Blogging for Free

Here at the Nauvoo Commuter, we publish a regular blog and ask for no money. That's fine. It would be a little weird if we did.

I am advising my daughter on starting a business. One option is to follow the course suggested by a prominent incubator: start a free service. After a large number of people are hooked, then find a way to monetize it. You can offer an upgraded (premium) pay service, offer advertising space, sell other information, etc. But you monetize only after the system becomes an institution.

This is something YOU can do.

The quote of the day comes from Jeff Bezos: “you can’t put into a spreadsheet how people are going to behave around a new product.” 


I believe that our over-reliance on proforma tools is caused by our fear of failure. They are either attempts to control the future, or to predict it in order to prevent failure.


But you really can't see how a potential product or service will work unless you can watch a customer, in a natural purchasing setting, decide whether or not to purchase the product. If it doesn't work, then try adjusting the value proposition by changing the price, distribution method, or how you advertise. If it still doesn't work, then scrap the product or service rather than launching it on a full scale. If you don't launch it, then move on to the next idea.

Sustainable Frugality

Or would calling it Frugal Sustainability be more appropriate?

Creative accounting might indicate the recession is over, but the real results of recession: unemployment, general uncertainty, etc. linger. Further, since Central Banks had each attempted to cure a hangover with massive consumption of whiskey, intoxication remains. You can't cure a debt problem by multiplying the rate of borrowing.

So perhaps your next business plan should involve assisting people through both economically stagnant and resource-depleted scenarios.

 - Selling wood heating stoves or becoming a Chimney Sweep
 - Re-upholstering
 - Recycling
 - Upcycling
 - As people are reluctant to purchase real estate, try home repair or
   remodeling (help people "love the one you're with")
 - Sell mopeds
 - Teach homesteading
 - Develop a farmers market

"Use it up, where it out, make do, or do without," as they used to say in frugal times of earlier generations. 

Industrial Recruiting

When a woman has an affair with a married man, and finally convinces him to leave his wife and marry her, she never realizes that when she becomes the new wife, he will eventually cheat on her. "But he loves me. He never loved her." Adultery is rarely based on finding someone you love more. It is based on an illness or character flaw.

As a community leader, you might think you are so attractive with your low wages and educated work force that convincing a corporation to love you more than the current host community is a great idea. But eventually you will be the old wife, and another community with lower wages will woo them away again. Your town will be ex-wife #2. Or #3.

Every professional in the economic development realm seems to now agree that any effort spent recruiting factories to your community is a waste. 

Further, other problems exist with choosing the future of your local economy by 

How can you choose which industry is best suited for your region?

How can you decide which industry will be best situated for coming macro-economic changes?

How can you use taxpayer money to bribe corporations to relocate?

If recruiting factories is dumb, then trying to recruit a low-wage call-center operation is even dumber.  

I Like Pie

Do you view the pie as finite?  If someone gets a larger slice, does that mean your piece will be smaller? Or do you believe that by cooperating with other pie-eaters, you can increase the size of the pie?

This topic has been discussed by several commentators, but it really is a philosophical difference that divides humanity.

If a tourist visit a neighboring town, does that mean you have missed out on that revenue? Or could you work together, multiplying the tourist stream by many times what you could by yourself?

In tourism, the key to community development might be regional development.

Scapegoats

When the Black Death swept across Europe, the scale of death and suffering was so great, and the cause so invisible, that people could not cope with the horror. They needed a scapegoat.

So Jews were often rounded up and killed. It was not rational, but when you need to direct anger away from yourself, a scapegoat can be very convenient. Governments have used Jews for centuries to deflect blame for incompetent governing.

We still do it. The U.S. government created a ginormous credit bubble, then told investment banks they would be protected if they made stupid investment decisions. Those are the two main causes of our current crisis. Of course the people who control the microphones blame deregulation, corporate greed, or other sideline issues. "Pay no attention to the man behind the curtain," the White House yells.

But we also see this problem even in small communities. Local economies are being ripped apart by unstoppable global forces, but unfortunately we often look for local scapegoats to blame. Immigrants, city councils, mayors, racial or religious minorities, infrastructure, brain drain, school principals, climate....

Blame is easier than solvency.

Ebay and Socialism

Dar eBay: you are not a monopoly.

Your company continues to act the part of a socialist government, envious of any citizen who turns a profit.

The company learned that some of their sellers are earning profits, and seek to harvest them. So you again raise your rates. Your announcement was couched in doublespeak. More sellers will flee to competitors. And you will raise them again in the future. And lose more sellers that time as well.

Your base might be growing as the market grows, but your share of the market is shrinking. Someday you'll be Chrysler, a company still probably atop the minivan market.

Branding and Socialism

Our community's entrepreneurship committee is working on a project to help local artist's sell their wares. We have been working on a way to help them market their products by combining efforts. Here are some relevant issues:

 - Artist co-ops rarely work. Asking predominantly right-brained people
   to agree on marketing could be difficult.
 - Artists can't imagine that their products are unwanted by consumers.
   Who will tell them and hurt their feelings? The other artists?
 - How can you keep the brand consistent? Various types of art may not
   be compatible within the same brand. Example: will you sell children's
   lullaby collection books alongside pornographic works?

The Animal Farm model is difficult and usually breaks down. The way to succeed is not to sell things that artists want to sell, but to sell things that people want to buy.

The best method is for an independent team to establish a firm, create a brand, then source products from the artists, and sell them. This is the Henry and David model. Pottery Barn would never tell everyone that they can sell anything they want through their store channels. Pottery Barn has buyers, who are expert at understanding consumer wants and buying behaviors, procure what they know will sell.

We plan also to form a "farm club," a group of students and artist hopefuls who can sell their wares through a separate brand as they learn how to respond to customer tastes. That way we respond to the need to help people become self-employed artists without diluting the exclusive brand.

Dear parochial seller

Dear Entrepreneur on the Prairie successfully selling your wares on the internet. We congratulate you.

Here are some numbers that will obviously surprise you: two billion people now use the internet. The U.S. population is 300 million (including infants and the infirm). It seems a lot of people outside the U.S. can buy online. Why are you so afraid to sell to them? So afraid of being scammed by Nigerian mobsters that you lump everyone outside the U.S. together, calling them all mobsters?

Buck up, keep a stiff upper lip, and learn how to lower your scam risk. And make money.

Roll the dice on disaster

I recently perused a body of research which indicates that people who look forward to the end of the world are those who feel unsuccessful in the current world. The End will not crush them, but will turn the tables. It will put them on top. "I might be a failure now, but you won't be laughing at me then."

History does not uphold the idea that huge upheavals bring the bottom people to the top. Some mixing up does occur, some people are brought low, but rarely is anyone switched to the top spot in the new order, simply because they were at the bottom before.

The current recession will probably get worse before it gets better. And natural disasters will probably increase in frequency, continuing the trend. But hoping for despair is a gamble of the worst kind. Punishing yourself further now, in the hopes that you will be chosen as a leader in the post-Zombie Apocalypse, is a scenario of such incredible odds that you should not ever consider it. Instead, gamble that the world will get better eventually.

And don't let anyone take advantage of your despair-wish. 

Forget Surveys

I am not a proponent of market research. I believe it has three weaknesses:

- People don't know what they like. No one understands themselves, why
  they make certain choices, or what they prefer.
- People don't respond genuinely. To use an example of class evaluations,
  students in my classes don't respond in useful ways. Outliers on both
  ends give feedback about me that "he is the worst teacher in the
  department," and "he is the greatest teacher ever." I receive more positive
  feedback about my wonderful hair than about information about how to
  improve the class. People have different ways of communicating, different
  agendas, and some are are suspicious of surveys.
- People don't understand unless they have a prototype in hand and have
  opportunity to use it in real life. So they need to experience your product
  or service, then decide if they like it. They need to test that new gold club
  by swinging it. They need to eat the food at the restaurant,

Observing people choosing your product from others on the shelf and then using your product--when they think they are not being observed--gives you information you can use.

Start the business, then learn and muddle through until you figure out how to make the business successful, even if success means significantly changing the business. Market research is often a method of procrastinating. 

The Power of Free

Newsday.com became a paid-subscription based news site in 2009. In the first six months, the site attracted 35 subscribers and earned revenue of $9,100. They paid $4,000,000 to design and set up the site. (Source: Mikal Belicove)

This week I am reading Chris Anderson's "FREE: The Future of a Radical Price." The book's contention is that you can often make more money by giving away your product or service for free. The issue is approached from many angles, and covers considerably more than that simplistic synopsis.

Read the book. Consider the implications. Don't be like Newsday. 

Dear Nebraska

Dear Nebraska,

Warren Buffett won't live forever, so you might consider re-branding your state.

The entrance to the state in Interstate 15 indicates you are the home of Arbor Day. But we don't observe more trees than in Iowa or Missouri (you certainly have more than Wyoming, but Wyoming has meticulously landscaped the entire state east of the Tetons to resemble the moon's surface. The effect is chilling but remarkable, and few states have the resources to replicate such a grand scheme.)

Do you have other trees we cannot see from the interstate? Why don't we know about them? You cannot compete with naturally forested regions in tree numbers, but you CAN be the state that plants more.  ...or claims to plant more.

Part of your job is to tell us you are special.