Archive May 2016

Google Adsense Monetization : Why you should apply ?

google adsense

Why Apply For Google Adsense Monetization ?

Earning money online is interesting and displaying Ads aka Advertisements opens a whole new bunch of opportunities in making money online. So, how do you get people to display ads on your website?

Let us look into the options available,

1. Alert every company that such and such blog of yours exist and they can advertise.

2. Apply for an Ad network with your web site and display relevant Ads on your website.

The second option makes a lot more sense and makes the process of displaying Ads simpler on your website. So, what are Ad networks?

Each ad network is a company or an organisation who gets called by other companies whenever they want to Advertise a content. Some of the famous Ad networks include Adsense, Chitika, Infolinks, Viglink, etc.
There are so many Ad networks available on the market, why should you choose Adsense?

Why Google Adsense ?

Since you are given so many Ad networks as options, it doesn’t make sense to display a huge number of Ad banners on your website. So, you must effectively look for the Ad network that can pay you a satisfactory amount and also be reliable side by side. Well, this makes Adsense – the best option left for you.

Adsense is a product of google that helps blog owners aka publishers display contextual Ads onto their website. I had personally seen people earning thousands of dollars via google Adsense. To simply put, Adsense is the best Ad network you can see in the market today.

Google Adsense is a contextual network – this means that the Ads displayed on your website are similar to the content of your website. For example, if you start your blog on foods, you are more likely to see restaurants Ads on your website. This makes the Ads become more relevant to the content and thereby the Ads reach the target audience. Also, google Ads take the information data from cookies. Cookie data of a visiting person helps google learn about the interest of the viewer. From the data collected about the interest of the viewer, targeted Ads gets displayed.

Advantage of google Adsense over other networks:

1. Wide Range of Advertisers:

Google Adsense has a high range of publishers, covering all niche categories that all relevant to most bloggers. Thus, showing relevant ads marks the primary advantage of Adsense.

2. Google Adsense is a PPC (Pay per Click) Ad network:

Google Adsense works as a PPC. That means, whenever visitors of your blog clicks on your Ad, they get redirected to the corresponding Ad web page. Also, for every click google adds a few cents or even a few dollars ( if you are really lucky and trust-worthy ) to your account. This amount is called CPC aka Cost Per Click. Also, google deposits a few dollars / cents for every 1000 views of an Ad. This amount deposited is called CPM aka Cost per thousand Impressions.

3. Single Adsense account can account all your website(s) earnings:

With an active Adsense account, it is completely possible to place Ads on any other website that is approved by Adsense. Additionally, you can create custom channels in Adsense and can monitor how various Ad element are interacting with users.

4. Payments and Cash-outs:

Most of the bloggers face problems with the payment from other PPC Ad networks. Google Adsense makes a significant difference from other Ad networks in these relations. Adsense shows a high range of transparency in payments and you are unlikely to face payment issues.

5. Google Adsense is user-friendly and supports multiple platforms:

Google Adsense is highly user-friendly and has it’s own android application. Several third-party iOS applications are available for Adsense. The apps on multiple platforms and also the web app helps users of Adsense in taking a quick review of their earnings.

There are many other advantages in using Adsense over other Ad networks. Got one? Blow up in the comment section below.

How much should the cofounder equity be – Split the pie

cofounder equity calculator

Cofounder Equity – Learn to split the Pie

When you come up with a profitable and marketable idea, it’s high time for you as a founder to realise that ‘Two heads are better than One’. At this point of time, you search for a co-founder. If you are lucky enough to find someone of your preferred mentality, things are going to be challenging.

One of the most important Challenge is splitting the equity among the founders. This is a crucial step in your startup, and believe me, this discussion room has shut down much more startup firms than you can imagine. The discussion room must be filled with a verbal, mental and emotional conscience.

Assuming you are the founder, with a mind-blowing marketable idea. Your co-founder is going to take care of the technical aspects of developing the software you need. According to your co-founder, he’s taking up a high-end task of developing the whole software, you would need to run the business. He’s the one going to burn the midnight oil to make your business run at the initial stages. At the same time, just because you came up with a profitable idea, doesn’t mean you have a grant for 90% equity. So here comes the splitting of the pie.

Cofounder Equity : What should you think about 50/50 equity split?

A 50-50 equity split might be one of the worst decision you may take as a founder. A 50-50 equity split just signifies your low confidence level as a founder of a firm. Always remember, a technical co-founder might burn the midnight oil to prepare the software in the initial months, and you as a founder would be waiting simply for the software to get ready. So, the activities of a co-founder get bestowed as a higher one at that instant. In fact, coming down to reality, after months of preparation of the technical part, the founder’s task of marketing, user acquisition and other non-tech aspects takes a huge effort. Also, you always have the option to hire some other technical guy to complete your software.

So now, think a fast-forward of 2 years from the present. Is a 50-50 equity split reasonable?
Well, definitely not. The biggest deal now is to make the co-founder understand this with all mental, emotional and verbal conscience.

Also, it’s worth noting that your firm is expected to run for several upcoming years. Will the co-founder stay in your firm for such long time? You cannot allow a co-founder to quit the company and also carry a huge share in the firm. That’s where the vesting of equity comes into the role. The discussion of splitting the pie goes incomplete without mentioning the vesting period.

What to consider while splitting the equity ?

I would recommend you to go via a logical framework that would eventually evaluate the co-founder’s or any employee’s contribution to the success of the firm. The logical value of Input, Risk that was taken and dynamic changes in input with time should be considered in the allocation of equity.

Also, now we need another logical framework to recover the equity when a co-founder or employee leaves the company. A good framework will look into the contribution of a person as well as the nature of separation. If the contributor separates due to his/her own fault (may be failing to work for the firm) or if the firm decides to layoff some of its employees (may be due to some restraint) – At these situations, the framework should support and benefit both the company and the contributor.

Characteristics for splitting the cofounder equity:

1. The First time experience of working in a startup environment before.
2. The Achievement of the previous startup the co-founder had worked in regards to his/her contribution alone.
3. Activity of the person with regards to the firm (CTO / COO/ CMO/ other)
4. Willingness to work full time only when the firm gets funded
5. All Monetary contribution to the firm till current time.
6. An Estimate of rate per hour that can be expected for the contribution of the co-founder to the firm
7. Number of hours the co-founder spent working on this project (e.g. average number of hours worked per week x number of weeks worked)

Splitting the cofounder equity – Bottom Line

Based on the evaluation above, splitting of equity can be evaluated. Also, a co-founder equity of maximum 40% can be suggested, but remember, it’s always subject to evaluation. If you believe he could be the only person in the whole world who you crave to do this activity, you can go with 50% equity sharing.

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Should you consider equity share over salary in a startup?

equity taken mind

Equity share :

If you are on the verge of joining a startup, ‘equity compensation’ would be the single most incentive a firm would attract you towards. Startups are known for their bankrupt bank accounts and their needs to develop the product with the existing cash. This renders the employees an incomplete or a cut-down salary or in a more raw stage null salary incentive.

Since your salary cash is going to be less than the market rates, the startup firms assure you a little stake in the situation. Equity compensation helps the firm save some cash and improve the product and operations. Now, hands down to those who are weighing an equity – Keep in mind equity has it’s own risk and benefits.

Risk and Benefits of Equity share over salary:

1. Equity share is not hot-cash but a steady walk to money:

The main risk of equity compensation is that you are not guaranteed to benefit from the stakes. There are a lot of factors that affects the stock price and in-turn your equity benefit values. Firstly, your startup has to succeed and remain in operations. In case your startup shuts down, despite your efforts, your stake value flows down to zero. Contrarily, assuming your startup succeeds and acquires enough consumers, there is a high chance for your stock price to riseup.

Let us look at an example,

When amazon entered IPO initially, it’s stock rate was $15 on an average which is same as the stock owned via equity by employees. Coming down to 2016, each stock of amazon worth $713. That’s a huge increment and thus, the employees who had worked for amazon intially with equity compensation would be able to gain a lot. That is how equity compensation works and benefits you.

Also Read: Amazon Founder and CEO Jeff Bezos gets richer by $2 billion in an instant after stock price surge

2. Varying Equity share Structure and Tax hurdles:

You can be compensated with equity either in form of ‘Incentive Stock Option’ (ISO) or in the form of ‘Restricted Stock Units’ (RSU). Each form of equity compensation packages a different tax consequence. It’s always good to listen from the firm about the type of compensation offered.

Jumping onto explaining the tax hurdles, let me tell you, equity defines your net worth. You will be stuffed with the tax burden even though your stock value falls. Thus, it’s real important to know when to cash-out your equity for cash and when to save it in form of equity itself.

Final Statement:

Equity share payments allow startup to manage financial struggles, when the firm could not afford to pay its employees. While Equity compensation lures the eyes in the form of huge cash tomorrow, it is badly subject to higher risk factors. Equity Compensation is a very strong platform for startup firms to keep their employees motivated with less payouts.