Friday, January 08, 2010

Karl's Full Disclosure: Complicated Relationships (part 2)

Last Time I discussed a bit about how this blog operates. Like most blogs, it operates however the author feels at any given moment. This blog is not and could not be a big master scheme to get a bunch of referral fees. In addition to being really boring, it would be very hard work.

There are blogs that exist to make money. In fact, some of my favorite blogs. But there's a real easy way to make money: Sell advertising. But if you sell advertising on your blog, you better have a darn good blog because it's going to be your full time job. I already have a job.

If you haven't followed earlier posts on this subject, see
- FTC Guidelines Part One: Good Intentions Don't Make Good Laws
- FTC Guidelines Part Two: Everyone's a Criminal
- Karl's Full Disclosure: Endorsements (part 1)
- Smart-mouth comments at the end of this post: Goodbye and Good Riddance to 2009

Anyway, This is the continuation of my full disclosure about money and relationships and kickbacks and referral schemes and all the stuff the FTC thinks they have the power to regulate.

GLB, KPE, and Complicated Relationships

My life and my business are very complicated. This is because I own more than one business and I try to be active in two worlds at the same time.

First, I own and run KPEnterprises Business Consulting, Inc., the best computer consultants in Sacramento. KPE brings in clients and money. In addition, it gives me experiences that allow me to write books. Please buy as many as you can afford at

Second, I own Great Little Book Publishing Co., Inc., which was founded to publish and promote my books (see GLB, as we lovingly call it, runs the SMB Books web site and online store mentioned above. The goal is to provide a wide variety of products for SMB Consultants in addition to my own books.

Here's a shocking secret you would never have guessed if the FTC did not make me tell you this: One reason I sell other authors' books is so I can sell more of my own. I know that's crushing news and many of you will be disheartened to learn that. I'm sorry.

Third, I own a brand that is not technically a separate company but operates out of GLB. It is called Relax Focus Succeed&reg, and has a web site at We call this company RFS.

KPEnterprises has been able to generate some speaking engagements for RFS and GLB. RFS and GLB feed each other to some degree.

In addition to a monthly newsletter and lots of promotional activities for KPE directly, I also produce a number of products under various brands. This blog is run by GLB and promotes the weekly SMB Email I produce. (Sign up at or

GLB produces events such as seminars that last from 60 minutes to eight hours. (To book an appearance, please visit The Great Little Book Speaking Page. The page doesn't actually speak.) Of course these events get people on my mailing list. The mailing list gets the SMB Email, plus the occasional advertisement and sometimes a list of great resources to check out in the SMB Space.

GLB events also include conference calls, podcasts, and webinars. Our latest conference call series has just launched on the topic of Cloud Services. You can sign up for the next conference call (January 20th at 9:00 AM Pacific) at Harry Brelsford will join us for his State of the Nation address and a look at what's up with Cloud Services in the SMB Space in 2010.

GLB also produces a printed catalog. We have a bunch of advertisers in that catalog. Obviously the catalog promotes those people. But it also promotes GLB and SMB Books.

GLB has other products, but they are minor in nature and often quite specialized, such as

Meanwhile over at Relax Focus Succeed . . .

RFS has an occasional newsletter and a blog. (Sign up for the newsletter at and check out the blog at

I put on RFS seminars, normally in association with some activity related to KPE or GLB.

Those are just the relationships that exist between my own companies. Now add all the SMB bloggers, vendors, promoters, visitors, and pimps mentioned in the last three posts.

Please study this diagram in great detail:

Note that "other sites" includes everyone from vendors to partners, blog readers, references on forums I don't know anything about, etc. Some of the advertisers for the catalog are also in that pile that says Other Sites.

Did you know that SMB Books has an affiliate program? Yes. You can earn money by putting a link to SMB Books on your blog or web site. You'll get a percentage of all sales made to people who click from your site to mine. Sign up at Of course you'll have to do a five-part blog series to describe our relationship and let people know that you might some day earn $10.

So far, none of our affiliates have retired on the money earned through this program.

And this diagram is quite simplified because that simple little "other sites" piece includes thousands of sites, many of which I don't know about. It includes bunches of links from Microsoft, the internal forums at ConnectWise and Autotask, lots of SBS User Groups, lots of blogs, thousands of mentions on blog posts and user forums, SMB Nation, MSPU,, MSPSN, all of our authors, many of our clients, etc.

This tiny diagram represents a tiny fraction of the complicated inter-relationships that exist out on the web. Think of it like a room full mouse traps with ping pong balls on them. You drop one promotional idea into that room and all the ping pong balls start flying around triggering all the mousetraps.

Now understand that this tiny diagram is like one atom in the universe of rooms filled with ping pong balls.

I never see -- and could never possibly see -- more than .0001% of all activity related to how my companies and my referral partners are perceived on the Internet.

The FTC Guidelines say that I'm responsible for the behavior of anyone who says anything positive about any of my products or services AND has ever, or might ever, receive any benefit from me.

Dear FTC: Please monitor the posts on Twitter for 60 seconds (see tweetgrid) and you might begin to understand how absolutely impossible it is to comply with your guidelines.

Note also that many forums are subscription only or limited to members. So there are days when I get a flurry of activity from some subscription forum but I can't follow the link and see what people are saying about me. I only know that people are linking from there to me. I literally have no way to know what's being said or why people are linking to my blog or SMB Books site. How can I be responsible for what's being said there?

Think of the tens of thousands of people and businesses in the SMB Nation universe. Add tens of thousands in the MSPU universe. Add tens of thousands in the Own Web Now universe. Now add every vendor in the SMB/MSP space. Now add all the consultants in the world who might pay any attention to what's being said by any of those bloggers, vendors, advertisers, etc.

I'm a tadpole trying to change the course of a cruise ship.

I appreciate that the FTC wants to do a power grab. But they have absolutely no idea what they're doing.

- - - - -

What Constitutes Typical?

In my last post I mentioned, at the end, that I don't know how typical my results are.

One of the FTC guidelines is that you have to state how typical your experience is. Of course this is intended to control the health miracle business. "Lose weight eating pork rinds." I get that.

But the FTC paints with a broad brush.

If an endorsement (see post #1 and post #2 in the series) says something like . . .
    I saved $10,000 with this program or I made $10,000 by using what I learned

The person who makes that endorsement MUST state how typical it is.

Okay, so I know my company used to pay about $12,000/year for workers comp insurance. My excellent assistant Jennifer got that down to $10,000 and then $8,000. Then I joined the ASCII insurance program and got it under $1,000.

Is that typical? I have absolutely no idea. First, I live in California and our workers comp laws are too horrible to contemplate. Second, I have no idea what's going on in the insurance industry as a whole, so I don't know if rates are going up or down or sideways. Third, I don't know how my company and my classifications are different from any other company on earth. Fourth, I have no idea how ASCII does this. And so forth.

And I don't care. I don't want to research that. I honestly, honestly do not care.

The FTC makes me responsible for stating how typical my experience stories are. But without a huge amount of research, how could I possibly know this? The FTC also makes ASCII responsible for my statements. Even if I make them in one of a million places they will never find on the Internet. Even if I make them on a site with zero traffic.

True story: The day after I posted the ASCII example here, I got a call from someone at ASCII about putting my books on their site for members only. I asked if they'd seem my blog post and the answer was no. After a few minutes the caller reviewed the posting and expressed gratitude for the promotion.

But you see how it works? They're looking to promote me by selling books and making a little money off the transaction. I'm promoting them over here and they're promoting me over there. The two are not directly tied. But clearly they both come out of a long-standing desire to promote what we believe in. You can't orchestrate that. You can't "do" that. It happens.

Another example . . .

Robin Robins

I could tell you how much I've sold in the last month, quarter, or year. And I could speculate about how much MORE I've sold because I use the Technology Marketing Toolkit. But like ASCII, there's no way for me to know what's typical. There's no universe of average performance.

I have often said that Robin Robins is more of a coach to me than a marketing guru. With programs like hers You get out of it what you put into it. If you buy the big binder and stick it on a shelf, you will typically make zero additional dollars. If you follow her advice and send out the letters as she wrote them, you'll make money. If you fiddle with the letters you may or may not make money.

You may or may not have read my little book called Managed Services In A Month. In this book I literally give you every step, every action, and every decision you need to make to do exactly what I did when our company moved to flat-fee managed service agreements.

I am amazed at how many people read that book and then come to me and thank me. Then they tell me how their managed service offering is structured and it's nothing like what I did in the book. They didn't do anything I recommended but they give me credit for helping them see what the world can look like and start moving away from their old business structure.

What is typical?

I have no idea.

John Milton wrote: "A wise man will make better use of an idle pamphlet than a fool will do of sacred Scripture."

You will act on anything that inspires you. And you will naturally point to that thing (process, person, product) and tell the world how great it is. You will not know how typical your experience is.

Will you have the same experience as I do with ASCII or Robin Robins? No. Probably not. But I have no way of knowing that. I can only know my own experience. And only I can decide how much I'm going to put into making a program work.

If you use your treadmill for drying clothes, you won't lose much weight. If you use it to run or walk every day, you will lose weight. It's not the treadmill's fault that you choose one level of commitment over another.

Perception is Reality

Happily, I have faith that the FTC Guidelines will be dramatically limited by the courts because they are too over-reaching. Among other things, they make ME responsible for YOUR actions even if there is zero interaction or agreement between us. AND they make me responsible for the perceptions of YOUR readers based on what you said (not what I said) about my products and services. And (see the earlier blog posts) I am responsible a MISinterpretation of reality by YOUR reader even if a proper interpretation is possible.

It's so evil that it's hard to wrap your mind around. Is the FTC a vast community of evil scientists in lab coats petting cats?

The FTC guidelines are well intentioned. But isn't the road to hell paved with good intentions?

I believe what I believe. I say what I believe. Your mileage may vary. I have no idea how typical I am. And I don't care to spend a minute of my life trying to find out. There are too many shiny objects ahead that are much more interesting than knowing whether my past behavior is in the middle of a bell curve.

As I mentioned in the last blog post, I'm going to just do what I do. It is certainly not my intention to harm any vendor or friend by saying something nice about them.

Forget the FTC.

How can I possibly be responsible for every activity of every person in the SMB space who mentions me AND the perceptions of every person who experiences every comment from every person in the SMB space? The short answer is: I can't. It's impossible.

So here's the good news: I don't give a sh*t what the FTC thinks or wants. Their new guidelines are STUPID and un-enforceable. About 250,000,000 Americans and about two billion people in the rest of the world are violating the FTC regulations.

It's time for a bunch of people at the FTC to read Unleashing the Idea Virus by Seth Godin. This book presents a greater understanding of the world we live in than anything coming out of the FTC today.

Of the Billion or so people using the Internet, I'll take my chances that the FTC will pay any serious attention to me and you.

Please disregard this and the previous four blog posts. Sorry.

Note regarding irony: Is that disclaimer filled with more self-promoting links than you've ever seen in one blog EVER? Wow. I'm glad the FTC gave me the opportunity. In fact, I'll give free shipping on any order, no matter how small, to anyone who enters the coupon code FTCSUCKS at between now and January 31st, 2010.

- - - - -
FTC Disclosure Statement:
I make every attempt to honestly state what I believe and enjoy the freedom of posting whatever I feel like on this blog. This is a big complicated world and I have many interconnected personal and professional relationships. I may in some way receive money or other benefits from any of the products, services, or companies mentioned in this blog as a direct or indirect result of my actions on and off this blog. Any experience mentioned here is just my experience and I have no knowledge about whether it represents a typical experience with any products, services, or companies mentioned. Whenever it is possible to have both an honest and a misleading interpretation of my statements, please assume honesty. Thanks. - karlp


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  1. So it's you thats generating SPF questions in the Vladville inbox? @#%@

    Just admit that you're a slimy vendor whore, take your check and move on :) Welcome to the brotherhood, enjoy your green jacket.


  2. Now hold on a second there, Vlad! For the benefit of the FTC, I'm not getting paid to say this and I'm not getting any free books, either, but I have to correct you. Karl is not slimy! I have shaken his hand on more than one occasion and it was quite dry. :>)

    As to the green jacket remark, I think it is outrageous that you should try to besmirch his character by trying to subtly connect him to Tiger Woods. I've seen Karl drive and he's no Tiger Woods! :>).

  3. I don't think you guys are taking the FTC very seriously.

    Big brudda is watching.

  4. First you scare everybody, then you literally say "F the FTC". You are confusing me and making me pee myself laughing at the same time.

    Seriously though, I've been following this like you and it all seems very undefined at the moment. I think it's more about scaring the straight up liars on the net that are purposely trying to deceive people but you can't just single them out.

    Just do your thing as long as you're not planning on selling get rich quick schemes, penis enlargement pills or weight loss products.


  5. Wait. You're saying Don't sell those things? I just had John start coding a new section at SMB Books. Now I gotta stop him.


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