Gumroad Launches To Sell Digital Goods With a Simple Link

When selling digital goods, be they PDFs, photos, art, icons or anything else where a download completes a transaction, creating an online store can seem complicated. A Google Checkout Web Element, released last year, simplified things a bit, but a new entrant, hacked up over this weekend, makes the transaction for posting and delivery as simple as a link, with no need to ever create a custom store. The solution, which is raw, but shows potential, is called Gumroad.

The project of Sahil Lavingia, who is better known for his work on iOS apps like Dayta and Color Stream, was cooked up with the aim to let friends send simple links to each other over sites like Facebook and Twitter, and recognize real revenue from the transaction. So long as the seller has an e-mail account associated with PayPal, there's hardly any setup required.

Setting Up a Sale on Gumroad

To start selling digital assets with Gumroad, you need to set up a user name and password, and then you can post links to your digital goods, assigning prices, title and description. Once you share the link, users can buy the goods, and the money, minus a cut that isn't yet finalized, will be deposited to your PayPal account.

I tested the service this morning, posting links for a set of PDF'd comics I made of Oakland A's players from 2005 to 2008, and also the FTC disclosure icons Jeannine Schaeffer made at the end of 2009 for bloggers with conflicts. Try both links - they lead to Gumroad, and if you want the full set, it could cost anywhere between 2 and 3 bucks. It's very easy.

Promoting the Gumroad link on Twitter

If there are questions about this service's usability, they become like those on other payment systems. If I get the eventual URL for the digital asset, why not pass it around for free? Why not upload that asset to a peer to peer (P2P) service? And why should I trust this service with my credit card data and secret code? They may use HTTPS, but the service could do more to make me comfortable to do transactions. It's also not clear how fast money gets deposited to PayPal.

Showing 1 download at $2.99 In Gumroad

All those caveats aside, it's an interesting experiment by a known developer who is trying to think of new ways for us to do transactions with one another simply, much like eBay, PayPal and Square have. Check it out at http://www.gumroad.com.

Google Checkout Web Element Simplifies E-Commerce

In a simple Friday update, Google's Web Elements team rolled out a number of new options for Web site owners to integrate the company's tools in their content. Among the updates was a new offering for Google Checkout, which, when used in combination with Google Docs, presents a very easy way for people to create online stores - for everything from physical goods to eBooks and services, depending on what you offer.

While Google Checkout has not enjoyed the market awareness and penetration of its competition, PayPal, the new offering lets users create their own marketplace on their own Web site, instead of resorting to other common methods, such as Yahoo! Stores or the Amazon Marketplace.

To create a store, one needs to make a new spreadsheet in Google Docs, with corresponding SKUs for the products, enter a price, and the total number of products available. Other features, including graphics and varieties of products are optional.

Web Elements comes into play when you link this database to the new Checkout gadget. As you can see below, I made a quick one to offer eBooks, product reviews or even one-day consulting. Depending on the store, you could of course sell specific goods, and draw down from your inventory - including the option of presenting a standard price for shipping and handling.

Once the gadget is created, you can post it to your blog, add it as a sidebar for your Web site, or just grab the HTML and post it elsewhere. All told, it's a solid way for individuals and small businesses to get into simple E-commerce without too many headaches.

Of note, while the offerings and prices for my demo are clearly examples only, if you hit the buy button and send cash my way, I am sure we can figure out something. So go for it.

My Demo Google Checkout Gadget from Web Elements:

Open Identity Exchange Proposes Identity Trust Framework

Today, at the RSA conference, the Open Identity Exchange (OIX), aimed to increase trust in online identities, and backed by the OpenID and Information Card Foundations, announced its inception. In parallel, the U.S. Government is recognizing multiple technology companies as meeting federal standards for identity assurance, including Google, PayPal and Equifax, essentially securing users' ability to register and log in at federal Web sites with credentials from each of those services.

Goals of the Open Identity Exchange include building online users' trust and confidence in the exchange of identity credentials, standardizing these interactions and reducing hassle with online logins, registrations and purchases. As practically any Web user knows, frustrations with remembering scads of online user names and passwords, each corresponding with different sites with varying trust levels, can be a complete pain - no matter how much effort is taken to standardize, and the alternative, keeping one password for multiple services, which many do, has many more problems of its own.

OIX and its members are looking to reduce the problems with today's Web and move toward further highlighting open standards. Founding members of OIX, a non-profit corporation, include Booz Allen Hamilton, CA, Equifax, Google, PayPal, Verisign and Verizon.

The Often Complicated Process of Assessing Trusted Identity Online

Google's participation in the exchange follows the company's hirings of some of the more vocal advocates of OpenID and the open movement in general, including Chris Messina and Joseph Smarr. Earlier this week, a Google spokesperson wrote by e-mail that the inclusion of the company as part of OIX's launch should not come as much of a surprise.

"As you probably know, Google has long supported and contributed to the development of identity standards such as OpenID and OAuth, largely in order to increase online security by reducing the reliance on password use across websites." they wrote.

A white paper on the new OIX Web site, entitled "An Open Market Solution for Online Identity Assurance", explains how open identity technologies, including OpenID and Information Cards, serve to take closed user name and password systems deployed by most Web sites and expand them to accept identities issued by other parties, such as Google, PayPal and Equifax. Much of the paper, and OIX's mission, centers around the issues surrounding identity, including social, business, legal and emotional, such as trust.

This model of trust is explained in a second piece which defines a new "Open Identity Trust Framework (OITF)". The OITF paper shows holes in today's trust frameworks, and questions how people passing along personally identifiable information can be sure their data is protected with acceptable technical, operational and legal safeguards, while proposing a structured role for policymakers, providers, assessors, auditors, and dispute resolvers, to be sure that all participants are acting in a trusted manner. It may seem overly bureaucratic, but considering the Federal government needs to accept its findings, process is a good thing.

Lest you think this just yet another association or bureaucracy with talking heads looking to grease the skids of online growth, see the conclusion of the OITF model paper, where the authors explain a data utopia: "
Imagine 
that 
the 
OITF 
model
 takes
 off
 and
 identity 
aspects
 of 
all 
digital 
communications 
become
 reliant 
on 
this 
new
 layer 
of 
the
 Internet. 
Society 
could 
become
 dependent 
on 
this 
type 
of 
infrastructure 
for
collective 
action. 
The 
authors
 want
 to
 make
 it 
clear
 that 
trust 
frameworks
 for 
identity 
information 
portend 
to 
be
 so
 important 
for 
the
 future 
information 
society 
that
 they
 warrant 
extensive 
scrutiny, 
participation, 
and
feedback
 from
 a
 wide
 representation 
of 
stakeholders.
"

You can find out more on this new exchange at http://openidentityexchange.org. In addition, Google posted on the announcement on the company's online security blog: Federal Support for Federated Login

Meg Whitman's eBay Resume a Target In CA Governor Race

Although there is a full month left before the calendar flips to 2010, candidates for next year's gubernatorial candidacy in California are already lining up to take the state's top spot when Arnold Schwarzenegger leaves office. Among them is Silicon Valley notable Meg Whitman, whose years at the helm of eBay are being made the centerpiece for much of her promotional advertising, including radio spots and a good part of her online presence. Early polls have her tied with repeat runner Jerry Brown at 41% in a hypothetical matchup. But as great a story as eBay has been, the company's focus just lends itself to creative opponents and speechwriters.

Start with the tagline... Will Meg Put Your Children's Future Up for Auction?

Of course, replacing "your children's future" with "your business" or "your home" or whatever your favorite buzzword is still works.

And don't forget what auctions are all about... Selling out to the Highest Bidder. Without saying I think Meg is any better or any worse than Brown, in a world of politics where lobbyists are frowned upon and outside influence is distrusted, one could spin Meg's approach to politics or issues as doing just that.

After all, can't you just name a "Buy It Now" price at eBay? What is the price for a politician?

Whitman's bio, an impressive record including her education at Princeton and a Harvard MBA, floats through her work with Bain & Co., Stride Rite, Procter and Gamble, FTD, Hasbro and Disney - talking about her taking what ended up bring a dream job, when she joined eBay in 1998, and delivered an "unparalleled business success story", saying she "revolutionized the way goods are bought, sold and paid-for on line."

There is no question eBay changed the game online - managing to fight off competition from Amazon, Yahoo! and others - an unquestioned success. But if I were in politics, I would highlight the fact that eBay is the place to take old junk you don't want any more, or a place to find last year's models today. Meg Whitman's audio ads are talking about "change", just like every other politician talks about change to elicit voter interest, even as eBay's current campaign says things like "This season's shows still look great on last season's HD TV."

While it's easy to anticipate GOP opposition targeting Brown, who served from 1975-83 in the role of governor, as recycling old ideas, being tied so much to a company that champions this very thing doesn't exactly put Whitman in the driver's seat in terms of next generation forward-looking thinking.

Additionally, during Whitman's tenure at eBay, at 2005, the company very visibly purchased Skype for $3.1 billion. While the company also purchased PayPal on her watch, which has been a fantastic success, the majority of Skype was sold from eBay earlier this year, with a valuation well under that mark, after the deal never really made sense after years of stalling. Brown and other opponents' handlers could see the Skype buy as a costly billion dollar gamble that distracted eBay from its core business. With California being in such budget peril these days, it's a story that almost writes itself.

Regardless of your political leanings, it is clear these kinds of comparisons are going to come up. And lest you think we have moved on in politics away from soundbites and taglines, we haven't. If Whitman becomes the GOP candidate, or a front-runner, eBay could be as much a hindrance as it ever was a benefit. Her opponents should be dreaming of fun taglines, and her team should be getting ready to respond when they do.

10 Business Models to Monetize Web Applications

By Rob Diana of Regular Geek (Twitter/FriendFeed)

During my morning reading, The Long Tail had a link to a survey of Web app business models. If you take a look at the charts listing the revenue models, you will see there are twenty models listed. However, that is not an exhaustive list of ways to make money. Some of the models, such as Fixed and Variable Subscriptions, have several "implementations" that you can attempt.

Having said this, why is it that monetization is so hard for many Web 2.0 applications? Let's look at what needs to be done to support the various business models.

Subscriptions

1. Fixed subscriptions are a simple concept where people pay monthly fee for a product or service. Typically, you can charge for removing advertisements or some level of premium features. The problems with fixed subscriptions are that you need to create a subscription payment system and you need something to charge for. The first issue can be rectified by integrating with something like PayPal. The second issue is what most sites have difficulty with, what do you charge for? Premium content or features are much harder to find as you want to ensure you can build as large an audience as possible. Premium features need to be really interesting, and generally not available for free elsewhere.

2. Variable subscriptions are much more interesting. These are things like charging for use of an API or data feed. These are difficult as it requires a large amount of tracking application usage, and the pricing plans are more difficult to administer. Again, there are the questions of whether your services are generally available for free or even that useful.

Third Party Support

3. Advertising is the most common form of third party support. However, most Web applications are not launching with advertisements, which I think is a mistake. Google AdSense may not help you make millions, but maybe it offsets the costs a little bit and it opens up opportunities for real advertisements in the future.

4. Sponsor is a glorified word for really nice advertiser. A sponsor typically has a permanent advertisement on the site. These are nice, but it typically requires a decent amount of traffic in order to attract one.

5. Paid content is the black sheep of third party support and generally vilified by bloggers. The amount of negative publicity that you could receive from paid content may not be worth the money, especially if your site is still young. I would definitely recommend against this unless you are an established blogger and can easily defend your position.

Products And Pay-Per-Use

6. Products and Pay-Per-Use are probably the hardest monetization models to use. Do you have a physical product or virtual product that you can sell? Are people even willing to buy your product? Products typically require a significant amount of capital to develop or purchase, so your costs are generally high as well. Pay-per-use models are also difficult to develop. PayPal is an excellent example, where they charge transaction fees for each transaction. Just like the variable subscriptions, tracking of application usage can be difficult and for transaction fees, there is a large amount of financial work involved. Most technical people do not have significant financial background, so there is a large knowledge obstacle to overcome.

Services

7. Branding tends to be a side effect of what you have tried to do with your application. However, there is good money to be made from consulting and speaking engagements. This is an interesting option, but it tends to be more of a personal option as opposed to monetizing your application directly.

8. Create a platform. This is part of the model for the iPhone. You can charge developers for the development kit. This is immensely difficult to do because your platform must be hugely popular. Twitter is becoming a platform, but has been so open with their API that they would have difficulty charging people at this point. With this option, you should start charging immediately when it is released.

9. Affiliate sales are also an interesting option and do not require a huge amount of initial work. The difficulty with affiliate sales is that you still have to create something that is worth buying. I would also think that the amount of revenue possible from affiliate sales is smaller than most people creating Web applications would want. Granted, I do not have experience with this model, but you are sharing revenue with the people who are your affiliates. You could create a larger sales network in this way, but people would have to want to sell your product.

10. White label services do not appear very often for some reason. This is similar to the platform model, but the difference is that your software is not obviously at the forefront of the product. Ning is the most widely known option in the social network space, but there is a significant amount of competition. This model also requires some portion of other models as well. Ning has fixed monthly subscriptions as well as variable usage subscriptions. You could avoid mixing models by charging a larger fee for the initial creation of the white label service, but a larger initial payment will also scare potential buyers away.

Obviously, this list is not complete, but these basic models can be implemented or even integrated into most applications. I have avoided the "holy grail" of internet applications, selling the entire startup, as there is no direct way to implement this. It is also ridiculously difficult to survive without any monetization and be purchased for a decent amount of money. Most potential acquirers would like to see some semblance of revenue and potential revenue before buying something. It does help to be the hot application in the hot industry, i.e. YouTube or Twitter, but there are very few opportunities to do that and there will be tons of competition.

Read more by Rob Diana at RegularGeek.com.

Be a Real Friend to Your Social Networking "Friends"

Not every single contact you make online is somebody you would want to spend time with in real life. While you might be following thousands of people and making new "friends" on Facebook, LinkedIn, Twitter, FriendFeed and all the other networks, you would likely hesitate before sending them an open invitation to your home. But I've personally seen many examples of people I've known online crossing the chasm and operating in the world once reserved for classmates, colleagues, fellow church members and family. What might have started out as a casual acquaintance, or connection through similar interests can easily transform to one where you can connect in a more personal way.

The debate of labeling such a contact a "friend" is not new. Mark Dykeman, in a post on Mashable, asked in September, Is a Social Media Friend Really a Friend?, asking, "Would you trust a social media friend with your money? Your home? Your significant other? Your children? Your life?"

The answer of course is not uniform. Each example listed above has a certain weight of importance, and implied risk. But even if you don't want to casually hand your keys and credit cards over to somebody you have been throwing sheep at on Facebook for two weeks doesn't mean you can't find real connections with people who will help you out.

A few examples:

1. Would you invite a friend you met online to "crash" at your place for a few nights instead of finding a hotel?
2. Would you refer a friend you met online to a job position you found, and introduce them as a trusted candidate?
3. Would you purchase a product and ship it to an online friend in another state without getting paid up front?
4. Would you pay the phone/Internet/electrical bill for an online friend who you knew was short on cash?
5. Would you split a hotel room with an online friend at a conference even if you'd never met?

I use these examples because they are all things I've either done or had done by friends of mine online.

For example, although I had looked high and low for a Nintendo Wii Fit throughout the Bay Area, and on Amazon.com, I had no success in finding one. (See my complaining on FriendFeed) But Jesse Stay, who has been a blogger here over the last two months, and someone I got to know on multiple social networks, let me know his mother has a knack for tracking down the evasive products. Sure enough, on Halloween day, a box came to my office, containing the Wii Fit, and displaying the address of Mrs. Stay, from Massachusetts. My wife and I are now amusing ourselves in acting like we're going to use the Fit to pursue something resembling an exercise program.

In the age of PayPal, pushing money around also has become easier, assuming you have it. If you watch people's comments on Twitter and other networks closely enough, you can sense stress, or, when there are gaps, know if something has impacted their usual schedule. Sometimes, it's a money issue, and reaching out via PayPal, or making a call to the utility that's getting in their way can give them the breathing room to keep going as they were before. I'm not suggesting you start playing charity and laying out thousands of dollars, but in the time where you can lend a helping hand, we've reached the point where online acquaintances are just as deserving as those offline. And if you ask them to pay you back is of course up to you.

Similarly, way back in 2001 a friend I knew from an Apple online stock board said he wanted to fly out to see the MacWorld Expo, but he didn't have a place to stay. Having never met him, I offered my apartment for three nights, and he and I took off to see Steve Jobs in person. I also shared a room at the recent BlogWorld Expo with someone I'd never met.

Why so trusting? A few things. First, I believe people are inherently good, and I've chosen to interact with good people online, who share ideas, are trustworthy and positive to be around. Robert Scoble says "you are defined by who you follow" and if I were following people online that I wouldn't be friends with in the real world, then that is my mistake. You also, thanks to the ease of publishing and dissemination of opinion, have the option of publicly embarrassing or outing an individual who has wronged you, so the incentive to do well and act within accepted guidelines is strong.

Of course, not every friend is equal. Just because almost 2,600 people have chosen to follow my account on Twitter doesn't mean that I am going to give them cash and a place to stay. But for those who I have had many interactions with over time in multiple networks, and traded e-mail or phone calls with, I know I am building relationships that have a potential to transition to real world. That's why I know at some point, I am going to take my wife out and let Drew Olanoff babysit my twins, why I bet my kids will be having playdates with Milan Scoble and Thomas Buchheit, and why I've tried to help find new careers for many people whose blogs I read and whose work I follow. These investments I'm making now are going to be paying off, and I encourage you to take a look at your own online "friends" and see if you too can be a real-world friend to them.