I came across another post on digital point the other day about why people don’t start their own business.

I was going to blog about why I don’t agree with the post and what my thoughts are on why more people don’t get into business, but I think I’ll save that for another day because I just came across another post on DP, which happened to be by the same person coincidently, and in this one he’s really showing his business knowledge…

Which is none, he’s blogging and posting about business with next to no knowledge at all from what I can make out, and as I was reading his post his stupidity infiltrated my mind and sent me into a rage of flaming… yeah, I might end up banned on DP, but I had to give this guy a reality check.

Here’s the post he made:

In my previous post WHY IN ONLINE BUSINESS? I tried to explain about online business. Now I will explain the difference between traditional business and online business.Traditional business means the business which we know about from our childhood. These are a bookshop, sweetmart, daily needs shop, provision stores, hotel, restaurants, vegetable shop, department stores, etc. etc.Traditional businesses have some limitations. You can’t do it as part-time, requires huge investment which a common man can not afford, unless and until you have some experience of business you can’t start, unfortunately if you fail in one business then it is very difficult to start another one, requires big space and set-up, you have to work as per customer’s demand. etc. etc. etc.

While in online business you don’t required any investment, you can start it at free of cost, this you can do as part time job and if you got huge success, left the present job, it’s possible. Online business requires very less experience but if you have some technical knowledge that is well and good. You can do it from your home or cyber café because this type of business
don’t required any set-up, only a computer with internet connection is sufficient, online business has no time limit if you wish you can do it as 24 x 7 x 365.

TRADITIONAL BUSINESS
01) Business has local limits.
02) No help from field experts.
03) Physical exercise required.
04) Difficult to change field.
05) Failure is visible to every one.

ONLINE BUSINESS
01) Global business.
02) Experts are ready to help.
03) No physical exercise.
04) Can do in any field of business.
05) No one will know about your failure.

In my opinion online business is very good form of business, for a person who has desire
of his own business. Start it with no investment,improve skills,work hard,keep faith on yourself.

And yeah, my reply is below, I don’t know if you’ll agree with me, but have a read… beware of my language, I was pretty angry about his post:

Your blog is poor and your bold posts are pissing me off… go back to plumbing. This is a forum not a blog.

On top of that your post is complete bullshit, and you have no idea what you’re talking about.

YOU CAN start a traditional business with next to no capital. YOU CAN start a traditional business part time, YOU DONT need huge sums of cash, YOU DONT need experience, YOU CAN fail and start more (i’ve failed in at least 10 traditional businesses) and i find failing is the greatest way to learn anything in business YOU DONT need a big space, I’ve seen vegetable shops that are no more than a wooden stand

An example is me, i started a sushi train with NO experience in cooking, or any offline business. i also started it with next to no capital and i’ve never managed the business, never been part or fulltime involved.

An online BUSINESS not a random blog or something crap that a 12 yr old can do, i’m talking real business like you are, i would argue DOES take knowledge and investment, unlike any offline business where you can make sales by having a location, the internet nullifies location and creates an equal playing field, so to survive you need to know what you’re doing, you need to spend your money well and you need to do it from more than a internet cafe.

I’m talking about traditional online business… not a blog.

TRADITIONAL BUSINESS
01) Business has local limits. (No, location is the greatest asset of an online business, the only limit is the owners stupidity of starting in a bad location)

02) No help from field experts. (What? so all the small business centers around the world won’t help an offline business at no charge? I’m astonished, even the government funded ones that are built to help local small business? shame on them)

03) Physical exercise required. (I’m a tad lost with this one? i assume moving away from a keyboard is exercise?)

04) Difficult to change field. (why would you want to? you should be focusing on making your business work)

05) Failure is visible to everyone. (your on the internet with your photo, i will know when you fail.)

ONLINE BUSINESS

01) Global business. (i own a sushi shop in Thailand, i’m from Australia, my offline business is global).

02) Experts are ready to help. (Experts like you?)

03) No physical exercise. (i go to the gym, i don’t want to be fat.)

04) Can do in any field of business. (yeah you can, but unless you know what you’re doing you will fail)

05) No one will know about your failure. (You just failed, i know you).

Sorry to flame you but i really think you need the reality check right now.

I found a post today on Digital point, it was someone asking about how to write a risk management report, and he basically started the both with “I’m estimating I’ll sell 100, but what if I sell 20?”

I’m blogging my reply because I felt I made a good point!

This is the post:

Hi, i am writing a proposal but i am stuck in “risk management” section.

Anyone of you know how to write a proper RM?
Let say, if i estimate i can sell 100 of the products in a month, but eventually, only 20? What’s the RM report i can write?

And furthermore, if i say, i can Advertise the product in order to boost up the sales but what if i dont hv the Advertising budget?

I wonder how smart those folks can write out this kinda articles?

And here is my reply

Writing about risk management isn’t too hard.

It’s all about how are you going to manage the risks that you are going to take?

So first go through and list out all your risks (might be similar to your KPIs).

And then write out how you’re going to mitigate and manage those risks to help achieve success.

The key with any plan is to not bullshit yourself or someone else.

I can estimate that I’m going to sell 100 products a month right now, but it’s complete bullshit, you can’t estimate that, it’s impossible to estimate that without first having any established and current history of selling the products already, and without showing that in the past you have been able to successfully increase sales by doing X or spending $Y.

And if by spending $Y is the answer that you’ve shown in the past, there’s still no guarantee that it will work again, you can display ways to mitigate that risk by diversifying your $Y spend into different market segments, tracking the $ spend per conversion and slowly growing sales while not blowing out your spending.

On top of that you should never estimate anything, estimations, any at all are complete bullshit and I never believe any estimations or agree with them at all.

Rule of thumb in my book is to never estimate.

Set KPI’s, targets, goals and plan ways to achieve them, use your risk management plan to apply mitigating factors to your marketing efforts, diversify the marketing, or target the marketing, cross market your product or partner up with other providers.

Work out ways to achieve goals, not estimate what you could make or sell.

I could estimate that I’ll make $1m this year, but without a plan with goals, a map to get there and ways to manage my risk I’ll never make it. It’s just a bullshit estimate.

Everyone should diversify their investments. You don’t need a million dollars to invest to diversify; investing can start with as little as $40! Heh

Seriously, though, you can invest in a new opportunity for nothing, just your own time. All you need is an idea and some motivation.

If you do have some spare cash, even a little, it does help. If you do you should start talking to people, discuss some ideas on a joint venture for something, look at what you can bring to the table and come up with something where both parties can benefit. Brainstorm something together, you could even try to take your idea to a micro venture fund.

Before you know it your investing in something new and you’re ‘portfolio’ of investments has expanded and you’re more diverse than before.

I like to diversify offline just as much as I do online; my latest venture is in sushi, of all things. Unlike the internet where everything is local, and to compete with another site you need to be different, or offer something very special, offline businesses don’t have to do that, offline businesses can offer location over difference.

If you’re in an area like me, a small city, and there’s no sushi train or place to buy sushi, then there’s an opportunity there to start something, it doesn’t have to be the best sushi in the world, or the cheapest, or the greatest looking, it does help to have a good product and of course we’ll try to do that, but the location is what’s going to make it work.

Especially with a restaurant, we’ll be opening in an area with other restaurants where there is high foot traffic. Just like the internet where traffic is king, with offline businesses such as restaurants, foot traffic is king, foot traffic for restaurants is like organic search engine traffic, it’s a life blood, if you’re in an area where people naturally search for food on a daily basis, you’re going to get some hits, hopefully some bookmarks, referrals and with any luck some return visits! Try and keep that bounce rate low…

I’m no restaurant king with years of experience, but I’m no idiot either, I’ve seen restaurants with fantastic tasting food that are in really bad locations, they bleed to death slowly over years and rarely survive or make decent profits, if that same restaurant was in a street with other restaurants the traffic and word of mouth would have made it successful in no time.

Anyway, back on topic, my diversification is simple; I’m taking revenue from my other businesses and using that revenue to support a new venture in a whole different market segment.

If for some reason my development studio failed to convert projects and our staff costs started bleeding us to death, my personal backup is in a whole different industry, if we started to die because of a global market slowdown in the internet segment, which has happened before, then I’m ok, I have a restaurant, people always need to eat!

I think it’s a vital part to anyone’s financial success to diversify their personal investments, it doesn’t have to be much, and it doesn’t have to be big, start small, start small multiple times, and nurture the venture, bring in some partners so your time required to work on the venture or invest into it remains low.

In the past I’ve started ventures with upwards of 6 different partners all bringing something different to the table, we had a common interest, to diversify and supplement our income, and by dividing up the work load and investment we were able to give the business what it needed to work.

Partner up, brainstorm, plan and get it going on!

Have an idea for a web application? Want to invest in a real online venture? Something custom built to actually take on players in the market?

To build something substantial realistically costs thousands every month in development fees.

Let’s break down a professional development team, such as ours.

To develop a business application to the high standards that we have to for our clients, we have the following staff in house:

A Systems Architect, Project Manager, Programmers, Designers and an accounts person to manage the billing.

Of course they all aren’t fulltime on 1 project.

I’ll break down the % of time spent on an average 4 month project by each team member.

1 Systems Architect: 20%
1 Project Manager: 20%
1 Programmer: 100%
1 Designer: 50%
1 Account person: 10%

Our apps are all web based apps, hosted either internally or externally (intranet / internet), so there’s a high level of input from a designer who handles the interface design and xhtml etc.

This should be typical for any midsized development house. Let’s take US rates for staff and break down what a project would cost, and also look at the % per project.

Systems Architect: $100k – 20% = $20k a year, about $7k in wages for 1, 4 month project
Project Manager: $80K – 20% = $16k a year, about $5k in wages for 1, 4 month project
Programmer: $60k – 100% = $100k a year, about $20k in wages for 1, 4 month project
Designer: $50k – 50% = $25k a year, about $8k in wages for 1, 4 month project
Accounts: $45k – 10% = $4.5k a year, about $1.5k in wages for 1, 4 month project

So in total, in wages alone, for 1, 4 month project the cost for a company to develop an application is at least $40,000!

Plus, if this company is a contracted company, than they need to add profit and cover other costs, looking about $100k plus.

If you were to shop the project around and found a lone ranger, a 1 man show that can do it all, to cover his own wages for 4 months is still around $20k, and you would realistically expect less development done in that time since their time will be spent on other things, management, architecture, design, client updates, billing etc. I’d expect 3 days of a 6 day week of actual programming.

So how can I possibly justify my topic of a whole development team for $40 a week? Where is this crazy and bullshit deal?

Well there isn’t one. Not yet. Not that I know of anyway.

I can however divulge that I’m considering it…

I’m a systems architect and project manager for our current projects. We also have another project manager on staff, a designer, some ruby on rails programmers and some other general staff for accounts, and support.

There’s a bunch of projects that I want to build and I’m willing to open my team of developers to outsiders in exchange for their expertise, industry contacts and their own network of resources.

On top of that a requirement would be to share the development costs.

I can afford to reduce development costs to as low at $40 per week, on the proviso that there are 10 people investing in the application development.

So my thinking is that I’d invest in at least 3 shares minimum, and put the other 7 shares up for anyone to buy into at that $40 per week.

Why?

Well, I can afford to develop my own projects, and we do. But that’s what we do, we develop applications, we don’t necessarily have all the greatest industry contacts, networks of websites with thousands of users every day or things like that.

We can build businesses but we don’t have the time to market them, I’ve done marketing before professionally and I understand the resource requirement and time that’s really needed to make a web business work, and that’s not time well spent for a team like ours.

So I’m willing to open my team up to outsiders to own a portion of a business and in exchange for our super low development costs / super cheap investment, I’d only be accepting people who can offer what we don’t have, that marketing and promotion side of things.

Honestly the money for development isn’t an issue, but it covers my team costs and re-assures me that the people involved are dedicated to the cause; they have a financially invested interest in what’s going on, I would want to be partnering with people who have the resources and traffic to promote whatever it is we build successfully.

At the end of the day it’s about making the development successful, I wouldn’t be profiting from the development, so it’s in my best interest to partner with worthwhile people so me, just like you can profit from the business itself.

As for what we would be building, well I’m undecided. I have a lot of ideas, but who says it has to be one of my ideas? If someone comes along and has a good idea and is keen for what I’m proposing, then we might run with that and see if we can round up some other people to invest in it.

Anyway, just been a thought of mine, thought I’d blog about it.

Client work pays the bills and more, but I’m not into doing client work forever, we’re building our own apps and I’m defiantly interested in expanding that scope.

I’d be interested to hear some feedback on what people think about it all.

The quality of some of these sites on entrecard.com are pretty subpar.

Sure there’s a good number with traffic, and some with some quite nice designs and content, there’s even more that have next to nothing to say at all, and on top of that are sporting really horrid layouts.

There are thousands of good themes out there for all the blog platforms so I don’t see why people deploy these blogs without a half decent one.

I must have gone through over 200 sites today to try and find some good blogs to read, and I came away with nothing. Nothing new, nothing interesting, nothing that captivated me and made me wants to read.

Some of the sites in there I do already read, and I like them, but aside from those, I found almost nothing new, just wasted a few hrs trying to discover some.

I did say almost, there were some alright sites that had content worth reading, not just regurgitated crap.

http://www.entrepreneur.com.sg

http://dotcommogul.net/

http://theblogentrepreneur.com/

http://www.toasteggme.com/

there were a few more but I lost the links… heh.

It’s basically the same as the old layout and design, a few things moved around, new fonts and CSS.

Overall I think it’s a step back in areas, not the biggest fan of the new styles, but I guess I’ll deal with it.

The new style still hasn’t delivered any moderation of the listings; I’m still an advocate of Sitepoint implementing some kind of moderation to weed out the bad or fraudulent auctions.

Like what the hell is this?

AsbestosLawyersBailMeOut.com

Not only is the site a horrid design and built purely for what I would call spam purposes, others would call it a made for AdSense site.

The site is really a proxy site, with lawyer content around it so the AdSense ads are high paying ads.

So the site violates the AdSense TOC.

My advice, don’t buy this, or anything from the seller, simply trying to make a quick $ by selling sites that will be terminated soon enough.

Seems like everyone is jumping on the social networking bandwagon, from aggregators and add-ons to whole social networks, it’s starting to get saturated.

The big thing with saturation is that there’s nothing new coming out of it all, there are just smaller versions of all the same stuff.

Here’s a short list of pointless social networks

http://www.sazze.com/ social networking with product reviews… pointless mashup.
http://www.veridoo.com/ Multilingual social networking with some branding added…
http://www.fubar.com/ Social networking… in a bar? Get drunk, make friends? It’s getting popular, amongst people with nothing to do
http://www.tweet140.com/ Something stupid to do with 140 twitter characters
http://www.linksladies.com/ Female golfing social network
http://www.wallstreetchic.com/ Social network for business women
http://www.itog.com/ Social networking built on opinion
http://thebiz.variety.com/ Hollywood social networking

I could go on for hours; there are thousands of them now, all more pointless than the other.

For me I figured MySpace was ugly and pointless, never used it, was more for 14 year olds, I do like Facebook, it has some purpose and is useful for keeping in touch with people I know.

People are touting it as a sign of recession and a sign of an online marketing slowdown (since Google control the vast majority of online ad revenue).

What they aren’t talking about is how it jumped from $415 to almost $450 in 1 day. Since then it’s dropped around the $435 mark.

Hardly call for concern.

What would be concerning me more is that since November 2007 – when they were $750 a share, they have been falling A LOT faster then they climbed to get there.

Like I said before, $750 a share they were in November, 5 months ago, they are now $435 a share. Last time they were $435 a share was about November 2006! (Click the 5y view).

This is why I think Microsoft will outlive any other major player in the marketplace, for the last 5 years their stock price has been on average the same, around $27.

It’s jumped up high, it’s gone down low, but it doesn’t just completely crash and burn, they have lots of fingers in lots of pies in lots of different markets, lots of places to draw solid revenue from.

Meanwhile, everyone is throwing money into gold and oil, personally I’d be buying shares in MSFT or GOOG right now, get it while it’s cheap, it’ll go back up again.

Recessions hurt the poor and make the rich, richer.

I’m in a predicament at the moment, I have a new recruit on staff who’s been with us for about 7 weeks now, he’s still pretty inexperienced and he’s not coming up to speed as fast as I would have liked – or what others have.

So I’m now in a predicament, so I cut this new guy before its 3 months in and no progress or do I stick it out for the 3 months and hope that things have improved?

I’m trying to let him learn, given a few weeks to do no client work and only skill up on specific topics, I can afford to keep him on for the 3 months and do next to no client work, but after that it’s really only costing me money, not only in wages but client work that’s not being billed for.

Meanwhile since he’s not up to speed, I’m stuck taking on the overflow work, which is stressing me out above what I really need to be, and is defeating the purpose of why I recruited someone new anyway.
On top of that he’s also taking up time of other staff asking them questions and getting them to help all day long.

I really want to give people a chance and let them have the opportunity to prove themselves and to have a job etc, etc, but I have to look out for myself too.

I have a bad feeling about it all, he’s not progressing much, I think I will let him have the full 3 months but I don’t think it’s going to work out.

Which sucks, I hate firing people and I don’t want to have to go through a whole new recruiting process.

Having to find a new recruit could just make things worse, I might not find someone or I might end up in the same situation again. It’s tough, but a decision needs to be made.

I think the biggest problem with ruby apps is the hosting.

PHP is so easy to host, you can upload it almost everywhere since mod_php is usually deployed by default with apache and php is deployed with every server now days.

Problem with Ruby is that it *can* be memory hungry and there’s ‘installing’ to do on the server side to get it up and running.

On top of that, web hosts either don’t support it, don’t support it well, or charge a lot to support it.

You can pick up an average ruby hosting plan with a plesk or cpanel control panel etc etc, but it’s going to be slow, not only because you’re on a virtual hosts - shared environment but because it’s not setup right, not load balanced and what not.

Just because it says FastCGI doesn’t mean its fast, Lighttpd isn’t all that light, and using a VPS and still using a control panel like plesk to handle your rails isn’t going to solve any issues.

This is where I think Slicehost is *almost* the perfect host for rails projects.

You can easily setup a couple of different slices (virtual servers) in a few minutes, and install SQL on one, and litespeed on the other.

Only downside is that there’s a lot of manual work to get it all 100%, not only on the server side, but on the client side.

Setting up your Capistrano, and other local tasks take time.

If Slicehost dedicated a side of their business to rails deployments, providing Capistrano recipes, deploying servers with litespeed and rails etc pre-installed, you know, like 5-6 different deployment configurations to choose from to get up and running, that should cover the most of what people are after.

Right now most non linux technical people are stuck either learning how to do all these things in linux which is time consuming, and frustrating at times, or people are stuck paying large sums for overrated hosting.

Mediatemple charge like $20 for 64mb of memory, mosso charge $25 for 128mb of memory and engine yard are off the scale with $990 per month + $690 setup… Not to mention engine yard’s $125 per month for 1gb of backup space!

‘Grid’ hosting, load balancing and what not isn’t all that hard to do, and it’s not terribly expensive, I think engine yard are overcharging a bit, but that’s my opinion.

If I ever got into hosting, I’d do the same as slice host but dedicated to ‘LAMP’ deployments on virtual servers, setup a grid over at cari.net and use 3tera to manage the virtual servers.