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March 06
This is another of the very helpful Harold posts that I feature here.
please enjoy
Julie
AGLOCO is a ‘big’ idea. What I mean by that is that AGLOCO must attract a big community to be effective. By their own standards the creators of AGLOCO have stated they want a community of at least 10,000,000 members. (Seems like a big number but it is just about 1% of the current Internet population.)
Oh don’t get me wrong, I think they can be profitable at 500,000 or so. But to really be the Internet Revolution I and others think they can be, they need to be 10,000,000 on their way to 100,000,000.
AGLOCO is still a pre-launch company (yes they have an enormous amount of publicity for a pre-launch Internet startup coming out of Stanford University – but they only announced their existence four months ago). Much focus has been on AGLOCO member growth and the AGLOCO referral system. It has been stated by AGLOCO that less than 20% of AGLOCO members will ever have a referral and less than 5% will ever have many referrals.
So, AGLOCO is much like a big tree with lots of leaves – regular members represented by the leaves. Like any tree, it will only flourish if the leaves are healthy.
To do that AGLOCO must appeal to a large segment of the world’s internet population. Let’s see what their chances look like.
Cost /ease of being a regular AGLOCO member.
• Free – no cost to join or maintain Membership – software is free
• Joining takes less than 2 minutes.
• Viewbar takes up a small amount of the desktop while surfing
• All information private – so no cost there
• No spam (a once a month AGLOCO update email appears to be the total email incursion.)
• Viewbar can be turned off anytime with one click – no spyware
Conclusion – cost to regular members is very low.
Benefits of being a regular AGLOCO member
• Some utility (probably not as much as the Google or Yahoo toolbars)
• Income from monthly surfing - $50 to $100 a year (smaller in first year)
• Income from affiliate rebates (discounts etc. - varies by person greatly - but the biggest users of the Internet would get the most benefits)
• Income from being an owner – could be more than $100 if a regular member is an early joiner.
Conclusion – a small but reasonable amount of cash income plus positive value of software utility.
Based on this very quick look at AGLOCO’s leaves, they should be very happy. They do almost nothing and get something (even $50 a year is infinitely more than any other software is paying them).
As the AGLOCO economic network grows over time, the amount of utility should increase as well as the actual cash economic dividends. This should mean the leaves stay green and the AGLOCO tree continues to grow healthy.
I do think that AGLOCO is a good idea for ALL Members. February 21 McCall - nothing to add
How I got to 17,000 AGLOCO referrals - and you can copy it for free - really, nothing to buy :)
I crossed over 17,000 referrals a couple of days ago. How did I get there? Quite simple; I have recruited 110 people so far and they recruited 17,000 more.
I have blogged more than once on this and recently I sent out an informational email to my direct recruits (I know about 80 of them). I listed all the resources I use to recruit with and give answers to questions I often get asked when recruiting.
Here is that email ---
Dear Francis,
Below are links to many of the places I use to learn or update myself on AGLOCO and where I send potential new members to go read about AGLOCO.
My suggestion is that you use this as best you can and more importantly you send it on to the AGLOCO referrals you personally know and let them use it and send it on.
Here goes:
Are there sites to send potential new members to read about why to join AGLOCO?
Is it really happening?
Is it too late to join and do well?
Do you have a good referral plan I can read?
AGLOCO economics spelled out (how much money can I make
Is it spyware?
Can you give me a good email to send to friends?
Can you tell me what to say to someone in person?
I want to create a blog to send people to – do you have some good samples?
Success Stories?
Please read as many as you have time for. And try to remember to forward on to you direct AGLOCO team.
RZ
I have read that question more than once on comments around the Internet.
Seems we have some Capitalists among the Revolutionaries. Well it is an Economic Revolution, so I think the Capitalists are in the right place, at the right time and are asking the right questions.
With ALGOCO there are two distinct different forms of payment for two distinct forms of member effort.
The two efforts are:
1. Being an AGLOCO member – using the Viewbar and generally being a worthwhile Internet economic ‘person’. (Looking at ads, downloading software and buying things online.)
2. Being a builder of the AGLOCO network (this means referring new members to the system.)
The two payment types are:
1. Cash – monthly (PayPal, checks, e-gold, direct bank deposits, Amazon dollars etc. – member picks his favorite least cost payment type)
2. AGLOCO Ownership – accumulated hours earned over time – earned directly and with referrals.
Here is how I analyze these things
Cash – (below are my opinions)
• I believe this will be very small amounts during 2007 slowly growing over time. • I think that the ‘ affiliate’ revenue sharing for people who do shop online will be the biggest source of cash to those people. • AGLOCO must pay its operating cost (as small as they probably are) before having money to pay members • Over time this should grow to more than $10 a month for the average member. • Builders will just get more of this.
Member ownership
• This all members should be accumulating starting with the first hour of viewbar usage. • Valuation of this I have blogged about with my six part Simmons Report series. – (but using the Simmons Report $150 over a two/three year period is a value that should be reasonable.) • How to sell these hours before AGLOCO is a public entity is a worthwhile question. My guess is that some enterprising member will set up a marketplace to buy and sell hours (like they buy and sell airline miles – big business in that I searched on Google and got 94,000 pages about it. This market would provide the cash some people would prefer today and a huge potential upside for those members who think AGLOCO will be a breakout winner. • AGLOCO’s website says they will use part of their profits to buy ownership from members. • Builders will just get more of this (much more) – The Simmons Report uses an average value of $30 for each referral – of course this will be more for early referrals and will only have any value of the Viewbar is used by the referrals.
The question of who would buy ownership of AGLOCO is a very simple question.
The answer is anyone who buys stock in any profit making corporation.
The Simmons Report does a nice job of outlining AGLOCO as a profit making corporation. If it paid out all its ash to members, then the it would be more like a club than a company. By making and retaining profits, AGLOCO can become an attractive Internet growth stock. Google sells for almost 50 times its annual earnings (and anyone who bought the stock when it went public has made 5 times their money so far. Yahoo sells for 60 times their annual earnings. This is because people believe it will make even more money in the future. In order for AGLOCO to achieve the high 20 to 60 times earnings valuation, in my opinion, at some point it will have to stop (or severely slow down) the giving of new ownership to all its members. Maybe only give away annually not more than 5% - 10% of the company (which is called dilution in the stock market world).
My personal choice of who would buy AGLOCO has already been stated – Microsoft. They desperately need a way to catch up to Yahoo and Google on the Internet. AGLOCO might represent just the way to do it. Go Bill Go. February 17
This is a wonderful post from Mccall http://mccallsnotes.spaces.live.com/
I want to be a Founder of YouTube.
I know it is too late, but I just read Harold’s post on this. Wow.
But I am a Founding Member in AGLOCO and so can you be one. I assume most (but not all) people who get to this blog have already joined AGLOCO (if not - do it now - takes less than two minutes – then come back and finish this).
Being a member of AGLOCO is a good start, but to be a true Founder, you have to ‘stick your neck out’. (It is like registering to vote – it is a start, but to really influence the world you have to not only vote, but talk to people about the issues you really care about.)
AGLOCO is the same way. To really be a Founding Member, you have to talk to your friends about AGLOCO. And not just about joining. But about them really becoming Founding Members as well and ‘sticking their necks out’. It is the only way AGLOCO will grow effectively – by organic growth – member to new member.
People often ask how I got so many referrals. Well I only found 100. That 100 found the other 16,000. The AGLOCO system works. But you have to make it work. (oh some day it will be easy to recruit for AGLOCO, but that day is not here yet and in my opinion it will not be easy until sometime in 2008.)
You want a clear message on how to get to 16,000 in the next 90 days?
This week get 10 friends (I know that you have more than ten people you know that the AGLOCO Revolution is right for). AND most importantly convince them to each get 10 referrals the next week (and check in with them to ‘help’ them get their ten - and it will quickly multipy). Tell them they are causing the revolution. Yes, you and they could end up making lots of money too. But for me, I did not join AGLOCO for the money and I do not write this blog for it either.
Harold says I will make more than $1 million from AGLOCO – I will be excited with a great dinner out with my wife. I believe the AGLOCO revolution is the right thing to happen to the Internet. Looking at all the YouTube money just convinced me more.
So, I agree with Harold that AGLOCO is an Internet Revolution. But it NEEDS YOU to be the revolutionary. February 16
It is probably obvious that AGLOCO is the total focus of this blog. But with YouTube giving out shareholder details, I thought it might be fun to compare it to what AGLOCO would do with $1.7 billion dollars.
Let’s look at YouTube first.
• Founders
o Chad Hurley -$326 million o Chad Hurley Children – $19 million
o Steven Chen - $326 million (He seems to have shared with family – David Chen $9.7 million, Richard Chen $9.6 million and Sharon Chen $9.6 million
o Jawed Karim - $64.6 million (quit YouTube early and went to Stanford to get his PhD.)
Total Founders $765 million
• YouTube employees ( from the list) – max time on job 18 months –
o Shannon Hermes - $1.3 million (receptionist/office manager)
o Julie Supan - $4.9 (chief press spokeswoman)
o Heather Gillette - $4 million (Director of customer support)
o Bradley Heilburn - $6.1 million (‘systems’)
o Christina Brodbeck - $8.6 million (senior user interface designer)
Micah Shebar - $1.6 million (community advocate)
o Colin Corbett - $6.5 million (Director for Networking)
o Yu Pan - $35.5 million (Senior Software Engineer)
o Michael Abe Solomon - $19.3 million (Principal Architect)
o Cuong Do - $17.7 (Engineering Manager)
o Kevin Donohue - $12.1 million (Vice President of Content)
o Dwipal Akhilesh Desai - $6.1 (Senior Engineer)
o Mayrose Dunton - $4 million (Director of Product Development)
o Erik Klein - $3.6 million (Senior Software Engineer)
o Matthew Noel Rizzo - $3.6 million (software Engineer)
o Hong J. Qu - $2.8 million ( User Interface Designer) o
Christopher Maxcy - $2.6 million (Vice President of Business Development)
o Jacob Mark McGuire - $1.6 million (Software Engineer)
Others ?
Total Employees $142 million +
• Investors (and others)
o Artis (Investments) - $75 million
o Others ?
Total Investors $579 million +
• The users/members of YouTube
As a group, they got - $0
Total users/members of YouTube $0.00
Sources:
Let’s look at AGLOCO - ( a hypothetical sale at $1.7billion – please note the part above is real – the people named received Google stock with approximately that value according to the SEC. The part below is hypothetical. Used to illustrate the major economic difference )
To do this we need to make some important assumptions. Timing – say 2 years ; # of members – say 5,000,000 active members. Also to make a comparison closer, I assumed that the $1.7billion bought out both AGLOCO and the management company (which gets 10% of the gross AGLOCO revenue).
Founders, employees and investors as a group are all part of the management company – I put 10% of the $1.7 billion to buy this ($170 million).
• Founders – there are 14 founders listed on the AGLOCO website – if they get the same 45% as YouTube’s founders got it would be $76 million – split 14 ways would be an average of $5.5 million each – (not in the same league as Chen and Hurley’s $326 million each, but still a lot of money.)
• Employees – if it is the same 9% as YouTube it would be $15 million for all of the employees.
• Investors would get the rest - $79 million These seem to be all great rewards for these people. (But not headline making ones.)
• AGLOCO members - $1,530 million (given the referral system about ½ of this would go to the members who built the network – their referral network and ½ would go to all members based on their personal accumulated viewbar hours. )
o All regular members -$765 million divided by 5,000,000 members (and based on their viewbar hours) – an average of $153.
A member who joins and uses the Viewbar starting in April 2007 - $306
A member who joins and uses the Viewbar starting in March 2009 - $13
o Members with referrals (average referral would be worth $30.50 - $153 divided by 5 levels)
Referrals who start using the Viewbar in April 2007 are worth about $61 each (if they start in March 2009 - $2.50)
• Lets make some wild guesses with this valuation and use some Top Gun names to make this blog more fun to read. (To make it simple I started with the February 16 Top Gun Numbers.) T his calculation is full of assumptions – I will use John Chow as my example of how imprecise this is. He currently has 5.072 referrals ( per Top Gun). He has a stated goal of 30,000, by the end of 2007 – he is a smart person and usually hits his targets. And let’s further assume he does not quit there and grows to 60,000 by the end of March 2009. Now the 5,072 are the most valuable kind of referrals ($61) as they will start with the Viewbar early (Value to John $309,392). The next 55,000 we’ll assume are gained equally over time and with a $30.50 rate) – Value to John $1,677,500). Total is $1,986,892. But all referrals will not download the Viewbar, so let’s cut this number by 50% to $993,446.
• Mr. X - $4 million
• David Lawrence - $3.5 million
• RZ McCall - $3.2 million
• John Chow - $1 million
• Yogesh Subhanand - $ 0.7 million
• Geoff Shenk - $0.6 million
• Valerie Underhill - $0.4 million
Let’s hope these people are not out spending this money just yet. The odds of things happening this way are near 0%, but the general sharing relationships are instructive.
The AGLOCO members will get the lion’s share of the value (the group starting and financing AGLOCO will get a smaller, but fair return on their risk). Individual members who join AGLOCO, but choose not to participate in actively building it will get half of the money. And the small group of AGLOCO members who help build the network will also receive a significant portion of the value created.
Hope you had some fun reading this. The YouTube amounts were fascinating to me. And, of course, being able to demonstrate so graphically what an economic revolution AGLOCO could provide was equally fun for me. February 12 This is McCall's latest - I like the tipping point lesson.
The time to Join AGLOCO is Now – I passed 15,000 AGLOCO referrals.
Went over 15,000 AGLOCO referrals yesterday and when I was getting ready to blog about it, I read a couple of comments on my last post. Some of the commenters, seemed to think it was already ‘too late’ to make a big splash as an AGLOCO recruiter. I think the opposite is true.
The Time to Join AGLOCO is Now
Why do I think that? I think this is a great time to join, because the AGLOCO membership is now growing at a geometric pace. (More people will join AGLOCO this week than last week and next week will be higher again.) This means AGLOCO will grow to hit a “tipping point” – that is the point at which there is a ‘mad dash’ to sign up and to sign up everyone in the world…. (OK – maybe “everyone in the world” was too high, but you get the picture.)
Where are we now?
I get various reports that AGLOCO is somewhere between 200,000 and 250,000 members right now. There are 700,000,000 Internet users out there. This means AGLOCO has less than 0.03% market penetration – or just 3 out of every 10,000 Internet users have joined AGLOCO so far – leaving 699,750,000 left to recruit.
As much as I and other Members like to get excited about AGLOCO’s growth and accomplishments so far, it has just started.
How big will AGLOCO have to get to see a “tipping point”?
I would guess somewhere between 10,000,000 and 20,000,0000 members. Even growing at a geometric rate 10,000,000 is still many months away. I am guessing that AGLOCO will hit 1,000,000 will be in April or May and 10,000,000 not until the end of 2007.
This gives a new AGLOCO member over 10 months to build a network before the huge numbers start rolling in (if AGLOCO hits 10,000,000 by the end of 2007, I believe it will hit 100,000,000 by the end of 2008. )
I look at Top Gun’s charts and see many people recruiting more direct referrals than I have. (My favorite of those is John Chow . He gives great recruiting advice to all people, especially those of you with a blog or website to promote. I think before the end of the year John will have more AGLOCO referrals than I have because he is recruiting more and faster than I am right now.
I also crossed over 100 direct referrals this past week (17 new people in February).
I am very excited about this. I went back to original people (people who did not sign up when I first told them about AGLOCO) with new updates and some of them signed up this time. Now I will work to get them to start promoting AGLOCO to their friends. It only with this constant adding of new directs that I have any change to stay in the AGLOCO Top Gun
One more thing
I just searched AGLOCO on Google (1,510,000 page results) – AGLOCO passed up two of my favorites “Warren Buffett” and “Berkshire Hathaway” – But last night’s Grammy winning “Dixie Chicks” are at 2,520,000, so still al long road ahead. February 09 I have been reading a lot of the AGLOCO blogs the past two weeks and many of them sound like McCall's below - it seems to be picking up.
I check Top Gun on this and McCall isn'tthe only one who is increasing at an increasing rate.
Wow – if you are reading this and you have been an AGLOCO member for more than a month then you have been part of an amazing process.
First - My small part of AGLOCO grew so fast this week that in less than 5 days it was up by more than 1,000 people – I am going up by 200 a day right now – I know this will slow down, but it is simply amazing to me right now. A month ago I was lucky to get 100 in a day – this means my network is increasing at an increasing rate – thus my casual use of the term Geometric Rate.
Second - Members are getting very active in recruiting. Top Gun has had a whole slew of new people show up. A new Top Gun #1 with 19,118 referrals (950 direct referrals – now that is a referring machine). Plus a new member who has 369 direct referrals in the first 6 days of February (wish I had found him).
Third - My post of four days ago (just four, you can use only one hand to count that out if you wish) was about Google search results and Internet popularity. I had great fun with it. AGLOCO had risen to 1,110,000 Google page results in its first 90 days of exposure (actual start of the website was November 22nd a mere 73 days then).
Well, now it is four days later and a Google search gives AGLOCO 1,270,000 pages (actually I tried five times over the last two hours and 1,270,000 was the lowest number Google gave me.) On the fun side, AGLOCO just passed “Arnold Palmer” 1,230,000 and “Lyndon Johnson” 1,170,000 in Internet popularity. But looking for geometric growth; this spurt of Google pages (160,000 new ones in 4 days) is quite amazing again – 40,000 a day is about 10% of Google’s 300,000 a day rate – which means for every ten new pages on the Internet mentioning Google one mentions AGLOCO – unreal.
Last - AGLOCO is taking its first steps to becoming a household name. I saw a blog last week about Super Bowl Ads, “Don’t Watch the Super Bowl Just for the Ads”, in which the author says people watch too many ads, “not just during the Super Bowl, but in other areas of their life too (AGLOCO comes to mind).” Again, this amazes me. A reporter is using AGLOCO as a reference about advertising in an article about Super Bowl ads - and the Viewbar isn’t even available yet. I wonder how powerful this concept will grow to a year from now.
AGLOCO increasing at a Geometric Rate – What does it mean to You and Me?
I think to you and me it quite simply means – we joined a winner.
We (the members) have made it this winner and we (the members) need to keep working right now to push AGLOCO to the tipping point of success.
I read Harold’s great post yesterday http://haroldbbbg1619.wordpress.com/ . An inspiring description of the revolution that the AGLOCO members are starting today.
You and I. We are starting an Internet revolution. And we are just starting to win. Geometric increases. They will not happen all the time – not every day or every week or every month. But, some will be leaps like the last four days.
Some people say to me “Hey, take it easy McCall. You have so many referrals you are an automatic winner.”
I am taking the opposite view. I am increasing my recruiting efforts. (I am a great believer along with Julie - and many others of you - that NOW before the Viewbar is out is the best time to take advantage of the AGLOCO opportunity. I have sent out more emails again this month. I have called people who have turned me down before. I have 9 new directs among my 1,000 new people and I am very proud of that.
The take away of today’s post – You joined a winner. Be proud. - And now… - increase your efforts and double your referrals.
(I am a fan of Warren Buffett - #2 in Net Worth behind Bill Gates in the US. He writes that you only get a handful of potential BIG winners in your life. When you see one, “Give it everything you can”. I am doing that with AGLOCO.) February 05
Harold just wrote a great post
February 5th, 2007 by haroldbbbg1619
I call my blog The AGLOCO Revolution – a better name might have been The Internet Revolution. I think AGLOCO is just going to ‘ride the wave’ of a Revolution that is happening.
The Revolution is that the Users of the Internet are the Creators of the Internet and should be the Owners of the Internet. And I mean this in the truly capitalistic way.
AGLOCO is not a socialist idea (no socialist would ever use the referral system to reward the builders of member network). No, AGLOCO is a very capitalist idea. (the company has a bunch of Stanford MBA’s working for it – they are capitalists I am pretty sure).
So how does it start?
Look around… You are starting it.
Like most revolutions the AGLOCO Revolution has been coming along for years. My previous post notes that Bill Gates was advocating paying users almost a year before the AGLOCO pre-launch website was posted on the Internet. And in 1999, some of the AGLOCO founders started AllAdvantage.com and it paid over $100 million to its members in less than two years - but it was owned by a bunch of venture capitalists and AGLOCO will be owned by its members. YouTube’s announcement that they will pay for content is not new. It is just a step along the trail (but even in YouTube, Google owns the company – not the user/creators.)
Yes – You are starting this revolution.
Check the community that has arisen in 80 days: — Google stats – 1,240,000 pages of search results – 125,000 blogger’s posts — sites with daily news reports ; plus AGLOCO feed sites and more AGLOCO news sites and AGLOCO commentary sites and AGLOCO forum sites. Even traffic on this site has tripled in the last three weeks. (When that happens you KNOW something is happening. “Where there is smoke there is usually fire.”)
And then there is everyone’s new favorite site - AGLOCO Top Gun (I have become a Top Gun junkie – I read it everyday and then try to figure out who is going to catch who – and who is this new #1 Mr. X and are there more of those out there? – totally addictive)
And of course, the ‘old master’, RZ McCall http://mccallsnotes.spaces.live.com/
All of us are starting this revolution even if all we do is join AGLOCO and do not recruit new members. The sheer size of the numbers is starting to be scary. McCall’s last post did a quick look at the Google search statistics for AGLOCO and put them into context. — AGLOCO catches Kobe Bryant in Internet popularity by May – This is hard to believe. Yet it is happening – three days after McCall puts his post up I did my Google search and got 100,000 more pages than his search did. That is almost a 10% increase in 3 days. (I am sure this rate goes up and down with the time of day of search on Google etc. – but even a 5% increase in three days would be amazing.)
So how do you start a revolution?
My answer is – Have a revolutionary idea that many people think is good and they are galvanized into action to support it.
One of my favorite AGLOCO recruiters is Valerie Underhill http://www.agpcommunity.com/agloco.html . She comments often on the AGLOCO Official Company Blog. She recruited 74 people to the revolution – and they have gotten another 1,600 to join them. That is a popular idea that has galvanized people. (Bill Gates thinks the AGLOCO revolution is coming, so does YouTube’s founder Chad Hurley – but more important to AGLOCO’s Revolution right now is that Valerie Underhill thinks it is a good idea and SHE is doing something about it.)
RZ McCall described Valerie and another woman recruiting for AGLOCO like this:
• “Julie at http://usjulie.spaces.live.com/ and Valerie at http://www.aglocopromo.com are the kind of members who will cheer and fight for what is right and they are cheering and fighting for AGLOCO.”
Those are the kind of words used when a revolution is starting. February 04 McCall'sLatest Blog
And my comment on it
RZ – I decided to play around a bit on Google (you seemed to enjoy it so much).
I just did AGLOCO and got 1,130,000 – so up from last night.
“Bill Gates” AGLOCO - 13,900 (just to see how often he shows up on the same page as AGLOCO) ; YouTube AGLOCO – 164,000 (lots of overlap here); money AGLOCO – 567,000 (I assumed this would be big); Julie AGLOCO – 819 (lots of Julie’s out there #1 was my blog J );
I like the game you invented. We should make a chart of AGLOCO and put it against some competition we want to beat.
Go Bears (I was born near Chicago).
Quote
Now at 13,000 AGLOCO Referrals – Just how popular is AGLOCO
Earlier today, I went over 13,000 AGLOCO referrals. The referral pace at AGLOCO remains very fast at this point. I noticed a blog today by John Chow on his crossing 4,000 referrals in which he noted that his referral pace was picking up as well.
In my opinion, this is not time to ‘slack off’. This is the pre-launch period for AGLOCO. This is the time you can be a founder and get ‘founders returns’.
Try recruiting all your friends six months from now. Maybe most of them will still not be AGLOCO members – But I bet the “good” ones will be ‘gone’. You know – the GOOD ones - the ones with 1,000 people in their outlook contacts who can double your total referrals if they get active. Everybody will be after those people. That is exactly what I recommend you do in my referral advice posts. Go after the ‘good’ ones first. Call the good ones. Get them signed up and then get them motivated to go out and recruit. I have only 88 direct referrals in AGLOCO my 13,000 referrals come from them. That is the power of AGLOCO and it is right now that it is most effective.
So, how popular is AGLOCO?
I just did a Google search on “AGLOCO” and got 1,110,000 pages of results (– (Note Google results can very by as much as 100,000 from one minute to the next I have noticed.)
What does 1,110,000 Google search pages mean? – That is what I decided to think about.
The first mention of AGLOCO on the Internet was on November 3, 2006 (by a blog called GigaOM) – exactly 3 months ago – just 90 days ago. So it has been growing 10,000+ new pages a day more or less. But that does not really tell too much of a story. So I decided to o some ‘comparative shopping’.
I put “Kobe Bryant” in Google – got 1,880,000 – that is more than AGLOCO, but then he has been an NBA superstar for 10 years now. Give AGLOCO another 90 days and it will be bigger than Kobe on the Internet. (I tried Wilt Chamberlain too - 694,000 so AGLOCO has already passed up Wilt.)
I decided to try some more famous people: Queen Victoria 1,650,000 – you remember Queen of England for 68 years – long enough and powerful enough to have a moral standard after her “Victorian Era” and an architectural style “Victorian Houses” – AGLOCO should pass her on the Internet by May.
I tried a few more famous people just for fun: “Tiger Woods” – 3,490,000 (but “Arnold Palmer” only 1,270,000 – AGLOCO might get near him by Valentines Day), “Theodore Roosevelt” – 1,530,000 and “Lyndon Johnson” – 1,160,000 (“John F Kennedy” came in at 4,930,000 – right next to “Tom Cruise” at 4,720,000) - "Britney Spears" was at 17,800,000, so what does that tell you about the world?
I stayed with entertainment for a minute “CSI: Miami” was at 2,080,000 (that is after 5 years as a top ten show.) or “Top Gun” - 2,080,000 – and the words “Top Gun” are used for many more things than just the Tom Cruise move – the AGLOCO Top Gun site for example.
I tried a couple of simple products with made up words as names; Windex – 1,060,000, Ziploc – 1,110,000 – both have been around for more than 15 years – and ‘everyone’ knows about them.
Then, I decided to try some company names – after all AGLOCO is a company name. I first tried Geico – I love their ads – 3,810,000. Geico is owned by Berkshire Hathaway the 13th biggest company on the Fortune 500 list – only 1,350,000 pages on Google (Berkshire Hathaway is majority owned by Bill Gates’ good friend, Warren Buffet, who is the second richest person in America according to Forbes. Too bad when AGLOCO hits 1,350,000 in a few weeks it isn’t worth the $46 billion that Warren Buffet has.
#3 on the Fortune 500 list is “General Motors” - 14,400,000 pages. So I moved down to #100 “General Dynamics” - $21 billion in sales last year and has $19 billion in assets – Google score was only 1,510,000. So I slipped down to #500 on the list, still $4 billion in sales and $3.6 billion in assets, “LandAmerica Financial” – Google score 192,000.
Now, what did I learn from all this? Well a lot more respect for the active AGLOCO community that already exists. In 90 days, they have already built the foundation for what might be the ‘next big thing’. Yes, it is fun to ‘beat up on’ an old golfer or an ex-president. But my thoughts go to the fact that AGLOCO is still in pre-launch. No product, no advertising. Nothing is pushing this company forward besides You and Me – the founding members.
What will it grow to? Well if I am right “the sky’s the limit.” YouTube - 123,000,000 (two years), eBay 390,000,000, (eleven years), and Google 892,000,000 (nine years). Wow, 892,000,000 in nine years – that is 100,000,000 new pages a year or about 300,000 pages a day 12,000 an hour. I better get this blog posted to add my one more page for Google – and one more for AGLOCO as well – 1,110,001 and growing. January 31
January 31st, 2007 by haroldbbbg1619
Harold is one of my favorite AGLOCO bloggers
Here is part of his most recent blog on the Simmons Report about AGLOCO - personally, I recommend you read the whole post.
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Total Revenue (per member) – The simple math is: the ‘run rate’ of AGLOCO revenue at the end of 2008 is Search revenue per user (per my analysis in Part #2) $48.00 - plus Advertising revenue per user (per my analysis in Part #3) $13.44 - plus Commission revenue per user (per my analysis in Part #4) $50.00 - plus Transaction revenue per user (per my analysis in Part #5) $65.50.
This equals $176.94 for Total Revenue (per member). (To understand ‘run rate’ – that is the monthly revenue rate at Dec 2008/ Jan. 2009 annualized. Since revenue is growing, the 2008 revenue would be smaller than $176.94 and 2009 would be larger.)
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Net Revenue – The simple math is: total revenue ($176.94) – less – expenses (30% of $176.94 is $53.08) – equals net revenue of $123.86 — which is a monthly net revenue of about $10.00.
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Cash distributions to AGLOCO members - On a monthly basis that would yield about $8 per month per member in cash distributions.
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Value of an AGLOCO referral - yielding $39.00 as the value of each AGLOCO referral.
This $39.00 is somewhat higher than the Simmons Report of $30.00. But, several factors should be pointed out.
• Several times in the different parts of this analysis it was pointed out that the two year time given by the Simmons Report maybe too optimistic for the per member review projected. I would be much happier predicting the $39.00 valuation at the end or 2009 or sometime in 2010.
• Not all members will yield the same about of ownership value. A member recruited now will have 24/36 months of Viewbar surfing time to give the referrer a substantial number of accumulated hours for ownership. A member recruited in 2008 will not have given the referrer many hours and thus at that point in time would have a much lower value.
I just did this as a comment on th eAGLOCO Official post.
Brian,
Thanks for another update. I am just the opposite of Mark. (Don't get me wrong, I want AGLOCO to succeed and make all of lots of money.) But I feel like a founder of AGLOCO - this is a new experience for me.
I tell my friends about AGLOCO. They look it up and we chat about it. I send them to my blog - they sign up. It's fun. AND I know that I am building a huge network inside AGLOCO. I agree with John Chow that now is the time to get as many referrals as you can. http://www.johnchow.com/3000-agloco-sign-ups
Once the Viewbar is released there will be tons of completion for referrals. While on one hand this will make it easier to recruit everybody, it will make it much harder to build a wide network. And if I get as wide a network as possible now, then when the post Viewbar frenzy occurs, all of my referrals will be able to make referrals much easier.
Look at Top Guns like John Chow 3,600 referrals or RZ McCall with over 12,000, (check here for more http://agloco-top-gun.spaces.live.com ), can you imagine how fast these networks will grow once people realize that AGLOCO really works. They will grow 10X in months (see McCall’s latest post to see his thoughts on the shape of his network http://mccallsnotes.spaces.live.com/blog/cns!9F2891B66EBAA762!509.entry
Why would I want a couple of dollars a month for the next two months when the more time I have now the more time I have to build my network, before the fund. That is what being a founder is all about. You build before you get paid – but when you get paid, it is very big.
This is a true founder’s position – AND - I do not have to put up any money to participate.
So please AGLOCO, like AGLOCO Test says http://www.aglocotest.com , let me build out my network first, then start the frenzy.
Julie – bbbk0695 January 30 Lastest edition --- just fyi
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AGLOCO Top Gun - January 30, 2007
Welcome to AGLOCO Top Gun
AGLOCO Top Gun Top Ten
January 30, 2007
#5 Geoff Schenk (NR) no website found 1,683 Members $ 50,490
#9 Well Begun Marketing (NR) no website found 1,200 Members $ 36,000
#10 Anil Joshi (NR) no website found 1,137 Members $ 34,110
Numbers in ( ) are increases from previous list - (NR) means no report
Next Ten
#12 Hector Garcia (+3) no website found 882 Members $ 26,460
#18 Frank Longo (+1) no website found 560 Members $ 16,900
#20 Paula Bernstein (+2) no website found 475 Members $ 14,250
AGLOCO Top Gun - Sharp Shooters
I had requests for the top Direct Recruiters in AGLOCO
#2 Geoff Shenk (NR) no website found 432 Directs
One time bonus
#11 Asheesh Bothra (+11)no website found 126 Directs
I know that at this point I am missing lots of AGLOCO Top Guns out there. If you think you qualify please send a screen shot of your account summary to aglocotopgun@hotmail.com or if you have it posted on your website - post a link to it in comments - Also note I use the Simmons Report http://simmonsreport.spaces.live.com/ for the US$ calculation.
If you found this information useful and are not yet an AGLOCO Member - Please join - here is my referral link directly to the AGLOCO signup pages www/agloco.com/r/bbbn6049 January 26
Harold does another great job on the AGLOCO Simmons Report
http://haroldbbbg1619.wordpress.com/
This is the fifth in my series about the Simmons Report: AGLOCO
As I stated in the earlier parts, I decided to do a couple of blogs about the Simmons Report (taking a section at a time). I suggest you read the whole report on the Simmons site ( http://simmonsreport.spaces.live.com ) to get a w feel of the whole report.
For Part #5, I am again going to the Detailed Analysis and look at the Second section of that: Revenue Sources and focus on just the Distribution Revenue.
Revenue is the heart of the AGLOCO economic system. The Report breaks revenue into four sections: Search, Advertising, Commissions and Distribution.
Distribution Revenue – The simple math is: The number of different ‘activities’ (‘groups’ joined, products downloaded, services signed up for etc.) that the average AGLOCO member does in a year - times – the payment to AGLOCO for having some of it’s Members ‘do’ the activity.
Only two things to figure out – seems easy, but it is not.
The area of Distribution in the Simmons Report seems to its ‘catch all’ area. Simmons Report mentions everything from eBay fees to Flash upgrades to credit card/loan signups to large group buying (computers, cars). So we need to break this down. Here is my list:
• Software upgrades
• New software distribution
• Community signups
• Service signups
• Buying group
• Information/data
Software upgrades – The fact is most of us do not upgrade our ‘free’ software. Why? Many reasons – but we don’t. So companies like Adobe, Microsoft, Google etc. have incentive programs to pay some people money to get other people (lots of other people) to download and upgrade ($1 for Flash or Firefox are just two examples). With the viewbar looking in, AGLOCO can ‘advise’ its users when it is really appropriate to upgrade – Who do you trust? – the company that makes and pushes the software or the company who pays you (your economic network company). - Over time AGLOCO users will grow to rely on AGLOCO for all their upgrade decisions. How much is in here a year? Probably not more than $30 to $50 max. Cut that back by 50% for lack of interest by users and another 50% for deal overlaps etc. that gives about $7.50. To be really conservative, drop it back by another 60% for the timing – Simmons is using what the revenue rate will be at the end of 2008. That yields $3.00 a year.
New software distribution – When AGLOCO is in the channel making the transaction occur, it will be able to earn part of the transaction. Whether it is ant-virus software, or online back up software or one of the many forms of software that are in the market and will continue to be in the market, this is a huge potential revenue source (very similar to commissions, but since AGLOCO is doing the full distribution it can get 20%+ of the value. This is a multi billion dollar market, so estimating AGLOCO revenue is very difficult. I used a 25% average commission rate and two deals a year ‘run rate’ by the end 2008. With an average gross cost of $25 each, that yields $12.50 a year.
Community signups – These range for $2 to $22. New communities appear constantly (and even the free ones will ‘pay’ AGLOCO). For example a competitor to Skype is now at $6 to switch (if the new qualified user activates and uses the service for three consecutive months.) In the new mobile software world, there will hundreds of new opportunities for an Economic Network to deliver users for the right % of the future revenue (and it goes to the AGLOCO users so they are happy to ‘join’). I used an average of one new community per AGLOCO user per year at a rate of $5.00. My personal belief is that it will be 10 times that rate.
Service signups – This is where I put credit cards and home loans (and real estate brokers and tax preparers and dentists and health insurance and auto insurance etc.) Another huge market that difficult to assess. New credit cards pay $50 to $100, home loans more than $1,000 etc. The number of activities a year the average AGLOCO user will do (and do it with the AGLOCO negotiated discount rate provider) is a number that will start very small and grow over the first five years in to a large revenue source. At the end of 2008, I would say the average user would be doing one service signup every 24 months (1/2 signup a year.) The value of these I would put at $50 each. That yields revenue of $25 for this analysis.
Buying Group – This again can potentially be everything else – cars to computers were items cited in the Simmons Report. Again, when AGLOCO is in the distribution channel in a meaningful way the AGLOCO % of the transaction rises. AGLOCO should eventually represent $2,000 to $5,000 a year in user off-line transactions. The sales channel % would again be high, 10% to 20%. This will become a $200 to $500 a year per user source of revenue for AGLOCO . But by the end of year two – 2008 – it will be a small fraction of this potential. Just a 10% average fee on $200 of group buying, yields $20 which is what I am going to use.
Future sources – I think the AGLOCO users will think of many new sources of revenue for the network. They will have the incentive and the opportunity to do so. Within ten years, I would think that user generated ideas will be more than 50% of AGLOCO’s gross revenue.
The simple math for Distribution revenue becomes; $3.00 + $12.50 + $5.00 + $25.00 + $20.00 which equals $$65.50. This is only two-thirds the amount in the Simmons Report, but in order to be very conservative I think it is an appropriate calculation. January 23 Just a fabulous post by McCall
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Why AGLOCO Will Win - and yes I went over 11,000 referrals today
I went over 11,000 AGLOCO referrals earlier today – the pace seems up a bit – over 125 a day. (Probably just a couple of very active newbies).
Why AGLOCO Will Win?
It’s the Members -- you and me and the thousands of active Members out there already… everywhere.
It is always the people who make the organization – whether it is AGLOCO, YouTube, eBay, Craig’s List or even Yahoo. You and me - We make it popular. We contribute our time and our energy. We make it happen. And We will rally behind people and concepts We think are good. This is why AGLOCO will win. Because, We, the people, are already starting to rally.
You can see it. You can hear it. AND you can even sometimes feel it. The AGLOCO network is growing stronger every day… in every direction.
Sure, the AGLOCO membership grows by thousands every day. But, that is just one dimension. More important is the growth of the community around the membership.
By community, I mean what members are doing, what members are saying and what they are building. Let’s look.
- John Chow (one of my favorite daily blogs to read) is taking the time to write extensively his views on why he is supporting AGLOCO http://www.johnchow.com/category/agloco/ His latest post gives a very detailed account of why AGLOCO can be a big winner on the Internet and on how his readers can position themselves to share in that.
- Some of the many community service blogs:
- There are the more serious AGLOCO sites which discuss the economic, political and social aspects of this brand new community:
- Of course there are thousands of recruiting sites and blog entries on regular spaces like MySpace. Simon, the creator of AGLOCO Rocks, was sited in the recent AGLOCO Update email for having a fun recruiting site. But what I find more interesting than just his site is that people in the community help each other, learn from each other and will build the network together much as they did at eBay. http://allaboutagloco.blogspot.com/2007/01/agloco-update-2.htm is a site built by one of Simon/AGLOCO Rocks recruits and obviously he was inspired by Simon.
- Even the traditional media is picking up the story - Red Herring’s current print issue has an article in it on AGLOCO – nice picture at Stanford. Traditional tech bloggers like VentureBeat http://venturebeat.com/2006/12/20/agloco-signs-up-tens-of-thousands-and-hasnt-even-released-viewbar etc. continue to check the progress. They are sensing what you sensing. The early growth of a new form of entity on the Internet. What they may not have sensed yet, is just how strong and powerful an entity it can be when the full force of its members is brought forward.
AGLOCO’s community right now is a founders’ community, a pre-launch community. It is already showing the foundation needed to build a great Internet community. Maybe… just maybe… it is the first of the great Internet communities. Because, unlike all of the proceeding communities, this one will be owned by its members and therefore run for the benefit of the community, not some ‘well meaning shareholders’.
Have a great day,
RZ
BTW – I really like watching John Chow grow his blog. – He has set a goal of being a top 100 in the world Technorati rated blogger. He wrote that he went under1,000 a few days ago and I noticed he was under 900 now. Nice John – I hope it is helped by lots of AGLOCO links to your blog.
BTW 2 – in response to many questions I get about this blog – yes you may copy and paste it for tasteful and appropriate promotion of AGLOCO – a strong growing network will benefit all members. January 20 Really a thoughtful post from a guy with a lot of experieince..
He recommends going out NOW - and so do I - Have any friends??? Recruit them now - they will thank you --- at least the ones who do more recruiting NOW.
Today I passed the 3,000 members mark in my AGLOCO network. As I write this post, I am sitting at 3,010 referrals. Considering I haven’t talked about AGLOCO in nearly a month and my referrals still increase by over 1,000, that’s not too bad.
and
Another thing I realized is many people are waiting for the Viewbar to become available before they start signing people up. I think this is a mistake. Personally, I rather have AGLOCO delay the Viewbar even longer because right now, I have very little competition. Once the Viewbar comes out, I’ll be up against everyone and their dog. I’m laying the foundation to build a huge front line so when the Viewbar is released, I can just sit back and enjoy the show. If you’re serious about building AGLOCO, then NOW is the time to sign up those referrals. There is so much out there i do not know where to begin.
I will get some good posts and blog them here.....
January 16 Here is his announcement blog - he deserves it - I have learned alot about recruiting for AGLOCO from his posts.
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Hit goal #1 - 10,000 AGLOCO referrals
I made my first major goal of 10,000 referrals in the AGLOCO network. My goal was to reach 10,000 by the end of February – it happened 6 weeks ahead of schedule.
Thank you to all my direct recruits who went out on limb with me and have backed AGLOCO. – I have 73 direct referrals and 9,934 extended referrals. This means my direct referrals have an average of 130 referrals each (direct and extended) . I have been aggressive in emailing and calling my friends to get them to sign up early for AGLOCO and I think many of them have done the same thing. This has been a big key for me. Recruit your friends and get them to do the same .It is that chain reaction which has given me so many referrals.
This is a very a nice moment for me (even my wife toasted with wine at dinner). More than a couple of my friends said AGLOCO was a waste of time (and it still could be), but at least I have helped AGLOCO reach some of its size.
There have been some great developments the last couple of weeks:
The AGLOCO Official blog has become very active www.blog.agloco.com.
The Simmons Report on AGLOCO http://simmonsreport.spaces.live.com is getting aired in many blogs. I see that Harold is doing a detailed study of the Simmons Report http://haroldbbbg1619.wordpress.com .
This Simmons Report has inspired some speculation http://usjulie.spaces.live.com as to what it means financially to individual AGLOCO builders.
It has even sponsored a Top Gun List http://agloco-top-gun.spaces.live.com
I applaud all these efforts to build a vibrant AGLOCO community. This is what will ultimately make AGLOCO successful.
It was a similar core of network builders that made eBay happen, MySpace happen, YouTube happen – and even Google happen to some extent. With AGLOCO, the network builders become the network owners and reap the rewards of their early support and efforts.
I think these are all positive developments in order to set a good foundation for when the viewbar software is released. (Personally, I would like a couple more months to have all my ‘early’ recruiting in order before the viewbar onslaught starts.)
My next stated goal has been 20,000 by the end of 2007 – so back out recruiting in the morning…. Harold has done another fine job on the second revenue section of the Simmons Report http://simmonsreport.spaces.live.com/ .It is a fairly long post so i have cut the "big" sections for her - I recommend first reading the whole Simmons Report - then all of Harold's analysis
Or just read my short blog and believe it......
January 16th, 2007 by haroldbbbg1619 http://haroldbbbg1619.wordpress.com/
Advertisng Revenue – The simple math is: # of ads showed to a member a month - times - click –through rate (CTR) – times – Cost per click (CPC) – times revenue share given to AGLOCO.
To figure out the number of ads per member per month you need to know how many ads per hour and how many hours per month of viewbar screen time. The AGLOCO viewbar has not been released and I could not find any information directly from AGLOCO stating ads per hour. AllAdvantage’s toolbar did 180 ads an hour (20 second rotation). So if AGLOCO does even a 30 second rotation it will be 120 ads an hour. AGLOCO is compensating directly for 5 hours a month, but with affiliate rebate sharing and search ability – my guess is the narrow looking AGLOCO Viewbar will be up most of the time (at least 15 to 20 hours a month). Five hours yields 600 ads and 15 to 20 hours yields 1800 to 2400 ads in a month. – I am going to use 1,500 ads a month for this analysis.
The CTR is another widely varying percentage, from a high in some cases of 3%+ to lows near 0.1% (a 30 times difference in response rates). AGLOCO’s ads will have the benefit of targeting both contextually (like Google ads based on the content of the page, but also AGLOCO ads can be based on previous pages, previous searches and previous ads clicked on). And they can be based on member profiles – where a member lives, age, likes and dislikes etc. This should lead to an above average CTR. On the other hand, it may take some time to build all of these features into the AGLOCO ad system. The Simmons Report is about AGLOC 24 months after the release of the viewbar, plenty of time to build in a lot of improvements. To be conservative, I am going to use an average CTR of 0.5% (one out of every 200 ads is clicked – one ad every hour and forty minutes.)
The CPC rate is also interesting. AGLOCO can once again use individual algorithms to maximize revenue. There are $10.00 CPCs and $0.02 CPCs. A CPC rate of $0.25 is what I used for this write-up.
The revenue share with the ad provider is the last metric. AGLOCO can go direct, but in the first 24 months that seems unlikely. Negotiating between, Yahoo, MSN, ASK and Google will be what is required. I believe AGLOCO can achieve at least a 60% revenue share.
The simple math becomes; 1,500 ads times 0.5% CTR times $0.25 CPC times 60% share. This equals $1.12 monthly or $13.44 a year. This is in the lower part of the $10 to $25 range that the Simmons Report uses. But still well within the range. http://haroldbbbg1619.wordpress.com/ January 11
I recently posted a comment on the Simmons Reort blog. Below I have reproduced my comment as my blog. I think what I just read uncovers a whole new way to think of the work we all have been doing to help AGLOCO succeed.
I set a personal goal of getting to 3,000 referrals by the end of 2007 -- I did it just becauseI do see AGLOCO as the user revolution. And I do think it is the fair way to develope the internet in the future. Now I see if I reach my goal I stand to make $90,000 extra money. This is a very wonderful surprise.
Below is my comment
I find this Simmons Report fascinating. The time and details about AGLOCO’s early revenue sources and their per user potential is very helpful to understanding the whole idea of how an economic network will work.
The addition of the personal value of a referral is more than fascinating- it really hits home what the potential financial gain we might all share if we work hard and AGLOCO succeeds.
BUT – Peter Wilson’s comments below are the most piercing evidence of just where this is all heading.
The creators of AGLOCO have build a system all users share in the value crated AND where those users who help build the system.net will gain a much bigger share. (AGLOCO’s website vision statement says this almost word for word).
The Simmons Report points out that the average user will have about $150 in AGLOCO value (after about two years) – and will be getting monthly checks between $5 and $15 a month too.
But not until Peter Wilson did the math did I really have any idea who powerful and rewarding the system could be for an AGLOCO network builder - like you and me or like…
RZ McCall already with 9,000 referrals would be getting $270,000.
$270,000 is a whole lot of money (earned by McCall in less than 6 weeks.
His stated goal by the end of 2007 is 20,000 referrals – which means he would get $600,000.
John Chow is at 3,000 people - $90,000
David Lawrence – the talk radio guy is already at 12,000 referrals or $360,000.
It seems almost too good to be true – but YouTube paid off at $1,6 billion and I am sure even John Chow is one of the top 20AGLOCO recruiters. (And if each one of them got $2 million it still would only be $40 million out of $1,6 billion – yes very doable.
Here is Peter's posted comments and a link to the Simmons Report which is a must read.
Peter Wilson said....
I work in the Internet advertising business. I followed AllAdvantage up... and back down. It seems to me that AGLOCO solved the biggest problem... which was paying users more money than they were worth.
Seems like AGLOCO is replacing short term cash to users with the riskier, but potentially much higher equity to users.
Simmons' numbers seem quite reasonable - even if I personally thing he should be talking three years not two.
I think it was a stroke of near genius to launch the member drive before the service - this way they have something to sell to the Yahoo's and Google's of the world the minute the service really starts.
The big winners -- I think they are the guys recruiting right now. They could be the real Founders of AGLOCO when it comes to cashing in.
The Simmons Report suggests that each referral of an AGLOCO member is worth $30. Using $30 you get some fast earnings by the early guys.
McCall - http://mccallsnotes.spaces.live.com/ - has over 9,000 - That is $270,000 in less than two months and he personally only got 70 people, the network he started got the rest.
John Chow is near 3,000 - $90,000 and he said he made $25,000 from AllAdvantage in 1999. http://www.johnchow.com/category/agloco/
And the biggest winner may be radio talk show host David Lawrence http://www.makemoneywithdavid.com who eports being over 12,000 - $360,000. David states that he made $100,000 with AllAdvantage.
These are the types of people who could grow networks to 20,000, - 50,000 and make $2- $3 million from AGLOCO. That is getting closer to Founder type money.
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Here is the link to the Simmons Report http://simmonsreport.spaces.live.com/blog/cns!645014F0B3DD8C0F!106.entry#comment
January 10
This guy has been analyzing the Simmons Report I wrote about a couple of days ago - this is a good place to read up on it if you have any questions about the Simmons report.
http://haroldbbbg1619.wordpress.com/2007/01/10/analysis-of-simmons-report-agloco-part-2/
January 10th, 2007 by haroldbbbg1619
This is the second in my series about the Simmons Report: AGLOCO
I decided to do a couple of blogs about the Simmons Report in my blog (taking a section at a time). I suggest you read the whole report on the Simmons site (http://simmonsreport.spaces.live.com/) to get the whole feel of the report. AGLOCO
For Part #2, I am going to the Detailed Analysis and look at the Second section of that: Revenue Sources and focus on just the Search Revenue
Revenue is the heart of the AGLOCO economic system. The Report breaks revenue into four sections: Search, Advertising, Commissions and Distribution.
Search Revenue – The simple math is:
X searches a month times X $ per search (which is a derivative of click through rate and per click value and revenue split with search vender – Google, Yahoo, MSN ASK etc.) times 12(months in a year to get annual rate.)
Simmons Report says this will grow to $30 to $50 per year per user by the end of the second year.
My research has shown that the average Internet user is searching at 37 times a month (and growing). Plus, AGLOCO users, by their nature, will be more active than average, so I am using 40 searches a month for my analysis.
Google reports that the average CPC (cost per click) for an ad is just under $0.60. And that about 23% of the time an ad is clicked on. The result is $0.138 ($0.60 times 23%) per search (this number is much lower for Yahoo).
It has been “reported” in a couple of places that Google makes a substantial payment to AOL per search - $0.10 is the number in the Simmons Report. Google also reports that it spends 80% of its gross revenue to acquire traffic (TAC – traffic acquisition costs). 80% of $0.138 is $0.109 – more than $0.10 reported on AOL. TAC includes some costs other than publisher payments and it is also reported that on average Google shares less than 50% - size of network matters).
So eventually AGLOCO should be able to get to $0.10 when its network has enough users in it.
The math: 40 times $0.10 times 12 is $48. That is $48 in search revenue per AGLOCO user per year.
So having a range of $30 to $50 a year is a reasonable range to use for the Simmons Report.
I will do ad revenue in my next blog. For those of you who need high goals. Here is MCCall. He hit 9,000 in less than two months. Wow, is all I can add.
I will keep putting his blogs here when they contain good advice as this one does.
Julie
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Just went over 9,000 AGLOCO Referrals
Things have picked up a bit in my referrals in 2007 from the holiday period at the end of 2006.
I am excited to get over 9,000 (my stated goals were 10,000 by the end of February and 20,000 by the end of 2007.
A couple of quick points -- I put a picture of my account summary on this blog (should have done this earlier).
First, as you can see I have been active with friends in adding some direct referrals in 2007 - five this year. I really recommend this to all – including you people with great blogs – to personally recruit people who you think will do great AGLOCO recruiting. These are the people that really produce results.
Second, as I have pointed out before. My 70 direct referrals have produced almost 9,000 extended referrals. That is more than 100 extended referrals per each direct. I know if you get referrals from a website or advertising you can not influence their referral ability (I read that AGLOCO will be adding an opt-in communication system to help a bit with that). But, by adding some people you do know to your direct referral list, you can help them to make more referrals – answer questions etc.
Really important – to get referrals you have to ‘stick your neck out’ and you have to ask people to join – and be prepared for more than half of them to tell you NO (and that you are crazy or stupid to work on this.) – Get over it. Most new ideas are rejected by most people. You are not asking anyone to part with any of their ‘hard earned’ money, so don’t be afraid to stick your neck out.
Here is picture of my account summary: - Click on link to see it
http://mccallsnotes.spaces.live.com/blog/cns!9F2891B66EBAA762!361.entry January 08 Here is what I am now sending out.
Hey Cindy,
This note is mainly to offer you a chance to help build AGLOCO – it is a Member-owned Internet community.
Here is why I would like you to help. First – it is free. Second - it is quick and easy to join. Third – AGLOCO’s purpose is to get its members their share of the money generated on the Internet (i.e. you make money). And lastly – if you help build the AGLOCO network you can make much more.
Here is a link to sign up (it automatically records me as referring you with my ID BBBK0695) www.agloco.com/r/bbbk0695
AGLOCO works with a toolbar type software called a Viewbar. Privacy is very strict so no spyware, popups or spam.
As to how much money you can make, there is a study which says the average user should get $5 to $15 a month. (But less at the beginning.) Click here to read the report. http://simmonsreport.spaces.live.com
How much can you make helping to build the network? The Simmons Report predicts $30 per referral. I have 200, but a friend of mine RZ McCall has over 8,000. He has a great blog site http://mccallsnotes.spaces.live.com .
AGLOCO is in their beta phase which is the best time to help them build out the network. So please join now and help build the network. Have questions? Their website has all the details so go there www.agloco.com/r/bbbk0695 or ask me.
Go Girl,
Julie January January 05 Below is a great study on how much an AGLOCO recrutier stands to make if AGLOCO is successful.
Basically, it is $30 per referral in ownership plus cash dividends in two years of $1 per month per referral. I am almost up to 500 total so that would mean $15,000 of equity and $500 a month. Even if Simmons is 5 times too high it would still mean I would get $3,000 - and all I have done is refer a few freinds and asked them to do the same.
Very cool - I encourage you to read the report. Then go out and recruit more for AGLOCO.
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AGLOCO
December 6, 2006 SimmonsReport@hotmail.com
Simmons Report: AGLOCO
Analysis:
This analysis is centered around the amount of personal value an AGLOCO user could get, with a special focus on a user who is actively referring new users to AGLOCO. Material used included the AGLOCO website (membership agreement, privacy policy, FAQs and general information pages). management interviews, critical blog postings concerning AGLOCO, internet advertising and commerce data, valuations of other Internet communities and the business model economics of Google, Yahoo, MySpace, You Tube, etc.
Conclusions:
The valuation conclusions are based on AGLOCO reaching two million users in a two year time span:
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A user who has no referrals should receive ownership in AGLOCO worth on average about $150. (plus monthly cash distributions)
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The average value of an AGLOCO user’s referral network should be $30 each in ownership shares plus the referrer’s share of monthly cash distribution.
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The average AGLOCO direct referral should be worth in excess of $3,000 each (see example below for details)
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The analysis also shows a range of monthly cash distributions of between $5 and $15 a month per user.
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The AGLOCO business model looks theoretically sound – (assuming they get to a decent size quickly - at least 500,000 users within nine months to a year)
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The cost of recruiting new users to AGLOCO can vary. For many users it is simply sending an email to friends or contacts – or talking to them directly. For others it is blog postings or website notices and for some users paid ads on search engines. The privacy and anti-spam policies of AGLOCO and the track record on these issues of Ray Everett-Church (AGLOCO’s Chief Privacy Officer) makes the risk of getting spam, pop ups and other trash as a user a non issue.
In general, given the low level of work needed to recruit new users to AGLOCO and the zero cost in terms of money, the cost/benefit ratio of recruiting new users to AGLOCO seems to be highly favorable. Because there is no limit as to the number of referrals a user can recruit, the upper end on this opportunity could be high (which means it can be worth putting in the effort to promote actively). This analysis was done two weeks after AGLOCO launched and there have been user postings noting referral networks of 4,000 and 5,000 already. At $30 value each this would be $120,000 to $150,000 so far, which means AGLOCO could make some serious recruiting users a high return on their efforts.
Referral Example:
- A user recruits ten people (10 direct referrals) –
- If on average, each direct referral recruits 3 new users (some will recruit many and some none, but the average is 3 for each level of your network) -- Value of 10 referrals $300
- The user would have 30 indirect users one person removed. – Value of 30 referrals $900
- The user would have 90 indirect users two people removed -- Value of 90 referrals $2,700
- The user would have 270 indirect users three people removed -- Value of 270 referrals $8,100
- The user would have 810 indirect users four people removed -- Value of 810 referrals $24,300
- Total referrals the user would have in the network would be 1,210.
- At an average value of $30 for each referral the total value would be $36,300
It should be noted that the AGLOCO referral system achieves two tasks:
- AGLOCO saves all the costs of marketing its services to potential new users. This is sometimes a major cost many Internet companies face. Other network companies like MySpace, Skype and YouTube also achieve this goal of users telling users, but in those cases users do not benefit in the value created by the growth of the user base.
- Users who help build the AGLOCO network are financially rewarded for doing so. Because most the value of network oriented companies is based on the size of the network, it isAGLOCO’s stated goal that the people building the network share in the value they help create.
Detailed Analysis:
Business model:
Three major aspects of the business were analyzed; the people who drive it, the revenues and the expenses.
- People
- Management ability - – for a start up AGLOCO seems to be pretty good as it has combined experience with raw talent:
- The raw talent – is in the form of current Stanford MBAs. AGLOCO is a revenue driven business model – passion and aggressiveness are good attributes to have for part of the team. The average age of a Stanford MBA graduate is 28 years old – these are not just passionate and aggressive, they come with a few years of experience behind them as well.
- The experience – AGLOCO has some – it may need more. Jorgensen was CEO of AllAdvantage, Ray Everett-Church was the Chief Privacy Officer there and Sam Flax was the Chief Architect for technology at AllAdvantage. AllAdvantage grew to over 10 million users and over $30 million in first year revenues. A good fit for on point experience.
- Management reliability - The reality of the internet is such that every new entity should be investigated from this perspective. Below, is why AGLOCO should not raise any Internet scam worries:
- There are over 50 people listed on the about page of AGLOCO.
- The ‘development team’ has eight Stanford MBA students – not the type of people who would risk their pedigrees and reputations.
- The ‘development’ team includes two veterans Ray Everett-Church and Jim Jorgensen – both of who are well known enough to have Wikipedia bios.
- The ‘contributors’ include a couple of easy to spot people like; Gil Penchina, CEO of Wikia, Zaw Thet, CEO of 4info and Valerie Williamson a VP the Open Source group OSTG plus a sprinkling of major firm law partners and venture capitalists – not scam types.
- Press interviews – some of the founders have been interviewed by major bloggers (VentureBeat, John Chow, GigaOM, and Red Herring). AGLOCO’s management is out front and visible.
- Revenue sources– this is the core of the business model. Some revenue sources are very dependant on the size of the user base. Here are the major ones:
- Search revenue – AGLOCO can become a significant source of search volume. Google gets 40% of its ad traffic from third parties (the biggest one being AOL whom Google pays an average of $0.10 per search). The average Internet user searches over 35 times a month. AGLOCO should be able to capture virtually all search revenue and its users are more likely to be active Internet types (given that the active users are the early adopters who will be the first to find AGLOCO’s proposition appealing ) – When AGLOCO is of sufficient market size, its search revenue should grow to between $30 and $50+ per user per year
- Advertising – the AGLOCO toolbar software is stated to contain a thirty second targeted text ad:
- The targeting is further defined as being related to the current site a user is on or based on past user behavior or demographic information. AGLOCO also has very granular location information with city and postal code for users. AGLOCO should be able to take advantage of Google, MSN or Yahoo’s ad engines immediately (AdSense, adCenter and ‘Panama’) and during the next two years add a local ad overlay.
- AGLOCO’s available monthly ad inventory should be somewhere between 600 and 1,800 ads a month per user (1 ad per 30 seconds, 120 ads per hour and 600 ads per month given 5 hours or 1800 ads given the more likely scenario of 15 hours surfing per month). With 100% of these ads being available for ‘keyword’ targeting as it now exists. This is substantially more inventory than leaders Yahoo or AOL have and this will definitely increase the attractiveness of the AGLOCO user community for advertisers.
It is difficult to estimate what ad revenue per user will be two years from now. It should start low and grow substantially over time. A quick starting place for analysis might be a $10 to $25 run rate in this period and much higher later. Targeted keyword CPC rates vary dramatically with Google and Yahoo both averaging over $0.50 per click in search (non-search ads are substantially lower, but do not have AGLOCO multiple targeting.)
- Commissions - Sales commissions (and affiliate fees) should be a substantial source of revenue for AGLOCO. Almost every online merchant pays them. Link Share and Commission Junction each have thousands of companies in affiliate programs. Sales commission varies from quite low 2% on some airline tickets to nearly 50% on some financial transactions, and is generally in the 10% to 15% range.. Spending per active Internet adult users (one on line in excess of five hours a month) is estimated at more than $2,000 a year – twice as much as the $1,000 overall online spending average.) . For valuation at the end of year two, an estimate between $50 to $150 per user in commissions was used
- Distribution – The distribution of products and services may become the largest source of AGLOCO revenue. This revenue source is different than the sales commissions since AGLOCO states it would be a direct distribution source (or a direct signup source). There are four basic areas of distribution:
- AGLOCO can distribute to its members products and services ranging from new credit cards to home loans and to computers or software. Credit card and loan revenue can vary from $50 to $500. Online software distribution should be a normal AGLOCO activity (for example backup software should earn at least AGLOCO $1 a month.)
- Upgrades on paid-for or free software – This includes payments from companies like Adobe which will pay for each time a user upgrades free program like Flash or upgrades of paid for software like Norton anti-virus.
- Referral fees of online communities – This includes payments for new active users. Examples include: eBay ($22), Skype (a % of anything spent), eFax ($10 -$50) –there are at least one hundred of these
- Offline large buying group – AGLOCO can act as a large buying group. (Example; referral fees on car sales are anywhere from $200 to over $1000. Using a $400 average and a one-in-ten to one-in-twenty annual user participation rate (5% to 10%), then cars alone will be a $20 to $40 per year source of revenue for the entire user base. Similar but smaller sources exist in other products.
- An annualized distribution revenue amount of $100 a year per user by the end of AGLOCO’s second year should be a reasonable estimate.
Total Revenue – With the above detailed analysis, the total revenue would be estimated to be between $200 and $300 per user – (annual revenue run rate at the end of year two). Below is a chart showing potential revenue growth per user by category over a two year period.
Expenses – operating costs seem to be dominated by:
- Servers and bandwidth – since most of the communications with users are coming from search company servers and ad network servers it would seem should be a relatively small amount.
- Sales and business development – passionate MBAs etc –while expensive people, this should still be a low cost as a percentage of total revenue
- Customer services – lots of users, lots of questions – AGLOCO has started by using teams in India, China and the Philippines. Most communication is email so language should not be a significant problem
- Technology - should be much simpler than a Yahoo or Google as AGLOCO is not building much (a toolbar is a known and simple technology platform.)
- General and administrative costs need to include processing user payments (PayPal and others make this cheaper) and the management company fee of 10%
A reasonable estimate two years out (assuming 2 to 3 million AGLOCO users) would be a 20% to 30% cost structure - as a % of gross revenue
Valuation:
To make this a bit stable and understandable, the time for valuation chosen was the end of year two for AGLOCO (approximately December 2008) and with AGLOCO having two million or more active users at that time. Also the projected revenue was reduce from the $200 to $300 per user range to $100 (again to be conservative.)
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Given market comparisons,; a growing community of two million users with revenue above $100 per user and heading toward $200, $300 or $400 per user and a profit margin of 70% prior to cash distributions to users should have a sizeable value, anywhere from $200 to $1,000 per user (depends on the rate of growth of users, rate of growth of per user revenues. With very little per user revenue Facebook valuation was near the $200 amount this summer. MySpace had very little revenue and was losing money when sold and YouTube was similar.
- With a 15% to 20% net profit margin (after cash distributions to users), annual profits of $15 to $40 per user would justify a value of at least $300 per user.
AGLOCO is in the advertising and sale/distribution business – somewhat similar gross profits of Yahoo and Google. Yahoo and Google both have valuations exceeding 35 times earnings. A 35 times profit per user would value AGLOCO at $350 to$1,400 per user. Yahoo has a value of 6 times revenue and Google has a value of 16 times revenue. Even at the lower estimate of $100 of annualized revenue per user at the end of the second year, the corresponding value of AGLOCO would be $600 per user.
- With a $300 per user valuation and 2 million users, AGLOCO would have a total valuation of $600 million. A good range to be in for a fairly new public company.
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Per the AGLOCO website statements, about half of the AGLOCO ownership is given directly to active users and about half is given to the referrers who build up the network. With a $300 per user valuation the average each regular user would have been given $150 worth of ownership in AGLOCO (of course people who started earlier would have more than average and people who started later less.)).
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That also means that the referrers would (on average) receive $150 of shares for each AGLOCO user – again with the early referrals providing more. There are five levels of referrals in the AGLOCO user referral system, so the $150 is split equally between five levels of referrers, $30 each.
- This result is simple stated as: For each referral in an AGLOCO user’s total referral network, a person should receive $30 in AGLOCO ownership value (plus a share in the AGLOCO monthly cash distributions to all users.)
- Since a user can really best affect their own personal referrals, figuring out the ‘potential’ value of each of those is important to understand.
- Obviously if a user refers a new user and that second person does no recruiting then the total value of that new direct referral is only $30.
- Conversely, if a user refers a very active AGLOCO recruiter who adds 1,000 new users then that new direct referral was worth $30,000.
- To make some kind of estimate of value it is necessary to ‘guess’ an average referral rate. Looking at blogs about AGLOCO from users a conservative view would seem to be to choose an average of three new referrals every new user.
- Using three referrals at each level results in each direct referral resulting in 120 new users. Using the $30 valuation for each referral the total value for the 120 is $3,600; plus $30 for the direct user for a total value of $3,630.
- While not a focus of this analysis, a quick calculation of the monthly distributions might be estimated. (This part was added at the request of some early reviewers of this report:
- Using the $200 per user gross revenue and the 60% payout percentage then the annual run rate would be $120 (about $10 per month. This would be in addition to the ownership received). A $100 revenue rate would yield about $5 a month and $300 would yield about $15.
- This valuation analysis has a couple of caveats in it.
- Obviously, eventually all the users who want to join an entity like AGLOCO will be exhausted so referring will not be very significant and new direct referrals will not result in 100 total new user. At that point, direct referrals would not be so valuable (but with more than 100,000,000 adult US Internet users alone, getting to two million in the US should not hit any limits in the next two years).
- Different countries users probably have different revenue potentials and thus different valuations (The AGLOCO site states that AGLOCO has the ability to change distribution rates by individual country if needed.)
- Additional sources include
January 03
AGLOCO = Infomediary
Hope you all had a great holiday I had a nice two week holiday trip - relatives near Nice. I did two Google searches today - first was AGLOCO - 820,000 pages - that is a lot of pages. Next I did AGLOCO and infomediary - 290 pages - pretty weak as a percentage of 820,000 - obviously people are more interested in recruiting new members than they are in what makes the whole thing work. (By the way - this blog was the #1 result in that search which shows how few sites really have much to say on the subject - there were 7 ads however.) I then did two more searches - infomediary and Google - 18,000 pages (this blog was #4 on that results page - which shows again a weak Google infomediary connection. Next - infomediary and Microsoft - 23,000 pages - several talking about the MS Passport as Microsoft's infomediary play. (This blog was not there on that search.) The conclusion - AGLOCO is a very attractive member machine - but most people are joining without the knowledge of just how powerful AGLOCO can become. So they are in for a good surprise. To all the people who have been supportive of me this year thanks - It has been very nice -- and to my new AGLOCO friends thanks too.
Julie
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