Entrepreneurs-Journey.com

I’ve been thinking lately about starting another Internet business. I’m not actually going to (right now), but I was considering my future and also what I might do hypothetically if today I decided to dedicate myself to a new project.

Over the past years of running an Internet business and studying information marketing and strategic business development I’ve come to realize there are some important things I would not do again - some pitfalls I would avoid right from the get go if possible. I suggest if you are just about to start your own Internet business or are at the early stages of developing your plan, that you heed my advice and avoid these Internet business pitfalls.

1. Don’t start a business teaching how to make money online.

This is the number one rule. Unless you are currently making millions online using innovative techniques and you have plenty of built up credibility and contacts to leverage for testimonials and endorsements, you won’t succeed teaching how to make money online. There are too many Internet marketing gurus already and the marketplace is saturated. The only way to differentiate yourself is through personality and social proof, and only well established marketers who already have had Internet business success stand a chance.

I’m not saying it’s not possible to be the next Internet marketing guru, but if you do decide to chase that goal you are facing stiff competition and a very jaded consumer. It’s won’t be easy to prove that you are different or any better than the other thousands out there proclaiming to have the next guaranteed formula for success online.

The same goes for bloggers too - don’t try and teach how to make money blogging unless you already make good money from it and can teach something new and different from the many other bloggers out there teaching how to make money from blogging. Earning your first $100 AdSense cheque does not qualify you as an expert. Sure you no doubt have some value to contribute, but if you want to base your business around your skill you better be really good at it or at least be very honest with what you are proclaiming to be or to offer.

2. Choose non-Internet related niches

This is not a hard rule but you will definitely make your life easier if you choose a niche that isn’t Internet related. Like point one, if people already do it online chances are the market is saturated. The markets that have untapped potential are those were the existing offline successful businesses don’t leverage the web…yet…or the opportunity lies in taking an offline business model and enhancing it by using the web as a distribution method or marketing channel.

If you come across a high-demand offline business model that has yet to be marketed online you can jump in and be first to market and establish yourself as the online expert. The best part - your prospects won’t have already been bombarded by online marketing techniques so even the most basic marketing efforts will likely result in tremendous rewards simply because you are first in to a virgin marketplace. These markets are not jaded from over exposure to Internet marketing so you don’t face as much sceptical resistance.

Of course if you do pick non-Internet related niches there better be a reason you can succeed at it. You need to be leveraging your strengths and for some of us (me included) it’s often difficult to find strengths that are not Internet related. Which leads me to point three…

3. Don’t focus on making money

In the past I’ve confused the enjoyment gained from building a business with the rush of making money. If the only thing you look forward to about your business is the money you will make or currently earn, it won’t last. It won’t last because you will only succeed until a better competitor enters the market and takes your money away (and takes your enjoyment as a result) or your business won’t grow because you are not actually leveraging anything you are good at. Making money is not a skill - it’s an outcome as a result of a skill.

You must base your business on two factors - market potential (a hungry consumer) and your strengths. If you don’t do this you will fail, or at best be mediocre.

4. Don’t enter a tiny market

One major pitfall is finding a hungry market but then realizing it’s tiny. There is nothing worse than fighting with competitors for the small handful of customers available. You can try and stick it out and hope you will be the last business standing or be bought out by one of your competitors (or the other way round) but this is not the best premise to be in business for. Be wary of fooling yourself that the market will grow and your business will grow along with it. That might happen, but don’t struggle for too long living for tomorrow’s growth potential if it’s not really there.

5. Watch out for tiny margins

Equally dangerous as a tiny market are tiny margins. If you study pricing and market differentiation you will learn all about premium pricing and discount volume pricing. I’ve discussed pricing and perception points before and no doubt your pricing structure will be one of the most difficult areas to formulate as you go into business. It’s a sticking point for me that I tend to develop and change over time, as hazardous as that may be (see this article for my pricing story).

The one pitfall you have to watch out for is basing a business on a margin that is tight or misunderstood. Ultimately you don’t know how much a margin you can make until you start selling something, so don’t plan too heavily upon making a specific margin, plan for variations. Long term efficiencies and changes to your market positioning can help increase your margins, but there are no guarantees. Early on be especially wary of margins as you will have an inclination to blow a lot of money on marketing and if you marketing costs outweigh your margins, and you can’t sustain your business growth without the marketing, you don’t have a formula for success. Creative marketing can help you through this of course, but just make sure the numbers eventually go to positive given a spread of potential margins (standard deviation anyone? - I can’t believe I’m thinking of my old business statistics class - I hated that subject).

6. Look for leverage points

If you want big time success and explosive business growth you need to find points of leverage. You won’t be successful on any grand scale without leverage because your output will be limited to how much you can do yourself.

Leverage can be a way of using the marketplace to magnify the size of your business (for example many to many business models or user generated content) or through joint ventures or host beneficiary relationships. Leverage is about thinking beyond a solo-mentality and finding ways to use other resources to meet your goals quickly.

Although not strictly leverage by definition, just the act of taking on outsourcers or employees to increase your output is a great start and is the path to a leverage mentality, which leads me to point seven…

7. Avoid self-employment thinking

Most people who leave a day job to start a business begin with a self-employment model. This means you create a job for yourself and add all the other responsibilities that come with business ownership, and lose the benefits that come from employment at a company (remember this article? - Do You Want to Run Your Own Business?). This is fine as a starting point (although you can avoid it from day one) but you must learn to start thinking about business building, which means separating yourself from roles that don’t build your business.

The biggest culprit to blame for self employment thinking is cash flow, or lack of it, since most new businesses have limited financial resources and as such the owner must do everything since they can’t afford to bring in other people. It’s important when deciding what business to start that you see how it is possible for you to stop doing the day-to-day business fulfillment roles (delivery of services/products, support, sales, etc) in the future. If you can’t automate, outsource, or hire people to do these roles, then you don’t have a business model, you have a job model.

8. Be aware of your own limitations

As sad as it might sound, most of us are only truly good at a few things. We can be sufficient at many things, but generally each of us only have a few gifts that can translate into business success. Before starting a business make sure you know what your talents are and how they translate into skills you can use to build a business.

Most of the things I do every day to manage my business leverage skills I have that I would call sufficient. I’m not great at them but I can spend some time and get the job done. This includes things like writing copy, technical jobs like server management, software installation and basic graphic design. Then there are other jobs I do that are routine, areas where you really can’t excel at, they just need to be done and I have to do it.

All of these activities take me away from what I should be doing - leveraging my time on the high value activities that use my talents - things like writing this article now. It’s taken me a while to realize that an important goal in my business is to set up systems and people to do the things that for me are largely a waste of time. These activities are important still - my business wouldn’t succeed without them being completed - but they don’t leverage my talents and I need to have people with talents in those areas handle them.

Don’t worry if right now you are not sure what your talents are but be aware that your goal eventually is to distinguish what you are exceptionally good at and stop doing what you are not good at. Don’t fool yourself into thinking you are the best at everything because A) it’s not true and B) this will lead to solo-minded thinking, which I’ve already mentioned will stifle your business growth.

Yaro Starak
Leveraging Coffee Shops

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Let’s jump straight into it - if you are reading my blog then you either already run an Internet business, you want to run one or you dream about running one (or you are stalking me!). With this article I hope to help you move from the “I want to start a business” category, to the “I am running a business” category. Here we go…

I Have A Business Idea (or several)

If you fall into this category and you already have ideas for Internet businesses but you haven’t actually started one yet, then I have some very simple advice for you - just do it! Put something into action, get some results even if the result is no result (that’s a result still!) so you can actually start to move forward. Stop dreaming/planning/thinking and start doing.

If you have several ideas and you don’t know which one to run with, pick the one that you can best leverage your existing skills, contacts and resources and do some testing. You may think one idea has “more potential” or you might earn more money from it, but that probably also means you face more risk and a longer learning curve. The thing with long learning curves is that if you don’t already have the chutzpah to even start a business a long learning curve is just going to be, well, too long for you. You don’t have the motivation or the courage or the experience or the conviction or whatever it is to push you through the slow process of failing that you must go through in order to succeed.

If you choose the perhaps less grand idea or the less risky business in the short term - the one that you can best leverage what you already have - you won’t face such a long learning curve and will earn results quicker. This will give you positive reinforcement and experience earlier - it will build up your chutzpah - and then, if appropriate you may be able to start up your original riskier or unique idea since you will have the confidence from the success you have already earned.

Think of it this way - a software programmer could have some amazing Web 2.0 idea which she could start, or she could do some software consulting as a self employed business owner. One business model is clearly riskier but potentially much more rewarding. However in almost all cases the low-risk consulting job will bring in financial return and positive reinforcement a lot quicker, while the end game with the Web 2.0 might be a huge superstar company, resources will be consumed (money, time) long before rewards start coming through. Obviously it comes down to your unique position and personality, but if you are having trouble even getting started then the path of least resistance is probably best for you - at least for now - you can still dream big for the future.

I’m not saying you can’t chase the biggest, baddest, craziest idea right from the start - some of the best entrepreneur stories start like this - but often the character behind the idea has some special qualities, those pure, somewhat deluded concepts that hardcore entrepreneurs have where they “just know” they will succeed no matter the odds against them or the reality of the present situation. That sort of blind faith motivation usually leads to one of two outcomes - tremendous success since the person never gives up, or tremendous failure since the person never gives up. It’s a fine line.

I Don’t Know What Business To Start, But Gawd Damn I Have Plenty of Information Products Full of Ideas, If Only I Would Pick One!

Ahh, the serial information product purchaser. I love you guys. It’s you opportunity seeking folks that keep the online marketers pockets laden with money - your money. They keep coming up with ways to make money online, release ebooks, videos, DVDs, courses, seminars, mailing lists, membership sites, all promising riches, and you lap it all up - all of it!

Yep, you are a crazy lot but there is one clear thing about you - you are not afraid to put money down in order to make money and you believe in education, either that or you are a sucker for a good sales page!

If this is you, you need to stop buying info products. Honestly, stop it now. If your computer and bookshelf is laden with online business ideas, all of which you have studied with enthusiasm but never gone much further than one or two steps into actually implementing something before you snap up the next “great online money making concept”, then you have to break the pattern.

Here’s what you need to do. Stop buying products, look at what you have already, what you have learnt and where you think you could best leverage your skills. If you like writing content and setting up blogs or websites then perhaps AdSense is the way to go. If you have something to teach other people and that doesn’t have to be in the Internet marketing arena, it could be any niche, online or offline, then maybe setting up a membership service or writing an ebook is the way to go. If you don’t want to bother with making a product yourself but you like the idea of selling products then perhaps drop shipping or affiliate marketing will be good to you.

Here’s the important part though - whatever idea you finally pick, you have to stick to it from start to finish. Complete every step in the course/book/tool you bought. Every step and then evaluate your position. And I can tell you, if you truly did complete every step that a quality information product teaches you to do then you are almost guaranteed success. Why most people don’t succeed is because it takes time and energy and let’s face it, unless we see money coming in immediately most people have a hard time sticking to something for longer than a few weeks - at most!

Realistically if you were to follow Internet business information products and implement all the steps you are looking at months and months, even years of work before you really can say you did everything well. That usually means completing long term search engine optimization on your website(s), setting up, testing and tracking a comprehensive pay-per-click advertising campaign, implementing other traffic strategies, networking, forming relationships and doing joint ventures, testing and tracking conversion on your website(s), writing content, blogging…there is so much to do to truly have success online. While it might be nice to blame the information product and accuse it and the author of being all hype and no substance - most reasonably good info products really do teach good stuff, there’s just a lot of work involved to do it all successfully - so the only person to blame for failure is you. It’s harsh, but it’s true.

Next time you buy an information product in the hope that it will be THE big idea for your online business (like all the others that have gone before it) be absolutely certain that you are prepared to implement everything it teaches, otherwise you shouldn’t buy it. Go back and implement the techniques in the other products you bought but never got around to using properly first.

Best of all, if you actually do implement well and create a business, you can then buy all the great info products that come out, write them off as an education expense in your tax and know full well that you will be capable of implementing the nuggets of advice you learn, increasing your income by leveraging the success you already have in your existing business.

Positive habits tend to reinforce themselves. Once you start implementing and getting results you will find that you want to keep doing it. The experience you will gain will give you confidence and awareness of the long term benefits of implementation and replace your old “get rich quick” opportunist thinking mentality, where you bought products because you were caught up in the promises being made and did not consider the reality of the effort required to make things work.

I Have Too Many Commitments - I Can’t Quit My Job To Start My Dream Business

Okay, you may be right, you have a lot of commitments and pinning your financial requirements on a new enterprise is too much to handle. My advice - don’t do it, do both. Start your business and keep working your job. In this case you need to have great time management and structure your life well so you maximize your work efficiency (of course this is a good strategy for anyone, but it’s particularly important for someone who wants to transition from working a job to running a business where the short term involves doing both at the same time).

Let’s think 80/20 rule. If you get 80% of the outcomes from only 20% of your efforts then you really only need to focus on a core few functions to handle this situation. You need to keep working your job so a good chunk of your day is gone to that. Then you have all the other “life things”. In my case that realistically probably leaves about 2 hours per day of real productive time for your new Internet business. You could start sacrificing sleep to get more hours but I’m not known to do things like that - you might be.

Two hours, you may be surprised to learn, is more than enough to get your business going, if you are 100% productive during that time and that two hours is spent on your 20% core productive functions - those things you need to get done in order for your business to start generating cashflow. After all it’s dependable cashflow you require so you can reduce the amount of time you spend at the job office and increase the amount of time you spend at the home office. Most people don’t spend much more than two productive hours in an eight hour working day anyway so you will be ahead of the curve if you can stay focused on your 80/20 activities for a full two hours.

From that point on you juggle. You balance your activities with getting your new business running and slowly change the ratios so you do less “job” and more “business” until that great day when you have enough business cashflow to finally quit your job. Of course that’s only the beginning of building your business, but at least you are past that not-really-that-scary-yet-it-stopped-you-for-so-many-years period where you were afraid of not meeting your commitments without your job.

It does take a leap and definitely a commitment but to be really honest with you, the only real obstacles you face are psychological, they are not reality. You don’t believe you can start a business because of all the fear that your commitments generate, which are tightly linked to your job income since it currently keeps those commitments at bay. Since you believe that it becomes your reality. Once you lose the fear and take action you realize the reality of the situation is not that scary and with some time and efficiency management anything is possible - you just got to believe and take action kid!

Do Something

Reading over the paragraphs I just wrote above it’s pretty clear that there is really only one piece of advice you need to follow to finally start your online business - you need to take action and do something. Everything else boils down to the way you think and the way it causes you to act but generally as long as you are taking action to move your business forward (and start something in the first place!) your outcomes are always good because you are learning and gaining experience, which all lead to greater motivation, better decisions and more taking action - a guarantee of success!

So go do something already!

Yaro Starak
Action Taker

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Every new business, new product or service, and new marketing approach started with an idea. So whether you are looking to create a market-busting product like the iPod, or come up with a campaign idea like the Million Dollar Homepage, there are creativity techniques that can allow you to conceive something new and turn it into reality.

There are three major hurdles to overcome before any idea can come to fruition:

1. Identify a Problem
2. Idea Generation
3. Idea Selection

Needless to say, having a solution without knowing what the problem is doesn’t usually get you very far, so know what it is you’re trying to accomplish and what problem you want to solve.

If you keep up with your industry, talk to customers, study what is not working in your business, you should have a ton of problems you would like to solve. Alternately, you can use sites like Google Trends to find problems that others are trying to solve, and design a better mousetrap.

Once you have that problem firmly in mind, you can begin using some of the proven techniques for generating possible ideas. Then begins the difficult choice of selecting the ideas that have the most potential. The remainder of this article will focus on the second step - Idea Generation.

There are many well-known techniques and methodologies for coming up with ideas including Brainstorming, Talking Pictures, and other group creativity exercises. There are also the many picture-based processes including Ishikawa Diagrams and Mindmaps. Since our minds work using pictures and inter-relationships versus words, many of these techniques are valuable in guiding us to new solutions. A great wiki site that provides an overview of techniques for all three areas of creativity techniques can be found at www.mycoted.com. Peruse the entries to get some insight on current methods of idea generation.

Brainstorming is the most recognized buzz-word associated with idea generation, yet most people are not familiar with exactly what it means or how to go about it; some may picture locking them self in a room, deprived of food and drink until a great inspiration jumps out of their head - however, there are less painful and more productive methods available. Many of these methods have specific ground rules, guidelines, and methodologies (e.g. round robin, think tank, etc.). There are a ton of great sites to help you find a good brainstorming methodology including the Wikipedia entry on brainstorming techniques and also Perfect Brainstorming by Innovation Unlimited.

One of the more informative lists on the latter site is the 10 Rules of Brainstorming:

* Set Directions
* Involve Everyone
* Encourage Cross-Fertilization
* Don’t Overlook the Obvious
* Suspend Judgment
* Don’t Fear Repetition
* Don’t Stop to Discuss
* Record Every Idea
* Apply the 80/20 Rule

My personal belief is that “suspending judgment” is the most difficult rule for many people, and is the one that kills more good ideas before they ever even have a chance. Don’t assume something “will never work” or is “totally hair-brained” until you go through the entire process. It may just turn out to be the seed of exactly what you are looking for - you never know.

Another key observation, is that in almost all of these techniques ideas are generated as a group. Yes, it’s possible to come up with a great idea all by yourself, but working in a small group can provide the momentum to generate many possibilities, or make a good idea even better.

My personal favorite technique for idea generation is Mind Mapping. It is both an organizational, memorization, and creativity tool. It is based on the method that Leonardo Da Vinci used to keep his notebooks and construct new theories. There are even some good software tools related to Mind Mapping to help you get through and document the process: Mind Manager by MindJet, and Map Your Mind by Mayomi. There is also a free tool that is worthwhile called FreeMind . Others can be found at the Wikipedia entry for Mind Maps. If you are interested in some other creativity and idea generation tools that are not related to mind mapping per se, check out Axon Idea Processor and Imagination Engineering.

Finally, if you are interested in this whole topic of innovation in business and idea generation, the best blog I know of on this topic is Idea Flow by Renee Hopkins Callahan at Corante Hub.

So now that you have been inspired (?), get out there and start generating some ideas - and create the success you’ve envisioned for yourself.

******

Michael Martone is the author of the blog VerusNova which helps Small Business owners leverage technology to create a more successful business.

His blog can be found at http://verusnova.com/blog

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Does the idea of continuous passive income from websites you can set-up and forget about sound good to you? Well that is what niche content websites are all about. Let’s take a look at this online income method.

I was over at Ben Bleikamp’s new blog, College-Startup, where he has been writing about his efforts to create niche content websites.

The concept is reasonably simple. Do some research, find some very tight niches that aren’t well serviced at the moment, build a content website targeting the niche, stick some AdSense, Chitika and similar advertising programs up and just let it sit there earning a few dollars a day.

Now you must be thinking how does this make good money? Well it doesn’t make much, but if you are lucky and do your research well, $2-$3 a day is enough to consider it a success. Once you have done this you can move on to your next niche content website. Over a period of a year if you set yourself a goal to create one of these content websites per week at the end of 12 months you would have 52 niche content sites. If they all make an average of $2 per day that’s $104 per day total, around $38,000 USD per year. Best of all the websites require no maintenance, it’s all about picking an untapped niche and filling it with content.

How To Make This Work For You

Before you run off trying to pull this off remember that in order for it to be successful you need to be confident you can successfully generate good search engine traffic to the niches you select. The recursive income only comes when you have search visitors clicking your ads. By the way, random search visitors are usually better ad clickers than loyal readers and that’s one of the reasons why this technique can work. Randoms come to your site once, read your content, click an ad and probably leave never to return again. Loyal readers come back for new content and often screen out the ads. It’s not in your interest to establish a repeat audience using niche sites. You don’t want the responsibility of adding new content since chances are finding content about a niche you don’t necessarily have much interest in can be tough. In this case it’s just search traffic you care about, forgot about being sticky.

Step One: Find A Niche

First you need to find niches where there is some traffic. You should use the usual tools, such as the overture inventory keyword data miner, to conduct research on how many searches are done for certain key phrases (look for sites with at least 1000 searches per month). Don’t aim for keywords and topics that are highly competitive, look for low competition with *some* traffic. Take for example Jonathan Wold’s Sump Pumps Information niche. How random is that! Do you even know what a Sump Pump is? I don’t, but he suspects enough people are searching for sump pump information online and he only needs a handful of them to click his ads per day.

The key is to find topics that people search for and advertisers use Pay-Per-Click marketing and other online advertising methods to sell to these people. Your niche content site helps to bring these two groups together and you take your middle man fee, with the help of the search engines for traffic and advertising programs for a monetization system.

Always be certain there are monetization possibilities before starting a niche content site otherwise you will be wasting your time. Look for AdWord campaigns by doing Google searches for the niche you are considering - if you see several ads down the right column that target the niche then you know advertisers are paying to reach these markets. To be really thorough, log into AdWords and set some test campaigns up and see what the bid prices are for your keyword research subjects. If the prices are reasonable then there probably is some competition for those keyphrases from advertisers running AdWord campaigns.

Step Two: Scan For Competition

Once you find a few niches you think have potential search those keyphrases and see what results show up. If the natural search result sites that turn up are badly optimized (look for low PageRank, poor title keyphrases and heading tag keyphrases) and you are confident that a site with well optimized content would quickly jump to the top of the rankings and by quickly I mean about 3-6 months (remember the Google Sandbox is going to impact how quickly you get high rankings) then you might have your first candidate for a niche content site.

Step Three: Build A Site

I suggest you go with WordPress to manage your niche content site. WordPress is blog content management software that runs off a PHP/MySQL backend (this blog uses it). It’s very easy to set up, handles most of the search engine optimization for you and all you need to do is pump in the content and off you go. There are some occasions where a plain static HTML site may be more appropriate, for example when you only need a micro site of a handful of pages and it would be quicker to just set up the few pages using a HTML template design, but I’ll leave that up to you (read Bo’s Marketing-Syndrome post on WordPress vs Static HTML? for more discussion on this topic).

How To Find Content

At first thought this would probably be the hardest part of using the niche content site technique - how do you come up with content for a niche site that very likely you have next to no interest in or experience with? Now if you are not the writing type and can’t waffle on and bang out a few key pages of content yourself by utilizing what’s already available online, then you may want to try these options:

• Use articles from public article repository sites such as Ezine Articles and GoArticles

. Writers contribute articles to these sites that you can republish on your site as long as you keep the author’s byline intact. The downside of this is that other people also can do the same and your article won’t be original. However if your niche is small enough there won’t be that many other people out there discussing the topic (in fact you are banking on it) so if you are lucky enough to find some on-topic articles in repository sites, make use of them.


• Another popular method is to republish Wikipedia content. Wikipedia is an online encyclopedia contributed to by anyone and if you have ever used the site you know that it has entries on virtually any topic you can think of. Chances are your obscure niche content site topic will have some entries in the Wiki and under the GNU Free Documentation License you can republish the content on your site.
• Freelance writers all over the web are eager to take your money in exchange for their writing skills. Elance is the largest freelancer hub online and listing your article writing project there will flood you with responses. Most writers are pretty adept at producing content on almost any topic, even if they just regurgitate someone else’s writings in a new way. A few thousand words shouldn’t cost you too much money. If possible try and establish a long term relationship with a good writer if you plan on needing their services again.
• There are special article subscription services that give members the rights to make use of articles, some even promise a certain amount of new articles on a range of different niches will be provided on a regular basis so as to keep members subscribed. The idea here is that you get access to an article pool that only other members are granted access to. This is deliberately done so the articles are only utilized by a handful of people and often membership sites will cap their numbers at a few hundred. Members can do what they want with their articles knowing that at worst only a few hundred other sites are using the same materials.

  Personally I have never subscribed to an article site and I’ve read various reports, some good, some bad, about article membership services. I’m skeptical about the concept and I don’t like the idea that you have to either choose a niche that directly matches the articles available or try and modify articles to match your niche. I also have no idea where article membership sites source their articles but I have a feeling it would be a room full of trained monkeys writing the new articles each month (or ahh, freelance writers of course, and let’s not talk about cheap Indian labor). Given that most members subscribing to the articles will be chasing the same niches this seems like a formula to guarantee you will have at least a few hundred people competing in your niche - not much of an opportunity then is it!

The Importance Of Keyword Click Through Prices

For most niche content sites AdSense and/or Chitika will be the main monetization strategy. These programs pay on a per click basis and click through prices are calculated based on advertiser demand. The golden mix is to find a niche with few well established content sites but a lot of advertisers competing to find customers. This means click through prices will be high but the market is not likely to stay untapped for long and likely a bunch of competing content sites will pop up. In fact you may never find this combination.

A more likely scenario is a niche where there are high click prices because of lots of advertisers and a few well established content sites or moderate to low keyword prices but almost no competition. How you can succeed in these situations is to be better at search engine optimization than any of the other sites. If your site pulls more traffic you get more clicks.

The situation you want to avoid is a niche with few advertisers so low click through prices. No matter how much traffic you get and much you dominate a niche, if there are no advertisers paying to use Google AdWords you won’t get any AdSense income or it will be 10 cents a day from the one advertiser with no competition. Bear in mind however that there are general advertisements, for example Chitika can show cameras, computers and other electronic products that may appeal to a general audience and produce enough click throughs to make it worthwhile. This is a risky venture though since your niche is not relevant to your monetization method, the amount of income you earn will like be very random and inconsistent.

Underachieving Due To Low Entry Barriers

If you have read Perry Marshall’s Renaissance Club Newsletter you will know about two online marketing strategies he discusses, one called ‘underachiever’ and the other ‘overachiever’.

Note - if you haven’t signed up for the special offer to try Perry’s marketing newsletter it’s still available and you still get the Definitive Guide to Google AdWords, five marketing reports and five audio CDs thrown in just for trying out the membership for one month at $29.95 - check it out here for more information.

Overachiever

Overachieving is when you dominate a niche, become an expert and “go deep” by offering more than just one product or service. You may offer seminars, audio recordings, DVD video classes and a whole host of additional materials that make the lifetime value of a loyal customer a lot more than a once off purchase or text link ad click. This method means you can afford to compete by making a loss on the sale of your first product or lead capturing method because the value over time of that conversion is much higher. I’d say Perry’s offer that I mentioned above is a loss leader (overachiever) strategy too, he can’t be making money shipping off all these CDs and reports at such a low price and paying out affiliate commissions - but he knows that the 5% of customers that become fans and purchase everything he produces will spend hundreds to even thousands of dollars over time.

Underachiever

Niche content website building is an underachiever strategy. Profitable niches rarely stay uncompetitive for long and as niche content site building becomes popular you are going to be fighting with others for niches. Underachieving is when you deliberately choose to lightly skim a niche, perhaps by selling an ebook to a market that currently is not satisfied. Niche content sites service a unique niche with basic information and generate advertising income as a side effect, there is no intention to further capitalize on the audience. The idea of course is to rinse and repeat, building up a portfolio of profitable niches. The problem here is that you must keep working to find new niches to replace those that become too competitive to fight for.

For those that can manage a lot of sites and in fact enjoy the variety that comes from building sites on such an array of different topics, the niche content site strategy can work well. If you can build a really large portfolio, competitive action won’t impact you significantly because it will take a long time erode your entire income stream. Remember though that it’s not true passive income forever since you will need to replenish your portfolio with new niches if you want this strategy to work for you long term.

In my mind however a better way to go about this is to treat niche content site building as an education and research tool. Learn what it takes to get free traffic to a site from search engines. Learn how to optimize sites, find profitable niches and build content quickly. When you stumble across a niche with unexpectedly high demand and return consider switching your strategy from underachiever to overachiever. Start collecting email addresses to build a list. Get an ebook written, find affiliate products to sell, create a membership service, record screencasts to build information products, and “go deep” in the marketplace. Become the expert in that niche so you can own it and depend on it for long term income despite competitor actions.

Leverage Your Previous Hard Work

I’m sure you will find that many of the weird and wonderful niches you come across are already serviced by hobbyist sites, very unprofessional, perhaps hosted on free hosts with designs created in Frontpage or even (shudder) Microsoft Word. They usually have low PageRank but due to lack of competition will show up as top results in search engines. A quick search and easy technique to surpass these sites in the search engines is to leverage one of your already successful, high PageRanked sites.

Most online marketers have a site that they devote the majority of their time to, likely a blog or their main business project. This site enjoys good, hard-earned traffic and has lots of backlinks that were built up over time. Using this site as a tool to promote another site is an advantage, especially in the niche content market.

For example this blog is my main site. If I built a niche content site I would link to it from the sidebar that is on every page giving the niche site lots of valuable backlinks, PageRank points and helping it to very quickly enter the search engine indexes. In fact I’d hazard a guess that a site-wide link from this blog alone would vault a niche content site to the top of the results for it’s niche without much other work on SEO. There might be some sandbox issues initially, and true the relevancy of the links would not be very good, but given the competition likely doesn’t even know what SEO is and your carefully researched niche is small and untapped, the advantage is significant. Having a powerful site to leverage is a big helping hand for a niche content site marketer.

Conclusion

You will be surprised by what type of niches you can dig up. Often the most bizarre topics have real followings. Everything from how to raise turtles, where to find the best secondhand clothes, how to do magic tricks, how to snowboard, learning to cook vegetarian - and these are mainstream topics already well catered to. It’s your job to find the obscure, to think outside of your box and find markets that you would personally never consider being a part of yourself. Thankfully the search engines are full of keyphrases and all you have to do is get out there and research. Browse Wikipedia, follow the external links and expand your horizons. You may find some very profitable niches that no one else has thought of.

Yaro Starak
Internet Business Guy

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If you spend any amount of time reading blogs you probably have come across a blog network. Prime examples include 9rules (Entrepreneur’s Journey is a member), the largest and arguably most famous Weblogs, Inc and the recently launched b5Media.

I won’t go into the definition of a blog network because quite frankly no one really knows and everyone has an opinion of what it should be. The only key ingredients are blogs, a blog network has to have blogs. These blogs are networked together somehow, either by an umbrella brand or a payment structure or a traffic referral system or whatever, and you have a blog network. It’s all about multiple authors creating content on multiple blogs for the good of the people (the readers), building something greater than the sum of its parts.

With the recent big ticket ($25 million) sale of Weblogs, Inc to AOL the monetary potential of a blog network was highlighted. Anything with the word “blog” in it has become hot property. Frankly though, blogs are only just going mainstream and it’s early enough days that opportunities abound in the blogosphere.

Looking at blog networks as a potential business opportunity is mouth watering for a web entrepreneur. The typical valuation measurements are the same as for standard websites, traffic and profits (sometimes revenue for newer businesses and future potential will always play a part in evaluation). Weblogs, Inc pulled $25 million because it had both significant traffic and significant revenues (they haven’t disclosed profits). A budding entrepreneur looking to cash in on blogs should look to the same metrics - traffic and profits - and at the moment, traffic comes from good content and profits usually comes from advertising.

If you look at the current blog network marketplace it is far from crowded. Yes a new network appears to launch every other day lately (and some close just as quickly) but only a few are truly large and/or bring in significant revenues. The opportunity to create a new blog network is definitely there as long as you follow the golden rule in business, niche your market in order to differentiate yourself from the competition.

At the moment most of the largest blog networks are loose collections of good solid blogs on a range of topics. Weblogs, Inc is a complete hodge-podge of different blogs, a media network focusing on quantity to reach as many different markets as possible. 9rules and b5Media also do not discriminate and look to take in or create blogs on almost any topic. The generalised media blog network format is well served and moving into this market would be more difficult.

A much smarter strategy would be to bring together bloggers around a single industry or topic area. The competition in most areas simply doesn’t exist yet. There may be individual blogs on almost any topic you can think of, but there are no coordinated blog network hubs broken down by niches. An entrepreneur could choose a lucrative demographic and either bring together or purchase the current blogs covering that area into a new network or start from scratch, hire bloggers and start brand new blogs for a brand new network.

Dane Carlson of the Business Opportunities Weblog has started doing just that. His niche is business opportunities. He already has a great popular blog that brings in a lot of readers every day. His network is up to four blogs now having brought in some friends to blog on similar topics, including work at home opportunities and MLM opportunities. If he keeps adding more solid blogs his network may become the authority for business related blogging. With enough traffic the advertising revenue will continue to soar and who knows, an AOL sized company may come knocking on his door with a big wad of cash.

To offer a hypothetical example let’s take the home housewife demographic. The audience watches Oprah, reads gossip magazines and probably cares a lot about fashion and beauty. I’m a budding entrepreneur so I’m going to build a blog network around this niche. I’ll gather blogs on topics like shoes, clothing, celebrity gossip, self esteem and makeup. I might look around the blogosphere and see how many independent blogs already exist in this niche. I’ll consider buying or hiring these blogs and bring them into the network. I might raise some capital and put up some ‘Bloggers Wanted’ notices to hire some new writers to pay to produce daily content. I’ll build up the blogs over time, keep the niche nice and tight and focused so we attract a certain type of audience (good for advertising click through rates) and build up revenues. After 12 months I will have an asset, bringing in good revenues and piles of traffic, ripe for a buyout.

It paints a rosy picture doesn’t it. I admit it won’t necessarily be easy. You may find that the advertising dollars never make profits after you pay for bloggers. This could be because you chose a niche with poor click through prices or no advertisers. You might have trouble establishing traffic to your blogs. You might never get bought out because the whole blog craze dies down by the time you have built your asset. There are no guarantees in entrepreneurship but success is only rewarded to those that take a chance.

Those bloggers currently operating a popular blog are in particular sitting on a potential goldmine growth strategy by expanding their single site into a network. By leveraging the traffic and audience of an already established blog, new blogs can be introduced and enjoy an instant audience to build from. If word of mouth and viral blog networking are good to you your new blogs will grow quickly. The current blog networks often succeed off the backs of one or two significant linchpin blogs (for example Engadget for Weblogs, Inc) that form the backbone of the network and bring in significant advertising revenue and exposure for the entire network.

I have a feeling that blogs and blogging are here to stay. I suspect our future may be filled with blog networks that essentially perform a similar role to current media distribution channels. No longer will we look to the big syndicated news sources, instead blogs will provide the most up to date information and interesting content. Ironically though many bloggers may just end up being paid employees of blog networks and their content and blogs owned by the big syndicated news sources anyway. In that case not much will have changed, you just may not need a journalism degree to get paid to write about your favourite topics.

As an entrepreneur or even just a person with a passion for a topic, a great business opportunity exists right now. There will never be this time again, a time when blogging is new and blog networks are even newer. If you stake your claim today your blog network may become the authority source for information on your niche and it might even make you a millionaire too.

Yaro Starak
Entrepreneur

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