Confessions of a Six Figure Professional Blogger

Ramblings

Anatomy of an Internet Bubble, and How I Almost Fell For It

September 7, 2007 | Comments

Those of us who have been online awhile remember the so-called “bubble burst”. We hear about bubbles all the time in this business. People LOVE to speculate about the next bubble burst. In fact, a lot of people are looking at this whole “Web 2.0″ thing as another bubble about to burst. But, what the heck is all this? Well, let me explain it in brief, and then give you a little story about how I almost lost it all in the midst of the 90’s bubble.

What is a Bubble?

Anybody familiar with even the basics of economics knows that the economy is cyclical. It rises and it falls, over and over again. We see periods of growth, more growth, then a gradual slowdown, then a faster slowdown, then a recovery, then a gradual growth, and so it goes. It just happens. Well, the internet economy is part of the overall economy, and it has ebbs and flows just the same way.

“Bubble” refers to the sharp growth of something while it also being simultaneously weak, and could burst at any point. A real bubble is very weak, has mostly air on the inside, and can burst instantly. A technology bubble is something that grows, is mostly hot air, and can burst instantly. If you look at the normal progression of a bubble in technology, it starts with great, new technology. It proceeds to grow. Others catch on. MORE people catch on. Then the money-makers and pure marketers jump on the bandwagon in a big “me too” migration, dirty the scene with pure money making motives and no innovation. Lots of money gets thrown around in a big digital gold rush. It is all based on hype – hot air. And, it bursts when the laws of economics catch up to the fact that there is no substance there.

So, that is the usual progression. It is pure technology. Smart people making cool new things and have little business and marketing skills. Then smart businessmen get involved and start creating a buzz around this new technology. It grows to the point where we get a good balance between innovation and marketing. But, then the “make money at any cost” people get on the bandwagon, create a lot of hype, get lots of venture capital. They are better at marketing than they are at creating a decent product. It is hot air, and it goes POP!

A bubble burst.

The 90’s Bubble Burst

The famous “dot com bubble” of the 90’s is a lesson in and of itself. It is marked by a LOT of hype and spectacular failures. Online businesses were sold as the next big thing, where anybody can just put up a website and make millions. Dot-com businesses were sprouting like weeds, many without any business plan, but flooded with lots of venture capital investment. It was all hot air. And it all came tumbling down.

Like many things on the stock market, it is usually a collection of things with bad timing that cause a collapse. When you take the poor earnings reports of some of the dot-coms, the government’s ruling of Microsoft as a monopoly, the Federal Reserve increasing interest rates to try to slow the bubble down, some of the internet tycoons cashing out their stocks at the same time and various other factors, the whole thing came tumbling down. Internet businesses were disappearing overnight.

My Personal Experience

I have been working online for a long time, since 1997 to be exact. So, I came into this in the height of the dot-com bubble. PC Mechanic was my first site, and it grew like crazy. I was eventually approached by a company called Efront Media to buy the website. They offered me essentially almost $1 million in fake money for the site and I fell for it. The promise of big dollars was enticing. I fell for the internet boom. I had grandiose dreams of buying my own sailboat, a nice car, a big house. And here I was a poor college student living with my parents at the time.

ut, why do I call it “fake”? Well, it was based on a monthly income stream and stock options. The total sum WOULD have been almost $1 million, but it was all money which did not exist. The concept of a stock option was crap because the company was not public and had no idea when they would go public. So, they based a LARGE chunk of their offer on this non-existent stock. The cash part of it was a monthly payment stream, so essentially they were paying me over time while they were making money with the site. The “offer” they sent me had the $1 million figure in BOLD, with details underneath. My jaw hit the floor seeing an offer that large. How could I say no?

The company was dishonest, and I fell for it (stupidly) in the height of the dot-com bubble. Later, they had the nerve to start paying me less monthly because they said the traffic was not as good as contracted. They offered nothing in terms of news on an IPO. So, it amounted to a takeover of the site with no financial compensation. Sure, I was getting monthly checks, but gimme a break! I was making monthly income from the site before eFront!

eFront Media was a prime example of the dot-com bubble. They may have originally approached me with honest intentions. But, their “value” was all on paper. Nothing real to it. They were enticing site owners with big dollar values that were not real. When I started hounding eFront for breach of contract, the criminal CEO of that company actually told me I had to BUY the site back from them. I ended up getting a lawyer and authoring a letter to eFront telling them they were in breach. I removed the site from their servers (luckily they didn’t bar my FTP access to it). I put the site back onto my own web host. Then, I had to work eFront hard to get my domain name transferred back. While I firmly hold that the CEO was a criminal shithead, there were people there who were not and one of them made it go right for me to get my domains back. In my letter, I told them if they don’t like what I did, I would see them in court. That letter was refused by the sender.

While we were in the midst of all this, FuckedCompany.com (sorry about the name, but that is literally what it is called) was hounding eFront. And it came out that the CEO was involved in some internet chat hanky panky. His computer was hacked by somebody and his chat logs were made public. That seemed to mark the final downfall of eFront Media. The logs not only contained said hanky panky, but also private chats with others on how to deal with the pissed off publishers (like myself). It made for interesting reading, I have to say.

eFront died. It was a sinking boat, started in the dot-com gold rush, and then got involved in really questionable tactics to stay afloat as reality set in. And I almost lost it all by attaching myself to it.

Just a quick note, the eFront domain is now held by a completely different company which has no ties to any of this. So, I don’t want anybody to connect dots that aren’t there.

The Next Bubble?

A lot of tech pundits will tell you that Web 2.0 is the next bubble. And it’s funny, too, since a lot of people can’t really even place their finger on exactly what Web 2.0 is.

I DO think Web 2.0 is the next bubble, but I DON’T think that the next burst will be nearly as dramatic. Sure, there are a lot of people out there starting various social sites, slapping “beta” all over their colorful logos, hiring “evangelists” to sell everybody on the idea. And many of them could go POP. Some people will lose their shirts. But, I think internet entrepreneurs, on the whole, learned hard lessons from the 90’s bubble. Those people will not (hopefully) fall into the same hype this time around. But, some will, and they could lose out big time.

Web 2.0, while as much an undefined buzzword as it is, is also a real concept. The social nature of the web is a real phenomenon . Social networking sites, community driven content, interactive bookmarking, web applications…all these things indicate a very real trend on the internet. It marks great business opportunities and many are taking advantage of that.

But, a lot of “me too” marketers are jumping onboard, too, with weak concepts and crappy business plans (if they have one). It’s the same pattern as the first bubble burst. So, yes, we probably do have a little POP coming. Will it be as dramatic? Likely not.

Actually, for the REAL bubble burst for this economy, one should look away from the internet and more toward real estate and predatory lending practices using fake money. THAT is the real bubble, but it has little to do with WebbyOnline, so I will leave it alone…

Other Viewpoints:

Battle of the Bloggers, Childish as Hell

August 20, 2007 | Comments

One of the talks given at Gnomedex was that of Jason Calacanis. He came to talk about the pollution on the internet, i.e. spam. All of us know about this stuff. It includes email spam and, more pertinent to Jason’s point, search engine spam. His point? That so many businesses are out there practicing SEO tactics to get into the top results of the search engines, even though they are not most relevant. So, while you may search for “travel to Seattle”, for example, you may get a bunch of results from people who paid SEO firms to get them into the top results, not necessarily sites which are most relevant to traveling to Seattle.

Good point, and then Jason moved into talking about Mahalo. Now, for those of you who do not know who Jason is, his wiki entry explains that he is the co-founder of WebLogs, Inc. as well as the former GM of Netscape. His new venture is Mahalo, which means he was talking about his own business at Gnomedex.
OK, next we have Dave Winer. You can check out his wiki entry for more bio on the guy. In short, he is one of the fathers of blogging, so to speak.

OK, both of these guys are titans in the world of the internet. Movers and shakers, so to speak. So, they both come to Gnomedex. Winer as an attendee. Calacanis as a speaker. Calacanis starts talking about Mahalo. Winer blurts out “conference spam” and causes a bit of a scene in the room. Calacanis is visibly shaken by this. And then, as usual, the blogosphere takes it out of the realm of Gnomedex:

And so it goes. This is geek soap opera.

OK, I was there. I thought Winer was kind of rude. Then, I thought little of it. I was actually surprised to find that it carried over into a battle of the bloggers online. I think it’s rather childish. I mean, I know this kind of stuff gets people involved and gets traffic (after all, I’m blogging about it). But, these are two people who are both, in their own way, very instrumental in developing the internet sites and technologies we use today. Don’t they have anything better to do than to get into personal bitch-fests on their blogs?

Oh, and Chris Pirillo, smartly, has stayed out of it. Good move. :)

Twitter a BlowHard Platform?

August 16, 2007 | Comments

When I was at Gnomedex, people were sending out “tweets” all the time on Twitter. I found it to be really ironic, actually, considering that my conversations with people usually gravitate to the fact that Twitter is rather useless. But, since bloggers are usually first in line to try the latest crap idea on the internet, I guess a lot of people in the audience thought people cared enough about what they said that they needed to read it in real time.

Then, I saw Pirillo’s first analysis of Gnomedex and read this:

I believe the functionality of Twitter at Gnomedex had an overwhelmingly negative impact, both on-site and after the event. It provided an immediate emotional outlet for people who – in some cases – shot first and asked questions later.

So very true. What we had at Gnomedex were people typing in “off the cuff” thoughts about speakers as the speakers were still on stage. I mean, come on. It completely takes the thought out it, and is borderline rude.

Which leads me to ask – is Twitter just a platform for blowhards?

I have given Twitter a try. I actually have it pulled into the sidebar on my personal blog. But, I don’t use it often, and the reason is because I’m not sure that it really has any value. I asked the question a few weeks ago – Is Twitter of Any Use to Anybody ? I outlined some legit uses for the platform. But, unfortunately, most people don’t use it for those kinds of reasons. They use it to, instead, bloviate. I mean, look at the public timeline and refresh every a few seconds. Try to find something on there worth ANYONE’s time.

As for bloggers, I think it is best for a blogger to offer something with thought to it. Something that adds to the public pool of knowledge, so to speak. This is why a good blogger is worth his weight in gold and gets traffic. Twitter is not at all conducive to that. It limits you to 160 characters, and invites people with humongous egos to type crap into the public cesspool of knowledge.

I don’t really blame Twitter for it. Its just a social media platform and you can’t judge the platform by what it’s users try to do with it. It’s similar to UStream. Ustream is actually a really cool platform, but a huge majority of it’s users offer really crappy content. You can’t blame Ustream for that any more than you can blame Twitter for stupid “tweets”.

I think a self-respecting blogger needs to exercise some thought in how they use Twitter. If that means you don’t even use it, then fine. I mean, not EVERY new social platform HAS to be used. I may continue to use it in some capacity, I don’t know yet. I’ve tried it, and once I get over the fact that I can post to my site from my cell phone (which is admittedly cool), I’m left wondering what pile of social poo I just stepped into.

Gnomedex 2007: Was It Worth It?

August 14, 2007 | Comments

I have been back from Gnomedex in Seattle for a couple days now. Getting back to the normal schedule and playing a little catch-up. I still have a lot of stuff to go over, but I thought I would provide a little analysis of Gnomedex. Call it my little bit of feedback for Chris.

2007 was my first Gnomedex. I have been aware of Pirillo for a few years, but didn’t really follow him much. But, this year, when I really jumped head first into blogging as my publishing medium of choice, I found myself on Pirillo’s blog one day and decided he was a guy worth keeping an eye on. When Chris switched his publishing methodology into live video, I took note. My video guy and I were pondering why he made the move. After all, live video is a consuming way to create content. And when you add IRC to the mix, you are really opening up in a big way and, with that, comes annoyances. Chris seems up for it, though.

Seattle

Gnomedex is the yearly conference he and his wife, Ponzi, put on in Seattle. Why Seattle? Well, I imagine it is because he lives there. Plus, a lot of geeks live on the west coast. I was asking around and it seemed I lived in the back-country of tech over here in Florida. Many of the attendees seemed to come from Seattle or the Bay Area (meaning San Fransisco). Seattle, while not really that convenient for me, is a good location to do the show. It is a beautiful city, and I have to say you can’t really beat the location right on the water like that. You can read my impressions of Seattle over on my personal blog.

The Content

I have attended some conferences in the past and I can say that Gnomedex is definitely different. The audience is mostly bloggers or people wanting to do business with bloggers. And the topics covered were pretty diverse. Now, I have to be honest, I didn’t really see the point of a few of the speakers. Namely:

  • Robert Steele. Robert Steele ended up getting around to a point relevant to bloggers and that is how important the blogging movement is to steering the future of the country and being a source of information and holding the government accountable. That said, the guy was WAY too political in my opinion. It was, in my eyes, 30 minutes of bashing everybody under the sun and saying Bush and Cheney should be impeached mixed with 15 minutes or so of something useful. But, again, this is Robert Steele you’re talking about. He made some good points, but considering where he was, he was only proving to me that the statement “opinions are like assholes” was true.
  • Michael Linton. He made a talk about open money that, quite frankly, went way over my head. And judging by some of the comments I heard from other attendees, I wasn’t alone.
  • Sterling Allan. He made a somewhat interesting talk about alternative energy, but again, I didn’t really see what it had to do with bloggers.

Since this is my first Gnomedex, I really don’t know how it compares to past years. I think most of the talks were pretty relevant, but a few just left me wondering why they were there. That said, another part of me realized that that kind of thing goes with the territory, and here’s why:

It is a blogging conference. Bloggers are, by nature, pretty opinionated and they like to profess their opinions. Also, the thoughts of bloggers are all over the board. So, considering the audience, the selection of speakers was actually fairly representative. Personally, though, I would prefer a little more applicable stuff rather than the “get you thinking” stuff. Let’s talk about something I can use, not the reasons why Bush should be impeached. Steele makes his own speeches, but having him as the “keytone” speech really had me wondering if I was at a tech conference or a rally for Democratic Underground.

The speakers that were spot on related to us were Guy Kawasaki (the best speaker, IMO), Cali Lewis, Ronni Bennett, Jason Calcanis, Darren Barefoot, and one of the founders of JibJab. All spoke specifically to what they were doing on the web. Interesting talks and applicable. Also, Josh (another attendee) makes mention of a couple of interesting appearances. Namely, Jason Calcanis getting bashed by Dave Winer for “conference spam”, and the humbling appearance of Derek Miller who spoke from his bed over video phone. Derek is suffering from cancer and is still fighting it strongly. Derek’s appearance was very moving and, I could tell, a little hard for some in the room to watch.

The Value

I’ve had people ask me if my trip was worth it. It’s an interesting question and not one that can be judged by the conference alone. Gnomedex is clearly one of those conferences where the value you get from it depends highly on how much you put into it. It is what you do with your ideas and the connections you make when you are there that determines how much you’re going to get from Gnomedex.

For me, the value of Gnomedex is not so much in the speakers, but in the people I met while there and the overall vibe I got from it. The conference has a unique energy to it. These are bloggers, and they love to talk. And Pirillo has a wired personality, which adds a lot to the show’s vibe. If I can put that vibe to work for me, apply some ideas I got, then I get value from attending Gnomedex. If I do nothing to followup, then it would be a waste of time.

To Chris Pirillo

Chris, I know you’ve been here before. So, in the chance that you read this post, keep up the good work. I enjoyed meeting and talking to you for a few minutes while I was there. Gnomedex is an interesting conference, and calling it the “un-conference” really is appropriate. The energy you bring to it plays a large role in what carries the conference along. I can guess the amount of work that you and Ponzi had to put into that thing to pull it off. So, well done, my friend. I would be interested to see why you called it “imperfectly perfect“, although I think that’s an apt description.
Will I go next year? Probably.

Gnomedex – HP’s Party

August 10, 2007 | Comments

I am freshly back from the pre-registration party at Gnomedex 2007, sponsored by Hewlett Packard. That means I spent some time talking to the reps from HP. The guy who is (I believe he said) the head of the design team for their notebook PCs. Interesting conversation. He was showing us their new tablet form factor PC as well as their huge 20 inch notebook PC (which weights 15 pounds). They have great screens, though. Actually the laptop I am typing this post on now was on display there as one of their new models (not this particular computer, but one like it).

I also had a good conversation with the guy behind Minekey.com. Check this thing out because it is an interesting mix between blogging and social media. Essentially, it uses a cookie similar to MyBlogLog which tracks you across multiple blogs. As you build up a history of reading, it will custom tailor recommended links from selected RSS feeds based on your reading preferences.

I also saw the serving end of Chris Pirillo’s Ustream channel. Met a guy who works for Ustream who was manning Chris’s feed. I might have some more to say on this a little later…

I’ll keep it short because I want to get some shut-eye. HP and Chris put on a nice party. Open bar there for awhile, provided by HP. That’s always a nice touch. :)

You can view photos I am posting over on my Flickr account.

In Seattle for Gnomedex and a Little Tired

August 9, 2007 | Comments

Just a quickie post. I have arrived in Seattle and I am in my room at the Grand Hyatt paying $9.99 for 24/hours of internet access. Yeah, they kinda rape you on the net access. I don’t know why people can’t just give free wi-fi. Even sitting at Atlanta airport today….tried to check my email, but no I have to spend like $7.00 or something just to get to anything besides the airport website. Come on, guys!

But, I’m here. City is beautiful. Very hilly. I think I might walk down to the pre registration party this evening. They say it’ll be like a 15 minute walk. Can get some cool pictures on the way. I will need to almost literally CLIMB back to the room tonite, though, because it is a steep hill coming up from the water. Yikes!

Gonna catch a little shut-eye so I can be a little more aware at the geek-fest this evening.

Getting Tickets for Tradeshows Through Flight Miles

August 8, 2007 | Comments

Since I am traveling this week, something came to mind. Actually, it came to mind some time ago but I thought to talk about it here today. And that is the use of flight miles to make attending tradeshows and conferences more affordable.

I am traveling to Seattle this week, and I had to pay for the ticket. Now, I got a decent deal on it through Hotwire.com, coupled with my hotel. However, I am flying Delta. Delta isn’t exactly my favorite airline. They are trying to cut so many costs that they are just short of using duct tape to hold the wings on. But, I had to actually PAY for that ticket.

On the other hand, Delta (as you may know) is the primary partner airline for American Express. My wife and I have been using American Express for personal expenses for some time. Our trip to Russia last year was done using flight miles. It dawned on me this year – why not have an Amex for the business? I spend a lot of money on various things for the business, so flight miles would add up fast.

With Delta flight miles, it takes 25,000 flight miles to earn a round trip ticket within the United States. 50,000 miles to get a round trip international fare. So, yeah, it can take some time to build up. Some purchases will get you double miles, and they often give you big bonuses at the beginning. But, the way I look at it is that I am spending the money anyway – why not get something for it? Plus, it also helps you consolidate expenses.

There are other cards that earn you flight miles, but I think American Express is a little more service-oriented. And they should be considering they are charging an annual fee and an interest rate which will bury you alive. Yeah, definitely do not use this card if you are not able to pay off the balance in full every month. Their interest rate is pretty high. You want to use this card for the perks and the flight miles, not to bury yourself in debt.

So, check it out. Attending conferences is a good way to keep in touch with what is happening in your field. But, that usually means business travel expenses. You might as well do what you can to make it more affordable.

We’re Having a Baby Girl!

July 24, 2007 | Comments

Just a quick personal post. My wife and I had an appointment this morning for an ultrasound. Long story short, we’ve having a baby girl.

Watching them to do the ultrasound was pretty interesting. She turned the lights out and started rubbing the wand on my my wife’s stomach. On screen you can see – grey crap. Seriously. I guess you go through a bunch of training to interpret what you’re looking at. It all made sense to the doctor, but to me, it mostly looked like a bunch of grey stuff. Every now and then she’d get a good angle and I could clearly see the baby. Everything looks normal.

So, I’m having a little girl. I’ve always wanted a daughter…I just didn’t care what order they come in. :) It looks like we’re going to be striking that one off the list on number one.

As Forrest Gump says: “One less thing.” ;)

Is Twitter of Any Use to Anybody?

July 23, 2007 | Comments

Use for TwitterTwitter has turned into a bit of a phenomenon. The site has earned a love/hate relationship among bloggers, usually with them trying to figure out if the thing has ANY use at all. Well, that’s a good question. I saw a post over at LifeHacker that asked Is Twitter Worth Your Time? I was curious so I decided to look into it.

What is Twitter?

Twitter is a site which allows people to post short (max 140 characters) messages of what they are doing at any point in the day. Messages can be submitted via instant messenger, SMS on your cell phone, or directly via the Twitter website. When you send in a “tweet”, it is briefly featured on the site’s homepage. But, we’re talking only a few seconds here due to the volume of people trying to keep the internet up-to-date on every twist and turn of their lives. A look at the public timeline shows that most submissions are useless.

Uuumm….Why?

That’s what I thought. You can basically think of Twitter as a big blog site where people can post small little snippets of stuff. With only 140 characters of space to type, it’s not like you can do very much. Each person’s profile (here’s mine ) can act like a little blog. When I post an entry, it lasts on the public timeline for about 20 seconds before it cycles off the page. Just speaking for myself, I have no use for this. I am not interested in telling the world what I’m having for dinner or who I’m talking to on the phone. For a minute, it is kind of cool that you can submit to your profile using SMS or IM. I hooked it up to my cell phone and it did work fine.

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Summary and an Offer of Help

July 15, 2007 | Comments

This is the sixth of a six part series on how to get your small business website off the ground.

OK, the last five posts have walked you through the basics of getting your business website off the ground. I decided to write this series for one primary reason: I saw a need for it. I have seen a lot of business sites that are wastes of time. And at the same time, I have seen that there seems to be a sense of misunderstanding and confusion on how to get the ball rolling. To so many small business owners, the idea of running a website seems daunting. You are very busy and don’t really have the time to deal with all that geek talk out there on how to do it. So, you do the best you can with the knowledge you have and hope for the best. The end result is that you have a business site up there that is underperforming. It might bring in the occasional lead, but nothing like what you had in mind.

And the worse part is that it is easy to get lost in all the chatter. There are a lot of blogs like WebbyOnline that talk about how to promote your online business or make money on the net. However, at least in my opinion, it’s not often that somebody just sits down and lays out the basics. Instead they talk about the latest and greatest, and what’s new – leaving in the dust the majority of small business owners that just want a site that works without spending their entire lives making it happen.

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