Tuesday, November 06, 2012
Microtesting Pt. 2
So the Zeekler experiment didn't go as planned, but that doesn't mean the lessons weren't valuable. This also doesn't mean they were worth $300, but I was very lucky compared to most other victims. It was a worthy try, but as I stated in my last post, there are no short cuts to wealth, though that does not mean one can't leverage technology to maximize one's results while minimizing one's effort.
Essentially, you, the potential entrepreneur, need data to set up your business and successfully entice someone to make a purchase. A classic example of this notion is found in Thoreau's Walden, of all places. When describing a Native American who was trying to sell baskets to the people of Concord, MA, Thoreau stated that no one in the town would buy them. The Indian then asked if the townspeople meant to starve him. Thoreau responded that the seller had not convinced anyone that these baskets were somehow needed, and therefore couldn't sell any. The key, as with any business, was marketing information, or in this case, the lack thereof.
The Indian could have sold his wares by extolling the quality of his work compared to the local craftsmen, or by convincing wives that the baskets would make for a better home than her friends who did not buy them, or whatever. To take it a step further, he may never had understood what was needed to convince Concord residents to buy his baskets, or that they may never have bought them, since on both counts he was an outsider. Had he known this, he could have found another way to make money.
Fast-forwarding to our present day, I cannot say if the need for information has lessened, but the effort and expense collecting it has certainly diminished. I refer to the Internet, of course. Actually, because of the Internet, the need for marketing services has diminished, even if marketing is still required. It isn't discussed in polite circles, but most marketing isn't done by people anymore; it's done via computer generated algorithms.
Most people understand the process via tracking cookies. If you visit a website and search for chocolate chip cookies, you may get ads that direct you to recipes, or a local cupcake store, or a coupon for Toll-House morsels (which sounds really yummy on this late hour of Election Night 2012). If you search for the cookies as well as diabetes treatments, you may get coupons for a gourmet chocolate store that specializes in sugar-free desserts. You get offers seemingly tailored to your needs and desires, thereby making a sale more likely.
Or you may get complete nonsense. This was my experience while posting photos from my trip to Petra in the Hashemite Kingdom of Jordan on Facebook. For the next 6 months or so, all my Facebook ads were in Arabic, and I couldn't seem to block the ads fast enough to force the company to show ads that have some dismally small chance of making a sale, or even causing me to click "like." As absurd as this experience was, it taught me an important lesson (that didn't cost $300!).
The lesson, and this is where the notion of micro-testing truly comes into focus, was these ads had really no cost and therefore no risk. You supplied the data, and a computer program chose a small ad to possibly convince you to buy something, download a game that itself is chock-a-block loaded with ads, or whatever. With every successful sale, the algorithm is further adjusted with the hope of increasing sales in the future. Obviously, my experience with advertisements in a language I can't read shows the system isn't perfect, but changing the system is close to free. Of course, Facebook does need to generate some revenue, so somewhere someone needs to buy something sometime to keep the ad revenue flowing.With the stock price in the toilet, I cannot be certain of their overall success.
I'm not close to setting up an online venture where pay-per-click ads would be involved, but I can explore my options in other ways while minimizing my time and effort. It was with this in mind that I clicked on an offer from Groupon. This particular sale was for an ESL program run exclusively online via TESOL.com, and the price was $69. Normally, the cost would be $500. It was an offer I couldn't refuse, even though my last foray into ESL was less than successful. The key is the minimal expense and 120 hour time requirement. The college's ESL program was roughly the equivalent of 18 credit hours in one semester, and coupled with registration I almost had a nervous breakdown. If this doesn't work, then I leave ESL to more capable people. If I do enjoy it, then I'll take the school's program again, this time armed with the work from the present course. That's certainly my aim, and if ESL doesn't pan out, then the simplest avenue to offshore income will be closed, meaning living overseas will require a great deal more research and planning, i.e. work.
Essentially, you, the potential entrepreneur, need data to set up your business and successfully entice someone to make a purchase. A classic example of this notion is found in Thoreau's Walden, of all places. When describing a Native American who was trying to sell baskets to the people of Concord, MA, Thoreau stated that no one in the town would buy them. The Indian then asked if the townspeople meant to starve him. Thoreau responded that the seller had not convinced anyone that these baskets were somehow needed, and therefore couldn't sell any. The key, as with any business, was marketing information, or in this case, the lack thereof.
The Indian could have sold his wares by extolling the quality of his work compared to the local craftsmen, or by convincing wives that the baskets would make for a better home than her friends who did not buy them, or whatever. To take it a step further, he may never had understood what was needed to convince Concord residents to buy his baskets, or that they may never have bought them, since on both counts he was an outsider. Had he known this, he could have found another way to make money.
Fast-forwarding to our present day, I cannot say if the need for information has lessened, but the effort and expense collecting it has certainly diminished. I refer to the Internet, of course. Actually, because of the Internet, the need for marketing services has diminished, even if marketing is still required. It isn't discussed in polite circles, but most marketing isn't done by people anymore; it's done via computer generated algorithms.
Most people understand the process via tracking cookies. If you visit a website and search for chocolate chip cookies, you may get ads that direct you to recipes, or a local cupcake store, or a coupon for Toll-House morsels (which sounds really yummy on this late hour of Election Night 2012). If you search for the cookies as well as diabetes treatments, you may get coupons for a gourmet chocolate store that specializes in sugar-free desserts. You get offers seemingly tailored to your needs and desires, thereby making a sale more likely.
Or you may get complete nonsense. This was my experience while posting photos from my trip to Petra in the Hashemite Kingdom of Jordan on Facebook. For the next 6 months or so, all my Facebook ads were in Arabic, and I couldn't seem to block the ads fast enough to force the company to show ads that have some dismally small chance of making a sale, or even causing me to click "like." As absurd as this experience was, it taught me an important lesson (that didn't cost $300!).
The lesson, and this is where the notion of micro-testing truly comes into focus, was these ads had really no cost and therefore no risk. You supplied the data, and a computer program chose a small ad to possibly convince you to buy something, download a game that itself is chock-a-block loaded with ads, or whatever. With every successful sale, the algorithm is further adjusted with the hope of increasing sales in the future. Obviously, my experience with advertisements in a language I can't read shows the system isn't perfect, but changing the system is close to free. Of course, Facebook does need to generate some revenue, so somewhere someone needs to buy something sometime to keep the ad revenue flowing.With the stock price in the toilet, I cannot be certain of their overall success.
I'm not close to setting up an online venture where pay-per-click ads would be involved, but I can explore my options in other ways while minimizing my time and effort. It was with this in mind that I clicked on an offer from Groupon. This particular sale was for an ESL program run exclusively online via TESOL.com, and the price was $69. Normally, the cost would be $500. It was an offer I couldn't refuse, even though my last foray into ESL was less than successful. The key is the minimal expense and 120 hour time requirement. The college's ESL program was roughly the equivalent of 18 credit hours in one semester, and coupled with registration I almost had a nervous breakdown. If this doesn't work, then I leave ESL to more capable people. If I do enjoy it, then I'll take the school's program again, this time armed with the work from the present course. That's certainly my aim, and if ESL doesn't pan out, then the simplest avenue to offshore income will be closed, meaning living overseas will require a great deal more research and planning, i.e. work.
Sunday, November 04, 2012
It was only $300, or the benefits of microtesting...
[Ed. note: As usual, your humble blogger began this post some time ago, and the circumstances surrounding the topic have changed and not for the better. Nevertheless, the thoughts are clear and worth transposing, even if they are not quite as appropriate as when the post began.]
In keeping with my prior posting, and as an attempt to explain better the thoughts I've developed on the topic, I've decided to finish paying off my last retirement loan, but I won't take the extra cash flow and dedicate it to either the apartment or student loans.
I consider upgrading the apartment separate from paying off the apartment early, since I'll directly benefit from new cabinets, bath fixtures, etc. The work will also raise the value of the place beyond the present
price, so it will help me get closer to breaking even when I choose to sell it. Beyond that, the most I will do is attempt to refinance the place to lower my monthly payment.
Having all this available money is dangerous since I'm, er... flighty. I didn't spend all this time and money correcting my situation only to mess up all over again. Sitting at home and counting my wages like Ebeneezer Scrooge isn't an option either, since surviving the upcoming hard times will require determined, pro-active work today. Essentially, I need to find a new way to make a living, and pronto.
I was thinking on all this when I received some bad news. Some months ago I set up a website through Zeekler, a penny auction website. The business plan was (cough) as follows: Let's say I want to buy an I-pad, but I don't have enough money, a common enough occurrence. Penny auctions will allow you to "place a bid" (actually, you're buying a raffle ticket for a dollar) with the chance to buy said Apple device for a much lower price, say $45.13. How would such a sale make money on a $600 item? Well, other people also bought a bid for a dollar promising to buy the tablet for a little less, and someone else made a slightly smaller bid, etc. You paid $46.13; the company made $2000. An astute reader would ask, why would anyone spend a buck if they aren't guaranteed to win?
The answer was that they didn't spend that dollar. This is where I and other investors enter the picture. We would buy bids, and hand them out to bidders, who therefore risked nothing if they didn't win. I was introduced to the company by a friend, who made money when I set up the website and paid my fee every month. I made money because I drove traffic to the website, and the company made money by getting people into a legal form of gambling. It's multilevel marketing for the new millennium. I was responsible for posting an add everyday, and I received a small sum based on how many bids I had purchased. No daily add equaled no daily money. You could withdraw the money you'd earned, or you could recycle it to buy more bids. It was generally advised you wait until you had 50,000 bids before you began taking money from your daily percentage. Note I'm not even talking about the bonuses you received from the people you recruited, those whom your charges recruited, etc. I never asked anyone to join me, and I am ever thankful for that today.
So my total investment was $300; this was to set up the site, and 2 more months of fees. I was supposed to buy additional bids, but something just didn't sit right with me, so I never bought them. I developed this feeling while in the shower, where I do most of my best thinking. My epiphany was as follows: one of the ways the company kept people motivated was by "retiring" points, so that you could never cash out 100% of all of your earnings, and you were more or less required to recruit other people to keep the cash flowing. Doesn't that equal a Ponzi scheme? Well, the Attorney General of North Carolina certainly thought so, and shut down the operation. Also, keep in mind I never actually bought anything from the site. It's possible no one ever actually won these auctions and everything was for show.
In the end I was lucky; I only lost $300. Others lost the maximum bid purchase package of $10,000 as well their monthly fees. Don't forget the pissed off family and friends who similarly lost a bundle, and were recruited by someone they trusted. To answer the obvious question, I am not angry at the lady who brought me in. I lost very little, but she lost thousands. The people who are going to be really pissed are those who did make money; they'll be required to pay back their ill-gotten gains, at least in theory. If I ever get back any or all of my loot, I'll treat myself to dinner and a movie, and be grateful. My lesson from this was that there's no get rich quick schemes out there; if it sounds too good to be true, it generally is. This covers the $300 portion of the title, what about the second part. Part 2 is coming tomorrow.
In keeping with my prior posting, and as an attempt to explain better the thoughts I've developed on the topic, I've decided to finish paying off my last retirement loan, but I won't take the extra cash flow and dedicate it to either the apartment or student loans.
I consider upgrading the apartment separate from paying off the apartment early, since I'll directly benefit from new cabinets, bath fixtures, etc. The work will also raise the value of the place beyond the present
price, so it will help me get closer to breaking even when I choose to sell it. Beyond that, the most I will do is attempt to refinance the place to lower my monthly payment.
Having all this available money is dangerous since I'm, er... flighty. I didn't spend all this time and money correcting my situation only to mess up all over again. Sitting at home and counting my wages like Ebeneezer Scrooge isn't an option either, since surviving the upcoming hard times will require determined, pro-active work today. Essentially, I need to find a new way to make a living, and pronto.
I was thinking on all this when I received some bad news. Some months ago I set up a website through Zeekler, a penny auction website. The business plan was (cough) as follows: Let's say I want to buy an I-pad, but I don't have enough money, a common enough occurrence. Penny auctions will allow you to "place a bid" (actually, you're buying a raffle ticket for a dollar) with the chance to buy said Apple device for a much lower price, say $45.13. How would such a sale make money on a $600 item? Well, other people also bought a bid for a dollar promising to buy the tablet for a little less, and someone else made a slightly smaller bid, etc. You paid $46.13; the company made $2000. An astute reader would ask, why would anyone spend a buck if they aren't guaranteed to win?
The answer was that they didn't spend that dollar. This is where I and other investors enter the picture. We would buy bids, and hand them out to bidders, who therefore risked nothing if they didn't win. I was introduced to the company by a friend, who made money when I set up the website and paid my fee every month. I made money because I drove traffic to the website, and the company made money by getting people into a legal form of gambling. It's multilevel marketing for the new millennium. I was responsible for posting an add everyday, and I received a small sum based on how many bids I had purchased. No daily add equaled no daily money. You could withdraw the money you'd earned, or you could recycle it to buy more bids. It was generally advised you wait until you had 50,000 bids before you began taking money from your daily percentage. Note I'm not even talking about the bonuses you received from the people you recruited, those whom your charges recruited, etc. I never asked anyone to join me, and I am ever thankful for that today.
So my total investment was $300; this was to set up the site, and 2 more months of fees. I was supposed to buy additional bids, but something just didn't sit right with me, so I never bought them. I developed this feeling while in the shower, where I do most of my best thinking. My epiphany was as follows: one of the ways the company kept people motivated was by "retiring" points, so that you could never cash out 100% of all of your earnings, and you were more or less required to recruit other people to keep the cash flowing. Doesn't that equal a Ponzi scheme? Well, the Attorney General of North Carolina certainly thought so, and shut down the operation. Also, keep in mind I never actually bought anything from the site. It's possible no one ever actually won these auctions and everything was for show.
In the end I was lucky; I only lost $300. Others lost the maximum bid purchase package of $10,000 as well their monthly fees. Don't forget the pissed off family and friends who similarly lost a bundle, and were recruited by someone they trusted. To answer the obvious question, I am not angry at the lady who brought me in. I lost very little, but she lost thousands. The people who are going to be really pissed are those who did make money; they'll be required to pay back their ill-gotten gains, at least in theory. If I ever get back any or all of my loot, I'll treat myself to dinner and a movie, and be grateful. My lesson from this was that there's no get rich quick schemes out there; if it sounds too good to be true, it generally is. This covers the $300 portion of the title, what about the second part. Part 2 is coming tomorrow.
