Thursday, August 27th, 2009
Some of you periodically ask me to define terms I’ve mentioned in my postings. I’ve included a short list here — I’ll probably add to it later (feel free to add terms with definitions through the Comments feature (and I’ll add them to the list)).
- Anchor Text — The clickable text of a hyperlink. The often-underlined text gives search engines and visitors information on what the page being linked to is about.
- Anecdata — A theory based on anecdotal information as opposed to actual data. For example, if someone in business says: “It appears that most of our customers are satisfied” (versus “Ninety-five percent of our customers report that they are very satisfied” in our recent survey.”)
- Bizoomer — A term used to describe a new Internet audience that is part “business” and part “consumer.” Examples of Bizoomers include eBay sellers, Adsense sellers and Amazon Associates. The term was coined by entrepreneur Rob Kelly in 2009.
- Cloaking — An approach that Webmasters use to try to trick crawlers into treating a Web site preferably.
- Cookies — A cookie is a piece of data stored on the user’s computer tied to information about the user. Web sites may use session ID cookies to confirm that users are logged in; those cookies terminate once the user closes the browser. Many Web sites also use a persistent cookie that stores your login ID or password to make it easier for you to login when you return to the Web stie. You can remove or block this cookie using the settings in your browser if you want to disable this feature.
- Cost of Goods Sold (aka COGS)– The materials cost used in creating the goods plus the direct labor costs used to produce the goods. COGS typically excludes sales, marketing and distribution costs. COGS varies by industry but are typically in the range of 20% to 50% of the price of your good.
- Cost Per Action (aka CPA or Cost Per Acquisition): An advertising business model whereby payment is based upon an action that a user makes as a result of the advertisement. Actions include: making a purchase, providing an email address, filling out a form, etc. An advertiser agrees to pay the publisher a set fee per Action.
- Cost Per Acquisition (aka CPA or Cost Per Action): An advertising business model whereby payment is based upon an action that a user makes as a result of the advertisement. Actions include: making a purchase, providing an email address, filling out a form, etc. An advertiser agrees to pay the publisher a set fee per Action.
- Cost per Click (aka CPC): An advertising business model whereby payment is based upon an advertiser paying a set fee for every click on an advertisement. Example: The Google AdWords program.
- Cost Per Thousand (aka CPM): An advertising business model whereby an advertiser pays a publisher based on the number of impressions (regardless of whether the user clicks on the ad). The “M” in “CPM” stands for 1,000 (M is the Roman Numeral for 1,000). Example: If you buy an ad at a $10 CPM, and the advertisement was displayed 50,000 times, the advertiser would owe the publisher $500 ( The equation is 50,000 divided by 1,000 multiplied by $10 equals $500).
- DACI — An approach to getting things done through teamwork. DACI stands for Driver, Approver, Consultant, Informed. See DACI To Get Things Done article for more.
- Daily Huddle — An approach to meetings inspired by the Mastering the Rockefeller Habits book. See this Daily Huddle article for details.
- Effective CPM (aka eCPM) — The eCPM represents your estimated earnings for every 1000 impressions you receive. It is calculated by dividing your earnings by number of page impressions, then multiplying by 1000. For example, if you earned $140 from 90,000 impressions, your effective CPM would equal $1.55 ($140/90,000) *1000 = $1.55. Some Web publishers use eCPM to measure the effectiveness of one income source (e.g. advertising) versus another (e-commerce). See this e-CPM article for more.
- External Link — A link from a Web site to another Web site.
- FICO –Stands for Free Isaac Corporation, a credit agency. Lenders use FICO scores to measure a borrower’s credit-worthiness. See this article on How to Boost Your FICO Score
- Fishbone Analysis — A strategic planning tool used to determine what is preventing you from getting something done. It was invented by Dr. Kaoru Ishikawa in the 1960’s — see this Fishbone Analysis article for more details including a Fishbone example.
- Freemium — A term used to describe a business model in which certain services are offered for “free” while others cost a “premium” (Freemium combines the words “free” and “premium”). Venture capitalist Fred Wilson of Flatiron is credited with inventing the phrase.
- G.A.P. Approach to Meetings — A tool used to organize meetings it stands for Goal, Agenda and Preparation. See GAP Approach to Meetings article.
- Google AdSense — The advertising platform by Google that allows Web sites to place ads from Google’s advertisers onto their own Web sites.
- Google AdWords — The advertising platform by Google that allows advertisers to bid how much they would pay if a Google user clicks on their ad after searching a keyword.
- Google Analytics — A tool provided for free by Google that allows Web Publishers to track statistics of their Web site. Google Analytics measures items such as number of visitors, page views and referrals
- GoogleJuice (aka Page Rank) — Named after Google Co-founder Larry “Page,” Page Rank is the rank (on a scale of 1 to 10) that Google assigns individual web pages within your site. Page Rank is reported to be heavily weighted as to the quantity and quality of links to your site. PageRank is a trademark of Google, though Stanford University owns the patent for it. For more details, see this Got GoogleJuice? article
- Hyperlink (aka Link) — A link is something on a Web page that when clicked on takes you to another Web page; It is typically highlighed by color or underline.
- Impressions — Impressions typically refer to the number of times an advertisement is displayed.
- Internal Link — A link from a Web site to another page within the same Web site.
- Keyword — A word, or set of words, that a user searches on.
- LAMP — An acronym standing for the following set of tools: Linux, Apache, MySQL and PHP/Python/Perl.
- Lifetime Value — How much a customer spends with you for their lifetime (or a designated period of time (e.g. One-year Lifetime Value represents what a customer spends with you for one year). If you’ve been in business already, you might know your Customer Lifetime Value. In fact you could simply divide the total amount of sales you’ve had since you began by the total number of customers you’ve had). See this article on How Much to Pay for a Customer to learn more about lifetime value.
- Link (aka Hyperlink) — A link is something on a Web page that when clicked on takes you to another Web page; It is typically highlighed by color or underline.
- LUMPS — An acronym for ranking factors search engine optimization that stands for Links, URL Structure, Meta Content, Page Content and SiteMap.
- No-Follow — Used to describe the label you put on a Web link that tells Web Spiders (such as Google) to not give external link credit to that link in terms of GoogleJuice (the opposite of a no-follow is a do-follow).
- Overhead — A type of cost. Typical examples of overhead costs include Payroll (although portions of payroll are sometimes included in Cost of Goods Sold), Insurance, Rent, Utilities, Legal, Accounting, Travel and Entertainment.
- Page Views — The number of times a Web page is viewed.
- PageRank — Named after Google Co-founder Larry “Page,” Page Rank is the rank (on a scale of 1 to 10) that Google assigns individual web pages within your site. Page Rank is reported to be heavily weighted as to the quantity and quality of links to your site. PageRank is a trademark of Google, though Stanford University owns the patent for it.
- Pay Per Click (aka PPC) — A model for paying for advertisements made famous by the Google AdWords program in which advertisers bid on how much to pay for a click that a Google searcher makes on an advertisement after searching for a keyword the advertiser bid on.
- Plain English — Plain English is an approach to communication favored by such people as Mark Twain and Warren Buffett. For more details, go to this Plain English, Please! article.
- Quality Score – An algorithm used by Google in its Pay Per Click advertising that ranks the relevancy of landing pages to their corresponding Pay Per Click
- Scrum — Agile “Scrum” is an approach to a frequent (often daily) meeting called a “Scrum” based on the Agile Methodology (originally a software development approach). See this How to Scrum & Sprint article.
- SEO (Search Engine Optimization) — The concept of optimizing how Content gets ranked by search engines such as Google and Yahoo. Here’s an SEO Tips article from an eBay SEO specialist.
- Sitemap — Sitemaps are a way for webmasters to inform search engine crawlers about pages on their Web sites so that search engines can more intelligently crawl the site. A Sitemap is typically an XML file that lists URLs long with additional metadata about each URL such as how often it changes, when it was last updated and its relative importance.
- Sprint — Agile “Sprint” is the amount of time from start to finish that a team works on a set of pre-defined requirements; derived from the Agile Methodology. See this How to Scrum & Sprint article.
- SRP (aka Search Results Page or “SURP”) — The listings of results on a Web page after you do a search.
- SWOT Analysis — A strategic planning tool standing for Strengths, Weaknesses, Opportunities and Threats. See this SWOT Analysis article for more.
- TRUSTe — An independent, non-profit organization whose mission is to build user’s trust and confidence in the Internet by promoting the use of fair information practices. It can be found at www.truste.org.
- Unique Visitors — Refers to individuals visiting a Web site (but counts them only once (as opposed to Visitors which may be repeat visitors).
- Universal Search — The concept of searching not just traditional Web pages but other Internet items such as audio, video, blogs and user-reviews.advertisements and keywords.
- Visitors — Typically refers to an individual visiting a Web site (see Unique Visitors).
- War Chest — A war chest refers to money set aside to deal with unexpected changes in business, or for expansion opportunities. The term originates with the medieval practice of having a chest filled with money to open in time of war.
Tuesday, August 25th, 2009
You likely need partnerships to grow your business.
Here are some tips I’ve used to close partnerships with such companies as Disney, Microsoft, Sprint, Sony Music and NBC.
- What’s Your Endgame — As Stephen Covey says in The 7 Habits of Highly Effective People, start with the end in mind. Imagine the press release you would like to announce your partnership – be as specific as possible.
- Establish the “What” before the “How” — Make sure to be clear with yourself and partner on “what” it is you’re both trying to do before you dive into the how. An example of a “what”: you may want traffic from your partner’s Web site to your own; and they may want you to pay them to advertise on their Web site. An example of a “How” would be: Your partner will put a link for your Web site on their Web site.
- Those Who Listen, Win — Don’t talk too much: focus on your partner’s challenges.
- Ask A Lot of Questions — As I pointed out in my article on Spin Selling, ask a lot of questions (especially about what your partner’s objective is). A favorite question of mine is: “What’s your biggest challenge?”
- Be Direct & Honest — Don’t beat around the bush. Be as honest and direct with your partner on what you want as possible.
- Determine the Fit First/Business Model Later — Focus on getting to know each other and finding the partnership fit first, before you get caught up in negotiating. The business terms will be much easier once you’ve fallen a bit in love as partners.
Best of luck!
Monday, August 24th, 2009
I work on the management team of a purely virtual company — as in, we don’t have any physical office.
At about 70 people, we are the largest purely virtual company I know of.
Note: see a recent update on 2 other virtual businesses at the bottom of this article.
Sure you may know larger teams of telecommuters out there — but they are typically part of a larger organization that has a physical office…we have none!
In fact, part of me sharing this posting is to find out if you know of any other sizable purely virtual teams out there!
In the meantime, I thought I’d share with you some of the pros and cons of a virtual business:
Virtual Team’s Pros & Cons
Benefits of a Virtual Business
- You Can Hire Best of Breed — Arguably the most valuable benefit of working remotely is that you can hire THE best person for a role (as opposed to settling on hiring in a specific region).
- Potentially Physically Healthier — Your team has the potential to lead a more healthy lifestyle if they work virtually as they’ll have more opportunity to exercise and they will also likely eat more meals made by themselves (which are typically smaller/healthier portions) — I recommend that you emphasize to your team to take advantage of this opportunity!
- Lower Overhead — You save the cost of renting, leasing or owning physical property.
- More Flexible Scheduling for Your Team — Your team can have a little more flexibility for determining their working hours; for example, if a team member wants to take off a half-day of work on Friday and then make up for the work on a Saturday afternoon, that becomes easier.
- No Commute Time — Your virtual team has the potential to work more hours than they would in an office since they won’t be commuting…this will also save them commuting costs (car, bus, train, etc.).
- Lighter Carbon Footprint — Your virtual team will be producing fewer greenhouse gas emissions per person.
- More Time With Children — Your team can see their children (or pets) more often.
- Metrics Become Dominant — My experience is that a virtual environment has an interesting positive bi-product: you will need to utilize metrics even more than usual (since you won’t be able to see as much in-person proof of results)…this is a good thing.
- Increased Travel Opportunity — Allowing your team to work virtually means that if they have the proper setup, they can work from different locations (allowing them to travel to new and exciting places that will help them grow)
- The Team Saves Money on Food — Your team will likely spend less on food when they work from home.
Challenges of a Virtual Business
- Difficult to Express Emotions — It’s way more difficult to read emotions in a virtual work environment — for example, if a person is about to cry, you can not as easily tell that over the phone that you can in person.
- Difficult to Visually Represent Thoughts — It is tougher to represent information virtually than in person. A giant white-board is way more efficient for communicating than any Web application I know of.
- Tougher to Post Job Listings — Many job posting sites — including Craigslist and LinkedIn — do not let you do a job posting to the whole world (they force you to name a geographic area)
- People Can Hide Things More Easily: More Difficult to Hold Accountable — In general, you will have to work harder to hold people accountable when you’re working virtually — it’s just much easier for someone to “drop the ball” virtually than it is for them to do so in person.
- Physical Dormancy — Watch out for your sitting posture. Working from home typically means that your body will be in a static seated position longer than if you were going into an office (since going into an office means you’ll typically be taking more walks to conference rooms, restrooms, outdoor breaks).
- Street Noise — You may find more street noise working at home. For instance, I work in my home which is one-story up on a relatively quiet street yet I still have construction work outside, yard work by neighbors and couriers buzzing my doorbell.
- Time Zone Management — You will typically have more your people spread across multiple time zones which means some creative scheduling. In the case of our management team, for instance, we have three of us in the Pacific Standard Zone (PST) and two others in the Eastern Standard Zone (PST); which is three hours apart.
- Lack of Physical Touch — I have learned that physically connecting with a team member — whether through a hug or a high-five — is helpful to team bonding…you have much less of that with a virtual environment.
- Fewer Opportunities to Bond Away From Work — When your team is working remotely, you will have fewer opportunities to bond outside of work because: A) There may be more of a physical distance between your homes and B) You won’t have a mutual office in which you can say: “Let’s go grab a drink together after work” or “take a jog together during lunch break.”
- Communication Becomes Even More Important — Effective communication in business is always vital; as you work in virtual environment, you will want to err on the side of over-communication to make sure your team is as much on the same page as feasible.
Bonus Tips for Virtual Environments
- Virtual Team Communication Tools
- Skype — Effective for two-person video conferencing calls
- ooVoo — Interesting application we’ve been testing for video conferencing beyond two people (we’re only on the free trial so far so we’ve just dabbled with three-person video conferencing so far)
- Google Docs/Apps — We use the Enterprise Version of Google Apps/Docs and are pleased with the collaboration abilities
- Live Meeting — We use Microsoft’s Live Meeting to show our desktops to each other
- FreeConferenceCall.com — We use this Web site to set up free conference calls
- Managing Virtual Teams
- Daily Huddle — Just about every person on the team is involved in some type of daily huddle with their team (ideally 7 or fewer people) (see The Daily Huddle article I wrote.
- Team Calls — We do a conference call with the entire company on a bi-weekly (every two weeks) basis (we cover general updates and training)
- Ask “How do you feel?” more often — I find it useful to ask our team how they feel more often than I would in an in-person work environment. This is especially important for the “Feelers” on your team (check out my article on Top Types: 16 Myers Briggs Personality Types (8 of the personality types are feelers). Go to the same Introverts — For the more quiet introverted people on our team, I try to get them more involved by asking them their opinion on conference calls (for more on introverts, check out TopTypes for more on introverts.
- Regular in-person get-togethers (including for Strategic Planning) — I’ve found it useful to get our smaller teams (e.g. our Management Team) together in person on a regular basis (quarterly or monthly is ideal if you can afford it) — in person meetings are most effective for Strategic Planning meetings (such as setting 3 year plans, 2-year plans, 1-year plans, etc.) where you need to do exercises such as a SWOT Analysis.
Another important lesson I found is that working in a virtual workplace tends to be really easy when your business is performing well and super-difficult when your business is having performance challenges.
That means that you’re really going to have to be at the top of your game during the tough times.
If you know of any purely virtual companies larger than 70 people, please comment below.
And you may enjoy this 5 Tips For Managing Your Virtual Team article I wrote.
Update On Other Larger Virtual Companies (Sept. 5, 2012)
There was an article in today’s Wall Street Journal that identified 2 other large virtual businesses: 1) Automattic has having 123 employees working in 26 countries with most everyone working from homes (though they do have a small San Francisco office for occasional use)); the article also mentioned Kalypso LP which claimed they have 150 employees around the U.S. and in Europe with no corporate offices.