It’s the myth of the straight line, of predictability and stability surrounding a project business model, that most entrepreneurs try, and that approach is flat world to its core.

I have seen this work rarely, like a Steve Jobs reality distortion field.  More often you create a product that people love and grow a business around it over time.

It’s knowing how you will get through those early days, and when you will begin to see revenue, that determines your success.

Straight line people get stuck because life and business comes in curves, shifts, changes, and is constantly adapting to the needs of consumers, the competition, and your market.

Sometimes stuck in flat world thinking, they keep pushing for their straight line to work.

A Curve Is Just the Limit of a Straight Line,

and Often a Shorter Distance

I see the same problem in many new entrepreneurs, who go in thinking that like math, business is a flat world where their actions will create revenue.

That myth interrupts many entrepreneurs, with an expectation that if they do A, they’ll get B.

Often they get C or D, with the inevitable pivot choice in front of them, maybe even above, below, to the right or the left.

1. If you are frozen by choice, you live in flat world. You can’t see the choices, yet choices are always there.
2. If you look at choice as an inevitability, you plan for it so you always have some alternative.
3. This simple lesson is the one thing entrepreneurs struggle with because alternatives (to some) means lack of belief in your solution.

Belief involves something that does not exist; your solution proves itself to you, you don’t believe in the solution, you believe in what the solution proves to you…or you go find the next solution.

You’ve got a give a pivot some time to grow, but how long does it take before you know a pivot is not a pivot for your business? What if it is a mistake in direction?

Because once you break out of the straight line myth, you find many, many paths to the solution, not JUST your idea which is so limited – you are in the box, after all, and you created the business.

Let me a share a few ways to move beyond the straight line.

Question/Answer Exercise

Your startup has no money, lots of debt, and a product just moving into alpha development to be tested. How do you keep going for 3-6 months?

Straight line thinking will start your mind into list building. It’s easy to create all sorts of lists, logically justifying them as “this might work”, and spanning the breadth of what could be created.

You draw up so many markets/choices, and try to focus on 20-50 of them at a time, figuring that a few will hit.

Yet unlike a Vegas gaming board, your odds do not improve by the number of choices you put into the equation. Your efficiency decreases dramatically with each choice over 5, as you lose more and more focus.

Be careful of fake productivity, where you are genuinely busy yet accomplishing little to grow your business. You see this near the end of many businesses, who are trying to look busy.

Productive, not production, work involves finding revenue sources, or funding. You have to do either one, or both, to continue.

Curved World Solution: Write down your laundry list of solutions, whittle them down to 10, and pitch them to each other, or a few friends who understand your business.

Pick 3-5, the fewer the better. Focus on nothing but these for the next 30-90 days. You’ll see them, they will be often the most obvious, the least glamorous, and a step towards the solution.

As I shared with many of my own employees, when it works, be amazed. Don’t expect it to work, expect to watch what works and adapt.

Define how much revenue you need to pay the bills, create a little positive cash flow, and ultimately profit?

How quickly can you make the bill money? Focus on this along with your dream, because if you don’t pay and investors won’t pay – you either create income or your business turns into an expensive hobby.

Ask yourself…

Which markets exist, can be somewhat easily reached, and what level of commerce lies beneath them?

How much do people of this age buy?

For example, many assume that social media is dominated by younger Generations X and Y. As I wrote recently, Zynga’s games are dominated by a 48 year old American male as a typical customer.

If you are selling on Facebook, knowing this demographic is conducting commerce within Facebook is huge, that’s a pattern, a buying behavior in action, not theory.

Does your audience buy? How much traffic could you get if you owned the market, or just got 10% of it?

Start defining your markets based on:

1. Who your customers know, like, and trust;
2. Where they go for recommendations, ratings/reviews, or feedback;
3. When and wat time of day and week they come online;
4. Why they buy products related to yours.

That why is what you must define, determine, and adapt. And since it’s not a flat world to your customers, your business better not be a flat world for you.

I’m happy to answer any questions you might have, flat world or not…

What popular startup advice is plain wrong?

There seem to be an increasing number of startup ‘gurus’ along with more and more websites offering advice. Yet, there seems to be a lot of crap. So, what do you think is the worst?

Take a look at this video, and let’s jump into the 2 worst pieces of advice I know of right now, because they hide the reality, AND the real fun.

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A Brief History:

How I Learned to Be an Entrepreneur

I’ve been an entrepreneur for 25 years, and wasn’t born selling stuff to my friends as a kid…which is what many think an entrepreneur does!

In fact, for the first 5 years I was in business, I was pretty lost.   No one told me how to do things, or that every effort needed to be followed up, researched, and tested. Alone to my own wits, I whined alot, stumbled, and basically got consulting gigs but didn’t build a business.

So when I share this advice, it’s not to bad mouth the emotion behind the advice. It’s good to be psyched about what you are doing, and to feel free, yet what I’ve learned is that people mistake these as the keys to being an entepreneur.

The key that I’ve learned is simple; LOVE solving the problem your customer has, so they come back again and again. If you don’t solve a problem, you’re not relevant, and the easy part is falling in love with your solution, what you are doing.

What happens if they, the audience, don’t care for your solution? That’s where you pivot and adapt, and wake up from the 2 worst pieces of advice I know for startups and enterpreneurs.

Bad Advice #1.

Be passionate about your product!

Writing a book or course on being an entrepreneur seems to almost require that the teacher say this, tying into a person’s search for meaning and excitement in their life.

Yet after the warm fuzzy part of the startup wears off, you start to do repetitive things, things you don’t like, and pivoting from your first idea onto the next, in search of the right answer as defined by your audience.

First the whole passionate schtick is like the self help/Secret end of this business, as if just being passionate will get it done.  Imagine that all you have to do is visualize, and repeat to yourself that you are a good person.

Sound insane? Do you know how many entrepreneurs I’ve met who are in their business and almost waiting for destiny to find them, talking to themselves instead of engaging their audience?

Yes you should care and love what you are doing, but it’s not about you, or your product.

It’s about the problem you solve, and you should be

passionate about solving that problem.

Everything else flows from that, even your products will change and adapt to the market. Love the  problem, not the product.

What most entrepreneurs love is their solution, their whole ego gets wrapped up in proving to the world that they have the right answer.

You only have one group to prove that to, your audience of future customers. If they don’t buy it, it’s not a good idea.

And if you believe in your idea more than their reaction, get a job now. Because you are wasting your time, and theirs…running a startup is not an ego trip, though a strong ego does help.

It’s about constantly researching the problem and your solution, pivoting and adapting, testing and measuring. Sound boring?

Welcome to the real world of the entrepreneur, long hours and lots of risk, and also lots of return. You either love it or you don’t, but don’t use passion as your excuse.

Passion is just the fuel that drives the business, but you run out if it is only passion, and not a great solution to your target audience’s problem.

Bad Advice #2.

The Freedom Myth of Being an Entrepreneur

What woke me up to the reality of freedom as an entrepreneur was my first venture, where I published a magazine and had to sell it, and the idea, to people.

This took more time than any  job, and my weekends became a quieter time to focus and work. I do love running my own business so this doesn’t matter to me, but what bugs me is wannabe guru’s selling the myth of freedom.

If you own a business, you have to make it run, and watch that it doesn’t own you. I learned that running my agency, with 20 plus employees and doing 80-100 hour weeks on average.

Now I loved the experience, but I also learned I lost most of my lifestyle. I was always working, and if you like that, which I did, you can do it.

Yet when I see people treat their startup like some lottery ticket, as if there is a script that has been written for them that will come because they deserve it, it just makes me laugh.

Karma is not something you deserve, it’s cause and effect. As an entrepreneur, you have to be the cause, always.

Gurus love to frame this as a being free from a job, from bosses, from all these negative things about having a job. That sells books and gets people into being an entrepreneur because they believe that it will be better than a job.

Then you become an entrepreneur and realize the long hours, lack of family time, dedication to the goal, leadership you have to show others and direction you have to give, and ultimately that you are responsible for everything.

Even worst, because you had a job, you turn it into a job. That’s death for any startup, because when it feels like a job, you’re likely close to the end.

So what’s my good advice, the solution? Be wise, be aware, and be in love with solving the problem. Don’t let the business run your life, and set some boundaries if you can.

I’m big on integrating my lifestyle with my business, which is why I’m not back in the grind of software startups like I used to, and still love to mentor. If that jazzes you, there’s nothing better than working with a team.

Just understand you should love what you do, but passion is an emotion, and it comes and goes. What really tells you that you are right is that feeling when people get it, start buying, and start talking about your business because it helps them.

That is where it gets magical, where you are connected to their needs, not your dream. And freedom, like the song goes, is just another word for nothing left to lose…

If you don’t know what to do if your business fails, if you don’t have a Plan B, you’ll never be free. True freedom is selling your business, or building a business that lasts for a long time and helps people.

Freedom is a goal, not a given part of being an entrepreneur.

And that said, I’m unemployable by birth, and my zest for startups fuels success because I know it’s a journey, and you have to define it each step of the way.

It’s easy to say you want to make millions, how will you make your first thousand? How will you break even, get positive cash flow, and start growing?

Answer these questions and you’ll know what passion is really about, solving your business problems, and the one key problem your customer has…because you likely won’t solve more than one, and that one should keep you very, very busy.

What do you think? What’s your challenge as an entrepreneur?

I can tell you from personal experience, and lessons learned from a monk and an ex-Marine football coach, that smiling is the key to excellence…

Sometimes your joy is the source of your smile, but sometimes your smile can be the source of your joy. ~ Thich Nhat Hanh,

When things get tough, smile. Coach Ted Monica

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A smile is not just a reaction, it’s a state of mind.  As an entrepreneur, you are going to be working with other partners, employees, investors, and customers. Each step of the way, your smile shows more than you are happy…happiness varies.

The practice of smiling is about handling stress and understanding how things come and go, ebb and flow, and all you can do is be consistent in your attitude.

Smiling is not only reacting to something that makes you happy, it helps you cause others to feel confident, assured, and trusting. The most important thing about this is you cannot use a smile as a lie, to yourself or others, because at an unconscious level, we all pick up on it.

A smile will get you through whatever challenges you have when you learn it comes from within, and is also an attitude for excellence, and peace, in your business and life.

The Entrepreneur’s Smile: Why It’s Important

In my 25 years as an entrepreneur, one of my biggest challenges has been my own nervous energy, anxiety from the numerous risks I encounter in my own entrepreneurial journey. And in the early days, I was clueless, stressed, and no one really wanted to work with me long term.

Because when things go wrong, when things don’t go the way you planned (ie, like most times), you have to adapt. In my early days I’d share my fears with people, sometimes even clients inadvertently. And while many of them liked me, they chose to go elsewhere eventually.

Over time I learned that I was creating the opposite effect, with myself and with others. It made me remember my days as a high school football player, on a team that never lost my last 2 years that I played, and went onto be #1 in New Jersey the following year undefeated again – an unprecedented feat for a school that size.

How did we do it? It all began with our coach, Ted Monica, an ex-Marine, Vince Lombardi inspired (and he worked with him), legendary football coach. I remember when we did 3 practices a day, full pads in the New Jersey heat and humidity, it was like bootcamp.

In the middle of one bootcamp we were running tons of windsprints, and I was in deep pain. My face was full of that stress, that pain, when Coach Monica came running up to me, grabbed me by the shirt, and told me to Smile!

I thought he was nuts, but then I smiled, and found in working out, putting all that stress in my face was missing the point. I was making things harder, by THINKING they were harder. That simple lesson helped me in my training since those high school days; even in the gym lifting weights, I’m smiling the whole time.

As an enterpreneur, I started to remember this lesson and slowly integrate it into my life. When something bad happened, I tried to smile. It was forced at first, and I had to learn to really live the smile, not just use it to make me feel good.

Soon I was able to work with others, and build major businesses because people like the way I handled the ups and downs, the stress. While I’m still as anxious and nervous as ever, the smile helps me temper the rollercoaster ride of an entrepreneur…

And it’s another thing my coach taught me; when the going gets tough, smile. One of the reasons we never lost is because this simple lesson was ingrained, and had us believing we would always win.

When a team believes, amazing things can happen. As an entrepreneur, it’s up to you to get your Team believing, and the more they smile, the more you will succeed.

Practicing the Entrepreneur’s Smile is Just Like Working Out

So how do you get to smile that much? First, stop equating a smile with a reaction to something positive, or funny…those are just part of the equation.

Wake up in the morning and smile, think about what you are grateful for, what you have, and all the people helping you, your family and friends. If you are like me, a bit of a recluse, look around you and ask yourself each morning to look at the world with a new perspective, with a smile.

And when problems come up, try to smile as your reaction, just as if something was funny. I’m not saying to do this like a crazy Dark Knight, just feel it inside, and focus on the solution to the problem…what will turn this problem into a smile?

It may not solve the problem, but it will get you closer to the solution.

Your Smile is a State of Mind

In the end, your smile shows from within, and can be the source of your genuine good nature, your ability to work with others, and your ability to adapt to changes as an entrepreneur.

Now I know many of you driven, trying to prove your better than someone else people will say this is a load of bollocks. That’s your right…

I can tell you that when I learned, and am still learning to smile (I’m no Zen monk, this attitude is alot like working out, and it’s easy to dip back into old, negative patterns of feeling and thinking) every day.

Each day I get closer to my goal, and each day I relax a bit more, while confronted by numerous obstacles.

Because I’m an entrepreneur by choice, not by birth; I had to learn how to do it. And I’d rather be in control of my life and my choices, and in business I need help.

You get much more help from a smile than you can imagine. You feel better, and over the years the smile is my reaction to all things…a reminder that this too shall pass, and you are measured by how you handle the tough times, not by your successes.

As I used to teach my employees at my agency, when it works, be amazed.

And learn to smile from within; it may not make you wealthy, but it definitely will make you rich.

What made you smile today?

What I’ve discovered, late to the game, is a whole world of people buying and selling web sites. And this isn’t about buying domains, where you have to build a business around that name – highly lucrative, yet a different market.

After creating this video with 3 case studies from Flippa, done live (disclosure: I haven’t worked with Flippa nor know any of the sites mentioned, this is just a quick review),  some folks asked me to break it down to the Essentials, which is what this blog post is about…

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This article is a follow up to Key Insights to Buying and Selling Web Sites (the video is the same, the blog post is different), where I look at what factors I would evaluate when buying an existing business, or one that needs revamping. Much of this I learned in Zac Johnson’s book, Flip this Web Site, which I helped him develop in my coaching program – this is not an affiliate link, simply an introduction to a long time, very smart friend.

The 2 Essentials: Buy a Web Site

With Existing Assets and Revenue, or

Improve an Existing Business

Just like buying real estate, web site purchases have their own location value - search, email, and community - and must have value you can increase. Look for something close to the on ramp!

When you buy a house in the real world, you look for location, location, location, number of square feet, bathrooms, and the ability to sell that house down the road for a profit…seems like that market is sort of dead, but it doesn’t take a genius to buy a house, it takes someone who researches, knows the details and flaws (every home, and every web site, has flaws), and is comfortable with the price and business to buy that property.

The same thing applies to buying a web site; if you buy an existing business with revenue, you need to evaluate that on revenue, consistent traffic locked in by search or loyalty, or both, and access to an audience.

If you want to fix up a site and leverage what you know to improve the business, you have to place a value on the time, money, and resources you will invest to turn that around. Just like adding a bathroom adds more value to a home than adding a closet, the cost involved in improving a web site must translate into increased revenue (or often, creating revenue), and increased value if you plan on selling.

Because with the Essentials I’m sharing here, the real key is your exit strategy. How long would you like to own this web site, and what would you like to do when you are done? Who would buy it?

From my first blog post: “Here I’m talking about buying a web site that exists, with assets like steady traffic, email lists, and sometimes revenue. The way Flippa lays it out for you is powerful, easy, and safer than anything I’ve seen before, including eBay.”

Here’s the 2 Essentials I see as important to buying and selling a web site:

Essentials 1. Buy a Successful Site Based On

Traffic, Search, Lists, and Revenue

When you buy a site, hopefully you are already experienced in the market you are targeting. In Zac’s book, he talks about buying a jewelry site, where he added his Internet marketing savvy and increased conversion.

Increasing conversion and improving the marketing increases revenue, and he was able to add this to a portfolio of sites generating revenue and traffic.

The same logic applies when you are looking to buy a web site that has traffic and revenue:

RecruitingBlogs.com is the example from the video, that reportedly sold on Flippa for $95,000. What amazed me is that this is a Ning site, which means the hosting and business is based on a low monthly fee, so buying the business means you are locked into Ning, or will have to move the site yourself off of Ning and replicate the various Ning tools like discussions, ads, Member Profiles (which builds your email list).

1. RecruitingBlogs.com has a community of job recruiters, people involved in finding people jobs, and extensive networking. The jobs market online is lucrative, even in this down market, and these people are the gatekeepers. So the quality of the audience, if you are in that business of contacting recruiters, is high, and the advertising revenue is steady. People buy ads for these kinds of sites, because of the quality of the audience.
2. Assets that excited me are a large, loyal community built over 4 years; talk about location, location, location! They also have an email list, steady monthly traffic, and steady monthly revenue.
3. While scaling this business would be difficult unless you can integrate it into other efforts you are building in this market, you can see how the audience and revenue mix here makes it a powerful tool for growth.
4. The key questions when buying must have been about scaling, can you add traffic and more users, or is this as big as it gets? Will this loyal audience stay with the site once it is purchased, as the new owner has to learn how the community operates.
5. Is there something special the original owner added to the community? This is the problem with buying a guru’s site for example, where people are loyal to the person’s pseudo-celebrity, and not the site itself.
6. While this site is based more on the activity of the audience, it’s smart to either keep the original owner around for 3-6 months to transition, and help you transition. The other choice is to simply replace that person; if so, what might the impact be to the audience?
7. Finally, what’s your exit strategy? Will you be able to add more members and traffic, integrate it into your own “network” of jobs-related sites, and leverage this audience?
8. Selling the site down the road means you understand that like you, people will buy this based on a multiple of Net Profits likely, or gross revenue, with traffic and the list as secondary measures. The list and community must also be responsive.
9. Can you name 3 likely buyers for this site down the road? Why would they buy it from you?
10. Just like a home, you have to measure the assets, the current and projected future value of those assets (after all, buying a dying community or old blog with little loyalty is not beneficial), and most of all, can you buy the business, run it, and increase the revenue and/or traffic? And in what time frame?

Essentials 2. Find a Fixer Upper – Technical or Marketing -

Where Your Skills Can Add Value

Fixing up a site is trickier, and like any remodeling job, you really want to think like a contractor, know your budget of money and time, and have a clear path to execution of your plan to improve this business.

Some businesses involve technical skills; in the video I share a web site that isn’t that expensive to buy,  under $5,000, with traffic. Yet that traffic is compared to Tumblr.com, and written in its own, unique code.

If you are technically minded obviously you can learn this; AJAX has made this world fairly easy to navigate. Yet unless you see how the code is written and how it executes, you have to be wary of buying someone else’s problem.

For example, I’ve had sites that worked great with low traffic, but couldn’t scale because the infrastructure – both coding and where it was hosted – were lacking. Obviously both can be improved, but you have to measure the time spent here.

You can easily get into a project that soon drags on and on, and never takes the next step. Like a bad fixer upper, it can become a financial and time strain on your business, rather than being an asset.

Like any fixer upper, it’s buyer beware, and be aware of what you are really buying. The site I mentioned in the video has traffic, but the owner really sort of cloned the Tumblr idea.

Tumblr is hugely successful, and this site has over 100,000 people using it monthly, so at first glance that shows that the technology likely works. I would test the speed of the site, how fast it loads, and the recent activity…for a social site, recent activity is all that matters.

If possible, search on services like Compete.com and compare it to Tumblr. The problem with this freemium model for a buyer like me, is that Tumblr is the big player, has great tools, and owns the market. Why would someone choose your solution?

This is clearly where a combination of technical and marketing skills are needed, 2 key skills I feel are needed for any web site business. If you can build the brand and create a comfortable niche as the next best thing to Tumblr, go for it!

Just remember, freemium models gain users, yet how many are active and remain there day after day? What does the growth curve of the site look at? How many users are generating that traffic?

The best part of the site is that it has an iPhone application, which if good makes it a good deal. You get an app and a site with traffic for a low price, but it’s obvious that the seller is not making money with it.

So how will you monetize it? For any fixer upper, you are either buying the audience or revenue, or both!

That’s the key to building a business online; loyalty and monetization. Be sure to check out Flippa and see what’s up, this is not only smart, it’s a new trend in this growing business called the Internet!

Trying to understand the Zynga IPO, and how Facebook monetizes its traffic, demands a new way of looking at the way businesses collaborate online. Social media is always discussed in terms of how it connects people (see Is Social Media Really Social to get a different point of view); rarely do you understand exactly how it monetizes.

In this video I share an exploration of the 3 tiers of partnerships (an example of my concept of Brevenue) that are developing among businesses, with Zynga as the example case study:

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The Mystery of Virtual Currency

Virtual currency is defined as online currency that allows you to purchase virtual goods, like buying water on Farmville for example. This can be accrued by activity, in terms of points, or purchased with cash, or gained by redeeming offers from specific merchants.

What virtual currency really represents is the ability to continue playing the game; Zynga has created games without end (see my recent blog post here), unlike traditional games where the player progresses through certain levels to essentially win in the end.

Winning implies a beginning and end; planting a garden can imply a lifetime effort, or at least an ongoing, ever changing effort, much like life, and has appeal to an older generation who do not play traditional games as much. The genius of Zynga is inventing games for this generation, who have the time and money to spend, and creating value for that virtual currency in the eyes of the player.

What’s powerful about the Zynga model is that it envelops the player in a social environment, competing and working with others, to build a farm or a city. Just like any farmer knows, this can happen year after year, allowing for an immersive, multi-user game playing role.

What powers it is the value of virtual currency to the player. Many claim not to understand why anyone would pay money for something virtual. The fact is they don’t, most redeem offers on Zynga’s various offer walls – literally a billboard like collection of offers from merchants like NetFlix, usually free trials or sign ups which pays an acquisition fee to Zynga, that is shared with Facebook (who gets a 30% cut).

Virtual currency is an accepted practice in many countries, especially in Asia, where this form of gaming entertainment is deep and monetizes far higher, currently, than in the U.S. Because it’s valuable to the player and seeing the revenue generated, it’s clear that this model of competition, of leaderboards and recognition for action, is needed in a social world where basically the only recognition comes from creating content.

Here the player is creating the content, involved, and will pay, just not in real currency which few use to buy virtual currency. It has become a lead generation bonanza driven by 3 Tiers of Partnerships.

Tier 1 – The Distributor:

Facebook and Traffic Aggregators

Social media sites can generate a ton of traffic, yet most companies are too busy managing the interactions of users, privacy, and managing the multivariate complexity of interactions to monetize.

Facebook is an example of the first tier of partnership, the one providing the traffic and users. That’s their job and they do it quite well.  Right now Zynga represents an estimated 10% or so of Facebook’s overall revenue, so the objection some have brought up to Zynga’s business model – that Facebook will simply replace or eliminate them at some time – is likely baseless.

Imagine getting paid 30% net for simply generating traffic; that’s Google-like margins for search, and evidence of why Facebook needs Zynga. Because what Zynga does is create immersive games for Facebook’s users that monetize.

Why would you want to replace that core competency? Traffic in social media is difficult to monetize, ads sell for $0.50 CPM, and the only one generating real revenue is Zynga and other companies intergrating game playing into the social experience.

Tier 2 – The Engager:

Zynga and Games as Business

What Zynga does with Cityville and Farmville is engage users, and create real value in their minds for the Virtual Currency. It becomes the center of their gaming universe, surprisingly for an average player who is 48, male, and lives in the U.S.

This is not your traditional game, nor traditional virtual currency which is often gained by effort, achievement, and recognition by the community, all of which play a part here.

Virtual currency can be purchased, or redeemed for an action just like a game. The difference with Zynga is the way it’s redeemed; you apply for a credit card or Netflix subscription, and gain points.

The monetization is now part of the game, another action, and frankly an easier one than simply participating and being patient. That is what drives players to purchase virtual currency through lead generation from traditional merchants.

The player doesn’t see that as paying money, even if they are billed monthly as many of these programs do. What the player gains is an ongoing, valuable, fun experience; it’s just entertainment that requires them to show up regularly and watch what’s going on.

If you want to get further in the game, you have to put some virtual currency on the line, and while you can gain enough by your actions to survive, to thrive you need to pay to play.

The lock in Zynga has is its games, brand name of those games, and the overall experience. It provides games without end that get people hooked and make them want to earn virtual currency in any way possible.

The easiest way is to simply redeem a lead generation offer on the Offer Wall; while it sounds crazy to an outsider, think of what an elegant, simple solution  to the problem of achievement in a game.

And if the player didn’t value the virtual currency, they would not redeem for it. It’s as simple as that!

Tier 3 -The Monetizers: Lead Generation Deals

The final part of the equation is the easy one, lead generation. This is traditional 2-step lead generation, step 1 being to get in the game and gain virtual currency, step 2 to redeem an offer to earn virtual currency.

Why many of the traditional lead generation companies, like credit cards and Netflix, love this model is the age and quality of the player. These are not smart younger people trying to game and fake out the system. They have money and they have the urge to play, and the offers fit the demographic and psychographic profile of the player.

If they didn’t, the offer does not continue, because most of these are performance marketing deals, not just ads. That means an action has to be taken for Zynga and Facebook to get paid, redeeming an offer.

Given the scope and size of the revenue being generated, it’s clear that these users, much like folks watching TV, are willing to pay for brands and deals that give them a product, AND the virtual currency to continue playing the game.

Those are the 3 tiers of social media partnerships I see; Facebook generates the traffic, Zynga provides the immersive gaming experience, and lead generation companies use to incentivized and rewards-based marketing come in the finish to close the deal.

As you know if you’ve read this blog, I call it turning Friends into Fans and Customers…and in the new paradigm, it takes 3 to play!

It’s brilliant, simple, and viral and works only if all 3 partners are in the game. Best of all, it’s driven by performance the whole way.

What do you think of Zynga’s model, and have you seen anything better? Please ask your questions below…

The challenge is many people’s perception, defining the social world in terms of Facebook and Twitter. Comparisons are not adequate to describe what’s going on here, and both of the social stalwarts were created at an earlier time, when the browser ruled the world.

Let me stir the pot with some ideas of how this represents the first, powerful move of social into mobile:

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Today smartphones and tablets (ie iPads) rule, even though most of us are still stuck back in the world defined by sitting in front of a PC.

The edge G+ has is mobile, combining the best of both worlds into a sleek delivery that is just amazing on the Android (Apple app still in waiting, and still to be seen).

Everyone knows that most Facebook updates are done through mobile, as are most Tweets. So while those two can be used on mobile, there’s something unique about G+.

The Facebook app on the Android is not that great, and it was designed for a world driven by AJAX. While it’s UI is great, it’s clearly a browser design,with little control over friends in your stream.

If you were creating a social network today, you’d think mobile first, then desktop, which is why I think G+ is so different, and may take a few years to scale, as mobile usage replaces desktop browsing as the primary way people interact with the Internet.

The Look and Feel are Mobile First, Browser Second

The first thing you notice is the clean design, white space, and non cluttered. Everything is designed in small graphics and streams based on text, clearly mobile and not reminding you of an online experience only.

G+ works on both mobile and desktop of course, yet behind the scenes is the only company that owns search, owns all that data we enter on search, our behaviors, AND owns it’s own mobile OS.

While the social leaders may compete, they have to adapt to the OS world of mobile, driven by Google, Apple, and Windows of course.

G+ is going to be integrated into a majority of phones, if current projections for Android’s growth prove to continue to be correct. A social network designed specifically for a mobile network is a powerful combination, and it’s clear to me that this is the design difference, both in UI and functionality, that sets G+ apart from any competitor in the social space.

One Source for Photos, Videos, Docs That

Follows You Via the Cloud

It’s easy to include your photos and videos from YouTube within G+, and therein lies another strength.

Combining all its tools into an easy to use interface, G+ offers the power of the cloud, with the comfort of traditional social tools.

You have the stream, the wall, RSS content feeds called Sparks that you can customize, plus the testing of multi-user video via Hangouts, that works online and via mobile phone.

While I’m not convinced the video chats via Google Talk will dominate, they are useful for business now, and pretty fun to do. Time will tell whether this is just an early test or something people fall in love with, and as it goes mainstream it will be interesting to see if this usage falls into the usual, multi-user video chat space of religion, politics, and porn.

For now, G+ is like a fraternity, mostly male, intelligent, digitally driven, and often the leaders in the social space.

In true Gladwellian splendor, Google has tapped into the influencers to test and participate, and let the  mainstream know what’s up…until they can be invited.

It’s a smart launch, a mobile launch, and on my Droid X, the app is sweet. You get a few icons for Home, Profile, Photos, and Circles; the rest is up to you, and your imagination.

Plus with Circles, you can segment and control your streams much better than anywhere else, being able to put people you know and those who you sort of know into different Circles.

While you can do this elsewhere, it’s just not as easy and elegant as on G+.

Google Targeting On Steroids

G+ will have the ability to deliver the most highly targeted advertising and services ever. Combine the keywords you search, web sites you’ve visited via their advertising networks, your circle of friends and social activity for the social graph, the time you spend here, AND on search – both online and mobile – and as a marketer, I can see one of the ultimate tools in development.

Blend these all together and you have targeting that has never been possible with other networks, mainly because they could never integrate the vast search knowledge Google has.

The key word going forward to me is proximity, both physical proximity as measured in your use of mobile for local marketing, where you live, where you travel, and what you do…of course subject to how much you share.

And there’s social proximity, those associations with people in your circles will tell much more than Facebook or anyone else could do, because you tell Google the network much more. The social element of G+ is simply the icing on the data cake.

John Battelle said it years ago – the new Web is all about data, and there is so much data here that can serve the user and pinpoint them where they are physically, or online, or both! And the proximity influence of the social graph – who we know and why we are associated, the implicit side of social media expressed by relationships and not just friendships and tagging, is mind blowing to me

Like all things Google, there is one central purpose to G+, just as there is to Android…Create More Searches!

Right at the top of every screen is the search box, which is how I finish the video and this post.

Google encourages consumption to create more search and has a social tool to power this that is built from the ground up for mobile.

We’re seeing another stage in the evolution of the Internet, and surprisingly an old contender is currently on top. While time will tell whether privacy concerns and mainstreaming power G+ to Facebookian proportions, the promise and delivery of something new is here and mobile.

Talk about augmented reality, what’s your take on G+?

Is social media really social, when a vocal minority of 10% dominate the conversation? Listen to this video and let me share a viewpoint that comes from building an educational social network since 1995, and in the spirit of discussion, not right and wrong….

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Google Plus to Facebook – What You Are is

What You Post, and Only 10% Participate

When you read about social media, it’s always from a small group of primarily male contributors who have become sort of social media rock stars. These folks get all the comments and all the likes, almost regardless of what they post…

I’m not bitter against these folks, like all celebrities they have earned their juice and respect, and deserve it.  Yet there is a stagnant feel to much of social media, because the same experts are talking about it, and the same people are just following them and agreeing with what they say, almost afraid to challenge the status quo.

What’s ironic is that this status quo is mostly saying the same thing and things are changing dramatically, and like most Internet generations, I’m not sure they understand the next thing coming…most become stuck in what they do, like Internet 1.0 marketers who still do the same thing and complain the business won’t scale, because they won’t adapt to social media.

The fact is, 10% of people create most of the content, likes, comments, etc. in social media. Think of it like a party you go to, and 10% of the people are talking, and the rest are milling around, lurking and listening.

Is it social media if they don’t talk, interact, and get involved? Or is it just another form of broadcasting, one way and asynchronous, and we just call it social because the tools help connect people to the 10%?

I don’t know or claim to know the answer here, I just know when 10% create content, the rest are just watching….and that’s not much different than TV, except a bit more interactive.

And yes those people could participate, but the fact is they don’t. This is why I find the whole idea of social media depends on vibrant communities.

For example, I love Namesake, which has a much higher rate of people participate than an average community, and the discussions are far more interesting, live, and vibrant. Yet even there, we all wonder why anyone would lurk, and lurkers still dominate.

Explicit Social Media Is Just Part of the Equation

What we call social media is mostly explicit, meaning it takes an action by the user to create activity. From adding a friend manually to posting a photo, tagging it correctly, and blogging about it, these take time…and a bit of creativity.

Since most people are not necessarily creative, they lurk and watch. Combine that with the herding mentality of the social media crowd – which sometimes is like a weird high school clique where everyone wants to look and sound hip, though it doesn’t seem like you understand from the outside what that look/sound of hip is…

By measuring social media value through explicit means, you eliminate the 90% who are just doing…these folks take photos, might tweet here or there, but on a consistent basis it’s just either not in their DNA or in their desire to put the product of their creativity out for the onslaught of social media opinions.

It doesn’t take laws or rules to create suppression of opinion; the power of the crowd, of the herd mentality, is more powerful than any rule. And right now in its early days, social media is ruled by a few who did alot to develop it, but may be standing in the way of it’s growth.

Implicit Social Media is the Future

For all the hot air about Color.com, it’s idea of implicit social media is one of the most revolutionary statements I’ve heard.

Let’s say you are at a concert, with your smartphone and the Color app; you take a photo and post it. That’s it, everything else – your location, identity, everything is separate except for you and that photo.

Someone in proximity to that photo, ie at the concert, see it and that connects you. You don’t have to approve them, you don’t have to do anything, proximity creates the bond, and your photo is shared.

It goes way beyond this simple example, but here the object of creation, the usage of social media, develops the implicit social graph. You don’t have to log in, post it, etc. etc.

You take  a photo and share it; those interested see it, and the photo is your connection, and your network grows because both of you are at a concert, which says much more about who and what you are – music has that kind of bonding and predictable behavior – than you having to fill out a profile.

Can social media move beyond the current limits of streams, walls, posts, comments, likes, and move into true interactivity, where our own actions will create connections implicitly?

I think so, if we use the data to serve the user first, then the advertiser, and that’s where I think social media is really not social.

The data still serves the network and advertisers first, then the user, and in that disorder lies the problem with social media.

It’s not social, it’s broadcasting in a different name…what do you think?

This is your brain on Zynga.

Take a 48 year old American man with time and money, give him a game without end and virtual currency, and what do you get?

A cash cow called Zynga, whose various Facebook games like Cityville and Farmville are generating mad cash.

Judging from the all the tumult around the Fall IPO, from wary investors who may/may not understand the business model to others trying to wrap their head around how you can make this much money off of 1% of users, it’s clear that something new is happening, and we don’t understand it.

We meaning most of us in the business, me included (photo aside) because I don’t play games, and wouldn’t find myself doing that much virtual currency buying. And I love to find out why my age group is doing this; after all, isn’t social media only for the young, hip, and ADD Driven?

Obviously not from Zynga’s results; maybe it’s the focus my age group has, coming from reading books and playing video games, just not at the level later generations would become immersed.

• That 48 year old user is the “average” user profile for a Zynga user; considering that age is on the edge of the Baby Boomer generation (though I think if you ask them most would say they have more common with GenX than the boomers), it’s clear that Facebook’s US users are older, have a bit more money even in this economy, and will spend it for entertainment.

Just like games impacted movie sales, games have massively shifted social media, from literal games to marketing techniques built on gaming mechanics. Yet the traditional gaming industry is not dominated by this age group, and real games still work better on a PlayStation, Xbox, etc., where games end….eventually!

This game doesn’t end, it keeps going and going and going and going…just like an Energizer battery, the average Zynga user is hooked

You can learn so much if you move beyond the hype about Zynga, your own preconceptions still based on traditional advertising practices, and grasp something that Asian audiences have done for a long time.

Play games and use virtual currency because it connects them to other people, among many other reasons.

This is one area where most of the US businesses are still in the dark ages, while the rest of the world is innovating…Facebook brought the audience, Zynga brought the games and the monetization.

Games without monetization are play; monetization without games is advertising (well, not Zynga’s kind of games).

Virtual currency works because it has value to the user.

Zynga is so interesting to me because it’s showing a way to monetize driven by old school lead generation offer walls, combined with the sheer addictive power of Facebook. And while I don’t understand the time and money spent – understanding that fewer users spend real money for virtual currency, choosing to redeem offers that pay Zynga and Facebook well – I’ve always been on the other side of the marketing equation.

Consumers are often lazy, selfish, and unpredictable – just like most human beings.   With the amazing choices of media available, there’s a reason for this burst of revenue and crack-like addiction to these games, something I’ll explore in my next blog post.

Why are some on Wall Street scared? Because what scares investors is:

1. Zynga is reliant on Facebook for most of its revenue, and represents about 10% of Facebook’s revenue by some estimates (see top links for aticles).
2. 1% of users generate most of Zynga’s money.
3. Facebook owns the distribution, Zynga controls the conversion. This doesn’t make sense in an old media world driven by walls and divisions between companies. Collaboration is just another social media hype word, right?

 


When virtual currency/virtual goods have value to the user, they are willing to go the extra mile to get what they want. You’ve seen it in home shopping networks with real products and real currency consuming consumers, now you are seeing it in social media with virtual currency that can be earned or bought.

Ask my generation and eventually they’ll say, ah, just buy it! It’s easier!

Who said marketers have no place in social media?

Marketers are beginning to play new games, and it has nothing to do with NLP, manipulative imagery and headlines, or tricking people into doing something.

Get them hooked to an experience that is fun and connects them to people, and yes they’ll pay for it. Just like recent generations are hooked to games, Zynga has simply mastered the art of games with no end, primarily to an older audience with disposable income.

And the game is just beginning….what do you think?

Understand that I have built an email list with 10 million, and generated over 50 million visitors to a site…back in the day.

The key is, back in the day; today with the impact of social media, and more and more choices, the question is not how much you have, but what is the quality, responsiveness, and conversion you get from those big numbers.

Surprisingly I’m seeing more success with focused, “smaller” audiences (I mean there are only so many Facebooks out there), where people actually know like and trust the business they are visiting. Here’s a quick video, followed by some specific actions you can take to find quality, segment your traffic, and separate the wheat from the chaff…

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Quality over Quantity: Why Old Ideas Are Fading Out

In the early days of the Internet, it was all about more, more, more…you’d see crazy traffic numbers, mostly inflated by laundering traffic and various means to jack up impressions to get more advertising dollars.

With the advent of smart tracking and wiser online businesses, combined with the insane and overwhelming choices we all have, it’s become much more a game of smaller groups of people who are truly interested visitors and…

Know, like, and REALLY trust you (you can’t fake this, sorry old Internet marketers, as I shared in a recent video, Trust is the New Currency).

You Get What You Look For…

The days of bragging how many people visit your site are gone, unless you are selling ad impressions…and even then at $0.25 eCPM’s I’m seeing, that’s not going far unless you generate millions and millions of visitors.

Sure it’s easy to say I’m going to monetize by advertising, but the fact is unless you are doing something HUGE, you are going to get less traffic. TV shows get less viewers, everyone is dealing with smaller audiences yet we all want to believe that we will get millions of visitors who come back again and again…

The only ones doing that are the big players, with big funding, and trusted brands. While many of my startup friends target this kind of growth, I like to ask them…

What are you going to do to make money if you don’t get millions of visitors, and can’t rely on advertising to fund your venture?

This is where they usually go silent, because they are in love with their solution, and in a weird “Law of Attraction” irony, they feel that negative talk is against their dream, so they shut you off.

Here’s one key to remember; it’s tougher and more lucrative to continually probe the problem, how the customer sees it, and then integrate  how you see it. Your goal is to find the key problem you solve, not a group of problems, because people don’t really know what they want, what their problem is, and even though you have written down what you THINK it is, they are still figuring it out.

Get out among them as Steve Blank says, “get out of the building” and get into the people. Listen to them, and take your time to define and figure out their problem.

Focus and Clean – Quality is the Goal

My best advice is to segment, segment, segment…if you have traffic, watch where they enter your site. Is it search, links, social media, email visitors, where are they coming from?

And how do those groups of people react to your funnel, how you introduce them to your product or service? Where do you lose them? Which traffic converts better so you can stop doing so much and focus on what works?

Quality is not easy, which is why most people focus on quantity. Quality will help you thrive, bet on it. Quantity is an old illusion that we need to wipe from our minds, as well as claiming that all businesses will be funded by advertising.

The big shift about to happen is based on this realization; you should be able to do more with less. Instead of telling me how you’re going to get rich with millions of people, tell me how you’ll survive with half, a quarter, or 10% of that traffic.

Because if you can’t answer that question,

you’ll quickly be eliminated.

How are you looking for quality in your marketing? Share your thoughts below, love to hear what you have to say.

OK, maybe not everything! But if you think that simply putting kittens, puppies, beautiful women, or severely weird stuff out there will automatically make something viral, you’re missing the point.

And if you think your product or service is so great that people will just talk about it, walk away from the mirror right now!

Here’s a quick video on the 3 myths of Viral marketing, followed by some specific advice from someone who specializes in viral marketing for many years (and not just in business, I learned a ton of this creating an educational social network with the same approach…in fact, that’s where I learned this back in 1996).

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Viral marketing is like strumming the right note on a guitar that makes the audience get up, notice, and tell their friends. In this pseudo ADD world driven by choices and choices, a real viral marketing campaign takes off when you get people to stop jumping and start focusing on what you have to offer, and tell their friends.

Myth 1: Viral Has to Be Weird, Wild, and Wacky

When you ask most people about viral campaigns, they almost always talk about the weird video someone sent them.

While that’s certainly viral, and organic, it’s not a recommended practice. If you attach your brand to something weird, wild, and/or wacky, you better hope it works.

If it doesn’t, you will be remembered for a very long time by that failure. As I learned long ago, is it comedy if they don’t laugh?

I’m not against risk taking at all, just saying that doing this right requires sophistication, and humor. Try getting up on stage and make people laugh, it’s really, really hard.

Your viral campaign is on the stage called the Internet, mobile, and social. And people remember the bad attempt as much as the good, and when you try again, you’ve likely burned their interest.

Myth 2: Viral Just Happens

While it’s true that organic viral campaigns come out of nowhere and get spread, when you plan a campaign that kind of luck is not likely.

A good viral campaign will try to create word of mouth, and often is driven more by the female gender than males…that comes from growing up with 6 sisters by the way.

Men share jokes and porn, women share things of value with their friends, and what makes your campaign valuable?

If you want to make it viral and valuable, you need to do some footwork. Don’t just sit around a room, go out and:

1. Research Twitter, Facebook, and discussion groups related to your product or service. Watch what people talk about, and look for the very few ideas they really jump up and down about. What’s important to them, not you, is the key there.
2. You won’t find this importance in your own head, and they often don’t know what’s important to them. Bank on it and define the 3 core elements related to your product or service, and test it out.
3. Try to start a simple conversation, see if people react, and if they don’t, ask them why via email..and phone if you’re smart…and do not encourage them to lie to save face, you must be able to handle the truth, which only they know (though not consciously!).
4. Know the times of day your audience frequents social media, opens your emails, visits your site, and the time of year that are related to your product. People buy more during the holiday season, yet many on the Internet still act like it’s a year round gig that’s all the same.
5. Listen to your audience, listen and learn, THEN develop your viral campaign.
6. And if you’re really stuck, or convinced you have to do it tomorrow, at least go to Amazon and read reviews of books related to the product or service you offer, anything that promises to deliver.
7. Read the 5 star reviews and cut/paste the words they use to praise, and always read the 1 star reviews for what was missing. The latter will give you a focused, blunt answer that may shock you, because when people are let down, they get angry…and anger is just the opposite of love! Put these two together and you’ll find the seeds of a viral campaign.

Myth 3. Convert on Referrals, Don’t Try to Convert the First Visitors

As I share in my Social Media video on marketing to pleasure instead of pain, remember that the first wave who visit your campaign are the judges.

It is their job to share you with their friends; these are the bloggers, the reviewers, the curators, and the wall you must overcome so they will invite their friends, their followers, and their fans.

Try to convert them and you lose, like most old school Internet marketers are doing. Get them to refer and participate, and the next wave they invite in will see activity from people they trust.

That trust opens the door and comes in 10-20X the amount of first visitors. Check your referral rates (how many people are referred, easy on Facebook), track how people invite, and drive them to specific landing pages that help you see if they are interacting, or ignoring you.

The gold is in the second wave of visitors, who give you their trust because the first wave said so….

Let me know your viral marketing questions below, what do you think, and what have you tried?

And are you leaving the comfort of your ideas to swim in the power of the audience, or just winging it?