Burn Rate

Rebecca has pointed out that most e-commerce companies, given their basic business model -- don't carry much inventory, leverage existing infrastructure as much as possible, and try to grow more quickly than possible -- basically have a choice of spending their VC money on one of two things: advertising or giving away free stuff. Her strategy for benefittting from the current economy is to seek out the companies offering free stuff and plunder them for all they're worth. Free shipping for new customers plus the deal-of-the-day can turn into a real windfall if you happen to find something you need. Kozmo's loss is your gain.

Well, here at the Laboratorium, our VC fund is a good deal smaller, indeed, well-nigh nonexistent, but that doesn't mean the same principles don't apply. And, lately, we've been , scratching our heads over the readership numbers, which are, well, still kinda low. Granted, by being an early mover, the Laboratorium has pretty much established itself as the leading web destination for Laboratorium-related content, but nonetheless, there remains this nagging feeling that perhaps it's not reaching quite as broad an audience as it might be. So we've gone back to our backers to try and get them to support us in a plan to increase our name recognition and grow the Laboratorium brand. Our chief backer was somewhat opposed to the whole advertising idea. In fact, at one point Ihad this idea whereby I'd use the Amazon Associates service to put links up on my page to Amazon as requested by friends, and then send them the %15 kickback Amazon offers. Other than my reluctance to actually try to milk Amazon too brazenly (I really do like them, certainly they're much better people and run a much better site than most of their competitors), I decided that I didn't want to have what was, in effect, Amazon advertising, on my site. We like to make at least a show of anti-commercialist defiance around here, as pathetically hypocritical as that show may be.

Which leaves giving stuff away. If the Lab were an e-commerce site, I'd offer free shipping. If it were an online brokerage, I'd offer free trades. If it were a subscribers-only content site, I'd offer a free trial period. But the fact of the matter is that the Lab is a weblog, and already free. Which means there's really only one way to go: bribes. Yes, that's right, I'm going to start paying you to read the site.

Here's the deal. You send me email, care of bottle_washer at laboratorium dot net. Then I go over to Paypal and I send you a quarter. You can have the quarter direct-deposited to your bank account, or you can have them mail you a check. Your call. Now, to turn this whole bribe deal into soemthing vaguely resembling an actual transaction, I'm going to require that you demonstrate that you've actually read the site at some minimal level of comprehension. I've got a real low threshold here -- "you read too many books and your color scheme is ass" will do, as would "I ate a Klene Zout and lived to tell the tale," or even "Z100 plays today's best music, now give me my money!" -- bascially, I just want some minimal evidence that you came to the site yourself, rather than just clicking on a mailto link your greedy friend sent you.

Grredy friend? Yes, that's right. As part of the Laboratorium promotional campaign, we're going to be paying out referrer fees! Everyone else you direct here gets you a whole shiny nickel. So if you start reading the site and so do six of your friends, you've just earned yourself a candy bar (at standard vending machine prices, that is). I'll pay out to (at least) the first hundred unique Lab readers. Including the referral fees, that's $30 of my own money I'm putting on the line here. Our backers are aghast, but their loss is your gain. This is my daily candy-bar money -- I'm giving up my midafternoon Kit Kat bar for this project -- so you can see what a valued place you, the Laboratorium reader, occupy in the ecology of my online life.

Never used Paypal? Well, under most circumstances, this sort of thing would put you at a disadvantage, but in this case, it rebounds to your further benefit! Paypal will give you five whole smackers for signing up with them, five bucks you can withdraw immediately, no strings attached. Free money, from the pocket of a large corporation. What could be better? (Actually, Paypal is another one of those services I hope makes it. This whole very-low-to-nonexistent fee microtransaction service is a really great thing, and I kinda sorta encourage you to keep your five bucks in the system, maybe even go off and try to start up a few more bizzaro little ventures like this here Lab giveaway, and do your part to help the financial counterculture flourish). What's more, I promise to plow back 100% of any Paypal referral fees I get into continuing the publicity blitz. I'm doing this for you, not for personal gain.

No dot-net e-noncommerce venture would be complete these days without a discussion of our privacy policy. All user information will remain strictly confidential, to the point where if I file it in the wrong email folder, I may not even be able to do anything with it. If you would like to be notified of major changes to the site (as if) or exciting new features (pigs flying, cold days in hell, etc.), please indicate so in the body of your message. In the event that I am sold into slavery, I will do my best to ensure your privacy and will attempt to destroy all user data, although, in all honesty, if you're expecting me to face torture rather than divulge your email address, maybe you're better off not collecting your quarter.

I got this idea -- hook Paypal up to to something the good Lord never meant for it to be hooked up to -- at least partially from the vibrating weblog ("fun with micropayments," you'll need to scroll down a twee). In fact, if you're looking for a way to dispose of your recently-acquired quarter, and don't object to spending it all in one place, I highly recommend it.

Now, the scary thing about this whole little enterprise is that, as of the end of last year, Wall Street was valuing each unique user of a site at upwards of $100. That is, if I got all hundred people to "register" with me as readers by collecting their quarters, my Street market cap would be somewhere in the neighborhood of ten grand, which isn't bad for a $30 outlay. Some objections to this reasoning. One, as I've argued (scroll down to "Fool's Gold," specifically the section on the NASDAQ), the market cap is a bit of a meaningless number, in that there is no possible way to actually extract that much money from a company, no matter what it's "worth" on paper (the effect is more pronounced at valuations in the many millions, rather than the few thousands). Two, those valuations were ridiculous and things have calmed down since then, quite possibly by an order of magnitude, perhaps even two. And three -- man, when you think about it, eyeballs really are pretty useless as a measure of Internet value.

The word of the day is "Laboratorium." Wanna go back to your place and spread the word?