You may have noticed that I added ING Direct as a sponsor for this site.

I’ve had an account with them since 2004 (long before this blog) and they are awesome. Essentially they are a high interest savings account, and they offer far better rates than your bank.

In general their rates on a regular savings account (that means you can move money in or out any time you want) are about equal to a 12 month CD (where your money is LOCKED in) at a regular bank.

Right now their rates are only 3%, but they fluctuate with the economy and are often over 4%. Thats earning 4% for free….zero risk, move it whenever you want, insured by the federal government against loss.

The way they do this is that they have no local branches and therefore no overheard from that. That is fine with me because I move the money in and out electronically, and use a local bank for my checking account.

Since I don’t invest in stocks, my money is only ever in one of two places:

1. Invested in real estate
2. Parked in ING Direct waiting for the next deal to come around that I like

The only other two options I’ve heard about that come close to this are: (1) a competitor to ING that came out a while back called American something. They offered a slightly higher rate to try and compete with ING but they were a small time operation and people complained of non existant customer support etc so it didn’t seem very safe. And (2) high interest savings accounts in other countries where you get the benefit of currency exchange and things like that. I’d be interested in learning more about this because the rates are higher, but just keep in mind it isn’t quite as safe because those accounts aren’t insured by the U.S. federal government like ING is.

Anyway, getting an ING account (or something like it) is pretty essential for building wealth in my opinion. Because otherwise if you have some cash parked somewhere it is just losing value to inflation. Tons of successful people I know use ING.

Oh yeah, and there is no minimum deposit and no service fees so take a few minutes and open an account.

I’ve haven’t used their mortgage or checking accounts but the rates look equally good.

In your opinion, when does it make sense to follow the plentyoffish model (ad supported) vs. the provide a service and charge a subscription model.

Taking that approach for example, someone could start a tutor site, make it ad supported, and potentially disrupt your site.

Thanks,
Aaron

This is a great question and I had to spend some time thinking about it.

What I came up with is that if you have the best site you can go with a subscription model, and if you don’t then a free ad supported version is a good alternative. Here’s what I mean:

Usually its not too difficult to look at what’s already out there and do it just a little bit better. This was the case with the tutoring website I put together. What’s out there currently is really not very good, so I was able to make a better site, and hopefully people will pay a small premium for that trust or convenience or whatever else they are getting from it.

On the other hand, if you are making a new site and you don’t think you can be beat the incumbent (like for example if you are trying to compete with match.com which already has a ton of users and fairly decent site), then making your site “free” could be your best competitive advantage.

In summary, you have to offer SOMETHING better to get people to use it. If you can’t offer a better service, then offer a better price (free). Or do both.

This list might be a little different than the typical great business ideas you see talked about in major publications (like Facebook, the iPhone, etc).

Those are great ideas, but I prefer to look at business ideas which are a little closer to home. Ideas that anyone with some hard work could get off the ground even if they didn’t have much money.

I like business ideas which…

• Have low startup costs
• Don’t require manufacturing a physical product (like the iPod, which incurs huge overheads)
• Actually charge something (unlike YouTube or more generally the “hope we get bought out by Google” business model)
• Scale well and don’t require your personal time for each person you help
• Fit the lifestyle of “breaking free” by not trading time for money

All of these ideas are somewhat obvious in hindsight, but I bet you can steal the “how” behind every idea and adapt it into a new business. How they made something easier, cheaper, faster, etc and helped a whole bunch of people.

Here they are in no particular order…(and by the way, I either use or have used every single one of these at some point besides PlentyOfFish):

1. Mozy
   Mozy is an online backup service. It automatically backs up the files on your computer over the internet, and offers unlimited storage space for a few dollars a month. I like this business model because its a subscription product, solves a real problem (when your hard drive crashes, it HURTS to lose everything), and scales well. You can build the system and it requires pretty much the same amount of investment whether 10 people use it or a million people do.
2. CollegeStudentTutors.com
   Ok granted I might be a little biased since this MY site :) But still, I like the idea because of the reasons mentioned above. It’s a better solution to a common problem than what is currently out there (the common problem being, where can I find a high quality tutor for my child at a good price who lives near me?). Super low startup costs and scalability are a plus here.
3. PlentyOfFish
   PlentyOfFish is a free online dating site that is advertising supported. The founder and sole operator, 29-year-old Markus Frind, runs the site from his West Vancouver apartment. The site pulls in more than $5 million a year from Google advertising with only its one employee/founder. Simply staggering. More generally, I like this approach of taking an idea you already know works online (match.com, eharmony.com, etc), and make a free alternative to it that is advertising supported. I’m sure their are dozens of opportunities that fit that model which are ripe for the picking.
4. Basecamp
   Basecamp is an online collaboration tool. It was started by just a few guys working part time and is now a multi million dollar subscription product. It worked because they went out of their way to understand good user interface design (something that, shockingly, Microsoft still sucks at). They built a loyal following of people who were happy to find software that “just worked” (a rarity) and really saved them time.
5. WordTracker
   A tool for online marketers that lets you find out what your customers are typing into search engines to find you. The product isn’t even that good, but considering how bad the alternatives are, the bar is pretty low (Yahoo deserves a particular dishonorable mention for the colossal wasted opportunity they had with http://inventory.overture.com, a similar site that is now offline). Anyway, again it is a subscription product that scales well and solved a real need that people had.
6. E-Junkie
   The process of accepting credit card payments on your website is traditionally nothing short of a nightmare. It involves horrible programming intricacies, laws and rules regarding encryption and storage, and having to deal with the shady credit card processing industry. It used to be hard to get a nice looking shopping cart set up quickly but E-Junkie changed that. It was surprisingly easy to get it set up on my website, and I’ve used many of the alternatives (OSCommerce, Zen Cart, buy now buttons, etc). I’m going to start sounding like a broken record, but….same reasons: subscription product, scales well, solves a real pain.
7. LuLu.com
   This one was probably more expensive to set up than others on this list, but its a great service for authors to get their books printed. Just upload a word document or PDF and they will do drop shipping, manage inventory for you, and get your book on Amazon.com. This company is making the idea of a publisher more obsolete (although that won’t happen completely for a while). Its a godsend to first time authors.
8. Quest
   This is a small local business in Houston, but I like the idea. It saves realtors and real estate investors all sorts of time by make a simple interface to look up and analyze investment property. Again, we see an improvement in user interface design which saves people time and makes their lives easier. This little innovation is a neat little subscription product that costs about $75/month (almost pure profit and again scaleable). At that rate you only need a little over a thousand customers and its a million dollar business.

Any time you see someone who is FRUSTRATED there is a business waiting to be born. Just go ask people around the office or your friends “What is the most annoying part of your job?” or just watch them for an afternoon and you’ll see something they are doing inefficiently. Any time you can save someone some time, money, or frustration you have a viable business idea. Now if it scales well you’re really on to something.

There’s no better time than now to take the initiative and put one of these ideas together. Hiring programers to make some software is cheaper than ever. What are you waiting for?

Brian Armstrong

Some of you have noticed and emailed me about the “Top Commentators” section in the right hand sidebar of this website.

This is a list of people who have posted comments on the site, and as a bonus for commenting it gives the top 5 posters a link to their website (based on number of posts). This link shows up on several hundred pages of this site including the Page Rank 4 homepage.

Its a great way to build traffic and ranking in search engines for your website.

Of course, you can also just email me a thoughtful relevant question that you really would like to know the answer to, and if I post the reply I’ll include a link to your site.

What ONE THING are you really dying to know, that would help you get a business started, quit your job, or get you on your way to financial freedom?

Hey Folks,

I’ve had some good success lately with Jeff Johnson’s video distribution techniques.

A few days ago I made this little 2 minute video demonstrating my new site:

Then I targeted my most competitive keyword (”austin tutors”) by putting this in the title and tags of the video.

Then I went to put it online. Normally I just upload my videos to YouTube since this is the most popular site. But taking Jeff’s advice, I uploaded it to Tube Mogul instead, which automatically uploads it to about 10 different video sharing sites (including YouTube).

This in and of itself is pretty valuable because it takes the exact same amount of time to upload it to TubeMogul as it does to YouTube, except uploading it to TubeMogul gets you maybe 5x the distribution for the same amount of effort. It would take me about 30 minutes per site to do it individually.

Heres the proof, it uploaded the same video to Yahoo, MySpace, MetaCafe, Google, Revver, AOL, DailyMotion, Blip, Veoh, and HowCast.

Within 24 hours I was seeing some of these video pages show up in Google search results for “austin tutors” (most on the 2nd and 3rd pages). Obviously Google likes these video sharing sites because normally my webpages would take 2 weeks to get updated by Google, but these were getting picked up within 24 hours.

One of them (the AOL video) got on the first page for a bit for my main keyword, then went back to page 2.

The next step was social bookmarking…
Read the rest of this entry »

From the Wall Street Journal a few days ago

The most compelling statistic of all? Half of all new college graduates now believe that self-employment is more secure than a full-time job. Today, 80% of the colleges and universities in the U.S. now offer courses on entrepreneurship; 60% of Gen Y business owners consider themselves to be serial entrepreneurs, according to Inc. magazine. Tellingly, 18 to 24-year-olds are starting companies at a faster rate than 35 to 44-year-olds. And 70% of today’s high schoolers intend to start their own companies, according to a Gallup poll.

An upcoming wave of new workers in our society will never work for an established company if they can help it. To them, having a traditional job is one of the biggest career failures they can imagine.

Check out the article here.

Hi Brian,
Any suggestions on how I would go about getting a mentor with a similar specialization that would be willing to help future competition? Any suggestions would be greatly appreciated.
-Michele

Hi Michele,

Just think about who is doing what you want to do already SUCCESSFULLY. Then try to get their email or just show up if you have to and ask for 5 minutes of their time. Tell them you’d like to get started and would appreciate any advice they could give. Ask them how they got started when they were in your place. Play to their vanity and desire to teach others.

If they are already successful they won’t care about creating competition because they’ll know competition is good for them and helping others is even more to their advantage. If they do care about this then they are small time and you don’t want their advice anyway, trust me (you should run out the door).

They’ll probably give you some task (book to read, or put some plan together, etc). Do it (this will prove to them you’re serious) and now you can check in with them later to show it to them. Ask for the next step and do it. Repeat, and you have a mentor.

Brian

Here is a little video update on the tutoring business launch. I’ve been doing all sorts of things to promote it. We’ve got enough tutors signed up in four cities now and I’ve been doing SEO, pay per click, contacting academic advisors, etc. Making progress slowly but surely…

Most people who want to start their own business don’t have a ton of money laying around and it’s probably one the most common questions I get emailed about: How can I get started without a lot of cash?

Well I’ve put together a list below of the best ideas I’ve heard and personally used. I hope you find it useful!

The three basic strategies to starting a business without much money are:

• Delay the normal “business starting” activities like incorporating, hiring, renting office or retail space, etc until AFTER your business has started earning money. This is known as bootstrapping.
• Doing everything yourself and spending your personal time instead of hiring an expert. (Takes longer but costs less.)
• Using some neat tricks and little known deals below.

Start With The Easy Stuff: Eliminate Expenses

1. Don’t rent an office! - work from home. Or better yet work from the best free office with locations everywhere: Starbucks. If you need to meet with a client and are worried about seeming small time without an office, don’t be. Just meet them at a restaurant for a lunch meeting. This is what people with the nicest offices do anyway.

2. Don’t hire any employees! - do it all yourself until you have some $ coming in the door.

3. Don’t hire lawyers, technical people, graphic designers, or assistants (see below)

Legal Stuff and Incorporating

4. Get a free lawyer and legal advice from the mentors at Score.org

5. Find a website with a similar legal document and modify it to your needs

6. An LLC is probably the best business structure, but don’t worry about incorporating until you’re earning money, just do a sole proprietorship, you can always incorporate later (you can get it setup with the IRS in just a few minutes by calling them at 800-829-4933)

7. Learn how to do your own financial statements for your business in Excel instead of hiring a CPA or bookkeeper (again you can do this after you’re making money)

8. Take a Quickbooks class at your local community college

Make a website for your business

9. Don’t pay a premium for a top end domain name, there are plenty of good ones left

10. Test out your ideas by writing to a blog, you’ll get feedback on what people like and don’t like

11. Get a free business website at www.wordpress.com. It won’t be your own domain (it will be something like yourbusiness.wordpress.com) but…

12. When you’re ready to have your own domain, get a hosting plan (new domain included) at 1and1 for $4.99/month, and install wordpress on your own server (instructions)

13. Get a professional website design for free with a wordpress theme that you can install with a few clicks (no programming knowledge needed)
Read the rest of this entry »

This is a guest post by Manuel Zeh, a friend of mine who has been travelling the world for 7 years and has come to some interesting perspectives on life. Manuel has travelled 40 countries on all continents and lived in 10 of them. He speaks 9 languages and is a professional pianist who has performed on Indonesian TV, at the Sydney Opera House and on the cruise ship “Sun Princess”, among others. He currently lives in Tokyo, Japan. Take a minute to check out his website at: www.manuelzeh.de

1. Retirement is NOT the goal of the game.

I used to think I want to work *really* hard so I could retire *really* early… when I suddenly realized that I wasn’t living life to the fullest now, while I’m still young. In a way, “working” means putting a price tag on your time, and selling it - and I believe my young years are priceless… they never come back. Yes, plan for later… but live in the present. The “now” is the only time we really have, and life is not a race, in which “whoever dies first, wins”. Statistics show that many people die soon after retirement, because they don’t have a purpose to live for anymore… other studies show that people who never HAVE to work again at an early age usually start to work HARDER then before, because that’s when they start doing what they love. Do these things you love NOW… they are likely your true calling.


2. Salary is NOT a good criteria to choose a job

Many people choose a job based on how much money they will make. Consider this… you spend MOST of your waking hours in your job - and life is made up of time, not money. Make your jobs something you love doing and you’ll never have to work a single day of your life! I believe the best three criteria to choose a career path are:
- something you love doing and are passionate about
- something that contributes / is useful
- something you have a talent for
If you fulfill these three criteria and learn how to market yourself, the money will follow… and you’ll be loving every minute of it.

3. A fun life full of experiences and achievement are NOT mutually exclusive

When I started travelling the world 7 years ago, I used to think that you have a choice to either ACHIEVE a lot or to EXPERIENCE a lot… and I consciously chose the latter. I’ve since found that if you follow your heart and your passions, things just fall into place and you’ll end up achieving a lot as a by product. Sometimes I’m surprised when I look at my CV and how impressed many people are by it, even though (or maybe because!) I’ve spent the better part of a decade travelling and having the most amazing life I could have dreamt up for myself.


4. Your parents do NOT always know what is best for you

Once I was dating a girl who, when she was 19, had wanted to travel. But she succumbed to family and society pressure and went with the responsible, financially secure choice instead. She went to uni, postponing her travels and became a dentist. When I met her, she was 26 and almost done studying… and she realized that she doesn’t even want to be a dentist, but it was too late. She also realized that she couldn’t really travel anymore because at 26 you’re not as free as at 19… she was already tied up with career, family duties, bills, a relationship, and so forth. I firmly believe that, if she had travelled at 19, she would have found herself. She would have discovered her true identity and what she really wants in life, instead of taking on a profession that she’d end up resenting. She would probably also have been a lot more motivated during university… studying with the serenity of knowing that she has already lived out her dreams, and that she’s pursuing a career she loves.


5.You do NOT need to be rich to travel the world

If a week in Florida can easily cost a few thousand dollars… how much is it to travel the whole WORLD for many YEARS? People sometimes ask me whether I’m a millionaire. Far from it… the formula is, I work in first world countries and save up. Travel in 3rd world countries. Latin America, Africa and Asia are ridiculously cheap… whereas in Europe, North America, Australia, Singapore, Japan and South Korea, you can make very good money. But there are many different ways to travel… most recently I worked on a cruise ship. Good salary, no tax, free food and accommodation, access to all the pools, gyms etc on board, lots of free time, travel in the South Sea on a pay check, and free excursions to all the islands.

Don’t come to the end of your life regretting the things you did NOT do… don’t dream your life, live your dream!
My best to you all,

Manuel Zeh.

Take minute to check out Manny’s website at: www.manuelzeh.de