really affected by the need to “get it out first” or the demands of producing tons of content on a regular basis.

I don’t mean to diminish the fact that some “blog” employees are working under tough conditions and that stress can be harmful to their health. But I think the reality is that these people chose to do what they do because they’re passionate about the topics they cover and these go-getters would likely end up in a stressful job of another sort if blogging weren’t available to them.

As I mentioned the other day I’m trying to work a new project in CakePHP which is the first time I’m working in the PHP framework. Actually I haven’t even really gotten into working with on the project yet - just working my way through some Cake tutorials. Even though it’s early in the process I thought I’d share some initial impressions.

Cake Forces Good Habits

One of the knocks against PHP in general is that it’s easy (and common) to mix your business logic, database access and display all together in one big mishmash. That’s certainly a valid complaint and I’ve done plenty of scripts that work that way but to be honest I don’t think that’s a terrible thing for a small project. Part of what motivated me to try Cake was the fact that Cake development follows the MVC (model-view-controller) pattern which separates the three parts into their own little area. I suppose it’s not entirely true that Cake forces this - you can certainly put all the PHP code you want into your template files - it would be crazy to try to use Cake without embracing MVC.

Cake Forces Domain Thinking

photo credit: DetroitDerekIt’s easy as a programmer to start thinking in terms of code and database tables. “The blog table has a userid that’s a foreign key to the users table”. Since Cake handles the database actions for you, you need to think in domain terms and define those relationships in your Cake models - a blog belongsTo a user; a user hasMany blogs. I think this is good but requires a bit of a change in how you approach the task at hand.

Cake Makes Some Stuff Very Easy

If you want a website that allows you to add, edit and delete entries in a simple database table you can do it all in minutes with Cake. Maybe even quicker. Unfortunately while that can get development up and going quickly that’s not useful in the real world. First, few useful applications are simply working with one database table. Second that quickie app doesn’t include user authentication. Third that generated app likely doesn’t look much like something you’d want in production. You can do all that - work with more complex databases, add user authentication, change the look - but its not going to be done in minutes.

Some of the cake tutorials and materials will point out that “You just accomplished [something amazing] with just 3 lines of code!”. That’s great and you can do some very cool and complex things with Cake with very little code but keep in mind that the code is often not the easiest thing to come up with in the first place.

Cake Uses Tons of Conventions

Part of how Cake accomplishes so much with so little code is by using conventions. Your database table is named “users” - all lowercase and plural and contains a field named “id”. Your model is in a file named “user.php” - singular and contains a class named “User”. Your controller is in a file called “users_controller.php” and contains a class named “UsersController”. You’re not technically required to follow all those naming conventions but doing so is part of what makes things “just work” in Cake.

Tons of Anonymous Arrays

Lots of parameters are passed as arrays which lead to lots of code that looks like this:

$this->redirect(array(’action’ => ‘index’), null, true);

As a gift to your favorite Cake developer you can find a key board that has a single key that will generate the word “array”. It’s a minor thing and I suspect something you quickly get used to.

Is It Worth It?

photo credit: geishaboy500I still have a long way to go to being productive with CakePHP but so far I think it’ll be worth the effort. Partially because of the promise that once you get proficient, development will get very fast. Partially because Cake handles the grunt work very well letting you focus on the business logic and domain work. Partially because it’s just fun to be working with some new and fairly advanced technology.

In general I learn best by just digging in and doing stuff and I think that’s the next step for me with Cake. I’ll update in the future with how it goes from here.

One of the downsides of being solo (and by nature cheap) is that you have to do your own sysadmin. I don’t mind it really and I’m fairly competent but not doing it often and not having spare servers around to practice on means that doing big upgrades is always a bit scary. Well I ran into some minor roadblocks on a few different projects I wanted to work on and they kind of forced my hand in doing some system upgrades that I’d been putting off.

MySql to Version 5

photo credit: chadmillI’m using CakePHP on one of my projects and it had some issues with the version of MySQL I was using. CakePHP is a PHP framework that includes an object to relational mapping component and the code that it generated for deleting an entry was giving MySQL errors. A bit of research pointed to MySQL 4 as the problem so I figured it was time to upgrade my MySQL installation. After of course backing up everything twice this was just a quick couple clicks in WHM and went off without a hitch.

PHP to Version 5

Another thing I wanted to try my hand at is a Facebook application. While you can do Facebook applications in PHP 4 the tutorials and libraries I was looking at were all oriented to PHP 5. And let’s face it, PHP 5 has been around for a long time and 4 (while it does seem to still be very widely used) should have gone away a while ago. I figured I’d better upgrade to PHP 5 before PHP 6 became the current release. This mostly went off without a hitch as well. In WHM you upgrade PHP through re-building Apache with the EasyApache tool. One tip - if you’re need FreeType support in PHP you’ll want to check the TTF option in the full options list. The FreeType option in Cpanel used to be listed under FreeType and it took me a while to figure out where it went.

Aside from the fact that I forgot that I needed the IonCube loader for one site this was mostly another easy upgrade. For some reason though the new Apache config pointed the DocumentRoot for my main site to a different directory. I kind of hacked my way around that by sym linking that directory to the old one. Probably not the correct solution but it worked and I was tired of messing with it.

WordPress to Version 2.5

The last upgrade was the easiest - updating WordPress to the just released version 2.5 was completely painless on 3 of my 4 WordPress installations. On the 4th installation I got some errors in the theme that was preventing me from loading the admin screen. Though to be fair I think the issue was created by something I did before attempting the update. Luckily this was a development only installation and I just wiped it out rather than spend too much time messing with it. It did raise a question I should probably find out though - how do you change the theme that WordPress is using if you can’t get into the admin screen? I took a quick poke around the WP database but didn’t see it.

I did need to update my PhotoDropper plugin - the new version uses a different AJAX library - and it took a bit of effort to find the “upload” functionality which used to be a box below the post and is now a little “add media” button in the post title bar.

Upgrading My Habits

The biggest thing I’ve been working on lately is upgrading my work habits. In recent days I’ve had a hard time getting good work time in because of family stuff and an overload of errands. I’m trying to really buckle down now and get some development work in on a idea I’ve been tossing around for a long time without doing anything. It’s not a huge project - pretty simple really - and I’d probably be able to crank it out in a few days but I wanted to take this opportunity to work with CakePHP. Both because I think Cake will be a good learning experience for me and because I think if I get proficient at Cake it’ll make future projects much faster. More on the project and Cake in the future.

Gyutae Park at Winning the Web has been running the Craziest Internet Marketing Contest You’ve Ever Seen for quite some time now. It’s been quite successful at generating buzz as it’s been blogged about extensively and even got multiple mentions in blogs like John Chow and Shoemoney. It even got me to sign up for the feed - I’d heard about the blog before but never read it.

Unfortunately so far the only content I’ve gotten from Winning the Web has been related to the contest. Which leads me to my criticism of contests as a promotional strategy. Contest draw people who like to enter contests. Many will do whatever it takes to win even if they have no interest in the content your trying to promote. Contests can drive traffic but since that traffic is often un-targeted it might not be very valuable traffic.

Now I think part of it has to do with where the contest is promoted. Certainly for Winning the Web all the readers of John Chow and Shoemoney would be targeted visitors. I did a contest once with my “big successful site” and promoted it a bit through contest forums and that traffic was darn near worthless.

Since winning the web’s contest is ending soon we’ll hopefully start to get some of the content we signed up for. I’m sure that the site has gotten subscribers and visitors who are only interested in the contest and will drop off but it’s certainly raised the profile of this new blog and it’ll be interesting to hear the results when it’s all settled down.

Oh, and I’m pretty sure that the Hummer H2 prize that was announced today is an April Fool’s joke.