So… You Want to be a Traffic Exchange Owner?

This is a favorite subject of mine, simply because after being in this business for over 3 years, one thing has remained constant, new traffic exchanges will open have a great first few months, then for some reason, never be heard from again.  Why is this?  What could possibly be the reason new owners fail over and over again?  Is it because they don’t put enough effort into the business?  Is it because they are in over their head?  Is it because they already have a TE and are in financial trouble whereas they cant pay commissions and therefore must open another one to pay for the one that’s failing? 

Well the simple answer to all of those questions is the same.  YES!!!

If you have been in this business long enough, you will have heard the term “Po-Dunk” at least once or twice either in a chat room, Skype Room or maybe even at TE Live a time or two.  They also go by the term “Cookie-Cutter” a term that was once used to describe sports stadiums that were built on the same blueprint, just like a cookie cutter is used to make cookies of all the same size and shape.  Examples are the now defunct Three Rivers Stadium, Veterans Stadium, and the old Busch Stadium in St Louis.  They were pretty generic, and all three looked exactly the same, as if the architect used the same blueprints for all three, hence the term “Cookie-Cutter”.

This blueprint is now being used for all of the small Traffic Exchanges that are being opened seemingly on a weekly business in this industry, and therein lies the problem.  People go into ownership with the idea that they are going to able to at least make a decent living running a traffic exchange, and they will soon be able to quit their day job and just be an owner, sitting in their underwear, answering support tickets all day, chatting with their members, and just watch the money roll in.  The truth of the matter is, this is not reality, it is fantasy.  The reality is, most Traffic Exchanges, if not all of them, will lose money the first two years they are in business.  Your overhead will be more than what the TE is earning in revenue and you will find yourself wondering if it is even worth it.

This is the key, and it is why I am NOT an owner, you have to be prepared to put the time, energy and YOUR OWN MONEY into your business.  If someone opens a brick and mortar business in the “real” world, you have to pay for the construction, the power, the water, and the furnishings,  all before you buy your first piece of inventory.  It’s an investment, and you have to treat your online business the exact same way.  You have to be prepared to invest your blood, sweat, and tears into it, not just open the LFMTE box, put it on a server and let it go, it doesn’t work like that.  You see, the allure of being an owner of an online business is the same as I mentioned above.  Working from home, not having a boss, working in your pajama’s,  and of course the misconception that it’s “easy work”.

The reality is, being an owner involves 12-16 hour days, monitoring everything, answering support tickets, dealing with server problems, coding problems, and of course surfers demanding their commissions.  It isnt something that you go into after deciding one day you want to be an owner and the next day you launch the site.  If you are going to do it right, then you have to plan it out, you have to have a design, a logo, figure out how you are going to promote it, and most of all, how much money you are going to spend to get it up and running.  It’s that last part that is the hardest, because no one understands how much you will actually have to spend of your own money to be successful.  Jon Olson once said that if you want to own a Traffic Exchange, and you want it to succeed, then you need to be prepared to invest upwards of $10,000 of your own money to do it right.  If you aren’t a programmer, then hire one.  If you don’t have a design, hire a designer.  If you are unsure as to how to promote it, use the leverage of Click Track Profit and purchase their tools.  Badges, XP, get them to promote your release.  They will work with you from the first step through the last to make sure  that not only is your launch successful, but the mentoring to keep you successful. 

Now I am not going to go on a CTP love fest here, simply because they don’t pay me to do so, and this post isnt about CTP.  What I am trying to point out is that there is more to ownership than just opening a box and letting it fly, and that is the problem with a lot of launches in this industry these days.  A TE needs to be raised like one of your children, with care, nurturing, a lot of time, effort and patience.  You want to be successful?  Put in the time and energy to make it work.  Be different, come up with something that no one has ever done before, and promote the hell out of it, because just because you build it, they wont come, you have to be out there and stand out.  Reach out to the successful people in this industry, specifically CTP, Legacy, Eric Goetmann, John Bell, Tony Tezak, and Robert Arnold, just to name a few.  They get it, they are successful and they have a track record of success. 

Lastly, I want to point out the dark side of this business, and that is the owners that decide they are going to open a new TE every other month, or every week, in some cases.  You owners are what is wrong with this industry.  The only reason I can imagine as to why you have to open multiple TE’s per year is because you are bad at ownership.  the TE you opened 6 months ago is losing money, you don’t have the capital to promote it, you don’t have enough capital to pay commissions, and if you don’t do another launch, you wont be able to pay your members next month.  This is why you are called “Po-Dunk” owners, because you don’t care about putting out a quality product that delivers, rather you just want to launch a cash grab for the initial cash flow you will get from multiple upgrades a new launch will produce.  Well, stop it.  Just. Stop. It.  Focus on being an owner of a quality TE, and not thinking up your next scheme to get some quick cash, you are the reason the TE Industry gets a bad reputation, because people are getting ripped off, and word of mouth spreads quicker than a good advertising campaign.  Do all of us a favor, and get a real job and get out of the TE business.

So in closing, the overall message to this post is simply, if you want to succeed, make sure you are prepared to put in the work.  It’s not easy, be prepared to lose money in the first two years, and have the time and energy to make it work.  Stop being the problem, start becoming the solution, the example to other owners, and above all, learn from those that are successful, because they actually want to see you succeed like they did

Oh, and just one more thing…  If you want an example of what I am talking about, there is going to be a launch tonight that will literally CHANGE the industry, and you will want to see it.  Keep your eyes and ears open, because its going to be special.  Watch our show tonight for more info, I am sure Brian and Robert will have a lot to say.

That’s my two cents…..

Scott Wright “The Sports Nerd”


Comments

So… You Want to be a Traffic Exchange Owner? — 6 Comments

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  2. Very good post Scott
    The truth is the truth,
    some people get hurt by the Truth and keep their head in the sand
    Some people take on board the Truth and make their decisions based on that

    Either way the Truth is what will keep people in business or not

    The reality is that you may be able to start a business with nothing but no one can sustain a business with nothing

  3. I suspect that some people look at TEs more like they did coloring books when they were children instead of viable businesses/sources of income.

    Think about it. In the coloring book analogy, you needed enough skinny books so each one of your friends could use one without ripping out the pages. They had to be similar enough so that no one got jealous of another kid and so that each child knew exactly what to do without having to go borrow a parent.

    When you treat TEs and a business based on shared advertising, you’re better looking at one site that many so that the greatest number of people are seeing each ad. As the owner, you need to be looking at market share, budgeting, income statements, break even points, etc. Not nearly as much fun as buying a bunch of similar things, with different themes, and passing them around.

    I’m looking forward to the launch tonight (about an hour and a half to go) to see how Lynn, Brian, and Robert have combined their skills to create an exciting new advertising platform that will help each of us create the greatest influx of new business.

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