Observe Business

I have a lot of respect for the Washington Post, I consider it one of the USA’s premier newspapers. However, I read this article which is titled “5 Perfect ‘Spare-Time’ Online Businesess” written by Yanik Silver, who, coincidentally, is also selling a book titled Moonlighting on the Internet.  The article says you can earn a ‘5th paycheck’ with little effort by these five methods: “Information Marketing”, “eBay”, “Affiliate Marketing”, “Blogging” and “Yahoo Stores”.

Yes, there are people who make a lot of money on the Internet, like John Chow and the oddly-named Shoemoney. However, it is not quick and it is not easy. Like most enterprises, it takes time, effort, hard work, and the very real risk of failure. There are literally millions of people in each of the five categories above, and most of them make little to no money.

But hey, this is America, the land of free enterprise. Give it your best shot!

The rental car industry has always struck me as ripe for some smart guy to make a lot of money.

Rental car companies are the ultimate commodity traders. They offer a product they don’t manufacture- a car, they don’t control the usage experience(the driving), and there is no residual income to speak of. Customer loyalty is practically nonexistent.

The rental car industry has gone out of its way to antagonize its customer. They charge you a fortune to fill up the tank if you forget to do it. Why can’t they just fill up my tank for me at the market price and maybe charge me an extra dollar or two? How many of us have used Google to try to find the nearest gas station to the rental place only to find ourselves in some dodgy industrial district at 5 AM? I once drove all around Phoenix airport to find a gas station and it took me 20 minutes.

The rental car industry is also harebrained in its usage charges. I have a friend who once rented a car and drove it 1,600 miles in 3 days. He paid the same as the guy who drove 20 miles in 3 days.

The cars offered by rental car companies tend to be whatever the American car companies cannot sell to paying customers, so you end up driving around whatever GM or Ford or Chrysler could not unload. In Southern California, if I see a shiny new American car, it is 90% guaranteed to be a rental. (Full Disclosure: Occasionally I have received a Hyundai or a Kia instead of Detroit iron).

Why don’t rental car companies go for the cheapest cars? They should be the biggest customers of the Chery or Berry or whatever car the Chinese are pumping out these days.

Rental car companies might also want to have custom cars created for them, that can handle a lot of punishment and stay on the road for a long time, like the London taxicab drivers have done.

When was the last time you heard about any innovation coming out of a rental car company?

Some interesting links:

This author of this article mentions how times have changed because people no longer want the free size upgrade at the rental car counter due to high gas prices.

And just for kicks here is a query on NYTimes.com that shows rental car related stories. Note the one from 1962, which is only available with a fee.

[Update]

I realized that instead of just mentioning what is wrong, which is easy to do, I should also suggest some solutions. So here are the solutions:

1. Fix the gasoline situation. Measure exactly the amount that the car is checked out with, by using some sort of measurement device. Then, when the car is returned, measure the amount it came back with, and if the car came back with less, then charge the consumer the market price for the difference. If it came back with more, credit them the market price for the difference.

2. Modify your fleet.  First, have fewer models. The consistently profitable and popular airlines such as Southwest in the USA, plus Ryanair and EasyJet in Europe, all run on one model, the Boeing 737. There should only be three models in the rental car fleet: small, medium, and large. You should also modify your purchasing so that your cars run for at least 100,000 miles.

3. Explore additional revenue and sales channels. You can sell advertising on the sides of your cars. You can also modify your rental pattern so that you rent to people who need a hassle-free car but don’t want to buy. For example, you could rent your cars out for a period of 3 months/3000 miles, whichever comes first, or 12 months/12,000 miles whichever comes first. If there is a problem, the customer can return the car and get an immediate replacement. The customer will thank you because he does not have to worry about repairs etc.

4. Make it safer to rent your cars. Offer a ’safe driver’ option for a 25% discount. This would entail the following: a speed governor would not allow the user to exceed the maximum speed limit. A GPS would be used to track the customer’s usage, and if the customer exceeds the speed on any road, then the discount would be revoked for that day.

5. Put a car camera in every car to reduce accident lawsuits. You will make everyone more honest and will deter frivolous lawsuits.

The NYTimes is known for being the newspaper of record. But they are hurting and trying to make the transition into the digital age. Jason Calcanis, a man who made a lot of money on the Internet AFTER the 2001 bust, said newspapers are dead.  So does Henry Blodget, who was a big Internet muckety-muck, fell into disgrace and has pulled off a triumphant return.

So what does this have to do with the ad above, which promotes a not-FDA-approved remedy for wrinkles? It purports to be able to turn a very wrinkly old woman into dewy-fresh young woman with no wrinkles.

The NYTimes paper version charges a lot of money for its ads and has top-notch advertisers such as the Fortune 100. The digital version has to make do with whatever it can scrape up from the bottom of the bucket. They don’t seem to be doing a very good job of targeting, either: I saw the ad, and I am not a woman. I don’t turn off my cookies, etc. I visit the business section and the travel section and the ‘world’ section fo the NYTimes website. But wait…I don’t visit the sports section. So I probably got tagged as a woman. Oops.

On the top we have the viagra website for the USA. Notice how it is so innocuous, they might as well be selling photo albums or wood stain.

On the bottom is the viagra website for Austria. It is raunchy and promises fun and excitement.

Top Site Arstechnica showing PSA

ArsTechnica is considered one of the top blogs on the Internet. It is ranked 2618 on Alexa and #7 on the top 100 blogs list on Technorati. But on a recent visit it was showing PSA’s(Public Service Announcements) all over its home page. That just shows how tough it is to make money on the Internet. Perhaps they should go talk to John Chow who claims to make mucho $$$ on the Internet blogging.