Archive for the 'Tilted Pixel' Category

Web Hosting - An Illustration of the Dangers of No Entry Barriers

Thursday, April 27th, 2006

The internet continues to grow at a rapid pace, not only in terms of the amount of websites online, but also internet use and business done online. A very natural and good thing has happened as a result - the cost of “space” on the internet has gone down. Virtually everyone wins in this situation, with the exception of those attempting to make money in the web hosting business.

Having operated websites long enough to be complaining about web hosting costs in 1999, and also having headed a web hosting business that is alive 3 years later and now part of my Tilted Pixel venture, I’m going to take you on a tour of the web hosting industry and show you what happens when you choose to start a business that is snowballing towards commoditization. If you know what web hosting is skip the next two paragraphs and jump right in, otherwise I have a little intro to help you along.

In case you aren’t completely familiar with how internet services work, the internet is literally run by a whole bunch of computers. Some computers at the very top of the hierarchy hold the whole thing together, but beyond that anyone with a computer and internet connection can not only go online, but they can also make their computer a part of the internet by providing services such as a website. By providing services your computer is now deemed a server. This architectural quality of the internet is great because it allows anyone to contribute and makes it very difficult for any single entity to assert control of what the internet contains.

If you are running a website you typically don’t want to run it on your machine due to the administration involved, high bandwidth requirements (a cable modem doesn’t stand a chance), and increased hacker risk, so you purchase a set amount of space on a machine run by a hosting company. Reputable hosting companies have special equipment operating in data centers - large facilities with incredibly high speed connections, redundant power systems, and 24/7 technical staff.

The Business and Economics Behind Web Hosting

Renting space on a hosting company’s server 10 years ago was far more expensive than it is now. This is primarily a result of the fantastically decreasing costs of computer equipment powerful enough to operate a website server and the shocking price cuts in bandwidth itself - the cost of actually being hooked up to the internet pipes capable of handling web server traffic. Alongside this a host of web server administration products was released and evolved, making it far easier than before to operate a web server.

So prices fell and hosting became cheaper. Why the hell are you boring me with this Matt? Well these price cuts and user-friendly software eliminated the barriers to entry, an economics and business concept defining the obstacles to entering a certain market. These obstacles include everything from government regulations, cost of start-up equipment, patents held by competitors, special expertise, etc.

The brunt of this occurred several years ago when the cost of renting a web server suddenly plummeted drastically. At the heart of this was Server Matrix, a new venture by capital-heavy Texas company The Planet. Leveraging economies of scale and an aggressive growth strategy, Server Matrix pulled a Walmart and started renting web servers at insanely low prices. The rest of the major providers quickly fell in line behind them and began providing the same. The funny thing is that by this time computer technology was advanced enough that these new cheap servers were more powerful than far more expensive web server equipment bought two years ago.

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5 Keys to Drastically Improving the Results you Achieve from a Business Website

Monday, April 24th, 2006

In preparation for launching a whole kit for customers of my main business, I have been giving some serious thought to which strategies and ideas a company should be most interested in applying to its own website. Taking into consideration effectiveness, ease-of-implementation, cost, and applicability for different industries, I’ve put together a first-draft sampling of five that I feel must be known by every business owner. None of them are a quick fix, and some may sound obvious, but none of them require you to be a tech wizard or an amazing artist.

1) Start a Newsletter

Pay attention to your mail box. Every week you probably receive a grocery store catalogue, bargain newsletter, or similiar information item. Stores, including international brands, continue to deliver these week after week because if done properly they work. However this is far from a perfect system. How many of the fliers in your mailbox are you actually interested in? How many do you simply throw out? Every single flier represents marketing dollars for the company, and quite a few are simply going in the trash.

By starting an e-mail newsletter that your visitors and customers can willfully subscribe to allows you to reach the people that want to listen to you, and to do so for only the cost of writing the newsletter copy. Forget about printing thousands of flier that are destined for the landfills. Your virtual newsletter has no printing costs and will keep your company and your latest offers in the minds of your most interested customers. Just don’t overdo it and keep your newsletter opt-in. The last thing you want to be associated with is spam!

2) Share Your Knowledge With Your Audience

The internet has made major differences in the way customers shop and the options they have. One such key difference is information. With virtually everyone in your market having online access, obtaining detailed and impartial information on a product or service is easier than ever. Rather than trying to mask this information with marketing hype, why not turn your website into an educational resource? You’ll have potential customers using your site to learn more about the product, get excited about it, and when its time to purchase they’ll come to you, the expert!

It’s about more than just a really extended sales ad though. Having real educational pages is something search engines go nuts about - they love content. This is why blogs do so well in search engine rankings - they are content-oriented. This is the kind of optimization that you can’t buy. Go ahead and inform your visitors. You’re adding value to the site, the product, and you get to share your passion for what you do!

3) Say it Clearly and Concisely

I have a lot of personal emotion invested into this point because I’ve made this mistake multiple times and paid dearly for it. There’s nothing worst than painstakingly writing the most awesome copy ever and finding that it’s totally bombing. Well there is worst actually - writing that copy, not measuring it’s success (see point 5), and using it even though it’s a flop. I’ve done this too and received miserable results.

Writing for the net is part science and part art. First you have to entice the visitor in whatever microperiod of time studies today are showing you have their attention for. If you fail at this crucial first point then the rest of your site really doesn’t matter. Achieving it takes patience, testing, and viewing the site from the perspective of a visitor. Nice clear headlines (preferably written using proper HTML header tags for crucial search engine categorization) often draw the reader in. Like with most aspects of websites, not everything works the same for everyone. Spend some time reading about the basics, but then practice, experiment, and of course measure.

Avoid massive paragraphs, particularly on your front page. As wonderful as your writing abilities are, people want to know in words (not paragaphs) what you are offering and why they shouldn’t close their browser window. Sell them on that first and leave the long-winded explanations to the product details pages where the people interested in them can find them. Use bullets and images to help space things out and prevent the visitor from being overwhelmed. Creating your front page is a lot like writing your resume actually - you want to get the key points out there, be brief, and don’t clutter the page.

To make things confusing, writing effectively doesn’t always mean keeping it short. You can provide informative content that users want to read and still have a lot of it. It’s all about presenting that information when the visitor is ready for it and that means knowing your audience and testing your copy.

4) Invest in Online Marketing - In the Right Places

Having a website is meaningless without traffic. If you are a brick and mortar business then you may be promoting the site to customers in-store already, but what about bringing in new customer? If you are an online company then your website is your source of business. Either way there are many ways to promote online and almost as many ways to waste marketing dollars for low return.

This is where putting some serious systematic thought and action into online marketing can have overpowering results. Every single website is unique so different people will have drastically different results from different online advertising. As always the key is to try a bunch on a low scale and home in on the ones that work and generate targetted traffic. Not to leave you starting from scratch here are just some of the options out there.

  • Advertising on a specific highly relevant website.
  • Becoming known as a trusted expert in a forum community.
  • Blogging about your subject matter.
  • Encouraging visitors to add your site to their favorite social bookmarking service.
  • Getting listed in local website or subject matter directories.
  • Joining a context-driven advertising program like Adwords.
  • Offering an RSS feed.
  • Posting some free product or service (opens up entire new traffic sources).
  • Releasing a press release.
  • Requesting links from well-known websites on your subject.
  • Selling goods on an auction or marketplace site.

Some of the above are easy to test, and some are not. No doubt many will fail for your particular business, but the few that succeed can be a goldmine. In all cases do not ever spam or otherwise break the Terms of Service of whatever resource you plan to utilize. Be creative too - every type of site has its own special advertising gem waiting to be found.

5) Always Test Changes

Getting it right the first time is highly unlikely. Whenever you add a new page, feature, or write some crucial sales copy, always test test test. Without actual test data all you have to go on is speculation. Does the headline that emphasises the quality of your service do the best, or the one discussing your unique expertise? Seemingly small changes can have huge impacts, particularly on the parts of the page that decide whether your visitor will keep reading. See the F-Pattern for Reading Web Content for an excellent study on how visitors read information on the web.

Testing is easier said than done of course, as you need a way to track the test. To be accurate the two test conditions should really be conducted and measured simulateneously. One way of doing this is an A/B split test where half your visitors have one version of your site presented to them, and the other half are given another. You then measure the performance of each page in terms of what you are trying to achieve, such as more sales, more downloads, or more sign-ups to your service. A small change can make a drastic difference. The ads on this site are a great example and as I strive to optimize the results while maximizing the usability of the site you may notice different ad positions and types over different periods of time.

How do you perform such testing? It depends how you run your site. If you have it professionally managed for you by a company such as Tilted Pixel then it’s just a matter of asking for the functionality. An experienced website provider should be able to supply the functionality at a reasonable charge. If you manage your website yourself or have knowledge of a web programming language you could always aim to write a solution yourself. For a programmer a basic A/B setup is quite easy to write. There are also third-party statistics packages which offer various metrics for performing such tests. My understanding is that the free Google Analytics package does just that.

Communitech Breakfast

Wednesday, March 22nd, 2006

Communitech is a terrific organization in the the Tech Triangle, and this morning I had the opportunity to speak about Tilted Pixel for five minutes as part of their “Tech 5″ portion of the event. Tech 5 provides student entrepreneurs a chance to present their company and the challenges and successes behind it. What a great idea for furthering entrepreneurship in the community!

The event went really well and I met some great people. The main speakers from VideoLocus did a fantastic job in their talk of developing a video compression technology and heading down the extremely tough road of transforming it into a standard. Stories of small start-ups becoming major players are very inspiring and anyone starting a company or considering it should be looking to learn from as many people who have done it as possible.

Applause to Communitech for continuing to do such a great job of bringing Waterloo region tech together and promoting entrepreneurship.