Florin Rosoga Podcast
Events

An interview about entrepreneurship and more

I was recently interviewed by Florin Roșoga, an entrepreneur from Cluj-Napoca (one of the cities near and dear to my heart) on the topic of, well, me… The discussion centered around entrepreneurship, work ethic and money. I tried to be as frank and direct as possible. The interview is in Romanian, it’s in podcast format and was published here. I’ve embedded the YT and MP3 players below. I hope it’s helpful to you (provided you understand Romanian 😀)!

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Reviews

Audit Defense may not be worth the price

Just a quick note to let you know the Audit Defense service offered by TurboTax in recent years is probably not worth the price. It’s run by a company called TaxResources, Inc., and they say they’ll represent you to the IRS in case you should have any problems with your return, for the low price of only $39.95.

Someone close to me got to find out exactly what they give you in return for that $39.95 “peace-of mind” fee, when an irregularity popped up on their tax return. They’d made an accounting error, found it out, wanted to report it to the IRS on their own, but contacted these folks because, after all, they did pay for the service.

In the meantime, the IRS also found out about the error and contacted them. This is where the Audit Defense service should have shined. Instead, my contact got the run-around. The Audit Defense team weren’t willing to help them in a timely fashion, didn’t want to contact the IRS on their behalf like they should have done, and only ended up helping them — if you might call what they got help — after several written requests. In the end, my contact lost out on precious time, got extra stress they didn’t need, and will need to pay the IRS additional penalties.

It looks to me like the Audit Defense people failed on three of their basic promises: they didn’t step in right away to deal with the IRS, they didn’t handle the entire tax audit, and they didn’t keep IRS penalties as low as possible.

The name of the employee who “helped” my contact with their IRS audit was Joe Schricker, and the company’s name again is TaxResources, Inc. The service is advertised as Audit Defense on TurboTax, and my advice to you is not to get it.

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Thoughts

So long, Contenture

According to their website and blog, Contenture is going out of business. That’s unfortunate. I signed up with them back in June of 2008, endorsed their services here on my site, and while I didn’t make a lot of money with them, I knew the idea of micropayments for web content was something that would eventually catch on, if only given enough time to take root. It’s sad to see them go, and I’m sorry they couldn’t hang on until they saw some profits.

I only know of one other company that offers similar monetization services, and it’s called CancelAds. Here’s hoping they stay in business, and the idea of micropayments/subscriptions for web content continues to gain momentum.

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Reviews

Life Inc – another perspective on today's society

Douglas Rushkoff Douglas Rushkoff, an award-winning writer, documentary filmmaker and scholar, has written a book entitled “Life Inc”, where he delves into what he calls the “corporate mindset” of today’s society, and how to overcome it in order to make our lives and our world better.

I’ll let him tell you what the book is about in his own words:

“What I started to do was to look at the different ways we as modern Americans have become disconnected from one another, disconnected from the places we live, disconnected from the value we create, and even disconnected from our own sense of self-worth. I came to the conclusion that corporations, or what we call the corporate mindset, were really at the center of this phenomenon.”

“We’re living in a world where if you want to make money, you’ve got to work for a corporation.”

According to Rushkoff, it turns out this “corporate mindset” can be traced back to the Renaissance, which is when kings began to monopolize on the income created by people. Instead of letting them trade freely among themselves, they created charter corporations which had exclusive control over certain industries. The kings got shares of stock in those monopolies, thus income, and those companies got to make all the money there was to be made in those markets. This centralization of power continued right through to our own time.

“The society built through the Industrial Age was built to mythologize the mass-produced object, because we needed to create a society of consumers who thought buying all of this stuff would somehow make them happier.”

“Most of us spend so much time working and consuming that we have very little time left to do anything that has to do with other people.”

“The more we behave as individual actors in competition with one another, the harder it is to encounter one another in a friendly way.”

“People can start investing in one another and with one another, make their towns better, and earn returns that you’re not getting from your Smith Barney broker… and see the return of your investment in the place you actually live.”

“This [economic recession] isn’t just a crisis, it’s an opportunity. It’s the first moment in the last couple of hundred years that we’ve had to rebuild our society and our economy on principles that serve humanity instead of killing life.”

I agree with most of what he has to say, and it’s important to realize he’s not against corporations per se, but against the slow creep of the corporate mindset into everyday life. After all, it’s thanks to corporations that we have industrial design, which allows us to get products designed to exact specifications and high standards. And the concentration of capital and research at some corporations and organizations has resulted in amazing advances in technology that have benefited all of us. Yes, you can do a lot of things in your garage, and you can get a lot of stuff done with your neighbors and in your community, but you can’t build a highly sophisticated computer, digital camera or a modern car at home. (You might be able to assemble them from purchased parts, but those parts were made in factories, too.) There is plenty of value to what he has to say, and the book warrants a close read. We do need to become more human, more connected, more dependent on our communities.

There’s a 9-minute video summary of the book at his Vimeo account. He’s also posted video clips summarizing the main ideas of each book chapter there. I’ll post the main video summary and the first three clips below. There’s also more info on his website at rushkoff.com. You can get the book from Amazon.

Life Inc. The Movie from Douglas Rushkoff on Vimeo.

Life Inc. Dispatch 01: Crisis as Opportunity from Douglas Rushkoff on Vimeo.

Life Inc. Dispatch 02: Insulation Equation from Douglas Rushkoff on Vimeo.

Life Inc. Dispatch 03: Money as Debt from Douglas Rushkoff on Vimeo.

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Wondering when California's budget is going to get fixed

One great thing about California is they’re not allowed to go into debt, like the federal government. They must always balance their budget. And yet the California legislature has failed to address this problem and has let deadline after deadline slip by, in seeming mockery, in spite of Gov. Schwarzenegger’s continued pleas and coaxing. When in the world will they get their act together?


Gov. Schwarzenegger’s weekly address, 7/3/09


Governor discusses state budget in weekly address

Anyone from California care to clue me in? Seems to me the legislature’s stalling because they have their own agenda and want to spite Schwarzenegger. What he’s saying makes sense to me. Is there another side to this story that I don’t know about?

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Using Contenture to handle micropayments

Back in April, I wrote about micropayments, and why I thought they were an equitable way to reward web publishers for their time and effort. I shared my thoughts on ad revenues, which, for most people, are minimal and not enough to live on, unless you are one of the relatively few websites that gets massive amounts of traffic.

In that same article, I also talked about how I thought micropayments should work, via a standard, instant way to charge readers a few cents per article, through protocols that were integrated into each browser. Instead of charging fees for each transaction, which would be impractical for such small amounts, micropayment processing centers would charge for bundles of transactions which exceed a set limit.

Fast forward a few months, and ZDNet publishes an interview with Barry Diller, one of the early Internet millionaires, where he talks about the very same thing: the need to go beyond falling ad revenues by charging small amounts for useful information. That article was hotly debated on FriendFeed, which is where I found out about it. Among the comments, I found one pointing me to Contenture, a newly launched micropayment system (it saw the light of day on 5/26).

contenture

Contenture’s method of handling micropayments is different from what I envisioned, in that it involves a monthly subscription. Here’s how they say it works:

“… a fully automated system that requires no user interaction. Users simply pay a set fee to Contenture on a monthly basis, and that money is automatically distributed to the sites they visit. How much each site gets from each user is determined by how often that user visits that web site, relative to all of the other Contenture sites they visit. Users get their seamless experience, and the site actually makes money. Everybody wins.”

So what’s involved on my end? I installed Contenture’s WordPress plugin and pasted in an extra line of code to customize the ad hiding behavior. Others might need to paste a Javascript snippet in their footer, which is basically what the plugin does for you.

On your end (the reader), the code will check to see if you’re a Contenture user, and will automatically distribute your subscription fee to the websites that you visit, based on how often you visit each site. As an immediate benefit, all ads on my site are hidden from you. They’ll load as the page loads, but they blink out of view and the ad space collapses unto itself as soon as the page finishes loading. It’s pretty cool.

Other benefits I might be able to offer you in the future are the ability to view exclusive content, or perhaps to even close off the archives to those who aren’t Contenture users, although I’m not too keen on that, since Google won’t be able to index me properly any more if I do it. At any rate, the ability to offer more benefits is built in, and that’s nice.

Contenture’s model is opt-in (also called freemium) and so it has some limitations, in that I don’t get paid for everyone that accesses my content. My micropayment model, the one I envisioned and the one Barry Diller and others are talking about, is standardized across platforms and browsers and works for everyone, all the time. Eventually, I think we’ll get there, but Contenture has made a good start of it, and they did it now, which is why I signed up with them.

To let site visitors know they can support my site, I placed a small link in the header, as you can see below. I also have a link in the footer, also shown below.

header-screenshot

footer-screenshot

I look forward to seeing Contenture’s user base grow, so I can tell whether I’ve made the right choice. I want to keep writing and publishing online for a long time to come, but the only feasible way for me to do that is if I get rewarded properly for my efforts. I believe micropayments are the way to do it. It’s affordable for the readers, and it scales up nicely for me, the web publisher. Time will tell exactly which micropayment method will work best, and you can be sure I’ll continue to monitor the options available out there.

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Thoughts

The iMac: not so great long, long after

I received an email from Apple a couple of days ago, advertising the new iMac. The title of the ad was: “Amazing right out of the box. And long, long after.”

imac-ad

I disagree with that characterization. Perhaps it’s true of the new iMac, but it’s not true of our iMac. First, let me get something out of the way. I’m a Mac guy. I love Macs, I use a Mac all day long, I love their design and performance, and I love OS X. Unfortunately, my long-term experience with the Mac hardware, particularly when it comes to our iMac, isn’t so positive.

You see, we purchased an iMac G5 in late 2006, with an Apple Care plan. Thank goodness we did that, because we had problems with it from the get-go. A year after owning it, I wrote a post where I detailed the problems I’d been having. At the advice of some of the readers, I took it into an Apple Store to have it checked out. They replaced the motherboard and did a couple of other things. The repair experience was problematic in itself. Then, a short while afterward, the computer died again. This time we took it into a different store, where they replaced the motherboard again and did some other repairs.

Although that second repair experience was more positive, I had to take it into the store once more in 2008, for related issues. I can’t find the repair receipt at the moment, so I don’t know the date and I don’t know what they fixed, but yeah, that was the third time I had related repairs done to it, very likely for the same problems.

Then, inconveniently, about two months after the Apple Care plan expired in September 2009, our iMac died, just as it had died a couple of times before. It refused to boot up altogether. When I’d plug it in and press the power button on the back, nothing would happen. But, if I was extremely lucky, every once in a while, some noises would be heard in the back of the machine, as the cooling fans and hard drive started rotating, only to die a second or so later.

When this last hardware failure occurred, we were packing for an extended stay in Romania. I took the iMac along, since we had data on its hard drive that we needed. Once here, I was able to open it and retrieve the data from the hard disk. Unfortunately, the computer itself is still dead. What’s worse, I’m nowhere near an Apple Store. There are no official Apple stores in Romania. None at all. Where do I take it for service? And will I have to pay for the repair? A logic board replacement on an iMac G5 is somewhere around $900, and that’s only for the parts. It hardly seems fair to pay for a lemon repair, because that’s basically what I have — a lemon. Our iMac G5 has had repeated hardware failures of the same parts (at least three failures) while the Apple Care contract was still valid. The right thing for Apple to do would have been to replace it with an equivalent model, or to offer me a significant rebate on a newer model, allowing me to upgrade as painlessly as possible to more stable hardware. But none of that happened, and now I’m stuck with dead hardware.

So yeah, I don’t think the iMac is so great, long, long after. I’m sorry I spent our money on it, actually, and sorry it never worked as it should have, from the get-go.

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Micropayments: the only equitable way to reward web publishers

The more time I spend writing and publishing articles on the internet, the more I realize that trying to get paid for my efforts through advertising is not a sustainable way to make a living. I get decent web traffic, but that’s not enough. Have you seen the going CPM rates these days? I’d need to get ridiculous amounts of traffic in order to see any sort of worthwhile profits, and even then, I’m not so sure the costs of running my website wouldn’t trump my revenues or at least take a big bite out of them.

The current system is messed up. Most web publishers don’t get tons of traffic, which also means they don’t make money. They’re lucky if they break even with things like Google AdSense or affiliate programs or other some other ad programs. They, like me, don’t want to load up their websites with ads, left and right, top and bottom, inbetween the lines and everywhere else. They just want to worry about writing and publishing informative articles. They don’t want to spend ¾ of their time (or more) advertising their site and getting their buddies to vote up their posts on Digg or StumbleUpon or who knows where else. They’d much prefer to not have that headache at all, and to only write and publish. But they can’t, because the system is faulty. It only rewards the very few who get the most traffic.

Do you want to know why newspapers aren’t making money these days? Why they’re going under? Sure, blame shoddy journalism, blame whatever else, but the truth is they relied mostly (or solely) on advertising for their revenues, and look where they are now. Subscription fees were kept artificially low, and as circulation numbers started to go down, they couldn’t charge their regular rates for ads, and revenues went down fast, in a vicious spiral that fed itself.

Had a decent micropayment system been in place, the web would be a flourishing, profitable, preferred way to make a living nowadays, instead of the insane, overloaded, “buy, buy, buy, look at me, no look at me, no, I’m better, wait, my titles are more interesting, I get more traffic, I make more money, I know how to increase your traffic, I have more free stuff” nuthouse that it has become. Everyone’s desperate to publish more articles, to make the titles and text more titillating, to grab an extra click from you here and there, to make you vote or like or bookmark their stuff so they can supposedly get more clicks and votes and likes and bookmarks and more and more and more meaningless crap that leads nowhere and contributes to nothing.

Unfortunately for the world and the web, micropayments were talked to death, even in the early days of the internet, and all the fancy initiatives went nowhere. A lot of people were wronged because no one bothered to get things going. Just think, all this time, web publishers of all sizes could have been making an honest living! Fortunately, this nasty situation can still be set right.

Here’s my micropayment initiative. I think it’s workable, and more than that, it would allow a lot of people to make a decent living by doing what they love: writing, not hustling and wasting their time pushing their site on people.

First, we need all the browsers and feed readers to work with the companies or organizations that would process micropayments. Whether the functionality is built in or added through plugins is up to the browser makers and feed reader makers to decide. Users would enter their account information directly in their browser’s or feed reader’s preferences, and their micropayment accounts would be automatically charged every time they access a micropayment-enabled article, on the web or via a feed. There’d be no logging in every time, like with PayPal, which is a hassle when all you want to do is read an article.

Second, search engines and websites would display the price of the article next to its title, just like they’d display the site or the date the article was written. The browser itself would display an extra icon when such a web page is accessed, just like it displays a lock when HTTPS websites are accessed. Perhaps a dollar sign or some other currency sign would show up next to the website’s address. If the user would move their mouse over the button, the price would be displayed, similarly to the behavior of the alt or title tags.

Third, and this would happen behind the scenes, the browser itself would read the price tag of the article the user is reading, and would send that information along to the micropayment service along with the user’s account information. Notice this means the user could use their micropayment service of choice — so there wouldn’t have to be just one — and the browser or the website wouldn’t care. The micropayment service would then transfer the price of the article from the user’s account to the web publisher’s account. The transaction fees would best be charged in bulk, per 50 or 100 transactions or so, and would be deducted from the web publisher’s balance.

That’s it! It’s so simple I just don’t know why it hasn’t yet been implemented.

As for the price of the articles, each web publisher could set their own price. I propose 5 cents per view. When candy and soda costs 75 cents to $1 or more, I think no one would balk at paying 5 cents to read a good article. But let’s have a look at some proposed traffic figures just to give you an idea how 5 cents can add up.

Say you get 5,000 views per month. That’s a modest amount of traffic, but at 5 cents per view, you’d still make $250 at the end of the month. That’s nothing to scoff at. Tell me if you wouldn’t be happy with that money in your bank account!

How about someone who gets 25,000 views per month? That’s a fairly decent amount of traffic. At 5 cents per view, they’d make $1,250 per month. That’s already a line of income. That’s money in the bank you could be using to pay your bills, but you’re not seeing it because micropayments don’t exist yet. Isn’t that infuriating?

How about someone who gets 50,000 views per month? That’s a nice amount of traffic. At 5 cents per view, they’d make $2,500 per month. That’s practically a decent salary right there. If you keep your expenses low, you might even be able to live off that in the US. If you lived in another country where living expenses are less, you could live nicely on that money.

The best part is this: it isn’t free money, and it isn’t money that could be yanked away if your advertisers get pissed off with something you wrote. This is money each and every web publisher has rightfully earned through their work, and yet there is no micropayment system out there to make this possible. This means all the web publishers out there are currently being cheated out of money they could be earning. Isn’t it ridiculous and completely unfair? Think of newspapers, where dedicated journalists work, day in and day out, and who have to close when they could focus their efforts on web publishing and turn a very nice profit with their traffic!

What about developing countries? I suppose the price for reading an article could differ based on your country of origin. The micropayment processor would automatically charge those countries less per article, say 30 to 40 to 70% less, depending on their general economic status.

What about subscriptions? They’re nice but not sufficient. They’re nice because you can predict your income more reliably when you know you’ll have so many subscriptions coming in every month, but not sufficient because users don’t pay per usage. If they end up spending less time on your site, then they’ll feel like they’ve wasted their money on the subscription. Also, just in case you haven’t noticed, subscription numbers are down everywhere these days. When money gets tight, subscriptions are among the first things to go.

What about goodwill, and doing stuff for free? That’s nice, and I already do plenty of stuff for free, but the problem with goodwill is that this world still functions with money. When was the last time you paid your mortgage with goodwill? When you buy your groceries, do you pay with a smile and a hug?

Micropayments are the best way to go forward. I wish people would stop talking about them already and someone would get going with the idea. It goes without saying — but I’ll say it anyway — that I for one would be glad to work with any legitimate company that wants to start processing micropayments.

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Our economy: a very distinctive photoplay

I found this photo of a truck advertising the Rialto Theatre on Shorpy. What perked my interest was the juxtaposition of the truck in front of the US Treasury Building. Although the photo was taken in 1925, it’s somehow applicable to our times.

Rialto Theatre truck in front of US Treasury, 1925

Doesn’t it seem strangely non-coincidental that a photoplay/movie truck would find itself in front of the Treasury building, particularly when you consider what economic times we’re living in? I for one have been feeling like we’re watching a theater performance every time I turned on my TV in recent months. Politicians and government employees and suits from the Federal Reserve (which is separate from the US government) and CEOs have all paraded in front of the cameras and wept for the state of our economy when they themselves were at fault for its state. They’ve been crying crocodile tears and promising to make it all better, and we sat there mesmerized, hoping for a savior.

We had the drama of the economic downturn, then the drama of the election. The first act is over. Now we await the second act, which includes a bonus appearance from a fantastic pork-barrel stimulus plan guaranteed to make all the Washington hogs cry out for joy. I don’t want to spoil the plot, so I won’t tell you what I think of it, but it’ll involve a lot of work from the US Treasury building in the photo above. They’ll need to print a lot of Monopoly money to finance it all.

At any rate, this is what I think of the economic crisis. And this is what I think of the way companies are treating their employees nowadays. Finally, this is what I think of the problems car companies are having. Call me the guy from the nosebleed seats who thinks the show sucks and keeps throwing peanuts at the performers. Maybe I’ll get booted from the theatre, but at least I’ve spoken my piece.

Just remember, there will be a third act…

Photo used courtesy of Shorpy.

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Is it any wonder there's computer piracy in Romania?

If the US and other Western countries are looking at Romania and shaking their heads while wondering why there’s so much computer piracy there, perhaps this will help them get the picture.

In 2008, the median monthly salary in Romania was €285, or $353, as another source quotes it. The same source says that by 2014, the median salary will grow to $1,400, but that’s another story. I’ve heard a number of such predictions in previous years, none of which have yet come true.

Let’s look at Microsoft Windows, probably the most pirated piece of software in Romania. Vista Home Basic, which is really just XP dolled up a bit, is 325 RON, or around $101. The decent version of Vista, Home Premium, is 434 RON. When you convert the median monthly salary to RON, the Romanian currency, it comes out to about 1,120 RON.

Now, when you keep in mind that most people make less than 1,120 RON per month, do you think they’d give up a third of their gross monthly income (before taxes) so they can buy an operating system legally? Would you do it?

Say you made $40,000 per year in the US. Wikipedia says the median income for men in 2007 was roughly $45,000, and the median income for women in 2007 was roughly $35,000. If we use $40,000 as an example, that works out to $3,333 before taxes. If Windows Vista cost you a third of that monthly income, or $1,111, would you pay full price to get it?

Don’t think only software costs this much in Romania. I have on my desk right now two inkjet cartridges from HP, one color, one black. The black ink cartridge, a 338 Vivera, cost 67.75 RON, and the color cartridge, a 342 Vivera, cost 73.05 RON. Those prices are in line with what these cartridges cost in the US, but that’s the problem, isn’t it?

People in Romania don’t make the same salaries as people in the US or in Western Europe. Since the 1990s, prices in Romania have risen to match those in Western Europe, yet salaries have risen at a much, much slower pace. Romanians have to contend with paying Western European prices for food, clothing, utilities and fuel, yet they make a mere pittance compared to their European counterparts. It’s simply not fair.

When you have to decide between buying food or paying all your utility bills in the winter, or when you can’t buy adequate clothes or shoes because you have to pay your rent and other expenses, paying for software is the least of your worries. I for one don’t blame Romanians one bit for using pirated software. Considering the amount of money they’re making, I completely understand why they turn to cheaper solutions.

UbuntuDo you know what I advise my Romanian friends and family when they come to me for help? I tell them to use Ubuntu. It’s free and it’s legal. I’ven even installed Ubuntu recently on two computers, one for family and one for an acquaintance. So far, the reaction was positive. They’ve been able to work with their Office documents on Ubuntu thanks to Open Office, and they’ve been able to view and play their photos and movies as well. For most people, the Linux platform is the way to go, especially when you consider that they can’t afford to get the faster and more expensive hardware that’s needed to run Windows Vista.

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