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5 Tips for Corporate Types Looking to Break into the Start-up World

A few yeas ago, Jeff Jarvis was in Toronto promoting his book What Would Google Do.  As a VP Digital at a large newspaper, I invited him to stop by our offices to meet some key executives and to provide some input into a planned redesign of our website.

It was a nice afternoon, if a bit weird for Jeff (he was placed at the head of a giant boardroom table and asked to give his perspective on the future of media).  But at the end of our time together, I did something strangely out of character.  I pulled Jeff into my office and begged him to help me get the hell out of the newspaper industry.  

I had been a vice president for less than 6 months and though I loved the world of digital media, I was quickly discovering that I did not love the corporate world.  I wasn’t good at the politics and couldn’t get my head around working in an industry that seemed more interested in managing decline than building something new and exciting.  In fact, I was having daily dirty thoughts of working in the start-up world.

Amazingly, Jeff (who is very kind) did in fact help kick-start my journey toward a new life in the start-up world simply by making a few introductions.  

I took it from there.  And, after a little soul searching, a lot of work and a couple false starts, I’m now the CEO of Shopcaster, an ecommerce start-up that I’m currently expanding into the US.

If you feel trapped in a corporate job and long to make a break, here are five tips for making the big leap:

1.  Make sure you’re doing it for the right reasons

Do you have a genuine desire to build something from nothing or are you just bored or dissatisfied with your current job?  Or worse, have you watched The Social Network too many times and are dreaming about Zuckerberg’s billions?

Start-ups are hard.

Can you handle constant uncertainty?  How about ambiguity?  Constantly changing priorities?  Are you willing to work long hours at a punishingly fast pace?  Are you capable of working with next to no resources - ie. in a tiny office space with limited staff and virtually no marketing budget?

Without true passion and drive, you’re going to struggle.  

2.  Make sure you can afford it

With all the stresses of start-up life, the last thing you need is to be worrying about your own finances.  If you get paid at all, start-up pay is nowhere near the levels of corporate pay (not to mention the lack of benefits).  

Sure, the long-term goal may be to make your millions, but the truth is, most start-ups fail.  Do yourself a favour and build nest a egg first.  Even if it takes a couple of years to get there, at least you’ll be working toward something.  And, you won’t be freaked-out about your mortgage payment when you should be focused on how to grow your business.

3.  Talk to everyone

Do your research.  Which start-ups do you admire?  Who are their investors?  Get some meetings and let it be known that you have a certain skillset and you’re looking to make a move to a start-up.  

If you’re not a techie and you’re looking for a technical co-founder, get ready for a long hard search.  It’s probably easier to find a husband than to find a great CTO.

Ask for help.  In the corporate world, we’re taught that needing help is a weakness.  In the start-up world, not admitting that you need help is a weakness.  Ask for introductions, ask for advice, ask for resources.  

But, you have to be willing to give help too.  Which leads us to tip #4...    

4.  Be willing to work for free

If you’re looking to join an existing start-up, the best way to break in is to volunteer your time and do some project work.  You can do it by working nights and weekends before you leave the corporate world.  Not only will it show the start-up team what you can do for them, but it will help you determine if start-up life is really for you (see tip #1).

If you’re starting a new business from scratch, you’re going to need a working prototype and some thoughts on a revenue model before your first investment.  That means working for free.

5.  Only make the leap if you love, love, love the start-up you’re entering

My first start-up job was at a company called CanSport LIVE where we were gathering amateur sports organizations into a digital advertising network.    I joined the company because I thought that the business model was very clever (we were selling actual soccer moms to advertisers).  

But the job didn’t give me the satisfaction I longed for when daydreaming at my old corporate job.  And that’s because I have zero passion for amateur sports.

So I had to go back to the drawing board and that’s when I found Shopcaster, a company I truly love with a mission I care deeply about.  

And let me tell you, I took a 70% pay cut for this job and I’ve never worked harder in my life, but I’ve also never been happier or more fulfilled in my career.  

I wish all you daydreaming corporate types the same.

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I Have a Confession to Make: I'm No Longer a Newspaper Person

A couple weeks ago, I tweeted about newspapers with Twitter giants Jay Rosen and Mathew Ingram.  This may not sound particularly surprising or unusual, but the truth is, I haven’t tweeted about newspapers in months.  And, it felt a little strange.  

Perhaps even more telling, I haven’t written a blog post in almost a year.  Take a look, my last post was about what newspaper companies should be focusing on in 2012.

You see, I have a confession to make.  I’m no longer a newspaper person.

My journey to non-newspaperdom has been such a slow process, I hardly know when it began.  But I think I can pinpoint it to the Spring of 2006 when I took a five day course on innovation at the Harvard Business School.  

I was the Director of New Ventures for my newspaper company and at the time was struggling to save a failing print magazine that I had created a few months earlier.  The highlight of the week was a session with Clay Christensen in which he discussed his theories on disruption and innovation.  During the case discussion, Christensen challenged me to think about how newspapers and other print media could innovate in the digital world to save themselves.  I admit that I dismissed the idea immediately thinking, “It’s not that easy for our industry...he doesn’t understand...dollars for dimes" and all that stuff.  When I pushed back at him (embarrassingly cocky of me), he just shrugged and said, “Newspapers will have to innovate, or they will fail”.  

Those words stuck with me.

Over the next three years (after shutting down my magazine), I spent all of my time learning the digital space, eventually becoming Vice President of Digital Media.  I came to understand the new economic reality of the media industry and the new drivers of value and competitive advantage.

I discovered that it was possible for newspapers to innovate their way back to prosperity if only newspaper executives would:
a) take innovation seriously and
b) get out of the way of the people trying to innovate

Newspaper executives did neither of these things.  

And eventually, like thousands of other newspaper employees, I was “structured out” of the industry.  In my case, job loss turned out to be a very good thing.  It allowed me to redefine myself through my blog, my Twitter presence and various consulting and board gigs.  But I still felt very much a newspaper person.

Now, as I watch an industry-wide proliferation of cost cutting, paywalls and cash cow milking, I’m just sad.  These great institutions are eating themselves alive due to a lack of imagination, a lack of will and a lack of courage (with a couple notable exceptions).  

I've become disconnected.  I won't return to the newspaper industry.  

In fact, I’m off innovating in the world of local, independent retail as CEO of a start-up called Shopcaster.  I work in a world where disruption and change are expected daily, things move super fast and inertia leads to a certain and speedy death.  I love every second of it.  I know I'm where I'm supposed to be.

I will always love the newspaper world and newspaper people (hell, I live with one) and I wish them well.  Perhaps there’s still time to save themselves.  Clay Christensen has teamed with Neiman Labs to offer more advice to newspapers.  And there’s some pure-play digital good'uns returning to newspapers to fight the good fight such as Jim Brady and Steve Buttry at Digital First, Mark Potts at the Journal-World and John Ferri (full disclosure - the aforementioned person I live with) returning to the Toronto Star.

But, I’m already well into my next chapter.  Watch for this blog to be about the joy and pain of growing a tech start-up.

The chart below is already proving to be more accurate than I would like to admit.  

I hope you’ll stick around for the ride.

 

Two Ways News Execs Will Have to Radically Change Their Thinking in 2012

Forgive me, I’ve been a shamefully negligent blogger these past few months.  

Between COO’ing at my own company and advising three others, I almost forgot how much I enjoy telling newspaper executives what to do! (Well, except for my role as a PostMedia Network digital advisor, but they actually want me to tell them what to do, which kind of takes the fun out of it).

So, here you go newspaper executives, the two things I think you will have to start thinking about in radically different ways in 2012:

1.  I’ve said it before and I’ll say it again: It’s not about ads, it’s about ROI.

As Newsosaur Alan Mutter pointed out on his blog last week, the big guys (and some littler guys too) are coming after your local advertisers.  

Google is expanding its GYBO.com (Get Your Business Online) program, Facebook is offering do-it-yourself extreme targeting and a CPC payment model.  Then there’s Groupon, Living Social et al, Foursquare and a zillion different mobile products.

What do all these solutions have in common?  They provide direct, measurable ROI to local advertisers.  And believe me,  that’s all local advertisers care about.

It used to be that an ad in the weekend newspaper would make the cash register ring.  That’s because newspapers used to be as much about shopping as they were about news.  Think about it - a news hole of only 50% meant that the rest of the newspaper was all about display ads, classifieds, special sections and flyers.  And because of that shopping environment, they delivered excellent results to their advertisers.

But now, shopping is a thing that is done digitally.  Even if we don’t always buy online, we’re most certainly doing our product research, feature comparing and deal hunting there.

And over time, newspapers have become less effective at making the cash register ring.  The old days of slapping up a display ad and not proving that its working are well behind us.  Just ask the folks at Patch.  Or ask your advertisers.  You'll quickly find that the more they know about which advertising vehicles are driving their sales, the less likely they are to buy display ads.

Asking print reps to sell digital display packages is a short-term solution that takes advantage of the knowledge gap of many retailers who have yet to learn the many advantages of digital advertising. This is not a long-term strategy.  Far from it.

News organizations are going to have to spend a lot more time studying what works and what doesn’t for their advertisers.  

Gannet, Tribune and the Tennessean are taking advantage of the knowledge gap in a different way. Through products such as Gannett Local, 435 Digital and 1100 Broadway they’re helping local advertisers navigate the digital advertising world.  They’re saving them time and providing proof of ROI.

The contextual environments of content verticals drive a much higher click through rate than running the same ads in an environment of unrelated content.  In my experience, behavioural advertising and re-messaging ads can out-perform even so-called “high-impact” display ads by a factor of 10:1.  Who in your organization is thinking about these and other ROI focused products?

It’s time to get serious about understanding the online advertising world.  Competing in this space is not a part-time job.  Nor is it for the faint of heart.  

Meeting the local advertising challenge can’t be done without great digital talent.  And that’s where radically different thinking challenge number two comes in...

2.  It’s time to get greedy about talent.

I don’t mean to be alarmist, but no one wants to work for you.

Let’s face it.  It’s all about supply and demand.  Great digital talent, especially at the executive level is very difficult to find and even more difficult to keep.

It’s not personal, it’s just that you’re not as exciting as other digital companies, nor do you offer the (even remote) possibility for your employees to become multi-millionaires as a result of an IPO.  On top of that, you’re old media, with old processes and old...well, you’re just old.

Actually, it’s not just newspaper companies that are challenged in the talent department.  AOL has had a 50% turnover at the executive level in the past 6 months and even the mighty Twitter is having trouble keeping engineers and executives.

Sites such as LinkedIn and PleasePoachMe make it easier than ever for your competitors to find and to start a nice chit-chat with your talent.  If you’re going to keep them, you’re going to have to start thinking very differently.

Give them control over their products and strategies.  You’ve hired them to do a job.  Trust them.  Don’t force them to keep explaining why the sky is blue - they hate that.  (I once had the CEO of a large media company ask me why digital people working for mainstream media companies are all so very bitter.  Constantly having to explain basic digital concepts is one of the reasons).  Get lots of great digital people, not just one or two.  That way they can collaborate, as well as push and energize each other.  And for Godssake, don’t have them report to non-digital people (and most definitely not the CFO).

And here’s the big one....Give them a piece of equity in the new products they create for you.  You heard me.  Equity.

Not willing to go there?  Well, feel free to sit back and watch as start-up after start-up start eating away at the local revenue you have left.

 

Everything You Need to Know About Big Media Leadership in Two Simple Charts

Recently, I came across a fascinating study that I believe is very revealing of the thought process of media executives.  

Published in January, 2011 by the Jordan Edmiston Group, the study focused on C-level executives across the media, information, marketing services and technology sectors and was “created to capture senior media executives’ outlook on growth opportunities and key challenges that face the industry in the months and years ahead.” 

Seeing how I spend a great deal of time on this blog complaining about the blindly arrogant and often hopelessly illogical decisions made by these same executives, I was gratified to find everything I’ve been saying summed up neatly in just two charts:

 

1. Media Executives Still Believe That Their Problems will Fix Themselves

When asked about their expected growth drivers over the next one to two years, the top three responses were:

1. Organic growth (82%)

2. Launching new products/services (76%)

3. Expansion of market share within existing markets (70%). 

It seems to me that two of the top three answers equate to “don't do much of anything and wait for things to get better”.

Gary Pruitt, CEO of McClatchy and one time hero of mine (he used to call his papers “athletic” because they were lean but powerful – I loved that), recently demonstrated this wait-and-see mindset when he stated in a conference call that he hoped the newspaper industry would soon “stabilize”.  In other words, there’s nothing we can do but wait. 

(Not that they do much better when they decide to launch new products and services as illustrated by Tribune’s baffling plans to enter the tablet hardware business, but that’s another blog post.)

 

2. Media Executives Still Don’t Know That They Are a Big Part of the Problem

When executives at companies with revenue of $250 million or more were asked about the internal barriers to growth, the top three responses were:

1.  Lack of talent in emerging areas (technology, Internet, etc.) (54%)

2.  Company structure slows growth/incompatible with path to growth (40%)

3.  Conflicting internal agendas. (34%)

Interestingly, only 13% of those same respondents cited lack of talent in senior management as a barrier to growth.

Huh?

Let’s see, our staff isn’t qualified, our company structure doesn’t support growth and everyone is off running with their own agendas, but this has nothing to do with the quality of our senior management?

It’s not us, it’s them.

We saw this attitude play out last month with Rupert Murdoch’s assertion that he’s not responsible for the hacking scandal at News International, but rather he was “let down” by those below him.

Where are the great media leaders?  I know of two. And I do know others are trying.

Being a great leader requires doing things no one else wants to do.

It may mean re-structuring for a new reality as Clark Gilbert did at the Deseret News when he separated the print and digital parts of his business.

It may mean putting the digital talent in positions of power as John Paton did when he put the digital people in charge and fired those who could not adapt.

These were not popular decisions.  They were not easy decisions.  They were gut wrenching decisions. 

But both companies are now launching into their digital futures.

That’s leadership.

 

 

 

Dear Print Industry: Your Efforts at Self-Promotion are Pathetic.

Let’s take a moment to examine the NAA’s new industry promotion ad. 

Hmmm…there’s a woman with green hair sitting at a table with a very thin newspaper on it (mustn’t be many ads).  Protruding from the woman’s head are three party toothpicks containing images of electronic devices. 

Well that’s a bit strange.

Beneath the woman is a large tagline: “Smart is the new sexy”.

WTF?  When did green hair become sexy?

Wait a minute…is the NAA, in their own clever way, trying to say that newspapers are sexy?

The answer can be found in Editor and Publisher.  As it turns out, the NAA has decided to abandon “campaigns based on logic” in favour of a “more visceral message” created to “remind advertisers and consumers about the core competencies of newspapers, about why they should be – and are – trusted, valued and revered.”

Revered? Ugh. 

For an industry that relies on marketing and advertising dollars for about 80% of its revenue, newspapers have always had a shocking disrespect for the science of marketing. 

Case in point: This particular ad was tested on people at the ad agency that created it, the NAA’s working committee and its board of directors.  And guess what?  They “had a 100-percent positive reaction to that headline”.  Imagine that!  People like to be called sexy!  Who knew?

Perhaps the most spectacularly clueless thing about this campaign is the media plan.  The NAA intends to advertise newspapers, in newspapers.  That’s right, in newspapers.  To people who already read newspapers.

Amateurs. 

Just to be fair, the NAA isn’t the only print industry organization wasting valuable time and resources creating self-promotional campaigns.  Board member Donna Barrett admits being inspired by the magazine industry’s own lame campaign.  And up here in Canada, the Canadian Newspaper Association’s 2009 promotional campaign even included an execution with the word “sexy” in it (while you’re on their site, be sure to check out the hilarious pdf entitled Newspapers: A Green Choice).

I dearly hope that incoming NAA CEO Caroline Little will shake this musty old organization to its core.  They should focus less on reminding readers and advertisers that they are valuable and more on actually being valuable.  That means hard-core research and analytics aimed at understanding how to generate a healthy return on investment for advertisers as well as true reader engagement.  The results may be unsettling, but at least they’ll be useful.

What the NAA shouldn’t be doing is telling its membership what it wants to hear.  That’s an irresponsible waste of their dues.

 

9 Things: My Keynote to the ACNA

The start-up world has kept me hopping these past few weeks and I've been a very bad blogger.  Time to get posting again!  And I'm starting with the keynote presentation I delivered to the Atlantic Community Newspaper Association on May 13th.

Slide-by-slide commentary is below the SlideShare.

 

Judy Sims ACNA Keynote Presentation

View more presentations from Judy Sims.

1. Title

2. My name is Judy Sims and my day-job is as the COO of a Toronto Internet start-up called CanSport LIVE where I’m busy revolutionizing the business of amateur sports.

3. But up until 2009, I worked at the Toronto Star where as VP Digital media, I was responsible for thestar.com and also launched 4 digital products in 2 years.  Though my day-job is no longer in the newspaper industry, I keep a toe in the water as a member of the PostMedia Digital Board of Advisors.   I’m going to set the stage for our conversation today with a few slides on the new economics of media.  My apologies, there will be some charts and graphs, but I’m a nerd and I can’t help myself.  But the truth is, I find that talking in scientific terms, rather than emotional ones is the most effective way to begin discussing change.

4. What we’ve seen happening over the past 15 years is a fundamental shift in the way the economics of media work.  The root of that shift is the move from a world where media content was relatively scarce to one where content is very abundant.  The barriers to entry are down and anyone can become a publisher.

5. And not only is there a lot more content available, that content has become “atomized”.  Media is now consumed in smaller and smaller chunks across a wider and wider range of media sources.  The average YouTube video is only 3.5 minutes compared to a 30 to 60 minute TV show.  A blog post is only 3 to 10 paragraphs verses 20 or more in a newspaper or magazine article.  Twitter has reduced this even further to only 140 characters.

6. And now we’re even seeing this happening in the advertising world.  Ads have become unbundled from news.  Flyers are becoming daily deals. 

7. Workopolis, Kijiji, Autotrader, Flyerland, Craigslist – the ads are the content.  They’re the prime attraction.

8. The result of this atomization is that economics of this new media world are the inverse of the old media world.  Where content was once scarce and attention was abundant. 

9. Now content is abundant and attention is scarce.

10. Okay, here we go with the charts.  The economics of media, like the economics of any product or service are based upon supply and demand.  Where supply is low, demand is high and where demand is low, supply is high.  Where the two curves intersect determines the balanced market – the quantity produced and price it sells for.  This applies to the cost of a newspaper or movie or the cost of advertising.

11. This is what supply and demand for media looked like before the Internet.  Because there were significant barriers to entry as a media company, i.e. you needed a printing press or a TV studio or movie camera, supply was relatively limited and demand was relatively high.  Thus prices were high.  In our case, that meant that we were able to charge high rates to our advertisers.  Looks good doesn’t it?  We could even do a little marketing or increase circulation by moving into a new town or subdivision and we could even grow our demand and increase the price we charge advertisers.  It was awesome.

12. This is Umair Haque.  He’s an Oxford-trained economist who has been studying the impact of the Internet on various industries.  He defines this media 1.0 world as the Age of the Blockbuster.  The blockbuster resulted in very high revenues and profits for media companies for decades.

13. But Media 2.0 changed all that.  Reduced barriers to entry have increased media supply exponentially.  All this new content has made it easier for us to find what we like online so we actually consume more of it, shifting the demand curve out.  Good news right?  Well, the problem is that the demand curve hasn’t shifted out nearly as much as the supply curve.  The result is a hyper-deflation of media prices.

14. And we are in fact seeing this in action in the online world where supply of advertising inventory is much higher than demand.  And, technologies are being created everyday that make the purchase of advertising inventory increasingly efficient and increasingly complex.  As a result, there has been downward pressure on advertising rates both online and offline.

15. Umair Haque believes that we are witnessing the end of the Blockbuster Age

How the NYT Paywall May Succeed in Spite of Itself

Here it is, the eve of the NYTimes.com worldwide paywall implementation.  As you may know, we here in Canada (the Great White Test Market) have been living with it for the past two weeks. 

I have made no secret of the fact that I am not at all a fan of paywalls:

• They keep newspaper companies and their employees focused on the company they were, not the company they’re going to be. 
• They distract senior executives and key staff from engaging in true innovation as they spend months working out paywall policies, prices and technologies. 
• They both literally and figurately put a wall between newspapers and their audiences, making it very difficult to build the kind of engaged audiences who can drive ROI for advertisers.   
• And, it pretty much sacrifices the under 30’s in a market – in the form of both readers and potential employee talent.  They simply won’t pay for content and they don’t want to work for someone who is charging for it.

So yes, I hate paywalls.

But something in the past two weeks has caught my notice.  Since the paywall (or is it a pay fence?) went up in Canada, I’ve seen a sharp increase in the number of Canadians in my social graph posting NYT links on both Twitter and Facebook.

Is this a new form of politeness?  If a link comes through social media, it doesn’t count toward the Times’ 20 article limit.  Could it be that folks are posting more NYT links to give their friends and followers more access to free content?

Could the paywall actually make the Times more social?  And even more interesting, could it be that the Times actually anticipated this when they created the strategy?

Nah…  It couldn’t be.  Could it?