Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. He has also recently published his first science fiction book, Battleframe.

Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face. Due to demands on his time, Michael may be contacted by clicking here for limited consulting assignments.

I've Just Seen The Future

I've Just Seen The Future

Last week I was walking with my wife through our local shopping mall and came across a Virtual Reality (VR) Samsung display. Without any hesitation at all we both donned headsets and headphones to experience what the latest and greatest VR was really like.

For those of you that are unfamiliar with VR it involves putting on some goggles and the images for each eye are slightly misaligned so that you get true 3D vision. The headphones are regular and are typically designed to block out any external noise. A head tracking device completes the kit so that when you move your head the images that you are viewing also move.

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I first experience VR about twenty years ago at the Walt Disney Imagineering labs and it was incredible so I was looking forward to seeing what the latest and greatest was like.

The VR gear that we were testing was built by kickstarter funded Oculus Rift (later purchased by Facebook for a couple of billion) and the headset used a Samsung Galaxy phone for displaying the images. It’s incredible how far the computing power of a phone has come!

What I was really looking for was immersion. That point in time where I actually believed that I was where my eyes and ears were telling me.

The simulation that I was experiencing was an ocean dive where I could swim with fish and eventually encounter a great white shark. It really was incredible to be able to look around and see everything. The actual shark encounter was pretty good although being eventually eaten and inside the stomach was a little macabre.

I found the head tracking and the displaying of the images really good. I’d move my head and the image would instantly follow. In the past this would create a sense of motion sickness as the image would lag behind your movement. The only time I did feel a little off was when the simulation moved me up towards the boat. I was doing anything and yet I was moving….this was a little off-putting.

For a device that will sell for a few hundred dollars it was an amazing experience. It has the potential to bring a whole new level of meaning to tele-computing, gaming and education.

For instance, could you imagine your classroom teacher talking about Neil Armstrong landing on the moon and the whole class was waiting for him as he stepped down the off the Lunar Module! Now, that’s a whole new level of education!

Right now Sony, Oculus and Samsung are the forerunners in VR technology. There are quite a number of smaller startups doing some interesting things as well to facilitate the integration of movement and doing things such as simulating your hand in the virtual environment. All really cool stuff!

If you get a chance, I would highly recommend trying it out. VR is almost there but I’m sure with a bit more time that it will truly be a world changing technology. BTW – Oculus is planning on releasing their commercial headset around mid-next year.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
Click here to arrange time with Michael
Click here to advertising on whizzbangsblog.com

Recent Comments
mgilmour
It's going to be really interesting as the line between reality and illusion becomes blurred. I actually believe that this could b... Read More
25 November 2014
mgilmour
I'm in with this Kassey!
25 November 2014
mgilmour
LOL! What more can I say!
25 November 2014
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10 Comments

Skunk works and visions

Skunk works and visions

About eighteen months ago I started writing a series of episodes for a science fiction website that I started. Over time this grew into a manuscript of 106,000 words and this week a lot of the final pieces of publishing my first novel finally fell into place.

For a start I purchased a block of ISBN numbers. These numbers are used to uniquely identify each version of a book (eg. ebook, paper back) for libraries, shops etc. It was a great feeling buying the “codes” that my own book will be designated by.

Just yesterday, I commissioned an artist to do the front cover…..you’ve got to have a decent looking cover as many people will judge the book by it. So where did I find the artist? I perused thousands of illustrations from artists all over the world at DeviantArt.com (it’s a great site). I then narrowed down the selection to about five artists I thought best represented what I was after. Of the five artists, three responded and I interviewed each from there.

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This Sunday evening I’m having a group of beta-readers provide their feedback on draft five of the manuscript. It’s the final feedback prior to me doing any minor clean-ups and fixing some grammatical errors that may have slipped through. It will probably be around two weeks work…..so not too long!

So in about four weeks I should have my first science fiction novel in print and e-published (fingers crossed with all the rush up to Christmas). It all started with a vision of writing a book.

Like anything worthwhile, it takes a lot of effort but it’s the vision that empowers you to move forward. I had some really difficult times in this journey and some rather severe critics of a partially completed work…..the vision helped me to move through these obstacles.

Over the years I've seen too many people coasting through life without any clear sense of what they're trying to achieve. I do think that it's important for there to be seasons in your life that are like this....but I wouldn't recommend making it a habit. Before long, you're old and full of regret.

When I was a teenager my grandmother said to me, "Michael, you only get old when you think you are." She had a zest and zeal for life which inspires me to this day. In her late sixties she and my grandfather went on an adventure that involved criss-crossing Africa and even traversed the Sahara desert in the height of summer! WOW!

As well as a vision I find that it’s personally important for me to develop another creative outlet that's not directly related to any of my businesses. This time, it was writing a book. I like to think of it as my skunk works project that just refreshes and energises me in everything else that I do…..besides, you just never know where these projects will lead you.

So I have two questions for you?
1.    What is your vision?
2.    What is your skunk works project?

Having a vision is like oxygen and when the vision is a passion that is a bit out of left field then all the better. You see, I can have a vision for a business that I have no interest in whatsoever. It will help move the business forward and help me through adversity but it really isn’t going to get me excited.

Now having a vision for a passion…..that’s another story! You get fired up and look forward to spending those few moments where you can do what it is that gets you excited about life. So my suggestion is….stop reading this and go and do something you’ve always wanted to.

Have a great weekend!

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
Click here to arrange time with Michael
Click here to advertising on whizzbangsblog.com

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Successfully Outsourcing Your Domain Management

Successfully Outsourcing Your Domain Management

I was speaking with a client that had been with ParkLogic for many years and they asked me to conduct a complete review of their portfolio. Without giving away too much about who the client is I thought that I would share some of the history and the results of the analysis.

The client initially had a team of people managing their domain portfolio for them. When they moved their domains over they ended up letting these people go or reassigning them to other projects as they were no longer required to manage the domains.

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I want to be right up front and say that I'm one of the founders of ParkLogic. Despite this, I found the results that we achieved for the client incredibly revealing about how a properly managed domain portfolio can produce huge rewards for investors. They completely outsourced the entire management of the portfolio to ParkLogic and this is what was acheived for a 4 years period.

 

So across the last 4 years the results can really be summarised in four simple charts.

 

Graph 1

 

The first chart shows the number of domains in the portfolio steadily dropping (orange line) as we managed out the non-performing. We had established a set of business rules with the client that we applied to the domains as part of the dropping process.

Naturally, the revenue declined as the domains were dropped and the industry overall declined. The portfolio went from doing around $38K/month to $28K/month or a decline of 27%. Given that many of the domains that were dropped had some revenue this decline was expected.

During the same period of time the domain industry experienced a MUCH sharper decline in revenues. It was through our technology and processes that we were able to bolster the earnings and cushion the major decline for our client.

The key line is the revenue per domain (the blue line). As seen by the dotted trend line it is sharply trending upwards in an almost linear fashion. The average revenue per domain per month has moved from about $1.75 to $4.48. This is an increase of around 256% which is an outstanding result that we see continuing into the future as we release new capabilities on the ParkLogic platform.

Graph 2

 

The second chart gives a picture of the financial position of the portfolio for the past 4 years, both 2011 and 2014 are partial years. The expense line includes all registrations and ParkLogic management fees. The fees cover optimisation, registration management and first line of call on any legal matters. The client no longer has $150K-$200K per year in staffing costs.

Although the revenue has declined the profit appears to be reaching an asymptote as the decline in costs are matching any declines in revenue.

Graph 3

 

Chart three shows the decline in renewal costs as we applied the agreed business rules to the portfolio for domain renewals. The bump up in 2013 is a timing issue on registrations and a portion should really be attributed to both 2012 and 2014.

We see a lot of domain investors renewing domains that are completely worthless and this directly impacts the profitability of the investment. We now have the portfolio at a nice stable base of profitable domains and the number that are being dropped each year has diminished greatly.

Graph 4

 

The final chart sums everything up. The profitability of the investment is trending upwards from 243% to 335%. As mentioned earlier, the cost of the staff that were laid off as the client outsourced to ParkLogic is not considered in the profitability calculation.

So during a tumultuous period of time for the domain industry ParkLogic managed to increase the profitability dramatically. In addition, the client no longer has to worry about the portfolio and waste their time managing their domains…..it’s been completely outsourced. All they have to do is count the money and receive an quarterly report for their board.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
Click here to arrange time with Michael
Click here to advertising on whizzbangsblog.com

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What a CATastrophe!

What a CATastrophe!

The other evening my wife Roselyn and I went out for a bike ride. We left the door to the garage open and upon returning I made sure that I closed it so that it didn’t bang with the wind in the middle of the night.

Around lunch time the next day I asked Roselyn if she’d seen Pepper, our cat. She’s a wonderful cat that often curls into a ball in some hideaway in the house so it’s not unusual if we haven’t seen her for a while. She always comes when we call her name as she hopes to get some tasty morsel or two from us…..strangely this time when we called her name there was no sign of her.

After hunting around it suddenly dawned on me that maybe I’d inadvertently locked Pepper in the garage. Sure enough, after opening the garage door there was our cat staring with accusing eyes back at me. I apologised to her with a can of tuna and all was good.

So let’s unpack this story a little as there’s so much to learn from it.

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When I closed the door of the garage from my perspective I had done nothing wrong. In fact, I was doing right by making sure that it didn’t bang all night. From Pepper’s point of view I was the most horrible person in the world! How dare I deliberately lock her in the garage!

This is often exactly the same when two people have a disagreement. It’s all about perspective. Like Pepper and I, it’s often the case that neither party was trying to do something deliberately to antagonise the other. Stuff just happens.

I could have tried to prove to Pepper that I was right and the cat was wrong for going into the garage in the first place. Pepper could have hissed at me that I should have checked the garage before closing the door. Both of us would have been right…..and also wrong.

The key here is the apology (ie. the tuna). An apology is all about recognising that you’ve hurt another person’s feelings, it’s not about whether you are right and they are wrong. In fact, it really doesn’t matter if you’re right or not.
My father used to tell me that you can win an argument and lose a friend or say sorry and keep a friend. It’s your call what you want to do.

This past week I wrote an apology and it did not matter whether I was right and the other person was wrong….what mattered was “I’d locked them in the garage” and they were hurting. A genuine apology was needed to help rebuild the bridges in the relationship that I’d inadvertently broken.

When I read some of the comments on the article it was clear that many of them missed the whole point of the apology as people rushed to take sides. It wasn’t about rights and wrongs at all…..and hence, for the first time ever I closed the comments on an article.

One of the comments would bear mentioning, as it really struck me…..it was suggested that I looked weak by apologising. You know what, I personally believe that someone who is willing to apologise is actually strong. It also means that when they mess up or hurt your feelings etc. they are willing to place the relationship before their pride. This is not to say that I’m some great “hero” but it’s a good life lesson to ponder. It’s also one of the major reasons why I’m still married after 27 years.

Let’s take this cat and garage story one bit further. Let’s imagine that Roselyn had asked me whether I’d locked the cat in the garage. I would have said, “No, of course not.” Later after the cat was found in the garage Roselyn could have said, “You’re a liar!”

No, I wasn’t a liar. From my perspective I didn’t lock the cat away. Luckily my wife is very understanding and she didn’t say these things but how often have we leapt to conclusions about someone’s actions and disparaged their character? It’s easy to do and it’s very destructive. My advice is to be very careful before you judge another person’s actions.

Over the years, it’s been my observation that many arguments are the result of different perceptions of the same events. In my case, the can of tuna went a long way to mending my relationship with Pepper and last night she curled up on the couch next to me. :-)

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mgilmour
Thank you Kassey!
16 November 2014
whizzbang
I'm a regular visitor to your blog.. but never commented on anything.. But This time I'm commenting... I would like to say that S... Read More
15 November 2014
mgilmour
Kan, it's great to see you here and comment on this article. It means a lot.
16 November 2014
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Buying and Selling a Traffic Portfolio - Part 5

Buying and Selling a Traffic Portfolio - Part 5

Like any industry where buying and selling is involved there is a potential arbitrage gap between what the seller is generating and what the buyer can potentially earn once a transaction is complete. This can dramatically change the return on the investment.

A simple example would be if a seller has all of their domains parked at Company A and they received a 75% payout. As the buyer, you know that at the same company you receive 85%. That’s a 13.3% greater payout. This means that if you paid 24 months revenue for a portfolio you should get the payback within 20.8 months.

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If a seller has all of the domains at a single parking solution then there are a considerable number of additional ways that you can increase the revenue. Over the years at my company ParkLogic I’ve found that the maximum any parking company typically wins in a portfolio is 20% of the traffic.

This means that if you are acquiring a portfolio that has been parked at a single parking company then you can at least improve it 80% of the time. That’s a great outcome! At ParkLogic we also have a real-time bidding system in front of the traffic that sends the traffic direct to advertisers to provide additional revenue uplift (enough of the sales pitch!).

The reverse of the above is when you find a portfolio that is parked all over the place or where there may have been some special deals in place that underpinned the revenue line. For example, let’s imagine the portfolio had a group of domains that were all going to a particular affiliate company? Will the deal also migrate with the domains or will the deal suddenly vanish once you parted with your hard cold cash?

Likewise, for domains that have “slept around” they are likely to be fully optimised. Be careful of buying these portfolios as there is unlikely to be much of a “free” revenue uplift from optimisation. What I would recommend is to ensure that you can establish an account with the optimisation company prior to the acquisition. We have a number of ParkLogic clients buying and selling domains between them to more secure their ROI.

I’d also be careful of fad domains. These are domains that are popular for a time and then the traffic just dies off. So do your due diligence on the traffic by requesting stats across six months and then view the traffic data on a domains by domain basis to see if there are any trends that you don’t like. Spikes in traffic and downward trendlines tend to be the bad ones to look out for.

Particularly look out for what I would call the “lucky click” domains. These are domains that may be sold in amongst all the others that have a tiny amount of traffic but got a $30 click. You’ll probably never see that click again but if you buy these domains you’ll be paying a lot for them. To find them calculate the RPM for each domain (revenue / view * 1000). Sort the domain list from highest to lowest and you will discover that these domains are typically sitting right at the top…..get rid of them from the deal.

The wise purchaser will take the time to thoroughly go through a list of domains and indicate which ones they are prepared to pay for and which ones they aren’t. The seller will try and keep the portfolio together as an aggregate to stop this type of cherry picking. In the end it will become a negotiation. The strength of your position in the negotiation will be determined by how much homework you have done at the analysis stage.

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Michael Gilmour has been in business for over 32 years and has both a BSC in Electronics and Computer Science and an MBA. He was the former vice-chairman of the Internet Industry Association in Australia and is in demand as a speaker at Internet conferences the world over. Michael is passionate about working with online entrepreneurs to help them navigate their new ventures around the many pitfalls that all businesses face.
Click here to arrange time with Michael
Click here to advertising on whizzbangsblog.com

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