December 23, 2007:  In his most personal podcast on this site, Jon uses the hard-won examples of his own web sites to talk about how the Internet can be used as a “feedback loop” to affordably market test new ideas. Jon explains why “do what you love, the money will follow” doesn’t work and how the Internet can help us to make our passions marketable.

Remember all the idiots who said that the Internet was going to change everything? I was one of them. Yep, I was a card-carrying member of the mid-90s gold rush. The money felt queasy easy, but I still wanted a piece. The Internet’s value to businesses has swung back and forth ever since. Where we’re at now: a pretty good market for smaller players with attitude like you and me.

True, giants like eBay are now entrenched, but the Internet still provides an avenue for those who want to test new businesses without risking shirts. And it’s a great place to experiment with the feedback loop – you can get instant response on new products. And you can get a great handle on the popularity of your pages by crunching traffic stats until your eyes dry.

Ever since the mid-90s, companies have been trying to figure out how to (wank word warning) “monetize” their web sites. The obstacles have changed, but the challenge continues. As of this writing, youtube.com is getting a lot of business press for how much money it is losing despite the site’s huge popularity.

There was a point in the late ’90s where advertising was supposed to save struggling web site sites and solve their revenue problems. But the first wave of Internet advertising collapsed. Banner ad rates came down to earth as companies wised up to the fact that intrusive, “one size fits all” advertising has severe limitations.

In the last couple years, Internet advertising has seen a huge comeback. Traditional advertising has been complimented by the Google “contextual” ad phenomenon. Google Adwords is now just one form of embedded advertising that is driven by keywords. You can see these ads on the right side of Google’s search listings. But more importantly, you now see Google-type ads on all kinds of web sites. Any web site with a decent amount of traffic can now use this type of advertising as a revenue stream. Enterprising folks such as www.askdave.com can make a very good living solely through hosting these ads on their sites. “AskDave” goes extreme, forcing you to smack into those Google ads early and often, but you can opt for a subtler approach than “AskDave” and still make money.

Contextual ads make a big difference in the Internet economy: you don’t have to be ESPN.com to attract an advertiser’s attention. The days of “if you build it, they will come” have returned – though without the evangelical zeal this time around. You can see this even in the case of youtube.com, which built a hugely popular site without a business model and then sold it to Google before I could finish this chapter. Build a site, get traffic, put ads on site, make money. Advertising revenues are crucial because consumers won’t pay for much content besides porn. There are exceptions: ESPN has found a way to charge users a modest amount per year to access their Insider program, but even CNN.com, which tried charging for its video content, had to revert back to offering video for free, using an advertising-based model instead.

Knowing that “if you build it, they will come” sets us free: we can now build sites that cater to our interests. Keep in mind: not all consumer groups are created equal in the eyes of advertisers, but just about any site that has significant traffic can convert some of that traffic into ad revenue. Of course, the most effective sites have multiple revenue streams, combining advertising with paid premium services and mail order products. A small publisher, for example, would have advertising as well as an online bookstore where customers can order books. Informative free content and book samples would drive people to the site. Of course, some folks have enough industry know-how to build web sites that target businesses instead of consumers (this is typically called “B2B” as opposed to “B2C.”) If you can attract businesses to your site, you may be able to charge more than you could with a consumer-driven site.

But the Internet is more than a revenue stream. For many businesses, the real value of the Internet is relationship-building and product education. The majority of customers now routinely research products online before they buy. You can get a real feel for a company’s offerings through a well-developed web site. And of course a company can develop a nice database of prospects by compiling email lists from folks who sign up to receive product updates or free content.

Once you develop enough web traffic, your site will be indexed by the search engines frequently enough that you will be able to identify visitor trends in a matter of days or even hours. And search engines, particularly Google’s, are biased towards sites that offer quality content. Scoring a prominent place in search engine results can drive prospects to a business and save a huge amount of money on marketing. Even conventional brick-and-mortar ventures, such as restaurants, can benefit from a well-thought web site that attracts new customers, offers halfway accurate driving directions, and builds its brand via local and national “portals” that tourists scour.

No, the Internet can’t eliminate business risk. But the Internet makes it much more affordable to roll out new business ideas without the “empty your wallet” marketing required by a traditional business startup. And the Internet makes it *much* easier to take advantage of the so-called feedback loop. Most of the email you get from your site will be annoying, but all of it (barring herbal Viagra spam) will be invaluable. By posting this book online as I write it, I’ve put a lot of reader feedback to use. I don’t know how good the final book is, but it’s much better because of those who took the time to tell me why it sucked.

People make too much of “slaying giants” on the Internet. You’re not going to beat Amazon or Home Depot at the online game. But even myspace.com is a fairly recent invention, so there’s still room for bad ideas to go big. The best thing: a well-designed web site makes a ragtag team look legit. I’ve ordered products from people who probably had pretty lousy hygiene, but I’ve never been burned. Well, there’s one punk in New Jersey who trashed me on eBay. I’ll be sending James Gandolfini by his house shortly.

So if advertising is such an important part of a small enterprise, why aren’t there ads on this web site? Fair question. In business terms, it’s a mistake not to put ads on this site. I don’t have a good reason, except that it feels wrong. I feel the same way about jonreed.net. There are times when ads can cheapen a venture, or imply that your motivations are about getting paid first and everything else second. Sometimes that’s true, but sometimes it’s not.

Having said that, I am in the process of building a new SAP web site, and when there is decent traffic, I will definitely accept advertising. It’s hard to explain why I would take ad money on one site and not another. I just want to make sure with freefromcorporateamerica.com that people see these ideas are not compromised.

People need to stop looking down on ads and placing themselves above the economic fray. Most folks I’ve met who present themselves as above the world of commerce turn out to be independently wealthy. Their hypocritical judgements of my unambiguous desire to be rich have been a great source of inspiration to me. I have also met a few heroic martyrs who were not about the money and solely dedicated to their cause. That kind of life works for a few of us. But there are way more holier-than-though hypocrites than there are heroes.

Claiming economic power, and more specifically, monetizing your ventures, is not a sign of selling out. It’s a sign that you are sick of scrambling and ready to live. Contrary to the beliefs of some, you can help people more when you have resources at your disposal than when the working world has its foot on your neck. Of course, becoming successful does mean sacrificing some precious “street credibility.”

Working towards dreamy goals makes you less cool. People make fun of me all the time because I don’t drink. Then again, that’s probably what I deserve for doing most of my writing at a bar. If the price of being cool in your free time is busting ass for crap wages the rest of the time, I’m more than happy being a freak or a geek or whatever I am. Making money doesn’t mean becoming a corporate tool. If we can find a way to get paid doing something we care about, and if we can use that money to help some people and set some things right, then as far I’m concerned, that’s the new American Dream.

So let’s make some freakin’ money. And yes, the Internet can help us in our quest, but it will never substitute for business know-how. It’s just a tool we can use to launch ventures on the cheap and accelerate the feedback loop. No, we might not win the “cool competition,” but we’ll have the satisfaction of knowing we fought for our dreams instead of giving in to party culture. If that’s a stigma, it’s one I can live with.

Want to buy Free From Corporate America or see reviews of the final published version from readers like yourself? The printed book is now available on Amazon.com with product reviews.

You can also get a discounted version of the final book in eBook (PDF) format, or you can pick up a copy on the Kindle. The published version of the book is significantly enhanced from the web version available on this site.