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Yes I’m Still Alive And Well

UpAndRunning

Yes I’m still alive and well. I know you’re not suppose to post a where have you been or sorry for not writing in a long time, but I’m going to break the rule since it’s been over a year since my last post.

So where have I been? Working very very very hard. It’s not an excuse for not posting yet at the same it is. I’ve been so overwhelmingly busy that I just haven’t had the time to post. Each post takes me about a day to write, well this one is an exception, but on average they take me several hours to about a day to write. I wish I had more time but I just don’t. As my company LandlordMax continues to grow I find that my time is more and more limited.

I’m not the only one, I remember for example reading Joel Spolsky’s blog JoelOnSoftware on a regular basis. I just looked at his blog recently and he’s only written two blog posts in two years, which made me feel better for not having as much time myself. He’s not the only one, it’s actually quite common, he’s just the one that came to my mind first as I was writing this. Unfortunately this is one of the side effects of growing your business. I’m of course going to do my best to be the exception to the rule!

That being said LandlordMax is now on it’s 12th year of business! We’re preparing to launch a web based cloud version of our property management software LandlordMax very shortly. Our current goal is before the end of the summer and we’re working very hard to achieve this goal!!

This obviously opens up a number of questions, such as what will it cost, and so on. All that I can say at this time is that we’re working out the details of our business model. A web based cloud version is very different than a downloadable version, there are different cost factors and so on to consider. So although we’re ready to announce that we plan on offering a web based cloud version very shortly, we’re not quite ready to announce it’s pricing model yet. That being said we’d love to hear your feedback and comments so please feel free to contact us.

That being said you should expect to start seeing some previews of the new web version shortly, including video previews. We’re not quite ready yet but it shouldn’t be too much long. The previews will not just be here but also through our email newsletter. I have to admit our email newsletter has also fallen quite behind but I plan on resurrecting it very shortly. And the closer we get to the release the more details and information I will be able to share.

So in the spirit of breaking the blogging 101 rules, here’s to apologizing for not posting more often and that I plan on posting more in the near future! Your classic Blog faux pas.






Blog Blazer Friday – Abdylas Tynyshov of AdesBlog.com

Each week I will be publishing an interview from the book Blog Blazers (in alphabetical order) which can be purchased on Amazon here. The interviews were all done in 2008 and the full list of bloggers interviewed can be found by clicking here.

This week the interview is with Abdylas Tynyshov of AdesBlog.com

abdylas-tynyshov

adesLogo

Abdylas Tynyshov
AdesBlog.com
http://www.adesblog.com

Biography:

Abdylas (also known as Ades) was born in 1978 in Kyrgyz Republic, popularly known as Kyrgyzstan internationally. It’s a tiny republic in Central Asia with a population of approximately 5 million people .It’s one of the former 15 countries that gained independence after the collapse of USSR in 1991.

This important incident brought along a lot of opportunities to Kyrgyz people from the outside world. Suddenly lots of countries were opening businesses, schools, and universities in Kyrgyzstan. One of these schools was his high school, which was opened by Turkish educational organization called SEBAT, in conjunction with Kyrgyz Government.

After graduating from Kyrgyz-Turkish High School in 1996, Abdylas applied to International Islamic University, in Malaysia (IIUM). He was accepted to the Department of Information & Communications Technology (ICT). He then graduated from IIUM in 2002, and went straight into the IT Industry. Initially, he worked as a Web-Designer, with his last position being a Creative Lead. But after working for about 3 years, he decided to concentrate on his own projects and pursue his education. By this time he was running a few online projects generating some income, so much that in November 2005, he was officially self-employed.

Today Abdylas is doing his MBA at Management Centre of IIUM, majoring in Strategic Management. He is also actively involved in several personal projects, including his blog and a few other websites which generate over 2 million unique visitors a year combined.

Interview:

Steph: What makes a blog successful according to you? Is it traffic, reach, revenue, etc.?

Ades: Personally I think the person behind the blog makes the blog successful. His or her ideas, expertise in certain field, his or her thoughts and predictions make the blog stand out from the crowd.

However on internet, mostly traffic, monthly revenue and the number of RSS subscribers determine the success of the blog. Not always, but most of the time.

Steph: When did you decide you finally reached success with your blog?

Ades: Success is very subjective. Personally I believe that I have a long way to go. Some people might consider me successful already, however I think I still have a lot to learn. So for me, success is a lifelong journey.

Steph: How long does it take to become a successful blogger?

Ades: It takes several months to fully grasp how various tools and technologies related to blogging work. It takes another few months to perfect your writing skills. So basically, it could take up to a year to be a successful blogger.

Steph: Who do you think are the most successful bloggers on the internet today?

Ades: It would be Darren Rowse of ProBlogger.net and John Chow of JohnChow.com.

Steph: Which five blogs do you regularly read?

Ades:

Steph: Which websites would you recommend for any new bloggers starting to blog?

Ades: I think Problogger.net is a great place to start. Darren has covered most of the blogging related things already.

Steph: Which book(s) would you recommend for new bloggers (these can range from marketing books, blogging books, etc.)?

Ades: I personally think you don’t need to buy a book to learn how to blog. There are plenty of websites and blogs that teach you how to start your own blog for free. However new bloggers can consider this book The Rough Guide to Blogging 1 by Rough Guides

Steph: What is your most successful blog post ever?

Ades: I have written a post (guide) on blog posting frequency that consists of three parts. It’s one of my favorite posts. You can read it at http://www.adesblog.com/2007/10/06/guide-on-blog-posting-frequency/

Steph: What’s your biggest tip on writing a successful blog post?

Ades: The first and foremost, the post must be useful to the reader.

Steph: What’s your best advice in regards to content and writing for bloggers?

Ades: Always incorporate your own thoughts and analysis when blogging about particular issue or topic. Because at the end, it’s your personal opinion that counts. Your thoughts and ideas are your competitive advantage that differentiates you and sets you apart from other bloggers.

Steph: How important do you think are the headlines of your blog articles?

Ades: Extremely important. Because people like to scan the headlines, especially the new visitors. Your regular readers might read the whole post from beginning till the end, but new visitors will often scan the headlines first. Thus it’s important to have catchy and descriptive headlines that will turn these new visitors into regular readers.

Steph: Do you spend any money and time on marketing?

Ades: Yes, sometimes.

Steph: What are your main methods of marketing your blog?

Ades: Sometimes I would buy a banner advertisement from other blogs for a month or two. I have also used StumbleUpon’s advertising service. Other than that, I try to concentrate on producing quality content. After all, it’s the quality of the posts that matter the most (at least for me).

Steph: Which marketing tactic has surprised you the most in terms of its effectiveness?

Ades: StumbleUpon. If you have great content, you will be surprised how well StumbleUpon can perform. StumbleUpon can have the multiplier effect that other advertising programs don’t. You can read more on this effect on my post titled “Effective advertising strategy using StumbleUpon” available at http://www.adesblog.com/2007/07/02/effective-advertising-strategy-using-stumbleupon/.

Steph: What are your quick and short five best tips for blogging?

Ades:

  • Blog in a category that you have expertise
  • Register your own domain name
  • Use WordPress, it has many advantages over other platforms
  • Blog in your own style, do not imitate others
  • Have a professional design for your blog

Steph: What is the most common pitfall new bloggers generally fall into?

Ades:

  • Start blogging on free blogging platforms like blogspot.com
  • Being carbon copy of popular bloggers i.e. talking exactly on topics that these popular bloggers are currently talking
  • Monetizing the blog too much, filling the blog with all sorts of advertisements

Steph: If you knew what you know now when you first started, what’s the one biggest tip you’d give yourself today?

Ades: Register problogger.com and problogger.net (wink).

Steph: What repels you the most from a blog (animations, in your face advertising, etc.)?

Ades:

  • Too many ads inside the content.
  • Too many posts a day, anything more than 5 would be too much for me.

Steph: Do you make any direct money from your blog through advertising, product placements, etc.?

Ades: Yes. Most of my income comes from advertising, and some from paid reviews.

Steph: What is your best monetization method (Ads, affiliate marketing, etc.)?

Ades: Text links ads. Text-Link-Ads.com and LinkWorth.com has been working really well on my blog. But it might not be the case in the few months to come, because of Google’s tough stance on paid links.

Another method is of course direct advertisements. This includes text links, banner ads, and paid reviews for me.

From affiliate marketing programs, Shutterstock.com has been doing really good for me. It’s a website where people can sell their digital photos. When you refer people to ShutterStock.com, you get paid for every sale that the referred person makes.

Steph: Do you find you get more from direct monetization of your blog or from opportunities that come because of the existence of your blog?

Ades: At this point in time, definitely from the direct monetization methods

Steph: Thank you Ades for the interview.






Blog Blazer Friday – Aaron Wall of SEOBook

Each week I will be publishing an interview from the book Blog Blazers (in alphabetical order) which can be purchased on Amazon here. The interviews were all done in 2008 and the full list of bloggers interviewed can be found by clicking here.

So let’s start this week with Aaron Wall of SEOBook

aaronWall

Aaron Wall
SEOBook
http://www.seobook.com

seobookLogo

Biography:

Aaron Wall is a well known blogger who primarily focuses on search engines, internet marketing, and why ideas spread. He is also the author of the eBook entitled “SEO Book” which has sold innumerable copies and is referenced throughout the internet.

Although Aaron is successful now, it has not always been easy for him. Early in his youth he was nearly legally blind, at least until half-way through high school without knowing it. Even through this adversity he still had a strong disposition towards entrepreneurship, most notably buying and selling baseball cards.

After graduating high school, Aaron joined the military as a nuclear reactor operator on a special operation fast attack submarine. However this was not the lifestyle for him for several reasons and he soon left the military. Upon leaving the military Aaron went through some rougher times and almost went bankrupt. This is when he took a job as a middle level manager.

He continued to work as a middle-level manager for almost a year while simultaneously learning everything he could about the web. He finally quit to focus on his web initiatives when he had reduced his debt to $10,000 and was making at least some money on the internet, which at the time was about $100/month. It didn’t take him long to go from there to making $10,000 a month. Within a year (the end of 2004) he had achieved success! Since then he has only been growing his success.

Interview:

Steph: What makes a blog successful according to you? Is it traffic, reach, revenue, etc.?

Aaron: It depends on the goals of the site. I have some blogs that make no money and have a low readership but help people, and to me those are successful. Other blogs are just about personal expression while my business ones are more income oriented. It is easy to get stuck on traffic stats, but you still have to pay your way.

Steph: When did you decide you finally reached success with your blog?

Aaron: I started my blog in December of 2003, started selling my eBook on it in February of 2004, and was fairly successful by April of 2004. I got started on the web in January of 2003.

Steph: How long does it take to become a successful blogger?

Aaron: I had a little known blog on my other site for about 3 months prior to creating SEO Book, so I guess it took about 7 months total. Though you don’t really become successful overnight or at any set point in time. I think of being successful as being self funding and having the confidence necessary to keep learning and keep trying new things.

Steph: Who do you think are the most successful bloggers on the internet today?

Aaron: I think Seth Godin and Matt Cutts have great influence. I love reading GapingVoid.com. I am mostly focused on internet marketing at the moment though, so my view of the web is a bit limited.

Steph: Which five blogs do you regularly read?

Aaron: I read every post Frank Schilling writes on his Seven Mile blog. I am a regular reader of SearchEngineLand.com. And while it is not updated as frequently as those two, I love TropicalSEO.com by Andy Hagans. CopyBlogger.com and Paul Kedrosky are equally refreshing.

Steph: Which websites would you recommend for any new bloggers starting to blog?

Aaron: Brian Clark’s Copyblogger is a must read if you want to understand how to write compelling conversion oriented copy. Daren Rowse’s ProBlogger.com is a must read if you want to get into understanding the mechanics of blogging. I also think you should read at least a dozen blogs about a topic you are interested in to learn how and why ideas spread amongst bloggers. Use iGoogle or Google Reader to make it easy to subscribe to a wide array of blogs.

Steph: Which book(s) would you recommend for new bloggers (these can range from marketing books, blogging books, etc.)?

Aaron: The Cluetrain Manifesto teaches you why the web is different than monolithic marketplaces of the past. Steven Krug’s Don’t Make Me Think teaches you about how to create a usable website. If you make a site that is usable and market demand oriented people are going to use it. Seth Godin’s Purple Cow teaches you how to be remarkable. Links are nothing but citations or remarks. If you know how to be remarkable then marketing is easy.

Steph: What is your most successful blog post ever?

Aaron: As far as spreading on the web, I would have to say that posting about getting sued for blog comments went far. I also launched an SEO tool called SEO for Firefox. Beyond those, I don’t think I have had any signature posts that I could easily point out as examples of successful posts. I actually had one article that did well before I became a popular blogger, but I think many of my posts are pretty good and I was lucky enough to enter a growing market early with a unique voice.

Steph: What’s your biggest tip on writing a successful blog post?

Aaron: If you are new to blogging and want an idea to spread make sure you get community feedback early on such that market leaders in your industry have a vested interest in talking about your blog post.

Steph: What’s your best advice in regards to content and writing for bloggers?

Aaron: It is easy to think that if you had one hit post that would get lots of readers, but people are fickle and competition is fierce. Doing well with blogging is not about writing one key post, it is about performing day after day and helping a few people at a time. Eventually big success comes out of all the smaller successes. Sometimes it arrives via an accident or mistake.

Steph: How important do you think are the headlines of your blog articles?

Aaron: Headlines are critical. They set the tone for the piece and a strong one can even change the mood of the reader before they even get to the content. Some social media sites will vote up a story based on the headline, without even bothering to read the story.

Steph: Do you spend any money and time on marketing?

Aaron: I have spent over $100,000 and over 3 years marketing my blog.

Steph: What are your main methods of marketing your blog?

Aaron: I have an affiliate program, I buy AdWords and AdSense ads, and I pay for a lot of custom programs that I give away. In turn, people link at my site and tools and talk about my site, which leads to more sales.

Steph: Which marketing tactic has surprised you the most in terms of its effectiveness?

Aaron: Just performing day in and day out. Making oneself available via email, blog comments, etc. allows you to make connections and build brand loyalists one person at a time.

Steph: What are your quick and short five best tips for blogging?

Aaron:

Link out to other interesting pages. Linking out is a form of free marketing, plus it prevents you from wasting time trying to create the web again from scratch.

Read and write everyday.

Write a second personal blog for family, political, and off topic posts.

Consume information in a variety of formats, including books, DVDs, magazines, and blogs.

Mix up your format. Use pictures, headers, and sub headers.

Steph: What is the most common pitfall new bloggers generally fall into?

Aaron: Many bloggers get burned out because they try to be too rigid following someone else’s advice, and thus take the fun out of blogging or feel everything has already been said before.

Steph: If you knew what you know now when you first started, what’s the one biggest tip you’d give yourself today?

Aaron: Re-invest more aggressively sooner.

Steph: What repels you the most from a blog (animations, in your face advertising, etc.)?

Aaron: AdSense ads plastered above the content on a blog with a default WordPress design. It basically says I don’t care for you.

Steph: Do you make any direct money from your blog through advertising, product placements, etc.?

Aaron: I sell a bunch of eBooks. As an indirect revenue stream I sell consulting services.

Steph: What is your best monetization method (Ads, affiliate marketing, etc.)?

Aaron: Selling my own product far exceeds the profit potential for selling ads in my market. In the search marketing community most people are quite ad blind in nature, and there are only a few scalable business models that are willing to spend heavily on advertising across blogs.

Steph: Do you find you get more from direct monetization of your blog or from opportunities that come because of the existence of your blog?

Aaron: Right now I would say direct monetization is ahead, but I have lots of opportunities I am still building on. I just don’t like to count checks until they are cashed.

Steph: What’s your most interesting story related to your blog and blogging experience?

Aaron: My wife met me through buying my eBook. If I did not start my blog so she could find me I will still be a hollow lonely man.

Steph: What’s the one biggest opportunity that came to you because of your blog?

Aaron: Getting married to my wonderful wife. I don’t deserve to be with someone so wonderful. I need to work hard to become the person she deserves.

Steph: Any other comments or thoughts you’d like to share?

Aaron: Thanks for the interview Steph.






Blog Blazer Fridays

blogBlazers

Like I said I will start posting an interview a week from the book I published called Blog Blazers (seen above). However I decided to first have an introductory post today to give you a list of the bloggers that were interviewed (in alphabetical order as they are presented in the book). As well I thought it would be good form to add a link back to the introduction on every post for people who join later on as way for them to quickly catch up. This way they can have a starting point.

First the details for anyone interested in purchasing the printed book, you can buy it on Amazon here as well as a digital copy from the website here. The main difference is that you can click on the links in the digital book where as the printed book you have to type them in. Other than that the printed book and digital books are identical. In any case, I will be publishing all the interviews here so you can also just read them here and click on the links here. The printed book is really more for people like myself who prefer printed books, or the digital book for people who want everything together in one nice file for their iPad, Nexus, Kindle, and so on. Also please note that you can also subscribe to receive emails of the interviews by entering your email in the form in the top right corner or entering your email in the form on this page.

That being said, the book was published about 5 years ago, back in 2008. So over time some things have changed, but the interview questions were intentionally selected to be as timeless as was possible and while making it interesting and offering the reader a lot of actionable items. I also tried to ask everyone the same interview questions so that the book would make it easy to study how different people succeeding at blogging. You want to know the secret to blogging success, there is NO ONE SECRET! Different bloggers succeeded in very different ways. The biggest hurdles to blogging success are number one starting and number two stopping. There is no one single way to succeed or a single secret recipe for success. Different bloggers have succeeding in different ways using different techniques.

Back to the book, and before I go ahead and list the bloggers interview, if anyone wants to peek ahead and read the individual blogger’s bios, you can read their bios here. Warning of shameless plug: Also if you’re interested, you can find the reviews about the book here.

Now, as I was about to say before, deciding who to include in the book was very very hard. I wanted to not only include successful bloggers, but also up and coming bloggers, bloggers that weren’t mainstream yet. I wanted to include bloggers for different subjects and niches. There seems to be more technology related blogs than other niches. I also tried to include bloggers that I believed would be around for some time, at least 5-10 years. When it comes to blogging, most people are notorious for only blogging a short time, from a few months to maybe a year, so I wanted to avoid bloggers that were going to be gone shortly.

So without further ado, here is the list of bloggers interviewed in alphabetical order:

As you can see the list of bloggers interviewed is quite large and substantial. At the time some were just starting out and have now reached new heights of success!

I’ll be posting an interview a week for almost a year, for 40 weeks in all! It will be called Blog Blazer Friday.

Thankfully the vast majority of the bloggers I invited to be interviewed in the book have lasted the test of time, at least in blogging time (5-10 years). Almost all of the blogs are still alive, all but just 2 blogs!! The ones without the links are the two that are no longer online. A few more do have their blogs online but aren’t actively posting anymore. But overall the vast majority are still very active bloggers and have only grown more since the book was published! Overall I have to admit I’m pretty happy with the results 5 years later.

There’s definitely a lot of good information and details in the interviews and I hope you enjoy reading as much as I enjoyed compiling them.






The Move to Aweber From Feedburner is Completed

Handing keys over

As most of you realize, about two weeks ago I made the hard decision to move the email subscription list for this blog from Feedburner over to Aweber. I basically had come to the realization that Feedburner is coming to an end sooner than later, most likely sometime later this year to at most sometime next year. The signs are pretty obvious in my opinion. So as a result, rather than continue to build up the email subscriptions only to lose them later, I decided to take the hit and move to Aweber now.

I knew it was going to painful and I would lose many subscribers over in the transition based on what I read from many other bloggers. It was pretty clear the subscription count would drop significantly. There was no if, the only question was by how much?

Firstly, and this is the hardest to swallow, everyone you import over to Aweber basically has to re-subscribe (re-opt in but it’s really the same thing). To prevent spam, and thus to prevent people from importing random email addresses and email lists and causing harm to their service, Aweber require that every single person you import re-opt in. That is they will send out an email saying that if you wish to continue receiving emails, you have to once again click on the link to confirm your subscription. Not a big deal, but this does require an action from all your subscribers.

The problem here is twofold. Firstly many people are afraid of clicking on links they receive. When it comes to subscribing, they usually get it within a minute or so, so it’s very fresh in their minds. It’s an expected email and they’re ready to respond. However when it comes out of the blue, even if you announce it in a previous communication, it’s still not as expected, so a lot of people will be reluctant and just not click. It’s unfortunate but that’s reality.

Also, and this is again another reality of our world today, asking people to perform any additional steps is enough to lose a certain percentage. Yes they may still be interested in your articles, but any additional work will cause a drop of some people. Just like adding an extra field in your purchase is likely to lower your sales conversions, asking to re-opt in will unfortunately drop some people.

And of course, and this is probably a good thing, over time some email addresses will no longer be valid. For example I still had many hotmail.com email addresses which Microsoft have since converted over to outlook.com. So for some people they may just have re-subscribed with another email address. Others just missed the opportunity. Similarly others may have used their work email address and are no longer employed at the same place so the email address is still in the list but is no longer active. Basically a bunch of little reasons for why some subscribers are no longer valid. So all list naturally need some pruning over time. It’s just psychologically tougher to do at the same time as everything else even if you know why.

With that in mind, the last blog post I wrote here was to let people know what I was doing, so that they weren’t as big a surprise when they received the email to re-opt in. Basically a friendly notice. And since then I decided to wait at least a week to give as many people as possible a chance to re-opt in before posting again so they wouldn’t miss anything. So yes although I was planning on writing more often, I held back to give the transition a little bit of additional time.

So what was the end result? Well firstly I’m happy and relieved it’s done. I’ve been wanting to do this for at least the last 2-3 years. I don’t know why I held off so long, probably it just didn’t seem as important. That and I didn’t want to lose any subscribers along the way. In any case it’s now done and as a result I can breathe more freely. And most importantly I can feel more comfortable that any efforts I spend on growing the list are not going to be lost in the future.

And now for some metrics. Well right off the bat 26.6% of the emails bounced when sending out the re-opt in email. So yes although that stung, that’s actually a good thing. It’s the pruning I just talked about. S4o basically 26.6% of the email subscribers over the years are no longer active. So this is a good purge. No point in sending out emails to people whose email addresses are no longer valid.

After that, in terms of re-opt ins, well let’s just say that quite a good number of subscribers were lost. I expected it, and it was definitely within the norm from what I read online from other bloggers who did the same thing. Everywhere you read about it, people say do it sooner than later because the cost of transitioning is painful. After this experience I completely agree. Do it sooner than later. It’s not fun so if you’re going to do it, do it sooner rather than later. It’s better to keep the number of lost subscribers in absolute numbers lower because the percentage will most likely be about the same. In other say losing 10% of 10 is much better than losing 10% of 1 billion in absolute numbers. That being said, I’m finding a week later previous subscribers are still in the process of re-opting in, so I don’t yet know what the final percentages will be.

On a positive note I’ve absorbed the cost so that’s now done. And although I lost some subscribers, quite a lot did transition over which is great! Above that, all the RSS feed subscribers are still there, they haven’t changed in numbers at all according to Feedburner (I left Feedburner for the RSS feed for now since there’s no reason not to – there’s no penalty if they go away and I transition that later).

What’s also good is that I already have quite a large blog with almost 500 posts written over 8 years so that will definitely help me re-grow it back to the same level of subscribers pretty quickly. My guess is that I’ll be back to this same levels within 3-6 months, so that’s about the cost for moving if you’re curious. Which like I said before, if you research it, that’s actually pretty good.

I believe this is also the very first time ever that FollowSteph has had less email newsletter subscribers than my company LandlordMax Property Management Software email newsletter! By the way the company email newsletter is also managed by Aweber and has been for at least a year now. In any case I don’t expect that to last very long, usually blogs get more subscribers than company newsletters, regardless of how good they are. What’s nice though is to see both of them growing on a daily basis!!

And on that note, I welcome back everyone who has transitioned! I also look forward to posting quite a lot starting now. And later this week, I will start to post one interview a week from my book Blog Blazers which you can find on Amazon here. The list of bloggers I interviewed can be found here (and I will be posting in the order of the book). So it should be quite a lot of fun. There’s lots of great interviews in the book.

Until then, here’s goes to the first post using Aweber!






Moving Email Newsletter to Aweber From Feedburner

future and past

Today’s post is more for the people who follow this blog by email, those who have subscribed to the email newsletter to receive emails of the posts. Basically the recent closing of Google Reader has made me realize I can’t hold off moving away from Feedburner any longer. It’s pretty clear that Feedburner is on it’s last leg and that Google will drop it shortly. Another example of some of the risks of hosted services.

In any case, as a result I’ve decide to transition over to Aweber (affiliate link). I’m going to import the email list into Aweber, but the downside is that Aweber requires that everyone re-opt in to get the email newsletter. In other words they will not send you any new blog posts by email unless you confirm your subscription. They do this as a policy to prevent spam on their system. Otherwise anyone could just import any list of emails they wanted and Aweber’s email service quality would go down. The downside is that you’re almost guaranteed to lose some subscribers along the way, and as unfortunate as that is, I don’t think I have a choice.

Therefore please accept my apologies for this inconvenience, and please do go ahead and re-opt your email newsletter subscription when you receive the invite. I look forward to continuing to post many articles in the future. Also starting next week I plan to post one chapter of my book Blog Blazers each week (an interview a week). You can find the list of people interviewed for the book here. If you can’t wait, or you want a hard copy, you can order the book on Amazon here.

In any case, I do appreciate your patience, help, and understanding in transitionning to Aweber. And if you have any questions or comments please don’t hesitate to contact me. In the meantime expect to see an invitation email to the new email newsletter service later this week.

And thank you for following FollowSteph.com!!






Google Reader Alternatives – Not Everything Should Be Hosted

hostedServiceLockedOut

First let me preface this article by saying that although I believe SaaS, cloud services, and hosted services can be very good and wise decisions in some situations, in others they can also be very terrible options.

Not to rehash the past, but I wrote a previous post called What are the Risks of Cloud Services? I explain when it’s good to use hosted services and when it isn’t. They have a time and place, and running core and critical business functionality and data is generally a bad place to use cloud services. I won’t go into the same arguments again, I’ll just recommend you read the article if you haven’t already.

That being said, many people are about to be cut off from Google Reader at the end of the month. There’s only a few days more before their Google Reader service goes away for good. Luckily they gave us a month’s notice, but you can’t always expect this from every company. Additionally we’re very lucky that for most people this is a convenience rather than a critical service. Unlike say the core data for a property management company were you store your accounting, leases, tenants, late rents, etc., Google Reader is mainly just a place where you manage a large the reading of a large number of websites in a convenient and easy way. I personally use it and loved the service. I used it every day. I will definitely miss it.

The problem with a hosted service is that they decide when you can no longer use the service. NOT YOU!! It could be tomorrow, or in the case of Google they can give you a grace period to do what you need to. And in this case, we’re actually even more lucky in that Google offers the ability to backup the data. The big problem however is what do you do with the backed up data? It’s not an industry standard. Generally there is no way to backup the data, and in most cases you have no warning at all.

So what’s happened in the last while is that a bunch of people are trying to create products and services to fill in the void created by Google Readers dismisal. But before continuing, you should be congnicent that if it wasn’t such a big service from a big company, most likely the users of Google Reader would be out of luck with no alternatives. The norm for online services is that you lose everything when the service closes and you normally have no warning. It’s very very common! Just this month alone I personally read (who knows how many I didn’t see) about at least a dozen web services that have closed down on Hacker News which is a place where you can find a lot of interesting news from the Startup community.

One of the more poignants one that recently caught my attention and pretty much inspired this post was called My Startup Has 30 Days to Live. You can read the discussion from Hacker News here. Specifically one comment from patio11 drew my attention, also known as Patrick Mckenzie, where above suggesting they stop taking money unless it’s absolutely necessary to pay employees, he also said:

“It sucks. It will be better, very soon. You don’t have to be scared: this is routine and, while it doesn’t feel like it, you’re actually in very good position, both absolutely and relative to many other people.”

The key comment being “it’s routine”. That this is common. Many online companies close. The problem is that we haven’t experienced it as users enough yet. Much like most people don’t really realize computers and especially harddrives do fail, and quite often. I know more than a few people who have lost all their pictures and videos because they assumed computers just always worked and didn’t need to do any backups. Until digital cameras really became mainstream, most people didn’t really feel the pain when their computers failed because most of the data wasn’t as critical, or shall we say important to them. It’s different now, so people are going through an education process and are learning that you need to backup your data, that computers do fail and it can be very painful.

And with that in mind, I was quite surprised, well ok I wasn’t surprised by it but rather surprised that we’re still repeating the same mistakes when I read the following comment about one of the latest Google Reader replacement options called Sismics Reader which is a software you own and manage on your computer (I have not tried their software so I cannot say if they are good or not):

“This looks pretty promising. Judging from the demo, they have the UI close enough. They need to offer it as a service, though. I like that I have the freedom to run my own server, but I really don’t want to have to bother in practice.”

Basically you want to use a hosted services to replaced the hosted service that was just closed down and for which you’re now trying to scramble to find an alternative solution, because you were lucky enough to be able to backup your data, even if you have no place to restore it to yet.

Cloud and online services can be good in some situations, but we still have to learn that they have a place and time, and that time and place is NOT always!! We internally for LandlordMax use cloud and hosted services for a number of things including email delivery, email newsletter management, version control, and so on. But each of these systems can either be replaced within minutes to a day, or use a standard data structure where the data can also be pushed to another service right away. For example we use Subversion which is one of several industry standard systems for managing programming code. We do regular backups, and if our host goes away, we can move to another service within minutes. In fact we could host it internally on our own computers but we don’t for reasons that are more beneficial for us specifically. The key is that we’re not locked to the success of another company. Losing our programming code overnight would be catastrophic for us, so it’s critical that this data never be locked out. We need to make sure we have regular backups and alternatives should something happen.

With all that in mind I’m personally more interested in a Google Reader replacement that I can own and manage myself. There are just too many startups right now clamoring for Google’s fallout, and I suspect a LOT of them will be gone within the next year or two. And at that point, it’s right back to the very same situation as today. And the next time we may not be able to transfer the data to another solution. I don’t expect these new solutions will support each other’s data formats, assuming you can even export any data at all. At least with a software solution you own and manage you can continue using the software for as long as you need or want. If the company closes, discontinues the software, etc., you can still continue using the software for as long as you want. A small difference with a very big implication!

Online and cloud based solutions can be good, just be careful not to assume they are always good because this is not always the case. And if you haven’t already read my article about the risks and when it’s good and when it’s not good to use a hosted service, then I suggest you do so sooner than later.

And hopefully a good Google Reader alternative will appear soon. From what I’ve seen there hasn’t yet been a good solution to transition to yet. Every comment and suggestion I’ve seen so far about Google Reader alternatives has been about making due with what they have. There’s been no obvious goto solution yet. Right now it’s still really about just good enough until someone releases something worthwhile.

PS: In all this we never even mentioned issues such as what happens if you get locked out of your service. What if for example Google decided one day to lock you out of your Gmail account? What if your credit card failed and you didn’t notice until after they closed your account and deleted all your data? Just a few other things to look out for…






Printing is Broken on Mac OS X with Java 7

Confused Programmer

Printing on the Mac OS with Java 7 has been broken for a long time, months in fact. I don’t understand how this can possibly happen. After all printing isn’t exactly a small issue, and the Mac isn’t exactly a small market. So how can this be? For months? I don’t get it…

Specifically the font attributes are not honored on the Mac OS. Java seems to make the proper OS calls but for whatever reason the Mac OS just ignores those calls. Here’s the official bug report. To quote:

“Call to MacOS native function CTTypesetterCreateWithAttributedStringAndOptions did not produce the expected result.  Although the font dictionary was passed in options, for unknown reason, it is ignored.  Fix is to add the font dictionary in the attributed string and use CTTypesetterCreateWithAttributedString.”

And this only affects the Mac, it works fine in Windows or with Linux. The following code shows how to replicate the Java 7 printing bug on the Mac OS:

Font font = new Font("Times", Font.BOLD, 24);
Graphics2D g = (Graphics2D)graphics;
g.setFont(font);
g.drawString("Hello World", 10, 10);
// Increase font by 10 - Mac OS ignores this next line of code.
g.setFont(font.deriveFont(font.getSize2D()+10));
g.drawString("Hello World in a bigger font", 10, 100);

The weirdest part of this whole issue is that it’s really only broken in Java 7!! Of course it’s the only stable release of Java. How does that make any sense? It still works on Java 6 which is no longer supported (past it’s End of Life). For Java 8, which is still in beta and does NOT have a stable release, it seems to be working. However for Java 7, nope. Nothing. Nada. Huh???

In case you want to read further information from the better links I found on the issue, they are here, here, here, here, here, here, here, here, here, here, and here. Just a few links. So it’s not exactly an unknown issue. Many people are struggling with it.

That being said, several people have found workaround solutions, including us here at LandlordMax Property Management Software. A common solution I’ve heard is to create an image of what you want to print and print that image. It makes sense and it will work because you’re bypassing the font attributes. I’m not a big fan of this solution, especially since it doesn’t really scale well to multi-page report printouts that we need in LandlordMax.

So what we’ve been forced to do is create a temporary PDF file of the report, ask the Mac OS to print the file using the system command lp filename.pdf, and then delete the temporary file. This works pretty well, the only downside is that the Page Setup and printer setting options that comes along with most programs are not available because we’re not really printing from the software itself, nor can we pass them on to the system command. It’s not ideal, but it’s the only way to print within Java 7 on the Mac OS.

We added this workaround in the software with Java 7 Update 17. Unfortunately s far as we can tell the bug has been around at least since Update 9, but probably earlier. I just checked and we’re now at Java 7 Update 25, and guess what. Still no fix! No mention of the issue either.

The big question now is whether this is a Java (Oracle) issue or a Mac (Apple) issue? In either case, I would think both companies should want to fix this issue right away. It’s not exactly a minor issue. I don’t understand what’s holding up a resolution to this issue. It makes absolutely no sense to me. This is core functionality that affects both their users in a big way. It’s not a little bug, it’s huge! Printing is important, even in today’s digital world.

Hopefully Apple and Oracle can put their differences aside for a little bit and resolve this issue. It’s affecting a lot of people and we don’t deserve to be the collateral damage to their war against each other.






Facebook IS Overpriced

Is Facebook worth the price?

We’re definitely in a tech bubble again. Tech IPO’s are over priced once again. Just last year I wrote the post Groupon – Back to Crazy Company Valuations, in which I explained how and why Groupon was insanely overpriced. What’s happened since that post? They went public, quickly climbed to the $25 mark and then not even a year later they’re barely trading at $12! That’s a 50% price decrease!

Not only that but their numbers still make no sense. Ignoring their accounting oddities and controversies, the P/E alone would be staggering (assuming they had a profit). For the same market cap you could buy quite a few amazing companies with a lot less risk and the same revenue growth.

But today’s article is about Facebook and not Groupon, so let’s look at their story. Why do I believe they are incredibly overpriced? Firstly, the IPO price was insane. $38? Seriously? That gives them a market cap of about $100 billion dollars! In of itself that’s not a big deal, but when you take into account their revenues and then it’s insane!

The P/E for Facebook is over 100! The last time we saw P/E’s like that was in the dot com boom from about a decade ago.

But ignoring that fact, let’s do a comparative analysis of Amazon to Facebook, since they have about the same market cap, are both in IT, and so on. Facebook has $3.7 billion in revenues. Amazon has $51 billion in revenues. Yes that’s more than 10x the revenues. Both are experiencing similar growth rates. Amazon has about 5x the total profits of Facebook. Both are selling for the same price!

So why would I buy a company that’s at least 10x smaller and making 5x less profits for the same price? Or put another way, if you could by a local little store for $100,000 or one for $1,000,000 that had the same revenues, same growth, etc., which would you buy?

Ignoring that, which means ignoring yet another red flag (which in of itself should be yet another red flag – talk about meta), how stable are Facebook’s revenues? We know that Amazon owns ecommerce. But above that, Amazon is also a leader in cloud services. Many many many many companies (some very large companies) rely on them for managing their IT infrastructures. This isn’t small, it’s a huge deal in the IT world. Personally I believe this is the future of Amazon and where they will grow extremely large and powerful.

Ok but that’s just one competitor, and maybe Amazon is wrongly priced, maybe it’s even under priced itself (or maybe overpriced too, it could be that Facebook is that overpriced – I’m not debating if Amazon is a good deal today, just that compared to Facebook, Amazon is a much better deal). But what about some other companies. Did you know that McDonald’s is cheaper than Facebook! Yes, it’s market cap is $90B. That’s 10% cheaper. It’s not growing anywhere the same rate, but still. Anyone heard of Visa? Yeah, that’s cheaper than Facebook! And it’s a company that continues to grow. And no one has any doubts that it’s profitable with their interest rates and all kinds of fees, etc. For the tech oriented there’s also Intel. Yes it’s a bit more expensive than Facebook, but it’s generating 15x the revenues and almost 10x the profits. And it’s revenues are growing (not at the same rate, but still quite nicely nonetheless).

So basically when you buy Facebook, you’re buying the stock with all of the growth of these companies already built into the stock price. In other words, you’re buying it assuming it will grow to the same size as these companies. It has to grow BIGGER than these companies for you to make any profit because the price already includes these gains! That’s a huge claim!

Of course we all know the stock prices are irrational and the price could go higher based on that irrationality, but trying predict irrationality is a fool’s errand and if you don’t jump out at just the right time, you’ll get severely burned. Not something I want to try my luck at!

I believe that the biggest reason Facebook is getting such a high valuation is because of it’s brand awareness. Almost everyone is familiar with Facebook. There’s even been a movie about it. Many many people use it. The problem is that most people don’t stop to think where and how Facebook makes it’s revenues. In case you don’t know, most of it’s revenues come from ads.

Yes it’s similar to Google and their ads (Adwords), except that Google has a major advantage over Facebook. People on Google are actively searching for something when they go to Google. They aren’t just perusing and maybe they’ll click on an ad, they’re actively searching for something, including the ads! With Facebook, the ads are a distraction. When you use Facebook, it’s to socialize. It’s not to actively look for products. You’re in a completely different mindset. You don’t go to Facebook to find something, you go to socialize. With Google you go to find things.

And since Google and Facebook share such a similar business model, it’s only fair to compare them. Google is priced at twice the price of Facebook ($200 billion market cap). Google’s revenues are growing quite well, similar to Facebook’s. But Google is generating more than 10x the revenues and about 20x the profits!! Not bad for twice the price. And you don’t have to hope it will make it, it’s already there!

So let’s do a comparable analogy of Google and Facebook. If I was to give you two options:

– Buy stock A for $1 that’s generating $0.61 revenues and $0.20 profit
– Buy stock B for $1 that’s generating $0.04 revenues and $0.01 profit

Which would you want to buy? It’s pretty clear and obvious isn’t it? Now let’s say I added another:

– Buy stock A for $1 that’s generating $0.61 revenues and $0.20 profit
– Buy stock B for $1 that’s generating $0.04 revenues and $0.01 profit
– Buy stock C for $1 that’s generating $0.52 revenues and $0.05 profit

In case you’re wondering, stock C is Amazon. In either case, as you can quickly see, Facebook is incredibly overpriced. At this time, Google would appear to be the best deal (best profits – and a higher profit margins!). Of course this quick analysis is missing a lot of factors such as growth, marketspace, etc. But it’s good enough to see the scale of the valuations of the different companies. Kinda makes you think doesn’t it?

So how is Facebook fairing since the IPO? Well firstly did you know that Morgan Stanley spent billions to support the initial IPO price point?. Yes the market wouldn’t bare the initial price so it had to be propped up.

And since then, the price has continued to decline. Right now as I write this the price is hovering around $31/share. That’s approximately a 18% price decline in just a few days! And the biggest tell of the stocks success will be when it releases it’s first real financial report as a public company. If it doesn’t meet the incredibly high expectations, well let’s just say the market has a history of not being too kind to such stocks. It will be interesting to see how Facebook does on its first filing after the IPO.

But do remember that for Google, as important as the big accounts are, Google Adwords has a lot of small accounts too. My company LandlordMax spends quite a bit on Google Adwords advertising each month. And we will continue to do as long as the ROI is positive. However many small businesses aren’t experiencing the same positive results on Facebook. Here’s just a few examples:

As you will quickly notice, the results weren’t just not positive, they were atrociously negative. As in extremely bad! To the point that it’s in not even worth trying to adjust and fix.We’re not just talking small companies with naive marketers, but we’re also talking large companies with large budgets. That’s why I can’t see the same expenditure levels on marketing for Facebook ad campaigns as are happening today with Google Adwords. Yet this growth is already assumed and calculated into the current stock price.

Again some people have shown success, but I have read too many similar articles like those above to dismiss them as just bad luck. Sure Google has similar unsuccessful stories, but they are rare in comparison.

Being an entrepreneur, I constantly talk to a lot of other fellow entrepreneurs, and I have yet to personally meet someone who has had a successful Facebook ad campaign. Again, some people obviously have had success, and you can find articles about it. I just don’t personally know any. Whereas with Google Adwords I know of many people actively using it with positive ROI, including myself. So as anecdotal as this observation is, it’s still an important observation for me. Firsthand experience down in the trenches is always very valuable and should never be dismissed.

But if you buy Facebook stock, then the price includes this growth in today’s price. It has to acquire all these customers and more to justify it’s current price! Any increase in market cap (stock price) is then based on further expected growth and not actual real growth. Sure signs of a boom with a very high potential for a large price drop.

And in my personal predication Facebook will NOT meet it’s expectations. Facebook is a cool system, and it’s great for social networking, but in terms of a advertising value for a company I believe it has limited value. Unlike Google where people are actively searching, with Facebook the ads are more like banner ads. And we all know that banner ads have atrocious click through rates, just like Facebook ads are appearing to have. Yes you can significantly improve your targeting, but does that really matter that much? It doesn’t appear to be making that much of a difference in terms of ROI for Facebook ad campaigns from the results we’re seeing. And I can’t see it improving. I also can’t see Facebook trying to compete in search. So I personally don’t understand how they will ever get the same ROI on ads as Google.

Now I’m not saying Facebook isn’t a good business, it definitely is a good business. And it can definitely earn revenues and is profitable. All I’m saying is that the current price of Facebook is not inline with the value of its business. It’s too overpriced. If the price dropped significantly I would probably start to get tempted. But right now, it’s just insanely priced for what you get. Which means the price of the stock only has one direction to go, DOWN! Maybe not today, but give it a 1-3 years and it should better line up with it’s real value.

In either case, we’ll know soon enough. I’ll definitely have to post a follow-up in a year or two to see what happened between my initial predication today and then.

Update: Looks like the Facebook IPO is about to get quite messy!! It appears that the earnings estimates for Facebook were downgraded for the IPO but not everyone was notified. Firstly it’s very odd to do it at the very last minute of an IPO, but what’s even more worrisome is that some bigger investors were notified which is considered insider information. This could get really ugly real quick!!

Update 2: It’s quickly escalating. It now looks like Morgan Stanley, Goldman Sachs, and JP Morgan, along with Facebook itself, are being sued by investors claiming to be misled in the purchase of the Facebook IPO. If you thought Martha being sued for insider information and trading was a big story, this is going to explode in comparison. One of the largest IPO in history, an over-hyped IPO, investors losing 20% in two days, large dollar values of insider trades, a high profile company, it all has the making of one of the biggest stories of the year. I’ll even predict that a movie, even if it’s just made a made for tv movie, along with at least 2-3 books, will be released within a year.






What are the Risks of Cloud Services?

Cloud Services

Through my company LandlordMax I hear lots of people asking if we have a cloud offering (in case you’re wondering, we don’t yet). The thing is that most people ONLY look at the benefits, very few look at the potential and catastrophic issues that you’re at risk of. For LandlordMax we use several online (cloud’ish) solutions, and it’s great for many things. The problem is that you also have to be careful because for some things the downside can be catastrophic! Even possibly terminal to your business! It can be much bigger than you realize and I’ll explain why in just a bit.

First, let’s make sure we’re on the same page about what cloud offerings really are. So what exactly is a cloud offering? Most people today have come to define a cloud service as a service that’s hosted online. Although not exactly right, it’s pretty close. And for the purpose of this post we’re going to define cloud services as all online services. In most cases these are just going to be websites that offer services. Again, although not technically correct, it’s close enough for today. And anyways this is what most people understand cloud services to be.

If you’re interested in the exact details, Wikipedia has a nice article about cloud computing. As well you’ll probably want to check out their article about SaaS (Software as a Service), which is actually closer to what people really mean when they say cloud services.

In any case, let’s start with the benefits, so we can understand why people are so interested in these solutions (including myself):

Benefits:

  • Affordable: You don’t have to invest in any infrastructure, computers, etc., it’s all taken care of for you and amortized over time.
  • Automation and Maintenance: You don’t have to manage any computers, servers, upgrades, etc. It’s all taken care of for you.
  • Mobility: You can generally access the service anywhere there is an internet connection.
  • Focus on core competencies: Instead of spending time setting up your infrastructure, computers, etc. you now have the time to spend on where your real value is.
  • Scalability: Most online solutions will offer a significant amount of growth. You just move up plans. Amazon’s EC2 service recently had an amazing example where a system scaled up to 50,000 CPU cores within 3 hours.
  • Easier: If you don’t have to set up anything. You don’t have to figure out how it works. It’s all done for you.
  • Vendors are more experienced: In most cases, the service you’re using is the vendors bread and butter, they work in these systems all day, so they know their stuff in and out whereas for you it’s just to get the job done.
  • Quicker: You can generally sign up and start using the solution within minutes. If you have to set it up, it can take days, weeks, or more.
  • Less commitment: Maybe you only need the service for a month, half a year, etc., which means you can save from having to invest in a ton of infrastructure for a short lifespan.

As you can see, all of these are great benefits. Who wouldn’t want them? Especially for a smaller company, the benefits are incredible.

Of course, like everything else in life, you can’t have everything. Cloud services do come with costs. Not so much in terms of dollar costs, but in terms of very huge potential UNSEEN RISKS. This is especially true if you have to store data!

There are a few other cons, such as you can’t access your data without an internet connection, and so on. But really there’s really just one very big con, and unfortunately it’s generally unseen until it happens. That’s the worse kind of con! What’s worse is that most people don’t really talk about them, mostly because cloud services are still fairly new enough that most people haven’t really had a chance to experience this very big and potentially catastrophic con.

But before I explain it, let me give you an analogy that’s probably closer to home, and that you’re likely to have already encountered.

Most people store their pictures on their personal computer hardrives. Hardrives do fail. Google published a groundbreaking research report and the results were quite troubling.  Basically you can expect drives to fail at a pretty predictable rate. And unfortunately it’s not just hardware failures that you have to deal with, all kinds of things can happen such as a virus corrupting your system, power surges, and so on.

Father taking a picture of his family in the living room

In any case, before there were digital cameras, most people really didn’t have that much data, so all their really important data could usually be backed up on a CD or DVD (or if you’re old enough to remember this, floppy disks or tapes). It sucked to lose your saved video game files, or to have to install your applications again, but you usually could. Sure you’d lose some data, but usually it wasn’t that critical. Most important was generally backed up on floppies, CD’s, etc. because it was quick and simple.

Nowadays with everyone having a digital camera, there’s lots and lots and lots and lots and lots of pictures saved on people’s computers. Pictures they really don’t want to lose. The data is now much larger and generally more valuable. There’s so much data these days that in many cases you can no longer just back it up on a CD or DVD. But even at that, because of the quantity of data, most people just simply don’t do any backups at all, they expect their computers will just continue working. And computers usually just work until one fine day where it eventually fails and everything is lost. It’s terrible and catastrophic. Years of pictures lost in an instance!! It’s devastating. Yes there’s other data, but for a lot of people, their pictures are their most important data.

And so as cameras have become more common, we’ve started to experience more the pain of computer failures. And as such, it’s now much more common for the average person to have an external hardrive to backup their data. 5 years ago almost no one did this. Although not everyone still does this, it’s much more common. And its definitely going to be that much more common with time. We’re learning from our experiences. Once you experience it you vow never to let it happen again. It always takes that first time to wake people up, myself included.

I’ve been backing up prolifically since as long as I can remember because I’m one of the lucky ones to have experienced my first computer failures eons ago. And in 2006 I even wrote a post called 4 Simple Steps to Protect Your Data From 99.9999% of all Computer Failures which is still as true today as it was back then. I still mostly adhere to these steps, with the exception that I do even more today than I did back then

So why did I go on such a tangent with digital cameras and data backups, because when you use a cloud service to manage your data you’re basically exposing yourself to exact same risks!! You might not realize it, but with most online services you’re basically running without a net. There’s no backups. If anything happens, it’s the same as a computer failure with your digital pictures. And if the data is critical to your business, it could be catastrophic. What’s worse of all, there’s often no warning at all before it happens.

So let’s get into this con in much detail.

Cons:

For the cloud services you use right now, do you have a backup that you can use if they close down or you decide you want to move elsewhere? In most cases you have no way to extract your data at all, nevermind moving to another service. In those situations that you do, can you actually take that data file and use it anywhere else? Maybe in theory yes, but can you really in practice? If you can’t, then you might as well not have any backups at all. Why fool yourself into feeling more secure when you really aren’t. And this question leads us to some very interesting and provocative questions.

What happens if the company closes or decides to no longer offer their cloud service? All I can really say is good luck with that! Imagine for a moment that you have a contact management system and you have tens of thousands of contacts stored, with all their interactions, etc. The company that hosts the cloud services suddenly closes. What happens the day after the company closes? If it’s a service, the service is shutdown immediately. You’ve just lost all access to the system and your data overnight. Ouch!!

Lost all computer data

Online services that manage and store data have a lot of additional and very high risks. The scenario I just described is the same as if your hardrive just crashed and you just lost all your pictures and documents without any backups. However in this case, maybe your business relies on the data and system. It sucks to lose your pictures, but you can and will survive. Can your business survive? What is the impact on your business?

If it’s just a backup service of your data files, then it’s not a big deal, you can just re-create the backups with another service. Sure in the meantime you have no backups, but it’s quickly resolved. However if it’s all your customer and vendor contact information, communication histories, contract negotiations, etc., then the impact is going to be huge. What if you were using an online property management software system to manage hundreds or thousands of units and tenants and suddenly you have no access to anything. The impact could be severe enough to cause you to go bankrupt (you may not be able to properly collect your rents on time to pay all your bills, or even know what all your bills are)! That’s a huge risk. A risk that’s so large that it overshadows all the possible benefits!!

Which leads me to my next question, how much warning do you think you’ll get if the company hosting the cloud service closes? I can’t imagine a company that’s managing contacts, emails, projects, etc. publicizing that they’re on the brink of closing. Most likely you’ll have absolutely no warning. One day everything will be fine and the next day the system is down never to come back up. And to be quite honest, I don’t know that there’s much you can do to prepare for this anyways, even if they gave you a warning. How are you going to extract your data? What are you going to do with that data?

Following this, what happens if the service you’re using significantly changes it’s pricing model? It’s not uncommon for an online service to adjust their prices, there are many stories of significant increases in prices. Especially for newer companies, which most cloud based services are. Or better yet, what happens if the company gets acquired? Will the pricing models change? Other than paying what they want to charge you, what option do you have? Sure you can move, but can you really? What is the cost of transitioning?

And what will happen to the could service when it gets brought into the new company as part of an acquisition? Will it stagnate? For example Mint was acquired by Intuit in 2009 and a year later the comments weren’t that great. What if the new company is a competitor? Will they force you to transition to their service or you lose all your data? One of our big competitors has been doing this with the competitors they acquire. They’re basically closing the solutions they acquired and are forcing everyone to move to their cloud based solution. Not everyone is happy about this. It’s yet another very big risk of using a cloud service?

Which leads me to my next big question. Do you trust this company over the lifetime of your own company’s needs? In other words, will they offer the same quality of service in 2-5 years? What about in 10 years? If transitioning is next to impossible, which it is for most online cloud services, then you’re at their mercy. They could never upgrade or improve the service, or worse it could become slow, buggy, etc. with time. What recourse do you have other than completely starting over?

With a solution you install and manage, you don’t ever have to upgrade if you don’t want to. In fact, the company has a very strong motivation to improve their software because they generally only get paid when a new version that has enough value to upgrade is released. If it’s not good enough, people just don’t upgrade. And with time, the value of upgrades becomes more and more significant. In other words, the company’s motivations are probably much more inline with yours when they aren’t cloud based. They need to convince you spend more money on them, that the value is worth it.

Conclusion

Unlike pictures where it would really suck to lose Johnny or Susie’s 1st birthday pictures, the impact to your losing your data could be so significant as to destroy your business. I’ve already given a couple of examples, and it’s pretty easy to come up with additional ones. Basically anywhere you store data that’s critical to your business is at high risk.

Therefore I would now recommend you look at what services you use and determine what the costs would be if they suddenly went down tomorrow. Is that cost worth the benefits? In some cases yes, absolutely, but in other cases no way would you ever even consider it if you had thought about it first.

Pros versus Cons

The thing is that today most online services are still fairly new, and most really haven’t had the chance to close. Although cloud computing isn’t new, it’s really only been in the public’s attention for a short time. And as such very few people have experienced the downside. If I was to guess, I would suspect that most like you haven’t either.

I’ve personally only experienced it once, and it wasn’t with one of our core products, but even then it was pretty painful. I learned my lesson. Never again. And thankfully it wasn’t a service that’s core to my business. And because of that I’ve since been very careful with what online services my company uses.

Anything that can severely cripple us has to be done internally. It has to be installed and managed internally. This doesn’t protect us 100%, but what it does offer us is a buffer. If something happens we have some time if the company closes, collapses, changes, etc. We can at least still continue to use their software until we find an alternative solution, even they don’t exist anymore. We can’t use them indefinitely, but we do have some time to transition to another system. We might not be able to transition the data, but at least we can continue to access the old system if need be. And because we have some time, we can always hire someone to help us in moving data from one system to the other, even if it’s manual data entry. The key is that we at least have options. And most importantly that we’re not without our system overnight.

And with that, I will say that my company probably uses close to a dozen online cloud services. Am I a hypocrite? Am I willing to take those risks? Absolutely not. Each service we use would not cripple us if they closed tomorrow. It wouldn’t be fun if they went down, but it definitely wouldn’t be catastrophic either. There’s only one online service we use which I’m planning to push to an internally manage solution sometime this summer. It also wouldn’t be a catastrophic loss, but it would definitely be more painful than the others. It’s the only solution left with data that we’d need to extract that we wouldn’t be able to. However if we lost the data, it wouldn’t be catastrophic. It wouldn’t be pleasant either, but we could manage without too big a hiccup.

To give you an example of solutions we manage outside, internally we communicate using HipChat. Well at least until last month, before that we were using Campfire. Obviously we were able to transition because we’ve already done it. Losing either of these services overnight wouldn’t be fun, but neither would really slow us down much. They’re very useful and do increase our productivity internally, and losing the chat histories would have some costs because some info would have to be re-communicated, but as I’m sure you can appreciate, the exposure is pretty minimal compared to the costs and risks.

Another example is that we use Aweber to manage our company newsletter. Before I begin, let me just start by saying I chose them because of their reputation and my belief that they aren’t going anywhere anytime soon. In any case, if something happens, yes we’ll lose the latest email subscribers since our last local backup. That’s a cost, but really it’s not that big a deal. Yes we’ll lose our stats over time. They were nice, but we can live without them. The biggest pain would be importing the mailing list with a new service. Most likely all our subscribers would be emailed to confirm and verify they want to be subscribed to the new service managing the newsletter. So as part of this effort, we’ll probably lose a percentage of our subscribers. It’s not pleasant, but by no means is this catastrophic. We can definitely recover.

If however I was a real estate investor, or a property management company managing properties for others, losing all my data could be extremely catastrophic. All of sudden I no longer know which tenants owe me what amount of money (rents, back rents, damages, late fees, etc.). I now have to find all the signed lease agreements and go through that manually just to calculate this month’s rent roll. If I have 300-500 tenants, I might not be able to process all that information in time (I might have 5000 tenants on file but only 500 are currently active). What about all the workorders I have on file, all that information goes away. In some cases a request to fix a leaky sink can just be re-requested by the tenant, but what if a workorder is critical and it gets lost (for example a vacant unit needs a roof repair otherwise it will collapse, a leak that goes unchecked escalates, etc.). If I’m a property management company, I might have obligations on when I need to pay the property owners their rental revenues so they can meet their mortgage obligations, but if all my information is gone, I might not have the time to manually process everything. And when I do find a new system, in this example I now have to enter 500 units worth of data, 500 tenants contact info, 500 leases, etc. How long will that take? I might not be able to survive the 1-3 months it takes me to recover from my online cloud service disappearing on me overnight.

Using an online solution in the above example could be very catastrophic. In this case the risks just aren’t worth the benefits. In this case you’d most likely want to acquire a system which you can manage internally, so that if the software company closes, decides to stop selling the software, gets acquired, changes prices, etc., you can still continue using their software until you find a proper replacement. Otherwise you could come in to the office one day to find yourself in a world of hurt.

Online and cloud services can be very beneficial. They definitely have their merits. We use many such cloud services here within LandlordMax. However you always have to be vigilant in terms of what and how you use them. They really only have one con, bit it’s a whopper of a con! Which is that your data is at their mercy. You generally don’t have backups or anyway of transferring it. So always, and I mean always, make sure that a permanent disruption of the cloud service you’re looking to use isn’t going to destroy you. And if you’re already using it, then you should already start to make preparation plans just in case the worse does happen. Don’t wait until it’s too late because by then it will be too late!






 
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