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How to Make Money on the Internet

Do what you love, and other tips from the Web cowboys at the Seed Conference.

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With the economy in a free fall and jobs disappearing faster than the bubbles in a Red Bull, it was a relief to drop in on the third Seed Conference, held June 6 at IIT's Crown Hall, and get a jolt of high-energy confidence about the future. Hosted by three cutting-edge Chicago-based businesses—Coudal Partners, 37signals, and Segura Inc.—the conference (which is expected to happen three times a year) was targeted at Web, print, and video designers, or any other entrepreneurial soul looking to, as the online promo put it, "take creative ideas and turn them into something SATISFYING & BANKABLE."

An audience of 310—mostly young, mostly guys, from all over the U.S. and abroad—paid $499 a head to hear tales and tips from the principals of the sponsoring firms, and from their couldn't-be-hotter guest speakers: Jake Nickell and Jeffrey Kalmikoff, the brains behind the Threadless T-shirt phenomenon, and Gary Vaynerchuk, the madman of Wine Library TV.

These Web-ridin' cowboys of the new business frontier are rebels and loners, dreamers and dropouts. Take Carlos Segura, creator of the digital type foundry T26 and the first American winner in the 53-year history of the Red Dot Grand Prix international design award. He prefers to work alone, hates compromise, and says no to most potential clients because he doesn't want that "icky" feeling that comes with letting them think they know best. Still, they're beating down his door. He's never had to troll for business, he says, and succeeds by thinking beyond what's requested, seeing what others don't notice, and laying the truth on his clients even though most of them don't want to hear it.

Then there's Jason Fried, who started his 37signals software company in a spare ten hours a week and now counts Amazon founder Jeff Bezos as an investor. He says he built his business by paying attention to "the minutiae of navigating a site"—simple things like minimizing the number of times customers have to use their mouses and trading jargon like "advanced search" for specific, clearly written directions.

Jim Coudal reinvented his eponymous advertising firm after two large clients dumped him in the same week; it's now a developer of cool products, like the handy little graph paper notebooks attendees got and events like this one. It's also its own best customer, promoting itself through an elaborate Web site (coudal.com) featuring everything from puzzles to the Museum of Online Museums. Coudal sees the "old model" of work for hire as "outmoded, inequitable, and often stifling."

He riffed on his own theory of creativity, defining the "essential creative moment" as "something we know" plus "something we don't know" fueled by a rush of enthusiasm. Our short attention spans are working for us, not against us, Coudal opines, and we should be "ready to fail as much as possible." He says his company—which doesn't have a five-year "or even a five-minute" plan—asks three questions about every potential project: Will we make money from it? Will we be proud of it? Will we learn something along the way?

Neither Nickell nor Kalmikoff went to business school, and Nickell—a designer who started Threadless with another partner in 2001—is a college dropout. Now doing around $30 million in annual sales, the community-driven T-shirt business began as "a way to prove to potential clients we could build e-commerce," Kalmikoff says. By 2004, they realized it was the business. Now they have 45 people working two shifts in their north-side warehouse, and Inc. has pronounced Threadless the most innovative small company in America. Their management strategy—"Reactive: we deal with things when we have to," says Kalmikoff—is enough to make any MBA cringe.

They shared their rules of "crowdsourcing": (1) allow your content to be created by its community, (2) put your project in the hands of its community, (3) let your community grow itself, and (4) reward the community. Thing is, the rules don't always work. They say they tried it with a music business idea and failed "miserably."

Vaynerchuk, who came here from Russia at the age of three and aims to buy the New York Jets, started out working at the family wine store in New Jersey. He took it over in 1998 and built it up from eight employees to more than 100, with sales of $50 million a year, before turning his attention to the gig that's made him a new-media celebrity: Wine Library TV. Now he does a daily webcast in which he rants for 25 minutes about wine, and 80,000 people watch.

"I'm represented by the biggest talent agency in Hollywood, CAA. I just signed a huge, six-figure book deal. I will be paid more for speaking this year than I made five years ago," he rhapsodizes, adding there's still time for the rest of us to get on the gravy train. Now, he declares, "is the beginning of the gold rush in personal branding.... Every single person in this room can make so much more money than they can ever imagine, doing what they love." We just have to put in "a shitload of work" and be patient.

Vaynerchuk offers himself as the perfect example, pointing to the years he spent working in the wine store and the 12 hours a day he used to dedicate to posting comments on every wine-related blog he could find in order to build a community of his own. "Don't quit your job to become the queen of cheese," he cautions. "But if you're doing something that blows and you hate it, go work at 7-Eleven to pay your bills and spend every other hour building your personal plan. If you work 9 AM to 6 PM and get home at 7, whatever you put in between 7 and 3 AM is what you're gonna get in return. You want to watch Lost? Knock yourself out. I don't watch shit. I don't read shit. I'm all about my community and putting out content. I don't consume. I put out."

If you don't have a personal blog now, he says, rush to GoDaddy, buy your name, and get started.

"Talk about stuff—what you do for work, that your crap looked weird yesterday. Everything's going to be out there, you won't be able to hide anything, so embrace it." Word of mouth is "crazy powerful" and the Internet's "word of mouth 2.0."

The day ended with a networking party in a tent on the lawn, but before that the presenters lined up for Q and A. The questions were as personal as girl talk: about work (incessant for all of them—laptop-in-the-bathroom stuff) and what the long hours do to relationships (if your mate doesn't like it, you may need a new mate). When someone asked about "the one moment of doubt before you succeeded," the response was swift, unanimous, and emphatic: There never was any doubt. None. Ever. Not a chance. In the macho world of new-media entrepreneurs, dude, as Fried explained, "Even the failures are successes."v

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