Why did Mahalo revenue sharing fail?
Why do you think that revenue sharing did not work?
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M$14 Answers
As things stand, here are some interesting facts and figures to ponder:
1. Jason: Mahalo has achieved operational break-even, meaning that if Mahalo stopped spending on developments, and only had the 15 employees needed to maintain the site as is, it would be bringing in enough to match expenses.
2. Jason: Mahalo spends about 1/3 of its expenditure on development.
3. The "army of 60 guides" assuming 10 are senior guides, will cost Mahalo $65,000/month (ignoring the bonuses because those are only paid out if Mahalo revenue grows that month, making them easy to cover).
4. The payouts Mahalo paid to members over the past few months have totaled over $40,000/month.
5. Mahalo's share of page revenues was 55% up to now, and will become 100%, effectively increasing Mahalo's income >80% in one fell swoop.
So, let's do some math here. Mahalo says their income covers 15 employees. Let's guess the cost per employee is $60,000 (we're talking California here, and I'm including payroll taxes, benefits, etc.) bringing the total cost to $900,000/year or $75,000/month. This may well be what they bring in from overall ads, and let's guess that $5000/month from that is from Q&A ad revenue, and other stuff, leaving $70,000/month from page revenues. The cost of Mahalo's development effort is thus estimated at about $450,000/year or $37,500/month.
By doing away with rev share, Mahalo's monthly income would increase immediately by about $57,000/month. Subtract $65,000/month for guides and senior guides, and Mahalo is going to be losing about $8000/month at first relative to the current model. However, they will have about 6500 new pages per month. If these generate even $1 of revenue per month per page on average, Mahalo would start gaining from the second month.
My personal average has been about $5-$7/month/page and that's from the 30% PM share, so the total earnings from my pages has been $18-$23/month/page. This means that Mahalo could increase their earnings by over $130,000/month simply by building 6500 reasonably lucrative pages which they could do in one month. This vs. $8000 extra payouts relative to their current expenditures. It seems to me that this would within a couple of weeks potentially change Mahalo from a venture losing just under half a million dollars a year, to one that's profitable now.
The short of it is, rev share on Mahalo did not fail. It succeeded wildly. However, now Jason sees a way to change from losing a lot of money each year to becoming profitable in short order, and all he needs to do to achieve this is to get rid of the writers who made this all possible. In the business world that's called pragmatism. In interpersonal relations it's called something different. However, Mahalo is a business, and I for one do not delude myself into thinking Jason considers me a friend (if he met me on the street he would certainly not recognize me) so I guess we should just stick with "pragmatism".
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M$People do not want to build something that requires them to work hard on something, and take the risk, without any certainty for reward. People for the most part are against taking the risk to build a page to begin with, and since there is no guarantee of reward, they just don't build one at all. As far as uncertainty goes, people were uncertain about the results they would get from building and managing a page, so they did not build one at all. Just because someone built a page, didn't mean they wanted to promote the page so it gained revenue, and I think this was the issue, as people had two things to do, build and then promote in order to gain revenue share. People want guarantees, and the revenue share provided no guarantee, and extra work for the page manager.
Another reason is that Mahalo may have not been generous to people who wanted to build or manage certain pages that would gain the most revenue (these pages were allocated to Mahalo staff first and protected), and they would take away pages if they were not updated to Mahalo's expectations, which caused people to lose motivation every time a page was pulled from a Mahalo member. Also, since Mahalo left a limit on the pages as well, and would rather no page created opposed to having a page half created.
Another thought about reasons why Mahalo revenue sharing did not work involves the thought of understanding the Mahalo Dollar, which relates back to the word uncertainty:
Mahalo Dollars aren't considered real or are too confusing to understand the conversion, even though it's pretty straight forward.
My Thoughts
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M$
"People do not want to build something that requires them to work hard on something, and take the risk, without any certainty for reward. People for the most part are against taking the risk to build a page to begin with, and since there is no guarantee of reward, they just don't build one at all."
That's just not true. Look at rev share sites like Suite101, Helium, and even Associated Content. People are more than willing to write content without knowing if it will make them any money or not. People on eHow did it for years. I used to write for eHow before they went under Demand's flag, and there were articles that made nothing, and some that made big bucks, just like here.
It's not the rev share model that doesn't work, it's Jason's insistence on playing games with play money that didn't work. Too much control from Mahalo and too little control to the writers is what killed this site.
It also has to do with people wanting to have a quick reward. People want a prize to be rewarded to them quickly, whether or not it provided a benefit or even wrote the article themselves, believe it or not. This shouldn't amaze you, as you see more people copying and pasting answers found from other sites, just so that they can get the reward (even when they don't deserve it). If we were to ask the people if they copied and pasted the answer to get the reward or help out the person asking the question, what do you think their answer would be? Good take on the SEO, that's something I did not think about, yet it's not at all easy to have both skills as a writer and someone who optimizes a page for the search engine, as one person is thinking about writing a great article, and the other is thinking about what people would be searching for.
This is a very interesting analysis!
> Risk and Uncertainty
You're probably right that most people find that troubling, while a few of us find it a fun challenge! :)
It's partly what distinguishes people that are entrepreneurial versus people that prefer to work for someone else and get paid a regular predictable wage.
I guess to succeed with revshare you also needed a different skillset than simply being a good writer. You needed to be smart about things like what content earns revenue, know a little bit about SEO etc.
Maybe we could also say that the stakes and potential payoff weren't big enough for the entrepreneurial folks, but the risk and uncertainty were too much for the good writers that don't also have an entrepreneurial bent.
I can see both sides.
It sucks to spend time writing a really good page, and then find it ranks nowhere in Google, and doesn't make any money.
But I'm also pretty comfortable with knowing that only some of my work will "hit", and enjoy trying to create the hits. That's a fun and satisfying challenge.
I guess it's also the case that people that would be willing to devote a lot of time to Mahalo writing could probably not afford to have uncertainty about their income.
This is exact why I think higher paid questions are producing better content than pages. I am not surprised by the move. It seem logical considering the high cost of a page. The value of a page is difficult to determine.
I believe Mahalo is saying that it is getting annoyed because of lacking content. I get annoyed when answerers attempt to dump worthless trivia. I am willing to pay $15 to get a quality answer. Jasen has said that he wants indepth answers. I can tell you that an indepth answer has value. Trivia is noise. Mahalo attempting to reduce noise. Will Mahalo have enough money to build its wiki? I doubt it. Maybe they need to get a million pages and attempt to sale the company.
There's a lot of truth to the Mahalo Dollar not working, and people thinking it's play money. I also believe that there are challenges with revshare and people understanding it completely.
These are some solid reasons. M$ confused folks, and 19 or 20 writers told us they just wanted a flat rate.
the one out of 20 are upset now, but we can't build a large business around that small number of folks who believed in the revenue sharing model. if we had 10x as many folks doing it, well, things would be different.
With more and more emphasis an SEO every single day (and I am talking about everywhere, not just on Mahalo), there is this preconceived notion that you should "write for the search engine first, and your audience second." The reality is that, in order to attract longterm traffic and repeat visitors, you have to do both. You have got to be able to write quality content that people really want to read. Whatever your topic is, if you are writing about it effectively, the right keywords will show up by themselves organically.
I have been writing web content and online articles for a few years now, and I continue to see new internet marketers that want you to write 400-500 word articles that are nothing more than keyword stuffed gobbledygook. Even more are turning to automated software that can create this gobbledygook automatically and spin out several hundred of these articles a day. Yes, these people put these articles on their websites. Yes, it helps them to get indexed. Yes, it gets them a little bit of traffic.........in the beginning. After that, it could also get them sandboxed. Even if Google doesn't pick up on the content (which usually eventually happens), people who go to that site don't ever want to go back. Also, they are not very likely to promote this site or recommend it to others via social networking and social bookmarking tools.
What we want here is to have the kind of pages that people will want to promote, not just pages that offer the right kind of keywords and keyword phrases in all of the right places. Maybe advances in social networking and other social media has contributed to this a little, but I think the majority of the problem has just been people so focused on creating pages that are more likely to draw in page revenue rather than offering something quality.
The other part of this equation has to do with us writers ourselves, as Jason mentioned. I have spent a lot of time exploring other writing opportunities on the web. While in some instances, I do like the idea of revenue sharing, you often have to wait a long time to actually see the fruits of your labor. I don't know about you, and I certainly don't speak for every writer out there, but I have bills to pay now. I am sure that I will still have bills to pay a year down the road, but the idea of receiving payment for my work within a week or two of when I do the work makes it much easier for me. I writer for several sites, but the sites that I know are going to issue me faster payments are a bigger priority for me.
Most of this is just my opinion based on my own personal experiences, but I think that is why revenue sharing has failed here. As much as new changes make me nervous, I think the new format is a good idea. If we push to create more quality pages, then we can attract more users, and build an even larger community on the whole. As we do this, Mahalo can make more money, and they can afford to pay writers, guides, and senior guides even more on down the road :)
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M$
I realize that a lot of the coupon pages were also the idea of Mahalo, and I am not saying that there is anything wrong with that....nor am I pointing the finger at any particular VM or PM for doing so. If I were a VM, I would do the same thing. Obviously, there is no point in building a page that is not based on search terms that are frequently searched for or that could get a lot of traffic, but there are many other things besides coupons that have the potential for higher ad revenues, regardless of the CPC. There are plenty of pages that could have several thousand hits but only offer ads that have a CPC of one to two cents each. On these kinds of pages, it is still worth it, but what makes it worthwhile is having quality content that is not only going to keep people coming back or wanting to know more, but also prompt them to recommend the page to others. I know this has been mentioned before, but Mahalo topic pages are not exactly "buzzy" type content. However, if an outside visitor sees a Mahalo page and is happy with the information on a particular topic that they have found there, then the goal is to get them to want to use Mahalo for looking up all kinds of things and also recommending it to others for not only answers, but also information. I am not exactly sure what you are referring to as "regular" topic pages, but I don't think Mahalo should waste time building any pages that do not at least have the potential to generate traffic and ad revenues. With that being said, there are still so many untouched subjects out there that people search for on a daily basis. Regardless of what type of page it is, the quality of the material and the value of the information offered is what is going to lead to better success for the entire site....but again, that is just my opinion.
>> What we want here is to have the kind of pages that people will want to promote, not
>>just pages that offer the right kind of keywords and keyword phrases in all of the
>> right places.
Correct.
We want t have pages of true value, not just keyword-driven pages.
>> creating pages that are more likely to draw in page revenue rather than offering
>> something quality.
this is the trend of the web, and this is the major problem with revenue sharing: it drives folks to revenue above user need.
>> The other part of this equation has to do with us writers ourselves, as Jason
>> mentioned. I have spent a lot of time exploring other writing opportunities on
>> the web. While in some instances, I do like the idea of revenue sharing, you
>> often have to wait a long time to actually see the fruits of your labor.
Almost anyone can offer a revenue sharing business.... while it's not easy, it's not impossible. It takes a lot of tech and customer support, but it can be done. The issue is, do any of these sites have quality content and scale for you to draft off of.
In the case of Suite101 and Squidoo the content is horrible 99% of the time. It's simply content to drive revenue with zero value to users. We want to move away from this and get writers paid despite the performance of their pages.
We want to pay based on quality of content. I know, old school!
>> I have bills to pay now.... the idea of receiving payment for my work within a week
>> or two of when I do the work makes it much easier for me. I writer for several sites,
>> but the sites that I know are going to issue me faster payments are a bigger
>> priority for me.
DING!
DING!
DING!
Exactly what we heard from 95% of writers: pay me now, pay me quickly and pay me a rate that I know I will get--not half of nothings/possibly something.
best j
Your answer really resonates with me. I started writing for the net in late 2007. My first $5 felt like $5000! I've been writing all my life, but discovering that I could make a bit of money writing for this new medium was thrilling at first.
Since that time, I've watched the nature of writing for the net change. My first and second year writing online was awesome. I doubled my income. This year though, big changes have been coming down, not the least of which is that revenue sharing sites started struggling and playing these constant games to tweak profits. People started writing about what they imagined to be the hot keyword du jour, or writing for Amazon, instead of writing thoughtful, informative articles.
Google is fairly inscrutable, but to a purpose, which is, READERS are sick of these SEO games, just sick of them. Search engines are scrambling to find ways to exclude SEO-focused content, because much of it is cheezy and horrible, and as you say, readers find it and never go back. That's hard when the means for a search IS a keyword, but that's the current challenge--how to weed out this stuff. I get sucked into revenue sharing sites now for the community, but I usually end up leaving over money, time spent, and quality issues. Also personal control.
I still make money writing online, in fact it's my only job. At 57, I cannot find work in MI right now, and I'm glad to at least be able to do this. But I pulled my content from a couple of revenue sharing sites this year over issues like the ones surfacing here--mostly it boiled down to lack of personal control and lack of site integrity. I wish Mahalo will figuring this out. It isn't so easy.
I see the revenue sharing model as being in trouble right now in general. Corporate content providers are moving in to exert some quality control and skim profits, while search engines are turning the screws on this model and advertising is not what it was. I was seduced by playing around with Q & A here at Mahalo--a friend at DS said it was fun here--and now I find myself in the middle of a mess like the ones I left elsewhere in January. Honestly I feel like I have no one to blame but myself. I should have known better. I have had to review my own personal goals as a writer this year, since revenue concerns started to really take all the joy out of writing for me. That's not a bad thing to do in any field--it seems like that's what Mahalo is doing, asking, "Why did we start this? Where are we trying to go? What are we doing?"
I've gone back to working more on long nonfiction and more fiction for paper publication, and to working posts for my blogs and an ezine. For money i write for DS, which isn't fun but if I focus and don't come up for air I can get between $20 and $30 per hour there. That's more commensurate with a real wage. Even so, it's hard to keep it up and I do it only as much as I have to in order to pay the bils.
I don't think the new format here is going to work for me at all, but I do know that what is going on at Mahalo is going on everywhere. Big changes happening are fast in regard to writing online and it's hard to get out ahead of them. SEO skills and writing skills are not the same skills. People read writing, but they read it if they can't find it. The won't search at all if all they find is a pool of SEO-focused garbage.
That's my 2 cents. But I really like your answer. Thanks.
You and I are very much in the same boat, @pgrundy. I also make most of my writing income from DS, and like you said, it is not fun, but it pays the bills. I went from a full-time journalist in the real world whose wages continued to dwindle more and more due to falling circulation rates as more and more people turned to online news sources to a full-time freelance writer on the web. Every now and then, I try to turn out some quality articles for print publications, but the problem is largely a lack of time. As a web writer, you have to write 3-5 times as much in the course of a day as you would working for a print publication. This often involves, like you said, not coming up for air. I too have watched these sites change over the past couple of years, and Google has changed a lot as well. I am still not sure if this is attributed to the widespread success of social media or not, but it is evident that the general public is not happy with the way that many sites have been conducting business or with the quality of content found online. Also, just because you are a great writer elsewhere, it doesn't mean that you are the necessarily the kind of "quality" writer that these sites are looking for. If you scroll through the available topics on AC or DS, you will see that it is still very much all about keywords that involve product names or could involve the use of specific product names. Writing web content is a completely different ballgame, and it is one where the rules and the field are constantly changing. There are no "real" guarantees out there, and contributor sites and website administrators want to pay less and less for the content that you produce. On sites like Elance and Odesk, you can easily find someone in the Phillipines or in India that will write you a 400-500 word article for $1-2 USD, but it won't be anything that anyone can really read or understand. Most buyers know this, but they still fail to see the value in someone who can not only use English fluently, but has actual skills as a writer and can still use their set of designated keywords. It is a shame. It is sad. Things are changing very fast out here...on Mahalo, on AC, even on DS. Right now, I myself do not know which way the wind is blowing, but I do know that I am not satisfied with the kind of writing that I continue to do for sites like Mahalo, DS, and others. Hopefully, something new will come to light soon for me, for you, and for all of the rest like us.
I do see value in one of the thoughts here - making a page about breast cancer equally worthy for a writer as a page about red lobster coupons. There is definitely something to be said for that, especially in thinking about how you want your website to look in the long term - kinda trashy and ostentatious, or respectable and useful and covering all bases.
I do feel bad for all the people who worked so hard under the idea that the revenue-sharing model was sticking around longer, though.
The fact is, we did this coupon pages because so many page managers were concerned about not making enough money and threatening to quit.
We want to see folks make money! That's the idea.
however, we don't want everyone spending their time on just coupon pages... there are so many other great things to write about.
so, this new model means the person writing about breast cancer and how to do an breast cancer exam will make as much as the person making a red lobster coupon page. Previously someone might make $1-5,000 a year off a coupon page and the person doing the more important work would get $1-5. that's just not good.... we can now do the good pages.
My only comment - things like coupons are often MAHALO's idea. It's not ONLY writers who want to see the money. This isn't going to stop these article's from coming through - we don't know anything for sure yet, but if anything, Mahalo is going to want MORE high ad-rev pages, because this is what brings in the cash. Increasing the number of "regular" topic pages isn't going to bring in the money for them... so why would they do it?
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M$
I've got to start by saying... I don't know.
Unlike some of the other answerers, I'm far from certain about why it didn't work out as intended, though I can speculate intelligently about what the issues may have been.
First though, let's step back and ask: What does it mean to say that it failed?
From what I've seen the main reasons why Mahalo considered it a failure are:
- The pages produced weren't of as high quality as they hoped
- The quantity of pages produced wasn't as large as they hoped
- There were lots of overheads in running the revshare payment system
These "failures" may not be failures of the revshare model itself.
For example, the type of pages that have been getting built have been shaped to a large extent by Mahalo through barnraisings, and by the VMs through their choices of what tasks to create. If there are many coupon pages and product pages, well... that didn't happen despite Mahalo's wishes, it happened because that's what Mahalo wanted at the time.
The standards to which pages have been built have also been a function of the rules that Mahalo sets, and the QA process it uses. For example word count is not a measure of quality per se.
It's a pretty standard saying that "what gets measured gets managed". If QC and feedback from VMs is all about things like wordcount, inlinking, frequency of update etc etc, that's what will get the attention from PMs.
Rules and regulations breed a "compliance mentality". A compliance mentality is one where people are asking themselves "Have I done enough to pass QC?". not "How brilliant can I make this page?"
It is important here to realize that its the system that breeds the behavior, it's not down to some perversity or shortcoming of the people involved.
The build-a-page-in-one-hour stuff I heard about the Go Team is more of that kind of thing. True people can build good pages in under and hour... I've learned to do it myself in many cases. But if your over-riding concern is "What can I get done in an hour?", there is no way that is automatically the same as "What would this page need to make it really awesome?" In fact people will stay away from creating pages that need more than an hour to build, for example because they need lots of research.
Now I'm not even saying that Mahalo got anything wrong here!
What is at work may be deeper than that.
The deep question about the business model might be: Given the amount of money that can be generated in ad revenue from a typical page, and given the time and talent it takes to build a great page.... Is there any way that skilled people can possibly be paid enough for it to be worthwhile business to have them make high quality pages?
All the pieces of that sentence are important. You can slice and dice your business model in many ways.
For example, maybe you don't try to get the best people writing for you, so that what you can afford to pay them for writing squares with how much revenue can be generated from their work.
Or, you do go for really good writers, but then you only deploy them on pages that have high revenue potential.
All this is not a question about Mahalo particularly or uniquely.
It's not that different from the questions that the newspaper industry faces. i.e. Given the ad revenue we can make, how many writers can we have, how much content can we have, and how much time can we let people spend fact-checking and polishing?
So it is possible that the deep down answer to the question "Why didn't the rev share model work?" is... Regardless of the payment model there's not enough ad money to be made to pay good writers to turn out large volumes of high quality of work.
To put it at its most basic: How could it ever make sense to pay a good writer adequately for a page that takes and hour to build but only gets a 100 views a year?
Hopefully things are not quite like that, and there is a way to do this that will work out for everyone. :)
Now some thoughts on the revshare model itself.
Jason said that revshare was intended to foster entrepreneurial behavior.
I liked the idea, and I also am a big fan of encouraging entrepreneurial behavior.
I think a good way yo understand what the issues might have been is to consider the simplification that some people have an entrepreneurial bent, and some people are more inclined towards a freelance mindset. (Probably a lot more the latter than the former.)
I think there were problems for both groups in the way things were set up.
1) The "Entrepreneurs"
If you had an entrepreneurial bent, there were some big downers when it came to applying that attitude to Mahalo page management...
- Entrepreneurs get a buzz from finding and going for opportunities themselves
- Entrepreneurs don't want people managing them and second guessing them
- Entrepreneurs want to own their work, not have their page revocable by Mahalo at any time
- Entrepreneurs want to play the game smart... they want to build something once that earns well
- Entrepreneurs don't want to be doing things that are time-consuming for little return
- Entrepreneurs aren't big on following lots of rules and guidelines
- Entrepreneurs want to see the possibility of someday getting a really big return
So if you were the kind of entrepreneurial PM that Jason wanted to encourage, there were a lot of reasons why you'd maybe not feel comfortable with the Mahalo setup, and not throw yourself into it.
2) The "Freelancers"
If you had a freelance mindset, there were also a number of points of discomfort.
- Freelancers want to get paid promptly for their work
- Freelancers want to get paid for time spent or words written
- Freelancers want to deliver a piece of work and be done with it
- Freelancers like to concentrate on their craft, and leave clients to worry about business value
- Freelancers are very leery of any perceived risk of not getting paid for work done
- e.g. Mahalo dollars which can change in value, and whose cash out rules can change
- e.g. Pages which could be revoked anytime, so losing the expected revshare
Now remember I said I don't know why the revshare model didn't work...
I still don't!
All this is in the realms of hypothesis and speculation.
But the speculation is that the entirety of the Mahalo ecosystem, not just the revshare model per se, did not suit either "entrepreneurs" or "freelancers" well.
It looks like the new system is designed to make the freelancers a lot happier, while the entrepreneurial folks will have to look elsewhere for their micro-entrepreneurial kicks.
My one suggestion would be that Mahalo think about the possibility of a model that works for both types of people, something like the franchise system.
Consider something like a Subway franchise. The people that make and serve the food don't (by and large) want to be entrepreneurs. They want to get paid every week for the work they put in. And they're typically people that are pretty happy to work for a good manager and do what they're asked to do.
Now think about the guy that owns a Subway franchise. Well they don't want to be a glorified company employee. They want to be a semi-independent business person that owns something with great prospects, where they can use all their business and management skills to make it as great and as profitable as it can be.
Now it could be that in Mahalo, "Subway franchise owner" could translate into something a bit like a Mahalo VM. But "Subway hourly-paid worker" probably does *not* translate into "Mahalo PM" at all, but into "anyone that a Mahalo VM decides to work with to build their vertical".
Summary
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The revshare model may not have delivered as expected because the Mahalo ecosystem did not suit either the entrepreneurially-minded, who'd want lots more freedom in how they work, and more ownership over what they produce, nor did it suit the freelance-minded, who want to just concentrate on writing and get paid quickly and predictably.
It may be possible to create a system that attracts both kinds of people, though that might involve Mahalo having to give the entrepreneurially-minded more freedom and ownership than it would like.
Note that if these speculations are correct, it's not solely the revshare model that was the cause of how things panned out,. Rather it was the way different pieces of Mahalo culture and process came together.
Also, anyone that seeks to create high quality content on the net, whether it's Mahalo or the New York Times, faces the big question of whether the revenue available can pay for the volume and quality of work they are looking to create. I guess the jury is still out, and hopefully Mahalo will be the one to find a business model that can make this fly.
I personally would love to see lots of high-quality, trustworthy information on the net, and that goal is one of the things I liked about Mahalo in the first place, and an important part of what kept me participating all this time.
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M$Wow, I am so sorry to let everyone know the failure of this is entirely my fault.
Due to a typo in the mornings duty roster one day instead of "Revenue Sharing" I typed "Revenue Shearing" and then all heck broke loose. A bad investment in a 100 acre Alpaca farm, a professional team of Swedish sheep shearers, new training and equipment, 35 pairs of Birkenstocks, 3 horses, 3 buggys, a grain silo, and a galvanized bucket to bathe in and Poof! by lunch that day we had allll moved to eastern Oregon and began the delicate process of shearing 100 restless new Alpacas.. after all we need the revenue from the shearing. We were glass-eyed, dreamy, hopeful, and excited to say the least..
The project fell apart by quittin' time that day due to a language barrier, a PETA fiasco involving the Oregon National Gaurd, a runaway horse and buggy, a steel bucket meets lightning strike during a bath incident, and one person who will remain nameless and their inability to figure out how to work the grain silo during an "accidental" fire.
We will pick up the pieces, we are of strong stock... but not one of us will ever be the same.
I am so sorry.
I called 911
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M$Mahalo staff should have devised a way that earning AdSense was dependant on creating better SEO ratings for the site - asking relevant questions is a good one, but also updating pages, perhaps. Small things that nevertheless benefit the site.
I feel that, too often on this site, there is a large gap between "those who don't contribute" and "those who contribute." There is no option for a gray area, and that leaves a lot of users in the dust. Frequently, members of sites are quite happy to just sit and watch, or occasionally take part in activities - it's not often you find people who are willing to dedicate all their free hours to creating and maintaining their online achievements. That is what paid staff do, not site members. I think it would help immensely if there were separate levels of page management - those that created one per week, five per week, ten per week, fifteen per week, and those that were vertical managers of five, ten, fifteen pages. All payments varied accordingly, of course. This would encourage even the smallest contributers to pitch in, which would more effectively balance out the numbers.
That's my thought, anyway. :)
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M$
Sure, every little bit counts.
I also can't stand this either/or idea of "People who Aren't Contributing" Vs "People Who Are contributing".
If you select some kick-ass people to create stacks of content all week, but still allow others to contribute great stuff when they can, it can only be win-win, to my mind.
Also, it was the Mahalo Dollars aspect. If you tell someone you are giving them 30% of the rev share, then you only give them 75% of that, it will turn people away from the system. Then there was taking away part of your rev share for the VM's that made a lot of people quit immediately. I got really turned off by that.
But Mahalo had to make up its mind if it was going to be an adsense site or a content site. Well written content pages and how-to's were not making any money. It was coupons and celebrity pages that were raking in the bucks. It's discouraging to put so much time into writing a good how-to, only to have it never make you another penny.
Taking away rev share is not the answer, I don't think. I believe paying in real dollars is the answer, but Jason will never see that. Now the only way to make Mahalo dollars is through the answers, which is not going to be that popular when all you can get is a $25 gift card for $44.
This is a disaster, mark my words. I know you are going to lose a lot of money from this, Rob. I'm sorry about that.
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M$
When it comes to page management, I sometimes put a great effort and do history work to build a good page, with original content. I may spend hours working on a page because of research, fact checking, etc. Over time, I will make relevant updates, additions, etc. That page may generate $0.02 in revenue over the entire year, at the whims of the search engine sprites.
If a good writer is going to make an effort producing quality work, there needs to be a level of certainty that the effort will be compensated appropriately. Would you spend countless hours maintaining a garden if you weren't guaranteed the vegetables would grow?
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M$
I am not a 'green' write on the web - I have hundreds of articles and opinions on various opinion sites and content oriented sites - I am a fairly successful writer on many sites, and what helps me is the simplicity on these sites - it's obvious from the outset exactly what i need to do to earn money.
There's so much on Mahalo that isn't. For example - I note that on many of my questions and answers I see Pending Adsense revenue - but I thought I only got revenue on topics and 'pages' - so why is this showing up on questions.
The key for me is simplicity - and not just simplicity for veteran members - it has to be so simple that every new user immediately understands what it takes to earn on Mahalo.
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M$
The rest was a little bit of icing on the cake. Revenue sharing from the point of view of a writer like me, worked if it gave me a penny extra. The fact that some of my pages earned $.50 or more in a month on rev. made it so that those pages grossed more than minimum wage for the time put in.
I didn't really care that I was earning minimum wage. I could write up a page or two in an evening when I was home alone, the house was clean, laundry was done, critters were fed, and I wanted to work towards the $150 I was hoping to gross each month that would go towards extras in the household.
Even when I write on other sites, I know that my article on a horse related topic will not generate the residual income from ad impressions that someone else's article on the latest Hollywood sex scandal will. No big deal. I could care less. If my article makes a little extra, its all good with me.
I can't see how there is ever a failure when a person is making some extra money no matter how small. The "failure" tends to be perceieved by the one sharing and not getting as big a slice of the proceeds, again no matter how small they may be.
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M$
I'm with you on this. I tended to write pages on areas of interest and expertise that weren't likely to get the kind of rev share coupon pages and celebrity gossip bring in. But I enjoyed writing the articles, took great pride in giving 150% to create a good page, and enjoyed getting some extra income for my efforts.
I wasn't making big bucks, but that didn't make me think rev share didn't work and needed to change. I'm a bit offended that Jason takes the tone of speaking on behalf of those who weren't making a lot of money ... why assume we begrudge those who made more profitable subject choices? I was happy with the system as it was. I am heartbroken at having my pages taken away.
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M$I write web content through DS, which stands for Demand Studios. They pay according to article length, but it works out to about 3 cents per word. If you write a set number of articles each month for 6 months for them (which I never quite manage) you have access to a group health plan. I don't know if the plan any good or if its is affordable. Probably not. DS sells their content to lots of big names, so it's kind of exploitive--I mean, they pay you $15 for 500 words and sell it for god knows what to the NYT and EHow and all kinds of other sites--but it's steady money for when private client work dries up, which it does more and more, for me anyway. They pay through Pal Pal every Friday no matter how much you made that week, and they pay the Pay Pal fee, not you. Some people won't write for them under their real names, because they feel DS is a mill, but I'm not that fussy. Here's a link to a review I wrote of DS for a guest blog post, if you are interested: http://uninvitedwriter.blogspot.com/2010/04/freelancer-and-corporate-model.html
Demand Studios is a corporate content service. You apply to their service the same way you apply for a job. sometimes they are taking apps, sometimes they aren't. If they are taking new writers, you then can choose from a pool of articles and write as many or as few as you like on a pay-per-article basis. I mostly write about gardening and insurance topics for them. Another service like this is Break Studios--same model, but they pay a little less, about 2 cents per word. I've yet to submit an article there but I did get in right away.
I write fiction on my own and submit it to ezines and paper publications, the old fashioned way. I am also an editor at an ezine called Eye on Life, where I write three regular columns. I am currently working on a series of e-books I will eventually self-publish and market at Eye on Life, where I have an Amazon store. I also write for pay occasionally for Copia, an ezine. The articles I write for Copia are nonfiction, adventure type (travel, try this, do that). They pay me $50 for 700 words and have contracted for five articles this year. I owe them four more and I should get on that, seriously. It's almost July. I am always looking for new markets, which is how I ended up here, but I don't think I'll stay.
I'll include the links for these various places in case you are interested, plus some links to other places I write in case you are interested in those too. I also have revenue-sharing content up at Triond, Suite101, and Bukisa--don't make a lot there, but they stay what they are, don't change it up too much or too often, no community, just slap your stuff up and get a Google percentage while they do the promotional stuff. I like that model. Triond is nice because they pay every month, no minimum for pay out.
I used to use Elance a lot and I do retain some clients there but Elance has gotten really trashy and its hard to even get a penny a word, so I don't bid on jobs there anymore, I just use it for my existing clients so i can escrow payments. (Get payment up front before starting a job and hold it in escrow.)
Thanks for asking and again, I apologize for any confusion I caused with my comments. Best of luck to you and let me know if I can do anything for you. Making a buck writing is hard no matter what, but making a buck writing fiction is REALLY hard. I write the fiction for me, the other stuff for money. I have better luck with little literary publications (payment in copies) for fiction than paid markets, but I'm working on that. I have had some decent fiction publications, just no dinero for those publications. If you're interested, Eye in Life, the ezine I was talking about, has an awesome writers group at Ning. Check it out. You might enjoy it:
http://eyeonwriting.ning.com/
I'm also including some flash fiction sites that are always looking for content. I had something published at Weird Year (fiction) and Yesteryear not long ago. It was fun and you can list it as an actual publication on your resume/vita.
http://breakstudios.break.com/
http://www.demandstudios.com/
https://secure.elance.com/
http://eyeonwriting.ning.com/
http://www.eyeonlifemag.com/
http://www.eyeonlifemag.com/i-hate-my-job/
http://www.eyeonlifemag.com/the-paranormal-detective/
http://www.eyeonlifemag.com/the-pgrundy-review/
http://diaryofanalienlifeform.blogspot.com/
http://paranormalpopcorn.blogspot.com/
http://www.weirdyear.com/
http://www.yesteryearfiction.com/
http://www.dailylove.net/
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M$2. Cost-per-Click advertising distributes earning highly unevenly
3. Due to #1 and #2 Contributors could not figure out how to work hard and get a return. Success was largely based on luck.
4. Quality contributors were, in large part, not interested in revenue sharing. 19/20 contributors told us they wanted a flat payment they could count on.
That's it... if any of these were to change significantly I think it would have been a massive success. Some day when we are at 10x the traffic we might try again.... perhaps a modified version where folks get 10% of the revenue from their pages and 30% of the revenue from all of the pages split evenly.
Anyway, we tried and now we're on to the next phase: the march to 1,000 contributors getting ~$300 a week.... next year we might have the largest dedicated contributor base in the world!
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M$
Jason,
Thanks for the explanation. Am I understanding correctly that this was when you started looking for guides for the change that will take place tomorrow? Did the applicants know that they could (as many have) cash out hundreds and thousands of dollars per month with uncapped potential, or was the upcoming change that M$ will no longer be convertible to US$ already an underlying reality? If the latter, it would be unsurprising that nobody in their right mind would take such a job if you could not get a well-defined rev share convertible in a reasonably stable way to real money.
Jason,
I'm really curious where the "19 out of 20" statement comes from. Was there some sort of poll of PMs (if so I must have missed it)? Are you quoting the number based on the fraction of people who were active PMs and making less than those taking on the new guide positions will? Something else?
I'm not being facetious here, I just really want to know the answer.
Yes, 95%+ of people did not want to build on spec for months to perhaps make a revenue share some day Opher.
Also, the people who did say yes did maybe five or 10 pages, and quickly became disillusioned.
If 50% of folks were willing to build pages for three to six months before getting to $500 or $1,000 in revenue, well, we would still be doing this.
Folks who are super disappointed in our revenue sharing experiment ending should get together as a group and create a website based on revenue sharing and keep the experiment going.
My guess is that when you launch your own service Opher, you will quickly become frustrated by the number of people who are happy with it, the number of folks who say they will participate and then don't and perhaps most of all by the direction your service will take in terms of quality.
The revenue sharing rewarded people doing a lot of pages of low quality. Our new system means we have less contributors doing more work, and we can pick who those people are. This means the bottom half of our contributor base in terms of quality will go to one of our competitors like Suite101, and our best contributors will stay and do more work.
This means over time we will spiral toward quality and our competitors will spiral toward a landfill of low quality content..... now, if only Google could really understand the quality difference between those pages. :-)
@Opher,
We got over 5,000 applications for writing positions via job sites for Mahalo. Over half of them would respond to use when we pinged them back. That would reduce the pool to 2,500 who were interested enough to respond after sending in their resume. Of those we could get 10% to actually create and account--so maybe 250. Of those 250 about a dozen became actual steady contributors.
Most folks dropped off when we explained we paid a revenue share in virtual currency every 30 days.
When we shifted to weekly pay in a currency people had heard of we were crushed with a response.
So, the 19 or 20 thing is probably generous!
This is so wrong it is comical!
We are making these changes so more folks can make money and it will cost us more money to implement the new system then keep the old one.
We didn't change the system to screw anyone... we changed the system because it was only working for the top couple of individuals (like you could count on one hand). the average payout was ~$400 or so, and now we will have 60 folks averaging around $1,200 or so.
in the next year it will grow to 200-500 Guides and $1,300-1,500 a month i would guess.... and so on and so on, until we hit 2,000 Guides and $2M a month in payouts... which i think is where this will wind up.
the fact is a VERY small number of pages made a lot of money (think a couple of dozen coupon pages and how to pages) and 99% of pages made very little. that is the nature of search-driven and adsense driven sites.... a small number of pages make a lot, most make a little.
that is why things "failed."
and failure is that only 10 folks ever really got to cash out over $1,000 each month... most months we were under that.
now we will have over 60 folks breaking that number, and if the market is showing us that they really like the new deal. 100+ folks are linning up for those 60 slots and that's after one day!!!
we need active contributors, not the folks who sat on pages (which was most page mangers).
The cost of running revenue share is 1/3rd of our time and effort... so, keeping any piece of it is simply not worth it. It's much easier for us to just push a large chunk of revenue to our Guides and give a bonus based on quality.
We've got to build a system that scales or we simply won't be here three or four years from now. We're not building Mahalo to have a small site--we're trying to have one of the top 100 and then the top 25.
to reach that kind of a goal we simply can't build a service that only a handful of people want to participate in.
I'm bummed out that revenue sharing only worked for a small number of people and failed to inspire a rush of people to Mahalo.... I obviously thought it would or i wouldn't have invested over a year trying it!
However, after 48 hours we have 150+ qualified folks who want the 60 Guide Positions. It seems contributors have voted, and they voted against me, revenue sharing and the other folks on these threads who loved the concept.
I can't force people to agree with us.... and I can't sit here and watch the site stall from a lack of new contributors. I've got to do what's best for everyone... not just the dozen folks who love revenue sharing.
The good news is that the folks who love revenue sharing can start their own site and share the revenue... proving me wrong. I'm dead serious, if folks love the system so much nothing is stopping them from going and starting their own site that copies exactly what we tried to do over the past month.
@jason' s point is puzzling.
On old system, it's $400 x n where n being the number of Mahaloians.
On new system, it will be:
$1200 x 60
and
$0 x (n-60) (may not be $0 but maybe some low $)
If these really equate, what is n ?
400 x n = 1600 x 60
n = 240
But it's not good to envy about the 60.
We should help them to get more ads revenue :-)
@jasoncalacanis
Is it possible to have high revenue pages be spared from the Confiscation ?