Check out this page Ramit Sethi put together about getting your finances under control.  It’s generally great advice and I do quite a lot of it already, like setting up automatic deposits to my ING Direct savings accounts.

Here is an email he got from a reader…

“I want to earn more (I know, who doesn’t)

I keep reading all these finance books and like any other lazy American, I haven’t done shit. I’m 30 and a little behind on saving for the future, plus my boyfriend is a post-doc and not making a ton, so I’m kinda saving for both of us… yadda yadda) Essentially, I love the automation idea, I am just not sure how to start automating my life…

I have the (Roth) 401K, I also have a Roth IRA, but haven’t set up an automatic deposit into that – I know I should, I’ve just been sending in the lump sum every year… bad Leah, bad! Other than those two, I have no idea what to invest in. I like the idea of keeping a close tab on the 401K but let’s face it, I just put it in a lifecycle fund and haven’t touched it since. What else do I invest in? Basically, I just want out of the rat race.”

If it sounds familiar then check out what his response was.  Financial education is too important to be left to chance.  Speaking of which, have you done your financial statements for October?

Until next time, keep breaking free!
Brian Armstrong

Just wanted to give an update on how my SEO experiment went from this post a month ago.

For those who didn’t read it I setup a category on BuyersVote.com for the best halloween costume ideas of 2009. I did this because I knew it would be a popular keyword in October, especially toward the end of the month. And if I could make a good page targeted specifically for that niche keyword, it might get some traffic.

Well, it worked. I just BARELY got on the first page of Google in time for Halloween and managed to get the 9th or 10th place listing (which is still on the first page) for some costume related keywords. It was enough to triple the traffic to BuyersVote.com for a month (which isn’t saying much given how little it was before, but still, you have to start somewhere ;).

Here is the graph from Google Analytics.

Check out the keywords which drove all the traffic.

It’s also interesting to note that I think my page actually had the best content of any of the top 10 listings. Most of the other pages were made-for-adsense sites or crappy articles without many good costume ideas. It shows you that crowd-sourced content works, even on a small scale.

So what did I learn from this experiment? Primarily it shows this could be a good growth strategy for BuyersVote. With just a few good niche review topics like Ski Resort Reviews, Blogs for Entrepreneurs, or Mac Web Browser Reviews it could start to get some good organic search results. If I get just a few, that will be enough to start getting new contributors to the site who will generate new topics, and new search results, and it will be come a positive feedback loop to growth.

This is the hardest part about starting a site like this: critical mass. Nobody wants to be the first reviewer on an empty site.

Feel free to steal this SEO idea too (I didn’t come up with it) and apply it to your own site. Basically just pick a highly specialized keyword (so it’s not too competitive) that will have a lot of traffic coming up. Seasonal or holiday related keywords work well for this. Then if you generate a page targeted to just that keyword, it’s possible to get on the first page of Google, even if you have a relatively new or unknown site.

What do you think? What might be some other good niche topics to add to BuyersVote.com?

By the way, the site now has 405 items and 113 contributors, so if you haven’t already, please take a moment to create an account and add some reviews.

Until next time, keep breaking free!
Brian Armstrong

Students in this entrepreneurship class at Stanford were given $5 and two hours to see how much money they could earn.

Some of the ideas will surprise you.  Great example of thinking outside the box (especially the last one)!  The video can be viewed here or click the image below.

If you’re interested in starting an online business from home, and you’d like to learn about the top businesses that are working right now, then check this out:

http://www.startbreakingfree.com/go/ignition/

Or here is the video link:

You can get a free ticket to a 90-minute webinar called: ”10 REAL Online Businesses You Can Start From Home RIGHT NOW.”

Eben has started several multi-million dollar businesses – ALL from his home. So he’s the real deal.  You’ll want to see this (it’s free).

Register while they still have free seats available!

Until next time, keep breaking free!
Brian Armstrong

The 37Signals guys launched a new site this week called Haystack.com.  Here is their post explaining the launch.

It’s a simple idea: create a directory of website design companies so clients can quickly find a good one to work with.

The idea is not particularly brilliant and original, but they absolutely nailed the execution on this project.  Let’s look at a few reasons why this is going to be (and already is) a big success.

At the end I’ll show you exactly how much money they’re making from this just a few days after launch (it’s a lot).

1. It’s Passive

The first reason this business makes sense is that you build it once and it runs on it’s own.  You aren’t trading hours for dollars working with individual clients.  What time you do spent on it after launch is spent ON the business, not IN the business.  This is an important distinction and one of the keys to building wealth.

2. Freemium

They also used my favorite business model on the web: freemium.  People can try it free, but if you want some additional benefits they ask you to upgrade for $99 per month.

This might be worth it to any web design company who gets at least that much new business from it each month.  It’s basically a marketing tool for them.

What’s particularly impressive here is that I think they NAILED the breakdown in benefits between free and paid accounts.  They didn’t try some gimmicky upgrades like a “pro” badge or a 30 day free trial.  Paid accounts get three things:

• six images to show your work instead of one (this reminds me of AutoTrader.com)
• listings in search results above free users
• a bigger display of your work than free accounts (the image is 4x as big)

That last one (size) I’ve never seen in any other freemium model and I think it works great here since they are displaying creative work.

(Side note: another freemium benefit which works really well is an upgrade based on storage, or amount of usage like number of users/projects/invoices sent/etc.  DropBox, Flickr, Evernote, Basecamp, etc all use this with great effect, and it works much better than a 30 day trial or something like that.)

3. Permission Asset: Their Blog

The final reason they nailed this is that they have a lot of clout in this field (website design) and their blog has over 100,000 readers.

It’s hard to overstate the importance of this.

The site launched just a few days ago and you can already see on the homepage they have 72 paying customers with big listings (and hundreds of free accounts).  That means the site is already generating over $7,128 per month in profit and it’s just a few days old.

What would it have cost to buy this much interest in advertising dollars in just a few days?  $100k?  $500k?  I have no idea.  Maybe it wouldn’t even be possible.  People don’t put much faith in ads and $99/month is a lot of money.  But they got this “advertising” for FREE just by making one blog post.  Of course it took them years to built up that asset (their blog) to get it there.  And they didn’t fake it by writing cookie cutter, me too, articles.  They wrote really useful stuff from the heart.

The message is clear: if you don’t have a blog, you need to create one today and start building a relationship with people who know and trust you.  Communicate as personally and authentically as possible.  That way, the next time you are doing something important (a talk, a new business, a book, etc) you have a built in audience.

Conclusion

As someone who has a similar business – after all UniversityTutor.com is just another directory site, I’m providing tutors with a way to get new business instead of web design companies – watching the Haystack.com launch gave me a couple new ideas.

Primarily, it’s made me wonder if I have the right breakdown between free and paid tutors accounts on my site.  Currently, I let tutors get the first 3 job requests free, then ask them to upgrade for $10/month.  This worked much better than a 30 day free trial but still has a problem: tutors who don’t want to pay at that point get kicked off the site!

Currently there are about 7,000 tutors with live profiles on the site.  But there are an additional 5,000 tutors who USED to have a profile on the site but they decided not to pay after 3 job requests and got booted off the site.  That means I’d have almost twice as many listings if those tutors hadn’t been kicked off (or more accurately, the number of listings would be growing twice as fast over time).  It’s also probably hurts the number of tutor signups you get in the first place if people know there is a ticking time bomb on their account (3 jobs left, 2 jobs left, 1 job left…boom!  pay up or your account is gone).

So what is the solution?  This made me wonder if there are different benefits I could provide for the paid tutor account that didn’t involve a deadline.  How about…

• Get listed first in search results (yes, maybe)
• List more pictures (no, doesn’t work here)
• Bigger profile (no, probably not as important here – photos don’t matter as much in tutoring)
• Offer more storage, or bandwidth on the site (no, doesn’t work in this case)
• Make the job requests limited some other way, like max 1 per month, but you can do that forever with the free account  (maybe…)

I’m not sure, what do you think?  Getting listed first in search results sounds like a good one, and I might add that anyway (even if I keep the same business model).  But I’m not sure if that alone would be enough to convince people to upgrade.

Making a limited number of job requests per month (every month, with no deadline) is an interesting one.  This works well for sites like FaxZero.com, where you can only send a limited number of faxes with the free account but you can do so forever without upgrading.  So a “light” user gets hooked on it for free, but if they need to start sending more faxes it’s a natural upgrade.  But would this work for tutoring?  There is a relatively high turnover in tutoring, so you need to keep getting new students, but it’s not like faxes.  Getting just a couple good regular students could be all you need for a while.

What do you think?  Have I struck the right balance with UniversityTutor’s business model or is there a way to offer a free account without a deadline and curb the number of tutors getting booted off the site?

Until next time, keep breaking free,
Brian Armstrong

I’ve noticed a trend of sites coming out recently that are built around the idea of taking short, funny, user generated content.  Often users can submit them as text messages or emails.  Sort of like Twitter but on a particular topic.

It might sound stupid, but some of these sites are getting over 1 million unique visitors a month, and probably doing about $1 million a year in advertising revenue from it.

For example, fmylife.com let’s people submit funny one liners about how much their life sucks.  Users rate them or bury them based on how funny they are.

TextsFromLastNight.com does something similar with funny text messages you probably shouldn’t have sent when you were drunk.

Juvenile?  Worthless?  Maybe, but they are also pulling an insane amount of traffic and dollars from these sites.

Two people I’ve talked to recently are starting similar sites.

The first is TextsFromTheGame.com, a similar idea based around sports and all the trash talking that guys love to do.  These guys are just getting started so if you’re a sports fan please help them out and go submit the best trash talk you’ve heard recently.  Also add “text at textsfromthegame.com” to your phone so you can easily forward them good ones you hear in the moment.

It’s easy to forget these after the fact, so the idea is that when someone says something really funny you can shout out “that’s going on textsfromthegame!” and forward it right there from your phone.

The other one is still being developed but it will be exfiles.com (a great domain) and will feature short quips about, you guessed it, your crazy ex-boyfriend or ex-girlfriend.  Follow them on twitter or add your email to their website to get notified when it launches.

I have to say, these don’t strike me “change the world” type of projects or see them as helping a ton of people.  But who knows, maybe making people laugh is all the value you need.

What do you think?  Passing fad, or new way to build a big site with user-generated content?

Until next time, keep breaking free!
Brian Armstrong

I had an interesting conversation with Neil Patel earlier this week.  I called him to get some advice on UniversityTutor.com and how I could take it to the next level.  Neil is a really successful guy in the web business space, so I figured it’d be a good brainstorm.

His biggest advice was to get more incoming links to the site.  This is probably the most important thing you can do to rank well in search engines, because Google (and others) place a high value on how many sites link to you.  It’s also a great barrier to entry against competitors because an established site will have lots of incoming links built up over time and it will be very difficult for a new startup to outrank them in search engines.

I’m already ranking well for some local searches (such as biology tutor austin)  but not so well in other (such as find a tutor).  This is largely due to how long those sites have been around and how many incoming links they have.

So obviously getting more links is good, but HOW was the big question.  Neil’s advice was to follow the same model Yelp.com used with their user badges.  This lets Yelp users display their reviews on their own blog or website.  They get to show off their work, and Yelp get’s an incoming link.  You just have to provide users with a little snippet of code and an incentive to paste it into their site.

So a day later I had launched tutor “bling” that my tutors can add to their own websites (blogs, school websites, facebook profiles, etc).  Since a lot of the tutors are university students, it would be particularly great if I got some incoming .edu links (these carry a particularly high value) but we’ll have to see on that.

As an added incentive I built in my UniversityTutor affiliate program so all the pre-generated links contain a tutor’s affiliate code (they can track it using the stats at the bottom).  Using this they can not only advertise their profile, but also get paid for any new tutors they refer.

One More Idea….

This wasn’t related to my conversation with Neil, but I thought about it after reading a story on Hotmail.com.  Hotmail got popular FAST (something like 2 million users in 18 months) almost entirely because they forced you to include a line in the bottom of every email that said “Get A Free Email Account At Hotmail.com”, or something to that effect.

There are over 100 contact messages going through UniversityTutor.com every day now, so I decided to add a line to the bottom of their contact emails reminding them of the opportunity to refer new tutors and get paid for it.  You can see the new line in the email below.  This is more for word of mouth than SEO because I don’t think Google will index links from someone’s Facebook profile.

So what do you think, will it work?  Here is a graph of search engine traffic to UniversityTutor.com over the last three months (traffic from search engines makes up about 50% of total traffic).

It will probably take a month or two to have any effect (if it works), but we’ll see!

Until next time, keep breaking free!
Brian Armstrong

This post is going to be a random collection of thoughts/events from the past week.

Video of Mint.com Founder

You might have heard recently that personal finance site Mint.com got acquired by Intuit for $170 million.  This video by the founder, Aaron Patzer, is really awesome and should be watched by all entrepreneurs I think.

Click Here For The Video

Some highlights…

• Each technical founder adds $500k to your valuation, each MBA founder subtracts $250k from your valuation
• He discusses how keeping costs low saved his company (personally I think they can be even lower), a common theme on this blog

Answers.OnStartups.com

This is a brilliant site that just came out which does questions and answers for entrepreneurs.  It is based on the software behind StackOverflow.com, a popular question and answer site for programmers which has seen meteoric growth over the last year.

Traditionally there have been 3 main types of community websites: forums, wikis, and blogs.  This format is different.  It combines elements of all three while adding some new features.  I think it is far and away the best format for a Q&A site.

After seeing this format take off with StackOverflow.com, I incorporated pieces of it into the BuyersVote.com design, such as the voting and reputation.  I think we’ll see more Q&A sites like this come out soon, so this is probably a good opportunity for entrepreneurs to start their own niche Q&A site (accounting and taxes anyone?).  I’ve put in a request to get more info on obtaining the source code for free if you want to start your own Q&A site like this.

Anyway, I think this will turn into an amazing resource for entrepreneurs.  Check out the site and start participating.

UniversityTutor.com Update

Finally, I’ve been making some interesting changes on UniversityTutor.com.  I’ve built some massive campaigns in both Google Adwords and Microsoft Bing lately to drive new traffic to the site.  They are converting (in other words each dollar spent on ads is bringing in more than one dollar in revenue) and the site is seeing some good growth right now.

In addition, I was playing around the other day and typed “tutoring jobs” into Google.  My site ranked on the 5th page of google results.  If you aren’t on the first page of results you are basically non-existent for that keyword.  Nobody clicks through to the 2nd or 3rd page.

I decided to try targeting the “tutoring jobs” keyword so I can improve my ranking in Google.  I setup this page for tutoring jobs which you can see is optimized for it.  There is a trade off here when you target a page to search engines instead of human beings.  The text I had on the page before was “Tutor Signup” with a different heading about signing up for a free account.  This was probably a little more clear to human beings than the simple “tutoring jobs” title I have there now.  But it will rank better in search engines.  So it’s a trade off.  I’ll have to see how it works out.

Until next time, keep breaking free!
Brian Armstrong

Sometimes I post up reviews of books I’ve enjoyed.

But I think it’d be interesting to get a collective approach from all the readers of this blog.  What books on business have had the greatest impact on you?  Which book do you find yourself recommending to other entrepreneurs the most?

A bunch of suggestions have already been added to BuyersVote.com.  What would you add or subtract?  You can check out the list here to add your two cents.

In case you’ve never used BuyersVote.com before, here is a quick review of how it works (it’s really simple):

• If you like an item, vote it up (+1)
• If you don’t like an item, vote it down (-1)
• If you have a better idea, add it at the bottom

You’ll have to login to vote (sorry, that is the only way I could find to keep voting fair), but you can use your Google account or one you already have so there is no registration process.

This isn’t really related, but another category that I put together recently on BuyersVote is for the best halloween costume ideas of 2009.

As you can see, some of them are good, some are bad (maybe even offensive).  But this is the beauty of crowd sourced data.  Good ideas get pushed to the top and bad ideas get pushed down (with enough participants).

I actually have an ulterior motive for this category: I’m hoping to get on the first page of Google for keywords related to Halloween costume ideas this season!  There will obviously be quite a bit of traffic over the next month for those keywords and, if it works, some new people will be introduced to BuyersVote that wouldn’t have otherwise seen it.  This is a nice little marketing technique that you might want to try: target a highly specific seasonal keyword.  If you can get on the first page of Google for it, you might be able to ride a nice wave of traffic that few other people are competing for.

Until next time, keep breaking free!
Brian Armstrong

It’s inspiring to check out your Google Analytics stats sometimes.  Things go up and down naturally a bit each month, but as long as you’re helping more people over time then it will be hard not to be successful.

According to Google, over 33,000 people used something that I built last month.  That’s a drop in the bucket compared to many sites online but for me it still feels pretty good.  It’s way more than I could have talked to in person, for example.

Remember, the only way to build wealth is to help other people.  If you want to earn more you have to either:

1. provide something of greater value
2. provide it to more people

Most people focus on #1 – for example, a doctor earns more than a barber.  When you need a heart transplant you really need it, whereas a haircut can wait.  There is almost no upper limit on the amount you’d be willing to pay to get a heart transplant done right (after all, what use is your money if you aren’t around to spend it).  But a botched haircut isn’t going to hurt much other than your social life for a few weeks.  The principle of scarcity is also at work here.  There are plenty of people qualified to cut hair but fewer who are qualified to perform heart surgery.  You could say there is a higher barrier to entry into that market (medical school, intelligence, etc).  So clearly, one way to earn more is to provide something of great value that people can’t get anywhere else.

But I think it’s a mistake to focus only on #1.  You miss out on scale.  Even if what you’re providing is 100 times more valuable, you’re limited in that you can only help a fixed number of people in a day (indeed, a doctor and a barber see about the same number of people in a day).  Technology is the key that allows you to scale.  It allows you to help not hundreds, but thousands or millions of times more people.  Now we’re not talking doctor rich, we’re talking Bill Gates rich.  Technology lets you build a water wheel instead of carrying buckets.

Even if you are helping each individual person less, scale makes up for it.  Each of the 33,000 people who came to my websites in the last month probably only got a little bit of help (nothing like the value of a heart transplant).  But if next month 50,000 people used it or 50 million, it wouldn’t take much more of my time and I would have drastically increased the amount of value I contributed to the world.  In other words, it scales.

There have been lots of technologies over the years that let people scale, and some of them still work.  Writing a book scales (you don’t have to sit and tell it to each person, they can read it on their own).  Having a television program scales (whether 10 or 10 million people watch it doesn’t change what you do).  But I think technology in the modern sense (specifically software and the internet) is perhaps the best one around today to get rich.  It’s probably the one with the biggest untapped potential because it’s the newest and still evolving.

So see if you can build something that helps people AND is scalable.  It’s definitely more work up front to do that.  In the beginning maybe nobody will use it and you could have earned more giving haircuts.  But in the long run if you keep growing the number of people you help each month, then people will find a way to compensate you for it (whether it’s flat out paying you, or clicking some ads, or whatever).  If there’s no limit on the number of people you can help then there’s no limit on how much you can earn.