Anyway, not that you are back or faking that you went ahead and read it, there was something that both Ecwid and Yola said that has been sitting in my mind since the interview.  I am getting a little bit ahead of myself though. First, intros. Best way to describe Ecwid is shopping cart as an app. Fully integrateable into any site, to include Facebook pages, Ecwid is 100% AJAX, it hauls, and is super easy to use. Yola is a web host that focuses on being able to create an advanced website without the need of technical skills. Okay, so if you didn’t read the article you are now up to speed.

When asked about how Ecwid could afford a free version, CEO Ruslan Fazlyev said, “you cannot afford not to have a free version.” Yola echoed these statements when they discussed their free solution. The free version gives them a foot in the door to compete against larger companies such as GoDaddy and they are confident that once someone uses their solution that they will be so pleased with it they will stick around and “move up the chain.”

Everybody Wants to be, Closer to…

Free seems to be one of the most popular business models on the Internet. When we look at what people use, what downloads are popular, what sites get the most traffic, or any other metric that shows performance of some kind we will see free models come out on top.

For many service industries the differences between providers is not what they look like on paper but how they are experienced. Unfortunately, the large companies will net more users regardless of experience merely because they are known. Therefore a smaller company must use some sort of tool to ensure the audience experiences the service they provide. If the smaller company has done their job of selling that experience (high quality, targets the actual problem of the user, etc), then they keep the customer. If they don’t the customer moves on. This is especially true the lower the cost of the service is. If you only invested a few bucks, then its not too difficult to leave a company. If you invested several thousand you might pass up companies who may or may not provide what you need.

Free is as low an investment as you can go and provides ample reason to leave if the service even seems remotely subpar.

Not Everyone Can be Free

For many companies free ends up being a liability. A few months ago, I read an article on Groupon and how a few businesses were moaning that they placed coupons there for free what have you, and the customers came in and only wanted the free item and nothing else. These businesses lost hundreds and thousands in some cases. Why you may ask, well mainly because they didn’t change their business model to accommodate the two problems of the free business model.

There are two problems with the free business model when applied for the first time to a company. The first one is a problem of moving free customers to paying customers. The second is an extension of the first, how can we make the free option look better than a lot of the competition’s paid for solutions, but not as good as our own paid for solutions.

Bottom line

Do I agree with Yola and Ecwid? Sadly yes. By sadly I mean that I wish it wasn’t necessary. However, I think for many Internet businesses offering a free solution is a necessity. Free solutions commoditize industries and I think place the focus on the wrong subject. Instead of looking for quality or for a solution that truly fits a lot of customers instead go for what’s cheap and if it doesn’t work move on. Free helps to push this sort of behavior and unfortunate small and midsized businesses pay the costs. These businesses generally cannot benefit from economies of scale and unfortunately have to either find a parent company, fold, or offer a low cost/free solution AND make it better than the larger companies. Some businesses do this well like Ecwid and Yola, both offer a great product. Others however fail more rapidly once a free offering is introduced.

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Let’s consider video for a moment. Video can present complex ideas and thoughts, it can teach, and it can entertain. It’s no secret that video searches are becoming very popular, and that the growth in video searches is continuing to grow. However, despite this growth search engines cannot parse the video to search for context. Instead they rely on titles, tags, and other information available on the same page as the video. Through closed captioning, if you present the full transcript of the video on the same page, the search engines now can parse ALL of the words used in the video and thus your videos will be ranked far better and more accurately.

More over, closed captioning provides a means to navigate your video far easier. If there is a complete transcript of the video available, than anyone can search for words and phrases they want to watch within the transcript and jump to the appropriate time in the video and view it.

Lastly, new laws are coming out that dictate that a lot of online video needs to be closed captioned. Some might say I should have opened with the “you have to do it or else” bit, but I figured I will start with how it will help you.

For a practical demonstration of the benefits of closed caption we can look at CNBC. CNBC has a lot of video: news, interviews, etc. To get it all up to snuff would take a monumental amount of work. So CNBC contracted to a company called RAMP and what RAMP did was automate the process of transcribing the video. The benefits of this process are many. First it allowed a rapid way to add captioning to all of CNBC’s media on the fly without the aid of a poor intern slaving away in front of the computer constantly hitting pause, rewind, play. Secondly, the transcript was datamined for keywords, terms, stock tickers and the like. Thus the search media was found and added. Next the service includes a full searchable transcript that allows the user to skip to whatever they are highlighting. This adds a high level of navigation to the video.

And the pay off? According to RAMP, the added features increase session length by almost 90% and video completion by almost 70%. Video is not something easily interactable. However, by adding closed captioning, not only does the video become interactable, but it becomes navigable and searchable.

So if you don’t want to do us a favor, do yourself a favor and add closed captioning.

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It reminds me of the cable TV industry actually. Now you too can be the proud owner of 10,000+ channels for your viewing pleasure. But come on, how much TV do we really watch? For myself, I watch very little. I have a handful of shows I watch when I can (normally I save them up for a weekend of melting my brain) and a few non-fictional shows that I find diverting. But in all, I imagine I watch shows from about 6 channels.

I dropped cable and dish network because of this. I can see all I want to see on Hulu and various online video sites. And I know I am not alone. Even my friends who enjoy letting their brains ooze out their ears from TV meltdown also spend more time on Hulu than they do on cable TV.

How many online users use the 10,000+ features a web host has? I would imagine they too are like TV watchers, they have a few features they require and won’t use any of the others. I suppose its comforting to know that you can add ColdFusion to your site, even though you are running pure PHP, but honestly, isn’t it like having the Golden Oldie Polka channel alongside your Food Network (or substitute for favorite channel)?

Price is not the main factor. If you make price your main factor you are going to wind up disappointed. Instead let me offer a replacement to Price and that is Cost.

Surely I jest yes? Isn’t cost and price the same? Some of you already know where I am going with this and others need an explanation. Price is how much you pay from the outset. It is the sticker cost of an item. For instance, $1.99 a month for a web hosting plan, the price would be $1.99. Cost is how much you end up paying over the long haul of the product or service.

For instance, taking a jaguar (price at a cool $60,000) to a mechanic to find that the parts need to be special ordered (ka-ching!) and an authorized mechanic should install them (ka-ching!). That you have to use the premium gas (ka-ching) instead of the cheap stuff. The oil put in the car must only be synthetic (ka-ching) and since the engine is constantly purging oil, the topping off of the oil reserve is a weekly activity (ka-ching). As we add all of these together we might find that the initial $60,000 is dwarfed by the total cost of ownership of that vehicle.

This can be applied to web hosting, especially those who desire the world for free from their web host. However, this brings up a bit of a quandary. If people know you get what you pay for, if people understand that $1.99 is probably really cheap (thrift store cheap) for web hosting why do they still want to have everything for a few bucks? I have to assume it is because of two things.

1) What idiotic company would sell a product without making a profit on it? The logic then goes, if you can make profit off of 1.99 a month then why are there companies selling the same stuff for 5.99? 10.99? 19.99? Are they all greedy or something? Which leads to my other point.

2) The average person doesn’t know the true cost of the service.

As a service industry, web hosting requires staff, a lot of staff depending on quality level. Employees don’t come cheap, in fact I would think that salary would most likely be the highest cost for companies who put support ahead of other factors. The unfortunate part is that this large cost is difficult to manage. Let’s face it, customer support staff has a high burnout rate. Hopefully, they are being moved to different departments if they are talented, but that doesn’t help the customer support section. New employees must be trained as old ones leave. Companies tried to lower this large cost by going overseas. Instead this often made their customers hostile. So hosts were forced to shave costs everywhere and hope it adds to big savings.

Virtualization is one of those shaves. Being able to combine more accounts on a computer and use every last resource in the data center greatly reduces power cost, real estate, and the rest. Automation reduces work load of employees, streamlines efficiencies and plays well with others, especially virtualization.

But even if you used green energy servers, topped them off full of accounts (without overloading), automated everything, purchased discounted bandwidth, used recycled air from outside… did everything right when it comes to cost, you still couldn’t justify $1.99. In fact, I would believe it difficult to get a high level of customer support for less than $10. And that is being generous. Especially considering that even with the best video FAQs and rock solid hardware (which would also cost a lot of money), there are a lot of customers that just want to talk to a real life person. And if you want to staff it 24/7 you need several shifts of customer support techs. Not too mention writers who can update the FAQ and knowledge base, while promoting the company. What’s more, the cost to acquire a customer generally put the web host in the hole sometimes by a few hundred dollars.

Though it is treated like a commodity, I assure web hosting is not. If you want nothing, then feel free to pay nothing. But, if you require something more substantial, do not balk at paying more upfront. The question then becomes is it worth paying more upfront to ensure you don no pay a huge amount later? I think you know the answer to that.

One of the problems of being an expert is that we believe we know more about certain topics than others and in so doing close the doors of learning. As many know I went back to finish my degree. Not necessarily because I needed to, but because I wanted to prove what I know and that is that I could. I graduated a week ago with highest honors (yes a little self plug there) and in looking back I wasn’t always kind to my fellow classmates. By doing so I closed off many opportunities for learning.

Expert status is fun. I enjoy fielding questions, be it from email or face-to-face. I enjoy being on the ground floor of a lot of today’s innovations. But if there is one thing I learned from going back to school it would be that you can learn something from anyone, be it a new technique or just patience.

Being too far from home, I ordinarily search for a gas station (learning all sorts of new things about me today), however none were in sight. The urgency of my need forced me to look anywhere and everywhere. I came upon a row of stores and went from one to the next. In my yellow haze, I noticed a grocery store and thought to myself perfect; they must have a bathroom.

The sounds of water misting vegetables, customers filling large water bottles, and even seeing a few employees downing cans of coke was becoming too much. At last I found the bathroom. I went for the handle. It wouldn’t open!

Now I am a patient man, and regardless of the pain I was beginning to feel I stood their, trying my best not to do any sort of dancing in place… and given the circumstances I think I did quite well. Figuring there was someone in there, obviously the door was locked, I had no reason to expect something more sinister was afoot.

Unfortunately, I was wrong. Not only was there no one in there but a second glance of the door knob struck me cold. There was a coin deposit attached to the door. For a low installment of two shiny quarters you too can pee in an area deemed socially acceptable. I checked my wallet, my pockets, my car… no change. Now I had thought of many ingenious ways of making my displeasure known. Granted most of them are illegal in 17 states and some 30 odd countries; I decided to refrain. Defeated I climbed back into my car and drove off.

I know a lot of companies are looking to save some cash. Who wouldn’t? But there are levels of service that are expected. There are some features that should not be served a la carte, but come with the solution as a whole. That grocery store is not in the business of selling convenient plumbing or water service. It is in the business of selling food and supporting items. The amount of money they gain from selling bathroom rights is minimal. The amount of money they save from not having to clean the bathroom is also minimal. In fact, I would wager that they are either at the break even point or are losing money.

I was not the only one to leave in a huff. There were a few other customers who saw the cost of doing their business and were equally frustrated. I imagine at least one (other than myself) simply left the store without purchasing anything.

In the Web hosting space, don’t offer me 24/7 support and then tell me I have to pay for additional support tickets after my first 5. Don’t tell me I have unlimited space and then say I can only have 1 database on my account.

Don’t tell me I am a welcomed and valued customer and then in the same breath charge me for nit-picky fees for items that cost you next to nothing to provide, but help to make me feel at home and comfortable.

Coincidentally, the first store where I need to go actually had a free bathroom in it….

Apps! Clouds! Acquisitions! Growing your business! If you squint at the name and place your right thumb over the date you might think it was 2010 all over again.

The cloud has arrived! Well yeah, it has been hanging out, parked on the couch drinking your beer and stealing your cable. It’s like daddy’s little girl and the redheaded stepchild all rolled into one. Convenience and Security both still seem to be at odds. And standards? Still seemingly years away. Consumers want it, but we need it to live up to its word. That’s all that needs to be said. As an aside, who, cloud providers, can guarantee my data will be stored in my country (not necessarily US) and not be spread globally? If it is global, can you guarantee me data won’t be subject to the jurisdiction of multiple nations? Think about it.

Apps! I love apps; hell I am writing this blog from my phone. Sidebar: anyone else get the impression that session speakers know a lot more than what they are saying? Seriously,  with a handful of exceptions, presenters have a personal stake in not telling you everything. I say tell me and I might just hire you. Food for thought.

Apps: simple and complex, modular, delightful wastes of time or powerful tools to augment everything that is fine and good in the world. We have the delivery. We have the tools. We have the technology. But we lack creativity. Don’t just build an app cause someone told it will help your stickiness. Instead find out what people do the most on your site and make that mobile. Now go and be fruitful. I will expect my royalty check in the mail and its d-u-n-l-A-p not o-p.

Acquisitions, going to listen on Tom Millitzer’s presentation at 1. So howabout we take a break here and come back fresh?

I received a PR the other day on an executive position change. There are few definites in life. For those keeping a running tally they generally involve: you will die someday, you will be taxed both alive and dead, and that any executive hire PR your read will be a deep, deep, dark, dark, deep, dark deep pit (reference) of despair.

These three seemed pretty concrete to me until the other day when I read DreamHost’s press release for Simon Anderson. It very well might be the greatest press release I have ever read. Not only is it humorous and makes me want to read the whole thing, they weave facts about Anderson and the company throughout.

Brilliant piece of writing DreamHost, thank you for making my day.

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OpenDNS will be 5 years old. Who knew? Doesn’t seem that long ago when I interviewed CEO, Founder, and Visionary David Ulevitch about his shocking DNS system discoveries and how he intended to fix it. If you don’t use OpenDNS I would suggest switching. It is absolutely brilliant. To swap your DNS to OpenDNS follow the link to faster DNS. If you feel more socially inclined, they are going to have a party in San Francisco. July 28th at The Old Mint, meet David, Allison, and company.

Next shout goes to Derek Vaughan who is in France at the moment. Derek writes quite often for this blog and his writing is some of the best in the industry. Hope you are having a blast.

And lastly, umm, lets go with Open-Xchange. For those unfamiliar, Open-Xchange was at the forefront of the SaaS trend so many years ago, and they easily adapted that to a cloud format. Open-Xchange is a mail and collaboration service not unlike Microsoft Exchange. Recently, Open-Xchange picked up STRATO as a new client. STRATO is Europe’s second-largest web host. This deals places about 5 million + more clients into Open-Xchange’s capable hands. Congrats guys.

So one of the things I have been experimenting on is making my life easier. I have outrageous work hours and to bring the leash on that I have been looking for tools to make the mundane stuff more manageable.

First step was I use an egg timer to budget out my time when I have multiple projects going at once. This technique works quite well for me, unfortunately between cooking and working I often misplace the silly timer. So I definitely needed some kind of alarm.

I have an RSS feed that condenses the press releases from several thousand companies, checks… about 100 Google Alerts, and several PR channel streams. I have been using Omea Reader for a while to organize it all, but it sometimes gets lost in the shuffle. So I needed some sort of RSS reader that can br in such a place to give me real time results and force me to look at it lol.

The rest of the stuff I use is fairly normal, I wanted some way of checking my email without having to open Outlook or keeping it minimized while I glance at the headlines. I need a to do list I can cross stuff off on, a personal note pad; just your basic office stuff. Only I want it all digital.

I had used Rainmeter a very long time ago. Although I was impressed with it, it seemed more like a curiosity at the time and less like something I could actually use and not get bored. I have a problem with graphicly intense interfaces in that my eyes glaze over as I hunt for a means to reduce the amount of crap on my screen. I gave it another look however because it is one of the few desktop skinners, theme builders, whatever, that can run apps, panels, and the like. To make my life easier I grabbed Omnimo (theme/usability pack) for it and I have to say the sheer amount of stuff you can do with it is crazy. The best part though is how little resources the whole thing uses.

Omnimo comes with a few default themes you can use one being Windows Phone 7 the other being Windows 8. Although both looked alright, and I do thing operating systems in general are heading toward an app driven business model, I prefer just making my own messy layout. Still if you want to preview Windows 8, or at least a version that copies the leaked GUI of Windows 8, well maybe that selection will be your cup of tea.

Not really sure where I was going with this blog other than, Rainmeter + Omnimo UI is like getting hosed down with your favorite adult beverage whilst eating a giant prime rib (or substitute favorite food here), without the cleanup. Granted you may waste a weekend getting everything the way you want it, but you can’t win them all.

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In fact the computers were seized so violently that DigitalOne couldn’t even restart their own servers to provide support for those affected. Spokes persons for the various companies hosted at the data center said it was unclear what the FBI was looking for or why.

DigitalOne fully cooperated with the FBI pinpointing the servers in question. Instead of taking only the supposed criminal servers however, the FBI opted to take the whole enclosure.

What disturbs me is not necessarily the FBI’s actions. Well ok it does disturb me, but honestly I have grown to expect it. True, I am outraged hence this blog, but not surprised. What really got me is the comments to the article. I am amazed by the level of justification, the illogical arguments for it, and the general apathy.

The argument, “if you are against it then you are probably breaking the law as well,” never sat right with me. Mainly because its a logical fallacy. It would be the equivalent of saying if you choose apples over oranges than you are obviously an apple yourself. There is a breakdown of connection between the facts and the conclusion that shows an irrational mind. Likewise the arguments,  “if it removes one more spammer I am all for it.”

Yeah? Really? What if we nuked your house to kill a pickpocket would you be for that as well? I think people forget that the FBI is a servant of the people, not a thug. The FBI is there to investigate wrong doing and remove that perpetrator and not by any means necessary. I hate red tape, but the red tape is there to protect the innocent.

Something the FBI failed to do yesterday when they destroyed a ton of virtual real estate to take down one criminal.