The Other 8 Hours serves as a great reminder that everyone on earth starts with the same input (time), yet we achieve vastly different outputs based on how we spend that time.  Ideologically, the book falls somewhere between Robert Kiyosaki’s Rich Dad, Poor Dad and Timothy Ferriss’s The 4-Hour Workweek.  All three begin with the near-universal truth that nobody gets rich working a 9-5, and then branch off on their different paths on how to overcome that.  While Kiyosaki focuses more on investment strategies and Ferriss discusses automation and mandatory ignorance/isolation, Pagliarini offers some concrete actions that everyone can take to improve their personal and financial lives.  Since he’s not as extreme as Ferriss, I think this book will find a broader appeal.

I found the book full of inspirational stories from entrepreneurs and others who have escaped the rat race.  Pagliarini shares a lot of tips on how to free up more time, leverage your talents, and squeeze more productivity from each day.  He gets a little preachy toward the end, but it’s hard not to after 200 pages of rah-rah motivational, take charge of your life prose.  Even if you take away just one positive idea from the book, it’s well worth the read.

Every minute that goes by is one you’ll never get back.  Are you doing what you want to be doing?

And if you read nothing else, read page 183.

FTC Disclosure: If you buy The Other 8 Hours through the above link, Amazon will pay me 4% of the purchase price.

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Cash Accounting

Cash accounting is the more common choice for small business accounting.  Income is not reported until the money hits the bank account, and expenses are not reported until they are paid.

If the company earns $50,000 in revenue during November, but doesn’t actually receive the money until January, that income would not be reported until January.  But say the company had $30,000 in expenses related to that $50,000 in revenue, that they paid in November.  They would report the $30,000 expense in November immediately when it was paid.

For companies that are growing, cash accounting is beneficial for tax purposes because it can defer income.  In a sense, using the cash basis offers a more accurate picture of the cash-flow situation of a business.  Accounts receivable may be considered an asset, but money only becomes real once it hits the bank account.

Accrual Accounting

For companies that use accrual accounting, income and expenses are reported when they are booked or when the sale is made or delivered.  In the above example, the company booked and delivered a $50,000 job in November, but wasn’t paid until January.  Since that income represented November work, under the accrual basis, it was accounted for in November.

The benefit of accrual accounting is a much more “real-time” look at how the business is performing.  Income and their related expenses are often booked in the same time period, so business owners can get an accurate look at their margins.  The downside is companies may be over-reporting their income if some receivables don’t materialize when they’re due.

Enron is the famous example of accrual accounting gone wrong, banking millions of dollars in revenue on their financial statements that they were many years away from receiving, if they received it at all.

Which is Better?

Both the cash and accrual methods have their pro’s and con’s.  I use the cash basis for tax reporting because it allows me to defer a lot the income that was “earned” in Q4, but not paid until Q1 of the following year, while still deducting the expenses related to those earnings because those are paid right away.

But I also keep a separate set of books on the accrual basis, to see a month-by-month snapshot of income vs. related expenses.  There’s no reason you can’t do both, because it’s important to see where your business stands both from a cash-flow perspective and from an ongoing profitability perspective.

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1. What should I stop doing?

2. What should I start doing?

3. What should I keep doing?

4. What could I do with less effort?

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The photographer, realizing this would be the most boring photo shoot ever, asked me to find some shoes we could use in the picture.  I came back with a couple pairs of Bryn’s shoes and one of my size 13 runners.  “We can’t use that thing,” he said, “it would take up the whole frame!”  So Bryn’s more petite Nine West flats made a cameo.

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“Up $5k for the month.”

What?!  I knew immediately what he was talking about: affiliate marketing.  Here I was having just moved all the way across the country to start work at my “real job” when I get this message about a friend making way more money in way less time online.

At first I was jealous and anxious to know how he was doing it.  We’d both experimented with online marketing in college, but never made any serious money like that.  That text message was an eye-opener and a huge inspiration.  It wasn’t long after that I started work on the Shoes ‘R Us site.

When you share your success with others, I suppose you run the risk of bragging, but you never know what you might inspire.  Maybe even something life-changing.  Success can be fleeting, but there are always new opportunities to take advantage of.  So cheers to that, and thanks for sending that text.

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Awesome.  And even more awesome, it’s free.  I think it’s pretty smart business too.  The card itself costs almost nothing to produce and mail, and the online interface I used to design it was not super-complex.  And if it gets people using their Capital One card more because they like the customization and want to show it off, then it’s mission accomplished.

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Over 100 years ago, Henry Ford was tinkering in the shed out behind his house.  He was building his first car.  But when he finished, he realized he’d made one critical mistake: it was too big to fit through the door.

Undeterred, Ford actually knocked down a wall of his shed to take his new invention for a test drive.

Moral of the story: If you’re out to the change the world, you might have to knock down a wall or two along the way.

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A Timeline

April 2007 – Google acquires DoubleClick, and all it’s subsidiary businesses including Performics, the affiliate marketing network.  Conflict of interest, anyone?

June 2008 – Google rebrands Performics as the Google Affiliate Network (GAN).

October 2009 – Google integrates the publisher payment platform for GAN with their payment platform for Adsense.

Adsense is the division of Google’s business that pays website owners to host Google ads on their website, like the kind that used to appear just to the right of this post (more on why they’re gone later).  What does that have to do with affiliate marketing?  Absolutely nothing.

For most publishers, linking their Adsense and GAN accounts was a non-issue.  For me, it took just a couple minutes.  But for others, it was impossible.  And with Google leaving not a single other payment option, these publishers were kicked out of GAN on November 1st.  Some sort of perceived policy violation (click-fraud, for example – maybe these users clicked on one of their Adsense links once to test if it worked 5 years ago…) prevented them from being able to link accounts.  In the vast majority of cases, I think it would be difficult to prove any pattern of “criminal intent” on the part of the publisher.

And from what I’ve heard, there is no recourse.  You can appeal but no one will ever hear out your case.  There’s no number to call, no human interaction, you’re just screwed.  It’s management by algorithm, which as we’ve seen can both be incredibly smart and terribly stupid.

Google is excited to gain efficiencies by only having one payment system.  And they’re excited because now they get to hold publishers’ money an extra 30 days before paying them.  They’ve even come out and said with pride that the transition to the Adsense platform was a resounding success, with only 1% of publishers being unable to link accounts.  That 1% is an acceptable amount of collateral damage to the company with a market cap of $170 billion.

But to the 1% — the small businesses that relied on income from GAN advertisers — it was a devastating move.  To have their long-term relationships with advertisers severed by Adsense (again, completely unrelated to affiliate marketing) is absolutely brutal.  And terrible business for all parties involved.  Remember, Google makes a fee on every affiliate transaction, so they’re hurting themselves too.

The affiliate relationship is one between the advertiser and the publisher; the job of the network is to track sales and keep everyone honest.  In ending these mutually beneficial relationships, Google has clearly over-stepped the bounds of their responsibility.  It’s lose-lose-lose.  The advertiser loses sales from productive affiliates they approved to promote them, the publisher loses income since they can no longer promote GAN advertisers, and Google loses the network transaction fee on all those potential sales.

To protect myself, I’ve removed Adsense from all my sites.  The risk of setting of their alarms, maybe even by a competitor with malicious intent, isn’t worth it.

I can’t understand why a company that purports to be so smart and benevolent can be so unresponsive after making these arbitrary decisions that hurt all their customers.  If they’re so concerned about letting these publishers into Adsense, why not let them open an affiliate-only version of it just to collect affiliate payments and disable the actual Adsense code.  I bet one engineer could figure out how to do that in less than a day.  But then again, that would be management by reason, not management by algorithm.

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Last summer was kind of stressful.  After careful consideration, and 2 years of Internet-business income history, I decided to quit my job (salary, benefits, company car, all gone).  The very next day, Google decided my site was “poor quality” and “irrelevant” — and would no longer let me advertise with them.  Given my reliance on search-advertising, and their near-monopoly position in that arena, this was devastating news.  All of a sudden, what had been just fine for the last 2 years wasn’t good enough anymore.  The traffic plummeted and the sales I’d planned to replace my salary with fell off a cliff.

Their reasoning was this: my site provided a poor user experience, that, allowed to exist over the long-run, would lead to fewer customers clicking on Google’s ads, meaning lower profits for them.  Simple enough in theory, only they failed to see that the pages were highly relevant or take into account the thousands of happy customers my site served each month.  Would the customers really have bought all those shoes if the experience was so poor?  It should be self-policing; why would I waste money sending customers to pages they didn’t want to see?

Before the economy tanked, nearly half of all online shoppers reported using a comparison shopping engine to help find the best deal.  Over the last year and a half, I can only imagine that figure is much higher.  In shutting me down, Google made it harder for shoppers to find information they have been proven to seek and value.  At best, it makes you wonder how they interpret their own famous “Don’t be evil” code-of-conduct, and at worst, they open themselves up to restraint of trade allegations.

In shutting me down, Google lost a 5-figure-a-month revenue stream, which would be impossible to justify to shareholders.  Let alone the unknown ranks of other advertisers that suffered the “Google Slap.”  (Yes, this apparently is common enough it has been given an official name.)  As a publicly traded company, it’s clear Google cared more about their own agenda than maximizing shareholder value.  Are there other companies making so much money, they feel like they can turn it away?  Normally that wouldn’t be such a big deal, but when Google does it, the result is searchers only get to see what Google wants them to see.

Don’t be evil?

After three months of pain, lost-sleep, tweaking the landing pages, and begging for reinstatement, I got a note from Google admitting “there was an error” in evaluating my quality score.  Better believe I printed that email and put it in a safe place!  It only took them 90 days and tens of thousands of lost dollars to admit they were wrong.  But at least they did.  And just as quickly as I’d been turned off, I was back in business with “Great” and “highly relevant” pages.  They’ve willingly accepted my ad dollars again for almost a year now.

And such is the backstory of my love-hate relationship with big G.  Can’t survive without ‘em, and have to play by their rules.  As their search market-share creeps higher each month, we should all start to think of the implications of one company controlling so much of our access to information.  If this site is gone tomorrow, you’ll know why.

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On the Internet, a good domain name is the online equivalent of that corner lot in the neighborhood with good schools.  The problem is, all the good names are taken and only “fixer-uppers” are left.  That’s why you have companies called Flickr, Rowdii, Weebly, and Sedo — which auctions off domain names to the highest bidder.

Did You Know?

• According to GoDaddy.com, there are 456,976 possible 4-letter .com domain names.  Of those, only 0.7% remain unregistered.
• Sex.com holds the record for the most expensive domain name ever. It sold for $14 million in 2007.

“Domaining” is the art and science of domain-name speculation.  It turns out that online real estate is much cheaper than the real thing: you can register domains for under $10 a year.  And with the potential to strike it rich by selling to some individual or company with deep pockets, it’s easy to understand the appeal.  No lawns to mow, no rent to collect, only 1’s and 0’s in the ether.

But those kinds of large price tag sales are rare.  A more common way to monetize your domain is to place some text ads or directory ads that look like search results.  Most of these worthless sites won’t show up in Google’s index, but instead rely on “type-in traffic” — where the user just types the domain name into his browser to see what’s there.  For more obscure names, traffic is undeniably low, but it doesn’t take much to cover your cost.  And for a common misspelling of a popular site, it could be a big moneymaker.

I haven’t played these games, but do own a handful of domains.  Most are bookmarked for future projects.  Some I’ll let expire when I realize I’m never going to do anything with it or when I think of a better one to replace it.  My favorite?  BetterThanDuctTape.com is going to be your future source for all spare car parts.

Dot-coms are much more valuable than dot-nets, but it’s hard to quantify how much more valuable they are.  The owner of shoesrus.com had an idea: $5000.  That was three years ago when I said, “no thanks.”  I’ve made a number of attempts to contact him since to make a counter-offer but haven’t had any luck.  Oh well, you live and learn on your first big project.

One of my first domains was NJLEnterprises.com, a quick site built in college for my company at the time.  After moving across the country and changing company names, it had fallen out of use.  Then some guy called me randomly one day and wanted to by it for $100.  Deal.

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