Lessons from the "Million Dollar Homepage”

For the life of me, I can’t figure out how someone could sell ads on a webpage - that too a webpage with no content, just ads - for one million dollars! If you don’t know what I am talking about, well, welcome to planet Earth. Here we have something called an Internet, and recently an enterprising student come up with an idea called the The Million Dollar Homepage to make a truckload of money from the Internet. Notwithstanding the fact that I will never know how he did it, here are some lessons we can all learn.

  1. Being a student is NOT synonymous to Being Broke
    When he came up with the idea for the million dollar homepage, Alex Tew was 21 years old with an admission to a Business School. In his own words "Uni(versity) is not cheap, and faced with the prospect of graduating after 3 years with a huge debt, I thought I'd try and make some money". And he did! More than 1 Million Dollars. The lesson here to take away is that you don’t have to settle for a college debt. Agreed that not all ideas will be as successful as this one, but if you don’t give up and are even modestly successful, you can significantly reduce the amount of debt you will have to take on for funding your education.

  2. No idea is too silly
    Who would have thought that someone could make money by selling ads on a website that had nothing but ads on it??!! When phrased that way, can you see how silly that sounds? But if one thing this success story teaches us, it is that no idea is too silly. Now some ideas click and some don’t, but don’t ever give up because someone else tells you your idea is too silly.

  3. Implement your idea.
    Ok, so you have an idea. If you want it to go from just an idea in your head to THE million dollar idea everyone is talking about, you have to implement it first. If it is a huge success like the MDH, great! If it’s a modest success, that’s good too. Heck, even if it’s a total failure, you still learn from it. It will be great experience to help you in the future endeavors!

  4. If you want to succeed, you need passion
    Once Alex Tew decided to run with his idea, he ran all the way. There were people who thought it was a joke, and there were people who called him a silly goose. But he ran with his idea no matter what. He believed in his idea and did not let anyone tell him otherwise. He marketed himself on radio and he sent press releases to local news papers. He risked making a very public ass out of himself by standing for his idea, no matter how silly it is, and pushing it. Its easy to hail him as an "entrepreneur" now that we know he is successful, but can you imagine what it must have been like in the early days? To make an idea successful, you need passion!

  5. Think Big.
    How much does it take to really pay for three years of business school? You bet it isn’t 1 million dollars. But Alex went for the 1 million. Why? Because once you have an idea, and a passion to drive it, you might as well go all out. Reach for the stars. Don’t settle for less. Don’t short sell yourself. And of course, in Alex’s own words "I knew the site had to be 'The Million Dollar Homepage' in order to catch people's attention - anything else just wouldn't cut it, eg. '$100,000 Homepage'. Er... no."

  6. Market it.
    That brings us to the next lesson, market it. See how to spin it so that you can get others as charged up about it as you are. The great thing about this idea is it was one of a kind when it was started (Now there must be a gazillion copycats!). So by hyping it Alex could generate the buzz traffic to his site. He then used the buzz traffic to get some people to buy the ads. This generated more buzz, since the idea that could possibly not work was working! So, more people flocked to his site to check it out. This made more people want to advertise there, hoping to direct a piece of that traffic to their site. And the rest is history. Alex also used other tricks. He appealed to the customer’s emotions while marketing by using statements like "own a piece of internet history" and to the customer’s sense of value-for-money with statements like "The site will be online for 5 years guaranteed, however the aim is to keep the site online forever (or as long as humanly possible)". If you have an outside-the-box idea, then to make it successful you need to have outside-the-box marketing too!

  7. Be willing to adapt
    You never know what path success takes – so be willing to change with the changing direction. According to this article -

    The next major problem was that PayPal blocked his account. (PayPal's anti-fraud policy automatically blocks accounts with high volumes of transactions in order to avoid money-laundering schemes.) Tew was forced to quickly come up with an alternative payment method to keep up with the volume of orders he was receiving. Within three hours of PayPal going down, Tew had found a replacement. And although PayPal eventually enabled his account again, Tew kept both payment options open to prevent a similar problem in the future.

    Three hours. That’s the time Alex took to get back on his feet. If you think that the road to success is smooth, think again. You need to take the bumps, the curves and whatever else the road throws at you, navigate it the best you can and move on.

  8. Be willing to ask/hire help
    According to the same article -

    In the beginning, he had to manually upload every single image and all the links himself. As hundreds of orders began pouring in, though, Tew was forced to hire two people to help maintain the website's database and deal with customers...

    Tew also had to learn to release control to others. "In previous projects, I've wanted to do everything," he says. "With this, I had no choice but to get other people involved." So he enlisted the help of family and friends and even a PR person in the United States to deal with the international media.

    Alex could probably have handled the load by himself, but that would have slowed the momentum. And in something like this where the buzz is the success, even a little bit of slowdown of the momentum could be detrimental. In such a case you need to do what it takes to keep the momentum up. Ask for help or hire help, but keep things going.

  9. Capitalize on your success
    Did you know that the final 1000 pixels were sold off through an ebay auction for $38,100? (Source: MDH blog dated 18th Jan) That is a 3810% markup from the original stated price! That pushed the profits well beyond a million dollars. Alex knew when to capitalize. Also, have you heard of his new venture? The million dollar pixel lotto? Well, with so many copy cats out there, you would think it’s impossible to repeat this feat right? Well, not if you are Alex. If you are Alex, you think how you can capitalize on the buzz you have generated, on the hype you already have. How to strike while the iron is hot? So you double the price per pixel and offer a million dollar prize to those who click on the ads. Now you have people who want to click on the ads for the million dollar jackpot, and the advertisers are thrilled that there is more than just the hype that motivates people to click their ads. In the roughly 1.5 months that the pixel lotto was up, Alex has already sold $300K worth of ads! It’s incredible!

  10. Lastly, if your creative juices aren’t running right now, capitalize on others creative juices! :)
    For example according to this article:

    James Thomson, a Web designer in Branson, Mo., says he's wiped out $30,000 in personal debt accumulated after the dot-come bust with his site, www.millionpennyhomepage.com, by selling pixels by the penny, instead of the dollar. Monday, he had only $974 left to go before reaching his goal of $10,000.

    The wording there is weird, but I am assuming the article means that the $10,000 raised by Thomson was used for reducing his $30,000 debt. Nevertheless, $10,000 is quite a chunk of change for copying someone else’s idea! So, if you can’t beat them, join them. Remember, if you want to be a copycat, make sure to jump in on the bandwagon early, to add a good twist and of course, credit the original source!

So, to summarise, never stop dreaming. Never stop trying. And never ever think "I’m just a student. I am too broke. I can’t do anything!"

NOTE: Source for "In Alex’s own word’s" statements - The Million Dollar Homepage FAQ

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moneysmartlife said...

Right on! I think the best lesson is to give your idea a go. Like you said, even if it bombs you'll learn something and can apply it to your next venture.

ispf said...

moneysmartlife: For me personally, it is also one of the hardest lessons to follow :( There are a million reasons to prevent immediate action and by then I have another new idea brewing or the old one just plain fizzles out :( This was a self-motivation post of sorts and it kinda worked. I am glad you liked it!