More on Entrepreneurship/Creators
Esteban
3 years ago
The Berkus Startup Valuation Method: What Is It?
What Is That?
Berkus is a pre-revenue valuation method based exclusively on qualitative criteria, like Scorecard.
Few firms match their financial estimates, especially in the early stages, so valuation methodologies like the Berkus method are a good way to establish a valuation when the economic measures are not reliable.
How does it work?
This technique evaluates five key success factors.
Fundamental principle
Technology
Execution
Strategic alliances in its primary market
Production, followed by sales
The Berkus technique values the business idea and four success factors. As seen in the matrix below, each of these dimensions poses a danger to the startup's success.
It assigns $0-$500,000 to each of these beginning regions. This approach enables a maximum $2.5M pre-money valuation.
This approach relies significantly on geography and uses the US as a baseline, as it differs in every country in Europe.
A set of standards for analyzing each dimension individually
Fundamental principle (or strength of the idea)
Ideas are worthless; execution matters. Most of us can relate to seeing a new business open in our area or a startup get funded and thinking, "I had this concept years ago!" Someone did it.
The concept remains. To assess the idea's viability, we must consider several criteria.
The concept's exclusivity It is necessary to protect a product or service's concept using patents and copyrights. Additionally, it must be capable of generating large profits.
Planned growth and growth that goes in a specific direction have a lot of potential, therefore incorporating them into a business is really advantageous.
The ability of a concept to grow A venture's ability to generate scalable revenue is a key factor in its emergence and continuation. A startup needs a scalable idea in order to compete successfully in the market.
The attraction of a business idea to a broad spectrum of people is significantly influenced by the current socio-political climate. Thus, the requirement for the assumption of conformity.
Concept Validation Ideas must go through rigorous testing with a variety of audiences in order to lower risk during the implementation phase.
Technology (Prototype)
This aspect reduces startup's technological risk. How good is the startup prototype when facing cyber threats, GDPR compliance (in Europe), tech stack replication difficulty, etc.?
Execution
Check the management team's efficacy. A potential angel investor must verify the founders' experience and track record with previous ventures. Good leadership is needed to chart a ship's course.
Strategic alliances in its primary market
Existing and new relationships will play a vital role in the development of both B2B and B2C startups. What are the startup's synergies? potential ones?
Production, followed by sales (product rollout)
Startup success depends on its manufacturing and product rollout. It depends on the overall addressable market, the startup's ability to market and sell their product, and their capacity to provide consistent, high-quality support.
Example
We're now founders of EyeCaramba, a machine vision-assisted streaming platform. My imagination always goes to poor puns when naming a startup.
Since we're first-time founders and the Berkus technique depends exclusively on qualitative methods and the evaluator's skill, we ask our angel-investor acquaintance for a pre-money appraisal of EyeCaramba.
Our friend offers us the following table:
Because we're first-time founders, our pal lowered our Execution score. He knows the idea's value and that the gaming industry is red-hot, with worse startup ideas getting funded, therefore he gave the Basic value the highest value (idea).
EyeCaramba's pre-money valuation is $400,000 + $250,000 + $75,000 + $275,000 + $164,000 (1.16M). Good.
References
https://medium.com/humble-ventures/how-angel-investors-value-pre-revenue-startups-part-iii-8271405f0774#:~:text=pre%2Drevenue%20startups.-,Berkus%20Method,potential%20of%20the%20idea%20itself.%E2%80%9D
https://eqvista.com/berkus-valuation-method-for-startups/
https://www.venionaire.com/early-stage-startup-valuation-part-2-the-berkus-method/
DC Palter
3 years ago
How Will You Generate $100 Million in Revenue? The Startup Business Plan
A top-down company plan facilitates decision-making and impresses investors.
A startup business plan starts with the product, the target customers, how to reach them, and how to grow the business.
Bottom-up is terrific unless venture investors fund it.
If it can prove how it can exceed $100M in sales, investors will invest. If not, the business may be wonderful, but it's not venture capital-investable.
As a rule, venture investors only fund firms that expect to reach $100M within 5 years.
Investors get nothing until an acquisition or IPO. To make up for 90% of failed investments and still generate 20% annual returns, portfolio successes must exit with a 25x return. A $20M-valued company must be acquired for $500M or more.
This requires $100M in sales (or being on a nearly vertical trajectory to get there). The company has 5 years to attain that milestone and create the requisite ROI.
This motivates venture investors (venture funds and angel investors) to hunt for $100M firms within 5 years. When you pitch investors, you outline how you'll achieve that aim.
I'm wary of pitches after seeing a million hockey sticks predicting $5M to $100M in year 5 that never materialized. Doubtful.
Startups fail because they don't have enough clients, not because they don't produce a great product. That jump from $5M to $100M never happens. The company reaches $5M or $10M, growing at 10% or 20% per year. That's great, but not enough for a $500 million deal.
Once it becomes clear the company won’t reach orbit, investors write it off as a loss. When a corporation runs out of money, it's shut down or sold in a fire sale. The company can survive if expenses are trimmed to match revenues, but investors lose everything.
When I hear a pitch, I'm not looking for bright income projections but a viable plan to achieve them. Answer these questions in your pitch.
Is the market size sufficient to generate $100 million in revenue?
Will the initial beachhead market serve as a springboard to the larger market or as quicksand that hinders progress?
What marketing plan will bring in $100 million in revenue? Is the market diffuse and will cost millions of dollars in advertising, or is it one, focused market that can be tackled with a team of salespeople?
Will the business be able to bridge the gap from a small but fervent set of early adopters to a larger user base and avoid lock-in with their current solution?
Will the team be able to manage a $100 million company with hundreds of people, or will hypergrowth force the organization to collapse into chaos?
Once the company starts stealing market share from the industry giants, how will it deter copycats?
The requirement to reach $100M may be onerous, but it provides a context for difficult decisions: What should the product be? Where should we concentrate? who should we hire? Every strategic choice must consider how to reach $100M in 5 years.
Focusing on $100M streamlines investor pitches. Instead of explaining everything, focus on how you'll attain $100M.
As an investor, I know I'll lose my money if the startup doesn't reach this milestone, so the revenue prediction is the first thing I look at in a pitch deck.
Reaching the $100M goal needs to be the first thing the entrepreneur thinks about when putting together the business plan, the central story of the pitch, and the criteria for every important decision the company makes.
Carter Kilmann
3 years ago
I finally achieved a $100K freelance income. Here's what I wish I knew.
We love round numbers, don't we? $100,000 is a frequent freelancing milestone. You feel like six figures means you're doing something properly.
You've most likely already conquered initial freelancing challenges like finding clients, setting fair pricing, coping with criticism, getting through dry spells, managing funds, etc.
You think I must be doing well. Last month, my freelance income topped $100,000.
That may not sound impressive considering I've been freelancing for 2.75 years, but I made 30% of that in the previous four months, which is crazy.
Here are the things I wish I'd known during the early days of self-employment that would have helped me hit $100,000 faster.
1. The Volatility of Freelancing Will Stabilize.
Freelancing is risky. No surprise.
Here's an example.
October 2020 was my best month, earning $7,150. Between $4,004 in September and $1,730 in November. Unsteady.
Freelancing is regrettably like that. Moving clients. Content requirements change. Allocating so much time to personal pursuits wasn't smart, but yet.
Stabilizing income takes time. Consider my rolling three-month average income since I started freelancing. My three-month average monthly income. In February, this metric topped $5,000. Now, it's in the mid-$7,000s, but it took a while to get there.
Finding freelance gigs that provide high pay, high volume, and recurring revenue is difficult. But it's not impossible.
TLDR: Don't expect a steady income increase at first. Be patient.
2. You Have More Value Than You Realize.
Writing is difficult. Assembling words, communicating a message, and provoking action are a puzzle.
People are willing to pay you for it because they can't do what you do or don't have enough time.
Keeping that in mind can have huge commercial repercussions.
When talking to clients, don't tiptoe. You can ignore ridiculous deadlines. You don't have to take unmanageable work.
You solve an issue, so make sure you get rightly paid.
TLDR: Frame services as problem-solutions. This will let you charge more and set boundaries.
3. Increase Your Prices.
I studied hard before freelancing. I read articles and watched videos about writing businesses.
I didn't want to work for pennies. Despite this clarity, I had no real strategy to raise my rates.
I then luckily stumbled into higher-paying work. We discussed fees and hours with a friend who launched a consulting business. It's subjective and speculative because value isn't standardized. One company may laugh at your charges. If your solution helps them create a solid ROI, another client may pay $200 per hour.
When he told me he charged his first client $125 per hour, I thought, Why not?
A new-ish client wanted to discuss a huge forthcoming project, so I raised my rates. They knew my worth, so they didn't blink when I handed them my new number.
TLDR: Increase rates periodically (e.g., every 6 or 12 months). Writing skill develops with practice. You'll gain value over time.
4. Remember Your Limits.
If you can squeeze additional time into a day, let me know. I can't manipulate time yet.
We all have time and economic limits. You could theoretically keep boosting rates, but your prospect pool diminishes. Outsourcing and establishing extra revenue sources might boost monthly revenues.
I've devoted a lot of time to side projects (hopefully extra cash sources), but I've only just started outsourcing. I wish I'd tried this earlier.
If you can discover good freelancers, you can grow your firm without sacrificing time.
TLDR: Expand your writing network immediately. You'll meet freelancers who understand your daily grind and locate reference sources.
5. Every Action You Take Involves an Investment. Be Certain to Select Correctly.
Investing in stocks or crypto requires paying money, right?
In business, time is your currency (and maybe money too). Your daily habits define your future. If you spend time collecting software customers and compiling content in the space, you'll end up with both. So be sure.
I only spend around 50% of my time on client work, therefore it's taken me nearly three years to earn $100,000. I spend the remainder of my time on personal projects including a freelance book, an investment newsletter, and this blog.
Why? I don't want to rely on client work forever. So, I'm working on projects that could pay off later and help me live a more fulfilling life.
TLDR: Consider the long-term impact of your time commitments, and don't overextend. You can only make so many "investments" in a given time.
6. LinkedIn Is an Endless Mine of Gold. Use It.
Why didn't I use LinkedIn earlier?
I designed a LinkedIn inbound lead strategy that generates 12 leads a month and a few high-quality offers. As a result, I've turned down good gigs. Wish I'd begun earlier.
If you want to create a freelance business, prioritize LinkedIn. Too many freelancers ignore this site, missing out on high-paying clients. Build your profile, post often, and interact.
TLDR: Study LinkedIn's top creators. Once you understand their audiences, start posting and participating daily.
For 99% of People, Freelancing is Not a Get-Rich-Quick Scheme.
Here's a list of things I wish I'd known when I started freelancing.
Although it is erratic, freelancing eventually becomes stable.
You deserve respect and discretion over how you conduct business because you have solved an issue.
Increase your charges rather than undervaluing yourself. If necessary, add a reminder to your calendar. Your worth grows with time.
In order to grow your firm, outsource jobs. After that, you can work on the things that are most important to you.
Take into account how your present time commitments may affect the future. It will assist in putting things into perspective and determining whether what you are doing is indeed worthwhile.
Participate on LinkedIn. You'll get better jobs as a result.
If I could give my old self (and other freelancers) one bit of advice, it's this:
Despite appearances, you're making progress.
Each job. Tweets. Newsletters. Progress. It's simpler to see retroactively than in the moment.
Consistent, intentional work pays off. No good comes from doing nothing. You must set goals, divide them into time-based targets, and then optimize your calendar.
Then you'll understand you're doing well.
Want to learn more? I’ll teach you.
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Liam Vaughan
3 years ago
Investors can bet big on almost anything on a new prediction market.
Kalshi allows five-figure bets on the Grammys, the next Covid wave, and future SEC commissioners. Worst-case scenario
On Election Day 2020, two young entrepreneurs received a call from the CFTC chairman. Luana Lopes Lara and Tarek Mansour spent 18 months trying to start a new type of financial exchange. Instead of betting on stock prices or commodity futures, people could trade instruments tied to real-world events, such as legislation, the weather, or the Oscar winner.
Heath Tarbert, a Trump appointee, shouted "Congratulations." "You're competing with 1840s-era markets. I'm sure you'll become a powerhouse too."
Companies had tried to introduce similar event markets in the US for years, but Tarbert's agency, the CFTC, said no, arguing they were gambling and prone to cheating. Now the agency has reversed course, approving two 24-year-olds who will have first-mover advantage in what could become a huge new asset class. Kalshi Inc. raised $30 million from venture capitalists within weeks of Tarbert's call, his representative says. Mansour, 26, believes this will be bigger than crypto.
Anyone who's read The Wisdom of Crowds knows prediction markets' potential. Well-designed markets can help draw out knowledge from disparate groups, and research shows that when money is at stake, people make better predictions. Lopes Lara calls it a "bullshit tax." That's why Google, Microsoft, and even the US Department of Defense use prediction markets internally to guide decisions, and why university-linked political betting sites like PredictIt sometimes outperform polls.
Regulators feared Wall Street-scale trading would encourage investors to manipulate reality. If the stakes are high enough, traders could pressure congressional staffers to stall a bill or bet on whether Kanye West's new album will drop this week. When Lopes Lara and Mansour pitched the CFTC, senior regulators raised these issues. Politically appointed commissioners overruled their concerns, and one later joined Kalshi's board.
Will Kanye’s new album come out next week? Yes or no?
Kalshi's victory was due more to lobbying and legal wrangling than to Silicon Valley-style innovation. Lopes Lara and Mansour didn't invent anything; they changed a well-established concept's governance. The result could usher in a new era of market-based enlightenment or push Wall Street's destructive tendencies into the real world.
If Kalshi's founders lacked experience to bolster their CFTC application, they had comical youth success. Lopes Lara studied ballet at the Brazilian Bolshoi before coming to the US. Mansour won France's math Olympiad. They bonded over their work ethic in an MIT computer science class.
Lopes Lara had the idea for Kalshi while interning at a New York hedge fund. When the traders around her weren't working, she noticed they were betting on the news: Would Apple hit a trillion dollars? Kylie Jenner? "It was anything," she says.
Are mortgage rates going up? Yes or no?
Mansour saw the business potential when Lopes Lara suggested it. He interned at Goldman Sachs Group Inc., helping investors prepare for the UK leaving the EU. Goldman sold clients complex stock-and-derivative combinations. As he discussed it with Lopes Lara, they agreed that investors should hedge their risk by betting on Brexit itself rather than an imperfect proxy.
Lopes Lara and Mansour hypothesized how a marketplace might work. They settled on a "event contract," a binary-outcome instrument like "Will inflation hit 5% by the end of the month?" The contract would settle at $1 (if the event happened) or zero (if it didn't), but its price would fluctuate based on market sentiment. After a good debate, a politician's election odds may rise from 50 to 55. Kalshi would charge a commission on every trade and sell data to traders, political campaigns, businesses, and others.
In October 2018, five months after graduation, the pair flew to California to compete in a hackathon for wannabe tech founders organized by the Silicon Valley incubator Y Combinator. They built a website in a day and a night and presented it to entrepreneurs the next day. Their prototype barely worked, but they won a three-month mentorship program and $150,000. Michael Seibel, managing director of Y Combinator, said of their idea, "I had to take a chance!"
Will there be another moon landing by 2025?
Seibel's skepticism was rooted in America's historical wariness of gambling. Roulette, poker, and other online casino games are largely illegal, and sports betting was only legal in a few states until May 2018. Kalshi as a risk-hedging platform rather than a bookmaker seemed like a good idea, but convincing the CFTC wouldn't be easy. In 2012, the CFTC said trading on politics had no "economic purpose" and was "contrary to the public interest."
Lopes Lara and Mansour cold-called 60 Googled lawyers during their time at Y Combinator. Everyone advised quitting. Mansour recalls the pain. Jeff Bandman, a former CFTC official, helped them navigate the agency and its characters.
When they weren’t busy trying to recruit lawyers, Lopes Lara and Mansour were meeting early-stage investors. Alfred Lin of Sequoia Capital Operations LLC backed Airbnb, DoorDash, and Uber Technologies. Lin told the founders their idea could capitalize on retail trading and challenge how the financial world manages risk. "Come back with regulatory approval," he said.
In the US, even small bets on most events were once illegal. Under the Commodity Exchange Act, the CFTC can stop exchanges from listing contracts relating to "terrorism, assassination, war" and "gaming" if they are "contrary to the public interest," which was often the case.
Will subway ridership return to normal? Yes or no?
In 1988, as academic interest in the field grew, the agency allowed the University of Iowa to set up a prediction market for research purposes, as long as it didn't make a profit or advertise and limited bets to $500. PredictIt, the biggest and best-known political betting platform in the US, also got an exemption thanks to an association with Victoria University of Wellington in New Zealand. Today, it's a sprawling marketplace with its own subculture and lingo. PredictIt users call it "Rules Cuck Panther" when they lose on a technicality. Major news outlets cite PredictIt's odds on Discord and the Star Spangled Gamblers podcast.
CFTC limits PredictIt bets to $850. To keep traders happy, PredictIt will often run multiple variations of the same question, listing separate contracts for two dozen Democratic primary candidates, for example. A trader could have more than $10,000 riding on a single outcome. Some of the site's traders are current or former campaign staffers who can answer questions like "How many tweets will Donald Trump post from Nov. 20 to 27?" and "When will Anthony Scaramucci's role as White House communications director end?"
According to PredictIt co-founder John Phillips, politicians help explain the site's accuracy. "Prediction markets work well and are accurate because they attract people with superior information," he said in a 2016 podcast. “In the financial stock market, it’s called inside information.”
Will Build Back Better pass? Yes or no?
Trading on nonpublic information is illegal outside of academia, which presented a dilemma for Lopes Lara and Mansour. Kalshi's forecasts needed to be accurate. Kalshi must eliminate insider trading as a regulated entity. Lopes Lara and Mansour wanted to build a high-stakes PredictIt without the anarchy or blurred legal lines—a "New York Stock Exchange for Events." First, they had to convince regulators event trading was safe.
When Lopes Lara and Mansour approached the CFTC in the spring of 2019, some officials in the Division of Market Oversight were skeptical, according to interviews with people involved in the process. For all Kalshi's talk of revolutionizing finance, this was just a turbocharged version of something that had been rejected before.
The DMO couldn't see the big picture. The staff review was supposed to ensure Kalshi could complete a checklist, "23 Core Principles of a Designated Contract Market," which included keeping good records and having enough money. The five commissioners decide. With Trump as president, three of them were ideologically pro-market.
Lopes Lara, Mansour, and their lawyer Bandman, an ex-CFTC official, answered the DMO's questions while lobbying the commissioners on Zoom about the potential of event markets to mitigate risks and make better decisions. Before each meeting, they would write a script and memorize it word for word.
Will student debt be forgiven? Yes or no?
Several prediction markets that hadn't sought regulatory approval bolstered Kalshi's case. Polymarket let customers bet hundreds of thousands of dollars anonymously using cryptocurrencies, making it hard to track. Augur, which facilitates private wagers between parties using blockchain, couldn't regulate bets and hadn't stopped users from betting on assassinations. Kalshi, by comparison, argued it was doing everything right. (The CFTC fined Polymarket $1.4 million for operating an unlicensed exchange in January 2022. Polymarket says it's now compliant and excited to pioneer smart contract-based financial solutions with regulators.
Kalshi was approved unanimously despite some DMO members' concerns about event contracts' riskiness. "Once they check all the boxes, they're in," says a CFTC insider.
Three months after CFTC approval, Kalshi announced funding from Sequoia, Charles Schwab, and Henry Kravis. Sequoia's Lin, who joined the board, said Tarek, Luana, and team created a new way to invest and engage with the world.
The CFTC hadn't asked what markets the exchange planned to run since. After approval, Lopes Lara and Mansour had the momentum. Kalshi's March list of 30 proposed contracts caused chaos at the DMO. The division handles exchanges that create two or three new markets a year. Kalshi’s business model called for new ones practically every day.
Uncontroversial proposals included weather and GDP questions. Others, on the initial list and later, were concerning. DMO officials feared Covid-19 contracts amounted to gambling on human suffering, which is why war and terrorism markets are banned. (Similar logic doomed ex-admiral John Poindexter's Policy Analysis Market, a Bush-era plan to uncover intelligence by having security analysts bet on Middle East events.) Regulators didn't see how predicting the Grammy winners was different from betting on the Patriots to win the Super Bowl. Who, other than John Legend, would need to hedge the best R&B album winner?
Event contracts raised new questions for the DMO's product review team. Regulators could block gaming contracts that weren't in the public interest under the Commodity Exchange Act, but no one had defined gaming. It was unclear whether the CFTC had a right or an obligation to consider whether a contract was in the public interest. How was it to determine public interest? Another person familiar with the CFTC review says, "It was a mess." The agency didn't comment.
CFTC staff feared some event contracts could be cheated. Kalshi wanted to run a bee-endangerment market. The DMO pushed back, saying it saw two problems symptomatic of the asset class: traders could press government officials for information, and officials could delay adding the insects to the list to cash in.
The idea that traders might manipulate prediction markets wasn't paranoid. In 2013, academics David Rothschild and Rajiv Sethi found that an unidentified party lost $7 million buying Mitt Romney contracts on Intrade, a now-defunct, unlicensed Irish platform, in the runup to the 2012 election. The authors speculated that the trader, whom they dubbed the “Romney Whale,” may have been looking to boost morale and keep donations coming in.
Kalshi said manipulation and insider trading are risks for any market. It built a surveillance system and said it would hire a team to monitor it. "People trade on events all the time—they just use options and other instruments. This brings everything into the open, Mansour says. Kalshi didn't include election contracts, a red line for CFTC Democrats.
Lopes Lara and Mansour were ready to launch kalshi.com that summer, but the DMO blocked them. Product reviewers were frustrated by spending half their time on an exchange that represented a tiny portion of the derivatives market. Lopes Lara and Mansour pressed politically appointed commissioners during the impasse.
Tarbert, the chairman, had moved on, but Kalshi found a new supporter in Republican Brian Quintenz, a crypto-loving former hedge fund manager. He was unmoved by the DMO's concerns, arguing that speculation on Kalshi's proposed events was desirable and the agency had no legal standing to prevent it. He supported a failed bid to allow NFL futures earlier this year. Others on the commission were cautious but supportive. Given the law's ambiguity, they worried they'd be on shaky ground if Kalshi sued if they blocked a contract. Without a permanent chairman, the agency lacked leadership.
To block a contract, DMO staff needed a majority of commissioners' support, which they didn't have in all but a few cases. "We didn't have the votes," a reviewer says, paraphrasing Hamilton. By the second half of 2021, new contract requests were arriving almost daily at the DMO, and the demoralized and overrun division eventually accepted defeat and stopped fighting back. By the end of the year, three senior DMO officials had left the agency, making it easier for Kalshi to list its contracts unimpeded.
Today, Kalshi is growing. 32 employees work in a SoHo office with big windows and exposed brick. Quintenz, who left the CFTC 10 months after Kalshi was approved, is on its board. He joined because he was interested in the market's hedging and risk management opportunities.
Mid-May, the company's website had 75 markets, such as "Will Q4 GDP be negative?" Will NASA land on the moon by 2025? The exchange recently reached 2 million weekly contracts, a jump from where it started but still a small number compared to other futures exchanges. Early adopters are PredictIt and Polymarket fans. Bets on the site are currently capped at $25,000, but Kalshi hopes to increase that to $100,000 and beyond.
With the regulatory drawbridge down, Lopes Lara and Mansour must move quickly. Chicago's CME Group Inc. plans to offer index-linked event contracts. Kalshi will release a smartphone app to attract customers. After that, it hopes to partner with a big brokerage. Sequoia is a major investor in Robinhood Markets Inc. Robinhood users could have access to Kalshi so that after buying GameStop Corp. shares, they'd be prompted to bet on the Oscars or the next Fed commissioner.
Some, like Illinois Democrat Sean Casten, accuse Robinhood and its competitors of gamifying trading to encourage addiction, but Kalshi doesn't seem worried. Mansour says Kalshi's customers can't bet more than they've deposited, making debt difficult. Eventually, he may introduce leveraged bets.
Tension over event contracts recalls another CFTC episode. Brooksley Born proposed regulating the financial derivatives market in 1994. Alan Greenspan and others in the government opposed her, saying it would stifle innovation and push capital overseas. Unrestrained, derivatives grew into a trillion-dollar industry until 2008, when they sparked the financial crisis.
Today, with a midterm election looming, it seems reasonable to ask whether Kalshi plans to get involved. Elections have historically been the biggest draw in prediction markets, with 125 million shares traded on PredictIt for 2020. “We can’t discuss specifics,” Mansour says. “All I can say is, you know, we’re always working on expanding the universe of things that people can trade on.”
Any election contracts would need CFTC approval, which may be difficult with three Democratic commissioners. A Republican president would change the equation.
Mark Shpuntov
3 years ago
How to Produce a Month's Worth of Content for Social Media in a Day
New social media producers' biggest error
The Treadmill of Social Media Content
New creators focus on the wrong platforms.
They post to Instagram, Twitter, TikTok, etc.
They create daily material, but it's never enough for social media algorithms.
Creators recognize they're on a content creation treadmill.
They have to keep publishing content daily just to stay on the algorithm’s good side and avoid losing the audience they’ve built on the platform.
This is exhausting and unsustainable, causing creator burnout.
They focus on short-lived platforms, which is an issue.
Comparing low- and high-return social media platforms
Social media networks are great for reaching new audiences.
Their algorithm is meant to viralize material.
Social media can use you for their aims if you're not careful.
To master social media, focus on the right platforms.
To do this, we must differentiate low-ROI and high-ROI platforms:
Low ROI platforms are ones where content has a short lifespan. High ROI platforms are ones where content has a longer lifespan.
A tweet may be shown for 12 days. If you write an article or blog post, it could get visitors for 23 years.
ROI is drastically different.
New creators have limited time and high learning curves.
Nothing is possible.
First create content for high-return platforms.
ROI for social media platforms
Here are high-return platforms:
Your Blog - A single blog article can rank and attract a ton of targeted traffic for a very long time thanks to the power of SEO.
YouTube - YouTube has a reputation for showing search results or sidebar recommendations for videos uploaded 23 years ago. A superb video you make may receive views for a number of years.
Medium - A platform dedicated to excellent writing is called Medium. When you write an article about a subject that never goes out of style, you're building a digital asset that can drive visitors indefinitely.
These high ROI platforms let you generate content once and get visitors for years.
This contrasts with low ROI platforms:
Twitter
Instagram
TikTok
LinkedIn
Facebook
The posts you publish on these networks have a 23-day lifetime. Instagram Reels and TikToks are exceptions since viral content can last months.
If you want to make content creation sustainable and enjoyable, you must focus the majority of your efforts on creating high ROI content first. You can then use the magic of repurposing content to publish content to the lower ROI platforms to increase your reach and exposure.
How To Use Your Content Again
So, you’ve decided to focus on the high ROI platforms.
Great!
You've published an article or a YouTube video.
You worked hard on it.
Now you have fresh stuff.
What now?
If you are not repurposing each piece of content for multiple platforms, you are throwing away your time and efforts.
You've created fantastic material, so why not distribute it across platforms?
Repurposing Content Step-by-Step
For me, it's writing a blog article, but you might start with a video or podcast.
The premise is the same regardless of the medium.
Start by creating content for a high ROI platform (YouTube, Blog Post, Medium). Then, repurpose, edit, and repost it to the lower ROI platforms.
Here's how to repurpose pillar material for other platforms:
Post the article on your blog.
Put your piece on Medium (use the canonical link to point to your blog as the source for SEO)
Create a video and upload it to YouTube using the talking points from the article.
Rewrite the piece a little, then post it to LinkedIn.
Change the article's format to a Thread and share it on Twitter.
Find a few quick quotes throughout the article, then use them in tweets or Instagram quote posts.
Create a carousel for Instagram and LinkedIn using screenshots from the Twitter Thread.
Go through your film and select a few valuable 30-second segments. Share them on LinkedIn, Facebook, Twitter, TikTok, YouTube Shorts, and Instagram Reels.
Your video's audio can be taken out and uploaded as a podcast episode.
If you (or your team) achieve all this, you'll have 20-30 pieces of social media content.
If you're just starting, I wouldn't advocate doing all of this at once.
Instead, focus on a few platforms with this method.
You can outsource this as your company expands. (If you'd want to learn more about content repurposing, contact me.)
You may focus on relevant work while someone else grows your social media on autopilot.
You develop high-ROI pillar content, and it's automatically chopped up and posted on social media.
This lets you use social media algorithms without getting sucked in.
Thanks for reading!
James Brockbank
3 years ago
Canonical URLs for Beginners
Canonicalization and canonical URLs are essential for SEO, and improper implementation can negatively impact your site's performance.
Canonical tags were introduced in 2009 to help webmasters with duplicate or similar content on multiple URLs.
To use canonical tags properly, you must understand their purpose, operation, and implementation.
Canonical URLs and Tags
Canonical tags tell search engines that a certain URL is a page's master copy. They specify a page's canonical URL. Webmasters can avoid duplicate content by linking to the "canonical" or "preferred" version of a page.
How are canonical tags and URLs different? Can these be specified differently?
Tags
Canonical tags are found in an HTML page's head></head> section.
<link rel="canonical" href="https://www.website.com/page/" />These can be self-referencing or reference another page's URL to consolidate signals.
Canonical tags and URLs are often used interchangeably, which is incorrect.
The rel="canonical" tag is the most common way to set canonical URLs, but it's not the only way.
Canonical URLs
What's a canonical link? Canonical link is the'master' URL for duplicate pages.
In Google's own words:
A canonical URL is the page Google thinks is most representative of duplicate pages on your site.
— Google Search Console Help
You can indicate your preferred canonical URL. For various reasons, Google may choose a different page than you.
When set correctly, the canonical URL is usually your specified URL.
Canonical URLs determine which page will be shown in search results (unless a duplicate is explicitly better for a user, like a mobile version).
Canonical URLs can be on different domains.
Other ways to specify canonical URLs
Canonical tags are the most common way to specify a canonical URL.
You can also set canonicals by:
Setting the HTTP header rel=canonical.
All pages listed in a sitemap are suggested as canonicals, but Google decides which pages are duplicates.
Redirects 301.
Google recommends these methods, but they aren't all appropriate for every situation, as we'll see below. Each has its own recommended uses.
Setting canonical URLs isn't required; if you don't, Google will use other signals to determine the best page version.
To control how your site appears in search engines and to avoid duplicate content issues, you should use canonicalization effectively.
Why Duplicate Content Exists
Before we discuss why you should use canonical URLs and how to specify them in popular CMSs, we must first explain why duplicate content exists. Nobody intentionally duplicates website content.
Content management systems create multiple URLs when you launch a page, have indexable versions of your site, or use dynamic URLs.
Assume the following URLs display the same content to a user:
A search engine sees eight duplicate pages, not one.
URLs #1 and #2: the CMS saves product URLs with and without the category name.
#3, #4, and #5 result from the site being accessible via HTTP, HTTPS, www, and non-www.
#6 is a subdomain mobile-friendly URL.
URL #7 lacks URL #2's trailing slash.
URL #8 uses a capital "A" instead of a lowercase one.
Duplicate content may also exist in URLs like:
https://www.website.com
https://www.website.com/index.php
Duplicate content is easy to create.
Canonical URLs help search engines identify different page variations as a single URL on many sites.
SEO Canonical URLs
Canonical URLs help you manage duplicate content that could affect site performance.
Canonical URLs are a technical SEO focus area for many reasons.
Specify URL for search results
When you set a canonical URL, you tell Google which page version to display.
Which would you click?
https://www.domain.com/page-1/
https://www.domain.com/index.php?id=2
First, probably.
Canonicals tell search engines which URL to rank.
Consolidate link signals on similar pages
When you have duplicate or nearly identical pages on your site, the URLs may get external links.
Canonical URLs consolidate multiple pages' link signals into a single URL.
This helps your site rank because signals from multiple URLs are consolidated into one.
Syndication management
Content is often syndicated to reach new audiences.
Canonical URLs consolidate ranking signals to prevent duplicate pages from ranking and ensure the original content ranks.
Avoid Googlebot duplicate page crawling
Canonical URLs ensure that Googlebot crawls your new pages rather than duplicated versions of the same one across mobile and desktop versions, for example.
Crawl budgets aren't an issue for most sites unless they have 100,000+ pages.
How to Correctly Implement the rel=canonical Tag
Using the header tag rel="canonical" is the most common way to specify canonical URLs.
Adding tags and HTML code may seem daunting if you're not a developer, but most CMS platforms allow canonicals out-of-the-box.
These URLs each have one product.
How to Correctly Implement a rel="canonical" HTTP Header
A rel="canonical" HTTP header can replace canonical tags.
This is how to implement a canonical URL for PDFs or non-HTML documents.
You can specify a canonical URL in your site's.htaccess file using the code below.
<Files "file-to-canonicalize.pdf"> Header add Link "< http://www.website.com/canonical-page/>; rel=\"canonical\"" </Files>301 redirects for canonical URLs
Google says 301 redirects can specify canonical URLs.
Only the canonical URL will exist if you use 301 redirects. This will redirect duplicates.
This is the best way to fix duplicate content across:
HTTPS and HTTP
Non-WWW and WWW
Trailing-Slash and Non-Trailing Slash URLs
On a single page, you should use canonical tags unless you can confidently delete and redirect the page.
Sitemaps' canonical URLs
Google assumes sitemap URLs are canonical, so don't include non-canonical URLs.
This does not guarantee canonical URLs, but is a best practice for sitemaps.
Best-practice Canonical Tag
Once you understand a few simple best practices for canonical tags, spotting and cleaning up duplicate content becomes much easier.
Always include:
One canonical URL per page
If you specify multiple canonical URLs per page, they will likely be ignored.
Correct Domain Protocol
If your site uses HTTPS, use this as the canonical URL. It's easy to reference the wrong protocol, so check for it to catch it early.
Trailing slash or non-trailing slash URLs
Be sure to include trailing slashes in your canonical URL if your site uses them.
Specify URLs other than WWW
Search engines see non-WWW and WWW URLs as duplicate pages, so use the correct one.
Absolute URLs
To ensure proper interpretation, canonical tags should use absolute URLs.
So use:
<link rel="canonical" href="https://www.website.com/page-a/" />And not:
<link rel="canonical" href="/page-a/" />If not canonicalizing, use self-referential canonical URLs.
When a page isn't canonicalizing to another URL, use self-referencing canonical URLs.
Canonical tags refer to themselves here.
Common Canonical Tags Mistakes
Here are some common canonical tag mistakes.
301 Canonicalization
Set the canonical URL as the redirect target, not a redirected URL.
Incorrect Domain Canonicalization
If your site uses HTTPS, don't set canonical URLs to HTTP.
Irrelevant Canonicalization
Canonicalize URLs to duplicate or near-identical content only.
SEOs sometimes try to pass link signals via canonical tags from unrelated content to increase rank. This isn't how canonicalization should be used and should be avoided.
Multiple Canonical URLs
Only use one canonical tag or URL per page; otherwise, they may all be ignored.
When overriding defaults in some CMSs, you may accidentally include two canonical tags in your page's <head>.
Pagination vs. Canonicalization
Incorrect pagination can cause duplicate content. Canonicalizing URLs to the first page isn't always the best solution.
Canonicalize to a 'view all' page.
How to Audit Canonical Tags (and Fix Issues)
Audit your site's canonical tags to find canonicalization issues.
SEMrush Site Audit can help. You'll find canonical tag checks in your website's site audit report.
Let's examine these issues and their solutions.
No Canonical Tag on AMP
Site Audit will flag AMP pages without canonical tags.
Canonicalization between AMP and non-AMP pages is important.
Add a rel="canonical" tag to each AMP page's head>.
No HTTPS redirect or canonical from HTTP homepage
Duplicate content issues will be flagged in the Site Audit if your site is accessible via HTTPS and HTTP.
You can fix this by 301 redirecting or adding a canonical tag to HTTP pages that references HTTPS.
Broken canonical links
Broken canonical links won't be considered canonical URLs.
This error could mean your canonical links point to non-existent pages, complicating crawling and indexing.
Update broken canonical links to the correct URLs.
Multiple canonical URLs
This error occurs when a page has multiple canonical URLs.
Remove duplicate tags and leave one.
Canonicalization is a key SEO concept, and using it incorrectly can hurt your site's performance.
Once you understand how it works, what it does, and how to find and fix issues, you can use it effectively to remove duplicate content from your site.