What usually works: storytelling

What I’m listening to as I type this: Thirteen Tales From Urban Bohemia

I was watching a bunch of my students pitching their ideas for new web businesses, and found myself thinking about the Great British Bake Off.

I’ve only ever watched three episodes of GBBO, and the gap between the first and third was a couple of years. But what struck me most was the style gulf between the two – the step-up in terms of storytelling.

Which is how come I was thinking about the TV programme while I was watching journalism students pitch. Because the thing I remember most from learning to pitch myself – back when I was in VC-hunt overdrive, was that the best way to present the problem your product is designed to solve, is to explain it through telling a story.  Uber-VC Fred Destin said that.

Easy-peasy, lemon-squeezy – storytelling is what being a journalist is about. We “people” news stories, we add walk-you-through structure; hook-you-in intros, and wrap-up conclusions.

My strongest pitch started with the (real) story of the news story I wish I’d never put on a front page, and why that led to me launching two open publishing products. I would tell her story and show her picture:

Not saying whoIt would be wrong for me to retell her story here. But my aim was to illustrate why I was doing what I was doing and why I believed it was important to help people write their own stories.

I still believe that. I haven’t changed my view that a good journalist is an enabler of truth, not a director.

Anyway, I’m drifting away from the point here. Which is  that storytelling delivers a narrative shorthand that helps us to explain and to sell ideas.

It does so not because we’re natural storytellers – some are, some learn how to be; but because we’re natural story listeners. We learn about and make sense of the world through narrative. Perhaps increasingly so as we tell stories across more and different media.

I’m going to quote from Robert McKee’s  ‘Story’:

The world now consumes films, novels, theatre, and television in such quantities and with such ravenous hunger that the story arts have become humanity’s prime source of inspiration, as it seeks to order chaos and gain insight into life. Our appetite for story is a reflection of the profound human need to grasp the patterns of living, not merely as an intellectual exercise, but within a very personal, emotional experience.

McKee’s seminal book on the principles of screenwriting was published in 1999 – ten years after Berners-Lee invented the web and the same year a 15-year-old Mark Zuckerberg (aka “Slim Shady”) launched his first website.

McKee, Berners-Lee, not even Slim Shady Zuckerberg, would have imagined the billions of stories being shared across 1.37+ billion web pages today. We present the story of who we are (or who we want to be seen to be)  by sharing what we’re doing.

Here’s another picture and another story:

TGBBO's Ruby TandohGreat British Bake Off finalist Ruby Tandoh wrote a combative comment piece for the Guardian, about the “bitterness and bile”, “vitriol and misogyny” tossed casually at her and fellow GBBO contestants by some public and press.

Ruby acknowledged the “meticulously manufactured” nature of TV but may not have realised what “manufactured” means in terms of storytelling when the aim is to deliver McKee’s “personal, emotional experience.” When storytelling engineers an emotional response in the audience, should it be a surprise when that emotion spills over into the real world?

Boyd Hilton, TV editor of Heat magazine explained it thus:

Obviously the producers shape [GBBO] to give each contestant an identifiable personality….  It’s up to the people who make these programmes to create the stories and give us an idea of how they feel the personalities come across.

Anita Biressi and Heather Nunn, in their book Reality TV: Realism and Revelation, explain the success of Reality TV as “the exhibition of the self” wherein a revelatory narrative instructs audiences in “how to manage the self” through  recognisable subjects (ie people types) dealing with personal crisis.

The need to hold our attention within the time limit of the programme leads to a narrative shorthand of confession and emotional revelation in order to convince the audience of the authenticity – the ‘reality’ – of the stories being told.

Ruby becomes the weepy one, Kimberley the automaton, and Frances – well Frances delivers “integrity” (read authenticity). Each baking challenge is a typical action-through-conflict scene, and, just as all stepmothers are witches and all Princes handsome, each woman in the (any) group can only be one Spice Girl.

If the point of storytelling is to make an emotional connection between story and listener, or protagonists’ ‘story’ and the listener/viewer, what is the point of storytelling in relation to my students’ pitches? Why am I linking the Bake Off to the pitch off?

Because storytelling – narrative – is a shorthand to making a connection with your audience. Doesn’t matter whether that audience is 8m viewers, 1m readers, three VCs, or one grandchild.

Jack TV

Jack controlling the story arc

Stories have an arc. That arc is defined as an absolute value change –  the frog became a Prince; the soldier gave his life;  eventually, she won. McKee describes the core of a good story as a “fundamental conflict between subjective expectation and cruel reality.” We wanted this, we got that.

A good pitch includes a value change story arc that tells us how things could be better. It also includes – like reality TV – reference to the ordinary: this is something ordinary people will be changed by; this is a product recognisable people types will use to solve a problem.

You see a real cool girl in a class and you want to know what other classes she’s signed up for so you can sign up too… students go and look up other people and find out who they know, who their friends are, what people say about them, what photos they have… This is information people used to dig for on a daily basis, nicely reorganized and summarized… You don’t miss the photo album about your friend’s trip to Nepal. Maybe if your friends are all going to a party, you want to know so you can go too…

All stories Zuckerberg told in Facebook’s early years to explain why ordinary students would use it; the problems it would solve, and the value change it would deliver. Or how about Reed Hastings’ story of the $40 late fine for returning a video that led to him launching Netflix – an ordinary event, a problem we recognise and a solution we can therefore understand.

I’m going to finish with McKee on pitching business ideas through storytelling:

The… much more powerful way [to persuade people] is by uniting an idea with an emotion. The best way to do that is by telling a compelling story. In a story, you not only weave a lot of information into the telling but you also arouse your listener’s emotions and energy. Persuading with a story is hard. Any intelligent person can sit down and make lists. It takes rationality but little creativity to design an argument using conventional rhetoric. But it demands vivid insight and storytelling skill to present an idea that packs enough emotional power to be memorable.

 

tell-me-a-story

 

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What didn’t work (but could): newspapers

What I’m listening to while I type: Songs from the Shipyards

A little while back, I wrote about newspapers’ failing business model and its dependency on advertisers:

The issue is that the cost of producing a newspaper has outstripped earnings from newspaper sales since the 1880s. Since when, the business model has become almost entirely dependent on the delivery of an audience to advertisers – and the valuing of that audience according to both demographic and size.

I argued news is not the product newspapers sell; the attention attracted by news is what’s being sold. The business of newspapers is in providing an effective channel for advertisers.

So much we already know. You get people’s attention; you can sell them something.

The problem is that journalism is used to attract that attention – and both journalists and consumers of journalism would like journalism to be something rather ‘purer’, rather better than it is. But that kind of journalism is expensive to produce and most of the newspaper industry is failing financially.

We’re doing a lot of arguing about what newspapers should do next, but not making much progress.

His Girl Friday (1940)Newspapers have to do a lot of different things to get the attention they can sell to advertisers. They have to find and tell stories people want to read about; they have to present stories in a way that will make people want to read them; they have to deliver those stories so people can read them.

It’s a lot of effort when they could just stick with reader offers, holidays, dating and gambling. They should get into porn (I mean get into it properly)  it’s where the money is.

Telling those news stories is generally what we think of when we talk about journalism. But there’s no direct profit for newspapers in producing journalism; it’s a cost absorbed by the business in order to build or maintain the brand.

To reinvent the newspaper industry we need a business model where journalism is the product being sold, or the asset being valued.

A couple of definitions before I go on.

By “newspapers” I’m talking about the newspaper brand and its output, delivered through print and any other media.

By “journalism” I’m talking about, er…

Deuze argued that our understanding of what journalism is is pretty much based on what journalists themselves think it is:

scholars refer to the journalists’ professionalization process as… the emerging ideology served to continuously refine and reproduce a consensus about who was a ‘real’ journalist, and what (parts of) news media at any time would be considered examples of ‘real’ journalism. These evaluations shift subtly over time; yet always serve to maintain the dominant sense of what is (and should be) journalism… defined as a shared occupational ideology among newsworkers which functions to self-legitimize their position in society.

So journalists by and large define journalism according to what we do, or more accurately how we wish it was done. I’ve had that conversation hundreds of times in newsrooms – is this story “journalism” or PR puff? Is that person a good journalist or a sharp writer?

But what’s the value proposition for journalism to its customers?

If the primary customers for newspapers are advertisers, the value of the journalism to advertisers is its effectiveness in attracting consumers of journalism by type and quantity.

The journalism changes in reponse to market needs, to ensure the right consumers are reading the stories they want to read. It’s those consumers of journalism that value it the most.

I’m going to wander back to the newsroom…

Opening scene, His Girl FridayAt one newspaper where I was news editor I would spend four or five hours a day in news conferences, arguing over stories. There were generally around eight people in that room with ‘editor’ within their job title.

At two newspapers, I’ve sat in a conference group sometimes twice the size of the reporting team outside. We’d agree how a story should be delivered but wouldn’t be the ones delivering it.

Journalism is an old industry. It’s weighed down with historical ways of being and doing: there are still too many blokes in their 50s talking to each other.

So here’s my first suggestion: squash newspapers.

Go for flatter hierarchy, much more weighted towards the activity that’s being paid for.

Concentrate decision-making time on premium activity and manage majority activity through SOPs and supervisors.

Here’s my second suggestion: rethink what newspapers are paid to do.

Newspaper businesses have become really good at giving away their assets.

Not just sticking journalism they charge for in one outlet (print) onto another outlet (web) for free, but giving away valuable customer data (cookies and tracking) to other companies, and pretty much offering the PR industry an open door to talk to their readers.

Newspapers’ biggest asset is their readership. They use journalism (mostly) to attract that readership. The readership attracts advertisers. But by rethinking how their readership is “sold”, newspapers can revalue journalism and mine additional income streams.

If most of the work in newsrooms is making interesting news stories out of PR, why don’t newspapers see that as something they’re good at and can charge for?

The PR industry is worth $10bn globally, it’s growing as the press is shrinking yet a good chunk of that $10bn is being spent on getting PR stories into the press – for free. Doesn’t make sense as business model: close that open door and charge for entry, at least to the regulars.

Here’s my next suggestion: cut the number of journalists.

'The Front Page' (1974)The news industry really doesn’t need thousands of journalists with the same qualifications, it needs better job demarcation for the work that needs doing: fewer journalists and editors and more copywriters and subs.

So (bastardising Google’s 70-20-10 rule) have 70 percent of the newsroom doing 70 percent of the activity: subbing or writing news and information – that non-original news, entertainment, and information that forms the bulk of content.

Much of it originates in public and private sector PR. Much of that could be paid for. Doesn’t mean it has to be bad for the reader, or that the writer/sub doesn’t still get to ask questions to get a clearer story, or work out what’s most important to the reader. Do this job better and newspapers will be replacing fewer journalists with robots.

Put 20 percent of resources into “premium” journalism, the stuff that makes a newspaper’s reputation, produced by a smaller number of journalists good at finding real stories. Journalism needs to be free, newspapers don’t and by-and-large aren’t. Give the journalists and editors freedom to ferret out a smaller number of real stories instead of filling text boxes.

Finally, put ten percent of company resources into R&D.

Here’s one suggestion: Stop giving away data.

Block third party trackers, either to sell readership data yourself or to sell non-tracked web access to readers as a premium service.

And while you’re at it, find out what – or if – readers would really pay to receive ad-free, PR-free journalism.

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What didn’t work: Sweeble

What I’m listening to as I type this: Dead & Born & Grown

I’ve been putting off writing this post for half a year. Tying my tooth to a slamming door would hurt less.

This post is me saying, finally and publicly, that sweeble is over. My big publishing idea; the web-tech start-up I’ve led since 2008, is kaput. And probably always was.

Even the sign I’ve been driving around for three years is looking weary:

Fading sweeble signSweeble was (and I’m pretty certain still would be) the UK’s only web to print self-publishing platform, built so anyone could create their own proper printed newsletters, magazines and booklets. Everything was done online in sweeble; from writing stories, to laying out pages, to ordering printing. More useful than Blurb. I wanted to build a WordPress for print.

Anyway, it turns out it never really worked. Worse its browser dependability meant it never really would work without being rebuilt every couple of months.

In a nutshell, I made three fatal errors.

1. I contracted the wrong developers.
2. I didn’t manage the development process forcefully enough.
3. I got distracted by new stuff instead of being a one-project entrepreneur.

There are other bits I could have done better – like getting more publicity, or focusing on one market channel at a time, but they didn’t kill sweeble, just slowed things down.

And if the funding we were offered had panned out, maybe I’d have been able to pay new developers to build me a stable version of sweeble.

Weeping woman - Corbis
However, clouds and linings and all that, there are things the sweeble experience has taught me. So here’s my advice to anyone paying someone else to build something new:

  1. Your developers are not your friends. You don’t need them to like you.
  2. Contracts can help you think through the project responsibilities but are largely useless if it goes wrong.
  3. There are reasons why the thing you want to build doesn’t already exist and one will be that it’s really difficult to build. Expect problems.
  4. Concentrate on building the simplest, sharpest one-trick pony and don’t waste time and money adding every widget you dream up.
  5. The first time your developers miss a key deadline, stop the project (and payments) until you understand why and agree next steps.
  6. The second time they miss a deadline, start looking for other developers. Just in case.
  7.  Have a cut-off point in your head (time and money) when you’d be willing to cut your losses. Don’t keep spending just because you won’t walk away from what you’ve already given.
  8. Don’t leave project management to the developer team’s manager. Get weekly reports, daily reports if things are going wrong; ask questions and talk to the developers. You’ll never wish you got less involved.
  9. It isn’t about just getting to beta release, it’s about launching a product lots of users can use without tearing their hair out – just ask MySpace.
  10. Allow at least one third of build time for field/user testing. You need to be sure the product works when the developers have gone.

wizard-of-oz

Aside from lessons in what to do differently next time (if there is one, I’m still feeling a bit raw), what else have I learned from sweeble’s demise?

This: it’s time there was a registration authority overseeing and regulating the work of software/app developers and engineers.

In the UK we’ve got gazillions of trade bodies and quangos regulating work and standards on behalf of consumers.

There’s somewhere to go if you have a complaint against the bloke who laid your carpet or fitted your double glazing. You can check whether a dentist, solicitor or company director is OK or dodgy. You can get support if the firm that sold you your holiday goes bust or you were miss-sold a pension plan. You can find a certified gas fitter, engineer or electrician.

But you have no way of knowing, other than by word-of-mouth, whether the developer/s you’re about to spend thousands, or millions, of pounds with can do what they’re promising to do.

And, no matter how much you spend on lawyers and the contract, if the developers don’t deliver, you’re pretty much buggered.

Software project failures are difficult to prove in court (is it “goods” or “services”?) You’re looking at a lengthy process involving paying court costs, solicitor and barrister – and even if you win, the developer/s can opt for bankruptcy (or Chapter 11 protection in the US) and not pay you a penny.

It’s like me taking my car to a garage and not being able to do a thing about it if the mechanic decides square wheels would work better than the round ones I wanted.

squarewheeltruckThere are trade bodies for software engineers and developers but these are member-centered – serving the interests of the developer, not his or her customer. There are no codes, standards or regulations that can tell me, the buyer, whether I can have any confidence in the supplier’s ability to deliver.

The global software industry is worth around $350bn (Lucintel). The ICT market in the UK alone is worth £140bn and software and IT services make up £58bn of that. For comparison, that’s almost three times what we spent in the UK on getting our cars fixed.

My point being that this is a big and growing industry on which other businesses are increasingly dependent for their own growth, so why is it unstandardised and unregulated?

We celebrate the scale of spend in the software industry but ignore the billions lost on sub-standard work or delayed delivery.

When the NHS scraps a £12bn software project that “never worked”, we blame the customer not the supplier. ComputerWorld’s ten biggest software failures in 2011 demonstrates even New York City and Idaho can’t get back the hundreds of millions of dollars the authorities lost on failed software projects.

We’ve known, even before Brooks’ seminal Mythical Man Month that most software projects go wrong because of poor project management but we continue to believe that can be corrected with a contract and sharing Excel reports. We need help to get what we’re paying for.

My losses were in the tens of thousands rather than the millions, but it isn’t the money that matters, it’s having to draw a line under a good idea that should have worked. That really hurts.

One of the magazine templatesRIP sweeble.

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What didn’t (and sometimes did) work. Part 3: publicity

What I’m listening to while I type: Return of the Grievous Angel:

Number three on my list of  five things that make web-tech start-up success more likely is ‘Twitter chatter isn’t enough, good press and advertising last longer’.

I spend more time than is probably good for my career in the pub four doors from our home. 

Me and hubby will sit in a particular corner and, because the landlord controls the TV remote, we watch a lot of sport and in particular a lot of La Liga. Aside from developing an awe-struck appreciation for the genius that is Messi and a schoolgirl crush on the sparkliness that is Balague, I’ve also noticed just how much of Sky’s ad space is bought by internet-based businesses.

It made me think about the value of traditional press publicity and non-digital advertising to digital businesses. Or why you need old-school media to make new media businesses really successful.

Online ad spend first overtook TV spend in the UK in 2009, and will overtake TV spend in the US this year or next (depending on your choice of analyst). Yet earlier this year, analysts were pointing to a bit of a bounceback for TV advertising led by web businesses including Google. And multi-media companies like Gannett have seen a 38 percent hike in TV ad revenues, albeit boosted by the Presidential battle and the Olympics.

“The biggest way to attract mass is still television,” Estée Lauder Chief Executive Fabrizio Freda told reporters at a briefing in New York in April.

So, if you’re a web company with a product already used by a billion people, and investors eating their children to have a share of your expected future earnings, what do you spend cash on?

Telling us Facebook is like a chair.

If you’re the world’s biggest-earning web business, where do you place a third of your ad budget? Into TV. And when you’ve got a great new product no-one uses, where do you tell people about it?

Google spent $1.5bn globally on advertising and promotion in 2011, over 4% of company revenueand, along with Apple and Amazon, has one of the highest ad-spend growth rates. There’s a great infographic here.

Here’s a game we can play. I’ll run through a short list of successful UK web businesses and see if you remember their TV ad:

Wonga
Asos
lastminute
Betfair
Bet365
Moshi Monsters
Wiggle
notonthehighstreet
Lovefilm

And, while you’re thinking about advertising, had a LoveFilm mailshot or a notonthehighstreet catalogue drop through your letterbox recently? Twenty-five-percent of spend on postal mailshots comes from home shopping businesses– and if that’s not what Lovefilm and notonthehighstreet are about, I’m a monkey’s aunt.

Yes, you can grow your business at speed if you hit the jackpot on a Facebook frenzy or Twitter trend spike, but it won’t be enough for long enough. You need press coverage in the early days and cash to spend on advertising once you’re growing.

I get a spike of roughly an extra 2,000 views each time I tweet about a new post on wreckoftheweek, more if it’s retweeted. But that’s digital peanuts compared to the spike a mention in a magazine delivers.

My point being that this is stuff you can do yourself for free and that makes a big difference at start-up. Press coverage, listings, forums, social media, search-engine-optimised content. It’s about hours and hard work, not marketing magic.

Basically, you need to work out where your potential customers are, go find them and say ‘Hi’.

hiGetting the press to notice you is the hardest bit. Like VCs, they move as a pack so one tech reporter writing about you generally leads to another interview.

What works in most business start-up reporting is a positive story focused on firsts (eg your software is doing something new), or numbers(eg investors have chipped in a nice big figure) or milestones (eg hitting a nice big user milestone). And with a feelgood personal story about the founder/s thrown in. Here’s an example of all four in one Guardian story: Songkick raises £6.3m in funding round.

With my start-ups I was generally pretty ok at getting initial press interest and web chatter but not so good at keeping the interest going (ran out of ‘first’ and ‘numbers’).

However good you are at attracting free publicity and web chatter, eventually it comes down to spending money on traditional advertising. Which means making money or attracting investors. Facebook may not need to advertise for more users, but it does need to use advertising to scrape off some of that studenty-stalkery-privacy-dodginess attached to its brand.

I’m going to wrap up with something from research by McKinsey earlier this year. Note the last sentence:

The results revealed that advertising fueled about 15 percent of growth in GDP for the major G20 economies over the past decade by generating new business. While some companies launched unsuccessful media campaigns and did not recoup their costs, such failures were outweighed by the companies with strong campaigns that increased sales, attracted new customers, or improved margins. On a microeconomic level, introducing digital media to the advertising mix helped companies increase their revenues, market share, and profit margins to a greater degree than traditional advertising alone. (Notably, digital media produced its effect by enhancing the impact of print and broadcast ads, rather than by replacing them.)

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What didn’t work: newspapers

What I’m listening to while I type: Sea Sew

I’m not saying that newspapers are dead: individual newspapers will continue as businesses as long as the ratio between cost and revenue makes sense for the owner. But as a business model, we really are looking at the endgame.

Last week, Newsweek announced it was to end its print edition and go online-only in a bid to cut “legacy costs” attached to producing the printed product. Reports suggested $40m annual losses (one day I’ll do a chart showing how $40m/£40m is the default for stories mentioning newspaper losses), although other writers suggested it was that Newsweek just wasn’t good enough.

The same week, Guardian editor Alan Rusbridger was spitting bricks over a Telegraph story suggesting he was fighting to save The Guardian’s print edition against pressure to switch to online-only. It’s a story that surfaces periodically, not least because media commentators don’t believe The Guardian can turn around its £40m (yup) annual losses before the business runs out of money entirely.

The issue is that the cost of producing a newspaper has outstripped earnings from newspaper sales since the 1880s. Since when, the business model has become almost entirely dependent on the delivery of an audience to advertisers – and the valuing of that audience according to both demographic and size.

But the problem the business model now faces is that the assumption that equated size of audience to share of advertising revenue has been overturned by the shift to digital. Online audiences don’t deliver sufficient revenue because the advertising industry pays less for digital ads compared to print. The usual quote is that $100 advert offline = $10 on the web = $1 in mobile.

While 43 percent of Guardian News and Media’s readership is online, the company makes only one fifth of its income from digital. The Daily Mail is the most popular newspaper website in the whole wide world yet raises just 2.6 percent from online advertising. In May this year, the Daily Mail was selling 1.9m newspapers a day, but had 5.6m web visits a day. Despite web audience trouncing print, the Group’s news websites earned just £12m against £171m for newspaper advertising.

As Rusbridger tweeted in response to the Telegraph story: “Numbers for going digital only & junking print just don’t add up”.

It’s not just about newspapers having a business model dependent on (falling) advertising, but having a business model that separates product from sales. News is not the product that newspapers sell. News is an attractor: the attention attracted by news is what’s being sold.

 

nestle

In the next village to me is a big Nestle factory. When I walk the dogs, I smell the coffee. Nestle makes Nescafe, KitKats, pizza, icecream, petfood, babyfood…The branding is in the products, the quality is in the products. You know what to expect from a Yorkie; you know whether you like Dolce Gusto coffee.

The business model is that you buy the Nestle products you like, and 130 years ago that was the business model for newspapers. You don’t pay a monthly subscription to drink Nescafe. Shopkeepers don’t give you free KitKats in the hope that you’ll read the advert for insurance on the wrapper.

(I’m making the assumption here that it costs less to make a KitKat than Nestle sell it for. Unlike newspapers).

For newspapers to survive people have to want to read a newspaper. Whether you’re selling adverts or newspapers, you still need readers. But just how many newspapers you have to sell also relates to the size of the business you’re trying to support. The problem isn’t just with the newspaper sales model, but with the scale of the companies that run newspapers.

Newspapers are increasingly a by-product of the global corporations that run media businesses alongside successful insurance risk services (DMGT); contract printing (Trinity Mirror); TV stations, websites, magazines and nursing services (Gannett); TV, Hulu, publishing, Australian rugby league (News Corporation).

If all you need is to make enough money to pay a handful of staff and the print and distribution contracts, you don’t have to sell a lot of newspapers. It’s a model that still works at small-scale or local. But share dividends, company cars, pension schemes, city offices, ad campaigns, a $33m salary for the boss, well it adds up.

Am I saying newspapers can’t be big business? Yes, I am. But I’m not saying that newspapers can’t make money.

I am also saying that you can’t have a business branded by a newspaper but make your money selling insurance and running care homes. Eventually, the insurance-sellers are in charge and the loss-makers are cut or axed.

More importantly perhaps is that you can’t be a big, global, multi-purpose company and still expect to dance like a butterfly and sting like a bee when you’ve got a fight on your hands. As newspapers have now. As tech-VC Fred Destin puts it:

Most corporations are defined by the quality of their planning processes, which in turn become objectives against which execution happens and achievements are measured. Corporate behemoths, faced with change, stumble and fall. In fluid markets where everything can be priced and exchanged dynamically, startups thrive. They are the elemental unit of a cloud economy, highly adaptable and insanely good at one thing. But large corporations cannot adapt at the speed necessary to remain best of breed in all aspects of their business.

Here’s what I think we do with newspapers: we forget what we know about selling newspapers and look at what we’ve learned from the web.

The web is incomprehensibly massive and global yet personal. It’s like driving a car – we shut the door and think we’re the only ones on the road. It doesn’t matter how big the web is (or how few companies are running it); we travel around it according to our personal roadmap of interests.

A couple of weeks ago I challenged my entrepreneurial journalism students to come up with something they didn’t like about the news – a problem that needed changing. Each problem they raised came back to one thing – the news wasn’t personal.

It wasn’t that they only wanted to read the news that interested them, it was that they couldn’t easily access news they might be interested in.

The profession of journalism has been based on how to deliver news that most people would want to know. But most on the web is most products, most choices, most information, most of our friends, most people like us, or most like the thing we’re searching for – ie most of the things one person wants, in one place.

Apply that to news and you get most of the news that interests me, and some of my friends, and some people with the same interests as me – without me having to look for it. Does that sound like a newspaper to you? And then there’s that other bit – the things I don’t know that I might want to know.

So, given another run at investor funding , here’s what I’d do instead of launch a newspaper: I’d build what Facebook could have become on April 6th, 2005.

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What did (and didn’t) work in ecommerce

What I’m listening to while I type: Born To Die

If the trick to web-tech entrepreneurial success is to keep trying and tweaking the same model until you get it right, then Boyd Carson is getting it right.

I spoke to him about his e-ventures and his thoughts on ecommerce ventures in particular.

As a partner at Sapphire Capital Partners, he launches bespoke investment funds for clients in property, renewables or anything else: “picking the right products for the clients to invest in.” As Founder of Sapphire Ventures, he runs his own start-ups, focusing on niche ecommerce products – most recently weselljewellery.com

It’s his fourth ecommerce-led venture. Two failed, one (Where Wise Men Fish) was a success and he sold it on. He launched We Sell Jewellery four months ago.

What I found particularly interesting in our conversation was the technique he’s developed out of this experience. Basically picking a niche product; focusing on getting to know that product and that market; and testing it first with just a couple of products and landing pages before committing.

It’s a low-cash, ultra-fast way of testing an idea on a market before you start building a beautiful website or weaving your business plan. I found myself wishing I’d spoken to him before I spent months building lovecocktails.co.uk (twice) and then finding our extensive product list was a logistical nightmare.

However, back to Boyd. He’s launched two jewellery sites and two fishing-related sites – isn’t that a bit of a bizarre mix, I asked him?

“It’s about trying to identify a niche market. Trying to identify somewhere where one can add value to the process. Everyone was rolling up hotels but no one had seriously looked at fishing lodges.”

When he replied to my Linked In appeal, he said he’d seen a lot of people getting ecommerce ventures wrong. I asked him what mistakes he thought they were making?

“Not doing enough research on the product to begin with, spending a lot of money upfront doing the website, spending all the money upfront without knowing the product.”

He added that was an issue for any retail business but was particularly the case in ecommerce:

“People assume ecommerce is easy but actually it can be harder because there’s so much competition on the web.
“It’s about knowing the product and the market – does the market want the product? And also the market may want the product, but can you get it to market with enough margin to make a profit via the internet, because the internet is so competitive?
“Someone may want to buy, for example, a gold necklace. We may assume there’s a market on the internet for gold necklaces but the competition is so fierce that the only one who survives is the one selling it the cheapest.”

Hence Boyd’s strategy of focusing on niche markets. His second jewellery site has focused on niche and custom-made jewellery.

However, the assumption would be that luxury goods, such as jewellery or exclusive fishing holidays need investment in a website and marketing – don’t customers expect a certain look and feel to the website? Boyd thinks not:

“You don’t need a big website to launch. You do test pages to test your product quite cheaply. You don’t have to spend a lot of money to test a product and get some feedback.
“For example, if I had a budget of £500 I could do an adwords campaign and spend that as a way of testing the market, rather than spending £5,000 and putting everything up there.”

Of his two ventures that failed, he felt going for a market that was too niche, too small (fishing flies?) was a reason for failure, along with not having enough cash to back the business up in the early stages, “and probably I didn’t know what I was doing”.

I asked him whether having had a business fail is a positive thing?

“Yes and no. It can be very dangerous, an entrepreneur with a small capital base can easily blow the lot and then its game over for them.”

So what advice would he give to someone planning an ecommerce startup?

“Research the product and don’t run out of cash. Have plenty of cash stashed away and don’t blow it on sales and marketing before you’ve tested your product.
“I’d also say that networking is very important because it’s a very lonely process starting a business and to talk to other people in a similar position can reassure you that you’re not failing, and they can offer you ideas and help”

And the most important thing?

“The overriding thing is focus wins. Keep focusing on what you’re doing otherwise you’ll never succeed.” 

 

Thank you, Boyd.

Thank you, Boyd.

 

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What didn’t work – Geomium

What I’m listening to while I type: B.R.M.C.

Ben Dowling is one of those bright, young entrepreneur geeks that Cameron gets super-excited about  [er, that doesn’t sound quite right. Ed]

At 28, he already has one web-tech launch behind him and is currently working on at least two others. That first web-tech project, Geomium, was the one I spoke to him about – after he replied to my tweet call to tell me he’d definitely worn the t-shirt!

tweetWhat I found especially interesting talking with him was that the reasons he gave for why he felt Geomium had, ultimately, failed were ones I recognised from my own experience. In particular, the need to stay focused on your original concept, especially when you’re at that point where funders are biting. Anyway, background first.

Geomium was a social app focused on location. Developed by Ben and co-founder Michael Ferguson out of six months of conversation, prototyping and brainstorming that started in the summer of 2010. 

Mike (left) and Ben. Picture - The Guardian

The two hadn’t worked together before Geomium but had a shared interest in location and in the excitement being generated in 2010 around what location could add to social networking. Ben said:

“Initially, the  idea me and Mike had was very social, just around people and what they’re up to. But we thought, if we just have people then we need the critical mass of people and how can we get people to use it until we have that critical mass? So it was always location based – chatting but with people nearby, location was critical.”

Remember that Summer 2010 was when location was still pretty new. Foursquare had launched  at SXSW the year before – as did the rival it beat, Gowalla. But these were then US-centric and, while there was plenty of work and excitment around location, the space in mid-2010 was still pretty open.

Ben and Mike raised £33k of Angel investment, enough for them to give up their day jobs and concentrate on launching Geomium (as an iPhone app and website) and to start looking for the next stage funding that would make the difference between go and stop.

The product was getting good press and interest from VCs. But by Dec 2010, the Angel cash that had kept them working on it fulltime on had pretty much run out:

“We needed to raise more money around December 2010, Jan 2011. We were slightly unsure what to do with it [Geomium] at that point so originally decided to take on other projects and keep pushing this forward, but it’s really difficult to do it when you’re not fulltime because you get distracted and it’s not a priority.”

It wasn’t just the lack of funds that was impacting on the project at this point, but the pressures that come with the pitching process itself, particularly how the desire to reflect the VCs’ interests can add to that loss of focus.

I remember my own, increasingly desperate, pitching phase and how that hunger to get a funder on board would affect what I thought about my product, and I began reflecting what I thought the VCs wanted. Ben said this had been “a huge problem” for them too:

“We were pitching end November through December [2010] and in January we were part of Seedcamp pitching to five VCs at once. Before that you’re pitching to about one a week and getting feedback from that and so you change the pitch, and then the next week you do it again and get feedback and change it again.

“Then the next week at Seedcamp you meet different teams and they all give different feedback but there was always a common thread. By the end of it you end up with their personal passion, one will say one thing and the other the opposite – although it’s not relevant to us they just say it to everyone.

“But afterwards you realise a side point, not their main point, is a common thread that they all made and that’s the important bit.”

The “important bit” in Geomium’s case was to stay focused:

“They [the Seedcamp VCs] said by bolting more and more onto the product we might think we were making it more compelling but we were actually confusing users.”

For Ben and Mike, the space Geomium was competing in had filled up since they started 12 months earlier. Their response to that had been to add more features to their product:

“The initial idea was to focus on people but then it was “how to we do more? I know, let’s add events and deals.” There were lots of different apps coming onto the market that offered each of those parts but we decided to add them all: “Let’s add this, let’s add this. Oh, someone else is doing that; let’s add that too.” So you end up doing a mediocre job of lots of things rather than focusing on one thing and being the best at that.”

The pitches failed. The guys didn’t raise the extra funds they needed to progress Geomium. Ben summarised what they felt had gone wrong:

“When we first started it was obvious it [location] was going to be an interesting area but 12 months later, when we were looking to raise money, the space had really filled up. It had become increasingly competitive and a lot of the investors wanted to see some serious traction. We had good traction but not at the levels they liked to see and the reasons for that are because we did too many things.”

Ben started working on other projects as lead developer. Some apps, including BusMapper, but  mostly working for another promising start-up – Lightbox, an Android photo app  (has $1.2m VC investment and is currently in Series A fundraising round). Mike returned to the US and is now working on another location-based project – appthegame, with new partners.

Geomium is still running as an events listing website at www.geomium.com (the events route being one the guys had started to focus on towards the end), but Ben “pulled the plug” on the original website and mobile app at the start of December 2011.

But, as Ben explains himself on his blog coderholic: “Failure isn’t anywhere near as bad as you think it might be. Even when everything goes wrong, it’s actually OK.” (Incidentally, this BusinessWeek feature makes the point that ‘failing is actually OK’ in multi-million-dollar businesses too).

So, if Ben was mentoring newbie start-ups at Seedcamp 2012, what would advice would he give them?

“I’d say focus on one thing and do that really well instead of doing too many things. I think it’s a really, really common thing startups get wrong is to think the one thing we’ve found isn’t good enough, so let’s add more stuff. But really you need to focus on the one thing.” 

 

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The Startup Genome and women founders

What I’m listening to while I type: American IV: The Man Comes Around

I’ve mentioned the Startup Genome Project and posted previously about the issues women founders face, so I was interested to read the Project’s latest post “Defining the X Chromosone: the DNA of Women Led Startups“. Interested, but ultimately disappointed.

I don’t want to knock the project, nor criticise Pemo Theodore, the researcher/writer of that post, but one day I’d like to read something about women founders that has analytical depth to it.

Where are the quotes? What percentage responses? What constitutes “many people have said” or “many suggested” in a study based on 120 interviews (and just 18 female founders)?

(This isn’t a reflection on the SGP itself which is using valid research strategy and epistemology.)

I recognise that this is Theodore’s  introductory post and, as such, written to encourge women founders to sign up so that quantitative data can be collected to produce a more authoritative piece. But there’s no excuse for making generalist statements like the one below, particularly without any source references or quotes. 

Whereas many men have big dreams, women may tend to ‘think too small’.  This may stem hormonally from our primary focus on the immediate people in our care or responsibility.  Historically big picture thinking and exploring may have just been the domain of the male hunters.  However this can easily be learned and changed if needed. Women’s sports and working on teams can provide confidence in winning and losing on a big scale.
 
Since my teens, I’ve read a bucketload of similar broad-brush musings on the differences between men and women, and digested so many, unrelentingly positive, “Hey, look at this successful woman! Aren’t we women just great!!” features in women’s magazines/websites that I’m ready to throw up.
 
This month’s Red magazine (“2012 – The Year Of You”) has 228 pages, including a four-page feature on women pioneers and winners of Red’s Hot Women award. But there are 177 pages with adverts or things to buy.
 
I’m not the only woman out here who wants to think more than I want to shop. Can you all just stop writing articles at the intelligence level of a six-year-old who hasn’t yet decided whether Barbie or Action Man has the more attractive lifestyle. (Unlimited clothing budget and option to try a new job every year; against unlimited gadgets and high percentage of being blown apart by a firework….hmm)
 
I might be sounding uppity here (or should that be hormonal…)  but there’s more than enough weak journalism and half-baked research in the world without adding more verbal padding to a very serious issue.
 
There are fewer women founders than male founders for the same reasons that there are fewer women than men commanding battleships; fewer women than men on top company boards; fewer women than men running local councils and fewer women than men in the House of Commons  and in the US Congress.
 
Some of those reasons are to do with us women (eg 177 shopping pages) but most of them are to do with you men (eg you run the world).
 
I hate that the world has hardly changed since I left school with my GCSEs and more ambition than I have today, and I really hate that I haven’t done enough – and am still not doing enough – about that.
 
 

 

 
 
 
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Why startups fail – and why Moonfruit didn’t

What I’m listening to while I type: Time (The Revelator)

Couple of interesting things this morning via the UK Business Forums’ e-flyer that I thought worth a quick post.

First, the infographic below on ‘Why startups fail’ out of research by the Startup Genome Project.

 

Their ‘five core dimensions’ for success are pretty obvious: to succeed you need customers, the right product, a good team, a good/innovative business model, and a funding cushion. These are things all startup founders know but, as I’ve said before, knowing isn’t doing.

What’s interesting about the research is that they link success directly to keeping those  five core dimensions in balance during the scaling of the business – that ‘proper’ scaling means moving all five forward at the same pace, while allowing any of the five to grow faster than the others, leads to premature scaling and to startup failure. 

I’m not sure how much the concept equates to the reality, where growth is more like The Blob than those nice neat graphs, and when founder vision is half panic, half lightbulb moments. I’ll be looking in more detail at the project in a future post, in the meantime, here’s the story on Techcrunch.

The other useful piece in the e-flyer was this video interview with Moonfruit’s Joe White.

I mentioned his wife, Wendy Tan White, in my earlier post about women founders, and his perspective on the differences between running Moonfruit now and running it in the early days, pre-2000 dotcom crash, is interesting.

Among the points he makes are:

  • Despite the recession, the UK tech sector is “crazily buoyant” right now compared to other sectors
  • The recession is good for businesses like Moonfruit because, as they saw in 2008, the recession prompts more people to set up online businesses, as a secondary or main income, that make use of the sort of services Moonfruit supplies
  • It’s easier to launch a new web-tech business now because it’s cheaper, you need less startup capital to get going
  • The downside of that is that VCs expect you to be further down the road before you come to them.

His advice to startups? “Get as much done as you can before you go after funding.”

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Women founders and web creativity

What I’m listening to while I type: Balls and Hello Love

Had a nice email from Poppy Dinsey last week, of the fabulous WIWT (What I Wore Today).

Dinsey, in what I suspect is fairly typical female founder self-deprecation, said it was too early to say what worked and what didn’t with WIWT: “we’re such babies still”.  But it’s an interesting project, not least because in its first incarnation, WIWT was very much about Dinsey’s personality and a simple idea with minimal tech needs.

I used WIWT in an earlier post as an example of founders who can’t code but who find creative ways to build their personal online brand into a successful business.

Women seem to be doing particularly well at this – building what are fairly traditional businesses at heart (selling products, ads, mags) on the back of a strong personal web presence. Think Natalie Massenet or Tavi Gevinson , but also women founders like Wendy Tan White who, after having children, switched direction from computing and tech to doing an MA in Textile Design and finding a new creative vision that revitalised her company, Moonfruit.

One of the things that particularly interests me is that creative element in relation to these women founders. Dinsey is a  great writer. I don’t believe that just sticking pictures of her outfits online would have worked without the writing and the personality that came through her blog and Twitter writing.

As Dinsey points out in this video, her web writing had already kick-started the large following that she took with her to WIWT:


 
Similarly, Massanet’s Net-a-Porter was as much about giving an authoritative perspective on fashion trends as about selling the clothes. As a fashion journalist, she understood what makes women spend £4 on a copy of Vogue, and the pleasure they get from windowshopping the magazine. She knew that content was integral to building Net-a-Porter as an experience worth the site visitor’s time.

Here’s Massenet (back in 2007) talking about how they fused scorching customer service with good content:

“We very much believe in investment in the experience and making it richer, having more content, more video, but always fused with this idea that there’s an end experience, an end user who’s going to be expecting a delivery.”


 Except, I have several problems with what I’ve written so far.

First, by talking about women’s business creativity (particularly as an alternative to tech skills) am I reinforcing the generally-held belief that women’s businesses are inherently soft and fuzzy and, well, female (ie selling frocks not gadgets)?

Or is the problem that the decision makers around them are a largely amorphous group of men: middle-class, white, educated, married…, who assume that selling, or even better building, gadgets is a safer investment bet than selling frocks

However apologetic the interviewer in the Massenet video is, he doesn’t show that he understands the market she’s successfully engaged in, nor seems to believe he should understand it – there’s not a lot of evidence of good prep in his questions.

(And, as an aside, while I’m pleased that Hu was pleased, how’s this for undermining a CEO when she’s working! A TechCrunch Disrupt proposal)

There are several great projects out there trying to get more attention for women founders in web-tech;  TheNextWomen and Women2 for instance. But the reality is that women face the same barriers to progress in starting their own business as they do in the corporate workplace – only 14% of UK businesses are owned by women and women are half as likely to be entrepreneurially active as men (source: Prowess 2)

That’s something I saw myself, doing the rounds of VCs and Angels in 2010, with events like Seedcamp – great though it was – still overwhelmingly male, white and under 30.

According to those Prowess figures, “the most entrepreneurial age group for women globally is 35-44”  but when was the last time you saw a women in her 40s pitching at Seedcamp? (Aside from me!)

Women are more likely to take a break from fulltime work to have children in their late 20s and early 30s and, either because we find we can’t just step back on the career ladder again on the same rung we stepped off it, or because we don’t want to (if ‘coding twists the brain’, try giving birth), we’re more likely to look for alternative career paths post-children because family life means living life differently.

I don’t agree with everything she says, but Penelope Trunk writes with authority about the combined pressure of serial start-ups and family life, including why women opt to slow the pace  (Women don’t want to do start-ups. They want children).

But, just to get back to the creative vs coding idea. I still think that web-tech founders should know how to code, at least a bit, if only because knowing some code makes it easier to manage the tech in your web start-up.

But I do worry that there may be too much emphasis being put on knowing code (yes – including from me) and that that in itself is creating another barrier for women start-ups.

Not because fewer women can code, but because coding is part of the tech thing, part of the guy web thing (not for nothing are porn, sport and gambling among the biggest online money earners).

The web is ubiquitous. We use it without thinking about the tech behind it – like we use dishwashers without thinking of the electronics, or watch TV without seeing the pixels moving.

So maybe the tech isn’t actually what matters on the web – it’s the creativity of the idea; coming up with a different way for people to use the web tool to do something they already want to do (surf porn, gamble, buy frocks) or to do something they didn’t know they wanted to do (tweet, fight, manage a cartoon farm…).

I’m not suggesting that’s something women are better at. I’m not making any generalisations about women and creativity (where’s the data?). But I am suggesting that the assumption that every web-tech start-up team needs a tech-hot partner  may be missing the point of the web.

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