Welcome to Part Two of my interview with Aaron Wall, founder of SEOBook.com
The topic is online business models, with practical, street-smart insights into how entrepreneurs and small business owners can grow a business online, starting with no capital and just some ideas.
If you have not yet read Part One of my interview -- start there
. Otherwise, continue on below ...
Question: What role does your blog play in your new private-community business model?
Aaron Wall: As communities grow and age they grow via word of mouth. But when they are new you also need to keep marketing them to ensure they keep growing. For years I have been a firm believer that one of the cheapest forms of marketing is giving away free content.
Giving away content leads to citations on other trusted well read industry related sites.
The links from other sites and the archive of online content help the site rank well in search engines and get thousands of free visitors a day. Most of those people will not convert, but a few will, especially if you keep blogging and they learn to trust you more over time.
The blog also leads to a lot of media coverage and opportunities that would not exist if I were not a well-known blogger. Exposure and the credibility it brings allows you to charge for your services, and it also lets you stumble into many other good deals. I am not a fan of most JV (Editor's note: joint venture) partnership formats in the Internet marketing field, but I recently did a lot of work with another company in our space which should help create another nice revenue stream for both of us.
Question: How important is brand on the Web today?
Aaron Wall: Local substitution is the process where local merchants try to create something similar to a more expensive and higher quality good created elsewhere. That process has been happening for at least 1,000 years now.
With information every publisher is global, and cloning your knowledge is often as easy as copy and paste. Online many business models are based around advertising and automated networks. Whatever you are selling will work its way onto the Web for cheaper prices or free. Thus, it is hard to use price as a sustained competitive advantage.
A brand is defined in part by what people think of or how they feel when they hear it. While people can (and will) clone, rip off and steal your content, one of the few lasting competitive advantages that you have is brand. Brand is subjective and something that works at a higher level than most thieves do.
Brand and social relationships are what protect your business from the tragedy of the commons.
Question: Do you have a few quick tips for entrepreneurs who are bootstrapping, on how to build a brand inexpensively on the Web?
Aaron Wall: Start your business on a strong domain name that is easy to remember. If you think the name is clever but nobody else knows what it is then you might want to rethink that strategy. If you are starting from a limited budget it is usually best to be literal with your business name.
You are far better off building out your own domain than you would be if you built a business on a subdomain off of someone else's domain (Editor's example: having a page on MySpace.com). If you own your own domain name you are in control of your assets, but if you are stuck under someone else's domain it can be hard to move those assets to another location when your business strategy changes.
Make it easy for people to trust you and give them many ways to find you and interact with you. Blogging is so powerful because of its conversational nature, and because it makes it easy to subscribe to your thoughts.
If an industry seems hard to break into then try to grow by working on socially oriented marketing that strokes the egos of established players -- interview them, or conduct group surveys.
If you are in doubt with how much to share don't worry about sharing too much. You can always chose to share less down the road. If you share a lot of good information and help a lot of people that will help you gain social connections and the feedback needed to help evolve your business model.
Give people something to talk about so people keep running into your brand. A few weeks ago I had never heard of a niche news service, but then I saw someone I trust recommend them. And then I saw them cited again today by another resource I trust. Eventually when we see a resource cited enough times we build trust in it.
There is a lot of competition and a lot of choice on the Web. Trust, belief systems, value systems, and conversions are built over time through repeated exposure. Giving away unique and remarkable content is an easy way to build exposure, and is generally far more effective than traditional advertising.
Author Kevin Kelly wrote a post about artists needing 1,000 true fans to sustain their businesses. In a decade business will be a lot more like art. As you build a strong brand and get popular, figure out how to erect barriers (economic or otherwise) to help filter out time-consuming interactions with people who do not fit your desired market while ensuring you keep doing everything you can to reach out and connect with your true brand fans.
Question: If someone (say a consultant, copywriter, marketing professional or other creative/ knowledge worker) wanted to start an online business today, are there any online business models you would recommend exploring -- OR, alternatively, advise against?
Aaron Wall: I think it helps to have a diversity of income streams so you can afford to take risks with any of them and still be OK if stuff goes wrong.
Ad supported business models can work, but they are hard to make significant cash from unless one of the following is true:
-you are a thought leader in your industry and can sell ads directly to premium brand advertisers
-you have exposure in a big money industry like credit cards
-your site leverages a lot of consumer generated content
If you are new to the Web and run a publishing-based business model, rather than maximize earnings per pageview it helps to provide great content, a great user experience, and advertise your best content to help build mindshare and momentum in the network. After you have some momentum you can monetize more aggressively without much risk, but if you are too aggressive with monetization off the start then it may be virtually impossible to build enough momentum to create a strong business.
Low price point information products are probably a bad strategy because:
-a low price point shapes the perception of low value
-lower end customers are often far more needy than higher end customers
-as the network gets more competitive the needs of many people at the lower end of the market will be satisfied through the consumption of free information, products, and services
In Dan Ariely's Predictably Irrational he highlights that people are very adverse to loss, which is one of the reasons we are so attracted to "free." When something is free we fail to see some of the other costs associated with it like the time needed to consume it. Rather than offering a low-priced product and advertising it, a better strategy is to offer a free version and then offer premium products and services on top of it -- this is what makes open source software so powerful.
Question: Anything else you'd like to add, for entrepreneurs considering an online business model?
Aaron Wall: Search is becoming the primary way most people navigate the web. Make sure you do keyword research and look at the competition in the search results before picking product names and before you finish publishing content. It is crucial to get the keywords you want to rank for in your page titles.
If you are unsure of what business model you would like to explore, then consider starting a blog about your field. While you are learning the market you are establishing social connections and trust in the search engines. At any point in time you can leverage those assets to help promote your business strategy.
Thank you, Aaron, for the helpful interview.