Wired Magazine: Fail Fast

Wired UK hosted a discussion last night dubbed ‘Fail Fast‘. This month’s issue explains their premise succintly…

“Fail! Fast. Then succeed. What European business needs to learn from Silicon Valley”

The live debate followed the print feature, with the founders of Moo.com and Firebox.com as well as investors Luke Johnson and Stefan Glaenzer talking to Wired editor David Rowan.

If the magazine feature is half as interesting, it’ll be well worth a read.

Silicon Roundabout, David Cameron & Political Opportunism

Last year, David Cameron pledged £400m to turn East London into the next Silicon Valley.

Many people, understandably, will conclude that this is A Good Thing.

Exposure for startups, support for small businesses and the promise to help the Brits square up to our American friends – what’s not to like?

They’d be missing the point. Like Vince Cable on a bad day, I’m mad as hell and not going to take it anymore.

Not for the first time, the British government have missed perhaps the single most exciting thing about so many internet companies.

[whisper]They are not location dependent.[/whisper]

Meanwhile, David Cameron, Boris Johnson et al obsess over the location of Twitter’s UK office like star struck school kids.

The Problem

Let’s call the problem ‘not as sexy as Twitter’ syndrome.

The reality is that building any business –whether it is moderately or monstrously successful – is hard work, especially in a recession.

Most startups fail, and even the successful ones are more likely to hit Groupon’s teabag budget, not buyout offers.

Nobody wants to read about the mundane minutiae on sites like TechCrunch or Mashable: dealing with tax red tape, wondering why banks won’t lend profitable businesses money, etc.

That’s fine – it’s not what they do. These do, however, fall well squarely within the Government’s mandate to encourage small businesses, and that is what they should be concerning themselves with.

So why my scepticism of their sudden enthusiasm for internet startups?

Enter The Olympics

In the 2012 Olympics, the government has inherited a white elephant so large that it makes the Millennium Dome feel like a Poundland bargain binge.

The total spend is – forgive me – genuinely Olympic, staggering by any measure, but genuinely appalling given the state of the British economy.

After London was awarded the Games, the Department for Culture, Media and Sport announced a budget of £9.325 billion.

In December, the Spectator put the true cost to the British taxpayer at closer to £12 billion.

For some context, the Coalition’s Comprehensive Spending Review last year introduced £7 billion worth of public sector cuts.

I am not denying that the Olympics brings benefits.

It means jobs, tourism, redevelopment of a deprived part of London and the chance for me to sublet my flat to desperate tourists, for starters.

But I remain to be convinced that this these offer value for money. And I believe that the Coalition Government has come the same conclusion.

Hence the sudden enthusiasm to bring Silicon Valley to, um, Stratford.

What’s This Got to Do With Startups?

The government is committed to hosting the Olympics, which will leave them with a very expensive, very empty Olympic Park afterwards.

If you’ve ever visited the former Olympic sites in cities like Barcelona, you’ll know what to expect.

The Olympic Park will be in Stratford, a part of London that is regretfully better known for deprivation than startups.

And Cameron & Co have pledged £400m to turn this into a Silicon Valley-style success.

This equates to approximately 0.3-0.4% of the Olympic spend, depending on whose figures you believe.

Suddenly, it feels less like backing British business, and more a case of ‘for an extra £50 we can use it for something useful’.

Details remain vague on how exactly the government money will be spent.

Vaguer still are the what exactly the name dropped firms – Intel, FaceBook, Google et al – have to do with it.

Will it work? I have my doubts. Here’s why.

What the Government Should Be Doing

Motivations aside, the things that encourage great execution are not as trivial as shared local boozers, fancy offices, or persuading Google to move their YTS kids in next door.

These distract from the real issues facing small businesses in 2011.

What the government should be doing is taking responsibility for fostering an environment that encourages homegrown entrepreneurs, not chasing the superstars of Silicon Valley.

That means things like encouraging bank lending to profitable small businesses or keeping services like Business Link that help nurture them.

I’ll be the first to admit that these ain’t half as sexy as getting to tweet: ‘Hanging with @Ev at Twitter HQ’.

But they would do rather more to encourage small businesses in the UK.

The Future

I’ll end with a few predictions:

#1. Government involvement with internet startups will be an expensive, ill-conceived disaster. Think ‘Millennium Dome with wifi’.

#2. Those that buy into it will be the American behemoths currently located in the UK burbs (eg, Amazon, eBay etc) – not homegrown startups.

#3. Stratford will continue to host a smaller startup scene than my kitchen.

PPS. Thanks to Flickr user mbiddulph for the photo.

Beat That Quote.com: Google’s Monopoly Move

You won’t find Beat That Quote.com in Google’s index, because Google have this week…

#1. Bought the UK finance comparison site for £38m

#2. Banned them from the search index for violating their T&Cs.

I’ve written before about Google’s abusive monopoly position. Google buying a major finance comparison site is merely the latest symptom.

Everybody in the search industry is having a good old chuckle at BeatThatQuote’s hilarious/filthy/scary backlink profile. Beat That Quote’s fruity paid links that have got them penalized, with BTQ no longer ranking for their own brand name.

But people appear to be missing the point: Google buying major comparison/affiliate sites is bad news for everybody (except their shareholders) – and here’s why.

Google is a Monopoly…

Let’s recap…

  1. Google has 88-90%+ market share in the UK search market (depending whose stats you believe).
  2. As a public company, Google’s sole responsiblity – despite the ‘don’t be evil‘ schtick – is to maximize profits for shareholders
  3. Finance comparison sites are (amongst?) the UK’s profitable comparison sites…
  4. …as well as some of the biggest spending AdWords advertisers
  5. Google miraculously appear #1 on AdWords for ‘compare credit cards’ et al

#1 for ‘compare credit cards’, you say? Crazy times. It’s almost like they know the algorithm. Who’d have thought it.

Think Google aren’t going to push their luck with their treatment of Beat That Quote? You’re mistaken. They have a obligation to their shareholders to do so.

And the reported 30 day link buying penalty is nothing more than a smart gambit to appease competition regulators: “See! We treat our own sites the same way!”.

Except they don’t.

Think JC Penney’s recent paid link shenanigans are only going to get them hurt for 30 days? Seems unlikely – especially when they compete in part with Google’s new property Boutiques.com…

In recent years, Google have (allegedly) dished out penalties to various BTQ competitors for over-aggressive linkbuilding, including:

Let’s be clear: many major finance comparison sites are up to shenanigans against Google T&Cs.

But if I worked at any of those companies, I wouldn’t be ‘feeling lucky’ next time Google’s next P&L figures require a pick me up.

Last year, the French Competition Authority concluded that Google was a monopoly and ordered the search giant to reinstate a banned AdWords advertiser.

Germany’s justice minister described Google as a ‘giant monopoly’ last year, while Russian Competition officials blocked their acquisition of the Begun ad network for similar reasons.

Expect further interest from other countries in the coming years.

Meanwhile, Back at Google HQ

Since I always imagine Larry & Sergey as Bill & Ted of Excellent Adventure fame, perhaps the hypothetical Google HQ conversation might go like this…

Larry: “Dude, I just remembered our guys in the UK blew Tuesday’s lunch budget on a massive finance comparison site.”

Sergey: “Hey – maybe we can leverage this to give our P&L figures a little tickle?”

Larry: “Remember, dude – don’t be evil…”

Sergey: “Let’s make it awesome – or merely drive the costs down to zero & put our competitors out of business – and nobody will ask any questions when we nuke the competitors for shady paid links…”

Larry: “Dude! That is a most excellent solution to our most heinous of problems: perpetual aggressive growth.”

Sergey & Larry: [Play air guitar ‘Bill & Ted’ guitar riff in sync]

…But You Can Do Something About It

Google’s acquisition of Beat That Quote can be investigated by the UK’s Competition Commission. In order for this to happen, the case has to be referred by the Office of Fair Trading.

Many moons ago, I worked at the the OFT. Complaints from members of the public can and are investigated. Here’s how to file a complaint.

To report anti-competitive or other behaviour by a trader or traders, please write to:

Enquiries and Reporting Centre
Office of Fair Trading
Fleetbank House
2-6 Salisbury Square
London
EC4Y 8JX.

Alternatively, they provide an email address: enquiries@oft.gsi.gov.uk.

Examples of Google’s Abusive Monopoly

Unsurprisingly, it’s no good merely saying ‘I don’t like it’ – you need to explain to the OFT how the company in question is engaging in anti-competitive behaviour.

For example…

#1. Moving organic results below the fold, adding more ads above the fold, and then giving the top slot to your own finance comparison site.

#2. Or price gouging comparison site AdWords advertisers who compete with Google’s monopoly.

#3. Or banning affiliates who use AdWords to drive traffic.

#4. Or issuing arbitrary lifetime bans for AdWords advertisers without right to reply.

#5. Ditto with AdSense publishers .

Just sayin’…

Since Google is the only show in town when it comes to the search marketplace, each and any of these constitutes abuse of monopoly power.

Further Reading On The Google Penalty

Background On The Acquisition

Background On Google’s Monopoly Behaviour

The Times Online Paywall: How To Cancel Subscriptions

Last year, The Times & The Sunday Times introduced a paywall.

Buried in the small print is a nasty surprise. You can’t cancel your subscription without six business days between your request and the rebill.

That means eight full days notice in a typical week in order to cancel a 30 day subscription.

Not good enough.

When I tried to cancel my Times Plus subscription, the customer service rep told me I had to pay for another month first. Au contraire – more on that in a moment.

Missed what you agreed to? That’ll be because the clause in question is buried five pages deep in their 8,000+ words of terms and conditions.

Nowhere on Times Plus could I find any mention of updating billing/cancellations etc.

How to Cancel Times Plus

The good news is that The Times use the Direct Debit scheme to handle subscription payments.

Direct Debits are regulated and covered by the Direct Debit Guarantee.

In short: you can cancel any time by contacting your bank, and they are obliged to help you sort the mess out – even if The Times refuse to help.

So to avoid the rebill, just call your bank & request that the Direct Debit is cancelled their end.

They may ask you to contact the Times first, but if you explain the issue they are able to cancel without their agreement.

Here’s What The Times Say…

Dear Richard,

Thank you for your email. Once you have an active subscription, simply email us and let us know you wish to cancel the direct debit and we will action this for you.

However, please note we will only cancel the next direct debit if there is a gap of 6 Business days between request to cancel and request for next payment. If the next payment due is WITHIN 6 Business days, then we can only cancel the direct debit after the next payment has been taken.

This is as per our Terms and Conditions:

27.4 To cancel your subscription you must either email us at help@timesplus.co.uk or write to us at Customer Liaison, News International Limited, I Virginia Street, London, E98 1RL. You may cancel your subscription or registration at any time however except as specified in clause 27.3 above:
a) no refunds will be made in respect of your subscription or registration payments; and
b) payment of your next monthly subscription or registration payment shall be taken and not refunded where we receive your notice of cancellation less than six Business Days prior to the due date of payment of that monthly subscription or registration payment.

These can be found by clicking on the following link:

http://www.timesplus.co.uk/welcome/tp_terms.htm

Kind Regards

John Gill
Times+ Customer Services

Shorten URLs & Get Paid For Your Traffic

Back in 2009, I had one of those ideas: This is either the best idea I’ve ever had – or the worst”.

URL shorteners like Bit.ly were driving monster volumes of traffic, while Skimlinks had proved that there was money to be made swapping links for affiliate links on the fly.

So I made an offer to buy a popular URL shortener when it came up for sale, with a view to putting the two together.

My thinking was that if a tiny percentage were commercial links – a fraction of one percent – the huge volumes of traffic would earn good money.

With millions and millions of redirects being served by even some of the smaller services, this seemed to be a great opportunity.

I canned the project for various reasons, but part of that was seeing data for various on what kind of sites people redirect.

In short: the volume of remotely commercial traffic was a tiny, tiny percentage of my already rockbottom percetage estimate.

Acquisition Engine have just launched a very similar idea, called SHRTN.

Use it to shorten your links on Twitter etc, and they pay you for the traffic. At present, it only works with a handful of affiliate networks, but more are to be added in the coming months:

  • Commission Junction
  • LinkShare
  • Google Affiliate Network

You can join SHRTN here.

How Can I Increase the Value of My Website?

Here’s the first Any Questions post. Got a question? Ask away.

“What value would you put on my website & why?”

This questions comes from paper billionaire Andrew Mason from Groupon Rishi from Designer-Watches.org.

The site gets 50-100 visits/day and is a watches affiliate site.

Good question. But since Clinton Lee from Experienced-People.Net wrote an awesome article on this very topic, I’m not going to try and better it.

Instead, I will answer a related question…

“How Can I Increase the Value of My Website?”

The glib answer you always hear is “more traffic, more revenue”. But the reality is rather more interesting.

When I make an offer on a website, it’s based on three things:

#1. Value to me
I’m interested in what a site is worth to me – not what the owner thinks or hopes it worth. As you might imagine, there’s often a gap.

#2. Risk
Are rankings a house of cards? Or has the site been around for 10 years & steady?

#3. Resale value
If the project doesn’t work out, how much am I likely to recoup on the project?

Fix Those Little Problems

In short: the easiest way to increase the selling price is to fix the things that is putting buyers off.

The bigger the pool of potential buyers, the higher price you can negotiate.

While you can’t do much about what a site is worth to me, you can do a huge amount about risk, resale value and a buyer’s perception of the two.

Example: I’ve had four serious approaches to buy Who Is Hosting This.com in the last twelve months.

If I ever decide to sell up – having the buyers approach you is a good starting point.

And you do that by making sure you learn…

How to Build Affiliate Sites That Don’t Suck

The term ‘thin affiliate’ is thrown about a lot.

But few people talk about how to build affiliate sites that don’t suck.

Rae Hoffman has written a few awesome posts on this very subject (see ‘Further Reading’ below).

I don’t want to cover the same ground she has, so I’m going to delve into a few specifics.

But I will borrow her term & suggest that you want to think about “building affiliate brands”.

#1. Premium Domains

…are especially desirable in saturated markets. If you’re operating in a niche where the only available-to-register domains are three hyphenated dot biz domains – you need to think aftermarket domains at Sedo, Flippa etc etc.

I know I’m always banging on about the value of quality domains for affiliates – see my post on Code.co.uk being for sale – but it’s a simple way to stand out from the crowd as an affiliate.

That’s especially true if you operate in a space full of thin affiliate sites with poor quality domains.

To take the example of Designer-Watches.org, the hyphenated .org domain makes me think thin affiliate. You’ll also be leaking traffic to DesignerWatches.org.

Can you imagine a big time brand using Designer-Watches.org as their URL?

Take a look on Sedo. These domains are all for sale:

  • DesignerWatches.net – $3,388
  • DesignerWatches.co.uk – Offers
  • DesignerWatch.co.uk – Offers

DesignerWatch.org is also parked, suggesting it might be for sale.

The simple fact is it’d be far easier to shift DesignerWatches.com than Designer-Watches.org, so premium domains help with resale value. And that means a larger pool of buyers.

Compare & contrast with some examples like…

Each is an affiliate site. Each tells you exactly what it does before you’ve ever clicked a link. Each is a name that you’ll remember & recall, and that means return traffic. Each means instant trust (to a degree).

(Please remember that moving domains can risk rankings – may post on this topic later).

#2. Multiple Income Streams

All revenue at Designer-Watches.org appears to come from eBay Partner Network.

That means you’re vulnerable in all sorts of situations.

  • eBay could decide to kick off smaller affiliates
  • You might accidentally fall foul of eBay’s T&Cs
  • eBay may decide they no longer need affiliates full stop (as they did with AdWords)

Any of these would mean your site lost all income.

I’d look at other retailers to add. Amazon.com is a good fit, as well as specialist watch retailers.

If the idea of messing about with all their affiliate links makes your heart sink, take a look at SkimLinks.

#3. Defensible Traffic

I’m guessing that almost all your traffic comes from search engines.

Google’s attitude to thin affiliates is well documented, so that makes your site vulnerable.

I’d be thinking about…

  • What could you add that would generate direct traffic?
  • How could you get integrated with Firefox plugins & search toolbars?
  • How can you build relationships with other webmaters in your niche?
  • How could you become the destination site for designer watches?

And if you are running thin affiliate sites, make sure they don’t look like thin affiliate sites.

Take a look at one of Aaron Wall’s posts on Mahalo for tips on that.

#4. Defensible Rankings

I’d far rather buy a site that generates links on auto pilot than a site where each and every link is begged or bought.

Sounds obvious… but few affiliates seem to think along these lines.

  • What could you add to the site that would generate links?
  • What would get your competitors linking to you?
  • What would make you the go to source in your industry?

I know everyone dozes off at the 156th mention of ‘quality content’ – and rightly so – but there are alternatives.

Think about…

  • Tools
  • Stock art
  • Free content
  • Accepting guest posts
  • Etc

#5. Unique content

Your site uses API/datafeed content from eBay heavilly.

Not only are you competing with eBay to rank for that content, but the other 1000s of sites running WP Robot.

Reworking datafeed content into unique content is going to work wonders for your traffic, and make the site a far more exciting prospect for a potential buyers.

If you don’t fancy writing 250,000 words about watches, take a look at…

#5. Quality Design

You don’t have to blow $1000s on a custom WordPress theme.

But even $20 spent getting a custom WordPress header will make that site look 10x better.

And pretty sites sell (although plenty of people will tell you that ugly sites earn).

Try 99Designs or the usual suspects for outsourcing.

In Conclusion…

Rishi, I’ll be checking up in six months time to ensure you’ve put my 24 carat solid gold advice into practice and are the prowd owner of DesignerWatches.com (TM).

In the mean time, check our Rishi’s blog at explicitly.me or his Twitter feed @rishil.

Got a question you’d like me to answer? Ask away or via Twitter @QualityNonsense.

Further Reading

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