The book is titled “Built To Sell” – which actually turned me off a bit at first.  It reminded me of “Built To Last”, the famous business book by Jim Collins, except quick flips have a negative connotation to me.

So I started it with a bit of skepticism.  But this quickly disappeared as I got into the story.  Built To Sell is told in a parable format (somewhat like Rich Dad, Poor Dad or The E-Myth Revealed) which made it really easy to read and very engaging.  I finished it within 24 hours.

The book goes through the story of Alex, a small business owner who decides he wants to sell his company one day and realizes he can’t because he has built a service business that is dependent on him.

Luckily he has a mentor named Ted, who takes him through the process of converting his company to one that can be sold.  This is based on mentors the author has had in real life, and it was clear from reading it that he has walked the walk.

It covers a bit of accounting, negotiation, business brokers, cash flow, etc.  I guess I left with the feeling that this kind of information could only have come from long meetings with lots of real mentors.  These are the kind of mistakes I wouldn’t want to have to learn the hard way.

Check it out if you get a chance.  After reading it, I mailed it to a friend of mine in Houston who runs a service business.  It was the kind of information I wanted to share.

Read on future King and Queens!

First Of All, Why Would You Want To Start Your Own Country?

This is usually people’s first reaction to the idea of starting a country, and rightfully so.

The simple answer is: you think you can make a better one.  Maybe where you currently live the government is annoying you in some way (like wars, taxes, environmental policies, oppression, extortion, etc – whatever you care about).  So after doing some strong letter writing campaigns that don’t accomplish anything, you start to look at what other countries are out there.  If you still haven’t found one you like, people eventually get the idea in their head that they could do better if they started one of their own!

But there is a more complex and serious answer to this as well.  Which is that there is a market for governments just like for anything else.  Allow me to explain.

When you go out for dinner you have to pick a place to eat.  You give the restaurant some money, and they give you some food and service in return.  If the food sucks you won’t go back, and if it’s great you tell all your friends about it and the restaurant thrives.  In short, there is a market for restaurants.  No surprise there.  This idea of “voting with your dollars” obviously works and encourages good restaurants.

But just like restaurants, there is a market for countries. You choose to pay money (taxes) to a government in exchange for some sort of services (military, roads, health care, etc).  And if you aren’t happy with the service, you can always leave and choose to patronize another country with your business.

But people rarely, if ever, choose to switch countries despite constantly complaining about the service.  Why is this?  Why doesn’t anyone seem very happy with their government, but you can find a pretty decent Italian restaurant in every city?  The answer turns out to be that the market for governments is inefficient.

We can see this by looking at two questions, and comparing the restaurant market to the government market:

• How easy is it to start your own?
  RESTAURANT: It’s relatively easy (get investors, incorporate, lease a space, hire some chefs).  Whether you will be successful or not is another story, but it’s at least not that difficult to try if you think you can make a better restaurant.   As proof of this you can see the thousands of new restaurants opening each year.

  COUNTRY: You need to discover new land (not possible anymore, every square inch of dirt on Earth is claimed by someone at this point), conquer another country by force to take their land, or pull off a military coup.  You could argue winning an election for president should be on this list, but that’s not really the same as having your own country – any country democratic enough to allow elections probably doesn’t give the president 100% power to do whatever they want in the same way an owner of a restaurant could.

• How easy is it to switch (as a customer) if you don’t like your current one?
  RESTAURANT: Easy.  Go down a few blocks.

  COUNTRY: Hard.  You’d probably have to quit your job, sell everything you own (house, car, etc), move away from everyone you know (unless you could convince them to come with you), and go through lots of paperwork to establish citizenship elsewhere.

What is the major consequence of this?   Well, it means that, on average, the service provided by governments is worse than the service provided by restaurants.  They can get away with it, because they know it’s such a pain for you to actually leave, and there are few other options even if you wanted to. Simply put, it’s an inefficient market.

To say “on average, it’s worse” may actually be too kind.  Indeed, governments on occasion actually murder thousands of their own citizens, so in some countries it’s not even close.  But even in the U.S. people have still occasionally gotten fed up enough to leave (when the draft was instated during the Vietnam war for example).  Compared to restaurants, the threshold is much lower.  I might not go back to a restaurant if the waiter was rude, or I just like the salsa at the other place.

So how can we make countries more like restaurants and get better service from them? Those two questions above hold the key.  Somehow, you’d have to make it easy for anyone to start a country, and easy for citizens to switch if they saw one they liked better.  Economists would call this lowering “barriers to entry” and reducing “switching costs”.  This is, at the risk of oversimplifying, what makes markets more efficient.  And more efficient markets make for better service because they have to compete against each other to win your business.

Now, you could easily say “but countries will never be as efficient as restaurants, they are far apart, natural barriers, etc, etc…”.  And I agree with you.  But efficiency exists along a spectrum, and the closer we get to the ideal, the more improvement we’ll see in government service.

To prove this to yourself you can take a quick look at cable companies.  They exist somewhere in between restaurants and governments on that spectrum (both in efficiency and service).  It’s harder to start a cable company than a restaurant (more capital required) and consequently fewer of them.  It’s also more difficult for customers to switch if they don’t like their cable company, because there are contracts and only one or two options in most neighborhoods.  It’s no accident that service provided by cable companies is far inferior to restaurants (“your food will arrive somewhere between the hours of 8am and 6pm tomorrow…”) but not nearly as bad as governments (cable companies haven’t murdered anyone yet, that I’m aware of).  My point here is that there is a range of efficiency in markets and it seems to correspond with a range in quality of service.  Any gains in making government markets more efficient would have some benefit, even if they don’t get all the way to restaurant levels.

So now that we’ve seen why someone might want to start their own country, you might be wondering…

Ok, So How Would You Actually Start One?

Let’s look at the three main ways people have tried over the years, with varying degrees of success, and a real life example for each.

1. Build Up A Man-Made Island

Ok this one is pretty hilarious.  In the 1970′s, a group of people (led by Las Vegas real estate millionarie Michael Oliver) took over this “island” that was just below sea-level (and thus unclaimed by any nation).

They brought in some barges of sand to bring it above sea level, and declared themselves the proud new owners of a country, which they dubbed “The Republic Of Minerva” because it was located on the Minerva Reefs in the Pacific.

They even made their own currency!

Unfortunately, the nearby nation of Tonga was not too happy about this new nation popping up in their back yard, and the Tongan King issued the following (very uncool) proclamation:

PROCLAMATION

His Majesty King Taufaʻahau Tupou IV in Council DOES HEREBY PROCLAIM:-

WHEREAS the Reefs known as North Minerva Reef and South Minerva Reef have long served as fishing grounds for the Tongan people and have long been regarded as belonging to the Kingdom of Tonga has now created on these Reefs islands known as Teleki Tokelau and Teleki Tonga; AND WHEREAS it is expedient that we should now confirm the rights of the Kingdom of Tonga to these islands; THEREFORE we do hereby AFFIRM and PROCLAIM that the islands, rocks, reefs, foreshores and waters lying within a radius of twelve miles [19.31 km] thereof are part of our Kingdom of Tonga.

Tongan troops (I can only imagine their military prowess) eventually came and took over the island, taking down the Republic of Minerva flag.  The founders were unwilling to defend the island (or to hire mercenaries like the next group described below), so they left and the island was eventually reclaimed by the sea :(

Whatever your thoughts on these guys, you at least gotta give them props for execution.  For all the people crazy enough to have this idea, how many of them actually went out and dumped sand into the ocean?  Well they did, way to walk the walk guys.

You can read more about the Republic of Minerva on wikipedia.  But in general, the idea of using a man-made island has a major flaw:  most “just below sea level” atolls are quite close to other countries and even if they are technically in international water, that country is quite likely to get jealous of your micro-nation and come kick your butt.  Be warned, if you decide to go this route, you should probably bring guns.

2. Take Over An Abandoned Sea Platform

This micro-nation, affectionately known as The Principality of Sealand, is stationed on a abandoned sea platform off the coast of Britain.  It is arguably, the most successful attempt to date to create a new country.

Back in the 1960′s, a guy named Roy Bates got fed up with the British government and decided to occupy it (it was abandoned after World War II when the British built it for naval defense from the Germans, and it resides in international waters also – a recurring theme here).  Roy was doing a bit of “pirate radio”, which is where you broadcast songs on your own radio station (without paying royalties).  The British government decided to crack down on his radio station, so he took the rather drastic step of moving it off shore and starting his own country while he was at it.

Here is a great little video on Sealand, if you want some background.  They even have a Facebook group you can join.

What makes Sealand perhaps the most successful micro-nation to date, is that it’s been around so long, and a hilarious story of a takeover attempt which led to the German government giving them a defacto recognition as a real country!

This story is almost too funny to believe, but apparently it really happened:

In 1978, while Bates was away, Alexander Achenbach, who describes himself as the Prime Minister of Sealand, and several German and Dutch citizens staged a forcible takeover of Roughs Tower, holding Bates’ son Michael captive, before releasing him several days later in the Netherlands. Bates thereupon enlisted armed assistance and, in a helicopter assault, retook the fort. He then held the invaders captive, claiming them as prisoners of war. Most participants in the invasion were repatriated at the cessation of the war, but Achenbach, a German lawyer who held a Sealand passport, was charged with treason against Sealand and was held unless he paid DM 75,000 (more than US$ 35,000). The governments of the Netherlands and Germany petitioned the British government for his release, but the United Kingdom disavowed his imprisonment, citing the 1968 court decision. Germany then sent a diplomat from its London embassy to Roughs Tower to negotiate for Achenbach’s release. Roy Bates relented after several weeks of negotiations and subsequently claimed that the diplomat’s visit constituted de facto recognition of Sealand by Germany.

You can read more in the Wikipedia article.

Roy Bates didn’t make the same mistake as the group above: we was willing to defend his land, and hired mercenaries to do it!

There are lots of other funny stories about Sealand, like the time ThePirateBay.com tried to buy it to store their web servers outside of any country’s jurisdiction, or the time Red Bull sponsored a sporting event there.  But despite Sealand’s success, there aren’t many of these abandoned platforms around for people to inhabit, so let’s take a look at one final solution people are proposing.

3. Buy A Floating Sea Colony

This option is known as “seasteading” – building a permanent residence on the sea which is somewhere in between an oil platform and a cruise ship.  It’s stabilized like an oil platform and is on piers to keep it above rough ocean waves, but has ballasts like a submarine so if necessary can float up a bit and be moved around (like if the King of Tonga comes after you).

If you think this is crazy (and it is), just keep in mind that both oil platforms and cruise ships prove something like this is already possible technology wise.

While these haven’t actually been built yet, there is a VERY good chance that they will in the near future.  The Seasteading Institute has received half a million in funding from one of the founders of Paypal to build a prototype – that’s serious money, and shows they aren’t just a couple of nut jobs posting ideas on the internet.

If you want to read more about it, they have a book (currently in draft form, freely available online) which lays out their ideas in more detail.  They seem to know what they’re doing.

So what will one of these cost?  Hard to say at this point – maybe $50-$100 million in total financing.  But you could buy a piece of land on it for less.  It’s likely these sort of countries will be funded early on by specialized industries like medical tourism, gambling, free trade ports, etc.  Something where their independence (low taxes, free trade, no regulations, etc) will give them an advantage.

You might think a country with no natural resources, a small land mass, and additional cost of importing all their food would be at a major disadvantage.  But then again, that is also a good description of a region like Hong Kong, and their economic growth rate over the last 25 years has left most other countries in the dust.  Freedom, it seems, might be sufficient for stellar economic growth, even if you have no natural resources.

Conclusion

So there you have it.  A quick overview of micro-nations and a glimpse of how we might start to see new countries pop up in the future.  It would be an interesting world to live in if anyone with $50 million bucks could start their own country (legally, and without killing anyone).

If you were into environmentalism, there would be a country for that.  If you cared about privacy, there would be a country for that.  If you wanted free health care or lower taxes or whatever, there would be a country for that.  It would be like new restaurants popping up all over, each trying to capture your heart and mind (and tax dollars) with the next great innovation in government.  There would be something for everyone, and innovation would take off at an incredible pace as all sorts of ideas were tested in the real world, instead of being relegated to “what if’s” in presidential debates.

It would be nice to see ads from all these countries, trying to win your business with the best service possible.  And if they didn’t live up to their promise, you wouldn’t be stuck – you could just float your house over to the next one.

Even if I never actually live on an island or platform in the ocean, I still think they are a good idea, just because they will put pressure on current governments to start shaping up.  It will lower that threshold where people get fed up enough to leave.  And the more competitive we can make governments to keep their citizens, the better service we’ll all get.

Until next time, keep breaking free!
Brian Armstrong

I also met up for drinks with another American entrepreneur living in Buenos Aires (found me through the blog). Turns out he started http://www.virtualdatingassistants.com/ Check it out and let him know what you think :)

I’ve continued to improve UniversityTutor.com. It is now ready for an international audience. Tutors can list prices in any currency and subjects in their local jargon. People can search anywhere in the world now, and I’ve imported a database of 80,000 cities around the world so it will continue to generate search engine optimized pages in various cities.

Marketing has already started internationally. I’ll be targeting other English speaking countries first, specifically the UK, Australia, Canada, and India. Did you know India has the second largest English speaking population of any country in the world (after the U.S.)? I didn’t.

I think I can get 10,000 or 20,000 tutors signed up by the end of the year.

Ideas On Improving BuyersVote.com

I’ve also taken a bit of time to refine my thoughts on BuyersVote.com – and gotten some great ideas from other people over the last week which have helped, so thanks for that. If you’re reading this I’d like to get your input as well.

I like the basic concept of user generated online reviews in ANY category, but it needs some work.

Specifically, the mental barrier to creating a new page is too high. There are too many fields to fill out for one thing. As a first time visitor to the site, I think I’d like the concept, but probably wouldn’t take the plunge to actually create a new page.

This is part of the brilliance in the simplicity of Twitter. There is a very low mental barrier to posting because you KNOW it can’t be more than 140 characters. If it was an open ended text field (like a blog post) people would subconsciously avoid it.

Another thing I’ve been looking at it the relationship between “pages” and “categories”.

The site right now is designed around the idea of adding a page, then you give it some categories later.

But whenever I’ve found myself wanting to use the site (like “man I wish there was a list of the best XYZ out there”), I’ve always thought about it in terms of a category, not a page.

So I got around to doing some sketches on paper (this is the best method of website design for me at least). Let’s put on our user interface design caps for a moment.

What do you think?

As you can see I’ve tried to make it based around adding a category instead of a page. You can add as many pages as you want under the category. The list of pages (or items) grows with some javascript similar to Google’s multiple choice forms if you’ve ever seen that, so you could add as many as you want there. You (or other people) could also add more after the category was created of course.

The “prove you’re human” is a captcha to prevent spam.

The home page could then be changed…maybe something like this with a search field, some currently popular categories (I like the idea of a homepage with changing content so people could start participating right away without actually creating anything), and most importantly a form to add a new category right on the home page?

Is this a better direction to take?

Some further simplifications could be made on an actual category page as well. Maybe instead of letting people do 1-10 reviews and averaging them, I should just use a simple “vote up” “vote down” number that tracks the total number of votes.

This is a slightly less fair method of voting because it suffers from a time bias – older items which have been around a long time could have accumulated large numbers of votes, where a new page with a higher % of up votes could actually be ranked lower. But I can think of some ways around this, like showing only votes for the past year or month as an option, so it may be worth it for the simplicity.

Actual reviews on the item page could be limited to 140 characters like Twitter as well, the lower the mental barrier further.

One downside to this approach is that each category would keep separate lists of items, so a page could not belong to multiple categories.

Right now, iPhone could be under the cell phone category, a smart phone category, and a web enabled phones category. Reviews and votes from ALL categories would be averaged 1-10 for a single iPhone page.

But if I switched to this, there would be no good way to keep them together. There could be half a dozen “iPhone” pages on the site in different categories, each with their own ratings and reviews. (In programmer speak, categories and pages would be a “one to many” relationship instead of a “many to many” relationship.) This bothers me a bit…but maybe it would be worth it for the simplicity?

I’m really not sure. These are all just ideas. I’ve been looking at some other similar sites too for ideas: see http://www.makefive.com/ and Google Moderator powered sites like this (click “view questions”).

I need to find something that is a powerful voting engine, but drop dead simple to use and remove every single mental barrier possible. Eliminating the need to create a new account since you can use one your already have, for example, was a big step toward that.

Please let me know what you think in the comments.

And until next time, keep breaking free!
Brian Armstrong

On a regular basis I would come to the homepage, or try to log into the backend, only to find the entire site was down or unresponsive. So I haven’t been very happy with 1and1.

It would usually come back up fairly quickly as 1and1 would reboot the server quite often, but it was frustrating and very slow to use. If I was getting frustrated using my own site, then I imagine many users as well.

So I finally bit the bullet and moved several blogs over to my hosting account on SliceHost. My hosting plan with SliceHost is a virtual private server (VPS) which should offer better performance. I already had this account because I was using it to host UniversityTutor.com (Ruby On Rails apps require more than what a shared plan can offer), and the extra capacity should be enough to run StartBreakingFree.com and HomeworkHelpBlog.com along side it.

In case you didn’t know, there are basically 3 tiers of web hosting you can get:

• Shared – this is the cheapest and lowest performance, basically it means perhaps dozens (or more) websites are all running off the same web server
• VPS – this the mid range both in price and performance and mimics a private server by running less than a dozen “virtual|” operating systems on one server. You get a private IP address, root access, and freedom to change whatever you want so there is more control.
• Private Server – this is the most expensive and most performance. Also the most freedom – it’s an entire webserver to yourself. It’s just that someone else manages it to make sure it has electricity and reliable internet at all times.

So basically, I moved from a shared plan with 1and1 for about $10/month to a VPS with SliceHost for about $48/month. Except I was already paying the $48/month to host UniversityTutor.com so I will actually save a little bit by canceling 1and1.

SliceHost’s 512MB plan is enough to host all my sites right now and I can’t recommend these guys enough. I’ll probably be doing all my hosting with them in the future. If you are a bit tech savvy their hosting is awesome, and they have really knowledgeable folks sitting in a chat room at all hours in case anything goes down.

With 1and1 you’d wait 48 hours to get an email back from their support team who obviously didn’t speak English, and would just send you a template email response that wasn’t helpful at all. SliceHost has people who actually know what they are doing sitting in the chat room at all hours.

Moving everything over was a big process with a lot of steps, so if you see anything broken or not working anymore, drop me a comment below. Thanks!

Brian Armstrong

Here is the video as promised of the new billing features on UniversityTutor.com.

For those just joining us, this represented a big change in the business model. Previously I was charging tutors $10/month to keep their profiles on the site.

With the new business model, tutors can now have a free account, but the client pays a 15% fee on any money they earn. For tutors who use the site a lot and don’t want their clients to have the 15% fee, they can still pay $10/month (for a Pro Account) and then the markup is only 5%. This is similar to the Guru.com business model which I think balances nicely between the free and pro account.

There were a couple important points I wanted to reinforce to the tutors:

• The *client* pays the 15% markup and not you. I stole this idea from odesk.com by the way, and it’s slightly different than how elance.com or guru.com does it, where they charge the tutor.
• Clients can only leave you a positive review if you complete the transaction online.
• Similarly, your number of hours of tutoring (aka your tutoring experience) will only get updated if you complete the transaction online.
• You don’t have to pay up front for “contacts” from potential students anymore. Now, we only make money if you make money – which seems more fair.

Here it the video on Veoh (which has slightly better resolution). Click here if you don’t see it below.

Or if you are international here is the same video on YouTube.

As you can see, it ended up remarkably close to my drawings from a few weeks ago:

I launched the feature this weekend, and sent emails out to about 5,000 tutors explaining the change and how it would (hopefully) benefit them. A handful of the tutors wrote back and were pretty upset about the change (which was to be expected when sending to this many people). But I wrote them back right away thanking them for the feedback and telling them it was still a work in progress and that really using the invoicing was optional for right now. They could still get paid with cash/checks if they wanted – clients just wouldn’t be able to leave them a review after.

Here is an example of one of the emails I got:

Subject: Silly

While I feel that it is justifiable for the website to make money and operating costs, the website should find another way to make these costs. Advertising to both the potential tutees and tutors could be a much better option. It could include specially directed advertisements based on
-info given about potential tutees
-Area
-Major and area of tutoring (of college students)

Additionally, I am concerned about the method of payment. Would it be through pay pall? That would be bad for me. My students have been very reliable with their checks.

Sincerely,
A disgruntled student

And my response:

Hi[NAME REMOVED],

Thanks for the feedback you make some very valid points! It is still a work in progress and nothing is set in stone yet so we’re definitely taking everyones feedback seriously.

To answer your question, the student can pay via credit card which is more common online, so no, Paypal is not required. In addition, you are not required to use our online payment method at all. If you prefer to keep using checks or cash that is ok with us, and you wouldn’t pay us any markup in that case.

For your current clients it may be easier to just continue doing this. Just keep in mind that to build a reputation on the site (reviews and hours) it might be better long term to transition over, but it is still totally optional, and to be honest right now it won’t make much of a difference since nobody has any hours recorded yet anyway.

But hope this helps and we’ll continue working on it. Thanks again!

Thank you,
Brian Armstrong
–
www.UniversityTutor.com

Her mood changed instantly when she wrote back:

Thank you for answering my questions.
I am actually quite excited about using the online system now!

Success! I’m really excited about it and hopefully it helps make the site much more profitable over the new few months as people start using it.

What do you think? Feel free to send me your feedback in the comments…

So the question becomes, what is the most effective way to spend your time and mental energy?

Think for a minute about a person carrying buckets of water for their crops. There is a direct correlation between how much they work and how much water they get. If they want more water, they have to carry more buckets.

Now compare this to someone who uses their time and energy to build a machine instead. This machine is “passive” in that it works whether it’s owner is there or not.

Obviously there is great leverage in having a machine such as this. It can work day and night while your time is preserved to build new machines or relax.

In the modern day of the knowledge worker, we no longer need to carry buckets of water with manual labor. But there is certainly the mental manual labor of a 9-to-5 job, copying and pasting in Excel, or whatever it is that you do. It really is no different in the sense that there is a direct correlation between your time and how much your earn. If you want to earn more, you need to put in more hours and continue working each week.

Now, if you are surrounded by people who carry mental buckets for a living, the idea of building a machine might sound pretty silly to them. I’m sure the first person who built a water wheel felt the same way. It is more difficult to build, costs money for wood and nails, and might not even work.

While you are messing around trying to get your machine working, your bucket carrying counterparts will probably get a lot more water carried in the short term. They might think you are pretty silly spending all your time and money on a machine that might not even work while they are getting consistent progress each and every day carrying buckets.

But at some point you’ll get your machine working, and it will start to match the output you were able to accomplish manually. Even if your machine is only producing the equivalent of what you could do manually, you still have a very significant advantage: your time and mental energy are still available.

Because they have been preserved, you can now go on to build a second machine, and another, and another. When you have 15 machines running simultaneously your output will be far greater than any one person could produce (or earn in a job).

This is the real key: preserve your most precious resource (your time and mental energy). Build systems and machines that work when you aren’t there. Avoid mental manual labor that require your time for output.

What are the best modern examples of these machines? Owning and investing in businesses, income generating real estate, some web businesses, etc. With these machines in place you can produce far more than any one individual could with manual labor, and get rich in the process.

In this article I’m going to show you how I have finally gotten the right home theater system setup that I am 95% happy with, which will allow you to…

• Get any TV or movie that you want to see for free, automatically downloaded for you in some cases
• Watch them whenever you’d like, no more tuning in at a specific time
• Skip any commercials
• Watch it on your television as it should be (instead of a computer monitor)

Full disclosure: depending on what content you download you may be breaking copyright law. It doesn’t bother me much if you do since the industry is so backwards, but I figured I should mention it. The irony is that this setup is a better user experience than anything you could buy.

As a side note/rant on movie theaters, why do people even go to these any more? You have to listen to other people talk and make stupid comments during the movie, you have to sit through 20 minutes of forced advertising at the beginning, you can’t drink wine/beer, you can’t cuddle with a significant other, you can’t pause it to take a leak, you can’t pay anything less than a 300% markup on candy. The list goes on and on. And perhaps the last remaining reason to go (larger screen/better sound) is largely disappearing with today’s home theater systems.

Anyway, moving on…

What You’ll Need

1. An old computer you don’t use (doesn’t matter if it’s slow, the one I’m using has an 800Mhz processor and a pitiful 384MB RAM, but it does have to have an s-video out port)
2. A TV that accepts S-video input (most modern flat screens support this)
3. An S-video cable
4. An audio cable like this which takes your computer audio and splits it into two cables for your TV
5. A wireless mouse/keyboard (not absolutely necessary but makes it a lot nicer so you can do everything from the couch, I have this logitech one and it works pretty well).

You might be able to find both of those cables laying around the house by the way, they are commonly included with various electronic devices like camcorders, etc.

Step 1: Install Ubuntu Linux

While you could do this with an old Windows machine also, it uses more memory and crashes more often. This is very doable on Mac as well if you have an old Mac around (I use Mac for my day to day work and love it). However Ubuntu is a free operating system, uses very little memory, and is actually much better than Windows so that’s the option I chose.

Visit the Ubuntu download page and get the latest version (8.10 at the time of this writing). Burn the file to a blank cd and pop it into the CD drive on your old pc. Turn it on and you should get an Ubuntu install screen.

Note you may have to use safe graphics mode (I did) since you are using the S-video cable. Go through the steps and in about 20 minutes you’ll have a shiny new Ubuntu desktop.

One final tricky step to configure Ubuntu: I had to remove pulseaudio because it caused some problems later. Basically, open the sound configuration panel (System > Preferences > Sound), set everything to “ALSA”, then open a terminal window (Applications > Accessories > Terminal) and enter the following commands: “sudo apt-get remove pulseaudio” and “sudo apt-get install esound”.

Step 2: Install Miro

Miro is an awesome free piece of software which will download all your TV shows for you. What’s really cool is that in the next step we will tell Miro which shows we like, and it will AUTOMATICALLY go out and download them for us whenever new ones air. This is basically like free Tivo.

If you want to get technical, Miro is actually a bit torrent client. Bit torrents are basically a technology that says “instead of downloading a single big file from one place, download little pieces from a whole bunch of places”. This allows you to get the data faster and more reliably since it’s distributed (like the internet) and has no single point of failure. It is also a very good idea to “participate” in this process by sending your little file pieces to other people once you have a file downloaded. Miro does all this for you of course so you don’t have to really know or care about all this, but I thought I’d throw it in for the fellow geeks in the audience.

Anyway, head over to the Miro download page. The Ubuntu instructions are a little different if you’ve never installed something in linux before. There are lots of different versions of Ubuntu. If you followed the instructions above you have the Intrepid version, but if you aren’t sure you can always goto Applications -> Accessories -> Terminal and type “lsb_release -a” to find out for sure. Then you have to tell it where to look in the Synaptic package manager, and then reload it and pick Miro to install. The instructions the Miro page are quite good.

Pretty soon you’ll have something like this running:

You’ll probably want to install all these codecs to make sure you can play all the videos. Just run “sudo apt-get install ubuntu-restricted-extras” from the terminal.

Step 3: Add TV Shows with TVRSS.net

Next you’ll want to add all the TV shows you want to watch to Miro. I’ll re-post the key steps from this article at FreeTvReviews.com which already describes it quite well.

• Visit tvRSS.net
• Click the Shows link

• Navigate to a show you want to watch
• Right-click “Search-based RSS Feed”

• Click “Copy Link Location” in Firefox to copy the location of the link.
• Launch Miro. At the top menu, click “Channels” -> “Add Channel”

• Paste in the link you copied from tvRSS.net and press Enter
• Right click the channel and click “rename” to name it something more meaningful, such as the name of the show. This will help you keep it organized.

Basically, you’ll add each show’s RSS feed to Miro and it will then download the new shows (using bit torrent files) as them come out. (A lot of jargon, I know…don’t worry about it too much, it works.) You can also download old episodes from the feed.

One more tip: in the Miro options I’d recommend setting the maximum upload speed to about 10Kb/second. On most DSL/cable modems this will drastically improve your download speed since it won’t be trying to upload at your maximum speed.

Step 4: Getting Movies

Many movies are also available as bit torrent files. Miro can download them for you or you can even install another bit torrent client on Ubuntu if you’d like.

The best places to search for bit torrent movies? I like to use mininova.org. Once you do a search, sort the results by number of “seeds” to get the best results. This means the number of people uploading pieces of the file. The more seeds, the faster your download will go and typically the better the quality of the movie (there are a lot of bad copies floating around sites like this so it’s not quite as easy to get good movies as it is TV shows).

Also, you will often have to wait until a movie comes out on DVD to get a good bit torrent copy. Before then, most of the copies are from people bringing video cameras into movie theaters and the quality is horrible. I normally just wait for a DVD copy to come out on mininova.

An alternative site you can try is thepiratebay.org also but they don’t let you sort by number of “seeds”.

Step 5: Getting a Killer Experience with XBMC

This final step is optional. You can watch all the movies/TV shows above in Miro or with another video player like VLC media player which is excellent.

But if you want to take it one step further and REALLY pimp out your system, consider getting XBMC installed along side Miro. This thing is GORGEOUS and makes a cool display to show all your content: TV shows, movies, pictures, music…it even does weather and a bunch of other stuff (for example, there is a plugin for getting hulu.com shows).

Once you have it installed, go to the ‘video’ section and click ‘add source’. You’ll want to point it to the directory where Miro is downloading your TV shows. Now you can view all your TV shows in XBMC.

You may also want to enable deleting of files in the XBMC options. Then when you’re done watching a TV show/movie you can clean it off your hard drive to save space.

With your wireless keyboard you can control the whole thing and it is AWESOME! Check out these XBMC keyboard controls for more tips.

Here is a video demonstrating XBMC on Ubuntu (it would of course be in full screen mode when you actually use it so you won’t see the the computer desktop around it):

Conclusion
Parts of this can still be a bit tricky unless you are a computer nerd, obviously. But it’s getting easier all the time. If you run into problems, post them below and maybe everyone here can help you figure it out.

We are quickly reaching a point where downloading media like this over the internet is actually easier and much more enjoyable than traditional distribution models like cable television or mailing DVD’s. As usual, big slow companies are behind the times with this and out of touch with what consumers would like. About 95% of what’s on TV is complete crap and really annoying, so this is a good way to filter out the junk. It’s also a huge opportunity for entrepreneurs to come in and make a killing!

Hope you find this useful or at least educational if you don’t plan to do it yourself!
Brian Armstrong

They are absolutely right about that. If you go the inexpensive/free route you can easily get bogged down in mysterious wordpress errors as you try to hack plugins together, or deal with incompetent contractors abroad.

If you are on a budget, then that is the way to go, but it doesn’t mean it’s necessarily going to be easy.

(Note: In my own experience, about 1 in 5 contractors that I use through sites like eLance.com and Guru.com are really good. So my solution is to give them a small project up front to evaluate them before deciding who to work with. It only costs a few bucks each.)

But if you have a little bit of money to spend (and we’re still talking relatively small amounts here – hundreds, not thousands) you can often get a really great design done for you without the hassle.

One site I’ve seen recently who is doing a great job is CrowdSpring.com. What’s unique about this is that designers don’t just BID on your project, they actually SUBMIT a preliminary design as their bid. This is really cool because it allows you to pick from a whole bunch of designers before deciding who to pay.

Right now they only do graphic design, and not programming, but it’s a good start.

Incidentally, CrowdSpring is a good example of a passive income business. They are also doing a percentage based business model similar to what I am contemplating for UniversityTutor.com, where they take a percentage of each booking.

Very impressive site…check them out for your next design project.

The past week or so I’ve been working on a cool new feature for my passive income business, UniversityTutor.com: MAP BASED SEARCHING FOR TUTORS!

This is using some Google Maps technology underneath to integrate with my site and hopefully it will make it much easier for people to find tutors based on their location.

Check out the screenshot below or click here to try it for yourself:

As you might recall, in the past I was using subdomains for each city to help people narrow their search. So people looking for tutors in New York City would visit http://newyork.universitytutor.com.

Here is an example of what it looked like:

It was more difficult to find tutors near you with this method. And it also had the unfortunate side affect that many metropolitan areas (which really should have been grouped under one subdomain) were spread out across multiple subdomains. With 1,600 cities in the database, I would have taken me months to figure out how to group them via endless googling. And even then it wouldn’t have worked very well, because you still wouldn’t have been able to search by zip code or street address, etc.

However, this old method did have an important SEO benefit because Google could index these pages better. They are largely text and having the city name as a keyword in the subdomain gave a huge boost in my rankings. This was currently driving about 500 people per day to the site (for free) just from search engine traffic alone. I obviously didn’t want to lose this benefit by switching to a largly AJAX & image based site.

In case you don’t know, Google has a tough time reading image based sites and figuring out what they are about so they tend to rank lower in search engines, everything else being equal.

So I decided to do both. I would keep the subdomain sites with their text content which were already ranking well in search engines. And I would set the homepage to use the new map based searching feature. I’ll probably put a big link on the subdomain sites to the “new map based view” so that people who come there from the search engine find out about the main site and hopefully bookmark it or remember it for next time.

Next steps? Keep evolving the business model!

The next step I’ve been thinking about is setting up a way for tutors to invoice clients and get paid through the website (right now they handle all payment with the client on their own via cash or check).

The current business model of offering a free trial and then asking tutors to upgrade to a monthly subscription is working fairly well (about 20% of tutors who go through the free trial end up subscribing for $10/month).

However, it’s still a tough sell and 80% of people don’t do it. I’ve discovered that people are psychologically very resistant to “paying” for a job (a job is supposed to pay *you* right). It smacks of a scam or some other internet scheme. Some universities have even refused to list my tutoring positions after seeing that tutors are charged a fee.

Yet people seem to be perfectly happy giving up a small percentage of earned money through a transaction fee. They have no risk to try it up front, and I only get paid if they get paid. It doesn’t FEEL like their money since they are just getting it (minus my fee) whereas ten bucks up front definitely FEELS like their money coming out of their account.

The other day I was checking out Guru.com’s business model and I think they may have nailed it. For new users who just want to try out the site for the first time there is zero monthly fee. It is a totally “free account” with no time limit or anything. For this they take 10% of any money you make. But at the same time, if you start earning a lot of money through the site and want to pay a smaller percentage then you can pay a small monthly fee (about $10/month) and the percentage drops to just 5%.

To me this sounds like the right balance. My guess is that the 20% of people who I’m getting to sign up right now are the same 20% who would upgrade to the “pro account” for $10/month. And the other 80% (who I’m earning zero from right now and quickly get kicked out of my site when their free trial ends) are the casual users who would continue using the site and pay the 10% fee.

Won’t People Pay Offline To Avoid The Transaction Fee?

Probably my biggest concern with this model (and the only reason I hadn’t thought about trying it until now) was the fear that people would just pay offline (under the table) to avoid the fee.

But I got a clue from Guru.com on this as well. Here is how they do it: the ONLY way to get reviews and build your experience on their site is to complete the transaction through their site.

Obviously, people are less likely to hire you for jobs if your profile on the site shows that you are brand new and have never done any work there before. But more experienced service providers can charge higher rates. This was a big key: show the number of hours this person has completed through your site as an indicator of their experience. And also only allow clients to leave reviews AFTER they’ve completed a transaction through your site. A tutor with several positive reviews and 50 hours of tutoring completed would be able to charge a lot more. Hopefully enough to make it worth it for them to complete the transaction through my site.

What do you think? Will it work?

I’ll be looking into this and testing it out. As always, I’ll share with you how it goes and keep you updated!

Finally, it sure feels great to be working on my business instead of in it. I was watching this lady have lunch today and it was obvious she was on her lunch break from Office Depot. She looked so drained, savoring every moment of her lunch break. I could just tell she must have been bored out of her mind stuck in that store all day working in a business. It made me realize how lucky I am.

Until next time, keep breaking free!
Brian Armstrong

I decided to do a video blog today to show you a recent change I made to my passive income business, UniversityTutor.com. For those of you who haven’t been following the blog for a while, I launched this business in about 1 month with $100.

I only changed one sentence on the website – and this led to a 14% improvement in my conversion rate. Imagine if you could get a 14% raise at your job for changing one sentence?

Check out the video to see how I did it (watch in fullscreen for best view).

Watch Website Improves 14% Changing One Sentence in How to Videos  |  View More Free Videos Online at Veoh.com

Takeaways:

• Put yourself in the mindset of your customer
• Try to look at your website with “fresh eyes” or show it to new people and get them to “think out loud” as they go through it. No helping them when they can’t figure something out! You have to watch in silence which will be very difficult but revealing.
• Test, test, test – little ongoing improvements like this can end up being huge contributors to your bottom line as they add up quickly.

Until next time, keep breaking free!
Brian Armstrong