Ahh…books are good. Chapters, borders, indigo, barnes and noble and all bookshops are good. Amazon.com too. Heck, even eBay is a good bookshop sometimes (I have to drop ebay into every blog entry I make .

Yesterday before and after meeting up with a friend in downtown Toronto I went to the Chapters in the eaton centre shopping mall. I like going to the super bookshops for two reasons - they usually have a Starbucks, and they allow people to just sit around and read books they haven’t bought. It’s sort of like a library for new books except you can’t leave with them (that would be stealing). With Starbucks there too it’s just the perfect place for a person like me to read, sit in front of a laptop and look busy while watching people, just chill and basically loiter around. Nice.

I usually head to the business books section and see if I can find a few neat entrepreneur or business biography books. I’m more into the anecdotal story type books, not the boring textbooks on sales, marketing, donald trump…etc etc. Sometimes I stumble across a book small enough that I can finish it in an hour or two. The less-than-hundred-pages-but-I’d-never-spend-$20-on type books. I read ‘who moved my cheese‘ in a couple of hours at Borders in Brisbane City once.

This time I picked up a new book, ‘Lucky or Smart? : Secrets to an Entrepreneurial Life‘ by Bo Peabody. Bo started Tripod, one of the first services I ever used on the Internet when I first went looking to build a website. For those that don’t know, Tripod offers website hosting and a web site building tool for people that don’t know HTML. At least that’s what they did back in 99 when I looked them up. I actually ended going with one of their rivals, GeoCities (which later was purchased by Yahoo!) to host and build my first ever website. Needless to say Bo became quite rich when Tripod was purchased by Lycos.

Bo’s book was an interesting read. Very light but it had a few noteworthy lessons for entrepreneurs that are worth recounting here.

1. Beware the EGO. Watch your own ego and learn to work with other egos. In other words, don’t take things personally.

2. Be courteous in all business dealings, even if other people are being bastards. You never know when courteous actions will come back to benefit you in the future.

3. Don’t believe the hype. Don’t over digest news and media about the industry you are interested in. Focus on what you do and don’t change it to try and catch on to the latest thing as reported in the press. The press is two months old anyway.

And his main point - be smart enough to know when you are lucky rather than smart. Often your friends, family, peer groups, the media and everyone around you will call you a genius when something you do is successful. The reality could be that you just happened to do something at the right time and right place. A good entrepreneur knows how to take action to create opportunities to become lucky. Then when luck strikes he uses that awareness to build on it.

Yaro Starak
Young Entrepreneur

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Were you a little too slow to get your idea out there? Perhaps you thought of something great but someone else thought of it too and executed it just that little bit better than you did. Whatever the reason if at first you don’t succeed try and use another person’s success to make your own!

I may sound like a broken record, but again I mention ‘the perfect store‘ by Adam Cohen, the story of ebay. In the book there were a lot of little side stories about events not directly part of eBay but influenced by the online auction site. These little side stories provided some of the most interesting content of the book and help to illustrate my point for this blog entry.

What do ShippingSupply.com, AuctionWatch and the Online Traders Web Alliance (OTWA) have in common? They are all enterprises that were created as a result of eBay.

ShippingSupply.com was started by your normal everyday eBay trader after realising that auctioning shipping supplies was highly profitable. How did they find out - they did an auction for shipping supplies after buying too much for their other auctions. They sold a stupid amount of supplies and decided to focus on that area instead. They opened a warehouse and eventually the whole family got involved. If you take a look at the website too you will notice that in this case, simplicity seems to be working!

The other two sites I mentioned are auction sub-communities that developed as a result of needing third-party locations to discuss online auctions, in particular eBay, without eBay being able to control the conversation like they can in their own community. Eventually these community sites grew real big and hey presto you have enough people for a web business (and to crash your servers too!). You can read more about the story behind these projects in the book.

Alternatively if your idea happens to have already been implemented by multiple online businesses, perhaps consider creating a piece of aggregating software. CheapFlights is a website that allows you to search many websites at once for discount travel. Rather than compete and offer the flights they simply collect all the data and present it to surfers in once place. People can then find the cheapest flights without having to visit multiple websites. CheapFlights makes revenue on a commission or per visitor basis that they send to the travel agents and airline sites.

There is no reason you can’t apply this principle to many other niche industries that may presently have a lot of competitors. Electronics? Beauty supplies? Hotel Accommodation? Used Cars? You can also go for a niche to suit your own marketplace or interests. Again, if you don’t have the skills to build the technology there are plenty of freelancers out there that can build it for you - think Elance.

So the moral of the story is - if there is a community you belong to or a service or product you use or you know of a very successful business and you can’t niche your market to compete then perhaps consider working to take advantage of their success. Think about what their customers purchase and try and establish a support service or product to meet their needs.

Yaro Starak
BetterEdit Manager

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“…(he) showed the company the immense traffic Nullsoft was getting to its site as people were downloading Winamp…(He) returned to Frankel (the creator of Winamp) with a six-month advertising contract…and a check for $300,000.”

I’m reading another Internet business book at the moment (yes I read a lot of entrepreneur books), ‘all the rave - The Rise and Fall of Shawn Fanning’s Napster‘ by Joseph Menn. The paraphrased quote above comes from a brief section in the book about Winamp, the extremely popular shareware MP3 player. Frankel, the fellow that built the software and distributed it on his website didn’t want to run it as a business but a mate came to him suggesting he should. He told his friend to go see what he could do and he came back with a cheque for advertising worth $300,000. Nice. That would make for a good day.

From there on Winamp went on to be a succesful business and is still the leading MP3 player on the market today. This story demonstrates the amazing opportunity there is on the Internet, even if you aren’t looking for it. At the time MP3 was a technology that was taking over the world. Winamp was a geek’s little piece of software that he gave away to others for free because he could. The software was simple and met a rising need, word spread, traffic skyrocketed and a $300k cheque came in out of the blue.

The best bit about this story is that anyone can replicate it if they determine (or guess) a trend for a mass market need before it happens. The Internet, and Internet technology, is going to continue to evolve. There will be another MP3 like revolution. In fact there will be many. Some will be huge (think about movies - when will there be a MP3-like encoding for movie files? - the 3MB full length film, I’d download that!) others will be in a smaller market niche. Some are happening right now and others are in development for tomorrow.

All you need to do is think of what will catch on, develop a piece of software or a website or even just register the .com (mp3.com anyone?) before the trend hits or anyone else does, and you could have a nice big cheque too!

Okay, easier said than done of course, otherwise everyone would be doing it. However it doesn’t hurt to stay abreast of trends in technology and keep your ear to the floor for the next big thing. And remember, if you can dream it, someone else out there can build it for you, so don’t let a lack of technological skills hold you back.

Yaro Starak
BetterEdit Manager

Comments(0)

I’m still reading ‘the perfect store‘ by Adam Cohen, which tells the story of eBay. I really must commend the author for his work on this book. It’s a very detailed, methodical book so far, and he doesn’t brush over anything. I hate it when a business biography glosses over important periods in the growth of a business. So far I’ve read up to the point investors were first brought in (and not because they needed cash, they needed the professionalism of a VC) however it’s the stages leading up to this point that have really interested me.

The founder of eBay, Pierre Omidyar, was a not a typical MBA educated, suit wearing, business entrepreneur. Sure, he was already a millionaire thanks to his share in another successful dot com, but eBay wasn’t developed with venture capital or any start up funding at all. Ebay’s growth was organic, natural, and was not given any advantages that a millionaire founder might be inclined to provide by using his own capital. It was the story of a hobby site gone crazy, and it was managed like that in the early days too.

Ebay’s culture was very relaxed. No suits, a small, messy office, not many systems (envelopes with auction fee payments were piling up in bags all over the place), one guy working the code on the website (which was crashing due too much load), another person handling customer support over email and forums, and another opening envelopes and recording payments. It was an absolute mess and they were buckling under the pressure of their own popularity.

A word of warning, if you are running an Internet business in the early stages (like me) and you are easily excited by thinking about your business, don’t read this book before going to bed. I cannot get to sleep if I read this book as I hit the sack. My mind clicks over, every paragraph inspires me and my mind launches into a overdrive of business thoughts and ideas. It’s not a bad thing mind you. This book in fact made me realise a very important idea regarding my own business, unfortunately I was so buzzed by the idea, that I was busy scribbling down notes at 3am in the morning and didn’t get a lot of sleep. Stick to fairy tales and counting sheep before bed if you want a good rest.

During the early stages eBay’s founders were always worried that a big Internet business like AOL would realise the potential for auctions and utilise their traffic and market power to compete eBay away. In fact they were so worried about it, their initial business plan focussed on a long term goal of selling online auction software and merely use eBay as a very good showcase tool. They figured that eBay wouldn’t enjoy it’s current growth or market dominance for much longer.

There were a few competitors at the time, however the only major rival, at least one that was receiving some reasonable press coverage, was a business that auctioned it’s own goods. A one-to-many principle if you remember from my last post. Basically they were a retailer that auctioned off products. On the books they had more significant revenues than eBay at the time, but that was because they recouped the total price of each item, and not just a small percentage fee as eBay did.

Regardless of competitors eBay had one clear advantage over every other auction site, and it was this advantage that really made the difference. Ebay had a community. A very loyal group of people were not just using eBay for auctions, everyday they actively participated and interacted on the eBay forums. Omidyar had originally instigated the forums for auction feedback purposes and also as a means for more experienced users to help out those new to eBay, again leveraging the many-to-many principle. Over time the forums grew to a huge social community which gave people a sense of belonging. Whenever new features were under development eBay staff always checked with the community for feedback. It was a very tight family.

Ebay had one thing I’m dying to replicate - outstanding word of mouth. Nowadays eBay uses all kinds of advertising methods like Google adwords, publicity, and other media advertising, but back then they didn’t advertise at all. They didn’t spend a dime - they were too busy trying to cope with how many people were already using the site - can you imagine that! The only advertising done, and it was free, was when Omidyar first launched his hand-coded hobby website (originally called ‘AuctionWeb’) - he made a few posts on newsgroups.

Then it hit me. My first real success online was a website I started much in the same manner as eBay, as a hobby. It’s called MTGParadise, or Magic: The Gathering Paradise [www.mtgparadise.com]. I managed that site for seven years. I built it back in my early days at university, in 1998, as a place to write about my hobby, a collectable card game called Magic (it was my life back then). It started off as a local website, then a national website, it had name changes, URL changes, design changes and I spent countless hours working on it. For a long time it stayed a small hobby site. It never was huge because it was not interactive, mostly a collection of articles, card lists and news.

One day I installed a free forum. It didn’t get much use at first, but eventually people started to trade cards and just hang out on it. My niche was Australia. There were already a few very popular international Magic sites, but mine was the only significant Australian site. Adding that forum was the smartest thing I ever did. MTGParadise became THE place for Australians to trade cards, talk strategy and indulge in their hobby. By 2003 the site ballooned and was getting 1000-1500 unique visitors per day and 300,000 - 400,000 impressions per month.

During that time I did no paid advertising. I swapped links with other sites, posted in newsgroups and mailing lists but generally just kept the place going. It was a lot like running a business, managing staff, writers, moderators, generating new content and keeping technical things running smooth. The community was tangible. The word of mouth was golden. People would say “I traded on Paradise”.

My fascination with the card game disappeared but I kept the site going for many years after. Just last year I decided I should move on and pass the site on to people that were still actively involved with the game. I sold the site in 2004.

Why did that site succeed? Why did eBay succeed? The community. The stickiness, the sense of belonging each user experiences. Wrap that with an addictive feature (eBay: auctions, MTGParadise: trading cards) and you have a recipe for good word of mouth.

Now why haven’t I attempted to replicate this with my current business?

Yaro Starak
BetterEdit Manager

Comments(1)

I’ve started to read ‘the perfect store‘ by Adam Cohen, which is the story of eBay. I’ve wanted to read this particular story for a long time. I LOVE the eBay business model. It’s such a perfect online business. So simple. So well targeted. It appeals to an aspect of human nature, our desire to trade, and makes a profit doing it. Brilliant. I wish I thought of it!

I enjoy reading stories that start with some geek, sitting at a computer, probably in a dark room like a parent’s basement or a dorm at university. He has an idea, has the geek skills to code a website for it and builds a hobby site. The website goes huge, a few months later it’s a multimillion dollar business (or in eBay’s case, multi-billion dollar) and bam, Internet folklore. Love it.

I like these stories because I want it to happen to me. I want to have a business story worth telling and I want to create wealth from something I built. Maybe not quite on eBay’s scale, that’s a very unique situation and a stupid amount of money, way beyond my targets, but it’s very inspiring nonetheless. I feel a sense of empathy with these geeks, heck I am pretty much a geek too (or is that nerd…what’s the difference again?), but without the amazing coding skills. I’d like a little glory with financial independence thrown in, wouldn’t you?

Often I look at my financial figures and I realise how much work equals how much revenue and profit. I start to think about being really rich. I’m very down-to-earth and I am capable of being happy with an average income, but like most people, I dream of more. I think of business models that really have the capacity to skyrocket profits. Something that if it caught on, could grow without my labour growing proportionally with it.

My current business model is good and lends it self to growth without the need for ongoing expensive infrastructure or staffing costs. At a certain point in the (hopefully) near future I can pay someone to do my role and just keeping adding more freelance staff to handle workloads. Right at the start of the eBay story however I read something that hit the nail on the head in terms of what Internet business model should be implemented to create something special. And eBay’s founder got this right (in fact it was his objective) from the word go.

He created an entity which brought suppliers and customers together and where demand and supply determined price. A perfect market…almost. To make a profit eBay scrapped a little money from each transaction. It’s the oldest story in the book - the middle man reaping profits off the supply chain. Throw in the scalability of the Internet, first mover advantage and you have a damn good business.

Ebay’s founder noted that business models that work on the many-to-many (eBay’s buyers and sellers) concept are much more powerful than the one-to-many concept (Amazon.com’s one online centralised store selling to many customers). This statement really hit me hard. It’s something I’ve been aiming towards when I think about new business ideas. It was written so simply in the book while I had cloudy ideas in my mind. It was nice to have the clarity. As usual simplicity works.

Elance is another good example of a successful many-to-many business. It links freelancers with clients. Both suppliers (freelancers) and customers interact in a web community. It can grow virtually infinitely with technology handling the service framework. People bring in more people.

Ebay and Elance have gone on to create a business within a business. Apparently more than 100,000 people now run eBay businesses to make a living. Just last night I saw an infomercial selling a course to learn how to start an eBay business. How good is that. That infomercial is creating more sellers and more buyers for eBay. That’s free TV advertising for eBay. Nice.

The challenge is to come up with the next many-to-many business and be an eBay too.

Yaro Starak
BetterEdit Manager

Comments(2)

My left ear is on the pillow and I’m thinking about my short term future. It’s 2am, not an unusual time for me to be away awake as I’ve settled into an 11:30am - 2am waking day here in Toronto. Normally though I can lie down and start reading a book, shuffle 1 or 2 pages and I’m gone, sleep takes me quickly. The last few nights I haven’t succumbed to slumber without a lot of tossing and turning. It’s my brain’s fault.

I roll over onto a combined shoulder/back position wary of the mornings I’ve woken up with a sore neck from sleeping on my stomach. Why is it that it feels best to sleep on your stomach but your head and neck just don’t work that way? Sleeping on your back is better for the body but I never can stay positioned like that for long without a strong desire to switch to tummy-mode.

I roll over onto my right ear and the thoughts keep coming. I can’t stop thinking about what I’m doing now, what I’m doing in the short term future and where I want to be in the further away future of my late twenties. In the present I’m at the whims of my decisions. I have no commitment but to myself. My mind changes often and consequently my plans do as well.

My thoughts turn to business. I’m excited about my business future, very excited. I have had no jobs the last week, not very encouraging, but not unusual for January. It’s given me the time to work on marketing and I’ve spent the last week tweaking and adding to the website. It’s some of my most satisfying work.

I face a multitude of options and I’m not sure which way to go.

I’m in Canada to promote BetterEdit. I’ve been putting out posters at the three campuses I’ve targeted, once every two weeks per campus. I’m going to keep at it for at least a full semester as a test run. That means I’m here until at least early April. I’m not certain postering is as effective in Toronto as Australia. The market is more competitive and my posters are gone from nearly every board I visit when I go to replenish. I don’t know how long they stay up.

In January we had two new Canadian clients, one business and one student. Both responded positively, the business client having already repeated. January webstats were great, in particular a 50% ‘added to favourites’ result which I hope means a lot of new Canadian clients are bookmarking in anticipation of using the service later in semester when their assignments are due. Time will answer that question.

I have options here. I can keep postering myself, by far the most cost efficient method. Alternatively I can hire a business to put the posters out for me. Why would I hire a company to do it?

PROS

It gives me time. I can head out to some of the further away campuses and put some posters out there (there are at least another 5 campuses within 1.5 hour drive radius of me).

I can test out how good postering business are. Maybe they know about boards I don’t. Maybe they are better at it than me and will do telephone poles and outdoor places I don’t currently. Then I will know if I can have them manage my campaign in Canada after I return to Australia.

CONS

It costs a bunch to hire a postering business. Probably $1000 per month just to do the three Toronto campuses I do now. If I had cash, I do all of Canada and all of America (100k a year should do it - why would I need a business if I had 100k to put towards posters!).

I could be wasting my money - maybe the market is too saturated (both in posters and editing services), maybe there isn’t a market for editing, maybe the poster company does a lousy job.

More options

Or…I can hire the poster company to do other places, like Vancouver, Montreal or the campuses just outside Toronto that I’ve been thinking about driving to. Where do I spend money? How much? Or should I not worry about hiring a poster business until next semester in Canada which isn’t until September and just keep doing it myself.

Or…Forget Canada and go back and focus on postering Australia. Get into Sydney and Melbourne properly. I have a good lead on a poster distribution system for the east coast of Australia which could be a perfect solution. Although at what price? I don’t know yet.

******

I roll over back on to my back and try to focus on sleep. It doesn’t last long.

I’ve been thinking too much. It’s not just my current business as it is now. I have other ideas I want to try. I want to develop a completely automated business model for editing where the client and editor work directly without me as middle man. It’d be completely turn-key and work 100% online. There’s a lot involved and I need to hire a web developer to do it because it’s technically way beyond my skills.

I have a friend that has just returned from a year long round the world trip. He’s great with web development and isn’t sure what he wants to do now. He’s talked about starting his own business, maybe. He’s reading entrepreneurship books. I’ve asked if he wants to work with me for a month or two on web development for BetterEdit. He hasn’t responded yet but I’m hopeful. He has strong technical abilities and can build a lot of online systems I’ve been dreaming about. I’d appreciate the human company while I work too. However I can’t really afford it and I’m not keen to dip into savings, although if business in the coming months were as good as last semester then the profits can go to his salary so I can afford it. There’s no reason to think it won’t be, but you never know. It’s investing in the future of the business afterall…that’s smart.

Maybe he’s not interested though. Should I hire someone else then? How can I find someone I trust and that has the skills I’m looking for?

Maybe I should get back to Australia sooner. Get to work on business there. Get web systems in place.

******

I roll over onto my left ear again. It feels fresh for a second and I feel a little more relaxed. Maybe I can sleep now.

I have another plan. I want to start a poster distribution business in Australia. I can handle Brisbane to start with, get it established and then move to Sydney, repeat the process and then move to Melbourne and repeat again. Brisbane would be a great test market and I can do it all myself to start with. Just put up a few posters, contact potential advertisers, easy enough. I need to work on the website. My new web development employee could work on that. The synergy with BetterEdit is great too. I establish a new business and also a way to advertise BetterEdit around Australia. But I’m not certain it will work, but damn I’d love to try it!

But I’ve done this before. I started an English school and spent a lot of money, time and energy only to close it down because BetterEdit was doing well and deserved my focus. Remember the rule - milk your *successful* business for all it’s worth before starting something else. Would I be repeating the same mistake starting a postering business? Is it a mistake to divert time away from BetterEdit onto another project? But these projects seem so interlinked, although the English school was too…and hey, it’s not like I’m that productive now with BetterEdit. I don’t work hard on the business and that’s the way I like it. I try to work smart, do the things that work and put out small bursts of energy. Live the 80/20 way right. I’m not lazy, I’m smart! But there is always more you can do, always things you can tweak.

******

I open my eyes, turn the light on and start reading.

I’ve just finished reading ‘The five people you meet in heaven‘ by Mitch Albom, the same author who wrote ‘Tuesday’s with Morrie‘. I cried some and learnt so much reading ‘Tuesday’s with Morrie’ but his other book hasn’t impressed me. It’s just left me feeling sad about life.

I also just finished reading the story of Starbucks, ‘Pour Your Heart into It: How Starbucks Built a Company One Cup at a Time‘, as told by the CEO. It was an interesting read, made me think more about business (I really shouldn’t read these types of books before bed, but I do), although it tended to be a bit too much of a glorification of the achievements of the author and his business. A lot of ego came through the book, but I know that is the sort of ego and drive is part of why the author achieved his business success. I’ve seen it before, Sarino Russo also had it. It’s a one minded drive. It’s powerful, inspiring, but a little scary too. It powers corporate greed and gives people the strength to make positive change. Do I have this sort of drive? Can I make a business that successful? Do I even want to? I don’t think I do. But then what do I want…

I’m finishing the third book that I purchased along with the above books titled ‘What do I want to do with my life‘ by Po Bronson. It’s about people finding purpose in their lives and recounts different stories from individuals about their careers, life choices, etc. It’s been a good read, sometimes a bit boring, but often a tidbit of stimulation pops up and makes me think and reflect. Most people will find someone in this book they can relate to. If nothing else they will feel comforted if they don’t know what they are doing or don’t feel right with their own life. Personally ‘The Alchemist‘, by Paulo Coelho did more for my life’s journey than Po’s book has, but more on a spiritual level which is always more powerful because of the emotions involved. I have had a few practical insights as a result of reading other people’s stories and I don’t feel depressed at all about my situation, just confused with all the options - all good options.

I’d like to surround myself with people that share the same drives as me. In his book Po talks about an office/building space that he rented along with other aspiring writers, actors, and other creative bohemian types. Their shared goals, similar direction in life and personal philosophies served to reinforce their career paths and provided a comfortable working environment. Like minded people tend to reinforce your choices because they would make them too. They can also help each other when they are lost. The shared frame of reference gives you genuine insights into problems others face because you have faced them in your life too.

I’d like to create a place for entrepreneurs. I had an idea in the past of getting an office space to be shared by start up businesses. Those that couldn’t afford an office individually could join in with a collective of entrepreneurs and share the space and costs. It would be difficult to organise, but I’d like to try. Another thing on the to-do list for when I return home.

******

I should return home. I have so much to do. But I’ve only just scratched the surface of Toronto. I have only met a few people and I’d like to see more, meet more locals, do more things. But business things are what really excite me and I should be in Brisbane for that. Although if a girl came along I’d probably do another 360 degrees and change my mind again. I’m easily swayed when my heart gets involved.

******

I switch off the light and roll over onto my stomach. Right now, I feel comfortable and sleepy. I think I’ll stick with right now, for now…

Yaro Starak
BetterEdit Manager

Comments(6)

In my first brief history post I gave a very condensed history of how I originally got the idea for my business and then took the steps to implement it. A few months after starting the business I left it alone to stagnate for a year or two while I did some personal growth things like finish university, travel to Tasmania and break up with a girlfriend. When I finally came back to my business I was starting with the infrastructure in place, a few thousand dollars in savings and a desire (or lack of) to never get a full time day job. I should also point out that most of my friends where in full time day jobs just out of university and earning nice graduate salaries. My dad was very suggestive that I get a normal job first, get some experience and then maybe do my own thing. Alas, my desire to control my own timetable dictated that I didn’t want to be ANYWHERE before 9am, especially working for someone else, so I decided working on BetterEdit was worth a shot for at least the freedom of choice it allowed me regarding my working hours. Let’s not forget I totally believed in the idea as well, so I had to give it a proper shot.

The government lends a hand

One day I was driving in the car with my dad and I was talking about how I knew if I could just get the word out there my business would be successful. If I had more money for advertising I could try many different things. My dad started talking about a friend of his that was getting paid to write a book. I asked my dad if I could speak to this guy. One phone call later and I had learnt about the New Enterprise Incentives Scheme (NEIS) program. The NEIS program is a government funded scheme that pays ‘life support’ income to you every two weeks for a year while you run your business. I went to an information session, and two months later, having written a proper business plan, fronted at a panel interview and having been assigned a nice business mentor I was on the scheme for a year. I received just under $200 per week, which technically I was supposed to use to support me whilst I spent time running my business, but since I was still living at home with minimal expenses I could use the money towards marketing BetterEdit.com. If you are an Australian and you would like to learn more about the NEIS program try googling for it. If you are not an Australian I suggest you hunt around for similar business start-up grants or sponsorship programs as they can provide much needed cash and business mentoring.

The NEIS program did two things for me, it gave me a little cashflow to play with and more importantly, it psychologically confirmed that I was running my business full time and taking it seriously. I can’t stress how important that second point was for me. I now had justification to work full time towards making my business successful. I was getting paid to do it. With a new found determination I went to work to get my business off the ground.

Marketing an online business

How do you market an online proofreading and editing business? This is a tough question. I’m still not sure today how best to do this but back a few years ago I had tested only one method, putting up posters at university campuses. I knew this worked to a degree, but being a good business student I had a lot more ideas to try, and try I did!

Before I go on and tell you what I did that worked and what I tried that didn’t I should point out that everything I did was within my own means. The main factor that dictates success for a business is the entrepreneur behind the business. I chose methods of marketing that fit my personality, which I was prepared to try. Some more outgoing people may consider more outlandish publicity stunts. You can read Richard Branson’s autobiography for some good examples of ballsy things a young entrepreneur can do.

Buying ads in print magazines

Over the next twelve months I tried the following methods to advertise (this is not in sequential order by the way - it’s all a bit of a blur now):

I collected all the magazines at the newsagent that targeted writers. There weren’t many but I figured this would be a good way to reach the author/writer market all around the world. I collected all the ad rates for each magazine. Unfortunately it was just too expensive to do a traditional advertisement but a few magazines had classified sections which where under $100 to advertise in so I tested this method. One American magazine I put in for three issues, two others for one issue. The result, not one client initially, but fast forward about six months and I got one query. Not a good start.

I decided to focus only on the student market and would leave the author and business editing markets for a while.

I came across a business in Australia that specialised in advertising in campus newspapers. They acted as an agent for a bunch of the leading student produced publications at the biggest universities around Australia. I decided to spend up big on this one which was a mistake. I should have tested smaller. I can’t remember how much was spent but around $1000-$2000 to target a lot of campuses. I can’t remember getting one client from this method but my tracking referrals wasn’t as good back then. Needless to say the ROI was poor. I came to the conclusion that the people that read student papers were not my market. I don’t think international students struggling with English will pick up a campus magazine. More often these publications serve as an outlet for budding journalists and activists to have a rant about whatever issue was pissing them off at the time. Political wannabes, union members and social activists were reading these publications, certainly not my target market.

University student clubs and societies

I decided that not only was I going to target students, it was international students that really were my primary marketplace. The niche was getting smaller.

How do you reach international students? I thought international student clubs and societies, of which there are many at every university, were worth trying. You’d think it would be easy to sponsor clubs and societies at universities. They always seem to be running an event so I expected them to be eager to contact me after I tempted them with the sponsorship carrot. It wasn’t the case though. Initially I hit resistance from student unions to even just get the contact details for clubs and when I finally did locate email addresses or leave notes in pigeon holes the response was poor. It turned out that the small clubs were so disorganised that they could never get their act together to work with me and the big clubs were so professional I had to spend $500 to get even the tiniest amount of exposure.

I spent $500 in cash and prize sponsorship to sponsor a huge talent competition run by a group of Taiwanese clubs. This let me run a PowerPoint slide along with the other sponsors at the event. My slide was shown about every ten minutes for about ten seconds during the whole show on two large projectors. My banner was also listed as a sponsor of the event in the event timetable brochure. The net result: three queries and one job. Again this was very bad ROI.

During this time I also arranged to have little ads in email newsletters sent to various clubs and had flyers distributed in welcome bags during orientation week. Neither of these methods proved very fruitful.

Free publicity using press releases

This is a sample of the initiatives I tried that in my mind failed. I had more success in terms of ROI when I managed to get some free publicity in a local newspaper and in a small pocketsized Internet magazine. I was actually surprised at how easy it was to arrange and it only cost me time.

As I wrote about in my first brief history post, Geoff Cook used his story as a tool for free publicity. A young person running an Internet business from his dormroom at Harvard during the dotcom boom was something interesting and helped him get unbelievable free coverage that literally pushed the awareness of his business to a global scale. I didn’t expect that, but I could certainly leverage my age as a story.

I had recently made it to the top 100 finalist round of a fairly well known youth business plan competition called the Nescafe BigBreak. Whilst I didn’t get to the winners stage where I could compete for cash, I thought it was a good selling point and something I could use for publicity. I wrote out a small press release highlighting my age, that I was a young person starting an Internet business and that I had recently been a finalist in a national youth business competition. I tried to make it as easy as I could for a journalist to use my story and emailed off three different sized press releases and some media captures of my business logo and website. I sent it off to the editors and journalists of my local papers and Internet related magazines. Two responded positively and I got a feature article in the North West News and NetGuide magazine.

Posters have always provided the best ROI

During the time I experimented with different marketing methods I never stopped putting out posters every week. I made sure that each campus had a fresh run of posters at least every three weeks (I planned for every two but I got lazy). Most of the jobs were coming from posters or repeat clients that had either heard from a friend that had used our service or seen a poster. Since postering cost me about $0.04 a poster and a little labour and time, it was providing much better ROI than any other method I tried. Whilst walking around campuses putting up posters was becoming very tiring and I dreamed of the day I could hire someone to do it for me, it was very good for me physically too. The exercise and opportunity to get away from the computer and be outdoors was refreshing my mind. Often I came up with more ideas while walking around a campus. The exercise and ‘meditation’ of doing something repetitive and mundane was helping me be more productive and ultimately helping my business.

Today I continue to experiment with many different promotional methods and in particular have started to pick up my online marketing methods. I post in forums and newsgroups. I write press releases and work on my website copy, link exchanges and SEO. I experiment and use trial and error mixed with intuition. It’s ongoing process that will continue as long as my business exists. Even this blog is a promotional tool.

If you want to read more about my current day-to-day marketing efforts (I encourage you to learn from my mistakes) then please bookmark my blog.

Yaro Starak
BetterEdit Manager

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I’ve started to spend some time trawling around the net looking for other individuals writing blogs about entrepreneurship. In particular I look for the more personal individual stories as opposed to “business lessons” that the big sites churn out day after day.

A friend of mine that runs an Internet marketing business, Will Swayne, has a blog that is about online marketing and publishes a lot of articles on this topic. I took a look at his links to other blogs and started reading Bnoopy - An entrepreneurship blog (love the name - it’s just fun to say Bnoopy).

One entry included a fantastic quote from Admiral Jim Stockdale which was used to explain the Stockdale Paradox. This was the first time I had heard about it, but to cut a long story short, this soldier survived for 8 years in a POW camp where he was constantly tortured. His methodology or cognitive thought process that kept him alive is the paradox. Here is the quote:

“You must never confuse faith that you will prevail in the end - which you can never afford to lose - with the discipline to confront the most brutal facts of your current reality, whatever they might be”

The author of the blog explains the concept in more depth in his full blog entry and also goes on to explain how this applies to business. His point is that entrepreneurs are ideas people, extremely positive, end goal focused optimists that sometimes fail to grasp the reality of the current situation.

A lot of business theory will tell you about planning, budgeting and forecasting. You should plan for the future and set precise goals to measure progress. Managing a business at the early start-up phase often means that you fly by the seat of your pants. Personally I don’t have detailed forecasts, budgets or any significant financial documentation beyond what is required for bookkeeping. However I do have goals, but they are *fuzzy* goals, not written down on paper. I know where I want my business to be eventually, but I don’t create excess stress by pressuring myself to be there in one year, or three or five. I work with my present reality and use my end goals and business philosophies to motivate me. Intuition steers the present. I like to think that right now for me, this is what the Admiral would recommend.

I admit I would definitely benefit from more detailed budgeting but the reality of my situation is that I must DO the business now rather than PLAN for business in the future. Is this is a mistake? It might be, but presently it suits me fine and keeping the owner happy is my number one business priority.

Yaro Starak
BetterEdit Manager

Comments(2)

I was having a chat with friend of mine on MSN. He is also an aspiring young entrepreneur and he was commenting that I appear a lot more focused on my business than some of his other friends who like to talk business but have trouble taking actions towards creating something. I asked if these friends of his were still in school and he said yes. I remembered back when I was studying I knew one thing, I didn’t like the prospect of a day job when I graduated and running my own business was definitely the way I wanted to go. I just didn’t know what sort of business I wanted to start.

Now that I have been running BetterEdit for a number of years and having started and closed or sold a number of other small enterprises along the way I can look back on what I have done and how I learnt to focus and take action, at least more than I used to and only on one project at a time! However I think a brief history is in order so you can see the processes I went through to get as much focus as I have now.

My story might provide you a valuable lesson, as often when you start a new business you have lots of untested ideas, grand plans but not a lot of focus on the little things and as a result you don’t take actions. A lot of business is trial and error and a journey of self discovery for the entrepreneur - he or she has to like what they are doing for the business to succeed after all! But you have take trials to make those errors or you won’t learn what works and get past the theorising and brainstorming stage. Nothing is more exciting than when you make that first sale.

I started BetterEdit around 2000-2001. I received the initial brain spark from www.cyberedit.com (now http://www.essayedge.com) after reading a news article in a Yahoo magazine about Geoff Cook the founder of the business. Geoff started his business in 1997 editing students’ entrance essays to get into colleges in the United States. Without going into too much detail, Geoff’s business was very successful and he himself became a millionaire. This article from Wired Magazine is one of the most important publicity articles Geoff received and really helped to increase his exposure and inform the consumer of his business.

I took the idea and applied it to the Australian marketplace, which is a bit different because students don’t have to write an entrance paper to get into university. However there are a lot of international students with English as a second language in Australia, so I believed that proofreading and editing could be a market. At the time I had just completed a group project which was a perfect case study. One of my group members from Asia had awful English and I spent a whole night editing his writing. I had also just learnt HTML and was eager to build websites as I was falling in love with the Internet. My mother’s partner was out of work and being a trained teacher was quite a capable editor, so I had all the ingredients. I spent a couple of days building the website and a business was born.

Fairly soon after that point however I left the business to focus on studies. I wasn’t in the right place in my life to devote the energy BetterEdit needed. The business started and basically stagnated for a year, however it was working because we had a few loyal clients, it just wasn’t growing because no one was doing anything to tell people about it. Fast forward to 2003 and I had just returned from a trip to Tasmania with a girlfriend. This was meant to be the start of a fruitpicking journey around Australia but ended prematurely. I also broke up with my girlfriend. I had no job, I was a business graduate with no desire to return to studies and no commitments to anything. Talk about opportunity!

I decided to give BetterEdit a really good shot and went to work on it. Over the first few years without me my family had managed to locate one or two good contract editors by sending job notices to the local universities. I checked that they were still willing to receive work, which they were. The website was still up and the email systems were working fine. All I needed to do was get the word out that our service was there.

Next blog entry I’ll talk a look at my first steps at marketing an Internet business.

Yaro Starak
BetterEdit Manager

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