I've been wondering about how to get images indexed by Google. Does anybody have any idea? I have a friend who has been trying to get this mormon image in Googles index. The page the image is on has been spidered and indexed by Google, but the image itself is not showing up anywhere in Google's image search.
We've been selling our locking mailboxes for almost two years now. This last fall, we were able to introudce our MailCase stainless steel mailbox. This proved to be quite a challenge because stainless steel is a lot harder than normal steel. You can't manufacture stainless with the same factory tooling as normal steel. You have to have special extra hard tooling made.
It is also a challenge because you don't paint them. I guess you could...but half the reason for having a stainless mailbox is because stainless looks cool! So, you have to take special care on the finsih. We put a brushed finish on ours. So far, our customers really like them!
I remember I used to complain when I started hearing Christmas music before Thanksgiving. I used to think that the day after Thanksgiving was the official start of the Christmas season and under no circumstances should there be any Christmas music before then.
Then, stores like Costco started setting up Christmas displays in September! I think if some people had their way Christmas would be a year round holiday.
Today I found my wife on the internet looking at gingerbread house websites two weeks before Thanksgiving. I guess old traditionalists like me can continue to fight the constant encroachment of Christmas on the rest of the year, but that would be sorta like trying to keep the sun from rising tomorrow. So instead of fighting, I'm embracing it!
So, with my new attitude toward the Holidays, I looked at some of these gingerbread websites with my wife. All I can say is...wow. It is amazing what people are doing with gingerbread these days. This webiste has adorable Christmas gingerbread house kits.
Once you're in the Christmas spirit, it's easy to spend a lot of time looking at the amazing creative things people do with gingerbread. It takes me back to when I was a child making gingerbread houses with my mother.
I have another distinct memory as a child. Nobody ever actually ate a gingerbread house. By the time Christmas comes, all the gingerbread is stale, the icing flakes off, and gum drops are hard as hockey pucks. Most of the time we just broke the house up and slid it into the garbage. How sad.
So, I think that is why when you are making a gingerbread house you also have to make gingerbread men. That way you can make a house too look at, and a gingerbread man to eat. Of course you can't eat a gingerbread man unless you decorate him first with a creative gingerbread man costume.
Well everybody, it is two weeks before Thanksgiving and all I can say Merry Christmas!
I completed a profile page for MailCase Locking Mailboxes on AboutUs.org. I created it probably close to 3 months ago and so far Google hasn't spidered the profile there. Could this be another instance of Google finidng the link but not showing it in Webmaster tools?
Has anybody else noticed this? I have spent the last several weeks doing the excruciatingly hard work of trying to build quality inbound links to the MailCase website. When I check Yahoo site Explorer, a lot of the links show up right away. But in Google's webmaster tools, these same links are not showing up as much as two months later.
I have reason to believe that I am getting credit for the links in Google because MailCase is steadily moving up in the rankings for my primary keywords. What I think is happening is that Google is giving me credit for the links, but not showing them in Webmaster Tools.
The word on the street is that a lot of the data in Webmaster tools is pretty crappy. I guess this must extend to backlinks too. I would love to hear from anybody out there with a similar problem.
Focusing on organic SEO seems like the logical next step to growing MailCase Locking Mailboxes. By focusing on SEO I will be able to organically grow sales as my ranking improves for keyword phrases like 'locking mailbox,' 'secure mailbox,' steel mailbox,' etc.
Getting sales is awesome, but getting sales too fast can be a problem. Your infrastructure may not be able to handle a large influx of sales all at once. Since SEO is a gradual process, sales from SEO will also increase gradually allowing you to still deliver outstanding customer service as tweak your logistics infrastructure to handle the sales.
So, I've decided to learn SEO. There are a lot of great resources out there for learning SEO but in all of my research it seems to have come down to two main resources. SEOMoz and SEOBook. Both have extensive free resources like videos, blogs and guides. To learn all of the ground level basic SEO stuff I thought I should just pick one and spend most of my time studying the free resources from the site. Then after I have learned everything I could for free, I would then apply for the premium membership from each respective site.
So, which one to choose? I spent quite a bit of time reviewing both sites. At the end of the day, I chose SEOMoz. Here is why:
Videos. Believe it or not my main choice came down to videos. Both sites offer free videos. With SEOMoz they have a "Whiteboard Friday" video series by Rand Fishkin, the CEO of SEOMoz. Rand stands in front of a whiteboard and explains various SEO concepts. His explanations are clear and he has a lot of energy. He is a natural presenter and he is very engaging.
Aaron Wall of SEOBook also does videos but almsot all of his videos are screen capture videos with voiceover. Watching just one of Aaron's Videos almost put me to sleep. While he is knowledgeable, he is just not as engaging as Rand and since you aren't looking at a person delivering the content, it is a lot easier to get bored and fast forward through the video.
Since I made my choice to go with SEOMoz I have not looked back. They have a very active community and they have excellent tools. I have not signed up for their pro membership yet but I will very soon. You could easily spend two weeks just reading and absorbing the free stuff.
I know it sounds like it, but I did NOT rip the title of this post from The Onion!
I have been working hard on optimizing the MailCase Locking Mailboxes website for on-site SEO. I figured that the best strategy for starting my SEO efforts was to get all the on-site stuff put to bed first before starting work on getting quality in-bound links to the website.
I had an awesome Drupal developer help me clean up my website (MailCase is a Drupal based website). He downloaded the XML sitemap module for Drupal and I opened a Google Webmaster Tools account and we submitted the sitemap.
The term I am trying to rank for is 'locking mailbox.' Google has about 28k searches a month for this term and I think there would be some great revenue generated by ranking high for this term. Before submitting the sitemap I did not even register in the SERP for 'locking mailbox.' After submitting the sitemap (it took about a week) I was ranking 195. Not great, but better than what I had before!
Before, my title tag was just 'MailCase | Home' So after submitting the sitemap I went in and changed the title tag on the home page to 'MailCase | Locking Secure Mailboxes'
It took about another week for Google to register this change but once they did I moved up 140 spots to number 55 for the term 'locking mailbox.'
I was amazed by that!! Those title tags are CRITICAL. I moved up 150 spots in rank in ONE WEEK!
Now 55 is still not great, but the improvement from not even registering in the SERP's to 55 in basically two weeks doing nothing more than on-site SEO optimization blew me away!
Well, I guess that must be the easy part of SEO, right? Now comes the hard part - building quality in-bound links.
There are no shortage of sellers on ebay.
There are two types of ebayers in this world, those that use it all the time for everything, and those who use it once and a while when it is the only place where they can find what they are looking for.
I used to fall squarely in the latter camp. I opened my eBay account in 2003. From 2003 until August of 2008 I bought and sold a grand total of 8 items through eBay. During those 5 years I used eBay so seldom that every time I bought or sold something I had to stumble through the interface re-figuring out how to buy and sell stuff there.
By October of 2008 when I was ready to start selling my Locking Mailboxes in earnest, I decided to start with eBay. Why eBay? I thought the learning curve would be the least steep of all the main online marketing methods (Pay Per Click, Search Engine Optimization, etc). Also, relative to the sales price of a mailbox the listing fee was almost negligible. That means that I didn't have to pay any significant fees unless I sold a mailbox.
Oh yeah, and my website still wasn't finished because my lame-ass web developer dropped off the face of the earth.
So I jumped in to eBay with both feet! I opened my ebay store, talked to other ebayers, read tons of blog posts, read everything I could on eBay, and got my listings all ready.
While I was doing all of this research, the one thing that everybody was talking about were the eBay policy changes made in early 2008. In early 2008 eBay wasn't even on my radar so even though I had heard of some changes, I didn't really know anything about them or what they meant. However, to the eBay faithful, these changes were massive, earth-shaking, cataclysmic changes.
One change was allowing fixed price listings to last for 30 days for 35 cents. Most ebayers thought this was a pretty positive change. EBay was obviously trying to encourage more fixed price listings. Everyone concluded eBay was doing this to stop losing market share to Amazon.com.
What was the biggest, heavy-duty cataclysmic change? EBay stopped allowing sellers to leave negative feedback for buyers. Sellers could leave positive feedback, or no feedback at all. Well, this upset sellers to no end. Where was the justice? How could they protect themselves against vindictive buyers? Blogs and articles were inundated with unhappy sellers complaining about how unfair this new feedback policy was.
Even to this day whenever WebProNews does an article on ebay you can count on hundreds of vitriolic comments from disgruntled current and former eBay sellers.
This all happened before I started seriously selling on eBay. During my research I read so many blogs and comments saying what a piece of crap eBay had become because of this new policy that I seriously considered not selling on eBay.
But I decided to try it anyway (better than passing out flyers door to door...right?) So, now having 6 months of experience in the eBay trenches I have somethin' to say about the new e-bay feedback policy: It's not actually that bad! As a matter of fact, I think the changes are actually a good thing. I think there needs to be some modifications to the current feedback policy but overall, eBay is better for the changes.
Why? Before, the sellers had much more power than the buyers. On eBay, a negative feedback rating is bad. Really bad. Ebayers (myself included) find themselves obsessing about their rating, trying to make sure they don't get negative feedback. Before the changes, there was always the possibility that a seller could give a crappy customer service experience to the buyer. This happened a lot. Sellers would mis-represent items, buyers would buy it, and then realize they were lied to. When they tried to get a refund from the seller, unscrupulous sellers refused. When the buyer threatened to leave a negative feedback rating, then the seller would threaten to retaliate with a negative feedback rating of their own to the buyer. What was a respectable, honest eBay buyer to do in this situation? For most smaller purchases buyers just left it alone and moved on rather than risk getting a negative feedback even though they would have been totally justified in giving the buyer negative feedback.
On bigger purchases buyers would complain to eBay. Eventually unscrupulous sellers would be banned. But this didn't help the buyer get their money back. Other sellers took forever to ship items. What if items arrived damaged in shipping? Again, getting unscrupulous sellers to perform without threat of retaliatory feedback from that seller was next to impossible.
Sellers had much more power than the buyers because of the way eBay was originally set up. It was set up for buyers to pay first for an item, then have the seller ship the item. However, both buyers and sellers had equal power to leave feedback. If the power of leaving negative feedback is equal for both parties, then the party who gets the money first and then has to perform has much more power over the party that sends the money and waits and hopes that the seller performs as advertised.
Obviously, in it's initial incarnation as an auction only site it would be impossible for eBay to set it up any other way. There is only one item in any given auction and several bidders so there would be no way to have the bidders get the item first and then pay for it. But, for the sake of this discussion lets do a thought experiment. In our thought experiment lets pretend that it was possible to make it so that the seller had to send the item to the buyer first and then the buyer would send the money. If both had equal power to leave negative feedback then the seller would send the item to the buyer and then the buyer could refuse to pay and still keep the item. If the seller threatened to leave negative feedback, then the buyer could threaten to retaliate. In this hypothetical experiment all the power would rest with the buyer. Sounds ridiculous, right?
This is exactly the situation that buyers have been in all along. They had to pay first without ever seeing the item. If the item was misrepresented and the seller was being a jerk about it, the buyer would have to think long and hard to decide if leaving negative feedback was worth it for fear of retaliatory feedback from the dishonest seller. As often as not, honest buyers did not leave negative feedback for dishonest sellers because the buyers determined that indeed, the hit to their feedback profile was not worth it.
By changing the feedback policy, eBay went a long way to leveling the playing field. Despite howls of protest from sellers, this change finally equalized the advantage that sellers had all along in getting the money before having to deliver the goods, yet having equal feedback power.
Having little experience on eBay before last November, the effect on me of reading all of these negative blogs and comments about eBay was for me to make a resolution: If I was going to sell on eBay, I had to offer insanely great customer service to avoid getting negative feedback. So that is what I did. I carefully inspected all of my mailboxes before shipping them to make sure they were perfect. When people e-mailed me with questions, I e-mailed them back usually within 2 hours. When they called my 800 number, I answered. If they had any questions after the sale I was all over it.
I remember one experience early on when a mailbox I shipped to an eBay customer in CA arrived damaged. I was freaked out because it was like the 4th or 5th mailbox I had ever sent by FedEx Ground. I was so afraid of his negative feedback power that I offered to send him a full refund including shipping charges, or a new mailbox with me paying the shipping. He opted for the new mailbox. I sent it out the very next day. Luckily I had purchased shipping insurance from FedEx and they reimbursed me for the damaged mailbox and the lost shipping. Now, I would like to think that I would have given him that great of customer service anyway, but fear of negative feedback ensured that I did.
Now that I have this mentality as a seller, it makes me a lot more confident as a buyer. Now I am squarely in the camp of people who buy everything on eBay. When I need something, eBay is the first place I look, and I get great customer service from the sellers there.
When eBay first made the policy announcement, disgruntled sellers all predicted the speedy demise of eBay. But they were wrong. There are no shortage of sellers on eBay. Go to any category and there are lots of sellers selling tons of items. There are plenty of sellers, just less crappy ones now.
I do have some criticisms of the new policy. When eBay first rolled it out they compared it to a retail store that a customer might shop at. Customers service is a one way street at retail stores. Basically the 'customer is always right' concept makes it so that customers can complain all they want, bring their items back and exchange them get refunds, etc. all without the store being able to retaliate against the customer. You would never find a manager at Wal-Mart going to a customer's home after work to complain that he/she was a crappy customer. That is what eBay was saying the old feedback policy was akin to.
This comparison by eBay is a stretch. Even now, with the power that buyers have to go back to retail stores and return stuff, and complain to managers etc., buyers still do not have the right to go spray paint negative feedback on the front wall of the Wal-Mart. This is essentially what a buyer can do to a seller on eBay now by leaving the seller negative feedback with no fear of retaliation by the buyer.
The new feedback policy changes the balance of power from very heavily in the sellers favor, now to slightly in the buyer's favor. Now you could have unreasonable buyers who threaten to leave you negative feedback if you do not refund some of their money, etc. I have sold probably 70 mailboxes on eBay so far and I have never run into a buyer like this, but I have heard that they're out there (all of my customers on eBay have been very gracious so far).
If eBay made one more change to the feedback policy then I think it would balance out the slight advantage that buyers now have. I propose that eBay allow a system for sellers to petition to remove negative feedback that they felt was left vindictively by a buyer. Currently negative feedback can be removed if it can be proved that the buyer was trying to extort money from the seller or if the buyer is using abusive language. However, the seller would have to provide proof (threatening e-mails, bad language in e-mails, etc.) If the extortion was made over the phone then there would be no 'paper' trail of the extortion or inappropriate language.
EBay needs a system to remove negative feedback that is left vindictively but where the seller does not have proof that the feed back was left vindictively. I propose that sellers who felt they've been wronged by buyers could petition to have the feedback removed. The problem with this is that every seller on eBay would petition every negative feedback and it would bog the system down. To counteract this eBay could charge the seller a fee to review the transaction. Say $150.00. Then eBay could form a 3 person panel. Two ebayers and one eBay employee would form the panel and review the transaction. Each of the reviewers could get $50.00 for their trouble and eBay could keep the other $50.00 to offset the cost of the employee review. The panel could review all of the evidence, they could call or e-mail the buyer and the seller and get everyone's side of the story, and then make a judgement. The ruling of the panel would stand.
Currently, a buyer who leaves negative feedback has the ability to go in and change it to positive if the seller makes the buyer happy.
With my brilliant modification to the eBay feedback system a seller could determine exactly how much a negative feedback rating was worth. If it was worth less than $150.00 then they could choose not to petition the rating and just leave it alone. If the seller knew in his/her heart of hearts that the negative feedback was justified, then they would not petition to have it removed, rather they would do whatever it took to make the customer happy. In most cases, this would cost less than $150.00 since the vast majority of things that sell on eBay sell for less than $150.00. If the seller determined that the negative feedback was going to cost them more than $150.00 in lost sales, and they were just absolutely convinced that they were wronged by the buyer, then they could choose the petition option.
Sellers are outraged that buyers might be able to vindictively and unilaterally leave negative feedback. With my proposal, it takes the outrage out of equation and makes it a purely financial proposition. The seller would simply have to determine the value of negative feedback, and then act accordingly.
When you boil it down to strictly a financial proposition and take the emotion out if, most rational people would just do whatever it took to make the buyer change the feedback from negative to positive even if that means basically bribing a crappy buyer. Hey, that's basically what Nordstrom does, right? They'll take back anything, in any condition regardless of length of time between the purchase and the return. They have decided that their reputation is worth more that what it costs to deal with a handful of unreasonable customers. On eBay, each seller has to make that same determination. In my case, I have determined that my reputation is the most important thing and that I will do virtually anything necessary to make my customers happy. Wait a second....I think this is what eBay intended to have happen! In at least one case (mine) it is working!
I was not active in eBay before the change, so I don't know the overall customer service levels of sellers then. I do know that I have been extremely happy with the customer service levels of sellers that I buy stuff from now on eBay.
Right or wrong I've become convinced that my future lies in marketing stuff online. The last year has been extremely tough for a guy who has made his living in the mortgage and construction business. The rules for mortgages are changing weekly. It is now harder than ever for an average person to qualify for a home loan.
The one thing I have had going for me is my mailbox business, MailCase Locking Mailboxes, that has been simmering on the back burner for the last 3 years. Mortgage and construction were so busy that I only worked on mailboxes here and there. I finally got my first shipment of mailboxes from Asia in August of 2008. This is about the time when I knew for sure that the mortgage business was seriously screwed. Since then I have spent the vast majority of my time focusing on selling mailboxes.
I decided to focus on 4 areas.
1. Selling on ebay
2. Search Engine Optimization
4. Amazon and other online stores
I've already been selling on e-bay since last November (2008) and have had some pretty good success. It has exceeded my expectations so far.
It took until January of this year (2009) to get the MailCase website finalized and the shopping cart set up and integrated.
Now I'm beginning the next phase of my online marketing adventure, Search Engine Optimization! I have tons of thoughts about all this that I'll be sharing in future blog entries.
I finally have a video done for MailCase. Click the embedded video below to watch.
It's amazing how things connect to each other. You never know from which corner your next idea or opportunity will come from. I read The Black Swann by Nassim Nicholas Taleb. He is not the most engaging writer I have ever read (he is really difficult to understand) but the thing that stands out is the quality of his thinking. For good or bad, his ideas have influenced my thinking dramatically. One of the main premises of his writing is that many times success in a certain endeavor is based on luck as much as anything else.
If you accept that premise, then one of the most interesting takeaways from his book is that it pays to be lucky. Like my wise father always says 'It's better to be lucky than good." Nassim Taleb points out in the book that the best way to maximize your chances of being lucky is by exposing yourself to as many business ideas as you can. The more exposure you have, the higher chance you have of being in the right place at the right time with the right set of skills (in other words, being lucky). Entrepreneurs have a greater possibility of being lucky than, say, a dentist.
If you take a hundred different dentists and follow them throughout their lives, maybe 80 or 90 of them might end up financially pretty well off by the end of their lives. The 10 or 20 who are not financially pretty well off at the end of their lives are that way for a variety of reasons. Some of them will have died or become disabled. Others will have made poor investment choices, or have been subjected to ruinous lawsuits. Most of them will probably do pretty well, but almost none of them will be fantastically wealthy.
On the other hand, if you take a hundred different entrepreneurs and follow them throughout their lives. Many will fail, and many will fail lots of times. A few will get lucky right off and get rich right away (ala Sergey Brin and Larry Page). Many will never get it right and everybody will have thought of them as failures by the end of their lives. Of the hundred entrepreneurs, the majority will probably never achieve a great success. However, one or two may achieve fantastic, almost unbelievable wealth. If you look at the distributions of the 100 entrepreneurs at the end of their lives, one or two will have achieved phenomenal success, a few others will be fairly well set but the majority will probably either have just made a living, or will have left entreprenuership altogether.
Nassim Taleb's point is that probably none of the 100 dentist will be fantastically wealthy, but at least one or two of the entrepreneurs will. So, he suggests to put yourself in as many situations as possible to maximize the probability that you will be exposed to that one idea or opportunity that can make you lucky!
If you look at a product that is similar to the one you want to produce, and it reads 'patent pending' on it, then you are screwed! Not really, but it is difficult because pending patents are not published. There is no way for you to be sure which element on the product is original and which ones are prior art (see my post on patents for a further explanation of prior art). You are not even sure which elements they are even claiming in the patent because there is no way to read the patent application while it is under review. Actually, you can get a copy of it to read, but it is very difficult. You have to send in a separate specific request to the US Patent and Trademark Office and pay a fee (as opposed to downloading free published patents from the USPTO website). To do that you would have to know specifically which pending application to ask for. Since there is no number or any other published information (inventor, company, etc.) yet associated with a pending patent application, it is very difficult to try to find which application to even ask the USPTO for.
So, if the product that is similar to your new product is patent pending, then you are in for an uphill battle until that patent is published. The best you could do is find examples of prior art contained in your competitor's product, and if your product contains those same elements as the prior art, then you are probably safe. Any elements not clearly in the prior art should not be included in your product until you know the details of the claims when your competitors patent gets published.
If it is your own product that you have applied for a patent on and it is patent pending...that is probably the best possible thing you could list on your product. You would leave all would-be copiers flummoxed as they tried to figure out which elements of your product are original. Furthermore, if you have a patent pending, you might not get the patent granted, but as long as it is pending nobody will dare to copy it exactly until they know if it is granted or not. What would be ideal is if you could have 'patent pending' on your products forever. No doubt some people probably just put that on their products whether it is true or not. But if the USPTO catches you..or if your competitors catch you then you could be liable for big fines, penalties, and lawsuits.
When I was deciding on a design for a locking mailbox I ran into a 'patent pending' problem. In a previous post on the topic I pointed out that it seemed like making a tray type design (as opposed to a narrow slot design) for the locking mailbox would be the most effective design because then it could take packages as well as letters. However, during my research, I found an existing tray type design already on the market. I duly purchased one to check it out. In my investigations I noticed that it had 'patent pending' on the manufacturers label. Now, at this time, I knew nothing about patents or intellectual property law.
So, I looked up a guy in the yellow pages who did patents (not a lawyer) and went to talk to him. I told him that the design I wanted to make was similar to the design of the mailbox I had purchased, but I was concerned about the patent pending on this one. The patent guy told me there was no way to know what the designer of this mailbox was trying to patent since it was 'patent pending' and none of the information was yet published. Overall, this guy was not very helpful and he basically told me that he would not try to make a locking mailbox of a tray design because of the patent pending status of this mailbox.
Well I could not accept that answer. I mean come on, there are thousand of examples of tray designs in depository boxes. All the UPS, DHL, and FedEx boxes are a tray design. All the libraries have book depositories that are tray designs as well as banks, and not to mention the blue R2D2 boxes that the US Post office runs. You can't tell me that the guy who makes this tray design has an exclusive patent on all tray type mailboxes or depository boxes.
But his point was, that may be so, but if you make a mailbox similar to this one, since you don't know what claims the designer of this mailbox has on his pending application, you don't know if your design will violate his patent, if he is even granted a patent.
So....... I thought...either give up...or do more research. Well, I don't like to be told that I can't do something. So, I decided that this 'expert' was not much help and it was time to do more research.
In my previous post I discussed a little bit about patents. There is also other intellectual property law that you have to watch out for when doing product development. Just because you purposely make your product so that it does not violate another patent, that does not mean that it doesn't violate some other intellectual property. One common type of intellectual property is called 'design patents.'
There are two types of patents. The first type is called a utility patent. This is the type of patent that most of us are familiar with. The less common, less useful type of patent is a design patent. This type of patent is for a product that does not necessarily have a new original functional element that nobody has ever seen before. In other words, it is not a new invention. Instead, it is for products that have an original design, a design that nobody as ever seen before.
Here is an example of a mailbox that looks like a fish. There is no new invention here. It functions exactly like a normal non-fish mailbox would. However, the maker of this mailbox very likely has a design patent on the mailbox. This would keep you or me from taking this mailbox, making a mold of it, and copying it exactly and selling the exact same copy of it. We could make another type of fish mailbox, for example, we could make a swordfish mailbox. The reason nobody has made a swordfish mailbox before is because the sword would keep poking the mail carrier as they tried to deliver the mail
Seriously, you could take this mailbox, and make the fins a little different, and then you would not be violating the design patent. Design patents are very specific. If somebody changes the design just a little bit, then they are no longer violating the patent. You can tell if somebody has a design patent because the patent number shown on the product begins with a letter 'D.' If you have a patent on a product then you are required to list that somewhere on the product in order to claim patent protection.
Furthermore, the US Patent and Trademark office won't issue design patents on obvious designs. If you tried to get a design patent that had an ordinary shape, like a mailbox that looked like every other mailbox you've ever seen, the USPTO would deny the patent. There has to be some unique original design element to the product before the USPTO will grant a design patent.
For the most part, when doing product development, it is pretty easy to get around another product like yours with a design patent. Simply change the design a little bit. You have to be a little bit careful here, because it has to be obvious that you changed the design. Somebody looking at the fish mailbox would have to be able to spot the differences in a reeasonable amount of time. The problem, as we discussed in the previous post is with the more well known type of patent, the utility patent. This is the one that will require lots of research to make sure your product is not violating some patent.
These blog articles are less about actual locking mailboxes and more about the process of product development, at least whay I have learned about product development through the process of doing these mailboxes.
You are almost never going to be able to do any kind of product development without having to take into account the intellectual property that may exist on other products that are like yours. There are almost no totally new products in the world. Most products are modifications of existing products, with most of those having some kind of intellectual property associated with them.
Patent law is tricky and complex. If you look at a product, and you see that it lists a patent with the patent number, then it is a pretty easy thing to go to the US Patent and Trademark Office to look up the published patent. The basis of patents are what are called claims. A person can make any type of claim they want in a patent application, however, there has to be at least one original claim in the patent, one new thing that nobody has ever seen or invented before. Also, patent drafters make claims as broad as possible. For example instead of saying "part A is attached to part B by a screw" you would say "part A is attached to part B by a fastening means (or means of fastening). That way somebody can't come and violate your patent by saying "hey...I didn't use a screw..I used a nail instead."
Anyway, back to original claims. So you make a series of claims for your invention, with at least one claim being completely original. For example...for my invention of a disappearing pencil I would say something to the effect "I claim an invention comprised of a wood like cylinder that is hollow inside, with the interior of the hollow part containing a solid carbon substance, with said wood like cylinder and carbon interior possessing the property of not being visible when a sharp noise making means is activated."
In this example, I claimed that I invented a pencil, and my claims spelled out a basic pencil. Well, the pencil has been around for decades. I did not invent the pencil. What I'm really claiming is that I invented a pencil...that everybody already knows about...but the pencil that I invented has one additional quality that nobody has every seen before in a pencil. That quality is that this pencil can disappear from view when I clap my hands really loud (or make any other sharp noise).
So my claim contains elements a) wooden cylinder b) hollow inside c)inside filled with carbon d) pencil can disappear when a sharp noise is made. If somebody else tries to copy my invention, and it contains all of elements a,b,c, and d, then they have violated my patent. However, if they just make something that contains elements a,b, and c, then there is no violation even though I have those in my claims. Any claims that I make that already exist are what is know as prior art. If somebody made a pencil, but without the disappearing feature, then they have not violated my patent. Even if their pencil looks exactly like mine there is still no violation because these types of pencils have already been around for decades and these known types of pencils have become part of the prior art. As long as it does not contain the disappearing feature, then there is no violation.
Somebody could make a pencil that contains a,b,c, but not d, but maybe they add some other element, e. If this knew element e was totally original and unknown as applied to pencils..then that new individual could file a patent on the basis of his new element e.
For example...maybe the new person made a pencil that could fly. He would not violate my patent. Now, if he invented a pencil that could fly and was invisible when you clapped your hands...then there is a violation.
Clear as mud..right? Anyway, when evaluating whether or not the product you want to make is violating the patent of another similar product, you will need to become very familiar with the patent in question and with all the products like the product in question that have existed before. The first step is to make sure your new product is not violating another patent. If in the process of this, you make an improvement to the product, then the next step is to see if you can get a patent on your improvement. To do that you will have to make sure that nobody else thought of the improvement before you. If they did, then it is prior art and you did not really invent it and therefore could not get a patent on it.
Of these two steps, the most important step is to make sure you are not violating the other patent. This step can be problematic because when you are looking at a series of elements in a claim on a patent, you can never quite be sure which of the elements is the original element. The patent itself does not spell it out...it does not say in bold red letters "and now, for the original element......" That would be too easy. You could see what the original element was, and then you could copy their product exactly, minus the element you know to be original.
When examining the patent, you have to try to figure out which elements of the claim are already known in the prior art, and which ones are original. In the pencil example above, it was easy. Everybody knows about the pencil, yet nobody has seen a disappearing pencil. So it is obvious that the wooden cylinder with the carbon inside are the claims that are contained in the prior art, and the disappearing feature is the new element. However, in the case of the nifty can opener I saw at Bed Bath and Beyond last week, you can't really be sure which element is original and which is not. You have to do a lot of research to figure out which elements of the can opener claimed in the patent have been around before this product came to market, and which ones are original to this product.
Often times, the patent office will grant patents on original elements that almost seem ridiculous becasue they are so simple. Like, in the example of the new can opener I saw, maybe the blade is oriented a different way than ever before on can openers. That can be enough different of an element to get a patent. If you can figure out which element is original, and if the original element was almost ridiculous in nature and really did not affect the functionality of the product, you could keep almost 100% of the functionality of the product but still eliminate the original element, then you could virtually copy a product exactly and not violate the patent (you might violate other IP law, but not the patent itself, more on this later).
So the key is to do enough research on the product in question that you can establish which elements of the patent are original, and which are known in the prior art. Then you make sure your product does not contain the original element. You do this by scouring old patent applications, and if it is a fairly common thing (like a pencil or a can opener) look at all the products like it you can find anywhere (home stores, your kitchen, etc) and examine them to see if the elements they contain are the same elements in the patent. Furthermore, in this process you might discover something new and original, and maybe you get a patent on that.
Mailboxes have not exactly been a hotbed of technological innovation over the last few decades. Basic mailbox designs have been around for what, forever? On the 7th day, God rested, on the 8th day, he created the basic design for a secure locking depository box.
Locking mailbox designs basically come in two flavors:
1. There is the kind that has a narrow slot. The slot is big enough to fit things like letters and very thin packages, but narrow enough that a human could not reach their hand down to the contents below. You put the mail through the narrow slot and it drops to the secure locked compartment below.
2. The kind that has a pull handle connected to a tray. When you pull the handle on the door, the door is connected to a tray that you put the mail on. The configuration of the tray blocks anybody from putting their hand in to grab the contents that have already fallen below. When you close the door, the mail dumps from the tray to the secure locked portion below.
The most popular kind for the US Mail is by far the tray design. The reason why is because the tray can handle bigger things like packages. That is why you will notice that almost all the depository type boxes in existence are some modification of the tray type. From the DHL or UPS box in front of your office building, to the outside book depository at your local library, to the bank depository box where you put your nightly deposits of many thousands of dollars in the bank if you are the owner of, say, Cafe Rio.
Most deposit boxes for video stores are of the narrow slot variety since most DVD's are quite narrow. Also, most locking mailbox designs for curbside delivery in front of your house are also of the narrow slot design. The reason why is because these are the easiest to design and make. The problem with these designs is that they are limited in the size of the package that can go in the mailbox. For most residential designs, this slot is quite narrow and cannot accomodate most packages.
What homeowners need is a curbside locking mailbox of the tray type! So, I kept lookinig. Finally I found a somewhat popular tray type that is on the market already.
Well, after a long journey, my mailbox business is getting close to launch. It was three years ago this April when I was reading an article in the Deseret News about mail theft in Salt Lake City. As I was reading the article the sudden thought struck me "why the heck doesn't everybody have a locking mailbox?" It seemed so obvious. Becasue of the increase in identity theft, someday, maybe in 5 years, maybe in 10 years, maybe in 20 years, someday everybody is going to have to have a locking mailbox in front of their house, or everybody will live in a neighborhood with a central mail pod. By golly, why shouldn't I be the one to provide it for them!
So I began to do some searching on the internet. It turnes out that there were quite a few locking designs already in existence. I went to Lowes and Home Depot to see if I could readily purchase any there. They had some limited designs in stock, but if you wanted anything half decent, you would have to order it. So, most locking mailbox designs were required to be ordered, either through a home improvement store, or from one of many vendors on the interent. These boxes were quite expensive (between $150 to $250 for a mailbox only).
The more I thought about it, the more I thought that selling locking mailboxes could be a great side business. Little did I know the adventure that I was embarking on and little did I know that it would take me 3 years and many thousands of dollars later (and thousands more than I expected) before I would have actual locking mailboxes to sell (which I still don't quite yet!).
However, it has been a fun and interesting road from there to here. I have learned tons, knowledge that I hope will make these mailboxes a success, and knowledge that I hope will be able to help me be able to create and market other products. But, in order for that knowledge to have a hope of paying off, the mailboxes themselves will have to be successful.
It has been a long time since I have posted in this blog. So, if there are still readers of it out there, and if you are interested at all, tune in and I will tell you a little bit about this story.
There have now been almost 170 mortgage lenders that have closed their doors. Most of these lenders offered subprime mortgages, but many offered bread and butter conforming mortgages along with some more exotic Alt-A type mortgages. It has been estimated that there are over 2 million homeowners nationwide who are in loans whose rates are set to adjust in the next two years thus forcing much higher payments. There are millions more in Alt-A type loans (stated income loans, option arm loans, interest only loans, etc.) that will also see increasing monthly payments.
Since so many lenders have gone out of business subprime and Alt-A loans have basically disappeared. It is getting increasingly difficult to find loans for customers who have less than perfect credit.
That is where FHA comes in. FHA is basically a federally backed mortgage insurance program. The homeowners who are in FHA loans pay an up front mortgage insurance premium as well as monthly mortgage insurance premiums into a fund managed by the federal government. FHA approved lenders lend money to the homeowners and then the loans are federally insured by this mortgage insurance fund. If the homeowners default on their mortgages the lenders are able to recoup a large share of their losses from the FHA mortgage insurance fund. So far, the FHA program has never had to be subsidized by the federal government. In other words, the premiums paid into the fund by homeowners who obtained and FHA insured loan covered all of the losses or claims against the fund by lenders who had to foreclose on delinquent homeowners.
New home buyers are able to use FHA to qualify for loans with low down payments (3% down, in some cases homeowners can even get in for 0% down..but that is a subject for another post). However, FHA also allows homeowners who are not in an FHA loan to refinance from a non-FHA loan into an FHA loan. FHA allows up to 95% financing with cash out to consolidate debt, etc
The advantage of FHA loans over regular conforming loans is that the requirements to get borrowers approved for FHA loans are more relaxed. I believe that a full 50% of people who are currently in a subprime loan could probably qualify for an FHA loan right now. What does this mean? Well, I think it means a mini re-finance boom as everybody in subprime and Alt-A loans who can, will refinance to an FHA loan.
Matthew said I could still post on this site occasionally if I had something worth saying. I think I do.
Sendside (the startup I've joined) is offering an invitation only Beta and you're invited. This is going to be limited so if you're at all interested in an email-type messaging system that has no spam, no phishing, and allows you to send tabbed messages with any type of application embedded directly inside the message... here's your chance.
Due to the number of requests we're receiving, we may have to limit membership for a short time. If you think someone you know would also like to be included, now's the time.
Welcome to the Sendside.
Check out this article in the Deseret News which features Your's Truly quoted in the article as well as extensive quotes from this blog.
I was contacted by the journalist (Jasen Lee) who wrote the article looking for people I knew who had subprime loans that were currently in default. None of my subprime clients were in default because of the fact they were in a subprime loan (I have had clients default but not because their loan was subprime, but they defaulted for other reasons like becoming unemployed, etc.). As a matter of fact, we are very careful in the loans we do for our clients. If we think there is even a hint of a chance they might default we will not do the the loan.
Instead, I pointed out to Jasen that he should do an article taking the opposite tack as everybody else. What about the 80% to 85% of people who used a subprime loan to get into a house who are not defaulting? They would not have been able to buy a house were it not for subprime loans, and they would not have been able to partake in the biggest property value increase we've seen in this market in any of our lifetimes, and perhaps the biggest property value increase many of us will ever see.
I have more thoughts on this issue but will save them for another post.
What is all the fuss about...I mean what is it really about?
I've posted twice on problems in the subprime mortgage market here and here. For those of you who were bored to tears reading those last two posts on the subprime mortgage market, well, time get out the Kleenex again.
As I wrote in my previous posts, the wholesale lenders (companies like New Century or Countrywide) who provide the money to subprime borrowers do not actually use their own money. Instead, they obtain large credit lines (sometimes on the order of several hundred million dollars) from commercial banks and also from Wall Street banks. These credit lines are used to fund the subprime loans made directly to the borrowers. The loans sit on the credit line of the wholesale lender for a month or two until the lender has enough loans to aggregate into a large pool. These pooled loans are then sold to Wall Street investment banks who slice and dice them into bonds and sell the bonds to investors. Actually, it's not just subprime wholesalers who work this way, but all mortgage wholesalers. This includes those who make so called conforming loans (loans to those with perfect credit, lots of equity in their home and good jobs) and Alt-A loans (those with perfect credit, but may be self-employed and cannot document income).
The loans are sold several times on their way to the ultimate bond buyers but the borrowers who originally took the loans only think it was sold maybe once. What really happens is that all of the subsequent buyers of the loans hire a company to service the loans to the borrowers. These servicing companies are the ones who send out the monthly statements to the borrowers, collect the payments, handle foreclosures and short sales, etc.
How is wall street actually slicing and dicing the loans into bonds? What are the ultimate investors actually buying? A recent innovation in debt financing is what has allowed so many new subprime mortgages to be offered and ultimately sold to bond investors. What the Wall Street banks did was they realized that they could divide up the large pools of loans in such a way that they could spread the risk around to the various investors. They sliced up the loans in what are called tranches (tranche is the French word for slice). The top tranche bore the smallest risk and the bottom tranche bore the biggest risk. If any of the loans defualted then any lost principal (the original amount lent to subprime borrowers) was borne by the last tranche (the riskiest tranche). To compensate the riskiest tranche for the risk, they were paid outsized interest rates (sometimes as high as 15% or 20%). For many investors, this high interest rate proved irresistible. Especially due to the fact that foreclosures were historically low for many years.
The top tranche paid the least amount of interest but also had the least exposure to lost principal. Because of the exposure of loss of principal was so low for the top tranche, the Wall Street banks were able to obtain coveted AAA bond ratings from ratings agencies such as Moody's.
So who are these investors buying these various tranches? Well, it depends. Those who were buying the safest tranche were large institutional investors like the California Pension Fund, or the Harvard Endowment. Those buying the riskiest tranche were typically hedge funds looking for extremely high returns. However, ironically many of these hedge funds took investments from large institutional investors who usually have some portion of their funds under management earmarked for riskier investments that offer higher returns. The hedge funds would take principal investments from investors. Then using this as a sort of security deposit (much like a down payment on a house loan) they would arrange loans from Wall Street Banks and investors on favorable terms. They would use these loans to buy the various tranches of mortgage bonds. The difference between what they paid their lenders and what they received in interest payments on their mortgage bonds was called the positive carry.
This is good business if you can get it. You are taking money from investors, using this money as a down payment to arrange financing from banks at one rate and then re-lending that money at a higher rate by buying mortgage bonds. The positive carry does not have to be very high for the hedge fund to show a large return on investment for its investors. Remember, the original investment from the hedge fund investors is just a down payment for the hedge fund to arrange credit and loans from banks. As an example, lets say you get $100 million investment in your hedge fund. You use this as a down payment to arrange $1 Billion dollars in loans from large banks and investors at a favorable interest rate, say the 10 year treasury bond rate plus 4% (which would be about 8.8%). You then use this money to buy mortgage bonds in the middle tranche that are returning 11% interest. Your hedge fund is making the positive carry of 2.2% (the 11% you are getting minus the 8.8% you are paying). This does not seem like such an amazing return, right? But keep in mind that the original investors in the hedge fund invested only 10% of the value of the loans. The difference of only 2.2% on $1 Billion dollars for one year is $22 million dollars. Relative to the hedge fund investors' original investment of $100 million, this is a 22% annual return for the hedge fund investors.
Above was just an example to demonstrate how a hedge fund could make very attractive returns. The actual numbers are often far larger. As you probably all know, most hedge funds take 20% off the top of any profits earned by the fund. These profits were so large that they enabled hedge fund managers to make huge money. One hedge fund manager John Devaney made so much money that he bought a 142' yacht that he named Positive Carry.
Of course, all of this only works if the subprime bonds are performing (that is subprime borrowers are paying their payments and are not defaulting). When the bonds default and the principal lent to the borrowers evaporates, then the lenders who lent the hedge fund money get very nervous and begin to freeze the credit lines and even demand repayment. Also, the investors in the hedge fund also get very nervous and begin to make withdrawals from the hedge funds as soon as they can.
The meltdown is caused because as subprime mortgages begin to default, it wipes out the principal investment by those investors who bought the riskiest tranche of mortgage bonds. As these asset classes get wiped out, then the large pools of loans sitting on the credit lines of the subprime wholesalers (companies like New Century, or Countrywide) become unsaleable to the Wall Street banks. Investors who are already getting killed by mortgage bonds they already bought are in no mood to buy even more of those same bonds from the Wall Street banks. Those banks and institutions offering the credit lines to the wholesalers freak out and freeze all further credit to the wholesaler. The wholesaler is then stuck and is not able to fund any new loans which essentially shuts down their business.
This whole business depends upon subprime borrowers defaulting at a predictable rate. When the rate of subprime defualts increases, the whole system begins to shut down starting with freezes on credit lines. Credit lines to hedge funds are frozen so the hedge fund cannot borrower its way out of trouble. Credit lines to wholesale lenders are also frozen so they can-not originate more loans to re-sell.
When I wrote before, this happened to New Century. Well, since then it has happened to dozens of other lenders. As a matter of fact, it happened to one of my favored lenders Aegis. I had a loan that had closed and was ready to fund when the announcement came with no warning that Aegis had frozen all fundings. What had happened is that Aegis' banks froze their credit lines.
The subprime woes are affecting even the largest Wall Street banks. An example is the much publicised collapse of two Bear Stearns hedge funds. These funds were actually conservative funds investing in the top (least risky) tranche of mortgage bonds. However the investors in these hedge funds began to freak out and redeem money out of the fund. The fund did not have enough liquidity to meet all the redemptions.
So what is going to happen? I'm not sure, but I do know this: A full 20% of mortgages in the US are subprime loans whose rates are set to adjust sometime in the next 2 years. All of these loans are now in the form of bonds that are currently held by investors whether they be institutional investors, hedge funds that have not yet collapsed, and hedge funds that have collapsed and have had to have the mortgage bonds taken as collateral by the banks who offered the hedge funds credit.
All of these bonds have value but right now the value is unknown. There is not a regular after market for these types of bonds and most holders of these bonds are afraid to sell them because they are afraid that the price they are offered for them will be so low that it will devalue the rest of the similar type bonds in their inventory.
I'll tell you what I would do if I had the resources, I would go to the investors who are freaking out and offer to buy their bonds for a song. Then, as I said in my previous post on this subject, I would go to all of the borrowers in my portfolio who are more or less performing and I would unilaterally extend the fixed rate period on their loans until such time that they could refinance out of that loan.
I believe that the vast majority of subprime borrowers do not want to lose their homes. They want to keep them and they want to pay on time with their loans. I would work with as many borrowers as possible to make their loans current. I would freeze their interest rate so their payments would not increase and I would take any back interest that they owe and add it to the loan balance. The most expensive thing for any investor is a a foreclosure. I would make the foreclosure on these homes be my absolute last resort.
Somebody who did this I believe could make a killing in the mortgage market. Heck, I could do it, I just need a few hundred billion dollars...anyone....anyone?
And what about the Yacht Positive Carry? According to The Economist magazine....its for sale.