Friday, April 2, 2010

No MBA? Try Warcraft Instead

At the start of 2009, I set out to create a new mini-app every month. I succeeded some months and failed other months. At the start of 2010, I set out to create a new mini-business every month. So far, I've succeeded some months and failed other months.

For March, I launched an internet marketing mini-business. Internet marketing businesses often involve one person, working part-time, outsourcing nearly all the work to other businesses and/or individuals. They are exceptionally small, which means that an internet marketing mini-business is a miniature version of something which is already small. In order to present a miniature version of something that was already small, I had to go beyond small, to super-deformed.

So I launched just one product. It was easy - because I had prepared.

I prepared for this in my usual way. When I decided to return to programming, after several years of living in a forest, taking art classes, and studying hypnosis, the first thing I did is I went out and bought some Legos. The reason is that Legos tap into the engineering side of my brain. They have many pieces, which you have to arrange in a particular order, so that you can create structures out of them to support other, larger, structures. They come in many flavors, from simple to complex. If you build a lot of things with Legos, you'll start to see design patterns. It's a lot like writing code.

I had to re-learn engineer thinking, and toys are the best way to learn (or re-learn) a way of thinking. If you use toys to learn, you're going to spend more time learning, because toys are fun to play with. If you spend a lot of time doing something, and think hard about how to do it better, you're going to get good at it. I've since seen this approach validated by Markus Frind.

Markus Frind describes increasing his traffic for Plenty Of Fish as a strategy game.

So when I decided to learn about business, I found a toy which works like making money: the World of Warcraft auction house.

This was a fun toy to play with. I used a strategy that I found in an ebook I bought for $40. (I don't remember the name of the book, which is why there's no affiliate link.) It showed me a particular, very effective way to buy low and sell high. I used this and I made some imaginary Warcraft money.

The system is amazing at low character levels. I had a lot of gold at level 1. However, the system taps out at the high end. By level 53, I was forced to skip some purples for blues, and I was beginning to wish I had levelled my professions. Like, once. Ever. (If you're not a Warcraft player, that means I had been rich as hell with minimal effort for a long time.)

After a while, I began studying business and internet marketing - reading blogs, downloading free mp3s, watching free videos, and buying books, videos, etc. I didn't realize it, but I was looking for businesses where you could buy low and sell high. I had that down to zero effort in Warcraft, because it's easy to get things down to zero effort when you start them at 0.00000001% effort.

Anyway, I found a similar kind of business model in information product marketing, which is similar to internet marketing but not identical - google Dan Kennedy - so I put some experiments in that direction into action: affiliate ads, a review site, a personal coaching program, and my first information product, an awesome video on how to get a great job, making six figures, working (from home) with the stars in your industry, even if you've been so fired so bad that the cops took you out of the building in handcuffs (which actually happened to me).

So far, so good. None of these are making me very much money but between them all I'm paying the rent and buying ramen (metaphorically speaking; I don't eat noodles, or any kind of processed food). Point is, my businesses are profitable. I even bought the amazing luxury of a new computer today: an original series Mac Mini from 1999 or something. The guy I bought it from had two of these in his house:

His name is Lars Lehtonen, and he not only owns two of these, he got one of them running Linux. He has an Apple IIe as well. His home (a converted warehouse) is piled floor to ceiling with crazy archaic computers, as well as bicycles, bicycle parts, enterprise-y Smalltalk manuals from the late 1970s, a motorcycle (in his living room) and miscellaneous madness. It looks like something out of William Gibson. To give you an idea who he is, I had a cup of tea in my hand. I told him I got the tea at a nearby café and he told me it's a favorite haunt of a local old-school luminary who created a key BBS technology in the early 80s. I bought a computer so old, I had to get it from a talented amateur historian.

Obviously this is not the standard internet marketer rags-to-riches story. Except for one thing: I thought, since starting a business is hard, it would take me all of 2010 to get to ramen-profitable, while working for someone else, doing the classic bootstrapped startup thing: working 9 to 5 for the man and then a few hours a night for myself. I figured I'd need a year before I had my own business paying my bills. It took about a month, counting from the time I launched my coaching program. I work for myself now.

Starting a business is not hard. Getting to ramen-profitable is not hard. Whatever comes after that might not be hard either. I don't know yet. Maybe I got lucky. Maybe not; maybe it's always this easy if you approach it with seriousness, and maybe some people should spend less time posturing with other people's money and more time playing Warcraft. I don't know. I do know that it takes a long time to make an overnight success. However, it takes ten to twenty years to make an overnight success in Hollywood. It only took me six months to make an overnight success in Internet marketing.

Of course, that's true as long as you accept ramen-profitable as a definition of success. I have to tell you, it's not the definition I was looking for. I would definitely prefer a definition which involved Lamborghinis in my living room.

But I'm pretty confident that ramen-profitable is just one step on the path to regular profitable, and that's not really the point.

The point is this:

Right before the dot-com crash, I realized the only people making money on the Internet were the pornographers, so when the crash hit, it didn't surprise me at all. I saw it coming, although only from a few months off. I'm sure more astute observers saw it coming from much further away than that. But there was this interesting, bizarre paradox: MBAs making shit up, burning cash like a bonfire, while scuzzy, unworthy low-life characters did actual business and paid more attention to profits and earnings than to science fiction authors. Don't get me wrong, I do love my science fiction, but I also know it doesn't belong on a balance sheet, and this was news to the MBAs running around San Francisco at the time.

Web pornographers looked disreputable during the dot-com boom. Internet marketers kind of seem disreptuable again today, at least to some people. But once again, the MBAs are mostly just making shit up, and it's the so-called "low-lives" who actually do something worthwhile, creating value, in an economy which desperately needs people to create real value. The MBAs are like "omg! starting a business is hard! fail fast, fail often!" when in general, all you really need to do is build an audience and sell them something, and in the case of Warcraft, all you have to do is find a system that works and then use it.

Whenever I think of MBAs, I remember this one job interview I did: a startup composed of two business guys and a programmer. I told them I could tell which one was the programmer, because he had a beard. I was kidding, but the programmer replied that he grew the beard because the business guys told him to. The business guys told me they did it so that the VCs would see that they had a real geek on their hands, and proceeded to lay out a business plan that clearly had a lot of that same attitude behind it: "let's manipulate and bamboozle the guys who have lots of money." (Sorry business guys; I know you're out there somewhere, and I wish you the best, but that's my impression of what your strategy was.)

The funny thing is, I was talking to them because they were using a pair of cool, unusual, "cutting-edge" technologies, but the odd part was that the pair of cool technologies were also totally unrelated technologies, stuff I'd never heard of anyone else ever combining. It was weird, like if somebody offered you a sandwich made of ice cream and asparagus. I asked the beard about that, and he basically laid out the same strategy for selling tech to the business guys that the business guys seemed to be using to sell their company to VCs. The business guys had no idea what these technologies were, but they sounded exotic, so they let the programmer use these technologies for wildly inappropriate purposes, partly because they didn't know enough to realize how wastefully he was burning their money, and partly because they knew they could sell that "exotic" bullshit upstream to similarly ignorant VCs. The whole thing just stank like a nest of fetid weasels. (Again, sorry, programmer guy, but that is my impression, and there are better ways to put exotic technologies on your resume.)

I hope I don't seem like I have a chip on my shoulder, but I think the moral of the story is it's better to play Warcraft like you really mean it than it is to get a phony accreditation and use it to launch a phony business backed with no genuine intent to deliver anything valuable to anyone. Honesty remains the best policy. A great drummer can make great music with nothing but a paint can and a stick, because they've developed within themselves incredible rhythmic precision; in the same way, if you learn how to make a great fortune in elven Monopoly money, you develop within yourself the essential skills of business.