Scoreboard Media Group, Internet Audience Development

I don’t want to turn this into a political debate.  That’s not my intent.  If anything, this is me, an economics fanboy, wondering if I’m the only one that thinks this is terrible fiscal policy.  This is the second time Obama has scared the everliving sh*t out of me with his Economic Plan. 

Now, let me just say that I think McCain is pretty much a disaster.  As a lifelong Republican, I really wish the Bush Administration didn’t pull out their gas can and torch the Party which has historically been more kind to small businesses.  I really wish we had a more innovative G.O.P. candidate.  Like a guy that isn’t terrified by his computer.  But with marginal tax rate numbers potentially ballooning like this under Obama, the audacity of his hope is really going to take a big chunk out of many of our earnings. 

$250,000 isn’t wealthy.  Not here in Texas and definitely not in NYC, Boston, Chicago, L.A, S.F., or Seattle.  It’s definitely enough to be comfortable, but this is a country that was founded on the pursuit of happiness (err, property) and a free market economy that rewards risk.  When you factor in the hours many of us put in to these startups, the wage rate certainly isn’t what gets you out of bed in the morning. 

Do you have a really successful business or startup and plan to cash out in the next 4-8 years?  Do you rely on dividends from “the last one” to fund “this one”.  Please bend over and enjoy that cap gains hike.

Anyone that knows me knows that I work a lot.  I really love this sh*t.  Nothing good happens when you have your economy’s tip-of-the-spear new industry small businesses are put in a position where those entrepreneurs are better off not working after August.  That kind of economy is called “Europe”.

So, I guess the questions to those of you that this affects, as entrepreneurs do you vote for hope at this cost?  Or do you think that the cost of hope might have swung a little too far into your business’s and/or family’s finances?   We live in the most charitable, giving country in the world with a very inefficient goverment.  Wouldn’t you at least like the option of catalyzing hope at your own discretion?

Anyways, I guess I’m just curious as to how entrepreneurs (who are all seemingly fueled by caffeine and hope) plan on rationalizing this and how it would affect your respective businesses.

In the last post about making f*ck you money online, Duncan Longshaw asked a really, really great question that I didn’t feel I could best answer in a Comment response:

“Is bigger necessarily the way to go though?

Beyond a certain point, I’d personally rather work less time on the business, than try and make billions. If your making more than enough money for your needs, then why not focus on working less, and spending more time with family and friends?

Not many “guru’s” are preaching this, but there are a few (like Tim Ferris, or James Brausch), who focus more on saving time than making money. They don’t seem to be doing to bad out of it either…”

That is so very true, Duncan, and it is actually a timely discussion for me.  On the flight up to San Francisco prior to publishing “How To Make F U Money Online”, I reread Tim Ferris’s The 4-Hour Workweek.  Even though some of the references in the book are slightly outdated, this should still be required reading for any SEO, affiliate marketer, or other such webworker.  This is the third time I have read it and I do so every couple months or so in order to “get my head right.”

As Duncan mentioned and Tim asserted, there is very little to be had by the traditional “going bigger is going better” model.  That was the unfortunate economy our parents were dealt.  It doesn’t make sense for the average intelligent worker on the Internet and it certainly creates an existential question for those of us sitting on some the most disruptive talent in history. 

Tim Ferriss asserts that the New Rich mavericks should use a figure of around $5000/hour (page 36) as the measuring stick of productivity.  Let’s look at some of the opportunites for those of us with a Competitive Internet background to reach that goal.

The Lazy Affiliate Model

I’d tell you how to do this, but Hagans has already given you the roadmap to the lifestyle.  My only concern here is that it’s highly unlikely you’ll create sustainable $5000/hour production because all affiliate markets become more efficient (less valuable) as they get older.  In order to keep finding lucrative niches to sustain the desired rate, you may run out of hours.

The SEO Consulting Model

No matter how good of an SEO Consultant you are, you are not going to maintain that pace for any sustained period of time.  At my peak, I was charging 1/5th of the “New Rich pace” and all that level of pricing did was ratchet up clients’ expectations of how much of my time was actually in play.  You’d also be somewhat of a dick if you charged full-price for every hour in a bulk hour relationship.  Most of the top SEO consultants I know and who I have compared billing styles with might bill $1000/hour, but none of us ever made more than $500,000/year at the most exclusive of rates and with the most exclusive of clients.  Plus we had the added benefits of working our asses off and subsequently worrying about getting sued by a multibillion dollar client (my favorite being one of the top law firms in the world…that coulda hurt if I dropped the ball!). 

Bigger was not better in this model.  And that’s why I walked away from it. 

The Entrepreneurial Model

This is where I found a little religion a couple years ago.  I could take all of my disruptive skills, join some friends, go tackle a $100 billion market as it was coming online, and dive head first into the venture capital community.  In the Maslow’s Hierarchy of Spam, this gave me an outlet to build something substantive and that would leave more of a legacy than taking $50 at a time from people looking for debt consolidation. 

The downside is that I took nearly a 60% haircut on pay.  That is probably going to be an irrelevant stat as we are building something of value wherein the equity stake will exceed the opportunity cost….but it won’t exceed the $5000/hour for the 4-6 years of investment horizon.

This is an amazing country.  There is a ton of investment capital for people like us to take an idea or product to market.  Given the right idea or product and the proper management of your capital, you can start something like Google, Youtube, or whatever the next big thing is…and $5000/hour will probably nothing more than an uncomfortable line item called “Strippers” on your accountant’s monthly itemized report.  Just be prepared to devote 10 years of your life and alienating just about everything else to get there.

The Disruptive Advisor Model

This is something that can be done parallel to the above two.  It is something I have done for the last three years and, in effect, have become my own venture fund.  Like any venture fund, some of those equity stakes I have earned as an Advisor have turned out to be worth less than the imaginary paper they were printed on…but a few have more than made up for it. 

Listen, as SEO’s we had to learn a lot more than rudimentary page tweaks to bring in the most money for our time.  Our competition…which is primarily Google…looks at just about every signal on the web.  And, in response, we had to learn how to manipulate every one of those signals.  While search may be the scorecard of the Internet, you really have to master every other audience discipline to reach those top SERP’s. 

With that meta-level of expertise in mind, you will find that just about every entity with an online audience would kill for some of your time.  Give it to them.  And then wet your beak appropriately.  If you don’t fully buy into their business model or the relationship, take cash.  If you think it’s the next YouTube, take as much equity mix as you can.  Trust me, they are broke startups and looking to offset big consulting fees.

A hybrid of the Advisor Model and one of the preceding Models can get you to $5000/hour.  Just be ready to juggle chainsaws instead of entering dance competitions in South America like Tim.

The Ultimate Leveraging Of Your Knowledge:  The Competitive Internet Hedge Fund

There is a great confluence of events happening right now in the SEO/Affiliate ecosystem.  There is a rising class of of us that can be Accredited Investors (or we have learned how to raise money in lieu of personal investment) and there is an ocean of distressed Old Media companies that we could radically benefit (look at what Marshall Simmonds did at The New York Times,).

Over the last year, I have had at least a dozen of these multibillion dollar companies try to bring me in to create a strategy for their online future.  As I have zero bandwidth or the inclination to do this on their terms, some of you reading this have been given those referrals (and you’ve done some amazing work).

But let me ask you this…what if there was a hedge fund comprised of the top audience builders and a mountain of cash to corporate raid the Internet?  With the top hedge fund managers earning in the billions last year and these being multibillion dollar issues we could influence, it would be like breaking into Fort Knox…but probably take less effort.

There you have it.  That’s my next move.  Exploiting opportunities in the financial markets with asymmetrical knowledge.  I can do that sh*t all day long from the beach (and with historically cheap debt or other such weapon of high finance). 

Whether it comes to fruition for me (or just become blogging delusions of grandeur), I would still keep encouraging each of you to think bigger.  Bigger doesn’t always mean more hours of work.  Or it may mean just that.  But don’t ever sell the skillsets we have short.  Sometimes you have to think bigger just to realize how powerful each of us can be. 

Godspeed, my friends.  And don’t forget to send me a Christmas card full of cash one day if you get there first.

When I think of what Jason Calacanis’ backyard might look like, I envision a circus-like atmosphere wherein a One-trick Pony is tethered to a well filled with people from the 1990’s.  And in these visions of mine, Jason likes to go to his well often, untether his pony, saddle up, ask the earliest Internet users in the well to edit his latest business plans, and then chase his gardener (who he pays $10/day to wear a sign that says “TECHNOLOGY”) around his backyard. 

Roughly 99% of the free world would call this backyard “maniacal”, but a few VC’s would see it as “revolutionary”.  I see it as 100% awesome.

I hope that 2008 is another headline-filled year for the Paris Hilton of the Internet and here’s how I think he’ll continue to reshape our world from his backyard:

1.  ATM Machines.  No longer will it be an ATM “machine”.  It will be an ATP…an automated teller person.  ATM networks are expensive and charge people too much to get their own money back.  But for only $10/day in wages, JC will have some guy in the lowest tax bracket dole out your cash to you. 

2.  Gas Stations.  Paying at the pump is for suckers.  That walk between your car and the attendant during a Chicago winter builds character.  You can pay extra for a “human guide” named Otis or Jim Bob to tell you about the Willie Mays or FDR while their overalls gouge the clearcoat on your whip.

3.  Telecommunications.  Telemarketing is spam!  All calls must now be connected manually!  You might have your boy Big Willie in your Five, but good luck getting ahold of him when some lady named Ethel at the phone company can’t figure out what series of holes in the wall she needs to plug to blow up his iPhone. 

4.  Stoplights.  Sitting at a stoplight in his car that is slower than mine infuriates Jason Calacanis.  Why can’t that software figure out that nobody else is around?  It’s back to traffic cops at every intersection.  Human-edited traffic patterns are the new sliced bread.  Or mass vehicular homicide.  Could go either way.

5.  Unmanned Aerial Vehicles.  Sure UAV’s are a great way to track or attack the enemy without putting the fine men and women of our Armed Forces at risk, but they are also expensive and may fly into schools or stadiums or hospitals if the software goes buggy.  From now on they are MAV’s, or as I like to call them “planes”.

I have a new rule and it’s working out great.  Before I start a new startup, joint venture, or site, I make everyone else involved watch this clip of Kevin Garnett gaming up.  This is the type of focus, confidence, humor, and chip on your shoulder you need before you go live to the web.

All you need to do is:
1. Load up the pump.
2. Load up the Uzi’s.
3. Load up a couple M-16’s.
4. Load up a couple 9’s.
5. Load up a couple joints with the silencers on ‘em.
6. Just load up some clips.
7. Round up a couple grenades.
8. Get a missile launcher with, uh, a couple missiles.

That’s it. You’re ready for war.

People keep calling, IM’ing, and emailing to see if I’m ever going to post again, so I thought I’d pop smoke for a few minutes.  I somehow let myself…nay, steered myself…into a situation where I’m chin deep in development work, so my free time to come on here and lob SCUDs at people has been minimal. 

With that in mind, here are a few things I’ve been thinking about:

1.  Andy sucks.  And by “sucks”, I mean “kicking my ass in our blogging bet.”  I still have a few late inning rallies planned, but it’s not looking good.  Never have two guys who have no desire to take on any client work expended so much energy in establishing a brandable consulting asset.  Andy and Rich also got a Miss Pac Man machine in their new offices.  Good times!

2.  Is Barry Bonds the most successful offline black hat?  This is kind of a debate within dorky Internet Marketing circles.  While Barry may be getting the most run now, I have to think Karl Rove or somebody at the deepest, darkest levels of global finance has done some Cheating Bastard stuff with much greater payoff than getting a large head, feet 3 sizes bigger than in college, and near universal hatred of everyone outside of the Bay Area.  Not that there’s anything wrong with that.

3.  Cameron Olthuis is taking a run at The Ten Figure Lifestyle.  He’s one of the good guys and I expect big things out of him.

4.  Someone asked if I was irked by Jason Calacanis’s remark of “these guys are actually pretty smart” as he closed the show I was guest on.  Not really.  We’ll sell my first major audience for a serious multiple over what he sold his first two, so that’s smart enough for me.  He also drives a car that is substantially slower than mine and, frankly, this makes me sad for JC even moreso than his Mahalo woes.  I don’t begrudge anyone who tries to make a living on the Internet and we have to respect the fact that he’s done so at a high level.  It’s damn hard work and he’s played some big games well.  That said, if there was a reality show where we were both given $10,000 and fake identities to go build the most profitable web audience, I go to sleep well knowing I could take that guy.

5.  With all due respect to Danny Sullivan, I don’t get the Sphinn thing.  At all.

6.  Here’s a little anecdotal research for you all to go endeavor upon.  We all know the real estate market is crashing pretty hard and worse days are ahead of it.  As someone who has substantial investment into specific real estate markets’ Internet plays, I’ve had to divert some of my resources.  Well, for the first time my dating life has led me in a good business direction.  All of the golddigging Realtor and mortgage skanks that once plagued my Treo are now heading back to school to get their Masters.  So, congrats to everyone spamming online education.  Should be a good run for you guys, especially as the job market softens and the .edu’s reap some of that bandwidth.

7.  Big domain name month for me.  Probably the first inflection point in my life as a domainer.  I’m selling one geo-name portfolio and I have one domain in the Domain Roundtable auction on the 15th that could go for a big number.  We’ll see where it ends up, but it looks like a little over 600% return in less than a year of accumulation.  That number would have been about 20%-50% bigger if I ever tried to cash flow those suckers.  I heart domaining.  I heart it a lot.

8.  I had gone something like 5 months without checking my Adsense account.  I saw the drips into my account every month, but I used to check my Adsense stats like a day trader on crystal meth.  Adsense Tweaker has to be a definitive level on the SEO Path, but I just could not care less about that income stream anymore.  If anything, it’s just a painful reminder that I should be seeking CPA or CPL offers for those sites. 

9.  Rand taking a run at Aviva Directory was maybe the all-time low at SEOmoz.  Maybe I breezed through it too quickly, but it came across a bit premeditated.  I wouldn’t say some of the SEOmoz client work on the social media side has exactly been squeaky clean either but, again, if I see another competitive webmaster out there trying to execute their model, I’m not going to go into Tattle Mode.  Unless, of course, it’s one of Andy’s sites.  Hell, I’ll start a dozen new Webmaster Central accounts to tattle on somebody of Hagans’ ilk.  Anyways, there were a million other ways for Rand to make that point and, as a veritable ambassador for our community, I guess I would have expected more.

10.  Rae Hoffman is on my IM list now and let’s just say I always knew there might be somebody who dropped more F-bombs than me, but I never expected it to be a woman.  I walk in your fucking shadow, Rae!

11.  I am still hiring for a ton of SEO, SEM, and spamming…err, marketing…positions in both San Francisco and Texas.  This is another request for resumes if you want to come work in some really exciting stuff.

Bonus Round:  Yes, Jessica Alba is single and, yes, for that I’ll always remember the Summer of 2007.  It’s the Summer of Opportunity!*

*And, if all goes well, the Summer of Restraining Order.