Cash flow is king
I’ve been playing World of Warcraft now for almost 4 years. For the insiders, I started right before the Sunwell and patch 2.4.2. One of my absolute favorite parts of the game is playing the in-game market, the Auction House. This is a live commercial exchange where you can sell your goods to other players and vice versa in a digital bazaar of sorts. Some of the best business lessons, some of the most important business lessons, can come from playing this aspect of the game.
One of the most basic but most powerful lessons about this aspect of the game is that when it comes to running a business, only one things matters: positive cash flow.
I switched realms recently to the Earthen Ring. In my first 30 days, I had to restart my Auction House businesses from scratch. The first step to doing so in-game (and in real life) is to get some working capital, some starter money. In order to be able to buy and sell, you need cash. Fortunately, as in real life, there are decidedly unglamorous but profitable jobs you can take. Here, for example, is the Jaggedswine Farm, outside the gates of Orgrimmar. When you kill these pigs, you get a chunk of boar meat.
Boar meat is decidedly uninteresting. It’s unexciting. However, in order to level a character’s cooking skill in game, it’s a necessary ingredient. Thus, a lot of people need it, even if they don’t want to get it themselves. Combine a boring, time-consuming task with a demand for the finished good, and you have the opportunity to make some money.
Once you get some starter capital, building your fortune becomes a matter of making smart deals and keeping cash flow positive in your in-game professions. In the case of one of my characters, it’s about keeping my costs for producing glyphs from exceeding the profits. I know how much the supplies for my profession will cost me. I know roughly what the finished goods will sell for. If I can keep cash flow positive, then there’s no limit to how much I can grow my business. Conversely, if I have negative cash flow, no matter how much I sell my items for, I will lose in the long run.
Cash flow is king. If you on a personal level are not cash flow positive, you need to fix that as soon as possible. Go start doing some affiliate marketing. Ask for a pay raise at work or change jobs if you’re able to do so. Publish a book for sale – it costs nothing besides time and an Internet connection these days. Whatever you do, get earning more than you’re spending.
This is the core business lesson that the Auction House teaches us: unless you consciously choose otherwise, always be making a profit. Always be spending less than you’re earning. Always be minimizing expenses while maximizing profits – and focus on maximizing profits so that you can grow. Cash flow is king. Cash flow is the lifeblood of your business, and as long as it’s positive, the world is your oyster.
Or boar. Mmm, boar.
No actual animals were harmed in the writing of this blog post. A whole bunch of digital boars got mercilessly slaughtered, however, and their innards sold for 4 gold, 37 silver.
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How to get started with affiliate marketing
Lots of people want to make a little extra money, and affiliate marketing is one of the simplest (remember that simple != easy) ways to go about doing it. If you’re interested in adding some beer money to your bottom line, consider getting started in affiliate marketing. Here’s a step by step tutorial on getting started with one of the most well-known and reliable programs: Amazon Associates.
Amazon will pay you around 4% of any item’s sale price for stuff that’s sold through your tracking links. Obviously, unless you can sell a whole bunch of MacBook Pros, this is going to be solely in the realm of beer money and not mortgage money, but every little bit helps.
Take note that you don’t need anything other than a mailing address and basic financial information to sign up – no inventory to manage, no having to do anything other than recommend stuff you like.
You’ll start by signing up for a free account. Once you’ve gone through the basic account process setup, it’s time to start putting together things you want to talk about.
When it comes to affiliate marketing, or any marketing for that matter, your best bet for long term success is to market things you already use, love, and want to talk about, things you’d recommend even if you weren’t getting paid. Why? From time to time as an affiliate marketer, you’ll get customers of your affiliate program asking you about products – and if you own them, you can help them. You can also make honest, true recommendations about the products and services you market because you already own and use them.
Once you’re signed up, create an aStore – one of my favorite ways to showcase the things you want to talk about and share. Use Amazon’s built in guide to get going, by setting up a tracking code:
Then by adding products individually or by category to your store:
After you’ve picked the things you want to market, configure the store to wear your colors and logos. When done, hit publish and your store is live and available to the world:
Now you’ve got your own electronic store online without a square inch of inventory or real estate.
Decide how you want to share it – with a simple standalone link, or embedded on your web site/blog.
You’ll also notice when you’re browsing Amazon and logged in that there is now an affiliate toolbar above each product or service. This gives you quick links to use for things like newsletters or blog posts. Any time you reference an Amazon product, you should use these links rather than just the URL of the page.
Don’t be lazy! Use these links for the extra few seconds it will take you to copy and paste them rather than the URL in your browser. Why? One of the great benefits of Amazon is that if someone reaches the site during their session from one of your links, everything they buy during that session counts towards your affiliate marketing profits.
For example – and this is real – one of my referral fees from this quarter was for condoms. I don’t market or refer to them anywhere on any of my digital properties (except for this post, I guess), but because someone bought them while browsing Amazon from one of my links to a different product, I get credit and $1.11 in referral fees.
Incidentally, this is also some interesting market research to tell you what else your existing customers like.
Affiliate programs are a great way to start earning some beer money, some extra cash, and if you find you have a knack for it, you can earn a lot more than beer money in time, but this tutorial and guide should help you get started with your first program and help you decide if you enjoy affiliate marketing.
Good luck, and please let me know your results in the comments.
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Not another dime: a protest that works
Please consider the following:
- Local Governments, Churches, Community Groups, Prominent Business Men And Others Are All Divesting From Big, Corrupt Banks
- Bank customers flee to credit unions
- Massive pile of news results about closing bank accounts
This, ladies and gentlemen, is the protest that works.
This is the protest that actually wakes up the powers that be.
This is the protest that generates results, that generates real change.
It’s the protest that says:
I do not believe in you, therefore I do not do business with you. Not another dime until you change your ways.
You want to change corporate America? Do not do business with companies you don’t believe in. You don’t like X company’s labor practices or wage practices or environmental practices? Don’t buy another thing from them. Find someone else. This is the age when you can Google for nearly everything and probably find 5 alternatives online that are cheaper, better quality, or more environmentally friendly.
You want to change the rule of big banks? Do not lend them your money. Find a local credit union or community bank and bank with them instead. Check out mycreditunion.gov to find one near you, then go close your account with the big bank and do business elsewhere.
You want to change the tone and tenor of Washington politics? Do not give a dime to any candidate running for office, period, because the electoral system is funded by individual donations as well as large companies. You want to make real change happen with your money? Skip the political candidate and donate to the local food pantry instead.
On a big picture level, the ballot box certainly is one of the most powerful tools that a citizen of a country (if they have the right to democratically elect their leadership) has access to. But on a day to day basis, there’s an even more powerful tool: your wallet. Make conscious choices about what you believe in and support those choices with your money. Encourage others to do so as well. You don’t need to convince everyone, just 4-5 friends and colleagues to make similar choices.
When you choose to stop doing business with someone, let them know why. Send them an email. Post it on their facebook page. Write up a blog post. Say to them very publicly and succinctly, with substantiation or citation of the facts you used to make your decision, here is why I am not giving you another dime. Hashtag it #notanotherdime or something like it so that others can see you and join you.
As evidenced by the powerful protests above, it does work.
Disclosure: I’ve been banking with a credit union since 2001. I do not hold investments outside of index funds in any banks.
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My visit to Occupy Boston
Yesterday, I paid a visit firsthand to Occupy Boston, the local branch of the Occupy Wall Street movement. I’ve been writing and talking about economics and politics for a while and about the Occupy movement, so I figured it was time to do some primary, field research and go there myself. So what did I find?
First, the Occupy movement is certainly diverse. Take a look at this short, incomplete laundry list of issues:
- Corporate taxation
- CORI/Background Check Discrimination
- Workers’ Rights
- Violence
- Murders
- Gun Laws
- Foreclosures
- Political Corruption
- White Supremacy
- Disparities in Education
- Budget Cuts
- Racism
- Bank Bailouts
- Voter Fraud
- Affordable Housing
- Corporate Crime
- Fraud
- State/Individual Sovereignty
- Foreign Wars
- Religious Intolerance
- 9/11 Conspiracy Coverup
The criticism that the Occupy movement doesn’t stand for anything is patently false. The reality is, based on conversations I had and the piles of brochures and other things I was given by volunteers is that the Occupy movement stands for far too much, so much so that it doesn’t know what it is.
That’s not necessarily a bad thing, but the movement completely lacks focus. With a laundry list of issues that long, there has to be some common ground. For example, people cited Arab Spring in conversation, but they neglected to realize that Arab Spring movements had a very clear set of targets: Hosni Mubarak, Muammar Qaddafi, etc. In each case, the target was the incumbent sovereign government that created conditions of structural inequality or injustice.
The second takeaway from Occupy? They’ve done a good job of identifying the problems (as you can see from the partial list above) that are totally valid and worth addressing. But because they have no common focus, no common ground, they also have no set of solutions to advocate for. Again, going back to Arab Spring, the common ground was clear: get rid of the guy in charge. I talked to two volunteers (who requested that I not reprint any identifying information) who, when asked how they’d solve the problems that Occupy is addressing, shrugged and said that they weren’t sure, but something had to be done.
A third volunteer said that we had to end corrupt government, end the power of corporations, and redistribute the wealth accrued by our corporate/government complex. When I gently suggested that that was the effective goal of communism, the gentleman I was talking to loudly protested, “I’m no goddamn communist. I’m a ****ing American!” I gave up at that point trying to explain that communism was an economic system, not a political one, and that communism can work on some scales and in some contexts. (Israeli kibbutzim are one such example of successful communism)
This is the third takeaway from the Occupy movement, one they’ve self-identified as an issue for their members. In order to more effectively articulate what’s wrong and what needs to be fixed, they need to get better educated about economics and politics. Of the five people I talked to, none had even a basic grasp of the difference between Keynesian and Austrian economics, which are the two effective viewpoints being promoted by various political sects today. For those not keeping score, the Democrats tend to lean more Keynesian, and the Republicans (especially Ron Paul’s ideological base) lean towards Austrian.
The bottom line for the Occupy movement is that it’s got a lot of energy. The people in it have their hearts in the right place as the political, economic, and social issues at the heart of the movement are very real. That said, it needs to get better educated and better marketed in order for it to resonate deeply with the average person and give them something to aim their discontent at.
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You get what you sell for
There’s an old, worn-out adage: you get what you pay for. The explicit lesson is that quality or quantity cost money, cost resources, and the more resources you expend, the more of whatever you’re buying you should get.
There’s a flip side to this adage: you get what you sell for; that is, if you don’t ask for someone to buy something, you’ll never sell anything. I want you to think carefully about a couple of social networking utilities right now, Klout and Empire Avenue.
Klout:
Empire Avenue:
There is an implicit message here. These networks, which essentially try to offer a way to assess your social media influence, are asking you to make a deal:
Trade money for influence.
Don’t believe me? Think about the statement that we started with: you get what you pay for. If you want influence, these networks are asking for your participation in social networks. The more you participate, the more influence you garner. In order to prevent easy gaming of their algorithms by mass adding friends and followers, they focus instead on activity, activity on content-based networks like Flickr, YouTube, Instagram, Blogger, and more. The more activity you generate, the more influence you theoretically garner.
Of course, all that content and activity you generate has to have at least some level of value in order for people to want to engage with you. There has to be some value to the photos you post on Flickr (uploading endless blue squares would be ineffective), the videos you post on YouTube, etc.
In order to “buy” influence, you must trade it with content of value. Now we introduce opportunity cost. Every time you publish your photo to Flickr instead of Fotolia, you trade influence for potential revenue selling your photo online.
Why buy this photo when you can get it at no cost through social media?
Obviously, there are no absolutes; you can sell stock photos online and still present some version of them on Flickr. You can create stock video and still have fun clips on YouTube. That said, if you’re hunting for clip art for your corporate newsletter, which would you prefer in lean times, a no-cost Creative Commons licensed work or a paid licensed work? That choice is easy – and unpleasant for content creators trying to be compensated for their work.
For the many people who are just getting started in social media, the initial bargain seems to indicate that giving away everything, trading away everything, in exchange for influence is the way to go, and very few people will contradict that initial impression. There is a balance, but very few people are aware of it or are willing to promote the balance between valuing influence and valuing commerce.
Take a few moments now, close the browser window in which you obsessively refresh your Klout score, and ask yourself what you’ve traded for influence. Ask yourself what you’ve gotten in return, and ask yourself if it’s been financially worth it.
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Are your social media networks supporting goals?
Looking at how everyone is trying to find a place for Google+ and all of the other networks, I thought I’d share the way things are shaping up and how I use them. You might find a few ideas you can use.
I look at social media sites from the perspective of what they do and where they fit in my “funnel”. Before we talk social, I should explain that I have 3 business goals I want to achieve with the stuff I do online.
1. Grow my database. Jeff Pulver says it best: we live or die on our database. For me, this means bringing people onto my mailing list and into networks that let me keep my data, such as LinkedIn. This database is a tangible asset – it’s helped people get jobs, supported the next two goals, and done some amazing stuff all on its own.
2. Book paid speaking opportunities. Pretty straightforward.
3. Sell stuff. Whether it’s copies of the Marketing White Belt book, the handful of affiliate programs I participate in, or generating leads for my employer, WhatCounts email marketing, I want to create additional revenue using the digital platform I have.
Ultimately, if the things I’m doing don’t support at least one of those three goals, then it’s probably not worth doing – or it gets bumped to the back burner constantly in favor of things that matter.
If you are using social media for business purposes, do you have a set of business goals that guide your social media work? If not, then please save this blog post to Instapaper or Evernote, close your browser, and don’t post a single thing on Twitter/G+/FB until you have those goals written out. Your goals and my goals will be different! For example, if you’re unemployed, one of your goals is likely “find work”.
Obviously, if you’re using social media for personal and non-commercial purposes, your goals should be different but equally meaningful, otherwise you’re likely to get caught in a giant time suck.
So, with these goals in mind, how do the networks shape up now for me?
The nifty icons are from the socialize icon set.
Twitter: great for discovery of new people, which in turn feeds goal #1. Twitter is now about discovery and crossing networks/niches/fishbowls for me. It’s become the standard currency of influence for the moment until G+ releases its API. Twitter is how I find the new folks to bring into the network. Assuming I prove my value to them, they flow into goal 1 pretty seamlessly.
Stumbleupon: the dark horse of social networks. I use it, and more important, other people use it a lot, for discovering new websites. That in turn drives traffic to the website, which supports goal #3 heavily.
Google+: G+ has been a lot about engagement of an existing base. That said, because it’s an asymmetric network, there’s discovery happening there, so that does feed goal #1. Whether it will support goals 2 and 3 is yet to be determined, though I am starting to see it as a major traffic source.
LinkedIn: LinkedIn is the money network for me. It’s consistently been a powerful force behind a lot of what I do, and it’s an easy place to create social currency. Every time I forward a job request on or connect two people who should be connected, I pile up social currency, which in turn feeds all 3 goals. I’ve booked paid engagements right off LinkedIn, and its database is downloadable to feed the other databases.
Facebook: Facebook’s not doing much for me right now. It’s too siloed, too walled off to be of much benefit for SEO, doesn’t push a ton of traffic, and what it does push tends to be of low quality that doesn’t feed any of my goals especially well. I use Facebook personally to keep up with friends and acquaintances, but for supporting my business goals, it’s been a bust. Maybe my audience isn’t there or isn’t interested in behaving like my crowd while there. Whatever the case is, it’s not working for me.
A few folks responded in the Google+ thread about which networks were working for them; experiences differ I suspect largely because our respective audiences and goals differ as well.
Take some time to think about what’s working socially for you in relation to goals that matter to you. If your social media participation isn’t supporting them, either you need new goals or you need to pivot and change up what you’re doing in social and where.
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