I was surprised to learn yesterday that the Democratic National Convention was in town. I thought I remembered writing a piece a month or two ago about being glad that the elections were over, but I guess I had my facts all jumbled.
A quick scan of Google News this morning suggests that the official election does not even happen until some time in the fall, so all the stuff that has happened so far doesn’t even matter. Admittedly I’ve had my head buried in the sand at work, and I’ve been building my internet empire on the weekends, so I haven’t had a chance to “tune in” to the ever-exciting election coverage.
Still, the Democratic National Convention is in my home town of Denver, so you’d think I would have at least known about it, and possibly received a visit from one of the candidates –surely at least one of the seventeen people running could have made it down to the burbs. I would have loved to have dinner with that one guy and his hot wife. (I would have looked up their names before they came over.) Sadly, I didn’t even know they were in town.
Of course, I don’t live in the city of Denver, nor do I work in Denver, so the chances of me bumping into any of the candidates were slim – even one of the random candidates like that Obama guy. I’m sure if Obama is still in the race, he’s probably struggling. I think he only makes like $700,000 a year – not enough to run a campaign. Of course, the whole point of our political system is that regular guys like me and Obama who only make $700,000 a year can still become President, because the system does not favor wealthy people, but he does have an uphill battle because Obama is hard to spell, and people don’t really remember the name. Plus, I’m not sure the country is ready to elect a man with young children. Most of the Presidents that I have known have had older children, so this must be what people want.
I wish I would have known about the Democratic National Convention though, because I could have offered some advice to the candidates. If I were running for President, and were visiting Denver, I would probably travel out to the suburbs and spend an afternoon at Park Meadows mall putting bumper stickers on all the cars. People like it when you put the bumper stickers on for them, so that they do not have to do it themselves. (I learned this “viral marketing” strategy in the parking lot of Disney World in 1985.)
Of course, I don’t think it matters how many people are running, or how many trees get cut down to make bumper stickers because I’m pretty sure Hillary has the election locked up. Her acceptance speech at the Democratic National Convention was apparently amazing, and people really like her because she is very electable and people really like her, so people like her because she is electable because people like her. Also she knows a ton of stuff about politics and stuff.
Other people were in town too – including every reporter in the world. I suppose this is the largest news story to happen in Denver since Columbine. Oddly enough, it was because of the under-handed, over-sensationalized, absolutely-inaccurate reporting of Columbine that I forever swore off news coverage, which is how I missed the whole Democratic National Convention thing. I’m guessing there have been sweeping changes in journalism since then though, so more than likely today’s television journalists only report on things about which they have information and do not just spout sensational speculation for the sake of ratings.
I am sad though because I read that Anne Hathaway was in town for the convention, and I would have liked to meet her for several days, possibly over a weekend. Her outstanding attributes make her a natural spokesperson for any campaign. She has a brilliant political mind, as evidenced by her stint on the university lecture circuit, and her grasp of economics is amazing. (Her paper on Hazlitt was brilliant.) But, apart from her treasure trove of political tomes (you must read her book on the political history of the US during the cold war) she just has a certain something – I can’t quite figure out what it is, probably her effervescent personality – that makes people, especially male people, want to be around her.
From what I was able to read this morning, there was only one riot in Denver this week. From the picture, it looks like some hippies – probably fans of the rock and roll band Rage Against the Machine – got into a scuffle with the Denver Police. It doesn’t look like any of the police were injured though, so all is well. In related news, the Denver band Flobots played a concert, which kicked off with their song “Handlebars,” followed by seventeen Steve Miller Band covers, and finished up with the long version of “Handlebars,” by which time most of the concert goers had moved on to listen to Hillary’s acceptance speech.
More than anything, missing the Democratic National Convention brings to light the fact that I need to pay more attention to the world. There is still time for me to study all of the candidates and make an informed decision before the elections some time in the fall, but what if there had been something big – like the Olympics or something – and I totally missed them? I would feel pretty stupid and uninformed. I don’t think the Olympics are until next year though, or maybe this winter, so I still have some time to get ready for that.
UPDATE: I went downtown at lunch to see if I could catch a glimpse of Ellen (I heard she was in town) and I got this short clip…
Part 1: Thinking about Free
I bet, if you wanted a clown to come to your birthday, there is someone out there, somewhere, who would do it for free. I base this on the fact that I played DJ at several of my kids’ school dances for free because I love to DJ. I suspect there is someone who loves being a clown enough to be a clown for free. But, how do you find that person? Only a foolish person would pay to advertise a free service, so unless you already know the clown (possibly your uncle), it will be tough to find them.
Of course, in my latest venture, I pay to advertise a free service, and I am not a foolish person. My site offers reviews and advice about products, and I pay money to have people visit that site. Why would I do such a crazy thing? Obviously the answer is that if folks end up buying one of the recommended products, I get a few bucks. To the consumer, the recommendation is free, and they pay no more for the product than if they’d navigated directly to the recommended site. But, of course, it is not free. The site that pays me is now out a few bucks – an expense which they gleefully pass along to the consumer. If they didn’t have to pay me, couldn’t they lower their prices? In fact, if Coca Cola or Pepsi did not have to advertise, couldn’t they lower their prices? But, would you drink a Coke if they were not begging you to do so on every bus, billboard and banner ad you saw? I would, but you might not.
I’ve been thinking a lot about free lately, due in large part to Chris Anderson’s blog The Long Tail. He has pretty much beaten the free horse to death so I won’t rehash, but this morning he featured some pictures from Safeway depicting the word “Free,” and one of them was “Free Parking for Safeway Patrons.” This seems absolutely absurd to me because I had never even considered paying to park anywhere but downtown. I recently became aware of paid grocery store parking when we visited DC, and again, I thought it was ridiculous. The only parking rules we have in the burbs is that you can’t park in the space or two directly in front of the dry cleaners, because they will get angry and yell at you and possibly tow your car. I have not seen a car towed since college, but I know it can happen.
I realize that space is at a premium in some places, and scarcity is the mother of paid parking, but when you are running a business you need customers to survive, and if the only way to get folks in the doors is to offer them a place to tie up their horses, then it is truly imprudent to charge for the rope. Then again, I realize that the grocery store I frequent probably pays a hefty sum every month for the privilege of having a parking lot right out front. This expense is passed to me, the consumer. I wonder if I paid to park, would the food be cheaper? (I would ride my bike to the store if parking were not free, which might save our country from the obesity epidemic, but that is another post all together.)
My point is that free is never ever free.I have been racking my brain trying to come up with some things that are truly free, and apart from a few feel-good examples (a dog’s love, a father’s day card made at school, amateur porn) (all of which have some expense tied to them) I can’t think of a thing – except maybe…
Actually, dependence on oil, in general, is probably more accurate, but that did not resonate with our test audience like the evil “foreign oil” buzzword. I don’t care what kind of oil it is – if they put domestic oil in the pumps I probably would not notice. So, really, it’s not my fault that I buy foreign oil, that’s all they give me. (Again, another post.)
Part 2: Clowns, and 401(k)s
But, I didn’t come here today to talk about free. I came to talk about clowns, your 401(k), and how the two are related. If your 401(k) is like mine, it is worth less than it was a year ago. Conventional Wisdom tells us not to worry about that. The market has good years and bad years, but in the end, (the end is always a long time away in these scenarios) we will average 20% a year and be able to retire comfortably. This “wisdom” is based on several decades of historical evidence. This “wisdom” suggests that the buy and hold strategy will consistently beat any strategy wherein you and I (the average investor) tries to time the market. But, chances are that your 401(k) is invested in mutual funds, and chances are that you have no idea which individual companies make up those funds.
In short, you’ve been faithfully handing over your money to a guy that you’ve never met, and he’s been buying and selling shares of companies for you. In the good times, this seemed like a great idea. But guess what, in the bad times, this “professional” has performed no better than you or I would have performed. So, why are we paying fees to the professional so he can lose our money?
If you hired a clown for your kid’s birthday party, and he made all the kids cry, would you hire him again the next month? No, because that would be stupid. What if he lowered his price? What if he offered you a percentage of his clowning business? No, no, and no. He is a crappy clown, so cheap doesn’t make him better, and certainly owning a piece of a crappy clown business is not going to get you any closer to retirement. So, why are you still investing in your 401(k)?
“Now is a great time to buy because stocks are cheap.” “I am investing in the future.”
“Now is a great time to buy because stocks are cheap.”
“I am investing in the future.”
Which future? Your future? How does Random Company C figure in to your future? Do you know which companies are receiving your money? Do you believe in those companies and feel that they will grow and prosper and provide you with a nice retirement?
Or, is it safe to say that you believe conventional wisdom – that “the market” will bounce back and have a stellar year real soon, so you keep handing over your money month after month because you have faith in the system? Continue to throw money down the rabbit hole and hope that, eventually, the rabbit will come out and give it all back to you, with interest.
Wouldn’t we be better off if we invested that money in companies that we knew and trusted and believed in, or even invested the money in ourselves? Could you start a business with the money that is in your 401(k) right now? (Could you have done so a year ago?) Could you pay for a college degree, or a once-in-a-lifetime vacation?
I’m not saying to ignore the future. I’m saying don’t trust the conventional wisdom that tells you the safest, most prudent way to ensure a comfortable retirement is to hand over all your investing decisions to a “professional.” The professional investor does not know you or care about you. They are only there to make a buck (your buck, actually.) Think about all the things you gave up for the opportunity to lose a quarter of your money in the stock market. Then think about what that money might be worth today if you’d opened a Starbucks. Yes, it might all be gone. But, how is that different? “The Market” could take it all tomorrow, and instead of saying “I tried and failed,” all you could say was “I trusted the system.”
So, I guess there is one thing you can get for free – bad advice. My wife would like me to mention that I have no business giving financial advice. I am not a licensed professional or anything, just a guy with too many thoughts in his head. By the way, I am still available for free DJ gigs. If you would like more information, send an SASE with $5.00 Shipping and Handling to PO Box 9, Denver, CO 80111.
Special Thanks to Seth Godin for the inspiration for today’s post. My free recommendation (without a kickback) is that you read any or all of his books. They will inspire you too.
I am aware that in some circles, talking about television is akin to discussing religion, politics, or natural hair color; some things you just don’t talk about. But, in this instance, it’s funny, so I ask that you leave your broom of judgment at the door, and come on in for a laugh or two.
That said, in our house we typically allow our children to watch one television show a night. It’s called The Disney Channel. I am currently writing a piece about one aspect of that endless show, Hillary Duff, which I think I’ve alluded to, but which is in no way ready for you to read. Watching only one show has it’s advantages; you don’t need a remote, a program guide, or a brain. You just sit, and the television does all the work for you.
But, something happened. I don’t know how, but one night I came home from the store, and The Disney Channel was gone. The family was watching Fear Factor, featuring Joe Rogan. If you have never seen Fear Factor, possibly because you can’t find the remote, it’s a show where people have to do stupid and/or gross things to win. I’m not sure what they win, but I’m guessing it’s a Sultanship in Brunia, because the contestants will do anything to win. “And now, in addition to the scorpions and tarantulas already climbing all over your body, we’re going to add a bunch of snakes, for fun.” You know how bad I want a Sultanship, but I don’t think I could do the snake thing.
Fear Factor is not really aimed at 7 to 9 year olds, especially the two shows that we have seen; Fear Factor: Playboy Playmates and Fear Factor: Other Women with Giant Boobs. But, the kids seemed genuinely interested in the women eating raw crab meat, so we watched. And, then we watched again. Our girls seem to love Fear Factor.
So much so, that recently our broken-legged six-year-old, in an effort to entertain herself, because she had already seen most of what was on The Disney Channel that day, tied the cord from the blinds to a piece of furniture, and then tied her new Barbie to that cord. “What are you doing, sweetie,” I asked. “Playing Fear Factor,” she replied. The blind cord was actually dangling the Barbie over a shark-infested ocean. Barbie had to zip down the cord, and smash into the piece of furniture, repeatedly, for several hours.
As an aside, the Barbie was naked, as are all Barbies in our house. Before becoming Fear Factor Barbie, she was California Barbie, and she was quite tan. I know seeing this naked tan Barbie tied to a zip line should have had no effect on me. And it didn’t, really. Sorry, where was I?
How she made the mental leap from Playboy Playmate to Barbie is, well I guess it’s not that big of a mystery. What she knows of Fear Factor, based on the two shows we have seen, is that women who are built like Barbie, and smart like Barbie, do incredibly dangerous or stupid things for fun. That’s the show, and Fear Factor Groovy Girl just doesn’t seem right.
Sadly, I don’t think Barbie won. At least, we didn’t have to give her anything for winning, since repeated ramming into furniture left her mentally impaired. But, only slightly more so than before she started. Just like real Fear Factor.
Dear Monetization News Daily,
I run a fairly popular social media site with 175 million registered users, a large percentage of who visit at least once a day. My users have filled out profiles, so I know who they are, demographically, and what they are interested in. But, I can’t for the life of me figure out how to monetize this site. Any ideas?
FB en masse
Dear FB en masse, Holy crap. Pardon our Arabic, but if we at Monetization News Daily had 175 million users, we’d be too busy peeing ourselves in delight to worry about much of anything else. But, we appreciate you taking the time to write, and we do have some ideas that might help put a buck or seven in your pocket.
Ads
We have one word for you – ads.
Advertising has been a money-maker for a great many sites over the last few years. If you’re not running ads on your site, you probably should. You may have considered running contextual-based ads, like Google Adsense, but worry that your content is not focused enough to display relevant ads.
If we had 175 million users, we would approach Google and ask if they would set us up in a special “social media” channel that would display the most popular ads from around their network. This sort of channel does not exist today, that we know of, but you have a large user base, and should have enough pull to put something like this together. You need to start thinking like a business, and not like a website.
One thing to avoid is to try to build your own advertising system. For instance, another social media site, Facebook, built their own advertising system where they sell blocks of space to regular Joes trying to make a buck. The trouble with this set up is multi-fold
One thing you should realize is that your user base is larger than the average Super Bowl audience. What’s more, your users keep coming back, day after day after day. Your space is worth millions and millions of dollars. I imagine a nice 200 X 600 banner for a product like Swiffer would pull in a few thousand bucks an hour. With the demographic info that you have, with a little bit of elbow grease, you might be able to customize ads for your users and really bump up your numbers.
Bake Sale
If advertising leaves a sour taste in your mouth, why not use your site to raise money for good causes? No, we’re not suggesting you start selling chocolate cakes to your users, but surely someone somewhere in those 175 million has a cause that they feel pretty strongly about supporting. Maybe you could set up a “causes” module and allow your users to create and contribute to these charitable organizations. You could take a small percentage without feeling guilty.
Most non-profit organizations have an advertising budget and would gladly give up a percentage of their donations just to have the attention of so many people at once. And, if you think that non-profit is not about marketing, take a long, hard look at the be-pinked Susan G Komen campaign and ask yourself how they got so many people to get so jazzed about cancer.
Yes, during difficult times such as these, selling charity is tough. When people start cutting things from their budget, charitable contributions usually get cut first, followed closely by summer passes to Six Flags and subscriptions to beer-of-the-month clubs. But, if you can get people thinking about charity now, when things turn around, you should be golden.
Subscriptions
Let’s do some simple math. 175 million users at one dollar a year equates to 175 million dollars a year. We could live on that. If we were a staff of ten, instead of just one guy pretending to be a “we,” we could still live on 17.5 million dollars a year. Now, we’re sure that with that many users, you probably have some data and hardware costs. Also, you probably have a developer or two on staff to work out the bugs and develop new features.
(Although, if you are developing features that your users suggest – stop immediately. They came to your site because they liked it. Why would you change anything about a site that could attract 175 million people? Leave it alone.)
We have no way of estimating your overhead costs per year, but we do know that if it is approaching 75 million dollars, you are doing some horribly inefficient things. But, even if that is the number, this still leaves you with 100 million dollars a year. And, that is at one dollar a year per user – a number we feel few users would hesitate to pay.
Other quasi-social sites like Xanga and LiveJournal charge $25 a year for their “premium” model. Even if only 10% of your users chose to access your premium service – which would not display ads, and include some great features like customized profile pages – you would still have 17.5 million users paying you $25 a year – or 437 million dollars. That’s more money than we made last year, or for the previous 36 years combined.
Research
We hope we’ve offered you some ideas, FB en masse, but to be honest, none of these ideas is especially earth-shattering and could have been researched on Wikipedia during your lunch break. (Except for the “social media” channel on Adwords – that is pure genius.) Further, this list is by no means exhaustive, as there are at least a half-dozen other ways you could monetize your gigantic user base.
If you are serious about monetizing your site, we suggest you type the term “monetization strategies” into Google, and just read the first few results. We think you’ll find that you are sitting on a gold mine, and that if you’d just pull your head out of your backside, you could own a good portion of the Eastern United States, plus Oklahoma.
All our best,
MND
