Blogging

Saturday Reading: InvestorBlogger’s Top Ten Feeds

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I’ve been reading a number of blogs for quite a while, and for my readers I’ve decided to export and save an OPML file of my favorite blogs for sharing. There are only ten feeds currently in the file, and as I read more blogs in the coming months, I’ll surely be expanding my list to 25 feeds.

If you’re interested, download the file (in zip format) and upload it to your favorite OPML supported FeedReader. The file is generated from Google Reader, and does work well with that and, of course, BlogLines Feed Reader.

Happy Reading. Oh, and do share what feeds you like! Perhaps I’ll add one or two of them!

Consulting and Advising – Combining Blogging and your Career

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Teaching: It isn’t all about grammar and vocabulary!

I’ve been a teacher of ESL (if you’re American) or EFL (if you’re not) for more than years now than I have fingers and toes, and in that capacity, I’ve been privileged to teach people in Taipei City and Taipei County from all walks of life: business men and women, clerks, company workers, pc engineers, sales staff, students of all ages, bankers, doctors, nurses, etc. Despite teaching English, I often find myself advising and consulting with my clients on learning English rather than just simply teaching vocabulary and grammar (or other prescriptions of language learning).

New Vistas: New Paths

It was still a surprise when I found myself in the role of consultant for someone I’d never met, and in a field that I was less familiar with: blogging. Recently, I’ve been involved with setting up, administering and writing for a blog as a supplement to a static website. Naturally, this is a market that is going to grow leaps and bounds in the coming few years, until Web3.0 takes over. Since I’ve been involved in computers for many years, and been working in blogging on and off since 2004 pretty much as my passion, I found that I’ve come to learn and know a little in a wider range of areas: blogging, marketing online, online tools, wordpress software, writing, etc.

Consulting: Opportunities in All Areas

I’ll be revealing more about the project as I work away on it, and as it’s going to be a challenge coming up with refreshing and interesting posts. Something I’m looking forward to doing. For those of you looking into creating online income, consulting is an option that is open to many bloggers though it may not be easy to go head to head with the big guys out there. If you have experience in a professional or business field that is much more specific, you could still find many opportunities to put your blogging skills to good use online and offline in the field of consulting, but particular to your specialty whatever that may be.

Did this happen to you, too?

But it isn’t the first time I’ve found that people are interested in what I have to say about a range of subjects; nor is it the first time someone has suggested directly or indirectly that consulting may be a career choice for me? In fact, one of the reasons I started InvestorBlogger dot com was because I found that many people were struggling with the same financial problems I was. While I hadn’t found the ANSWERS per se, I had found some ways that worked for some situations, and I was eager to share those successes.

Blogging: Opening New Paths?

It was only when I started blogging that I began to discover the core of my interests, and for me, blogging became not a didactic process (me telling you WHAT to do) but a dynamic and very personal process that helped me to further my interests in a number of areas, as well as help my readers. Too often when I read other blogs in the field of money & finance I hear the voice of the blogger shouting: “Do this” or “Don’t do that!” … as if it were the 10 Commandments… and I am repelled because I KNOW it isn’t like that.

There are more ways to peel a potato or cook an egg than one. It’s only by accepting and understanding that that we can begin to see alternatives: new ways to write, new ways to learn, new ways to share, and new ways to make money. It’s not a cookbook or a book of instructions, rather it’s a pantry with ingredients, some raw, some part-cooked, some chilled… We’re the chef whose job it is to combine, create and re-create what is there.

(ed. Post backdated to fill space in yesterday’s calendar!)

The 80/20 Principle: It’s just a rule of thumb

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not one of the ten commandments… Read on.

Ade’s blog just recently posted about the 80/20 rule and how it applies to bloggers. In this post, I would like to point out some of the reasons why I think the 80/20 rule may be flawed, and you’d be wise to consider NOT applying it to your blog’s readers.

An introduction: What is 80/20?

Wikipedia has a great article on the 80/20 otherwise known as Pareto’s principle. The principle was greatly popularized by a recent book called: The 80/20 Principle by Richard Koch. Good book, good reading. In summary, 80/20 states that the majority of results will come from the minority of inputs. In particular, 80% of sales in a bookstore will come from 20% of customers. There are many examples that you can find. While the numbers 80/20 are approximate, other variations have been seen, too, including 90/10, 70/30, etc. It is now being treated as a rule of thumb in many industries, and being applied in a number of diverse situations.

It’s a rule of thumb, not a rule!

The recording companies, principally the big 4, have been adopting this principle over the last few years with their back catalogues which have shrunk somewhat as artists have been eliminated who don’t reach certain mass market metrics. Now I was thinking about the 80/20 rule and it may or may not be true in some circumstances, but I would argue that in some situations, esp. like the CD industry, it’s a bad idea for a number of reasons.

Let’s examine CD purchases: logic dictates that you should only stock the top 20% of CDs. In some situations this may be fine if there’s limited stock space or some other important limitation. BUT a significant number of purchasers would probably buy a top 20% CD AND another CD of a lesser known artist. You then lose the CD sale for BOTH CDs not just one. Why? Well, as the CD companies are discovering: shoppers tend to buy multiple CDs at one time, and may shop frequently. With the top 20% of CDs on sale, such frequent shoppers would quickly buy the top 20% and then not have any more to buy. Result: they begin to shop elsewhere, where they buy the CDs that they can’t get in the bigger shop, and at the same time they’ll buy the popular CDs too.

For the shop, this is bad business: they lose the top quality purchasers who buy multiple CDs at a time. They therefore have to start increasing their advertising to attract those shoppers who only buy the top 20% of CDs, and those shoppers may only shop occasionally, may be more price sensitive, and may not be loyal to any particular CD store or chain of stores. Worse comes when even the marginally popular CDs are dropped as the store further refines its stock of CDs. Previously when third-tier CDs were dropped, sales may have risen incrementally, as some customers bought more second- and first-tier CDs. This effect would have been temporary as regular purchasers would soon find not much new to buy as most new artists would start out as third-tier or lower before being ‘discovered’ by shoppers.

So the store decides that with deteriorating sales in its CDs it has to boost its margins by shifting more copies of the top tier artists. It increases promotions, cuts second-tier CDs, and lo and behold, the sales and margins rise magically again. But worse is to come: customers begin buying fewer CDs (they either already have the ones they want or they don’t care for some of the artists) and regular customers become scarce. After the promotions are over, it’s difficult to get regular customers to come back, and the top spenders are now going elsewhere for their CDs.

So, it looks like the CDs/music market is declining, and the management is left with little choice but to scale back the CDs even more or close the store.

Of course, downloading (legal and otherwise) came along at a time when the CD industry was already in bad shape. Downloading and alternative mediums for music (online radio, ringtones, etc.), not to mention alternative sources for entertainment, all coincided to make things really difficult for CD companies. But to cut your catalogues and reduce your roster of artists is now looking to be one of the ways in which the big four cut their own throats.

The 80/20 principle sounds like a logical way of thinking until you realize that if you start to pursue the top 20, you will quickly lose a lot more incidental sales. And some of the incidental sales MAY just turn out to be the top 20% of purchasers in the future…

And for bloggers: should you follow the lead?

While the principle may be in principle correct, ignoring the 80% of your readers may lead to erosion of your blog income. Why? Because when readers click away from your blog, it’s usually through an advertisement. Hence, to maximize your blog’s income, you need to encourage your readers to love it, enjoy it (briefly) then click away to a Google Ad, affiliate link or other advertising. It’s likely that if you just focus on the 20% of your readers, your expenses will rise as a result of increasing usage your server’s power power, and your income will go down as regular readers become ad/affiliate link blind.

There are many people who do not seek to make any money out of their blogs at all. Power to them! Well done! There are bloggers like me who started before making money on a blog was possible, but have found the dollar signs an additional benefit. However, for both kinds, increasing readers is a great benefit, if the blogger can afford to pay for the hosting costs. If you cut into your revenue streams, then you’ll find that you will be paying the costs for your regular readers. If you are doing it as a hobby, perhaps that is appropriate for you. But perhaps not.

Overall, I am becoming a very anti-80/20 activist. I think focusing on such goals really doesn’t help much. I can cite several examples in Taiwan, where such short-term thinking led to very poor short-term results, muddied business plans, and withdrawal from the local market with a sullied reputation.

So I believe that the principle as a business principle is flawed, in many instances. I do recognize instances where it is a valuable ‘rule of thumb’ but it should not be treated as a law or rule in the absolute sense of the word. For the business world, which seems to be focused on the next quarter or next business year, it may seem to be a ‘golden rule’. In reality, it’s likely to prove to be fool’s gold. Unfortunately the 80/20 principle is fast becoming one of the canons of western business principles.