This is the first post in my Step by Step business series. Instead of talking about how to set up a business I will be actually setting up a business and take you step by step through the process I go through from thinking up a business idea through to implementing that idea and also sharing the results. I’m a firm believer of “doing” and that jumping in the deep end is the best way can learn how to do something. You will never learn how to drive a car by reading a book, you need to get out and drive. You will also never learn how to start and run your own business by reading about it, you need to get out there and do it.

A couple of weeks ago I was raving about how mobile will be the next big thing. What I’m going to do now is start up mobile site from scratch and go over all the steps that I will take to get this up and running and hopefully, profitable. My aim here is not only to set up another income stream but to show you how I do it, step by step. I will be quite candid about the results so if it is a flop, you will know about it!

I need an idea. How do I come up with a concept? Well I looked to the online world for inspiration. I asked myself what online business have taken off yet are relatively easy to replicate in the mobile environment? My first step was to visit Alexa and have a look at the top 100 websites for inspiration. There are the usuals such as Google, Yahoo etc. Some of the most obvious ones are in the ever expanding field of social networking, Facebook, Myspace, Twitter etc. However a prerequisite to my concept was that it needed to be easy to replicate and these social networking sites would definitely not be easy to replicate. The possible exception to this would be Twitter but Twitter has a great mobile interface and many people are “Twittering” via their mobile, so that was out. What else? Amazon? Probably a little complex and advanced for mobile (at the moment). Wikipedia? ahhh… no.

Then I took a second look at Youtube. My first look was interrupted by those little voices in my head saying “yeh right.. good try!”.. and “.. Youtube, I wonder what I could look up now?”. Just to introduce you, this is Mr. Negative and Mr. Procrastination.. I have been trying to evict these guys for the last 26yrs but they manage to find their way back in occasionally. So on my second look I managed to focus objectively and break it down to get a clearer understanding. What is Youtube exactly? Well in its essence, its a place you go to watch videos and share your videos to the world. Obviously there are far greater capabilities including networking and social interaction but in its most basic form, its just a video sharing site. Would a video sharing site be that hard to replicate?

The next question is to ask myself what is currently available in terms of video sharing in the mobile world? We know that Youtube has its own mobile version so why would people come to my mobile video site? Also what can I do to separate myself from the others? I did a search on Google mobile: mobile video sharing. There are a few present, namely Vringo, Livecast and Yamgo among others (interestingly Youtube didn’t come up). But looking through these and other sites it was obvious that they were either grossly deprived of content and you could only download a couple of bad quality videos, or they were too difficult to find what you want and start watching by requiring you to download some software or sign up with an account. The beauty of Youtube is that anyone can just jump on, watch a few videos without having to fiddle around with accounts and logging in etc. When browing on your mobile you don’t want to have to download software or log in everytime, it’s not like a PC where you can open tabs and have multiple windows on one screen. Mobile needs to be simple, straight forward and to the point. Give the users what they want straight away so they are more likely to come back. Give them a convoluted sign up process and time consuming ways to access content then you have lost them. Simple.

It’s looking more and more like I will head down the video sharing path but I need to differentiate my business from many of those out there. Obviously the biggest competitor will be the video sharing bohemoth Youtube. So what is their mobile offering like and how can I better it? To be honest, their mobile offering is pretty fantastic so there is no point in me going in there are doing the exact same thing with 10 videos asking people to use my site instead. That would be ridiculous. They do a better job than anyone else in the mobile marketplace by making the streaming of videos to your mobile so simple. You do a search, click the video your after and then watch it streamed onto your mobile.

Not worth competing? Well actually I see an large gaping opportunity presenting itself immediately. The problem with one type of mobile video site is that you need to do a whole lot of mumbo jumbo before you can start watching a video. The others that offer a simple download to mobile service (in 3gp format or similar) don’t have much content. Finally, Youtube makes it easy to watch videos but you have to stream them everytime and this costs you a fortune in data as well as the time it takes to download each time.

So I’m presented with an opportunity here. What if I can take the best of all these mobile video services and combine them into a single, easy to use video sharing service where you can search, submit, download and stream videos? It sounds simple enough. Now all I need to do is find out how I can actually do this!

Having a website or a blog without any analytics is like driving a car without a dashboard. You know your moving but what’s actually going on? I’ve actually had a car where the dashboard would freeze up occasional and it was the closest thing to driving blind I could think of. Obviously you can still drive but your not being told the vitals… how much fuel do I have? How fast am I going? This is not dissimilar to having a website without some sort of analytics. Yes you can get moving but in order to really go somewhere with it you need to know your sites vitals.

That’s one big problem with the net I believe, the lack of ability to see people who are browsing your site or blog. You know you get traffic and possibly sales but that’s about it. In the traditional retail environment you can see people walking in and out of your store, have a chat, and measure a good or bad traffic day based on what you can see compared to what you have seen in the past. On the net you can do this only with the use of analytics so saying that its important is a gross understatement.

Google analytics is undoubtedly one of the most popular, if not the best analytics program used on the net today. It extremely simply to install and just as easy to read. The first screen you see is the analytics dashboard relaying information such as visits, page views, pages per visit, average time on site and a couple of others. This is probably as far as many users will go and that’s a shame. Everyone has their own way of analysing traffic and pretty much everyone uses the basic dashboard, checks out a big of geographic info on their visitors then moves on. So what I’m going to do is, instead of going through all the relevant features (trust me, there are too many to list!), I’m going to let you know a couple things which I like to with analytics and why I do them.

1. Traffic Sources – located on the left hand column under “Dashboard”. This will give you a good understanding of where your traffic comes from. My favorite bit here is the “Keywords” section on the bottom right of the screen. This will tell you what keywords people search in the search engines to get to your site. Like many things in Google Analytics you can dive deeper and in this case I strongly recommend doing so. Click a certain keyword and you will be provided with a host of information about what people who used that keyword did on your site. This is where you can really see what is going on. For each keyword you will be given details of how long someone spent on your site, how many pages they visited, the bounce rate as well as the % of new visits. What does this tell me?

• Is my SEO up to scratch? – Are people who are coming to my site actually finding what they want? If there is a high bounce rate for a particular keyword then I know that this keyword seems to have high priority on your site yet is bringing in irrelevant traffic who are not interested in the information or product. Find those keywords which attract more in depth and longer visits as these are the words most valuable to you. Those which have a high bounce rate should be reassessed and adjusted in your titles or content as they are not attracting the right visitors. For example I have a website called www.thumbdoctorgames.com which provides free, ad funded mobile phone games. I found that many of my visitors were coming in from keyword such as “Doctor Games” or “Games for Doctors”. I had an extremely high bounce rate for these keywords as many of these visitors would just leave the site because they are not interested in mobile games at all. It was the name of the site itself that caused it to be indexed under irrelevant search terms. This told me I needed to look at the site and make sure that references to “Doctor” were minimal or contained in images as it was an irrelevant, yet popular, keyword.
• Who refers the most traffic to me? If there is a site that is referring plenty of traffic to me then I would increase  my exposure on that site or talk with the webmaster and request a contra-link or similar.
• Who is coming directly to my site? I love direct traffic. Direct traffic is solid, quality traffic in my opinion. It shows that someone has purposefully thought of your site and made the effort to visit as your are already in their mindset. To me this is the most valuable traffic you can get so I have this type of traffic in very high regard.

2. Content – The top content on your site is displayed in your dashboard anyway and it’s something I see all the time so I don’t really try to look more into my “top content” section. “Content Drilldown” is where the fun really starts. What does this tell me?

• The content drilldown has a list of your pages and the information about each page such as the usual bounce rates, uniques, time on page, exits etc. However instead of this being site specific it is drilled down to page specific.
• Selling products? This is probably the most important section to look at if you are selling a product online. If you have a sales page with a high bounce rate then you know something is wrong. If you have a pitch page that has a high exit rate then again there is a problem as no one is visiting your sales page.
• Where are they coming from and where do they go next? Very very important! Unfortunately Google does not make this feature particularly easy to navigate to however it is vitally important. Tha’ts why I have highlighted the first sentence. What you need to do is click on a page in the content drilldown section. Now once your there you will see a small dropdown list called “analyse” and it should by default say “Content Detail”. Click this and select Navigation summary. The next two images will show you what I mean:

Access Navigation

Navigation Summary

• When I have reached the navigation summary I am able to see how people got to this page from my site (previous pages), how many entered the site from this page (external) and how many went to another page from this page or left the site altogether. For example if I was after data acquisition and wanted someone to fill out a web form, I would think the sales letter would be in “previous pages” and then the next page would be something like “thank you for submitting your details”. If you find that people are exiting right after they get to the web form page or are heading straight back to “Index.php” then obviously, for some reason, people are not filling out your web form. This is an excellent tool to plot the path of how people are navigating through your site. You may think your site is foolproof and you have a solid navigation funnel but you may be very surprised how people actually flow through your site. Never underestimate this tool. If you only take one thing away from this post then make sure it is this point!

Obviously there is a tonne of information which I have completely missed but that was deliberate on my part. First because it would take me the good part of a year to go through all the possible features and even then, you may have a completely different way to analyse your traffic. What I’m doing here is giving a few more things to consider with the assumption that you already know the basics.

If you don’t know the basics then don’t just ask anyone about it, dive in and learn it first hand as I believe, as humans, that is the quickest way we learn things. Please feel free to share any methods you may have as I would be very interested to know and I’m extremely interested in learning from you guys as well.

An old online saying is that ‘content is king’. In all respect this is true as sites with a lot of great valuable content come out on top. Look at sites such as Steve Pavlina.com, millions of hits a month and it looks, well, pretty ordinary. So is this proof that content is king or is it not so clear cut?

Well the truth I believe, is that it is pretty clear cut. Great content accessed easily is the real king. Sure without content you have nothing but if you can’t access it you’ve also got nothing. Back to Steve Pavlina, here is a site with a load of great content (I strongly recommend you go have a read) but what it also provides is a remarkably efficient way of distributing this information. Some people say the site is extremely simple and almost boring but these people are missing the point. The site is laid out in a way in that someone can come to the site, read up- to-date content and at the same time be able to read other interesting articles without even searching for them. The user interface is absolute genius. It’s straight forward, simple, exceptionally clear and allows you to read more with every sitting. All this and he doesn’t even have a logo!

I think this ease of use has been somewhat neglected with many web 2.0 and other modern day websites. The introduction of Flash and to a lesser extent Java and even Microsoft’s Silverlight have greatly aided the ability to create aesthetically pleasing websites. Don’t get me wrong, there are both advantages as well as disadvantages of using software such as flash however just because they look great doesn’t mean that they have a good clean and easy to navigate user interface. Beautiful isn’t always better.

I came across a few examples recently which I thought I would share. The first came around when I was searching for movie session times. The two main cinema companies where I am are Hoyts and Greater Union. A couple of years ago Hoyts had a fantastic search function which enabled you to find your movie and the session time in about 20 seconds. Now they have decided to get all flashy (literally) and not only created a website that takes several minutes to load due to all the bells and whistles, but also a site that leaves you analysing and strategically thinking about your next move. Any mistake in your browsing skills will no doubt lead you to an irrelevant page that took you 3 minutes to load. Woe be tired anyone with a slow connection, your better off going the old school paper way. Check out this eye-sore:

The ‘Watch’ section on the left is to ‘watch’ movie trailers… not where or when you can ‘watch’ a movie. So you will aimlessly fiddle around with this to no avail and wonder why everything is taking so long while it loads all the movie trailers. So you think about clicking the ‘all cinemas’ tab… and it does nothing. Now your confused. Then you look to the top and think, do I select ’session times’? Also what’s this ‘Buy’ section on the right? Bingo… these will get your your session times (finally) and interestingly enough, ‘Buy’ and ‘Session Times’ both give you the same information yet provide two completely different ways to find it! It’s like taking the back streets or the main road… both will get you to the same place but look different on the way there. What’s the point? Why waste this space and clutter the site up? Why not put ’session times’ as the heading instead of “buy’ and you won’t need that ’session times’ option anymore. Anyway, who goes and ‘buys’ a movie session?? What genius thought up this heading? It doesn’t make sense. Have you ever told a friend “I went to the cinemas the other day and bought the best movie!” I understand they aim to sell tickets (ie buy movie tickets online) but because it’s so unclear, off the bat your confused. Give customers want they want straight away, then give them the option to buy it. First comes first, people will only buy tickets once they find the session they want to buy the tickets for. Give them to right information first then ask for the buy, not the other way.

In contrast you have greater union. Load time is decent however most importantly, as soon as you hit the landing page you know what to do.

Can you see it. Bright blue standing out from the rest of the site? The site leads to exactly what I wanted without me even thinking about it. The first thing you see is ‘Select a Cinema’ and ‘Select a Movie’. They want you to ‘buy’ as well but the site naturally leads you to finding the movie first, its the first thing you see and your first chance to interact. The search section is prominent and stands out from the rest of the site and there are no movie trailers confusing the issue or an unclear heading. Directions are simple; ‘Buy movie tickets online’ as opposed to ‘Buy’.

My other examples came about when I was searching for an online TV guide. Australia has terrible Formula 1 coverage and I wanted to see if Qualifying or Practice was being shown live (of course it wasn’t but that’s not my point. One HD preferred showing paintball! Yes… Paintball!). Here is an analysis of two sites I came across. I’ll put them both right after each other and you decide which one would be easier to find (the non existent) Formula 1 TV times:

Tv Fix Snapshot

Australian TV Guide Snapshot

It’s not rocket science is it? It’s Yahoo vs Google. Its convoluted Vs simple and precise. If your after a TV guide, which one of these would you choose to deliver you your content? And guess which one uses flashy bells and whistles and takes an eternity to load? Some people just don’t get it do they?

I should state that my blog in itself isn’t as user friendly as I would like it to be. I wouldn’t rate it that good either but I’m working on it and it’s a continual work in progress. I believe a simple and precise user interface is a trademark of a great site and the reason behind even average looking sites such as Steve Pavlina’s being so successful. They easily lead you to great content. Don’t get caught up in purely aesthetically pleasing developments to your site as it may just compromise the usability. The key factor to remember is that if people can access good content easily then your onto a winner, having one without the other will only  lead to traffic killing friction.

I have been doing a little bit of research lately. Readers of this blog may already be aware that I am a big believer of the 80:20 principle, officially known as Pareto’s Principle. If Can’t be bothered visiting that link well here is (another) run down: The 80:20 principle states that roughly 80% of the effect is based on 20% of the cause.

I occasionally think about every day areas of our lives that are effected by this rule. Then over a cup of coffee, or possible late at night after a little bit too much coffee, I go to work crunching numbers and seeing what interesting facts I can gather from it. My last number crunching session while hopped up on caffeine and sweet gooey Macadamia choc-chip cookies found me looking into the Internet world and the websites we so frequently visit.

Delving deep into the statistical data provided to me by Alexa I was focusing on the top 100 websites. I’m sure I would get a more accurate indication using the top 1000 sites but I only have one life time and I don’t plan on spending to doing data entry. Of the top 100 sites I wanted to find figures to explain whether the 80:20 was applicable in the online world. Its one thing to assume it is and another to go out and test it. Firstly Alexa doesn’t give out traffic numbers, only % of total web users that visit a particular site. Not perfect but not too bad either. I decided to use each percentage per website (averaged over 3 months) as points. For example Google receives 29.675% of total Internet users averaged over the last 3 months and I have regarded this as 29.675 points that go to Google. You can check out a screenshot of my list below. (Pictures in my Blog?? Who would have thought!!!)

Data snapshot

Once I entered the top 100 I sorted them into declining order from most points to least. Alexa sites are a bit jumbled up when it comes to this, nothing major but I wanted to keep it as accurate as I possibly could.

So what interesting stats could I make of it? Well first I put the 80:20 principle to the test. Do the top 20 websites make up 80% of the combined traffic of the top 100 sites? I understand that using percentages makes this a little bit difficult but remember we are using the same % variable each time (% of total Internet users). Here is a small pie graph of my findings summary (another picture!).

% breakdown graph

According to my findings the top 20 websites make up 72% of the total traffic points that comprise of the top 100 websites, a ratio of 72:28. I understand that this isn’t exactly 80:20 but we need to remember that it’s a relatively small sample (100 websites). To give you an idea if you pick the top 10 sites the breakdown is 37:62. The top 20 is 51:48. Top 50 is 64:35. So you can see the pattern. If I had the time (or the spider programming skills) and worked this out for the top 1000, that pattern would most likely to have continued to get much closer to the 80:20 ratio. 72:28 is quite telling nevertheless.

Other Interesting facts:

• The top 2 sites, Yahoo and Google, actually make up 20% of all websites in the top 100 list with a total of 20 websites between them
• Google on its own makes up 20% of traffic from this whole list.
• The final 50 on this list only make up 16.1% of the total traffic

I’m relatively pleased that this turned out quite conclusive and I have no doubt that if I was to use a larger sample then that 80:20 would be more definite but the stats show great support of the 80:20 principle.