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1  Bitcoin / Project Development / Any manufacturing engineers? on: June 24, 2011, 06:00:20 AM
If you are looking for a low capital Bitcoin project with an insanely high, skill based barrier to entry (for the other guys) I got a fun freebie.
2  Economy / Marketplace / Brick and Mortar Merchant Impressions- Part 2 on: June 16, 2011, 04:35:47 PM
I have been accepting Bitcoins for seven days and now have some Analytics stats to go on. My web monkeys usually run campaigns for at least a month before drawing any conclusions but we'll work with what we have. Much of this comes from the marketing people I work with, and the conclusions from professionals who advise me- but they've served me pretty well over the years and I share their conclusions.

First off- since adding Bitcoin overall sales dropped roughly 20% 5 from normal deviation over three years. Wait- before any knee jerk Bitcoin defense read why.

In retrospect we saw that sales dropped for some good reasons and it illustrates the need for serous multi-variant market testing with Bitcoin- because at the moment there is simply no data to go on.

I have a fairly well tuned text pitch on pricing, multi-variant tested over about 15 generations. For non-merchant types in it's simplest form this means running "Just $90" "Only $90" and "Price: $90" in rotation for a few hundred sales, then picking the one that performed best (made the most money) and refining it further. The results can often be surprising, guesses as to what will make people buy often wrong. Multi-varient testing is pretty much the most powerful tool in the marketing toolbox due to the Kaizen principle and...yawn. Anyway multi-variant testing = good.

So I have this well refined, high conversion cost pitch there now, and I got the web monkey to plaster in below it:

"We offer a 10% discount for sessions paid in advance with Bitcoins."
(except "Bitcoins" opened the video in a lightbox)

This is a good, honest offer- but it is totally unmarket-tested. There are any number of reasons it could detract from gross sales- customers see that others are getting a discount so resent paying full price, 10% sounds like too little compared to "$20 discount", or even "Just 9 Bitcoins", too many
pricing tiers (we already have several) and sales crash because it looks like am upsell scam. Could be any one of dozens of things- the problem is not inherent with Bitcoin- it's inherent in trying to market something new without any data to base it on or any existing, large successful merchants to take a hint from.

There already a pretty large body of published data on effective copywriting using dollars, credit cards etc.  I can hire a decent copywriter online in an instant to do that. Not so much so with Bitcoin- the marketing language has not be written yet. We can start with logical fallacies to get a starting point for potential lines of attack- but there is still the need for high volume, long term multi-variant testing.

This is actually *good* news as it creates what Warren Buffett refers to as a "moat"- raises the barriers for entry for our competitors. Based on what
I am seeing, Bitcoin is not going to just be something any e-commerce site can profitably "drop in" anytime soon, it's not just about exchange rates.

Should Bitcoin stay viable, the process of learning how to market, process and fulfill in Bitcoin will represent intellectual property that the merchant owns, that will give him a lead over competitors who come to the game later. Obviously this lead will last only so long as the basic body of information stays out of the public domain, but it is promising for smaller merchants.

I understand that much of the above will be denied by the dogmatic, but I'm not trying to dissuade potential merchants. I'm trying to say that for an established business it's not simply a matter of adding a currency conversion script and if they buy with bitcoin- bonus, if not then no harm done. It's more complicated than that.

As far as traffic goes. Having a link to my website in my Bitcoin.org signature resulted in about 90 visitors the first day, then leveled off to about 4-5 a day with active posting. The Average Time on Site from Bitcoin.org traffic was 3:14, 40% less than the overall site average of 5:28. This indicates they were most likely simply curious and not prospective customers. This is consistent with the Bitcoin.org audience of 18-34 year old men, versus my sites 35-54 year old crowd (Alexa).

No directory I submitted to, including my listing in the Bitcoin Wiki, sent any traffic. I offer a niche service in a single city and the Bitcoin community is still small so this is hardly surprising. I think eventually, if Bitcoin is successful online directories could end up being very lucrative. Bitcoin equivalents of Eros-Guide.com and Backpage.com that were equally Adult service provider friendly could represent a potential goldmine.

For the time being, brick and mortar merchants should not expect any sudden influx of customers- we are talking hard stats not wishful thinking. For B&M businesses the advantages Bitcoin has to offer will largely only be realized by evangelizing the currency to their existing client base.

Simply put, if you are accepting Bitcoin, you are marketing Bitcoin. Most established Bitcoin users are holding their currency at the moment- they have every incentive to hold Bitcoin and buy goods and services with USD- and that's what most are doing. The Bitcoin market right now is largely about exchange and speculation- purchases are still a novelty for most. So if your business accepts Bitcoin and you actually want to get Bitcoin rather than just have a sign in the window- you will have to be an evangelist and market the concept of Bitcoin to your existing customers.

Evangelizing Bitcoin is a bit of a tricky topic and there are other threads on the potential pitfalls of advertising Bitcoin. I linked directly to weusecoins.com- a wonderful site that in my mind represents the face that Bitcoin should be presenting the the public. I've not had a single potential Bitcoin customer stop there, they start digging, they read more- we all know how fascinating it is. Unfortunately that's where things get messy and I've had a mix of positive and very negative feedback, when honestly I'd rather not piss any of my customers off.

As I said, the issue of the politics of Bitcoin is being addressed in other threads- just be aware that as a merchant your customers will, in all likelihood see your decision to accept Bitcoin as a political statement and respond accordingly.

I sat down with my lawyer, a few other people and discussed the overall benefits and risks. With the Bitcoin community focused on their political message over attracting established businesses it is unlikely that any merchant coming to the currency will have opportunity for knowledge sharing and collective problem solving- thus more labor and higher entry costs. This is reflected the the structure that has been chosen for Bitcoin.org with Political and Off-topic forums, but not a single Vendors or Merchants forum. Vendors are not a priority at the moment and should not anticipate any particular support simple by virtue of adopting the currency.

My own state of New York is the home state of the Senators whom are seeking to outlaw Bitcoin. The combination of marketing hurdles, low demand for Bitcoin services, potential illegality, unwanted political affiliation, and limited community support, make in my opinion openly advertising the use of Bitcoin a poor decision at this time for any brick and mortar business.

I have removed Bitcoin from my site. I, and the people I go to for advice could be wrong- but I don't see a lot of established brick and mortar vendors lining up under the current conditions.

That being said I'm not all doom and gloom on Bitcoins- that would be foolish. The above is just an account of my experience and impressions of Bitcoin as a fairly average small businesswoman. Crypto-currency is here to stay in one form or another but like physical coinage it will be subject to revision and improvement. Currently Bitcoin is carrying a lot of unneeded baggage which it is going to need to shed if it wants to see mainstream adoption. If it does not, then we can all look forward to having an edge when it successor comes along based on our experience as early adopters here.



3  Other / Meta / Kill the Politics forum on: June 15, 2011, 11:30:10 AM
I got some fellow small business owners interested enough to check out, first they could not post or ask any questions (awesome move that), then once they dug around the tax evasion and "lets overthrow the government" derp scared them off.

Most of us would not think of plastering our political party logo on our business. As far as customers are concerned, Bitcoin.org is the face of Bitcoin. The two are largely inseparable. You come here to get the client software, and linking to it or advocating it leads your customers (as well as others) to think that you subscribe the the values expressed here. What kind of crazy business owner is going to link their business to a site and brand that advocates tax evasion and the overthrow of the government?
 
Yes, Bitcoin MAY change things- but it will never get a chance if people don't keep their politics on political web forums. You may be able to get people to adopt your currency- but not if you insist on linking it to your politics.

It's all well and good for Atlas etc. to use his allowance money and play "Come at me bro" with the US Government from behind Tor and three proxies- but real businesses don't have that option so would prefer he take the chest puffing and false bravado elsewhere.
4  Other / Meta / Moderation Team on: June 12, 2011, 07:50:12 PM
Can we have clearer guidelines? It seems rather arbitrary on the part of some moderators. Is there any penalty, or arbitration process for grossly abusing their position by locking or obfuscating relevant, topical threads or for accepting Bitcoin transfer in exchange for Whitelist status?

5  Economy / Marketplace / Brick and Mortar merchant initial impressions. on: June 12, 2011, 08:48:53 AM
Reposting this in Marketplace so it actually gets read. Note: because of new forum policies detailed here: http://forum.bitcoin.org/index.php?topic=15643
I will most likely be dropping Bitcoin. Hopefully this thread will still be useful to someone.


There are not a lot of B&M businesses posting here (don't see any actually) so while my business model won't directly translate for many, hopefully it's better than nothing.

I went to a Bitcoin Meetup in NYC yesterday and it's something I'd suggest prospective merchants do. I did not have much to say but the participants had a lot of useful information to offer.

Stats:
I went live with Bitcoin two days ago so I don't have a large enough of a sample period on Analytics to really offer useful intelligence on the effect Bitcoin has on traffic. When I have a full weeks worth of data I will post it.

Demographic:
My client demographic is heavily weighted towards men over 40, this is probably just outside the Bitcoin adoption sweet spot of 20-30 year old men (that's my estimate, if anyone has hard numbers on Bitcoin related traffic/interest by age and gender I'd love to see it). While 40+ are probably the most likely secondary adopters, in my experience they expect a higher level of service and professionalism, so are less likely to be patient with the current clunky Bitcoin applications.

Marketing:
Zero traction in my forum or in conversation with Bitcoin as currency. Most of these guys are high-flyers with large, well balanced portfolios, they have no interest in speculation with unproven technology, or in online purchasing hassles. Bitcoin as hard currency is pushed pretty heavily in this forum- but for most people that just translates as buy things online with a credit card, in 10 more steps than you do now.

What DID generate a huge amount of interest was Bitcoin as a barter medium. Clients hate to fork over a wad of $20s- it's a bit crude and ruins the experience for many. Within our community barter or "tribute" as a means for paying for service is very common. Unfortunately the goods and services that a client has to offer usually are not the ones that the business or it's contractors need. Bitcoins enable any client to earn sufficient funds to visit my facility with a modest investment of goods or his professional expertise. This has a great deal of appeal for salaried employees, who budget for a certain amount of time at the facility each month, and cannot easily increase their income under current market conditions, as well as for the large number of clients who prefer not to pay directly with cash for esthetic reasons.

In-house we have been referring to this as the "Cookie Factor". My neighbors will help me put up a shelf for a tin of cookies or a casserole, trying to pay them in cash equivalent to their time spent on the shelf or my time baking cookies would create discomfort all around. If I tell my clients Bitcoin is "cash", they already pay cash- so have no incentive to go through the hassles of acquiring Bitcoin. Bitcoin as a digital representation of their labor, or goods is another matter.

While I understand there are reasons to promote Bitcoin as hard currency, I am having more success and more client interest by marketing it as a barter medium. Whether this interest translates into sales, and so is a viable strategy for other B&M businesses only time will tell.
6  Other / Beginners & Help / Brick and Mortar merchant initial impressions. on: June 12, 2011, 06:27:52 AM
There are not a lot of B&M businesses posting here (don't see any actually) so while my business model won't directly translate for many, hopefully it's better than nothing.

I went to a Bitcoin Meetup in NYC yesterday and it's something I'd suggest prospective merchants do. I did not have much to say but the participants had a lot of useful information to offer.

Stats:
I went live with Bitcoin two days ago so I don't have a large enough of a sample period on Analytics to really offer useful intelligence on the effect Bitcoin has on traffic. When I have a full weeks worth of data I will post it.

Demographic:
My client demographic is heavily weighted towards men over 40, this is probably just outside the Bitcoin adoption sweet spot of 20-30 year old men (that's my estimate, if anyone has hard numbers on Bitcoin related traffic/interest by age and gender I'd love to see it). While 40+ are probably the most likely secondary adopters, in my experience they expect a higher level of service and professionalism, so are less likely to be patient with the current clunky Bitcoin applications.

Marketing:
Zero traction in my forum or in conversation with Bitcoin as currency. Most of these guys are high-flyers with large, well balanced portfolios, they have no interest in speculation with unproven technology, or in online purchasing hassles. Bitcoin as hard currency is pushed pretty heavily in this forum- but for most people that just translates as buy things online with a credit card, in 10 more steps than you do now.

What DID generate a huge amount of interest was Bitcoin as a barter medium. Clients hate to fork over a wad of $20s- it's a bit crude and ruins the experience for many. Within our community barter or "tribute" as a means for paying for service is very common. Unfortunately the goods and services that a client has to offer usually are not the ones that the business or it's contractors need. Bitcoins enable any client to earn sufficient funds to visit my facility with a modest investment of goods or his professional expertise. This has a great deal of appeal for salaried employees, who budget for a certain amount of time at the facility each month, and cannot easily increase their income under current market conditions, as well as for the large number of clients who prefer not to pay directly with cash for esthetic reasons.

In-house we have been referring to this as the "Cookie Factor". My neighbors will help me put up a shelf for a tin of cookies or a casserole, trying to pay them in cash equivalent to their time spent on the shelf or my time baking cookies would create discomfort all around. If I tell my clients Bitcoin is "cash", they already pay cash- so have no incentive to go through the hassles of acquiring Bitcoin. Bitcoin as a digital representation of their labor, or goods is another matter.

While I understand there are reasons to promote Bitcoin as hard currency, I am having more success and more client interest by marketing it as a barter medium. Whether this interest translates into sales, and so is a viable strategy for other B&M businesses only time will tell.
7  Economy / Marketplace / BDSM for Bitcoins (NYC) on: June 10, 2011, 08:29:22 AM
New York BDSM Facility now taking Bitcoins.

We offer a 10% discount off our cash rate for sessions booked and paid in Bitcoin a week in advance. I won't go into the specifics of all of the fetishes we cater to- this forum is not really the place for it and if you are into that sort of thing chances are you know who we are, but we have the best reviews and reputation of any Dungeon on the East Coast.

http://www.FortressNYC.com (NSFW, "R" Nudity, nothing explicit)

Mods: As far as I can tell this does not violate the Marketplace Rules and Guidelines, our services are entirely legal and we have a well established reputation as a legal, non-sexual facility. That being said I've lurked a little while here and I know there is a small but vocal "holier than thou" contingent.  We're a brick and mortar business located in a State that is already planning to go after Bitcoins and we've stepped up to accept the currency in fairly substantial amounts. That's enough of a potential benefit to the community that I think it should be taken into account when considering the unusual nature of our services. It would be a shame for Bitcoin to repeat the mistakes of Betamax. Thank you.
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