Category — Entrepreneurship

Before I dive into the pros and cons of this book, I think it’s important to acknowledge how significantly the book has impacted the way thousands of Internet publishers use and understand Adsense. At this writing, the book is just over a year old and it has been heralded as an instant classic in the growing world of Internet marketing. After making the New York Times best sellers list in 2006, The Adsense Code firmly established Joel Comm as an authority in the world of contextual advertising. Regardless of what I say in this post, the numbers tell the story. This book was a hit. Here’s why.

Although countless millions of websites run adsense ads, very few sites actually generate enough traffic to really see large, consistent adsense earnings. When web site traffic is low, infrequent and unpredictable, it’s tough for site owners to see how small tweaks in the placement or configuration of ads on a page affect click rates and earnings. This makes maximizing your adsense income difficult. But big numbers don’t lie. When a website is getting large amounts of consistent traffic, small changes in the way ads look and where ads are placed can make a big difference to the number of clicks they get.

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Where there’s a social buzz around good open source code, there’s opportunity. And where there’s opportunity, there will be entrepreneurs. In fact, digital entrepreneurship is one of the most natural and predictable bi-products of the open-source movement. Although open source die-hards (myself included) associate the open source movement with “freedom”, we should never delude ourselves into thinking that “freedom” will always produce code that is “free.” I’ve never understood why some open-source advocates are so adamant about defending the concept of a free digital utopia. Drawing entrepreneurs to code is fundamental to innovation, community-building and sustainability of any open source platform. Here’s a few arguments why entrepreneurship around open source platforms should be encouraged:

Innovation Requires Time, Effort and (often) Capital

Let’s be real, there aren’t many people who are willing to take on complex problems for the fun of it. It’s not a question of coding for coding’s sake either, it’s that most people just don’t have the time, energy or resources to justify starting, even if they can see a clear solution to a well-defined problem. The opportunity cost associated with “diving in” is often too great. The opportunity to profit from an idea or solution, however, can create a powerful incentive that shifts priorities enough to turn someone (who may have never started) into an innovating entrepreneur.

Innovators Respond Well To Social Incentives

Sure, entrepreneurs are driven to innovate because of monetary incentives, but that’s not the whole story. Social status, power, connectedness and pride play a large part in the innovating process. Income generation is often just the spark that starts the creative flame, but once a project is in motion, other incentives provide a lot of the fuel that keeps things moving. Successful entrepreneurs know that they’re not going to just release code off into a vacuum. In today’s hyper-connected world, communities form around innovative code, especially if it solves a common problem or need well. The word gets out, traffic increases, communities form and innovators can become celebrities (sometimes overnight). Even at a basic level, the popularity that ensues creates a sense of achievement and recognition that all human beings strive for. The desire for status and connectedness can be a powerful incentive that not only pushes digital entrepreneurs towards great code around platforms and products, but drives community-building and overall sustainability around those platforms and products.

Entrepreneurs Put In Effort To Draw Crowds

Because of the above-stated social incentives, entrepreneurs who innovate around open source platforms have incentives to become agents that build communities. We’re all marketers of our own brand to some extent, but for innovators releasing code into the wild it’s especially true. Making a stable, consistent income “adding” to open source platforms results from a combination of (A) filling a need or solving a problem and (B) making sure A LOT of people who are having that need or problem know about you. The A + B combination results in crowds, which is definitely what you want around open source because a lot of eyes and scrutiny results in better code (that’s the theory at least) and patterns of improvement lead to sustainability.

The point I’m trying to make, of course, is that whether or not profiting from an idea was the spark that got someone to innovate should be irrelevant - the end goal should always be community-building, better code and sustainability of open source platforms. Entrepreneurs are, and will always be, agents of change because they have a unique set of incentives that drive innovation and community-building. Those who are pro-open source should recognize that those incentives can have great affects for everyone and not get so hung up on defending the “free” faith. If we try to squash incentives that drive entrepreneurship by requiring everything that is produced to be free, the end result will just be less innovation.