No exit
During the Q&A session following my keynote speech at yesterday’s JEECamp, John Thompson questioned my assertion that there are only ever two exits for a new company: selling or going bust. Of course there’s a third - floating - but that’s not what he meant. He meant what’s wrong with a ‘lifestyle’ (ugh) business that makes you a living?
The obvious and correct answer is nothing at all. That’s a brilliant and admirable thing to achieve (like John’s own Journalism.co.uk). And it’s often a smarter thing to do.
Annette Naudin, BCU’s Media Enterprise course director, later took me aside to beat me up on the same point. Specifically, isn’t it unrealistic to expect or even encourage students to dream up a Scoopt-like idea that might hit the big time? Better, perhaps, to focus on a business that keeps you afloat and allows you to do whatever it is that you want to do, without necessarily chasing the pot of gold?
Again, yes. As we discussed, and I was advocating, an entrepreneurial approach is essential in these times of carnage, whether your goal is a £20k salary or a £20m pay-off.
So if I came across as dismissive of lifestyle businesses, sorry. I certainly didn’t meant to be. Scoopt was all about the big vision - I started the business with an eye firmly on the exit and was never remotely concerned about earning a salary from it - but that was (arguably) the right approach for that business in that space at that time. Right now, I’m growing a new lifestyle business from scratch - Blether Media - because right now that’s what I want (and need) to be doing. The upside with Blether is, or hopefully will be, a living. Nothing more. And that’s just fine.
Of course, one of the questions with any successful (i.e. profitable and sustainable) lifestyle business encounters is when and whether to consolidate or grow. I was intrigued by Jame’s Fryer’s presentation on SoGlos, an apparently thriving online magazine in Gloucestershire that’s taken two years of graft. Great work. But why stop there? If you have a model that works in Glos, why not roll it out across the country? Surely there’s a classic franchise opportunity here to give passionate people in their own regions the toolset and training to build their own SoWherever businesses? This could be an attractive opportunity both for prospective franchisees and for James and the team.
Anyhow, it’s one of the questions to consider when starting a business: not just the exit, cos you might not want one, but whether you want to build something that can be scaled - by others, under your control - later. If I was James, that’s what I’d be doing right now. And maybe he is.
The Midlife Crunch
From now on, I won’t be here so much. Not that I’ve been so much since, um, last June. But anyway, from now on you’ll find me over at The Midlife Crunch.
Achtung! Spitfeur!
I was at a friend’s book launch bash last night. Helen Fitzgerald’s first book Dead Lovely is now on sale in the UK - though in fact it’s been out in Australia, from where she hails, for a while, getting great reviews. She already has three more books in the publishing pipeline.
The evening was fun, as is her book. Check this for a killer opening page:
Some people find themselves all at once, like an explosion. Backpacking in the Himalayas maybe, or tripping on acid. Some people study the art of finding themselves, and graduate - or not - after years of diligence. I found myself bit by bit, through a series of accidents really.
The first bit I found was in a tent in the West Highland Way. My best friend Sarah was asleep. Her husband* was lying beside her, and I was swallowing his semen.
I discovered the next piece of me at the bottom of a cliff, where I dragged Sarah’s dead body, bumping her head from rock to rock. Sarah, my best friend since we were little girls, who I’d betrayed and murdered.
And then, in the darkness of my parents’ attic, I found the rest of me.
* The husband in question is called Kyle but any resemblance to yours truly is purely coincidental. Helen’s a mate but we’re not THAT close. Go on, buy the book. Here’s why.
It was good to see Agent Adrian there, whose early and ongoing perserverance helped Helen enormously. She introduced myself and a co-author (who’d better remain nameless) to AA a few months ago. He’s currently punting a book proposal of ours. I’ll talk about that here if we get a deal (and not otherwise, I imagine). Go, Agent, go!
I wrote a bunch of consumer tech books for Haynes a while back but years ago I tried to sell a teenage novel called Newton Smallbones. It attracted the eye of an editor at Bloomsbury, who sat on it for months and months before finally, agonisingly, saying nope. Why so long? Because at the time she happened to be working with an unpublished author called JK Rowling. This may account for her taking her eye off my particular ball, huh?
But here’s a thing. JKR later - much later - brought out a wee Potter add-on book featuring one Newton (’Newt’) Scamander. I ask you: Newton Smallbones -> Newton Scamander - mere coincidence? If Rowling ever hits the big time, I may sue.
But my first literary endeavour was in 19-gulp-74, when, aged 11, I wrote Spitfire Attack - an epic wartime yarn in two volumes jotters. Compare and contrast my first page with Helen’s above:
“Any idea what this is all about?” questioned Jim Acer. He was a tall dark-haired pilot, who had many ‘kills’ to his credit.
“No, not really, but I heard a rumour about a gun,” was the answer he received from Dick Brentford, an experienced pilot like Acer. However, he was by no means tall, and had fair hair which was combed back, exposing his scarred forehead.
Both men were making their way to a briefing room. and both were members of Spitfire Squadron Four…
‘Scarred forehead‘? Again with the Harry Potter thing!
Anyway, it’s thrilling stuff, I’m sure, though I can’t confirm this cos I haven’t read beyond the first page for 30+ years. When I force-fed Spitfire Attack to my 11-year old son recently, having rediscovered it in an old box, he pointed out that both Jim and Dick meet their maker pretty damn early on, thereby rather undermining any empathy the reader might have developed with the heroes.
Smart arse. Who needs heroes? I call it toying with convention, and I think Helen would know what I mean.
UPDATE: In response to John Kelly’s comment on this post, it’s only fair to show you Part 2, with the Spitfire head-on and all guns blazing (erm, in a seemingly random direction - art was never my strong suit)
Disarming Britain
Gah, I suck at blogging. But in my defence I’ve been busy working with Channel 4 on a project called Disarming Britain. It’s related to the Street Weapons Commission and is an attempt to engage teens with news and current affairs - specifically, for now, with knives and guns and all the ensuing tragedy.
We’re up and running here.
Conclusions, jumping to…
When I wrote about the BBC’s picture mistake, I immediately assumed that it had come via the user-generated content ‘hub’ - i.e. the pic had been sent in by a viewer.
Wrong. I have it on excellent authority that this wasn’t the case at all. I have no idea what really happened - whether it was an internal mistake or a blunder by a picture agency - but I’m happy to clear up my own gaff here. Apologies to the Beeb and to the UGC Hub. Citizen journalists are innocent!
Rock and a hard place
You’ve got to feel sorry for Peter Horrocks, Head of BBC newsroom, having to apologise for a citizen journalism gaff [UPDATE - see this post]:
Last night the BBC broadcast a still which we said showed dozens of bodies lying in the waterfront of the Irrawaddy delta. We have since discovered that the picture was actually taken in Aceh, Sumatra following the tsunami of 2004.
Ouch. Naturally, the BBC has pulled the pic and fessing up like this is creditable.
Unlike CNN’s iReport and similar ‘unedited’ CJ projects, where hoaxes are part of the deal, I understand that the Beeb takes great care to vet all user-generated content that it uses. And rightly so. In this case, Horrocks explains that “there were many bodies in the water a week after the cyclone”. In other words, the picture looked genuine and passed the basic hurdle of a journalistic sanity check. But that’s not enough.
It was a problem that haunted me in the early days of Scoopt. I was convinced that we’d be bombarded with fake pictures and hoax stories, and I was accutely aware that we’d be putting the reputation of the agency behind every picture that we punted on the open market. So we erred on the side of caution, always.
But in fact, the feared flood never materialised - largely, I suspect, because there was little real point in sending Scoopt a fake. If we sold it, we’d need your details to pay you, which meant that we could and would come after you if an image turned out to be dodgy. Plus we published very little on Scoopt itself, which means there was little incentive to try to hoodwink us.
With the BBC and other mainstream outlets, it’s a very different story.
- Membership/ID is generally not required, so there’s no barrier there
- Payment is generally not made, so there’s no need to provide true contact details
- Your pic, if it passes editorial control, will potentially reach an audience of millions - and that’s a pretty fine incentive for any halfwit with a view to a hoax
The BBC is well aware of this - and still it got stuffed. So what do you do to verify UGC? More journalistic rigour, for sure, but technology has to play a part here too. For instance, at Scoopt we always checked the EXIF metadata on images. This is information written into the image file by the camera. It typically tells you the make and model of the camera and, crucially, the date on which the image was shot. Now, you can fake this if you know how, and many cameras are set up with the incorrect date, and EXIF metadata can be stripped out of images if the file format is changed, and some cameraphone don’t write EXIF at all… and so on. But it’s still a safety check, and a useful one. If an image came to Scoopt either without EXIF or with EXIF that didn’t match the alleged story, we were suspicious.
I wonder if the BBC’s UGC hub checks EXIF routinely?
@demotix
Good spot from Noodlepie - it looks like we’ll soon be seeing the launch of Demotix, a company name I guarantee you’ll forget as soon as click away from here (go on, try it):
Remember those pictures of Burma, the Tsunami, the London bombings? They were all take by people like you. You are the future of news, and DEMOTIX is where that future is happening.
Hang on, didn’t I say that in 2005?
Whatever. As a mate wittily quipped, one of the team is ex-lastminute.com so they’ll doubtless be looking for a trade sale (and the founder is apparently in stealth mode).
Meanwhile, I’ve helpfully registered @demotix for them on Twitter - a pretty obvious pre-requisite these days, wouldn’t you think? So… maybe a £50,000 for a transfer? After all, musn’t be greedy.
Does it addiply up?
You’ve gotta hand it to Rick Waghorn - taking on Google AdSense isn’t necessarily the sanest smartest easiest way to spend a summer but that’s just what Rick seems intent on doing with Addiply, his new web advertising network. Here’s how it works (do correct me if I’m wrong, Rick):
- Let’s say you run a local business in Hometown.
- To attract fresh trade, you have an advertising budget of £xx.
- One obvious place to spend £xx is in the Hometown Gazette.
- But the Hometown Gazette, like most local newspapers, is
fuckedstruggling with circulation. It’s also relatively expensive for advertisers (it has to be expensive in order to survive). But it reaches local eyeballs, and that’s cool. - However, you have a business website so why not (also) advertise on the web?
- Trouble is, if you send your money to Google, your little ad disappears into the amorphous soup of the Google AdSense network. Sure, your ad will appear… somewhere - but you can’t control this. And for a local Hometown business selling, say, a shirt ironing service, there’s precious little point in having your ad appear on a website selling shirts, despite the obvious contextual link. You want your ad to be eyeballed by the shirt-wearing punters of Hometown. Nobody else.
- Google can’t help you.
- Addiply can. How? Because you choose which sites your ad appears on. So if there’s a local website that caters for office workers, or busy people, of affluent people, or men… well, that’s where you want to advertise. You want to advertise to people who might use your service, and now you can.
- Equally, if you run a site with a clearly defined target audience, you have a vested interest in carrying ads that have real relevance to that audience. Why? Because a) ads can, when useful, enhance the user experience; and b) you’ll make more money because the advertiser will see a healthy return on investment and come back for more business.
Simple as that?
The challenge here, I think, will be connecting the dots - plugging the right advertisers into the right websites. Google doesn’t have to worry about that because you pays your money and takes your chances. Your ad will appear in roughly the right context. You have no control over this but it doesn’t (seem to) matter because you only pay when somebody clicks on your ad. So Google can plaster it all over its massive network and eventually get the hits it needs to bill you. You might feel this is a good deal.
On the other hand, if there’s a local website with a niche audience that’s just perfect for your ad, you probably can’t advertise on there. That’s deeply frustrating, and ultimately just daft. It’s too hard for the site owner to accomodate your ad on an ad hoc basis without having a payment and tracking platform to manage it, and neither you nor the site owner can tell Google AdSense where to place your ad. So the opportunity goes a-begging.
- Aside 1: right now, my lame dog blog, an attention-deficit billboard, is carrying two Google ads: one for a poop scoop (a hit that anybody reading a dog blog might be interested in exploring) and one for cheap Weimaraner puppies on eBay (a definite miss that I’d rather wasn’t on the blog at all). Neither I nor that advertisers have any meaningful say over these placements.
- Aside 2: I once experiementd with a blog for a month called Carbon Sheep which took the piss out of cynical activities designed to fleece folk feeling guilty about carbon offsetting: “Tracking the carbon footprint of scaremongering marketing. Or how to make a million from global warming.” Inevitably, and gratifyingly, my AdSense spots carried ads for the very products and schemes I was satirising .
Now, Addiply does have to worry about connecting the dots. An Addiply ad should only be published on a site where it’s likely to reach a receptive audience; and site owners should only carry ads likely to appeal to its readers. There are no Google contextual analysis algorithms at work here, plonking ads in roughly the right place and playing a mass numbers game. Rather, Rick is relying upon advertisers and content producers giving it some thought (remember thinking?) and figuring out how to play together to mutual advantage.
Will it work? Well, it will likely require a great deal of legwork at the local level to connect the dots and ’sell’ the benefits of advertising to local businesses that have never looked beyond the Hometown Gazette. That’s definitely doable in principle, but whether revenues and subsequent commissions will make it attractive for door-knockers to actually get out there and do it is an open question.
But as Rick points out, the Addiply platform can extend beyond hyper-local laundry services:
[it] ought to be equally applicable to any other passionate, niche market…
And that’s the key. Prove the concept at the local level by bringing fresh advertising cash to relevant websites, with both parties having control and a shared interest in success, then roll out the model across niche markets everywhere.
The obvious riposte is that Google (or Yahoo) can do the same, if it wants to. All it has to do is throw choice and control into its network. It might not go knocking real, physical doors at the local level but it could make more meaningful connections between niche content producers and advertisers. Figuring out how to compete in that market is a tough one.
San Francisco dreaming…
Sitting here in Glasgow wishing I was in San Francisco. Why? Because that’s where WebMission 2008 is currently taking place:
Web Mission 2008 will see 20 UK Web 2.0 companies travel to San Francisco to explore new opportunities for growth with key people in Silicon Valley. This event will showcase innovative UK web talent, seek meaningful assistance for companies ready for expansion, and provide a platform for those involved to gain valuable media and business exposure.
Great opp. Mind, there’s bee a bit of a fuss over the value of the trip, sparked by Ryan Carson here
If we’re ever going to create a healthy start-up culture in Europe, we need to stop running cap-in-hand to American entrepreneurs and venture capitalists. Why couldn’t we have spent the thousands of Pounds that it’ll take to run Web Mission and do something exciting in London?
…and answered by TechCruch UK’s Mike Butcher, who is at the centre of the trip, here:
The vast majority [of WebMission companies] are simply here to research the market, take meetings with potential partners or investors or perhaps look at establishing a small office here. They are also here to LEARN, and take back anything useful to the UK, to make the startup scene and their own businesses more vibrant - something Ryan wants to I believe. I question his view that there is NOTHING to be learned from this exercise and everything we need is need the UK. That seems nonsensical.
Too right. When you’re in startup mode, you have to surround yourself with people who have been through the grinder, particularly if they’re prepared to help you - as so many are. Not all of these people are in California but a hell of a lot of them are.
Closer to home, the Edinburgh-Stanford Link brings Silicon Vallley entreneurs and investors to Scotland for the benefit of small businesses. I went to as many of these events as possible - still do - and benefitted enormously from talks by the likes of Kevin Hartz (Eventbrite), Sean Foote (Labrador Ventures) and Jim Buckmaster (Craigslist). Nothing like an hour or two with Jim to make you rethink… well, everything.
So good luck to the 20 companies over in SF. Mike Butcher’s a top guy to have on-side, despite his dodgy obsession with celebrities. If I was a betting man, I’d wager that every one of these companies comes back smarter, better connected and more likely to succeed. Hopefully they’ll all be able to do it here.
Big buys little, forgets why…
There’s a cracking feature in last Saturday’s Times newspaper about David and Claire Hieatt, founders of an eco-conscious clothing company called Howies. They launched it seven years ago and sold it to US giant retailer Timberland.
You could call it “Pret A Manger syndrome” - idealistic entrepreneurs set up an ethical company, pour in all their time, cash and energy, but ultimately need the funds and backing of big business. Can they sustain the ethical dream or does it turn into a nightmare? Is it selling out or selling in?
It turns out that David and Claire are refreshingly honest bout their current position - indeed, surprisingly honest given that they’re still working with or for Timberland:
But today the Hieatts seem conflicted about their decision and frustrated that Timberland isn’t investing as much money in the business as they would like. The truth is, David says, nobody loves Howies like they do… the couple I meet look serious and slightly stressed… The only problem appears to be Timberland’s financial situation. Last year it bought a number of brands, including the American skate shoe company I-Path. The implication is that this has left the company overstretched. “Timberland is having a hard time right now,” says David. “My challenge to Timberland has been that if you have bought the car, you have to be prepared to put petrol in it.” It strikes me that they are both uneasy about selling out, although neither will admit it.
It’s such a familiar problem. As a successful entrepreneur phrased it to me recently, reflecting on personal experience:
Big company buys little company for a bunch of good reasons… then instantly forgets what they were.
Result = frustration, every time. And when the original founders are a) pissed off about the lack of reosurces and support coming their way, and b) still in a position of running the company under new ownership, that’s an unhappy marriage. Happens all the time.
So, why sell? Often, as in the David and Claire’s case, the small company has no real option other than to sell. At a certain point, you either scale or fail. Some businesses can do this with an injection of capital (usually at a horrible price) but others needs a major-league partner.
Once sold, the future seems simple. All big company has to do is pump in sufficient resources to allow little company to do all the stuff it always wanted to do - all the stuff that made it an attractive purchase in the first place. But then big company goes and spends a lot of money elsewhere, or is adversely affected by market conditions, or screws up its core business, or whatever. Pumping even limited resources into little company becomes a speculative risk, and this is no time for speculation. So little company gets forgotten about, and fails to realise its ambitions. But at least big company doesn’t have to worry about the competition any more…
Somebody somewhere wrote about the difference between being bought and being sold. Being sold is when the owner of the little company calls some of the shots and is able to negotiate as an equal partner, more or less, in the terms of acquisition. A sensible outcome here includes a binding commitment from the big company to a) resource the little company according to agreed parameters, and b) butt out.
Being bought, on the other hand, is a situation where the buyer rolls out the barrel and makes you bend over it with your trousers at your ankles. It calls all the shots because your options are frankly limited non-existent.
Of course, I’m making big assumptions about how Howies and its founders are really faring under Timberland, based on one article. Maybe it’s all roses. I hope so. But I do know how hard it is to continue to care about something you no longer own. Deciding not to care is not always an option, easier though that would be.
