About “geniuses”

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In the past month two people have spoken to me about someone being a "genius".  They referred to the (different people ) as being simply better than other people.  They spoke about them almost with a sense of awe.

With all the interviews I do on meetinnovators.com, I am exposed to smart "genius-like" people very frequently (we do one interview per week).  So I've started to get some strong feelings about "geniuses".

"Geniuses" are normal people just like you and me.  They just happened to have hit the things in my post about internet entrepreneurship.  That is, using their natural abilities in their market, filling a market need, passion for the market and focus.  And there's one more thing they have: good strategy.

But, its a tricky balance.  Once that good strategy goes away so does their success.  Strategy is critical. 

An example:  Microsoft's strategy isn't working as well today as it used to.  The stock is far below its levels of 2000.  Fake Steve Jobs has a great summary of why Microsoft is going downhill

But does this mean Bill Gates is or is not now a genius?  No, its just that his strategy isn't on track like it used to be.  Locking users into various platforms worked great in the 80's and 90's, and today it doesn't.  Google doesn't lock users in, ever, and people love it.

It takes a magical balance to get things to work properly.  Once you have it, you have to ride it as much as possible.  But it doesn't last forever.  And even if you get it, you still won't be a genius in my book.  You'll be a smart guy who got it right.

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Thoughts on entrepreneurship

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Alan Weiss says you need 3 things to succeed in business:

- be competent in the market

- for there to be a market need

- be passionate about the market

I think these three things are critical.  When I talk with entrepreneurs who are having problems, invariably one or two of these are missing.  And when I look at the things I've done that haven't worked, its due to the same reason.

I'll add one more thing:  you need to have absolute focus on what you're doing.  As an example, google generally has focus, Yahoo does not.  Bill Gross from Idealab didn't have focus; he spawned lots of fascinating business models, including what would become the revenue model for Google and yahoo, but didn't focus on it, so he couldn't take advantage of it.

I'm skeptical of guys who are running unfocused business models.  So even though I hear great things, I'm very curious to see if Ken Chan and Next Internet can really deliver.  I suspect they will end up overworked and stressed and have a lot of businesses which end up not being as great as they hoped.  Ken is effectively running an incubator with 6-8 companies simultaneously.  Ken is a nice guy and I talk to him quite often.  So I definitely look forward to being proven wrong!

The problem is that new value only surfaces for a short time.  Several entrepreneurs are likely working on the same problem at the same time.  If you don't have the right combination of competence/market need/passion/focus, one of the other guys will overtake you, you can't do it with a team of employees, no matter how well they are compensated.  The entrenpreneurs spark is critical.

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Shoplet.com spamming to amazon’s list?

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I just got an email sent by a company I never heard of before called "shoplet.com".  And it was sent to an email address I never have used *anywhere* before except with Amazon.com.  They have my first name, last name and email address (that I only registered with Amazon).

So is Amazon selling their customer list to third parties now?  Or did Shoplet.com obtain this through other means?

Given that I highly doubt Amazon would sell their list, I suspect shoplet got it via other means.  I hope they get caught.

UPDATE:  Amazon wrote back and it turns out they share email addresses with companies when you buy through Amazon marketplace.  I bought some tape or something via shoplet from Amazon.  Apparently this is against Amazon's terms and conditions and is being investigated.  Here's the specific part from Amazon's T&C (their customer service response was very thorough, btw):

"Contact between parties must be courteous and limited to transaction
details.  Facilitating inappropriate or unsolicited contact is a
violation of our Community Rules."

lling

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Is it safe to live in Medellin, Colombia?

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I just finished reading the book "Killing Pablo" by Mark Bowden.  Its the story of the hunt to take down Pablo Escobar, the Colombian druglord who was listed as the #10 most wealthy person in the world by Forbes magazine.  The book is an exciting read.

I was a bit astounded by the amount of violence described in the book however. Medellin was a really, really, really violent place.  It was almost a war zone.  Pablo Escobar had a Colombian presidential candidate killed, among thousands of others.

Yet, I lived in Medellin 5 years after Pablo Escobar was killed, in 1998 for almost a year!  And I lived to talk about it.  :-)

I'd finished my time at AIESEC International and didn't really want to return to Michigan State University to finish 2 subjects remaning for my undergrad degree.  I talked with the chair of my department and he offered for me to finish up in a Colombian university since I had spent some time there already.  So I enrolled at EAFIT university in Medellin and took some classes.

Reading the book and learning about just how much violence there was made me rethink if what I had done - I had no idea things had been so incredibly bad.  Brutal killings were happening on the streets of Medellin virtually daily in 1993.

While I like to travel to offbeat places, when I lived in Medellin I felt it was very safe.  The overall level of violence in the country had gone down dramatically.  People were travelling between major cities through 12 hour rides in buses, which meant that kidnapping was not happening.  And there was no violence in Medellin itself.  My rule of thumb is to always do what the locals tell me, even if its counter intuitive or things feel safe.  So I just hung out with the local people all the time, stayed in the cities, and didn't visit the Red Zones, which are dangerous parts of the country to the north, near Panama.  I actually met some Canadians who travelled all through the red zones by bus and said it was great fun travelling there and they had no problems at all.  I thought they were crazy for taking that kind of risk, the locals would never have done it.  I don't know any stats on the risk of travelling through the red zones, but my guess is that if you travelled through there on 100 trips, 99 times you would be safe, but one time you would be kidnapped.

I talked with my father about it yesterday (I'm at home in Tasmania for christmas right now) and it turned out he was pretty concerned that I had lived there.  He was worried that he'd get the cut off finger in the mail and have to pay a large kidnap ransom to get me out.

But it really just didn't feel unsafe.  At the time if you stayed in a large city like Medellin and didn't go out into the surrounding countryside, you were perfectly fine.  There wasn't bombings and there weren't people being killed.  Of all the thousands of people I met when I was there, I met one girl who's mother was a mayor in a surrounding area of Bogota and was killed as a result.  I didn't meet anyone else directly affected.  I would never have stayed there if I'd been seeing any kind of violence in the city.  There just wasn't anything any different to any other city.  I'm even hearing about carjackings in Sydney, Australia now, because people can't steal cars as much with good self-locking systems. 

Before I moved to the Dominican Republic I was considering moving back to Colombia instead since I knew the country well.  But people there told me how it was then (2001) unsafe to travel by bus between cities due to so much kidnapping and the only safe way to travel was by plane.  That was a pretty big sign for me that violence was on the increase and I decided not to go back to Colombia.  I also wanted to be closer to the USA for business travel.

I really enjoyed my time in Colombia, the colombians are some of the most hospitible people in the world.  If you get the opportunity to visit the country, I would recommend it.  Don't spend time in Bogota, its cold and not very interesting. Go to Pereira, Medellin and Cartagena, they are all very fun cities to visit.  Just make sure you ask the locals about the security situation and follow their advice to the letter.

So the local situation in Medellin is variable.  But if you go there at the right time, it will be safe to live there.  Just be careful and do what the locals tell you.

Gracias a mis amigos colombianos!

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Innovating at MeetInnovators

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MeetInnovators was used as an example at the Great Ideas Conference in Florida a week ago.  David Gammel, a leading consultant to the associations market was talking about different associations being created on the internet, and we were one of his examples, along with a screenshot.  I hadn't really thought of MeetInnovators that way, so its nice to be recognized.

 

You can see more about the conference here:

http://www.greatideasconference.org/orlando/2007/attendee_home.cfm

And the full slides are here: http://www.slideshare.net/highcontext/innovation-technology-and-risk

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How Gmail and other services can reduce false spam positives

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Ever had important mail dropped in the spam folder?

Its annoying, isn't it. 

My mail has normally recieved 70-80 spams/day.  In the last 2 weeks its increased to 500-1000/day.   I used to be able to filter these by hand, I no longer can do it.  This means if a mail accidently goes into my spam folder I will no longer catch it.

So I found a simple technique for dramatically reducing false spam positives.  I'd love to see this automated in gmail.

Gmail has the ability to search folders using the command label:<folder name>.  This also works for the spam folder.. label:spam

So, when you select it to search on the spam folder, you can put in critical keywords for you, such as your name, your business name, or any other keyword which will almost always identify you.  This will return a search showing the spam emails containing those keywords.  It will immediately identify false positives.

If you choose keywords which are not commonly used in spam AND are always represented in your important emails, you immediately will save critical emails from being lost.  In my case, spammers often know my first name, sometimes know my last name, but rarely use the two together.  Having both in the body of an email is definitely worth going into my inbox.  They do not know my company name, nor do they know my business name.

Right now I can run this query by hand.  What I'd love to see would be a google-news style alert based around keywords to automatically move mail from the spam folder into my inbox.

For extra points:  I'd love to have google do a contextual analysis (adsense-style) on my email to identify uncommon keywords for me from my email and automatically whitelist those messages too.

I know spam assassin and other services allow keyword whitelisting - but thats hard to do.  I also hear outlook can do it, I'm not sure how.  But I've never heard of it built into a mainstream web client like hotmail/yahoo/gmail. 

Even if you're not getting 1000 spams/day into your junkmail, you eventually will, trust me.  :-) Given the rate of spam growth, this method will probably become the only way to keep good mail out of the spam folder in time.

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Who will rule the world?

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My friend Scott Rewick  made a very interesting comment to me last week at the conference we were at in Los Angeles.  He said that things are changing on the internet.  In the past the more aggressive internet guys “ruled the world”.  And now things are changing, and in future guys like Frank Addante and Eben Pagan will rule the world.

He’s exactly right.  What has been happening over the past 10 years is that the most aggressive marketers with no ethics have been making a fortune online by ripping people off.  And as the internet becomes better organized and more able to route around these people, its starting to change.  It’s a slow change but it is finally happening and is great to see.

As a business this means is that you will have less chance of being scammed and more chance of seeing true value from your partners.  And as an end user, you will be able to trust more of the advertising and applications you see online.

An extreme example is the Olympic champion skiers in Australia (who I’m ashamed of), that made a fortune promoting spyware online.  Once people found out how they made their money there was a huge uproar.  This is finally becoming harder and harder to do.

If you’ve been ripping off your customers and/or partners in the past, its time to change, or you will be left behind  - we’re leaving you behind!  Eben made a trivially simple, yet profound comment at his seminar, which I’ve never heard anyone say before – he wants to work with people who care about their customers.  It sounds so minor, but still is a large percentage of internet business today (including where a lot of Google’s revenues currently come from).

Let me also be clear that this community is very different to the fluffy web2.0 people who don’t generate any revenue.  There has to be both VALUE and REVENUE.  That’s been quite hard for a lot of companies except for Google.  Finally its changing dramatically.

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Get Altitude Conference with Eben Pagan and Nordine Zouareg

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So last week I went to an awesome conference http://getaltitude.com/ run by my friend Eben Pagan.  It was internet marketing training, but far beyond what is currently on offer; Eben is very sophisticated in his thinking and shared a lot of his brilliance with the attendees.

He also had some very interesting attendees.  You can see below a picture of myself with a former Mr Universe, Nordine Zouareg.  I couldn’t take a normal photo with a Mr Universe, so I had to fight him.  :-)

IMG_0683 

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Why most of the CPA/Brokerage industry will not be around in 5 years.

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Many people currently involved in the CPA industry feel that this industry is rock solid and not likely to change anytime soon. They may be in for a shock. There are developments coming from technological, business and legal areas which are going to have huge ramifications on the industry. One of those just happened.

Specifically I am referring the brokerage fees that CPA networks and brokers charge (around 20%) to push offers to fill the internet demand for remnant inventory, and the inefficiencies and expenses that are put in place by having so many humans involved in making web advertising work. Over time these people will be replaced by technology, just as many industries have been overturned in the past by modernization causing blue collar workers to lose their jobs.

The three biggest sources of traffic for a typical network are:

a. Email marketing

b. Pay per click traffic

c. Web inventory such as banners and text links

We’ll talk about these one by one.

CPA search marketing

Pay per click marketing is changing. Google has just announced it is going to offer a CPA model. At the moment it is possible to make a decent living by being good at PPC arbitrage of CPA offers. This works right now because Google and Yahoo have focused their business model around selling clicks, rather than selling actions. They do this because this is their version of branded CPM advertising – they can generally get more for it.

However, this causes huge inefficiencies in the system, because it is time consuming and complicated to figure out how to drive lots of PPC traffic, enabling therefore arbitrage opportunities.

Since Google has now started offering a CPA system, and Yahoo certainly will, this will change dramatically. Advertisers will be able to add a bunch of creatives into the system, along with a list of keywords and a CPA they are willing to pay. The system will then automatically test the base keywords you inserted, along with an extra list of keywords google generated itself. It will test them all against the various creatives you made; keeping pricing under a certain CPA you have set. The entire system will be fully automated, and the current arbitrage which is possible today will go away. Google and Yahoo can make quite a lot of money by making this change, given the average network commissions and the money made by PPC arbitrage players. Google has already switched and it is just a matter of time before Yahoo does as well.

Notice I don’t mention clickfraud – I don’t believe this impacts Google and Yahoo moving to a CPA model.

Email marketing

Email marketing is an area which is going to change on two fronts. CANSPAM is a law with many loopholes, one that allows people to send as much mail as they want under certain (not very restrictive) limitations. A lot of mail is being sent which does not provide true value to consumers, its simply mass market monetization that is driving volume, a process I really disagree with. At some point a new email law will be passed which requires something like "at the time of sign up, the sending FROM address must be displayed clearly so the consumer knows where they will receive mail from". And brokering of email data will be exclusive only. You join one list, you unsubscribe from that list, period. It’s only a matter of time until something like this is legislated. Don’t think so? A few years ago the telemarketing industry was doing great – now its been decimated with the FTC’s do not call rules. This kind of thing can happen literally overnight – look at how the online gaming industry has been affected recently.

Secondly, deliverability is going to get much more difficult. Right now, most ESP’s can get mail delivered almost anywhere except major ISP’s such as Yahoo and Hotmail. Reputation management is a new trend in email which will change this dramatically. Reputation management means that every IP address which is sending email is certified by an independent third party as to how that IP address is being used to send mail. It provides a lot of data to email receivers on exactly how that IP address is being used. If you’re certified and your reputation is positive, a lot of your mail will automatically be delivered. If you’re not, you’ll get blocked as spam.

Right now reputation management is being used by the major ISPs to confirm mail delivery – but once this is rolled out more widely across internet mail servers, mail blocking will improve dramatically, and those who are sending bulk co-reg data will find their deliverability falling through the floor.

Behavioural targeting

Thirdly, behavioral targeting is going to get much better. This has been talked about in the past, and never seems to truly work properly but it is starting to get much better now. Networks like Blue Lithium and turn.com are making a lot of progress with targeting and collecting a lot of data on their userbase. Reports I hear about Blue Lithium in particular are that it performs extremely well.

Impressive things are being done on the advertiser side to take advantage of behavioural targeting. For example, Think Partnership has a new product called Second Bite which saves shopping cart abandoners. If you decided not to buy a product and half completed your shopping cart, Second Bite will work to get you to finish your purchase. Think Partnership is just starting to buy banner inventory to save the cart purchase. What this means is that you can be browsing the web and you’ll see a banner saying "hey – come back and finish your purchase on <onlinestore.com> and get a 10% discount". Once this kind of inventory is brokered out to major behavioural networks, no general interest CPA offer will be able to compete with the CPM’s they will be able to pay to save a purchase. Sure, this is a narrow application, but many more clever targeting applications of behavioural targeting will appear, increasing CPM’s across the board.

In addition, client side behavioral targeting will increase. By this I mean that users will allow more data to be mined from their computers locally, and some of it will be passed back to the network. In an extreme case, imagine if Microsoft made its Windows OS completely free – but in return for being able to mine behvioural data from your machine. This data would be fed back to online targeting networks such as Blue Lithium, to target web advertising more accurately. No popups or any other nasty applications would be included. That could be a huge value add for consumers – with free software AND better advertising. Yes, this has huge privacy implications, but over time these will be worked out – the ECPM increase from accurate targeting will be too valuable, and consumers will not mind their data being mined in aggregate.

That’s not to say that everything is bad. Some areas of the CPA and brokerage industry will continue to work well. These include:

1) Coupon and affiliate sites. Publishers that are actively going out and finding links to promote on their site for consumers will continue to make money and want to use CPA networks. The human interface in this instance provides tremendous value to consumers since the publishers truly understand what their market wants.

2) Newsletters. This will become the standard for email marketing as the more aggressive forms of email marketing will be made illegal. This is similar to coupon and affiliate sites where publishers will actively seek out links to target their audience due to their understanding of their market.

3) Web and chat spam is going to increase. Right now we’re seeing quite a bit of spam on myspace, and given the progress people are making on defeating CAPTCHA mechanisms, this will only increase. If the postings cannot be effectively blocked by computers, then more of it will be done. Unfortunately CPA networks will see more volume from various forms of aggressive webspam as time goes on.

The branding industry will have some impact on these, but it likely won’t change much from the way it is now – some inventory will be sold at higher ECPM’s for major brands, and the rest will be remnant inventory. Of course the big question is how high the ECPM’s can get for behavioural targeting and whether they can beat branded advertising.

Some people will read this article and be thinking to themselves "no, he’s wrong, this has always worked, and it will continue to work". The reality is that the internet marketing industry has been around for a very short time, and we really don’t have any data points to compare against long term. The right way to think about it is "where is the true value for consumers and advertisers". If your business model doesn’t provide true value to all stakeholders, then at some point what you are doing will stop working.

If your business model depends entirely on brokering, you may want to consider how you will operate in a few years time once the above become reality.

A good way to think about whether your business will be around in the future is simply by answering two questions:

1) By running my business, am I creating true value for all my stakeholders (customers, employees, consumers, partners)

And

2) Am I keeping up with the very latest trends that might affect my business, including industries that are not directly related to my daily focus?

For number 2, you can say you’re doing the right thing because you’re reading this. J

Does this mean that all CPA advertising and lead generation will go away? Of course not. These are very fundamental models and the backbone of internet commerce.

Just watch out if your business model is entirely focused around brokering remnant advertising. If this is your primary business, make sure you stay on top of your strategy. You don’t want your company to be made irrelevant like has happened with generations of blue collar workers in the past.

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Cat Empire - my new favourite band

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While my brother was here, he introduced me to this band from Australia called “Cat Empire”.  Its an awesome combination of australian pub rock, latin (they actually recorded one of their albums in Cuba!) and a bunch of other genres.  They’re just a bunch of 22 year old guys from Melbourne, but have been doing extremely well.  The song below is one of my favourites “Hello”

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Contact us:
info@tasmaniaconsulting.com
Phone: 305-433-8188
Fax: 305-428-2665
Mailing address:
8260 NW 14th St,
EPS-X23064,
Doral, FL, 33126-1502
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Adrian Bye
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