Hi-ho, intrepid entrepreneurs and vicariously-thrilled spectators, and greetings from yet another busy yet more and more productive a week here at MetroProper. This is my third online update now, since becoming Chief Operations Officer of Proper (or COO; also known as "Executive Vice President" in more pretentious circles), back at the beginning of July; and things are still the same as the last update, with it almost 100-percent likely now that we'll be open for early adopters starting August 15th, i.e. 12 days from now. Nothing special is needed to be an early adopter, by the way; just show up! It's the full version of the network going live on that date, just with the celebration and press release pushed off two weeks (to September 1), so that all you nerdy web geeks, friends of ours, and members of the press (both professional and citizen) can get in there and play around with it, while there are still some bugs we haven't caught. In fact, there will be special "report a bug" and "suggest a feature" boxes on each page during this "alpha" time period...and not only that, but with all of them being sent directly in real time to our founder and CEO, Phil Tadros, who will literally be logged into Proper about 10 hours a day during testing. This is Phil's single-most favorite thing about being CEO, in fact, is getting in and actually playing around with the site, talking with other members and solving their problems; if he could get away with it, in fact, it's all he'd do as CEO, a fact which naturally drives me a little batshit sometimes as his second-in-charge.

Anyway, I find myself with a little extra time this morning, so thought I'd get an update posted about the newest with us; although disappointingly (or perhaps as a huge relief for some of you), probably not another barn-burning saga like the last two have been. There have, however, been some interesting things going on, so let me get right to it.

Okay, so after posting my last entry, I realized that I had left one important detail out of our vision for the company; how we're planning on paying for all this, duh. And that's partly on purpose too, because this is the one part of the plan that keeps changing the most on a day-to-day basis; the one we know the least about, the one that most needs to be set in stone before we officially open. It's almost pointless to detail our monetization plans in public at this point, really, because they keep changing in such a fast way, with the plan from a month ago almost unrecognizable from what we have in place now.

Nonetheless, here's the plan we're working on now, as of August 3rd...

1) We start with free usage for all; the ability to post and respond to classified ads, post and respond to event announcements, even if you're a casual visitor and haven't signed up for an account. (Yeah, just like Craigslist and Upcoming work.) And then if you're just an individual person hanging out there, not self-employed or the owner of a small business, you can just sign up for a free "Individual" account there, and have the same thing you have at MySpace; a multi-page profile, with some fields of information we define (like name, age, location, etc), and most that you define, like maybe who your favorite bands or writers are, five things you'd take to a desert island, the hottest goth lead singers of all time, etc. But better than MySpace, too; no external ads, no banner ads, no lag times that drive you crazy, no crazy color schemes or blaring unwanted MP3s, better uploading and playback of multimedia, with photos automatically resized so that they don't run way off the horizontal edge of your browser. And with your new email simply sent to your normal email account, instead of you being forced to come back to our site and read/respond to it there. (Yeah, it drives us crazy too.)

2) If you do own a small business, though, or are self-employed (freelancer, artist, performer, consultant, model, etc), for just a tiny monthly fee you can actually be listed as a "Business" or "Self-Employed" in our database, instead of as an "Individual." (Right now we've been talking about $1 to 5 a month, although that might change.) And if you're there to be serious, to find new business and customers and clients, this sends a powerful message; that you have your shit together enough to at least have a credit card, and to sit down and create an account. That alone gives you a big advantage at our site over the people who don't do this; and that's because when people do specific business searches, only the listings categorized as "Business" or "Self-Employed" will show up, meaning that you don't compete for attention with any of the free accounts. For this smaller fee, you get a "Basic Business" profile; the fields we define for you, that is, the exact information in a typical yellow-pages ad. And considering how much the yellow pages charges you for a listing ($40 a month at Yellowpages.com, for example, just for one city, $10 a month for each additional one), we hope that an amount like $1 to 5 a month for all 300 of our cities will be a little more reasonable for all you tiny businesses and freelancers out there. (That's $36,000 a year, for those who are keeping track, to have your listing appear in 300 cities at a place like Yellowpages.com; $12 to $60 a year for us.) And then if you want to keep maintaining a full individual profile for yourself at the same time, for free, you can do that too, so to keep in touch with your actual customers in a casual way.

3) Ah, but for $12 a month, you can marry the two; you can grab all that detailed information from your full individual profile, the ability to add friends and run comments and the like, and add it to your business listing. And see, when you do that, all that additional info shows up in searches for businesses and the self-employed too; this gives you a powerful advantage over your competitors during big generalized searches, because it's your listing that has the most information. And the most specialized information, too; not just that you're a graphic designer, not just that you're in Minneapolis and have your own website, but that you're fluent in Ruby and AJAX, volunteer for the W3C, and hosted a panel at last year's SXSW Interactive. And with your portfolio right there in your profile, even the multimedia bits, and with lots of great comments from past clients. Yeah, sure, who do you think that person is going to pick, who was searching on "Minneapolis graphic designers" in the first place?

This is where our education campaign comes in, as I mentioned last time, a special section of our marketing plan and budget, where instead of running ads we sponsor networking events, write and distribute tutorials, build the tech needed to display tag "clouds" and "frequently used tags" lists and "related tags" features at the site itself. We really do feel that this $12-a-month option is going to be an extraordinary one for small businesses...and ooh, especially all you niche freelancers in odd industries out there; but only if you all learn better and better how to actually use the tools at your disposal smartly, to attract as much new business as possible. That's what we'll be doing; holding contests, writing help guides, sponsoring social events, hosting a blog and wiki, where all of us as a group come up with better and better ways to use this stuff. We're hoping it'll convince a lot of you out there to go the extra effort, and spend that $12 a month to marry your "Individual" and "Basic Business" profiles into an "Advanced Business" one. That's $144 for a year, probably with a discount for purchasing a year at once; ShopLocal.com, for example, another one of our competitors, charges over $300 a year for basically the same thing (and under a system that doesn't work as well as ours will, frankly).

4) And then for an additional, oh, maybe $60 to 100 or so a month, you can actually purchase an "ad" in our in-house advertising system: our "Featured Profiles" section, running along the left-hand side of every single page, the only form of paid advertising we have at the entire site. That $60 gets you X amount of pageviews per month of your profile photo and name in that section, with $100 getting you Y (with "X" and "Y" still to be determined); you'll also then be able to specify that your ad show up more often during certain times of day (if you're a restaurant or bar), more often within certain sections or listings (if you're in a niche industry), etc. This is combined with the "analytics" page that all businesses and self-employed members get as part of their membership fee; a special page in their user account, showing exactly who is checking out their profile and "featured-profile" ad, not only by traditional demographic criteria (age, neighborhood, etc), but also by the rich information those people are publicly posting at their profiles (like favorite bands, what they find important in a company, etc etc), aggregated into a series of friendly charts and graphs. And then finally, of course, the promise that your featured profile is the only type of ad that ever appears; no competing against big flashy expensive national banner-ad campaigns, in other words.

So? Eh? A plan? We think that under this pricing, backed up by the multi-tiered marketing plan we have in place, we'll have enough revenue coming in per month (around $16,000, that is) to be a self-sufficient company by February 2007, and never have to borrow money or sell off a chunk of the business again. That's the hope, anyway. And like I said, take all of this with a grain of salt; it's still changing on a daily basis.

So, all you MBAers who have been following along have realized this by now, that the key to our competitive strategy rests in the relationship between money and innovation; that is, that we need to come up with as many great solid ideas as a fully-funded tech company does, and implement them as technically perfect as a fully-funded staff would, but at a fraction of the price of all the rest of them. And when I say a "fraction," I'm talking literally; as in, we really do want to pull off the same stuff next year that a million-dollar (or even $5-million) company would, but to do it for around $200,000 instead. And given the backgrounds that Phil and I have, this is an extremely reasonable thing to shoot for, and in fact a big natural advantage we have over most of our competitors; I mean, Jesus, we just pulled off a $100,000 launch party last month for a little over $3,000, all in under two weeks, and I know barely anyone else in the business world who can say that. Phil and I definitely know how to pull off really cool things for barely any money; most of our competitors don't, which is why we made that our main competitive strategy in the first place. That in turn fuels everything else; it lets us charge a lot less, to grow organically, to have less "chefs in the kitchen," so to speak, because of the fewer amount of outside investors needed. That then brings in more new customers, coming in much faster than at our competitors' places; and much happier customers, who will go out and convince their customers to become customers, without us having to spend an obscene amount of money on advertising, trying to convince them ourselves.

Oh, but all you MBAers know exactly where that first leads us -- straight to EXECUTIVE PAY, EXECUTIVE PAY, a topic so important that I can only envision it in all capital letters. In fact, for all you entrepreneurial dreamers out there, be ready for this to be your first big shock about opening your own business -- that nearly half of your entire yearly budget will be spent on the people actually managing the company, no matter what that company is and how many people you have on staff. And do you know how much executives go for in the Loop nowadays? Product developer -- oh, $50,000 to $75,000 a year for a decent one, $100,000 to $150,000 for a really good one. Project manager -- about the same. Art director -- yeah, about the same again. Marketing director. PR director. HR director. VPs for strategy, vision, innovation. Etc. Etc. Etc. And my job? As COO? Well, according to Salary.com, if I was doing the same exact job I'm doing now but down in the Loop, I'd be getting paid around half a million dollars a year.

We can't afford that. We can't nearly afford that. In fact, with a projected budget for next year of $200,000, we can only afford about $75,000 to $100,000 for the entire team, plus whatever pay Phil receives as CEO. Yeah, a real dilemma, because Phil and I can't do it all ourselves; there's no way we could develop an entire long-term vision, competitive strategy, marketing plan, budget, promotional campaigns and project schedules on our own.

And then, I started getting an idea. And that's because of what all these people started doing around us, starting around a month ago when we first started talking about the site in public. People started volunteering ideas. Good ideas. GREAT ideas. And smart ideas, too, things that just naturally fit squarely into the plans we were already putting into place. And that's because, all egotism aside, we've got a pretty good plan from the start; something that's been really getting a lot of people excited, we've discovered, even from the first moment they hear about it. Let's face it, Phil and I are surrounded by people in our target market in our day-to-day lives; our actual creative teams, for example, who are small-business owners themselves, plus our personal friends who own their own businesses, plus freelancers who do such big-idea stuff professionally, and who all want jobs with us. Plus, you know, customers! Believe it or not, in fact, the absolutely most useful new ideas we've gotten now have come almost exclusively from our customers themselves, not from anyone we've paid any money to, to "professionally" come up with new ideas for us.

So, I thought, why not formalize this? Why not start up a thinktank? the Proper Thinktank, in fact, made up of all these types of people I just mentioned, whose only job is to sit around and think of big ideas. We've decided to meet up as a group twice a month, in fact, at Phil's cafe (Dollop) here in the Uptown neighborhood, to just have these big three-hour bullshit strategy sessions about commerce and business and innovation and how it can all be combined together. Then we match this with an "intranet," basically a glorified private message board, where the bulk of the actual work gets done; where ideas are turned into plans, plans into goals, goals into schedules. (We're using Basecamp to do this, by the way; hell yeah it's exactly as good as all your friends keep saying it is. Attention, 37 Signals! We are based in Chicago too! We want to do something cool with you! Please! We are in awe of Basecamp! Seriously, write to me at ilikejason [at] gmail dot com if you're interested!) The full list of thinktank members is about 10 right now, will probably go up to nearly 20 before it's over; that way no one has to do very much work themselves, just what they have the free time to devote to it, with Phil and me and our lead architect Tom Gillis being the only ones actually on a weekly salary and required to be there each day (Tom one hour a day, Phil and me 8 to 10).

It's done mostly for fun, or for networking, or for having a bigger say in the creative assignments one actually does for us in the future for decent money; that's the basic idea. But then with a little bonus as well -- that if one of your ideas actually does get implemented, we pay you $500. We shoot for purchasing around 12 ideas in the next year; that makes for about $6,000 altogether to develop a deep and complex long-term vision and competitive strategy. And then without going into detail, that's how executive salary works as well; all three of us receive less pay than we would in normal corporate circumstances, but with "pay for performance" clauses where we can earn a significant chunk at the end of the year. Combine it all, for a grand total of around $75,000, for the output of an entire full-time senior management team. (And yes, that $500 for good ideas is available to customers too -- in fact, we're making it into a year-round contest at the site: "Suggest a feature and you could win 500 bucks.")

Hmm. Yeah, I know. It's unproven, I know that. It's risky, and I know that. It could very well fall flat on its face, and be this huge disaster that makes me look like a complete ass. I know that! But jeez, would it be cool if it actually works. And not only that, but how wonderful that it could mostly be done through the work of brilliant people in their twenties and thirties, people just like me, who have great ideas but personal quirks that have kept them from lucrative corporate careers. Tom, for example, is a full-time tech nomad; he owns no apartment, no furniture, demands the right to leave town at a moment's notice, to travel for as long as he wants, and to not have to give even an idea of when he's going to be back in town again. And I have a feeling that no traditional companies have been willing to hire him as an executive under these conditions, which is what's stopped him from getting paid just an obscene amount of money in the corporate world for his legitimately genius-level skills and ideas. Phil and I, however, have absolutely no problems with such an arrangement; in fact, we specially tailored Tom's job so that he could do the entire thing through the internet, whenever was most convenient for him, getting paid over the internet as well, so that he could not only travel freely but do his full-time job for us too.

That's what I'm talking about; getting smarter. The more I look into this stuff, the more just pure, undiluted waste I'm seeing in most corporate structures -- the very thing that makes most of these companies need $5 million a year to operate, that forces them into borrowing money from venture capitalists (the only ones with this kind of money to loan), that forces them to hand over half ownership in return and basically become these VCs' bitches, which is something we in particular are trying to avoid at all possible cost. All those middle managers; all those vice-presidents; all those people with big fancy titles and big fancy expense accounts, who when all is said and done aren't doing much more than 10 hours a week of actual work. And it all boils down to a very simple thing, too, something that can be easily corrected, which is why it's such a surprise -- it's fear. It's the fear that you hired the wrong person, and that they're going to screw everything up, and maybe put your own job into jeopardy. So for God's sakes, you better surround that person with a bunch of other managers and supervisors too, and make sure they're in the same cubicle every day, exactly from 8 am to 6 pm each day, so that you can get it confirmed four or five times that that person actually is doing their job.

The key to cutting the waste from senior management, I'm convinced, is to cut the fear first: to get to a point where you're utterly confident about the people you're hiring, and trust that they can work unsupervised for long periods and still get their job done. And like I said, that boils down to a surprisingly simple set of steps, that mostly involve just being smart about it all: to conduct interviews in a smarter way than they're normally done, ask smarter questions than most do, do smarter research about the candidates applying (like, duh, Googling them instead of just reading their resume). It involves you as the head of it all taking on more responsibility and more crap work; to take on some of the actual scheduling, some of the actual phone calls and other executive-assistant work, the kind of stuff that makes most middle-aged white guys say, "I'm way too important to have to deal with that kind of stuff." It involves sharing your plan with these people, and to be a transparent company; to actually get everyone up-to-date on the entire vision, share a surprising amount of it with the public, so they'll know how to elegantly add ideas to it, instead of us being deathly afraid of one of these people stealing it all and running to your competitors. We don't mind people stealing an idea or two from us; we know, after all, that it's a combination of ideas, execution and promotion that makes for a black-ink company, not just the ideas themselves.

Like I've said many times, I believe most humans too stupid to be able to pull off this simple stuff; and that's why the corporate world is in the kind of mess it's in right now, why these smart start-up websites have been stealing just billions and billions of dollars from them over the last decade. Like I said, I believe this is a big difference between us and the kinds of companies that need $5 million a year to pull off the plan we're putting together. And like I said, it's a risky plan, an unproven one, one that might blow up in all our faces. I'll say this, though, that it's nice to finally have a chance to put ideas like this into place, to actually have a budget where I can run around saying, "Yes, I'll take one of those, and one of those, and one of those too, please."

I guess we'll all find out the answer a year from now, right? That's one of the most beautiful things about business, in fact, at least in my opinion, is that bullshit theoretical arguments go out the window at a certain point -- you either pull a profit or you don't, either go out of business or expand. If at this point a year from now I'm reporting gross revenue of $1.5 million, if I'm reporting a 700-percent profit margin, as I'm expecting to do, then I'll feel justified in giving that giant middle finger to every boss I've ever had in my life, for dismissing all the ideas I've ever had about making their company a better and more efficient place. Let's face it, that's why I quit the corporate world for good in the first place, back in 2004; because I just couldn't face even one more day of the utter, UTTER stupidity I saw there, the UTTER waste, the UTTERLY incompetent people who were for some reason the ones actually in charge, while all the actual smart people were their secretaries and project managers and designers, having all their ideas ignored so that they could handle another phone call or xeroxing assignment. And, you know, if we're closed a year from now, I guess that then gives you official permission to laugh at me, make fun of me in public, write your nasty little emails that say, "Suck it, Pettus, SUCK it!" That's fair, I think; like I said, that's the beauty of capitalism and a free-market society, that it makes things very cut and dried, not really open for interpretation or argument.

Okay, back to work. Talk with you again soon.