EO / MIT Entrepreneurial Masters Program - Year 3

posted by Ian Wyatt | May 27, 2009

Today I'm driving from home in Vermont to the Endicott House in Dedham, Massachusetts, an off campus retreat center owned by MIT. This is my third year of the Entrepreneur's Organization / MIT Entrepreneurial Masters Program (formerly known as Birthing of Giants, when the program was also affiliated with Inc. Magazine).

I'll be spending three days in intensive learning sessions led by business leaders, successful entrepreneurs, and MIT faculty. My class of 60 fellow EO Members are entrepreneurs from around the world, including countries such as Australia, South Africa, Switzerland, India, and the U.K. The diverse group of students provides an amazing global view that is difficult to find elsewhere.

Speakers this year include Cameron Herold (BackpocketCOO and formerly 1-800-GOT-JUNK), Omar Khan (author of Liberating Passion), Jack Stack (SRC President and author of A Stake in the Outcome), Mark Eaton (NBA star), and Eran Egozy (CEO of Harmonix, creator of Guitar Hero and Rock Band).

The program begins this evening and ends Saturday afternoon, making for three packed days of learning. I'm excited to get to MIT, knowing that I'll come back to work refreshed and full of ideas to innovate my business model, improve my management, and inspired to grow my business even during this challenging economic environment.

Look for blog posts and Twitter updates (@ianwyatt) from MIT.

Why Vermont? Lifestyle.

posted by Ian Wyatt | May 19, 2009

Posted in Vermont Living | Comments (3)

It's been far too long since my last blog post - just over six weeks. This blogging thing takes time, and that's something I've been short on lately.

Last week Carrie and I completed our move to Vermont, shedding our city apartment in the Kalorama neighborhood of Washington DC. My company (Business Financial Publishing) will maintain an office in DC and I'll travel there once a month for business. However, after two years of duel residency, we decided enough was enough, and that it was time to make the move full-time to Vermont.

When I tell people I'm moving to Vermont, the most frequent question I get is, "Why move to Vermont?" And the answer is a simple one.

Lifestyle.

Carrie and I simply found the quality of life to be significantly better in Vermont than DC.

In Vermont, home prices are reasonable compared with a big city or even the suburbs. Working 40 hours a week is considered the norm, not a part-time job. And it's perfectly acceptable to take off a day in the middle of the week to go skiing after a big snow storm.

The climate is amazing. We experience four real seasons. The winter is long, but if you can survive the cold and snow (2008 / 2009 was our first full winter), then the rest of the year makes up for it. Plus if you embrace the winter outdoors, it can be a lot of fun. It gets warm in the summer, but we rarely use the air conditioning. Humidity is almost non-existent. And the state is well-known for its fall foliage and beautiful weather.

There's an abundance of locally grown produce and a big Buy Local movement delivers fresh food to amazing local restaurants (my favorite Vermont restaurants are The Kitchen Table Bistro and Sonoma Station in Richmond, Hen of the Wood in Waterbury, and The Common Man in Warren). We have space for a large garden in our yard, participate in a Community Supported Agriculture (CSA) with Maple Wind Farm and enjoy their great produce, and enjoy the local farmers market in Burlington and Richmond. This fall we'll take delivery of a whole pig that we bought from a friend who is starting up a pig raising operation in our town (we appropriately named our pig Pork Chop). It's like wine futures, but with animals. Cool idea - I hope we have room in the freezer.

In the DC neighborhood where we rented an apartment, $600,000 buys a nice two bedroom condo. Private schools can run +$20,000 per year. Politics dominates the town. And for those who can't afford a $3 million home in the city with a yard and a little privacy, the daily commute is exhausting. No thank!

So how did we choose Vermont? My roots to the Green Mountain state run deep. I was born in southern Vermont (making me a true Vermonter), where I lived until I was two years old. While my memories of those first two years are limited, my childhood included frequent trips to Middlebury, Lake Dunmore, and Lake Carmi to visit my grandparents, aunt and uncle, and cousins. I've always loved this state, but chose Washington DC as a "temporary" home for eight years.

Carrie and I are loving our life in Vermont with the pets (Pinot the puppy and the two cats, Almost and Pants). We're looking forward to visits from family and friends this summer, spending a couple weeks at a cottage in Charlotte, and boating on Lake Champlain. Friends - we love having visitors, and if you're summer travel plans take you to New England, stop by for a visit. The wine cellar and beer fridge are always well stocked.

Look for more frequent (and shorter) blog posts in the future.

Wine Library’s Gary Vee Lands +$1 million book deal

posted by Ian Wyatt | April 3, 2009

Posted in Entrepreneurship | Comments

The most up and coming wine expert and social media personality Gary Vee just landed a seven figure, 10 book deal with HarperStudio according to the Wall Street Journal.

For those not familiar, Gary Vaynerchuk (@GaryVee) is a wine retailer through his Wine Library in New Jersey, and also the host of the Internet show Wine Library TV. Gary has successfully developed his online personality through his straight talk approach to evaluating wines. In a world where wine is often thought to be expensive and complicated, Gary's funny and direct approach to wine is a welcomed change. Gary's first book Crush It! Turn Your Passion into Profits in a Digital World is slated for release in September, 2009.

With 166,000 Twitter followers (including me), Gary has successfully developed an engaged audience with a strong following. According to the Wall Street Journal, HarperStudio was in part attracted to Gary due to the platform and audience that he has cultivated through the social media.

Wine Library TV is a great example of how Internet entrepreneurs are using low cost video and social media such as Twitter to gain huge followings. And this book deal with HarperStudio demonstrates the perceived value of that audience. I think every entrepreneur can learn some lessons from Gary about how to build a social media audience and effectively use online video.

Paid Content vs. Advertising Supported

posted by Ian Wyatt | March 16, 2009

Posted in New Media | Comments

I've been thinking more about Plenty of Fish, entrepreneur Markus Frind and Internet business models as a follow up to my blog post from the weekend, Plenty of Fish: $10 million revenues & 50% profit margins.

In March, 2006, Plenty of Fish founder Markus Frind wrote a blog post titled "How I made a million in 3 months" on WebmasterWorld. The post begins with "Lots of hard work, and a billion+ pageviews." The second point of his post is more insightful: "You have to create sites that will bring in repeat traffic. If you think you will get rich off SEO think again. If you create a Free jobs site you could net 30 million + a year if you got big. Club listings site, free religious personals etc would all be big money makers. Look for established markets and offer a service for free and support it with adsense."

Other sites have done exactly this. Think about Craig's List, which for years has taken market share from newspapers by offering free classifieds to a growing online audience. Do newspapers still have print classifieds? Who pays hundreds of dollars to list a job in the local paper? While Craig's List today charges a nominal fee of $25 for job listings in major markets, much of the site is completely free - and was for years, which allowed Craig's List to steal market share.

Want to be the next Markus Frind? Start by asking, "what do people pay for online?" Music. Games. Porn. Dating. Job ads. Investment advice. All opportunities for free sites to topple the paid sites. Start a simple free site, add Google AdWords, and let the traffic and profits begin.

Will paid content fall by the wayside, with more entreprenuers like Markus launching free sites to undercut the paid content providers? Perhaps in some areas but not in others, such as music and games, where copyrights will keep that from happening. There is definately a trend toward more free content, as users launch free sites and Internet businesses extending the free line, giving away more for less (or free). Nobody pays for online news, gossip, restaurant reviews, recipes, or searching job listings.

The advertising model can work very well online, and my company's growth in recent years has been a direct result of growth in online advertising, and our ability to build a large and captive audience. But ultimately, businesses have to be selling a product or service, and users must be buying. If users never buy, busineses won't advertise.

I continue to believe that paid content is here to stay. Paying for content means that the user views it as being valuable. If it is free, users sense that it is worth little. The paid content barrier establishes a sense of exclusivity that everyone seeks. In a challenging economic environment where advertising rates are declining and media spending is slowing (even in the online channel), I believe Internet companies will continue to add products or services that they can sell to their users to offset declining ad revenues.

Plenty of Fish: $10 million revenues & 50% profit margins

posted by Ian Wyatt | March 14, 2009

Posted in Entrepreneurship | Comments

It's easy is it to build a multi-million dollar web business, right? Buy a domain name. Launch a simple web site. Tell your friends about it. Viral marketing kicks in. And a few months later, you're cashing big checks and rolling in the dough. Sounds easy enough.

However, my personal experience leads me to believe that this is not in fact the case. And other entrepreneurs with +$1 million business whom I've gotten to know, whether they are in the Internet sector or not, share experiences about years of relentless hard work and no pay, before reaping the financial rewards.

While catching up on my pile of old magazines, I came across the Inc. Magazine January / February 2009 issue with a cover story titled And the Money Comes Rolling In: Markus Frind works one hour a day and makes $10 million a year. How does he do it? He keeps things simple.

The title sums up the article pretty well: social recluse Markus Fiend, of Vancouver, British Columbia, is an engineer who held several dead-end jobs before going out on his own. Five years ago he starts a web site called Plenty Of Fish, working less than 20 hours a week on the business. His site grows to one of the top ten most-trafficed sites, generating advertising revenues of $10 million a year, with 50% net profit margins. The company has three full time employees, and Markus works a couple hours a day. As Inc. Magazine's Max Chafkin writes, "It's a 21st Century Fairy Tale."

According to Inc. Magazine, Plenty of Fish is the most trafficed dating site in the world, with 1.6 billion page views a month. The site is largely a free, advertising supported dating web site with four-times the traffic of Match.com ($350 million a year in revenues, primarly through subscription fees). In early March, Plenty of Fish announce a paid membership option for members that "are serious about meeting someone." (click here for Markus's blog, The Paradigm Shift: Adapt or Die)

Inc. Magazine leads the article with the story of little work, lots of profits. And the story does sound much like a fairy tale. Much of the article on Markus and Plenty of Fish is actually interesting. I found the better aspects of the story to be the insights into bootstrapping a new business, and running a lean operation that keeps costs down, isn't constantly re-investing its earnings, and as a result throws off great cash flows. Plenty of Fish is a good example of how Internet entrepreneurs with programming experience and some free time working alone from their apartment, can build highly trafficed web sites. Today budding Internet entrepreneurs can create scalable web sites using free open-source software, previously expensive tools, cloud computing, and an outsourced sales force (Google AdWords). And this can be accomplished for thousands of dollars, compared with millions of dollars a decade ago.

Keeping things simple is key to the success of Plenty of Fish. According to the article, Markus makes few changes or improvements to the site, because he's concerned about the potential negative impact on the business. Every change to a site can impact user actions, either positively or negatively, but it isn't known until after the fact. Instead of making the experience better or trying to achieve incremental improvements, he sticks with what works. Markus says, "I don't listen to the users. The people who suggest things are the vocal minority who have stupid ideas that only apple to their little niches."

I suppose this strategy can work when your site has +1 billion page views per month.

My Book: The Small Cap Investor: Secrets to Winning Big with Small-Cap Stocks

posted by Ian Wyatt | March 9, 2009

Posted in Small Cap Stocks | Comments

This blog has recently taken a back seat to a much larger writing project - my first book, The Small Cap Investor: Secrets to Winning Big with Small-Cap Stocks.

The Small Cap Investor is scheduled to be published in September, 2009 by John Wiley & Sons, a well-known publisher of business and investment books including the For Dummies series, I.O.U.S.A., and Louis Navellier's The Little Book That Makes You Rich.

As the title of my book suggests, the topic is investing in small cap stocks. Small caps are those with market capitalizations below $2 billion, and often represent some of the highest growth and most innovative publicly traded companies. Small caps are a focus of my investing strategy, and a core aspect of my company, through our web site SmallCapInvestor.com and Small Cap Investor PRO service.

How did I end up writing a book?

In late 2007, a publisher at John Wiley & Sons approached me about writing an investment book. She had seen our classifieds ad for a research analyst on Craig's List NYC, and after looking at our web site, she realized that we were a growing publisher of investment research and stock picks. Wiley had previously forged a successful publishing partnership with Bill Bonner's Agora Publishing in Baltimore, and was seeking similar partnerships.

Writing a book sounded fun. Who doesn't want to write a book, right? Every American seems to think they have a great idea for a book.

The idea was to write a book on small caps, since the focus of my investment research. Wiley assumed we had lots of content on hand already, and suggested that we hire a freelance ghost writer to help put things together. This sounded easy enough. This spring I signed a contract with Wiley and slowly began working on the book.

Completing a 256-page book is much easier said than done. Even with some existing content and a ghost writer to help put things together. The project was overwhelming and frustrating at times, giving me second thoughts about whether this was a worthwhile use of time and effort.

After three ghost writers, two research analysts, and numerous rounds of editing by colleagues at Business Financial Publishing, my father, and my wonderful wife Carrie (she was the best, most thorough editor of all who contributed much to the book), the book was completed and manuscript delivered to John Wiley & Sons last Friday night. Which meant I got to spend a weekend without writing or editing chapters.

Was all the work worth it? Time will tell. But I definately think so.

I'll be writing more about The Small Cap Investor book and why I decided to write a book. With the book now behind me, I'll be back to blogging more frequently.

The Business of Domain Names

posted by Ian Wyatt | February 16, 2009

Posted in New Media | Comments

Domain names are the real estate of the dot com world. Like real world real estate, the market for domain names has hit the skids as well, with prices falling from the highs of 2008. With transaction volume and prices falling, a recent article by industry publication Domain Name Journal reports that domain name industry insiders are increasingly focused on developing high quality, generic domain names into web sites.

I bought my first domain name in 1998, and been building a domain name portfolio for the past decade. My portfolio of +600 domain names is comprised of domains that I originally registered, as well as those purchased at auction or through domain resellers. I favor .com domain names, the most prized domain extension (as compared with .net, .org, .info, .me, to .mobi, etc). Most of my domains are in the financial or investment area, some of which have been developed into web sites. I also have bought domains related to health, wellness, media, beer and wine.

Given the economic slowdown, I've been giving some thought to my business. My company, Business Financial Publishing, is an investment content company that provides individual investors with investment insights, analysis and research through our various free and paid e-letters and investment services. But are we also in the domain name business? We acquire domain names, and develop them into products and services that can be monetized.

Historically, we conceive a product or service first, and then acquire an appropriate domain name. Most domainers, or those engaged in the business is owning, developing, and selling domain names, take the opposite approach by buying high quality domain names, regardless of the sector or topic.

Domain names can be registered with companies such as NetworkSolutions or GoDaddy.com for about $10 a year. But with many good domains already registered, more and more people turn to the domain name aftermarket to purchase domain names. The aftermarket refers to domains that have already been registered, and are being re-sold. Both individuals and companies such as BuyDomains and SEDO have acquired large portfolios of domain names, which they then re-sell or auction off to those seeking already registered domain names.

With the cost of buying and maintaining a domain name so low, domainers acquire portfolios of thousands of domain names with hopes of monetizing the domains through the resale of the domain, developing the domain into a web business, or monetizing direct type in traffic through Google (Nasdaq: GOOG) Adwords (type-in traffic refers to someone navigating directly to a domain name such as IanWyatt.com - for one-word generic domains such as Beer.com, type-in traffic can be significant).

Business Week magazine wrote a great article on the domain name aftermarket business, titled The Domains Of The Day: How two Boston entrepreneurs are making millions from names as simple as chocolate.com. The article profiles Andrew Miller and Michael Zapolin's company - Internet Real Estate Group - and their strategy for turning generic one-word domain names into multi-million dollar businesses.

The interesting thing about Internet Real Estate Group is the company isn't focused on any single industry. The company buys one or two word domains such as Software.com, Phone.com, Jeans.com, SportsFan.com, and WeddingGifts.com, and either develops these into web sites or sells the domains or businesses to others. Internet Real Estate Group bought the domain CreditCards.com in 2003 for $100,000 and sold the domain and credit card comparison shopping site in 2004 for $2.75 million to Austin Ventures. CreditCards.com was slated to go public under the leadership of Elisabeth DeMarse, former CEO of BankRate (Nasdaq: RATE), before the credit markets came to a halt in 2008. (I've known Elisabeth for years, and followed BankRate in my Growth Report newsletter starting in 2002 when the stock traded at $1.00 - it is now at $26 a share, down from a high of $55).

The Domain Name Journal or DNJournal is the best source of information on the domain name aftermarket business, reporting with feature stories on domainers and aftermarket sales. DNJournal in January published a good article, The State of the Industry January 2009: 15 Leading Experts Break Down What Went Wrong in 2008 and Predict What Will Happen in 2009.

Today I find myself thinking about which of my domains could be easily developed at a low cost into self sustaining businesses? While I don't have any one-word generic domains like Chocolate.com, I have plenty of domain names ripe for development.

Barron’s Highlights Small-Cap Outlook from Growth Report

posted by Ian Wyatt | January 28, 2009

Posted in Small Cap Stocks | Comments (5)

Dow Jones' Barron's last weekend printed an excerpt from Business Financial Publishing's Growth Report newsletter, which I founded in 2001 and currently serve as the Editor-in-Chief and Chief Investment Strategist. The below except discusses the performance of small cap stocks last week, as written by our analyst Kevin Pendley. PR is always great when you get it, and exposure in the premier weekly investing publication is a great accomplishment.

Sideways Consolidation
Market Review by Growth Report / Business Financial Publishing
1015 18th St. N.W., Washington, D.C. 20036

Jan. 21: Small-cap stocks took flight [Wednesday], notching the biggest one-day gain of 2009 -- just one day after sinking to the worst performance of the new year [and the worst ever recorded for a presidential inauguration day] -- amid strong earnings from technology-bellwether IBM ... . The fact that small-caps led the way on the rally is a positive sign amid plenty of gloom for the marketplace. Investors will have to become more comfortable embracing risk for the market to truly rally off these bear-market lows, and putting their faith in small-caps would be an interesting development. But that leap of faith hasn't been made yet ... .

The market has been buffeted with poor profit reports for months, and a majority of the news so far this year has been gloomy, but when IBM beat the estimate after Tuesday's close, it raised hope that things aren't as bad as feared. In addition, bank stocks have been relentlessly hammered in recent days, but Northern Trust handily beat the forecast as well, showing that not all banks are wallowing in a sea of red ink needing a handout from taxpayers to survive these rocky times. NTRS stock jumped 30% on [Wednesday], and IBM climbed 11%, providing a nice tech/financial one-two leadership punch.

Of course, that doesn't mean that everything is now all rosy for the market ... [Regarding housing,] it appears that a pickup in new sales in the near term is unlikely.

Energy prices provided a source of strength for the Wednesday, with energy stocks climbing 6.7%. Crude-oil prices rose 6.6% on the day -- those higher [prices came because] the New York market rolled out of the February contract into March, which has been trading at a steep premium to the February futures contract. Even after the close of the New York market, crude continued to climb, bolstered by the rise in equities, a slide in the U.S. dollar and production cuts out of the Organization of Petroleum Exporting Countries (OPEC).

Looking at sector activity [Wednesday], diverse financial-services shares, investment banks and brokerage companies, asset-management firms, banks and real-estate investment trusts were the biggest gainers....On the downside, automobile manufacturers, auto-parts suppliers, hypermarkets and apparel firms were soft performers, but losses in those areas were much less pronounced than the gains for banks, financials and energy companies. Airline stocks struggled. It was nice to see the Russell [2000] climb back above 450 quickly, but the overall market path remains a sideways consolidation, with a mild short-term bearish slant. A push above 466 would help further any bottoming argument here, while any slide back below 450 (and especially 440) would be damaging.

--Kevin Pendley

Top 5 Priorities: The Story of Ivy Lee and Bethlehem Steel

posted by Ian Wyatt | January 24, 2009

Posted in Entrepreneurship | Comments

Today I'll share with you a story that I've heard told by Cameron Herold of BackpocketCOO (former COO at 1-800-GOT-JUNK) at my second year at the Entrepreneur's Organization / MIT Entrepreneurial Masters Program in May, and again this autumn when Cameron came to Washington DC to present to the local Entrepreneur's Organization chapter. This is the story of the well-regarded management consultant Ivy Lee and Charles M. Schwab of Bethlehem Steel. The lesson is the importance of defining the the top priorities and focusing on those important items, not the other work that tends to tie up most of our time at work. I have already begun implementing daily top five for myself, and at Business Financial Publishing we're planning on getting every employee on board with top five priorities every day.

The Top 5 story...

One day a management consultant, Ivy Lee, called on Schwab of the Bethlehem Steel Company. Lee outlined briefly his firm's services, ending with the statement: "With our service, you'll know how to manage better."

The indignant Schwab said, "I'm not managing as well now as I know how. What we need around here is not more "knowing" but more doing, not knowledge but action; if you can give us something to pep us up to do the things we ALREADY KNOW we ought to do, I'll gladly listen to you and pay you anything you ask."

"Fine", said Lee. "I can give you something in twenty minutes that will step up your action and doing at least 50 percent".

"O.K.", said Schwab. "I have just about that much time before I must leave to catch a train. What's your idea?"

Lee pulled a bland 3x5 note sheet out of his pocket, handed it to Schwab and said: "Write on this sheet the five most important tasks you have to do tomorrow". That took about three minutes. "Now", said Lee, "number them in the order of their importance". Five more minutes pass. "Now", said Lee, "put this sheet in you pocket and the first thing tomorrow morning look at item one and start working on it. Pull the sheet out of your pocket every 15 minutes and look at item one until it is finished. Then tackle item two in the same way, then item three. Do this until quitting time. Don't be concerned if you only finished two or three, or even if you only finish one item. You'll be working on the important ones. The others can wait. If you can't finish them all by this method, you couldn't with another method either, and without some system you'd probably not even decide which are most important".

"Spend the last five minutes of every working day making out a "must " list for the next day's tasks. After you've convinced yourself of the worth of this system have your men try it. Try it out as long as you wish and then send me a check for what YOU think it's worth".

The whole interview lasted about twenty-five minutes. In two weeks Schwab set Lee a check for $25,000 - a thousand dollars a minute. He added a note saying the lesson was the most profitable from a money standpoint he had every learned. Did it work? In five years it turned the unknown Bethlehem Steel Company into the biggest independent steel producer in the world; made Schwab a hundred million dollar fortune, and the best known steel man alive at that time.

Thanks to Cameron for introducing me to this important and yet simple method for staying focused on the priorities. I can confidently say that on the days when I outline my top five priorities and work toward those items, I accomplish much more than when I show up to work and just start working. I highly recommend Cameron's videos and events - he is an outstanding presenter and speaker.

$100,000 Recovery Portfolio: Investing my real money in the financial markets today

posted by Ian Wyatt | January 22, 2009

Posted in Financial Markets | Comments (1)

Today I'm launching an exciting new investment service called Ian Wyatt's $100,000 Recovery Portfolio.

The Recovery Portfolio is an online investing service where I will invest $100,000 of my personal funds into an investment account and show individual investors the specific investments that I'm making to recover from the stock market crash of 2008.

I'll be investing in equities and fixed income (stocks, mutual funds, ETFs, options) to build a portfolio to earn income and growth in the coming years as I work to recover from the losses of 2008. Through this new service, individual investors will be able to see exactly what I'm doing with my personal investments, and have the opportunity to make the same trades as me even before I make them in my own portfolio. This service will provide subscribers with 100% transparency into my personal investments and portfolio management.

Tonight I'm holding an online investing seminar at 6pm eastern. In this online webinar titled Profits Without the Risk: Investing in 2009 and Beyond I'll share with you my outlook for the financial markets, and discuss some strategies for making risk and maximizing profits in these uncertain time. I'll also share two of my top investment ideas today - investments that I'll be making in my portfolio in the coming days. You can view the online video by clicking here.

We have over 5,000 individual investors registered for the event, and are expecting very healthy attendance as individual investors look forward to 2009 and ways to make money in the volatile financial markets today.

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