On the other hand, no matter how well you position your AdSense units, if your content is not well-targeted, no placement can compensate for this. If your content is not optimized for the right keywords, or if it is very diverse and the ads you get are a mixture of many niches (e.g., dating, health, money, computers), then your click through rate (CTR) will be low. We’ll assume that your pages are optimized properly and don’t rank equally well for both “dating advice” and “cash advance Nevada” or “cheap credit cards” for instance, because if they are like that, no AdSense positioning will help to get a decent CTR and generate money from your site.

Before we discuss the best places to put AdSense ads on a page, there is one more thing that needs mentioning. We discuss the Top 5 places for AdSense ads but this doesn’t mean you have to put 5 AdSense units on a page. Beware! As per the terms of service of Google AdSense, you can’t place more than 3 ad units on a page, or you risk your AdSense account being terminated.

This is why you need to pick only 3 out of these 5 places and see which of them work for you. The fact that these 5 places generally work, doesn’t mean that they will automatically work for you as well. You need to test where AdSense ads convert best for you and put them there. Here are the 5 places where your AdSense ads stand a higher chance of being noticed and clicked:

Top 5 Positions for AdSense Units

1. On the left, under the menu and above the fold

If the menu of your site is in the top left corner, the space right under it is a top location for AdSense ads. When visitors access the menu to navigate the site, they will notice the ads. If the ads are well-targeted, the chance to be clicked is very high.

A vertical bar (120×600 or 160×600) is the best AdSense unit you can put under the menu. Of all the 5 places listed here, this place is the best because even the visitors who visit only the homepage and leave your site right after they land on it will be exposed to the ads, and therefore might be tempted to click an ad before they leave.

2. Inline before the first paragraph

Another place where AdSense units stand a high chance to be noticed is in the very beginning of an article. When a visitor has come to the page with the article itself and there is a block of relevant AdSense ads right before the first paragraph, this also increases the chance for the ads to be noticed and respectively clicked. Depending on the layout of your site, the options you have are one of the square units or a half vertical banner (if your text columns are narrow and even the smallest square doesn’t fit).

3. Right under the article title

The article title is usually in a larger font and/or alternative color to be more noticeable. When relevant ads are put right under the article title – i.e. between the title and the first paragraph – they are also more noticeable. For many sites, AdSense units under the article title don’t work as nicely as the inline units right before the first paragraph, but you need to see how it is for you.

It is true that, with AdSense units between the title and the first paragraph or inline before the first paragraph, you might lose the visitors who click on the ads because when they click an ad, most likely they will leave your site before they have read your article. But if a click is worth it, then you can’t complain. If the visitors really liked your site, they will come back again, right?

4. Under/Next to an image

Images draw attention and this is why ads near an image are also easier to spot. However, keep in mind that you need to use a high quality still image, not an animation because animations smell like ads and visitors just skip them. Still, for many web masters AdSense units near an image don’t work, so you need to experiment to see if this works for you or not.

5. Right under the last paragraph

Finally, one more place where AdSense units have a decent chance to be noticed is a very surprising one – under the last paragraph of your article. Usually this position is way below the fold, but it does work. Why? Because when people have finished reading your article and they are looking for something to read next, a block of targeted AdSense ads stands a good chance of being noticed (and clicked). Vertical banners work best here and sometimes even image ads manage to attract attention.

Summary

These 5 places have proven successful for many webmasters. Of course, CTR depends on many more factors than the mere positioning but experience shows that there are places where even the best ad has little to no chance of being noticed. These places include the lower left corner, the right sidebar (especially under the fold), and obviously the bottom of the page (the footer) because readers generally ignore these areas completely and ads there aren’t noticed. This is why you should ignore these places and put your AdSense ads in the Top 5 places instead.

These basic principles of AdSense placement have been consistent for years, and with a little work they should help you too.

The Ant Fable

Having trouble viewing the presentation? You can also see it on SlideShare.net.

Photo by Matthew Hogan Photography

Editor’s Note: I originally wrote this for ZenHabits back in June 2008, but I’ve brought it over as I think NS readers will find it interesting!

Have you ever written out a list of goals you’d like to achieve and thought, ‘How can I get all this done’? Or seen an opportunity that you’ve had to pass by because you are just flat out? Life is a torrent of choices and possibilities, and often it’s hard to let them go. Should you compromise? Or do you just need a better game plan?

As an easily excitable person, I have a really hard time constraining myself to doing just a few things. Every project seems worth doing, every opportunity worth taking. Still I know that for many people, work is a way to make enough money to relax and enjoy life. If that sounds like you, then you may not get much out of this article. However, if your days are filled to the brim and yet you still can’t wait to start that new project, then I am speaking to you!

In the last few years I’ve become a successful blogger, co-written two books, built a web startup that employs lots of people, sold all my possessions to travel the world with my lovely wife, and co-founded an annual non-profit event. It sounds like a lot, and in a way it is. But there’s no reason not do more with our lives. After all, we only get one.

Here are seven techniques that could potentially enable you to do more with your time. Have your own personal additions? Leave a comment, because I for one am always looking for more ideas!

1. Find the Platform That Gives You The Time You Need

Aside from sleeping, your work life very likely takes up the most hours in your day. So it makes sense that the greatest savings in time and productivity can come from how and where you work.

Your aim should be to align your work and your goals of what you want to get done. While it might be that your goals can be achieved through a job, I found that the biggest change in my productivity has come from starting a business.

When I worked for someone else, I spent a lot of time working on their projects. Consequently everything else took a back seat and was allocated to the early and late hours of the day, and only received a small portion of my energy.

When working for yourself, you have mastery over your hours, how you divvy them up and what you spend the lion’s share on.

To gain mastery of your own time, you sometimes need to sacrifice now for gains in the future. I took a major 6 month hit of working terribly long hours for two full-time jobs – my regular work and building our start-up – so that I could achieve the platform that would give me more freedom later on. My wife will tell you it really wasn’t much fun and there was some real lows, but it was a sacrifice we both think was worth it. Now I am able to work for myself full-time while travelling the world – and those six months of sleepless nights and heavy stress seem a small price to have paid for this lifestyle.

2. Plan, plan, plan!

If you want to make the most effective use of your time, you need a plan. Without one, trying to do a lot will give you a major stress attack. Whether it’s daily to-do lists, business plans, or a productivity system, choose your weapons and put them to use.

Personally I have two planning tools that I use constantly. Next to me I keep a notepad with daily to-do lists. They usually span two A4 pages because I like to do some serious multi-tasking.

I also carry a Moleskine notebook with me literally everywhere I go. I spend a couple of hours a week writing ideas, goals, plans, and lists in it. What’s coming up next, how to increase income on a website, lists of actionables to launch a new project, the chapters for a book, points to write in an article. You name it, it’s in there, combined with enough squiggles and doodles to impress the most idle mind.

All this planning means that my time in front of a computer is spent purely executing. There’s less wondering ‘what next?’ or ‘what should I write?’ and more getting things done.

3. Work Smart

I love the idea of working smart because it is a great enabler to getting more done. The tricky thing is figuring out what exactly “Work Smart” means. I have found the best way to think of it is to ask yourself this one question:

If you only had a year left to do the things on your lists, would you be satisfied with what you’re spending your time on today?

Deadlines have a way of quickly prioritising things and revealing what is trivial and what is essential. The biggest enemy to getting a lot done is the inane and trivial tasks that it’s so easy to get bogged down in. Distractions, unnecessary emails, low-yield tasks and jobs, and all kinds of wastes of time. Cut out the time wasters and you have more time for the important stuff.

The biggest deadline of course is our own mortality. Faced with that question, pretty much everything that isn’t truly important fades away. Steve Jobs of Apple put it best in his Commencement address at Stanford in 2005:

When I was 17, I read a quote that went something like: “If you live each day as if it was your last, someday you’ll most certainly be right.” It made an impression on me, and since then, for the past 33 years, I have looked in the mirror every morning and asked myself: “If today were the last day of my life, would I want to do what I am about to do today?” And whenever the answer has been “No” for too many days in a row, I know I need to change something.

Remembering that I’ll be dead soon is the most important tool I’ve ever encountered to help me make the big choices in life. Because almost everything — all external expectations, all pride, all fear of embarrassment or failure – these things just fall away in the face of death, leaving only what is truly important. Remembering that you are going to die is the best way I know to avoid the trap of thinking you have something to lose. You are already naked. There is no reason not to follow your heart.

4. Push Yourself, But Don’t Overjuggle

You won’t get a lot done if you don’t try to do a lot. For every person the number of tasks, projects, and things they can keep in their heads at one time is different. So it’s important to find your ideal load where it’s enough that you’re a bit uncomfortable, but not so much that you find yourself feeling overwhelmed.

It’s important to be a little uncomfortable because you need stress for peak performance. A little stress will bring out your A-game. This is called “eustress” and if you think about a time when you’ve delivered a great speech, run a race, or pulled out a top performance at work, you will find you’ve been in this sort of stress zone.

If you overdo it though, you break through into another type of stress, called “distress” and here the anxiety and panic effects become a hindrance so that your productivity starts to drop.

It’s tricky to find the balance, and I find I periodically overshoot and break into the bad stresses and pressures. When this happens, it’s best to bite the bullet and drop or delay a project or two. Relieve the pressure and pull back into the right level of difficulty.

5. Team Up, Delegate, Outsource, Don’t Try To Do It All Yourself!

One person no matter how optimised, skilled and driven can only produce a fixed amount. If you really want to get a lot done, you need other people on board.

Working with other people increases the amount of resources in both time and skill that you have at your disposal. It will help you to achieve much, much more. Of course it isn’t easy to do and there are a number of natural barriers that you will need to cross. Some important things to realise:

• You need to accept that you can’t do it all yourself.Because it’s hard to let go of things, oftentimes you will put up the most resistance to plans to work with others. I often have to forcibly tell myself “I can’t do this, it’s just not physically possible to be everywhere, doing everything.” Realise that it is a choice between doing less and holding on to it all tightly, or letting go and accomplishing your goals.
• You need to accept that others might not do things the way you would. This is perhaps the biggest hurdle for many people in working with others. You know that you can do a certain thing just so, but someone else will inevitably do it his or her own way. Accept it, and you’ll come to realise that you also open up to things being done much better than you could have done them! And even when it’s not as good, it’s often a sacrifice that is worth it in the long run.
• Realise that working with others needs to benefit everyone involved. Other people are not your tools to achieving your goals. You can’t simply use others to pursue your own agenda without thinking about them. If you are teaming up with someone, you need to figure out how everyone can win out. If you are hiring people you need to make it worth their while.
• Realise you need to be systematic to make it work or you just escalate your disorganisation. Working with others is not a magic formula to increase your productivity. If you aren’t ready for it, adding more people to your endeavours will have the opposite effect and slow you down. You need to plan and be systematic in how you work so that everyone knows what they are doing, and works together efficiently and productively.

6. Work Hard!

A common desire is to amass multiple achievements, but well… not actually have to do a lot. If that is possible, it’s news to me. Last I checked, working got results, and working hard did even better.

So you have to make a choice. What’s it worth to you, what are you prepared to sacrifice? And just as importantly what are you not prepared to sacrifice? It’s important to have boundaries and not lose sight of what is important in life, so figure out what works for you.

Earlier we discussed working smart, well if you work smart and work hard, then you’ll really get a lot done.

7. Don’t be Bound by What Others Tell You Is or Isn’t Possible

If you don’t think something is possible, guess what? It isn’t. People do some pretty wild and unbelievable things. You’re a person, what makes you think you can’t do them?

In life you will encounter a lot of cynicism and disillusion, you’ll be told that certain things are or are not possible. Listen at your peril, as these are self-fulfilling prophecies.

While everyone has doubts, it’s important not to let them overpower you. If you’re feeling particularly low on confidence, there are still many things you can do to get over that. For instance:

• Start Small There’s no need to take on the whole world in a day, and building up to things is the best way to get over low confidence. Tackle a set of smaller projects or milestones, and accomplish them. Give yourself some positive feedback to build on and then go upwards from there.
• Just Start If you spend your time looking up at the top of a mountain, the climb seems a lot more daunting than if you just start with the bit in front of you. I often just jump into projects and ideas, deliberately not thinking them through, because I know that once I start, things inevitably work themselves out.
• Give yourself time Everyone needs time to accomplish their goals, and as a general rule, things usually need more time than you would think. I can’t even count the number of projects that have taken me waaay longer than I had hoped or planned for. But looking back, none of that matters. There is only what you did and what you didn’t do.

People like to talk about luck being a factor in success, and you could say that eventually that’s exactly what happened, Allen got lucky. But of course the message in this story is not that he got lucky, but that he set it up so that he could get lucky.

A few weeks ago I came across an interview on Mixergy of Owen Byrne whose name you might not know, but whose handiwork you will – he was the original coder behind Digg. While the whole interview is worth watching, there’s a particularly quotable moment when Byrne says:

"Luck is really probability and probability means if you’re persistent and keep trying eventually the probability is you’re going to succeed."

Like most entrepreneurs I too would claim that I’ve been lucky. But look a little deeper and I’d also say I’ve been unlucky. There are plenty of moments where things have gone wrong, money has been wasted, sites haven’t worked out or things just haven’t gone to plan. But they are just setbacks and in the face of dogged persistence, they quickly fade into the distance.

Setting yourself up to be lucky means taking the shot … over and over until it happens. After all the only certain thing in life is that if you don’t take the shot you won’t score.

In this post I thought I’d discuss some of the benefits for entrepreneurs and startups to setting aggressive goals and creating deadlines. But first let me begin with a story from my own experience…

Twenty times and twenty times again

At the beginning of 2007 I sent an email to our fledgling Envato team saying that our goal for the year was to grow our revenue by a factor of 20. While our revenue was quite small at the time, growing such a large way is of course no mean feat. Still the year passed with a lot of hard work, and it transpired that we hit the target almost to a tee by the end of the year. It was a huge milestone, the story of which I will no doubt make into a future post. As you might imagine there was much celebration and many remarks of “Holy Cow!” and “I can’t believe we actually did that”.

When 2008 rolled around, I thought “well if it worked once, maybe just maybe … ” and I sent out another email saying one of our goals for the year was to again grow revenue by a factor of 20. Of course this time our baseline was much higher. So the year ticked along and this time growth wasn’t coming quite as fast but I wasn’t phased because as you know in the beginning of the year it always feels like there is mountains of time.

It was around August that I think it dawned on me that unless something really changed there was no way we’d hit the mark. So we started planning like fiends, trying to figure out what we could do to meet our goal. It’s not that we hadn’t been working hard until then, but I think this realization forced us to see that it was going to take something special to hit this target.

Around August we completely revised our site launch schedule and dumped a site we’d been just a couple weeks away from launching (GraphicRiver) in favour of a different one (ThemeForest) that the team had a much stronger feeling about. We then embarked on our heaviest marketing campaign to date to get the site moving as fast as possible.

Did it work? Well, we never did hit that 20x goal, perhaps that was a tiny bit of unrealistic thinking on my part. However we did quadruple the revenue that year and this huge result was in no small part as a result of the August change of course, ThemeForest’s subsequent launch and focus.

Deadlines

I think to some degree or another most people work best to a deadline. Whether it’s the last minute all-nighter finishing a university project, the rush of getting a client project out to print before the printers close, or the manic activity of making sure your job is all set before you go on holiday. There’s something about a hard and fast end-point that has no give to it that creates laser-like focus.

This deadline-induced behavior is really useful because it encourages you to prioritize, dump the unimportant and focus purely on results. For me waking up in August and realising that the end of year deadline we’d set was looming large meant refocusing our energies in the most productive, results driven way I could think of.

The question then is given that there is no boss or client to set deadlines, how do you create this behavior by yourself?

Setting and Publicly Claiming Goals

When I was 15 I decided I wanted to go bungee jumping. Just to clarify, I’m a pretty normal person, standing on top of a bridge with nothing to hold on to and just a giant rubber band tied around my ankles is not my idea of relaxation. So when I found myself up 150 feet looking out over a snarling river I started having second thoughts, big second thoughts. I distinctly remember the bungee jumping man saying “Just hop out to the edge” and thinking “OMG, you hop out to the edge crazy man!”

But when I looked to the side of the cliff where all the onlookers were gathered I realized I couldn’t back down now. You see it turns out that there is something stronger than my fear of plummeting to my death in a freezing cold New Zealand gorge, and that’s my fear of not doing what I said I was going to do, of looking like a coward and of backing down.

So I jumped.

I don’t remember much about the jump itself, only that moment of frozen terror and the realization that there was no other option but to do what every nerve of my body said I shouldn’t do. Fear of failure is a strong motivator and fear of public failure is an even stronger one.

How can you use that motivation in business? Simple, just announce your goals. Tell your team, tell your friends, or if you’re really game you can even tell the world. Because once they are out there, there’s no way to bring them back, and you either have to live up to them or go down fighting.

For me in 2008 I’d told the team that we were going to hit that 20x growth goal, and once it was out there, I felt a personal responsibility to make it happen … somehow.

Have a healthy disregard for the impossible

When you create goals, no matter how unrealistic they might be, you are deciding that they are possible and that you are going to find a path to meeting them. When those goals are aggressive you set the bar really high. By inducing a deadline mentality in yourself, you force a ruthlessness of thought to pare down inefficiency and go for the heart of the problem and solution.

You may not always hit those goals, just as we did not in 2008. But as the old adage goes: “Shoot for the moon. Even if you miss, you’ll land among the stars.”

Motivation is a rather complex subject so in this post I’m going to talk about just one motivation tool that I use, namely other people. Heroes, role models and rivals are three types of people that keep me focused.

Heroes

I think everyone should have a hero in life. Someone you aspire to be like, who you look up to and whose actions you pattern yourself on. Having a hero is a good motivator because not only does it push you to keep a high standard to your own actions but when you feel dispirited you can ask yourself how your hero would respond.

For me, my hero is my own father. He is a man with complete assurance as to what is important and what is not, and he always keeps these values foremost and lets them dictate the events and character of his life. I admire this and try to model myself in the same way. So for example, I feel that honesty and truthfulness is very important. That means that in business I try to make sure that they are key values for both myself and for our company Envato. Sometimes it’s a very difficult standard to live up to but I try to keep in mind how my dad does things and what he would think of actions we might take and it helps keep me on track.

Having a hero will keep you on the right course when you’re unsure of what to do, motivate you to perform at your peak and will be a source of strength when you need it.

Role Models

While I only have one hero, I find role models everywhere. They are people who exhibit some characteristic I admire and try to emulate. Thus I think it’s possible to have many different role models, each excelling in a different field.

When I was training for a long distance running event some years ago, I would keep in mind a famous Australian footballer named Shane Webcke who was known for his stamina and endurance. This guy looked like a tree trunk with a head made from sandbags, and no matter how many times he’d get tackled, no matter how many charges he’d led and no matter how exhausted everyone else on the field was, Webcke would still be going. So every time I felt myself flagging I’d think about this footballer and find a burst of energy and renewed commitment.

A business role model I have is the company 37Signals. I very much admire their general philosophy, particularly some of the ideas in their book ‘Getting Real’. Whenever I encounter difficulties and barriers I remember the page on Embracing Constraints that goes:

Let limitations guide you to creative solutions

There’s never enough to go around. Not enough time. Not enough money. Not enough people.

That’s a good thing.

Instead of freaking out about these constraints, embrace them. Let them guide you. Constraints drive innovation and force focus. Instead of trying to remove them, use them to your advantage.

37Signals

This is a wonderfully inspirational passage that is brilliant advice for startups, and there are many other gems just like it in that book. So while I may not always use or sometimes even like the 37Signals products, I do aspire to many of their values.

Rivals

Enough of this namby-pamby feel good stuff, what about good ol’ capitalist competition? Rivalry can be a very powerful driver to keep moving, innovating and pushing forward. It is a useful motivator because you can find great rivals in any industry or field of work. When you identify rivals you track their progress and their successes and push yourself to outdo them.

I usually pick out rivals for pretty much every website or project I work on. I will choose the best competitor around, the one I admire the most and then keep them at the back of my mind as the standard to beat.

Rivalry keeps you on your toes, pushes you to go further or harder than you might otherwise. It stops you from getting lazy or overly contented and ensures that even if everyone else is patting you on the back saying what a good job you’ve done, there is someone out there driving you on.

When I find a consistently awesome rival site or company I will keep track of their traffic, their activities, their prices, their size, their community and what ever other information I can get, and I use this as a motivator to improve our own sites as much as possible.

I believe it’s critical to keep rivalry friendly. Choosing rivals isn’t about deciding some unsuspecting person out there is going to be your whipping post, rather it means finding the strongest competitor in the room and deciding that they are the benchmark you will measure yourself against. A friendly rivalry even allows space to link to and support your rivals, understanding that this isn’t about them, it’s about you doing your absolute best.

The great thing about benchmarking yourself in this way is that there will always be someone to aspire to. This fluidity will keep pushing you to new levels of achievement as you outgrow old rivals and find even greater ones.

Staying Motivated

Whomever you might choose as a hero, role model or rival, the important thing is that they help you to stay motivated to excel and succeed.

But there is a catch… Until you have actually started doing business these numbers are completely fictional. It is OK though, because even if you were a seasoned entrepreneur they would still be hypothetical. The truth is until the doors open nobody really knows how successful a business is going to be. There are no sure-fire hits. What you need to make sure is that you’ve thought through what is going to happen rationally and kept the wild assumptions in check.

Here are four pitfalls to avoid when “calculating” your expected revenues:

Pitfall #1 – Overestimating Your Market Size

When we started FlashDen, I can remember thinking “There are like 1 million Flash users, if only 1 in 10 of them is interested in our product that is 100,000 customers” … But just because there are X million people who might possibly fall into your market, does not mean that your market size is X million people. In reality our market for FlashDen was people who use Flash in their work, who purchase off the internet, who speak English, who … etc. That is our real market and it is a lot smaller than 1 million. Guy Kawasaki likes to describe this problem as the “all we have to do is get 1% of the people in China to buy our product” pitch. It sounds like a silly trap when you hear it from the outside, but overestimating your market size is actually pretty easy to do.

Pitfall #2 – Forgetting Your Costs

Whenever I go into a restaurant and look at the prices on the menu, almost always in my head I think something like “Well cucumbers cost $1, tomatoes cost $2, this salad costs $20 … these guys are making a killing!” Of course anyone who has ever been in the restaurant business or even just watched Gordon Ramsay hitting the kitchens of run down eateries will tell you it’s one of the hardest around. There are many hidden costs that I in my infinite wisdom reading my menu am forgetting, like marketing, rent, personnel, insurance, wasted materials, non-food materials like the menu I am holding and so on.

Assuming that all the costs that you can think of in just a few minutes of contemplation are all the costs can be a fatal assumption. This is one of the reasons writing a business plan is such a good idea, because it forces you to think carefully about many different parts of the business. Even so, for first-timers, you might want to add in some sort of buffer cost to factor in those things you wouldn’t have imagined until you’re actually out there, running the business.

Pitfall #3 – Assuming People Will Pay

Every business boils down to selling something to someone, be it a one-off sale, an ad sale, a subscription, a donation, or even the sale of the business itself. At some point you need to make assumptions and guesses about what people will pay. In my experience however pricing is often done in no small part through a bit of trial and error, going up and down to find what the market will bear, what people are and aren’t prepared to pay.

There are no magic ways that I know of to guess this one right every time. You can go by industry norms if there are some, you can go by what you yourself are prepared to pay, you can even do market research. Inevitably however you will have to make a leap of faith and guess, so I say be conservative – if there are surprises they will hopefully be happy ones.

Pitfall #4 – Assuming that Once its Built, the Hard Work is Done

Assuming that the product development – whether its programming some software, getting a web storefront ready or writing an ebook – is all there is to creating a successful business is another hazard. Maintenance, marketing, sales, ongoing development, bug-fixing, advertising, administration and support can really add up.

I can’t count the number of times I tell people how many staff we have working on FlashDen only to get a response of “But the websites are built, what else do you have to do? Don’t you just sit back and let the money roll in?” Perhaps there are businesses where you just build it and leave it, but I’ve never come across one. Passive income as it’s sometimes called only seems to work on a small scale in my experience. For a decent sized business building the thing is only the beginning, but then that’s what makes it so interesting!

Be Conservative

Knowing these pitfalls doesn’t mean you don’t fall in them anyway. I have fallen prey to all four at various times, and I think it’s easy to get caught up in the excitement of a new a business and find yourself counting the ways you’ll spend those millions just awaiting collection. But it’s important that you don’t let common sense go out the window, especially if it’s a business that is carrying your hopes and livelihood with it. If you use common sense, take the time to think things through and keep your assumptions conservative you should do OK. And remember you can always iterate through your business to improve it over time until you’ve gotten things pitch perfect!

Unfortunately for Ms Beeny the subjects of the show would invariably disregard most of her advice and just do whatever they felt like doing. Because I was rather fond of Ms Beeny – partly for her awesome name and partly because she always gave good advice – I would find myself secretly hoping the developers would get their come-uppance and see that they should have paid attention to the vastly more experienced host.

At the end of each episode, Beeny would come back to tally up the total amounts that had been spent and to compare this with some valuations that would be given by local real estate agents. What was strange though was that no matter how dumb the aspiring developers were, they seemed to almost always make a profit.

Aside from being a bit frustrating, it made me wonder how this could be. Surely a bad performance should lead to bad results?

It’s All Relative

One day I was watching a particularly silly pair of developers who made bad decision after bad decision, when Sarah Beeny touched on the wider property market and suddenly everything made sense. It turned out I’d been watching a season of the show that had been recorded during a property boom. Because everyone else watching the show was presumably also in the UK, that probably would have been common knowledge to them. I on the other hand was over in Australia and didn’t have the faintest clue what the benchmark growth in property value in Surrey or Nottingham was.

In that market, even if the participants on the show had simply gone on vacation and then returned a few months later, they would have made a killing. In fact so potent was the property market at the time that even if they had diminished the property it still would have netted a positive return.

Your Results are Only Half the Story

This anecdote illustrates an important point for any business. To understand your own performance you need to look at the industry you’re in. You may look at your own growth and think “wow, we doubled in size this year” but if everyone else in the same position quadrupled, then really you went backwards.

And the opposite is also true. Recently ad revenue to our company Envato has been quite flat. On its own that didn’t look too good because previously we’d been growing steadily. However put that into the context of the global online ad market which is not just flattening but in many cases falling, and all of a sudden our relative performance is great.

In Context and Out

On the flip side of this coin, if you judge solely on context you can fail to achieve your potential but still think you’ve succeeded. This is a lesson that was drilled into me by my father growing up.

I remember one day I was reporting back to him how I had fared on a Chemistry exam. I had just scraped through, a few points north of 50% which on its own didn’t sound so good. However it had transpired that the entire rest of the class had failed the exam (which, looking back makes me wonder about the education skills of our teacher, now that I think about it!)

I went home feeling rather pleased with myself and foolishly said so to my father at the dinner table that night. My dad gave me a long, thoughtful look and then remarked, “in the land of the blind, the one eyed man is king”. While I was puzzling over this phrase he proceeded to tell me that a C was still a C even if everyone else got a D, and that at the end of school nobody looking at my results would give me a chance to explain my relative position as context to my results.

So the lesson here really is that it’s important to look both in context and out. Measure by other people’s standards but also by your own. That and it’s always best to keep your mouth shut at the dinner table!

Years ago when I had more time to spare, one of my favourite pastimes was to play computer games. In particular, I rather liked those real-time strategy games like Warcraft and Starcraft, which brought hours of enjoyment, to the decline of my studies and chagrin of my girlfriend of the time.

I’ve not had the time to play one of those games recently, but now and again I do think about them, and how they relate to blogging and business. In particular they are useful for looking at the tipping point for a blog that we run at Envato called Psdtuts+, and how it went from small site to expanding little business.

Strategy Games

So in case you’ve not had the great pleasure to play one a real-time strategy game, let me outline roughly what happens in them. Generally you begin every round with a starting set of resources like gold and timber, and a few little guys to do your bidding. It’s your job to build a base by constructing buildings with your gold, use the buildings to train more guys and use the guys to harvest resources so you can then build more, train more, and so on.

Now the trick to these games is that you need to balance your growth and expansion if you want to be successful. You have to use your resources wisely and make your base self-sufficient, as your initial resources will run out quickly and you’ll be left floundering.

Psdtuts+

In September of 2007, I started a Photoshop tutorial blog called Psdtuts+ where we post comprehensive tutorials and general articles about Photoshop. My early tutorials brought lots of traffic because they were longer and more in-depth than anyone else was really writing at the time, so the site stood out. But because I work on lots of projects, I have only a limited amount of time and could only put together one tutorial each week. And while the traffic was good, there wasn’t much income from the site. From memory it was just under a thousand a month from Adsense, some affiliate links and some text-link-ads I was selling.

So in many ways, it was kind of like being in one of those strategy games I mentioned earlier. I had a little base, with a few posts going up a month, some resources coming in, and one guy to do my bidding – me! While not a bad situation to be in, I wanted to expand.

So I started spending what little income I had, and hired a tutorial writer. I also offered cash for contributions that we published and started accepting community contributions. After a few months of this we’d gotten to publishing two, and sometimes three tutorials a week, and correspondingly income had gone up. Unfortunately, so had costs. Because Psdtuts+ is and has always been popular, hosting all those masses of big images on every tutorial meant that I was serving up over a terabyte of data every month. Plus our tutorial writers cost money, because if you want the best content, you have to pay for it. And the more time I spent on the blog, the more I thought that I should be accounting for my own time in the accounts.

This status quo lasted for another three months. The site grew, but slowly. I was tied down to it, having to keep up my own work on the site. And though it wasn’t really losing (much) money, it certainly was not profitable. Without profits, there wasn’t really any way to expand, and so I was stuck.

So the question was how to harvest more resources. In strategy games, there are usually some key buildings that you need to build, that allow you to get more out of what you’ve already got. This was important because it was clear that if I simply hired more writers, built more sites, stuck more ads in, or a host of other expansion ideas, I wouldn’t really be getting anywhere.

The Tipping Point

In the end it was an idea that I’d shelved because it was too hard that made the difference. Where previously we’d been giving away the source Photoshop (PSD) file, then selling them individually, now we built a paid membership system. The system, which we call PSD Plus costs people $9 a month to join. For that they get to download the source files and we put up periodic extra tutorials that only they get to read. It’s built using aMember and WordPress, and took me a good two weeks to put together initially.

It took a little while of saving and a bunch of work to get the system up and running. But as all players of strategy games know, this is often the case in building a pivotal part of your base. And as in strategy games, it paid off when a few hundred loyal readers joined! Sure there is extra work now, because it’s really important that these readers get value for their money, but the tradeoff is extremely positive.

So all of a sudden the site went from break even, to profitability. So what to do next?

Expand, expand, expand!

The smart thing to do here would probably have been to not do too much, and build up some cash reserves. But where’s the fun and excitement in that? And besides, it wouldn’t really be a tipping point, if all I did was collect money. As we know from strategy games, there’s only one thing you can do when your resources have grown – build more!

So in the months since, I’ve hired an editor, commissioned some celebrity writers, expanded the posting schedule, and a few weeks ago built the first sister site at Nettuts+. And as these new expansions increase revenue, we can expand more, train more, and harvest more resources.

What’s the lesson here?

Well aside from learning that playing Warcraft wasn’t a waste of time after all, I suppose you could say that thinking strategically about your blog is important if you want to build a business with it. Look carefully at what you are spending versus what you are getting back. Think long term and don’t be afraid to spend money along the way – so long as it’s wisely spent. And good luck!

Since this post was written, the same principles discussed have built Psdtuts+ into a major blog network based at Tutsplus.com with close to 4000 members in the Plus program.

Case in point, on our site FlashDen we have to have someone reviewing every file that comes in for quality, functionality, pricing and approval. That person used to be me. Now at first that was probably a good idea, because I got a great feel for the types of files, features and pricing. I also interacted with the community and it was a very personable experience for early authors whom we really needed to get on board.

Fast forward a year and the file queue was permanently stretched out for days and days at a time. I would do blocks of file reviewing when I had time but increasingly that wasn’t very often. On top of that, I’m not sure I was doing a very good job of the file reviewing because a combination of time limitations and the wrong personality for the job led to me taking shortcuts.

And yet whenever it was suggested that someone else should take over, I kept resisting saying “It’d be too hard to explain everything to someone else”, “Only I can make sure it’s done right”, “No-one else will be able to price things how I want” and so on.

Eventually the pain of reviewing became so great even I had no choice and we hired one reviewer, then another and another. These days we have a team of about 15 and in retrospect my reasoning is very obviously flawed. But somehow it seemed real enough at the time.

Initial Cost = Long Term Freedom

I don’t think it’s uncommon to fall into the trap of believing only you can do something, or that you’ll never manage to find a replacement. But in fact pretty much everyone is replaceable and even if the replacement doesn’t do quite the same job as you did, in the long run it’s the only way to grow.

What I’ve discovered is that every time I’ve replaced myself there is a short term loss followed by a huge long term gain. The loss is the initial cost of finding someone, training them, answering questions and the time it takes for them to grow into the job. But the long term gain is that once it’s done, you (hopefully) will never have to do that job again.

It can be very difficult to let go, especially if you are a perfectionist or are giving up doing something you really enjoy. Currently I still design all the sites at Envato and I can see this is going to be a problem soon. What other company has the CEO also pushing pixels? But for now I love design a little too much, and I’ve got a barrel of excuses for why I can’t be replaced there!