Notes from Chris

Episode 472

Nobody likes going into a restaurant without having some idea of what to expect. And being the person that recommended a new restaurant is like playing with fire. It could go very well... but it could also burn you. And that was a risk that Mike Van Heyde, a product manager based in Austin, Texas, got tired of taking.

Mike is a self-described “nerd at heart” who was well-versed in application algorithms. So, when Netflix launched a contest that asked people to predict the rating their 2.5 million customers would leave 100 million movies, Mike was intrigued by the challenge. The prize was for $1 million… if you could beat their algorithm by at least 10%.

Mike had a firm grasp on computer algorithms. He didn’t know much about building a recommendation system, but he didn’t let that deter him from the potentially huge winnings. Since Netflix had set up a forum for the competition, Mike found himself doing lots of research into how to begin building this kind of system. He fancied himself a “complete novice” when it came to executing his idea, so he saw immense benefit in watching people with more experience discuss their problems and process.

Although Mike didn’t win the Netflix challenge, he did come up with a flexible algorithm that he could use for other occasions. This gave him his big idea: If people could have restaurants recommended to them in the same way that Netflix recommends movies, then the entire process (and deliberation) would be simplified. So, Mike spent a day building a simple prototype to test how his algorithm responded to the restaurants he already knew he liked, and the ones he knew he wanted to go to. A few tweaks here, a little adjustment there, and one application later… Foodio54 was the life of the party.

The algorithm was complex, but the concept was simple: Users would rate a few restaurants and Foodio would learn about their tastes and suggest places they might like.

Traffic to the site slowly began to grow through word of mouth and recommendations, but Mike kept it completely non-commercial for the first year. The easiest way to help Foodio grow was through advertising, and he was hesitant to put ads on his website in case it make the site look unprofessional. But, a year into his Foodio side hustle, he decided that he was “ready enough” and turned on Google AdSense—a platform that allows owners earn money through targeted ads placed on their site.

It was almost immediately profitable. Since then, Mike’s revenue has averaged $50,000 a year... and nearly hit $100,000 in annual revenue, twice. By early 2011, the traffic to Foodio was growing so quickly that Mike was considering quitting his day job and making his side hustle his full-time job. But then…disaster struck.

It turned out that Google updated their guidelines overnight and launched an important update which changed how they showed websites in their rankings. Traffic had declined by 75% in one day. Foodio was squashed like an overripe avocado.

Mike realized he’d made a critical mistake. He had focused on a recommendation algorithm that depended on ratings, making reviews and other content secondary.

The road to recovery took months, but he slowly and steadily built back Foodie54’s prominence. Before the crash, he was on track to earning $100,000 in a single year, and he hasn’t recovered to that point yet, but he’s still hovering comfortably at around $50,000/year.

The project remains a side hustle. Mike believes that the skills he’s gained would have been unlikely working for someone else would have been unlikely. He stills hope to one day be self-employed, and one of his next steps is to grow the Foodie54 site into a standalone phone application. But for now, he’s happy and comfortable, and the world is his self-recommending oyster.

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MENTIONED IN THIS EPISODE:

• Foodio54.com: Are bad recommendations causing you to lose your appetite? Check out Mike's app over on his website and never go hungry again!
• Google Adsense: Mike decided to try and monetize his web app using click through ads via Google Adsense

SEE ALSO:

• Understanding the Principles of Algorithm Design: If you're interested in algorithms and want to learn more, here's an article that dives into the principles of algorithm design
• Lost & Found: How Lost Property Helps a UK Woman Find Her Side Hustle: Tanya-Jane Park wasn’t looking for a side hustle when she went to a popular music festival, but when her friend lost her handbag, she managed to find one anyway
• Senior Center Director Creates Virtual Training Service: A director of operations at a senior center comes up with a way to improve training services—while building a sustainable side income

Inspiration is good; inspiration combined with action is better. Now get back to work!

Yours in the revolution,

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