When Aaron Wall started in the search industry in 2003, he was an unknown entrepreneur. He taught himself search engine optimization and went on to write a book called SEO Book.

He sold his book over the Internet in the form of an instantly-downloadable ebook (in PDF form).

SEO Book became famous in SEO circles and online marketing circles. Although many entrepreneurs write ebooks, the difference with Aaron is that he created a business around his ebook. And he bootstrapped his business from a clean sheet of paper -- literally -- to what it is today.

Fast forward 5 years. Aaron Wall is now one of the premier voices in the field of search engine optimization (SEO) and search engine marketing. SEOBook has become a brand unto itself.

In the past year, SEOBook has evolved from an ebook sold for $79 each, into a training course and private subscriber community.

It's been fascinating to watch Aaron build his business, first from a distance, and then more recently as I've participated in his subscriber-only discussion forum. For a long time I've wanted to ask Aaron some questions about how he structured his business model, including the evolution of that business model from an ebook into a subscription community. This past week I got the chance.

What follows is Part One of my interview with Aaron Wall on the topic of online business models. I think you will find many helpful insights to grow an online business.

Question: When and how did you start your career on the Internet?

Aaron Wall: I created a small rant website and wanted to market it on virtually no capital. From that perspective search was an obvious channel to explore. I began taking notes on SEO tips I had read and what I had observed from looking at search results on a site that was not meant for anyone but me to read (I felt I was still too new to teach or sell).

Somehow a Greek artist named Gregory Christeas found the site and contacted me asking me to sell him SEO services. I refused for a bit, then said OK. His sites quickly ranked; he recommended friends to me, and thus I got started as a professional SEO.

Soon after, in November of 2003, Google did a major update called the Google Florida update. I wrote an article about that update which became popular. I went from being obscure to having more leads than I could possibly accommodate.

Question: At the time you started SEOBook, you chose an ebook business model. Many business professionals use consulting as their main business model, with information products like ebooks and print books as minor add-on products, or they give the ebooks away purely for marketing. What gave you the idea that you could actually make the ebook into a business?

Aaron Wall: On SEO forums I kept reading how print SEO books were all outdated, which made the ebook model seem appealing. I worked hard at branding, and was actively involved in forums, at conferences, and in blogging about the field. Those activities worked well at building perceived value, which led to a lot of sales.

Also, in the SEO industry, client work tends to be feast or famine, so I thought that packaging and selling information would create a more stable income stream.

It worked well, but about 2 years ago copyright theft issues, increasing complexity in the SEO trade, and a rapidly expanding customer list growing beyond 13,000 were pushing my business model (and sanity) to the limit. I decided to build a business model around offering a more interactive SEO training environment -- offering online modules and community forums.

By charging recurring payments it filtered out much of the lower end of the market while ensuring I was able to provide a deeper and more valuable service to the customers who cared to pay a premium for a higher level of service.

Question: If you had to pick one thing, what made the difference between SEOBook becoming successful and so many other online businesses that have had more modest success?

Aaron Wall: I would probably say that I work twice as long as most people do. But that also leads to many lucky deals -- great mentors have taken me under their wings and taught me. The cash flow has given me capital to reinvest in creating an array of useful SEO tools that I give away to build brand exposure. And a few years back I got sued in a lawsuit that gave me hundreds of thousands of dollars worth of marketing exposure.

Question: Late last year (2007) you changed your business model to a private subscriber community. What caused you to make that switch? Is the time of the ebook over?

Aaron Wall: I think the ebook model is dying.

Most marketing ebooks tend to be of low quality, so calling an offering an ebook is sort of like wrapping an information product in a coat of garbage - which is not good for building perceived value. :)

Producing and distributing how-to videos does not cost much money. The Web is interactive, search is powerful, and many cheap and/or open-source content management systems make it easy to build a powerful community site that offers community interaction, and can quickly change to match the wants and needs of members.

My friend Brian Clark created a great report called Teaching Sells, about how to run membership sites. One of the things he mentioned was that traditional information products like ebooks are like monologues, whereas online interactive learning environments create a dialog which allow customers to help shape your offering to create the products and services they would like to buy.

If I had to start from scratch today I would not sell an ebook, but the format worked great from 2004 to 2006.

Question: In your subscriber community, which has a vibrant discussion forum, you respond to nearly every question. So far you've made over 5,000 comments! How important is it in your community business model to participate actively and be accessible personally?

Aaron Wall: I think some of it comes down to me being a bit of a control freak, but at the core I want to provide a service I would enjoy paying for.

So many membership sites gain members through high affiliate commissions and group-wave hyped-up email list spamming, but then leave members in the cold after the check is cashed.

Information without guidance is of limited value. Everyone has questions. Simply being available to answer many of them ensures that you help transfer a lot of value to the customer.

And thus far we have been quite lucky to have so many great members and moderators participating in the forums. On a number of occasions I have answered a question only to erase my answer because while I was writing another member wrote a better answer. I learn something from the site everyday.

Many of the most popular things offered on our site (like our SEO for Firefox plug-in) were things that I wanted to use, which I had designed to my specs, and then shared them with others to gain feedback to further improve them. Open source is powerful as long as you are willing to listen to the feedback people give you.

And this concludes part one of my interview with Aaron Wall. Part two is even more interesting. Due to length, I decided to break up this article and publish it in two parts. Go to part two of the Aaron Wall interview.