The key to making money online as a publisher is giving away free content with a clear path to at least one source of revenue. In his latest book, Free: The Future of a Radical Price, Chris Anderson lists 50 free business models that work, with examples of each. Since Chris is a publishing guy, many are publishing related. Let me explain a couple…

The easiest way to use free to make money online

The simplest is the sponsored website. The publisher posts great free content, Google sends tons of free traffic, sponsors pay to be associated with the website, and the sponsor’s customers pay a few pennies more each time they buy the sponsor’s product to pay for the cost of publishing the website. In this case millions of product buyers pay for the content accessed by a far smaller group of website users. It all mixes together as the sponsor pays to build their brand by sponsoring everything from websites to Super Bowl commercials.  The media mix is so complex that there is very little direct connection between the extra pennies consumers pay for the products they buy and the money an individual online publisher gets from a given sponsor to run their website. The pennies do add up as a kind of media tax.

Last year the average American consumer spent more than $1,000 for the products and services they bought to pay for all the free content marketers, producers and publishers gave them for free. So, there really is no such thing as a free lunch. In every economic system, somebody pays.

Other internet business models powered by free content

Before you get too excited, let me remind you that more than 50% of online advertising is sucked up by Google, Yahoo, AOL and MSN.

About.com, which is the 18^th largest website in America, uses this sponsor-driven Internet Business Model exclusively and only generates about $150M in annual revenue. It falls off pretty quickly from there. My private equity friends are fond of saying that “The Internet excels at turning advertising dollars into advertising dimes.” The Internet is the most disruptive communication medium ever conceived because it uses bits, not atoms, to make, store and deliver information.

Hope for content marketers, producers and publishers

Now before you get too depressed, let me remind you that some publishers spend more on advertising to sell their information products, than they generate from sponsors. If fact, many special-interest publishers traditionally spend 30 to 50% of their total expense budget on advertising (often called direct marketing) and generate zero percent of their revenue budget from advertising in any form. These publishers are in a position to benefit dramatically from an economic force (the Internet) that is turning advertising dollars into advertising dimes.

Harnessing the Power of Free Content:
The free to premium model

Mequoda Group is just such an organization. It is a user-driven membership organization that derives 100-percent of its revenue from end users. We spend virtually no money on advertising and instead spend about $300K a year creating and giving away free content and free software. The $300K is mostly spent on the time and labor (atoms) of the talented managers, writers, designers and developers who run the Mequoda Daily Network. Hosting and broadcasting (bits) is a small percentage of our budget and getting smaller as costs continue to drive towards zero. We make money selling premium content and services to a small percentage of the 21,000 Mequoda Basic Members who spend nothing to access our free content and software.

In 2009, less than four-percent of Basic Members upgraded to some form of premium membership and spent money with us. Over time and with the aide of our membership retention efforts, we expect the percentage to creep towards 10 percent. Other publishers report premium participation as high as 20 to 25 percent and still others do fine at less than one percent. The Free to Premium or Freemium Internet Business Model is very flexible. How publishers build their free base, and the many ways to monetize that base, are numerous and ever growing.

Integrated thinking or the power of the pyramid

We have refined our business model and pyramid over and over in the six years since Mequoda Group was founded (we celebrated our sixth birthday on January 31^st, 2010). Today it looks like this from the top down:

Gold Members get one-to-one consulting, support, managed hosting and email broadcasting services and pay $1,200 to $2,700 monthly for their Gold Membership Retainer plus consumables as used. This is a continuity revenue stream for Mequoda Group.

Summit Delegates attend our live face-to-face events where they interact with Mequoda Group’s Advisory Board, Officers, Staff and fellow Members. Cost varies depending on Membership status and number of days and average $1,200 per event. This is also a continuity revenue stream for Mequoda Group as Members make the Summit part of their annual training budget.

Pro Members get access to all live webinars, encore access to all past programs, free software and email Q&A support from the Mequoda Research Team about all things Mequoda. Cost is $297 per year and is a continuity revenue stream. Individuals can also buy access to single events and programs on CD. More about Pro.

Basic Members gain full access to the website including email update options, the White Paper Library and the ability to comment on our posts. Basic Membership is free.

37 Mequoda Systems & Counting

Since 2004, we have built or helped build 37 Mequoda Systems that leverage the power of Free to make millions of dollars on the Internet. Giving away free content works well when you have a plan to make money with a media pyramid that has a clear path to the gold.

“You just have to do it!” exclaimed one publisher at a recent roundtable discussion.

The “it” is Twitter, Facebook, LinkedIn, and the dozens of other components that make up a successful social media program. And while I agree and appreciate their enthusiasm for social media, let me make the business case in terms that publishers can understand. (Us retreads need to stick together in this topic least we be overwhelmed by the many options that can turn into an uncoordinated mess).  Allow me to explain…

Bringing Order to Social Media Activities

Social media for publishers is about building awareness, traffic, audience and brand preference. It starts with creating great free content that leads to someplace you want users to go, and then distributing that free content (or part of it) on as many platforms as you can. In the old days we called this PR, but today we call it content marketing, organic marketing, blog marketing and social media marketing. These are all different ways to describe a process that uses free content and personalities to achieve marketing goals.

The Basic Parts of a Social Media Marketing System

1. A Multi-Author Blog
2. Topics
3. Keywords
4. Free Content
5. Email Newsletters
6. Search Engines
7. Referring Websites
8. RSS Feeds
9. Twitter
10. Facebook
11. Linked In
12. Social Bookmarking
13. Clear Marketing Objectives
14. Measureable Goals
15. A Publishing Calendar

An Integrated System, Not Independent Activities

The foundation of your Twitter headline publishing schedule is comprised of the headlines from your blog which, when properly coded, can turn into a large source of website traffic. The full blog post can then expand on the Twitter headline to build awareness and preference for your brand, and point visitors to all manners of direct response transactions. A savvy online editor will add to the headlines other more personal posts to give the followers a sense of the editor beyond the blog content. A myriad of tools exist to make the whole process easy, fast and cheap. And the same blog posts can be used to power email newsletters, RSS feeds, Facebook, bookmarking networks, and on and on. Much of the process can be totally automated.

A Final Key Point about Social Media Content

Professional publishers with full-time writers, editors and researchers can use a social media marketing system to share the vast amount of valuable content produced by their entire organization.

Register today for Twitter for Publishers 2010, the live webinar on Tuesday, March 16^th… or if you can’t make the live event, pre-order the event on CD-ROM or join Mequoda Pro for unlimited Encore Access today. This discussion is crucial to making social media an effective component on your online marketing mix.

First impressions have never been more important than on the Web. The increase in broadband availability and the increase in user expectation have resulted in a fantastic explosion of technology and complexity. The age of the Internet has also created many websites that are like older homes that have been remodeled again and again with no master plan for making the rooms work together. Our research indicates that many of these complex websites will function much better when untangled to create a network of websites, each with streamlined functionality that the user can learn to use effectively.

This means there are many pitfalls waiting to ensnare the overworked, over-extended website publishing team. Brand integrity, clear messages, easy-to-use order flows and intuitive navigation fall victim to the race to keep up with “technology.” It may give you some relief to know that best practices in website design and execution are often a simple case of common sense—that, and an understanding of your audience’s expectations and perspectives.

To create the 14 Website Design Guidelines, we’ve reviewed hundreds of websites and interviewed dozens of website publishers. We’ve conducted a series of expert usability reviews and actual user tests to determine what we believe to be the top 14 best practices for the running a Mequoda system.

While these 14 guidelines are by no means the complete list of website design practices, they are essential to sound, effective website design. We’re sure that implementation of these practices will result in happier, more satisfied, readers.

1. Strategic Intent, or Purpose

To communicate strategic intent you must know two things:

1. What are your users trying to do at your site?
2. What do you want them to do at your site?

At least one of those goals should be a way to monetize the visitor. Clear strategic intent is much easier to achieve when the website has very simplified functionality. Complex websites confuse users.

The Mequoda System™ asks two key questions to classify websites into one of seven models:

1. Is the user looking for, content or commerce?
2. Who pays the website publisher for successful task completion, the user or the sponsor?

Knowing the answers to these questions is key to designing a website with clear strategic intent.

2. Content Webification

The Internet is not a book, magazine or newspaper. Nor is it TV, a live event or a brick-and-mortar store. The Web is a unique medium. A well-executed website offers the opportunity to do things that other media and physical venues cannot do, the execution of which is particular to the Web.

Let’s look at a few examples:

• Users buy books at Amazon because it offers a selection and an interactive capacity not available in any physical bookstore.
• eBay lets users interact in a way that wasn’t possible from traditional classified advertising or auctioneering.
• ConsumersReports.org makes 48 months of magazine content available in a searchable format, which is very differently from the same content delivered by the monthly magazine.
• Forbes.com offers 1,500 new business stories to its users every day with searches and alert services to guide them to the content they want.
• eDiets helps users choose which information program is best for them and then communicates daily, automatically, with timely, personalized information and inspiration.
• AmericanGreetings.com can deliver a gift card across town or around the world in a matter of seconds.

The key to successful website publishing lies in exploiting the user benefits that the Web has to offer at the expense of traditional media and retailers. Successful website publishers use content to create unique user benefits.

3. Relationship Building

Website success depends on providing incentives to encourage visitor email registration. Email registration permits the website to follow-up with visitors at a later date, using alerts or newsletters. If a website does not attempt to capture the visitor’s email address, visitors may never revisit. While every website should have an email capture method, the Mequoda Editorial Website Model is designed to be at the hub of a Mequoda Website Network that uses frequent email communication to drive traffic to the network’s ecommerce websites. For an editorial website, capturing opt-in email newsletter subscribers must be Job One.

4. Community Building

Some of the Internet’s most successful websites enable their users to generate more than 99 percent of website content. Monster.com, eBay and BookReporter.com are all websites that build community by letting the users do the talking. The user forums at Spirituality.com and the user product ratings and reviews at Amazon are two more ways to let the users participate in building the websites. Does the website encourage feelings of belonging, enthusiasm and loyalty? Does it motivate you to become involved by asking a question or contributing a comment?

5. Persistent Navigation

Users of your site should be crystal clear about where they are in your site, where they can go and how they can get back to somewhere they’ve been. With the exception of certain processes, like order flows, they should be able to navigate to all major areas of your website from anywhere in your website. Does your persistent navigation reflect the depth and breadth of your content? Does it provide quick and easy access to customer service? Is it intuitive? Is it consistent throughout your site?

Our research indicates that a change in top-level navigation is best accomplished when you also change the nameplate and the URL. Playboy.com, a pioneer in successful website publishing, is the gateway to a network of websites each with its own navigation, nameplate, and URL. This network of sites includes a variety of clearly branded membership and retail website types as illustrated in the seven Mequoda Website Models.

6. User Task Depth

Does the website encourage you to take the next step, such as request more information or make a purchase? We have found that there are three to five fairly common tasks that account for 80 percent of user activity at each of the seven Mequoda Website Models.

Not surprisingly, for content sites, the top task is to get more detail on a news headline. For commerce sites, the user is most often trying to complete a purchase. Browsing and searching are common to all seven Mequoda Website Models. For retail websites that involve the shipment of physical products, users are increasingly seeking to take care of customer service tasks at the website—canceling or returning an order or reporting a problem with delivery.

7. Affordance

Proper affordance means that something that is linked should look like it is—and that which is not linked should have no underlining or color-coding. Good affordance means that you aren’t making the user mouse-over the page looking for links. Good affordance also requires a website publisher to understand how different age groups expect a website to behave.

8. Labeling and Language

Far too many websites use language that is better understood by the site’s sponsoring organization than by its audience. Attention needs to be paid to the labels used in navigation and page titles so that it is consistent with itself and with the audience’s mental models for the content. The added bonus here is that key phrases and words that your audience understands will also improve your ranking in search engines, as they have been designed to evaluate relevancy as a “human” would.

9. Readability (Content Density)

We’ve known for ages in print that effective use of white space (number of columns, bolding, margins, etc.) increases reader pleasure. The same design principles apply on the Web. Actually, white space and employing Gestalt principles of continuity, similarity and proximity are even more important when formatting news content for the Web. This is because Web users tend not to read pages to determine if the content is relevant to their information search. Instead, they scan the page seeking information or clues to where they might find what they are looking for.

10. Organization (Marketing Quadrants)

On content-heavy websites, finding space to provide important marketing links is a challenge. Actual eye-tracking tests have revealed that people use a “Z” shaped scanning pattern when scouring Web pages for information. More importantly, they are less likely to scroll down the homepage than they are on pages that are several levels down. Keeping critical marketing information and contextual navigation “above the fold” is essential. Using primary marketing quadrants to generate brand-related revenue or build relationships and communities with users is the sign of a well-designed site.

11. Content Freshness

How up-to-date is the information on the website? Website credibility plummets if the home page promotes an event that occurred two months ago. Websites should be considered “works in progress” that are constantly updated if only so that they don’t bore repeat visitors. Research has shown that websites with a high update frequency generate more repeat visits per month per unique user. With the average number of websites per user going down and the average time spent on the Web going up, it is imperative that the content on your website be as fresh as possible.

12. Load Time

Two phenomena contribute to the users expectation of download time:

1. Broadband has dramatically shortened download time and
2. People are no longer going to the Web to be entertained.

They are looking for information. If they can’t get a bead on what they are looking for they will Google their way right off your site and onto another.

The Web Page Analyzer™ is a great tool for benchmark testing. It can be helpful to the designers of the site in diagnosing what’s wrong, but does not provide a 100 percent accurate measurement of load time. In order to measure a true, worldwide user experience, your site would have to be tested every 15 minutes or every half hour with every type of connection, all over the world. This would cost a lot of time and money—the Web Page Analyzer™ offers the next best thing.

13. Aesthetics

The average user expects professional websites to be clean-looking, information-rich, and intuitive. They respond best when the aesthetics of the site support the purpose of the site and are consistent with the user’s mental model. Is the design appropriate for the firm or organization the website serves? Layout, colors and typefaces determine the site’s personality and image.

14. Brand Preference

Most websites have a strong brand that often has roots in the physical world—but on the trend to dot-com, the brand can sometimes cause confusion. Are you building and maintaining your brand? Or are you using valuable space on your homepage to promote a “new brand” that represents you and a bunch of other players? Are you creating the type of brand preference that websites like Amazon enjoy where more than half of all visitors arrive by typing “Amazon.com” directly into their browser’s URL field?

Evaluating websites

The Mequoda Website Scorecard encourages you to score your website on each of the 14 Mequoda Best Practice Guidelines, add them together and arrive at a cumulative score. The goal is to emphasize the importance of balanced, usable websites. Your website should achieve respectable scores in all areas, rather than over-emphasizing a single area or two or omitting other areas completely.

These 14 Website Design Guidelines were developed by Don Nicholas with the help of Roxanne O’Connell, Roger C. Parker and Kim Mateus.

I have supervised the engineering design for 36 Mequoda Content Marketing Systems, 11 releases of the Blue Dolphin Smart Sub Content Marketing System, plus a variety of other online marketing systems dating back to 1995.

I am not a programmer or developer. I am a system architect and system driver. Like most drivers, I want speed, flexibility, handling and instruments that give me key metrics in real time.  And I want it all for the least possible investment.

The Need for Speed

In the early 70s, I rode for Team Yamaha. In the late 70s, I drove a S5G Nuclear Reactor for the US Navy. Today, my car is an Audi S6 and my boat is a Hunter 38. My CMS is Mequoda WordPress 2.8X and I drive it very, very hard.

My Audi S6 is a stock limited edition. My Hunter has a blown out electronics package for solo navigation. My Mequoda WordPress System has 27 custom software extensions built to my specifications or carefully chosen by our research team from thousands of available WordPress plug-ins.

Mequoda WordPress CMS Capabilities

The Mequoda WordPress 2.8X System that I use allowed me to create, edit and traffic this post, send it as an email newsletter, zone it by topic, add all the tags that drive the site’s attraction and conversion architecture, merchandise it with paid Mequoda event offers… and if you (or any Member) clicks and buys, the system will process and record your order and payment, send you an acknowledgement, and make all your data available to our customer service and reporting team. It will add the transaction to your ‘My Account’ page and send you an email reminder 24 hours before the event. It can also sell you a Mequoda Pro Membership, grant you access to all premium content you deserve and renew your membership every 12 months for as long as you live. If your credit card fails to process in some future year, it will remind you to update and if you don’t, it will prompt our Member Services Manager to give you a call before your access lapses.

So what else does my Mequoda WordPress System do that makes me (and my fellow Mequoda System drivers) so happy to slip in behind the wheel? Here are 21 more functions my WordPress does over and above the stock edition:

• Unlimited Custom Registration Offers

• Conditional Conversion Architecture

• Zoned Text Include & Banner Delivery

• Visual Conversion Path Reporting

• Registration Import Batching

• Integrated WhatCounts Email Management

• Integrated Beacon Event Management

• Digital Member Access Management

• Unlimited Sales Letter Order Flows

• Integrated Payment Processing

• Real-time Action Source Tracking

• Advanced Category Management

• Keyword Auto Tagging

• Automated Related Post Referrals

• Persistent Global Navigation

• Google Custom Search Results

• Site Sidebar Management

• Original Source Lifetime Tracking

• Google Analytics Reporting

• Integrated Landing Page Optimization

• Integrated Customer Service Management

Don’t Buy a CMS – Download one for free

I know Christmas is over, but seriously… If you are looking to upgrade your online content marketing system in 2010, don’t spend money to buy a CMS. Download WordPress and the Mequoda System plug-ins from the Mequoda Pro Download Library and get to work. Need some help with the specs? Just post a reply and I will give you a call.

Happy driving!

I just landed in Berlin for the FIPP DPC program that starts Monday. It’s a five day program where I get to preview programs and discussions with a small group of European publishers that I will also be presenting at our April Napa Summit. As I roll a session on Managing Digital Transformation around in my head, I keep thinking about something Patty Seybold wrote about her love affair with her Kindle eReader.

“I’m a Kindle devotee. I use it to read novels primarily. It’s wonderful to be able to carry a whole slew of books around in a lightweight eReader and then be able to download a new book, or newspaper or journal article on demand. I cuddle up on bed with my Kindle every night. I read it in the bathtub too (in its ZipLock bag I use just in case). But it would be nice to be able to have color illustrations and animation and the kinds of things that Apple is so good at,” said Patty.

As I sat in a hot bath in the Art’otel today, wishing I had a ZipLock for my iPhone, I realized I need more digital device stories from users and online publishers to add color to our upcoming discussions in Napa. So, hit me with your best stuff in the comments section below… tell me how digital devices have already become a part of your life that you would not want to do without… and feel free to share what you think is coming in the near future that excites you.

I plan to ask Patty to elaborate on her Kindle romance in the Napa sessions, let me know if you’d like to be part of those discussions, too.

See you Napa in just 6 weeks and 2 days.

I recently saw the new George Clooney film, Up in the Air.

This is a movie that will make you think about your life and what is important in it and about it. Up in the Air will make you think about what you are good at doing, being and why. At least it did for me.

Becoming a Master Flyer

Ryan Bingham, who Clooney plays in the film, travels more than 300 days per year. He is good at air travel. He is a Master Flyer who through an elite status has a travel experience unlike the average occasional airline passenger.

In 2009, I spent 168 days away from home (work and holidays) and earned more than 200,000 air miles. I am a Master Flyer, too. On average, I spend about 10 hours a week in airplanes and airports. This adds up to about 500 hours a year. I started my Master Flyer apprenticeship in 1983 when Greg Jones and I founded Lighthouse Software. I continued that pace through 1988 when I founded MagazineWeek and my travel dropped back to business normal.

I hit the road again in 1995, two years after Laura Pittman and I founded Blue Dolphin Direct. I continued through 2000 when we flipped Blue Dolphin Direct into Blue Dolphin Magazines and my travel schedule once again dropped back to business normal. Then Laura and I founded Mequoda Group in 2004 and my travel schedule kicked into high gear one more time. That is, more or less, 17 years of very frequent travel or about 8,500 hours in airports and airplanes. By the end of 2012, I will pass 10,000 hours at my current pace. And like Ryan Bingham, I am good at air travel, and I enjoy being good at it.

Malcolm Gladwell: 10,000 hours to achieve mastery

In Outliers: The Story of Success, Malcolm Gladwell asserts that 10,000 hours of dedicated practice is the number required to gain mastery over any complex activity. In the book, he demonstrates that for hockey players, rock stars, violinists and others, 2,000 to 5,000 hours of practice brings competency.  Those who rise to the top of their game or profession have raw talent, and they hone that talent with more than 10,000 hours of practice. And not just marking time practice, but 10,000 hours spent pushing themselves to be the best at what they do. Gladwell concludes that humans simply must have 10,000 hours of practice to master any complex activity.

You are what you do: Is that all there is to life?

As I thought about the movie, and did the math on my quest to become a Master Flyer, I asked myself what other activities have I gained mastery over in my 54-years on the planet. And what activities might I still be in the running for the coming years. The latter being the more important question.

I first thought about sailing. I joined a sailing club in 2008. I took the courses in classroom and on the water to be keelboat and coastal certified on boats up to fifty feet in length. Once I hit the 40 hours of time on the water required to be let loose with the boat on my own, I made runs from Boston to Marblehead and Newburyport and back. In two years, I have accumulated just over 200 hours on the water. At this pace, I can hope to become a Master Sailor in another 98 years.  Competency looks to be the more reasonable goal for this lifetime.

Mastery in 21^st century digital media strategy

My thoughts then turn to my 34-year career in media. Have I gained, or will I gain, mastery in some aspect of my profession?  Here is my napkin math on three roles I play today:

Media Consultant: First the math… The frequent flying has been tied to consulting. I have spent 17 years of my 34-year career teaching other publishers to discover and reach their goals, first at Lighthouse Software, then at Blue Dolphin Direct and now at Mequoda Group. On average I consult with about 15 clients at any given time and dedicate about 60 hours to each over the course of a year. (I will leave out the 1,000 hours a year I spend researching, analyzing, teaching and writing about new media trends, as that is not pure consulting). Nine hundred hours per year for 17 years adds up to 15,300 hours of consulting. So by Gladwell’s 10,000-hour standard, I may already be a Master Publishing Consultant.

Now it’s true that publishing in 2010 spans a vast and interrelated set of platforms and skills. Mastering the Media Pyramid, which I study and teach as a Mequoda System core concept, is not the same as mastering the creation, production and marketing of all the different media within it.

I don’t know anyone who has spent the time I have spent helping others understand their digital media business and their goals. And still it makes me ponder all that I do not know of which is knowable, and still more that is unknowable, in the digital media space.

And so I do the math for other activities that occupy a big part of my professional life…

Teacher: I began teaching for Computer Craft Learning Centers back in 1982. I taught Apple DOS, Wordstar and Visicalc. I was asked to develop and pilot a new program. In 1983, I was named Computer Craft Teacher of the Year. In 2010, I will lead more than 50 full-day programs. It seems that teaching and consulting go hand and hand for me. So let’s estimate that I have taught 300 hours a year for about 20 years, or about 6,000 hours of classroom teaching. No mastery here… just competency for now.

Writer: I love to write. For me, like every student, writing begins in school. I started taking writing seriously in Mr. Baldwin’s 8^th grade English class, which I began in fall 1969. Since then I have written dozens of short stories, hundreds of papers, hundreds of articles, several books and thousands of emails.

Side note: I am a hunt and peck typist who averages about 20 words a minute. This fact almost got me kicked out of journalism school. My professor kept mumbling something about the world belonging to those who can type. Personally, I am still holding out for the speech-to-text recognition software I saw on a Star Trek episode back in 1967.

So let’s say I have spent an average of 10 hours per week writing since fall 1969. With time off for bad behavior, that would equate to about 2,000 weeks or 20,000 hours of writing.  I will leave it to you, my readers, to decide whether Master Writer is a title I deserve.

Mastery in my personal life

I did the same math for my personal life. Time spent working at being a good husband, father, friend and, now, grandfather.  Suffice to say that I have met the 10,000-hour requirement for three of the four, yet mastery is not a word I would use to describe my skills or status in any of those roles. These roles are complex and always changing as loved ones age and situations change. So little is repeated. Again, it appears that competency is the best I can hope for in my personal life.

My hope is that this post might inspire you to think about how you spend your time in the years ahead. I know it has done just that for me. If you see Up in the Air, post a comment and let me know what you think and how you feel about the film and its message.

Hiring, motivating and managing online teams is the hard part of owning and operating a successful Mequoda Content Marketing System… Surprised?

Over the past 15 years, I have guided the launch of dozens of successful Mequoda Content Marketing Systems. I have also guided the launch for dozens of failures and for many more recent launches, it’s still too early to tell.

A few of those now successful Mequoda System launches include Business Management Daily, Ceramic Arts Daily, Dark Daily, Faculty Focus, Johns Hopkins Health Alerts, HR Daily Advisor, Knitting Daily, Morningstar, Mother Earth News, Tech Republic, TSI Network, Vida Y Salud, and of course, our own Mequoda Daily. They are among the most treasured accomplishments of my 30-year career in media and marketing.

The failures no longer exist.

So with each new Mequoda System I agree to guide, I ask myself about the odds for success. I am old enough to know now that their success does not revolve around me. After all, I have worked on many successes and many failures. Other circumstances and behaviors will overwhelm my contribution to the enterprise. So why do some online teams succeed and why do others fail? I think about this a lot. If I can understand what causes Mequoda Systems to fail, then perhaps I can help a few more succeed.

The Six Reasons Mequoda System Fail (and Succeed)

1. Failure to Connect
2. Failure to Grow
3. Failure to Monetize

While these are the observable reasons for failure, I know in my heart that the real reasons lie deeper.

1. Lack of Talent
2. Lack of Discipline
3. Lack of Capital

No soldier joins the army expecting to die. No couple marries expecting divorce. And no publisher launches a Mequoda System expecting to fail. Yet soldiers die, couples divorce and Mequoda Systems fail.

There is only one sure way to prevent failure: Don’t try.

If you never launch a Mequoda System, it will not fail.

Short of not trying at all, understanding the reasons for failure and avoiding them as best you can will increases your odds of success.

My advice: Set clear business goals, hire good people, empower them to succeed, provide them with adequate resources, and be, at least, a little lucky.

It can take three to five years to discover whether each new Mequoda System is a success. It often takes far less time to fail. Expecting quick success is actually a leading cause of failure as it leads to having inadequate resources.

Expect to spend the first year designing, building, planning, hiring and training your Mequoda System online team. Expect to spend year two experimenting, testing, growing and getting to know your audience. Then in year three, expect the revenue and profit to begin to flow freely. As one of my venture capital friends says, success always starts with a trickle.

How many types of websites are there on the world wide web of sites?

I care about the answer to this question, deeply. Like an anthropologist searching for the missing link, I believe that I can only truly understand the evolution of modern websites if I can understand how they are evolving. And as Darwin saw the earth, I see the web as an ecosystem where the strongest website archetypes will thrive and the weak will wither and die.

12 Master Website Archetypes

While the mechanics of a subscription website are most often associated with the Membership Website Archetype, all 12 Master Website Archetypes can be structured as subscriptions websites. Any of the 12 can be a subscription websites if the site requires the user to join or subscribe to gain access to the site’s primary user benefit or benefits (PUB).

For the record, we currently study the following 12 master websites archetypes: periodical websites, reference websites, magazine websites, newsletter websites, application websites, membership websites, retail websites, classified websites, directory websites, social network websites, lead generation websites and search engines.

The Seven Most Successful Subscription Website Archetypes

This is not to say that there are only seven subscription website archetypes. I suspect there are hundreds of subscription website types, if you count all the hybrid variations created by combining the 12 basic archetypes that offer one primary type of content or functionality. Like a gardener creating a new variety of orchid, subscription website publishers are constantly creating new types of Hybrid subscription websites.

Their Minimum Information Unit (MIU) defines all 12 master website archetypes. Of the seven archetypes that follow, the membership website and social network website are subscription websites by default as registration is required to create the membership community from which all value is created. The others can operate successfully without requiring user registration when sponsors underwrite the financial costs of running the site. All the examples we’ve included are for subscription websites, but not all require the user to pay.

Periodical Website: The MIU is a news post and the website content is organized by date and keyword topic (also called category). Adding photos, audio, video or other documents, may enrich the post. These sites are also called news sites, online newspapers, online magazines, online newsletters, online journals and blogs. The Wall Street Journal Online, Daily Word and The Economist are benchmark sites for the Subscription Periodical Website Archetype.  All three require registration and payment for full access.

Reference Websites: The MIU may be an article, book, report, document, lesson or episode. While simple sites may rely solely on HTML and PDF files, many more robust sites also incorporate still photos, audio and video in the MIU. For some sites, an audio or video lesson or episode may be the primary MIU. Consumer Reports, Lynda and Mequoda Pro are all benchmark sites for the Subscription Reference Website Archetype. All three require registration and payment for full access.

Newsletter Websites: The MIU is a single issue of a newsletter usually stored as a PDF or some other easily downloadable format. The Motley Fool Stock Advisor, Golf Odyssey, and First Class Flyer are benchmark sites for the Subscription Newsletter Website Archetype. All three require registration and payment for full access.

Social Network Websites: The MIU is a person or member and all the information that member shares via their member profile, forum posts, file uploads, link and other data. Registration is typically required, but most social networks do not require payment.

Magazine Websites: The MIU is a single magazine issue, which may be stored as a PDF or in a CDF (Closed Document Format) such as Texterity Cover Leaf. LEDs Magazine and Make Magazine are benchmark sites for the Subscription Magazine Website Archetype. While both require registration for full access, LEDs Magazine (PDF edition) is free to qualified subscribers.

Application Websites: The MIU is a software application that often requires access to information in a proprietary database. Morningstar, Hoovers and the BLR Job Description Manager are benchmark sites for the Subscription Application Website Archetype. All three require registration and payment for full access.

Membership Websites: The MIU, similar to the Social Network, is a person or member and all the information that member shares via their member profile, forum posts, file uploads, links and other data. This archetype is also called an Association Website or Member Website.  The Ladders, Match.com and SSWUG.org are benchmark sites for the Membership Website Archetype. All three require registration and payment for full access.

As I mentioned above, most real world subscription websites combine two or more of the above to create hybrid subscription websites, which when donned well, leverage the mix of functionality to create user benefits that are more than the sum of the parts. In 2010, we expect to see many new simple subscription new newsletter and magazine websites launch to take advantage of the rapid increase in the number of PDF compatible eReaders in the marketplace. We expect existing book, magazine, newspaper and newsletter publishers to drive reader demand for these new devices.

For an in-depth discussion of the six subscription website archetypes, check out my new webinar, Developing Successful Subscription Websites on January 26th at 12:30 pm Eastern. And for a heads up on new media trends in the eReader market, check out our Kindle for Publisher program. And if you’ve got a successful subscription website that you don’t think I’ve covered, add a comment to this post and tell me what you got. Please tell me a little about the site and include a link so I can check it out.

The year is 1981. It is winter in Sacramento. The weather is cold and gray by California standards. I have just been fired from my job as Associate Publisher of Sacramento Magazine. Mark Johnson, the owner’s son, felt I was over stepping my authority on some matter too small to be remembered 29 years later. I suspect he was right.

My magazine publishing career has been on a roller coaster for several months. My personal life has been along for the ride. The most stable thing in my life is my role as a journalism student at CSUS. I am a senior with three semesters to go until I graduate (more on that in a second or two). I did manage to get fired in time to shift my full class load from nights to days. Journalism Lab is only offered as a day class, so I have seized the opportunity and enrolled. I have written for the school paper (The State Hornet) in past semesters and know the student editor, Gina Spadafori, and like working with her.

I drop by Gina’s office to get assigned a beat and she puts me into the general assignment pool, and the copy desk as a headline writer. Many of the student staffers have taken the Journalism Lab numerous times for credit and for the experience. Gina was the Sports Editor in her junior year. I am simply not eligible for any of the cool jobs. Even though I am a senior, I am a newbie in the Journalism Lab and dues must be paid before promotion is an option at The Hornet.

At age 25, I am perhaps the oldest student in the CSUS journalism program. Although I have been a writer and producer for AFRTS and Associate Publisher for Sacramento Magazine, I am a newbie at The Hornet. Gina seems pleased to have me on the team. Moreover, she seems pleased that I will be putting my college education first, for the first time in my life. Although I have amassed more than the 120 credits required for a BA, they have largely been accumulated through CSUS night classes and transfer credits from my studies at Nuclear Power School. My switch to a journalism major from nuclear engineering means I will need more than 160 credits to graduate. And this means I will have a second senior year after Gina has graduated and left me to fend for myself at The Hornet.

A few weeks pass and Gina calls me into her office. She explains that the Journalism School has historically published a Rolling Stone-sized feature magazine in the spring of each year called Crosscurrents. It seems that Crosscurrents has been cut from the schedule for 1981 due to a budget shortfall. If I can find a way to fund it, the job as Crosscurrents’ Editor is mine. We discuss the required revenue and are joined by the paper’s advertising director. Given the time constraints, we decide on a single sponsor “Hail Mary” strategy. We map out the issue giving the sponsor the inside front cover, center spread and back cover. By 5PM, we have a commitment from the Valley’s largest beer distributor to back the issue.

And so a few months later, I find myself writing my first column as the editor of a magazine. It will be the first of hundreds, but at the time, I only know it as my first. I conclude that the column needs to be fun and hopefully memorable in a way that might still make it interesting for someone looking back on it decades after they graduate.

With our Kindle for Publishers Webinar coming up fast, I was reminded of the conversations we had in college about the future of periodical publishing, the rise of eReaders and the end of paper. In 1981, it was all wild speculation. In 2010, this column can only be read via Mequoda Daily on our periodical website, in our email newsletter and on a Kindle.

So here in its entirety is my column from Crosscurrents, published on May 15, 1981…

“Klink,” the sound of metal hitting metal. Your shuttle is finally docking.

“For your convenience and safety, please remain in your seat with your seat belt fastened until the ship has come to a complete stop and the captain has turned off the ‘fasten seat belt’ sign,” chatters the stewardess.

The ship jostles once more and comes to rest. The ‘fasten seat belt sign’ goes off.

“On behalf of your entire Earth Two based crew, we hope you have enjoyed your short trip and we look forward to seeing you soon on another Pan Am flight,” she rattles along.

Why don’t they just use a prerecorded tape, you think.

You really expected more from your first space flight, but your thoughts are turning to the grandson who should be waiting for you outside. Five years is a very long time to not see a grandson.

Will you even recognize him? He was only 17 when you last saw him. He is a man now—one who is about to graduate from college.

You hurry out into the receiving area.

“Jan!” he yells, running up to hug you.

There go at least two ribs, but you smile and hug him back as hard as you can.

“Aren’t mom and dad with you?” he asks.

“No, no, they’ll be along tomorrow afternoon,” you reply.

“Well, how are you? How’s the old house? Do you like being retired? Can you stay past the graduation ceremony? There’s an awful lot to see up here and we’ve got an awful lot to catch up on!”

“Do you always talk so fast?” you ask, trying to hide your smile.

“I’m sorry, but we do have a lot to catch up on,” he replies.

Now begins the grand tour of this earth away from Earth. The government offices. The hydroponic farms. The sports stadium. The shops and stores. And finally the university—Earth Two University.

Pride in your grandson. Fascination with this city. What a day. Old folks shouldn’t try to keep up with their grandchildren, but you’d never admit that.

“Bobby,” you finally say, “I could go on for hours, but we really should get home for dinner.”

“Oh sure,” he replies, “I just get carried away about this whole place—especially the university. It’s gotten to be like a home away from home to me.”

Bobby’s apartment is nice and very collegiate. Some of the artifacts on the wall could not have been bought. After dinner Bobby insists you rest in the living room while he takes care of the dishes. Now there’s a switch.

“Is this your college newspaper?” You take the shiny rectangle from its resting place on the couch.

“Yeah,” he yells from the kitchen. “It’s got the last issue of the year on it.”

You press the button in the bottom right corner and the screen flickers on.

“Carl Sagan to speak at grad ceremony,” reads the front-page headline. It figures, you think, even if he is over 100.

You punch the paging button, reading only the headlines as you go. Tuition, conservation, student politics, movies, concerts—it’s all there. Some things never change.

You thumb past a few more pages and stop to stare at a magazine cover inside the newspaper. “Space Currents” it reads across the top.

“Bobby!” you yell at the kitchen.

“Yeah,” he responds.

“Did you see this Space Currents magazine?”

“Sure,” he replies. “The newspaper staff wanted to do something special for the end of the year. You know—other than the regular newspaper.”

Garbage dumping in space. Space sledding. Earth Two nightlife. Minor league star hockey. It reminds you a lot of your old college magazine.

You remember running across a copy. It was called Crosscurrents. Stored away with old family picture albums and various yearbooks, there it had been. The pages had been old and yellow, but the memories were still there. You must have spent an hour looking through it and rereading some of the stories.

The main story had been on white water rafting. You’d never hit the white water, but had sure spent a lot of hours drifting down the lower American River with a six-pack dragging behind.

There had also been a story on one of the first dams they built in the Sierras. Strangely enough, dams like that eventually eliminated all rafting in California. A lost sport.

Nightlife had gotten its fair shake in the magazine. And why not—that had been of everyone’s best subjects in college. There had even been a special piece on boxing, that crazy old sport. Can you imagine people pummeling each other on a piece of canvas? Barbaric.

And then there had been a real wild story called “The Broken Neck Man.” You had even known the Italian kid who wrote it. Last time you had heard, he was still writing about sports in New York. Some people would just not retire.

That magazine had been quite a find. A neat little package of college life stored away to aid a failing memory.

Of course there was plenty that they didn’t print. Some probably they couldn’t print.

“Bobby,” you look up from the now blank square to find him intently watching you.

“Yeah,” he smiles, “what were you thinking about?”

“Oh, just a little bit of history,” you reply. “You really ought to keep this little magazine, you know.”

“Yeah I guess I should,” he says. “It could be pretty fun to look back at some day.”

“Yes, I’ll bet it could,” you say. “I’ll bet it could.”

•      •      •

May your memories be with you always.

Financial success for online publishers begins with embracing the right content and revenue model

In 2010, anyone with editorial content, or the capacity to create it, can become an online publisher.

If you’re a blogger, with a passion for any niched, special-interest topic, you might be able to get paid for writing about it using an online publishing business model.

If you’re the author of a printed book, or a successful public speaker, you can launch a one-person online publishing company.

If you’re a traditional print newsletter, magazine or book publisher who wants to begin an online publisher, you can quickly and easily create a separate profit center for online publishing.

A feasibility study, business plan and business development program can help your online publishing enterprise get started right. But regardless of the platform on which you launch your online publishing enterprise, and no matter the business model you eventually embrace, you must begin by making a fundamental decision.

Where will the revenue come from? Or more precisely:

How do you expect to make money online?

Will your online publishing business be user-driven?  Or will it be sponsor-driven?  Or will it be a hybrid combination of both?

In other words, who will support access to the content on your website and email newsletter? A paying audience or advertising sponsors?

If you chose the user-driven online publishing model, how will you get users to pay you (and how will you collect the money)?

On the Mequoda Digital Media Pyramid, the online publisher’s periodical website (or blog) and email newsletter (which is tied lockstep to the blog), are both free. They are the marketing arm of the online publishing enterprise, designed to build an audience.

So you won’t derive any revenue at those levels from users.

The revenue-producing levels are further up the pyramid.

Learn more about building a user-driven (product), sponsor-driven (ads) or hybrid online publishing model when you download Digital Media Strategy 2010: The Only 3 Ways to Make Money Online Now for free right now.

By the way, the 2009 Mequoda Hotlist is our annual listing of the fastest growing Mequoda System Publishers in America.  The multi-media publishers in the Mequoda Hotlist are used by the Mequoda Research Team to maintain the Mequoda System Best Practices for Successful Online Publishing & Marketing and are the base line for virtually all the content produced for Mequoda Daily, Mequoda Webinars, Mequoda Pro Seminars on Demand and all live Mequoda Summits and Workshops.

Our 2009 award went to Guideposts.com.