| July 27, 2010 5:13 pm

OMG-UbuntuOver the past few weeks, I’ve had a great deal of fun watching Benjamin Humphrey and Joe Elijah (d0od), the founders of “OMG! Ubuntu!” try and start their own business.  If you look back over their Twitter streams, you will see a lot of noise about product ideas, expansion opportunities and big dreams; and some of it is really interesting stuff.

(Does anonymously spying on two strangers via Twitter make me some kind of a voyeur?)

They’re talking about expanding the number of websites they run (there’s already an OMG! SUSE! website) and they’re even experimenting with merchandise.  The whole thing is a fascinating experiment in entrepreneurship, and I sincerely hope that Humphrey and d0od are successful.  Already, they’ve been doing some interesting things and I look forward to seeing how they pan out.

Consider their first big venture, the OMG! Ubuntu website.  By any metric, OMG! Ubuntu is extremely successful.  It boasts 12,000 RSS subscribers, 4,000 twitter followers, 3,000 Facebook fans and an average of 2 million page views a month.  This places it right up there with behemoths like LifeHacker, Gizmodo and Daring Fireball.

With that said, I’m not sure how well their experiment is going.  Even though they have an established website and brand with tens of thousands of subscribers and millions of pageviews, I don’t get the impression that the OMG! franchise provides a comfortable income.

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Which raises a really interesting question: what is the best way to “monetize a project”?  We all want our work to be self-sustaining, and some of us would even like for it to be profitable.  But what is the best way to make that transition?

1.

Like Humphrey and d0od, I have several ongoing projects.  This not only includes this website, but also my programming projects (Time Drive and LyX-Outline), a book and several design related endeavors.  But even though project self-sufficiency is very close to my heart, I haven’t been successful in turning it into a reality.

(Actually, I should qualify that.  I’ve been somewhat successful.  This website more or less pays its hosting fees and I’ve been able to purchase development time for both LyX-Outline and Time Drive.  Don’t snigger, I’m really proud of that.  But I would hardly call it a moneymaker.  It’s – as Steve Jobs said about one of his less than successful endeavors – a hobby.)

This doesn’t mean that I haven’t tried.  I’ve looked at all kinds of way to “monetize” my various “intellectual assets”.  Some of the more notable experiments include advertising and affiliate programs; but in most cases, I’ve concluded that they simply aren’t worth the time/effort required to turn a profit.  As one example, let’s consider Google AdSense.

For the better of two years, I’ve been running Google’s soul sucking ads on the full-text of posts.  I originally started doing this as an experiment.  At the time, I had just read a  case study on ProBlogger about how a writer was able to earn several hundred dollars a month by simply adding adds to his blog posts.  Doesn’t sound so hard, right?

Wrong.

Sure, it’s really easy to add advertisements to a blog post.  You just need to copy and paste the code from the AdSense website and press the submit button.  But simply running the ads doesn’t guarantee that you’ll make any money.  In fact, it’s probably a guaranteed way not to make money.

If you want to make money from Google AdSense ads, it’s important that people not only see them, but that they click on them; and getting people to click on the ads is a huge amount of work.  It requires that you trial different locations, colors and campaigns.   You need to be an expert in user interface psychology and design.  For example, did you know that people are more likely to click on an add if it appears at the top of a post rather than the bottom?  Or that it’s better if ads are on  the left of the layout rather than the right?  Or that it’s important to run ads in multiple locations so that if a reader misses one set of ads, they might see the second?  Neither did I.

To make it even worse, Google requires that you reach a certain monetary threshold before they will pay you.  For people in the United States, you have to drive $100 worth of ad sales before they will cut a check.  Driving $100 dollars worth of AdSense traffic is really, really hard.  As I said above, I’ve hosted Google ads for two full years, and I’ve finally gotten to the $100 point (or I will if someone clicks on another ad by the end of the month).  It only took 150,000 page views or so.

2.

Of course there are other ways to make money from a website other than advertising.  These options include affiliate programs or merchandise (OMG! Ubuntu! appears to be following this second path), but again, these don’t hold the promise of wealth either.  To make affiliate programs work (like advertising) you have to have a very large readership.  You have to drive traffic, and you need to interest others in the products and services.  In a lot of ways, it’s just like advertising; except more so.

To make merchandising programs work, you need to create and sell a product that people want to buy.  Unfortunately, most of the “easy” merchandising don’t really allow this.  I mean, go take a look at the stuff available in the OMG! Ubuntu! store.  They’ve basically slapped their logo on a bunch of cheap shit and asked people to buy it.

I absolutely love their website, I think they do a great job of reporting Ubuntu related news; but there isn’t anything that I really want in their store.  I don’t need a tacky t-shirt and I refuse to carry a man-purse (or “tote-bag” as they’re quaintly referred to).  The only reason I might buy something is to support the site, yet there isn’t anything that I’d like to buy, so I don’t.  It’s a malicious cycle.

This then beggars the question, are there any good options for monetizing a web site?

Well yes, there’s one: selling your own products and services.  When you hear the stories of massive online success where people have made millions, this is probably how they arrived.  But to sell your own products and services means that you must have them, and that they need to be good.  Which brings us right back to the starting point: what is the best way to transform a project (like OMG! Ubuntu, Apolitically Incorrect, the Ubuntu Manual, Time Drive or LyX-Outline) into a product or service?

I’m not sure that I have a good answer to that.  Anyone else have any thoughts?

Comments

7 Responses to “Making Projects Pay for Themselves”

Patrick wrote a comment on July 27, 2010

On your voyeur comment:

http://despair.com/somevedi.html

Rob Oakes wrote a comment on July 27, 2010

@Patrick:

Your link just made my afternoon. All I can really say is: God bless despair.com!

Somewhere I have a PowerPoint of the best official/unofficial Demotivators from the Internet and beyond. Whenever I’m in a particularly foul mood, or someone of Insufferable Happiness has wandered into my sphere of influence, I find it a wonderful way to return Sarcasm and General Order to the world.

I hadn’t, though, seen the figure that you linked to.

Founders of OMG! Ubuntu, take note. Despair.com sells the exact kinds of tacky shit that I’ll happily open my wallet for.

Golan wrote a comment on July 28, 2010

I think that to monetise something like Time Drive you have to think about more as a product than a software that does something that many people will find useful. At the moment you’re relying on people to:
1. Find out about it.
2. Go through the hassle of installing it (no, I don’t think PPAs are difficult, but I think most people do).
3. Decide for themselves whether they want to pay for it.
4. Go through the hassle of finding how to.

What would I do?
1. Have a website for Time Drive, not just a page on your personal homepage and promote it (!= advertise).
2. Offer binary files to download for most popular/important platforms.
3. Stick a price to it.
4. Don’t hide the price and the paying button on a different page (I’ve seen it before, but I wouldn’t know how to find out now).
4.1 Your default expectation should be that people should pay for Time Drive, not the other way around, but keep the free option highly visible.

Disclaimer: it’s only my personal opinion derived from experience and observation but I don’t know anything about making money. I wouldn’t be able to sell water to a thirsty man in a desert without making a loss.

Benjamin Humphrey wrote a comment on July 28, 2010

Hey Robert,

Nice article. I totally agree with you – it’s very hard to come up with a way to make something profitable. In the case of web sites, you just need shear volume of people visiting – but to get to that amount takes a lot of hard work. I also agree that our merchandise is fairly crap, doesn’t help that cafepress only give us a small selection of products to print on and we can’t tie products to designs – which is annoying. We also make hardly anything of each thing that is sold. But merchandise is certainly not going to be our main source of income.

In the next few weeks we’re launching another site, moving OMG! Ubuntu! to wordpress, implementing entirely new designs for both OMG! Ubuntu! and OMG! SUSE!, running some competitions, creating some new exclusive software for Ubuntu, launching OMG! iPhone and Android apps and mobile sites, and we’re also getting guest posters from Canonical and the Ubuntu community to write a post every so often. All of these things should hopefully set us aside from our competition (mainly webupd8 and ubuntugeek at the moment) who don’t do any of this. In Q1 next year we should have around half a dozen sites up and running, and hopefully we’ll be making enough money to cover the costs – but until then, it’s a real struggle for two poor guys in their early 20s to start a company!

Tommy Brunn wrote a comment on July 28, 2010

I’m definitely no expert on monetizing hobby projects, but I think that you’re absolutely right in that I doubt selling “tacky shit” that’s available from many other sources will make them much money. If you’re going to sell a product, you’re going to have to offer something that either isn’t available elsewhere or is available cheaper from you. It’s hard to find a good fit for what could be sold via Omg! Ubuntu! but perhaps they could see if they could become part of an affiliate program for services like Sparkleshare, Dropbox, Ubuntu One, GoDaddy and other hosting services? In other words, offer a slight discount on services available on Linux.

Once their Omg! Gaming! site launches, that would be an ideal place for reselling LGP games and other Linux ports.

tip wrote a comment on October 16, 2010

Maybe you can build on these ideas: http://tipping.selfpromotion.com/
Might be the right approach for Time Drive.

Ryan Brown wrote a comment on March 17, 2011

I am not an expert, just a college student working on my BA in Business Management and Leadership, but here is my two sense.

E-Commerce is an interesting and complicated subject, it makes the realization that companies like “AAA” made a long time ago only on a much bigger scale. This realization, of course, has to do with the growing complication of the customer provider and employee employer relationship. Let me explain below in further detail.

When we evaluate a company like “AAA” and ask who their customers are we immediately think of their member, but what about the relationship between the tow truck companies and the AAA organization. The tow truck company provides a service to its customers and their customers pay for it, does this not seem to mimic the relationship between “AAA” and and the tow truck company? So it would seem that “AAA” is the customer and the tow truck company is the provider, right?

Well what about the service that “AAA” provides to the tow truck company? “AAA” is an organization with a whole lot of members, and when they call a specific tow truck company up they are providing that tow truck company with a customer they would otherwise not havee recieved. Which service is greater here, who is the real provider and who is the customer?

The same type of complex relationships exist in e-commerce except on a much larger scale, because e-commerce is still a vastly developing inductry. More so, in this industry, entire technologies and market places can be made obsolete and vanquish overnight. These technologies and marketplaces are replaced with newer more inovating ideas that provide countless numbers of opportunities.

How does this relate to monetizing a website? Well let me give you a simple example. If I create an e-market around industry “A” and I bring many suppliers of the good or service provided by industry “A” together in one place, then I am providing a service to the consumers of industry “A” and the obvious way to monetize my e-market is to charge the consumer a subscription or transaction based fee. However, while the consumer may appreciate the service I am providing to them and may think it is really cool (probably not as cool as I do) they may not be willing to pay for it.

So how else do I make money from this e-market? The answer that comes to my mind is that I should consider the service I am providing to the suppliers. Sure I am bringing a lot of suppliers together for the consumer but they are not making money off of this deal, only gaining a conveninece. The supplier on the other hand now has a much larger customer base, which will likely result in sales and that equals revenue. That is your real customer, that is who you generate your revenues from.

I guess my real point is that the first thing one needs to do to identify how to monetize their website/e-project is to identify who all of their customers are, and who benefits the most. Then identify whether the entity or persons that gain the most beneift would be willing to pay a one time charge, transactional, or subscription fee for the service you provide. If they will, determine if this is enough to cover operational costs.

If they are not willing to pay for the service you provide then you can try to rely on advertising and merchandising or simply give up if you will. However, I might look into the following solutions first.

>>> How Can I add Value <<<

– What type of content can I add that may add the value needed to change the consumers mind

– Can I offer a free subscription version and a premium subscription version that offers added content such as inside information, coupons, financial advice from experts, more options related to my service, other bonus content that may add value.

– Is the site or project venture capital material?

In the end, if their is no way to add enough value to your sight or project to make revenues from it, and you cannot sustain yourself from merchandising or advertising, its time to realize that no matter how cool your site or project is, you must opperate it at a loss or get out. Of course, if the project means that much to you, and you can afford to do so, opperating it at a loss may be an option. Additional insight and innovating ideas can come from such opperations to help you in future endeavors.

DISCLAIMER: I am not an expert, as stated before I am a college student working on a degree for business management and leadership. These are just my thoughts and ideas regarding e-commerce and monetixing related projects.

Care to comment?