FREE! (with ads)

I´ve recently heard a few people talking about their business ideas. Not at a specific setting or event, more like a collection of occasions. And one thing I´ve seen quite a bit of are business models based on making stuff free, providing the users get shown some ads.

I´m not going to list examples, you know what I mean. Hell, the internet somehow seems to work like that. I´m not going to say these models don´t work.
But there is a skeptic in me.

The feeling I almost always get when people get all hyped up about “making milk free, as long as you watch a few banners” is that they are leaving the money-making part as an afterthought. And when asked how they will make money, they spurt “with ads, of course”.

This whole mentality of just sticking some ads on it and expecting them to they pay for the operation seems flawed to me in three major ways:

  1. Advertising is easier said than done.
  2. We almost don´t notice much of it
  3. Advertising must be tailored to context

1 – Advertising is easier said than done

I´ve worked in advertising, but not the online kind. And from my experience with online marketing, it is clear that it is way more complex than sticking ads on sites and applications. It was very humbling to understand this. What I think is that sometimes people are thinking that just because you put some ads on your product, these ads will bring in money. They seem to fail to think who is going to pay for them, how much, and perhaps more importantly, why should people advertise on your product and not somewhere else?

Ads are becoming a commodity and they tend to have heart-breaking conversion rates
(how many people who actually click on the ad go on and buy the advertised product).

If you are putting “Advertising” on your Business Model Canvas, take pause and think it through. Maybe not immediately, but do talk to people that know a lot about it, mentors, fellow entrepreneurs and the people you expect to actually pay you for this advertising.

2 – We almost don´t notice much of it

We know we get bombarded with ads everyday. But how many, really? Depending on which study you read (check this Quora post) you will get different answers, but one thing is certain. It´s a lot. And thank god we don´t really see them all. Now, this tells us two things. The first is that it is very hard to stand out in the ad jungle (especially when most ads seem to be written/designed the same way), the second is that you will need a large presence, for your ads to reach “critical mass”.

I´m not a specialist, but I figure that a single ad for the most awesome service in the world (“Free T-rex rides in Las Vegas, everything included”) wouldn´t get much attention surrounded by 10.000 Coca Cola ads.

When people don´t notice ads, they don´t buy more. When they don´t buy more, businesses don´t spend money on ads. This is a gross generalization, but you get my drift.

3 – Advertising must be tailored to context

This is for me, the most visible issue with paying your product with advertising. It isn´t all the same, it does not work all the same way, for the all the people. When you casually say “we will put ads on it”, what I hear is something like “we will put banners, popups (god forbid) or funny loading screens.”.

Talk about a missed opportunity. How can you really integrate ads with your product or service? There are a few interesting cases ( TapJoy is famous, but you will remember GoClapp) that do this. But to really make sure the type of ads you serve are fitting the context of your product/service, it is probably a good idea to think about it early on, when you are thinking about your business.

What is your market, how do they interact with your service, what sort of buying habits they have? As a Designer I have to say you need to speak with people to find out. Don´t get lost getting statistically relevant data, but consider these things and try to come up with answers that at least guide you in figuring out how to best apply advertising to your product.

Conclusion

Naturally this is just my personal view on this topic and I don´t know enough about the inner workings of online marketing to give great advice on it. I just wish future entrepreneurs to start thinking about this as early as possible. Don´t ruin your business with advertising that doesn´t pay or your product with ads that suck and interfere.

Bonus suggestion:
If you are organizing bootcamps, idea competitions or accelerator programs.
Throw in this constraint: you cannot get paid via ads.
Lets see people getting creative

365 days

One year ago I arrived home from the Netherlands. I had a backpack, a book full of tits and dicks, a black eye and a huge “best intern ever” cup. I had just been on an amazing roadtrip with Natwerk all the way from Holland to the Tomatina party. I doubt there would be a better way to end my previous job in guerrilla advertising.

And now, looking back to this year, I´ve realized it was a pretty good one. I had a shot at different things that taught me plenty. In this year I started learning electronics (Arduino), I´ve participated in an architecture competition, been to 2 big entrepreneurship bootcamps, had a go at co-founding a company that got some attention (that I´ve just left), started doing LiveSketching and I´m now in the process of getting a work Visa to move to São Paulo, Brazil. Other interests that caught my mind were video projection, digital fabrication, mobile applications, drawing zombies/robots and hacking analog photographic cameras. Not all were a success, but the learning was awesome.

In this period, i´ve learned the following things. A few are self-discovered clichés. Others will not be so evident:

  1. Done is better than perfect
  2. People are drawn into passion
  3. You must know who you are
  4. The right team is incredibly important for a project
  5. Most people I respect and look up to are still learning
  6. There is plenty of inspirational stuff in Gangsta Rap

1 – Done is better than perfect

As a Designer, this is something I struggle a lot with. On one hand I love the process of connecting the dots, getting ideas and coming up with new things. On the other, I truly believe that the devil is in the details. It is very hard to combine lots of different ideas in diverse fields with absolute perfect execution.

It has become apparent that the best approach is to start fast and furiously, especially with side projects that are the immediate result of my passion. Given that there are so many things I care about, it is exceedingly easy to lose focus and jump on to the next project. It is better to start executing really fast, get something to show for, and improve from there. I suspect this challenge will be my road mate for the rest of my life.

2 – People are drawn into passion

With the privilege of meeting so many interesting people (a big shout out to Frank, Henrique, Diogo, Paulo, Gonçalo and Miguel), it is clear that passion is a game changer. These guys are designers, inventors, engineers and social entrepreneurs and what binds them is the fire in their eyes when they speak of what they want to achieve.

They might not have all the details down, but they know what makes them tick. Most people don´t have such vision, tolerance for uncertainty or values and we are naturally drawn into those who seem to have all the answers. Hell, Cary Grant once said “I pretended to be somebody I wanted to be until finally I became that person. Or he became me.”. Passionate people are committed to achieving their potential and will act as beacons for the rest of us that are still unsure of how to spend our energy.

Better yet, everybody has a passion for something. If it matches the opportunities, jackpot.

3 – You must know who you are

This one is direct consequence of the previous topic. In the big adventure of going through life (I´m working on my tackiness) there will be choices. Some of them hard and no amount of pro/cons lists will help you. Recently I had to choose if I wanted to stick with a startup or take a job in a design consultancy. Part of me was in love with the entrepreneurial glamour of endless work, contagious enthusiasm and tight-rope walking above failure. The other side wanted to learn the most about the widest set of things, move to a new country and seeing how companies manage innovation. The second won.

While I was trying to decide in abstract terms of what is “better”, I couldn´t make up my mind. As soon as I figured out that if I never had to work another day, I´d go back to school, the decision was made. It was absolutely necessary to know who I am and what I want to do. Do it for yourself and stick with it.

Bonus tip: don´t think about “tactics” (“I want to work with DIY 3D printers”), but “strategies” (“I want to work with open design that allows people to directly impact their physical surroundings”)

4 – The right team is incredibly important for a project

I used to think this was bullshit. Just like I thought motivation was bullshit. It isn´t. If we agree that teamwork will probably take you further than going solo, we have to consider the sort of team you get.

Now, getting a team that has a skillset that completes itself is nice. Getting a team that shares a vision is pretty cool. A team that gets along well and can push each other is golden. A team that has all of this is extremely hard to find. But this is what takes you further. Some people prefer to go at it solo (I´m often that person) because it is difficult to find a perfect team. But if you find yourself in such company, make it count, for you have been blessed.

5 – Most people I respect and look up to are still learning

Aha, relief! This is especially visible if you are into stuff that is just showing up, lets say, less than a few years old. The mighty power of the internet lets you follow and interact with guys that write books, give conferences and teach at renowned universities. In the old days there was this feeling that if somebody truly kicks ass at something, you can´t reach her.

Well, now you can and it is refreshing to see that they are just as curious, awed and occasionally, procrastinating as you are. Isn´t this democracy?

6 – There is plenty of inspirational stuff in Gangsta Rap

This is a bit of a joke, but only partially. I don´t claim to be an expert in the matter, but especially with the old school and east coast stuff you will find some guys so focused on the hustling, makin´ that paper and getting paid that you can´t help but to be inspired.

This doesn´t mean you must start dealing dope and working on getting your CV in the criminal record form, but the drive to overcome adversity and refusing to stay where you started is something to look up to.
And for your enjoyment, listen to this