11.10.10

Will Disaggregation and Outsourcing Destroy the “Apprenticeship” Model?

Lawyers, consultants, and investment bankers follow a fairly similar career path: excessive hours and tedious work at the start of their careers, followed by vastly better compensation and marginally better hours later on.

This makes a certain amount of sense: the fastest way to get a decade of experience is do work double-time for five years.

The system works for people who are already in the industry: they get their grunt-work done. It works for people who are joining the industry: they learn everything they need to know, and the difficulty of the work allows the industry to keep an “up or out” structure along with a steady path for advancement.
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08.12.10

Demand Media’s IPO: Everything You Need to Know

Demand Media is the biggest pure-play SEO company in existence. And SEO is one of the fastest-growing marketing channels. So if you want to know what the marketing industry as a whole will look like, the best way to do it would be to take a look at Demand Media’s financial data. That information was available to investors and executives at the firm, but not to everyone else—until now.

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07.28.10

The Phony Scalability of “Local,” and “Long-Tail.”

VCs throw money at startups because they’re scalable. With the right model, the thinking goes, you can double your revenue while your expenses rise 10%. Then, you can do it again.

This works pretty well for some companies. Facebook, for example, hit 100 million users in mid 2008, with “more than 600″ employees. Now they have 500 million users, and 1400+ employees. 400% growth in users; 130% growth in employees. That’s exactly the kind of math VCs like to see, and it’s why they were willing to fund Facebook generously in the early stages. Facebook will run into scalability barriers after a while. At some point, the limiting factor is not engineers (a scalable resource) but customer service reps and servers.

For many of the current crop of hot companies, the end of scalability is coming much faster.

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02.8.10

What Happens When All Our Content Comes from Content Factories?

“Content factories” like Demand Media and Mahalo are turning the SEO industry inside-out. In the next few years, they will cut off the main source for entry-level SEO professionals, eliminate small web design agencies from the SEO business, and scoop up a bunch of ad dollars they absolutely don’t deserve.

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