Category Archives: Money

No business without revenue

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Bow before Jeff Jarvis. His latest rant on why journalists need to be thinking about for-profit organizations to support their professional trade is absolutely spot on. Furthermore I couldn’t agree more on his views that the last thing many journalists have an eye for is business.

Back when I had the pleasure of teaching journalism students about the wonderful world of online, I had two key messages to them: Don’t rely on a long career in an established media company – create success on your own. They took some time getting their heads around it, but by the time the course finished, 4 out of 5 completely got it. Which in turn made me happy.

Because journalists really do need to think more in business terms. Not in order to kneel to advertisers but in order to think from the perspective of the customer. Preciously many journalists still think that there is an audience just waiting to consume whatever they think they are in the mood of producing, and it’s just increasingly not the case.

But instead of getting despondent about it, journalists should look at all the opportunities for providing value and helping people in their daily lives, because there really are plenty of them. And yes, profit can be derived from these. And no, profit is not bad. It’s what sustains a living.

3 questions defining new products

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In the media industry there is a tendency to know it all. Not only how to produce the best content and get it across and distributed in the right way. But also to create new products and services. We know it all, right?

Of course we don’t. But since we think so, we need to borrow heavily from the work of Clayton Christensen and force ourselves to ask three questions time and time again whenever we think of something new:

  1. What is it you want to help your customer achieve? And no, answering “Get more enlightened” or “Follow the latest news” isn’t enough. It’s about understanding the deeper need on a very personal level. How exactly are you trying to make your customer better off with your product or service than without it? If you can’t answer it straight away, take your time and ponder it until you come up with an answer. Because this is fundamental.
  2. Why haven’t somebody already solved this issue for the customer? Look at the competitive picture. Why is this hard to solve (if it is)? And how deeply felt a pain point is it really. This is really going to be your sanity check on the point above, aka is there really a problem that needs solving?
  3. What value are you creating by solving it? Something really tangible? Or something that’s harder to explain? If it’s the latter, my argument will be that you’re not really trying to solve a big enough pain point and you should step back to one of the points above, until you really nail it.

As for value you should also be mindful of how you turn that value for your customer into business for you. There still isn’t anything remotely like a free lunch, so you need to make money out of every effort. There are tons of ways you can do that by applying a – to my mind – healthy overall transaction view of things, and if you’re lacking inspiration, here’s a very good overview model to get you started and increasing the odds of you nailing this.

Kickstarting business

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I’m a big fan of Kickstarter, the site that help start-ups, organizations and people get crowdfunding for interesting projects. Both because I think it’s always good with alternatives to angels or VC money and because I think it’s a cool way of getting a sense of whether your product or service actually has the potential to fly with customers.

I don’t think companies will get entire rounds of big financing through Kickstarter, because it’s an abstraction level that fits quite poorly with the individuals needed to fork out their savings to support the cause. But for specific products and services it’s an entirely different matter; those are more easily understood – or should at the very least be pitched as such – by people, takes less money than entire companies and have a shorter time to market and thus the feeling that you’re actually seeing something come out of the investment, you’re making.

Add to all this the verification of the product or service, you’re trying to get to market. I mean, if people can see enough value and meaning in what you’re doing to want to support it with their own money, it cannot be all that bad, can it?

 

The only real value is money

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Frederic Filloux has an excellent post on scams involving social media and apps, i.e. people or businesses building up their reputations online using everything but the means they should be using; hard work and value. But driven by the idea that what constitutes real value today is the amount of followers, fans and sharing that we’re involved with.

Wrong. The only real tangible value remains the one it has been for centuries: Money.

Why? Because all the scammers will get found out eventually. They will be busted through their own ignorance and people will realize that they have nothing to offer anyone. When they are found out not only the ‘value’ they have created through artificial means will be destroyed but also the inherent value that lies in deep trust. In other words they will be far worse off than if they had done nothing at all.

This shouldn’t be an excuse for just sitting idle and waiting for everyone else to implode. What it should be though is a call to arms to start creating meaningful value that can be converted to the only real value there is: Money. And no, I’m not talking about creating money through selling your junk to somebody else, before it tanks. I’m talking about creating products and services that your customers will directly want to pay you for. That’s the only real value creation there is.

Naivety

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The reality of business is that you need to produce something others value in order to stay in business. And that’s irrespective of whether you’re a company with decades or even centuries of history or a fresh young start-up; you simply need to show people around you while they should fund you either from purchase of goods and services or from investment.

When thinking about the above the big fuzz about Path and Pinterest and their assumed violations of end users rights seems like it’s blown out of proportion. Look, the offenses are neither big nor especially surprising.

It may be that Path has downloaded all your contacts without asking you based on some claim that it’s good for the experience, and ‘whoops, we forgot to tell’. To me it sounds more like a scheme to make sure that there is enough data in Path to provide real value to users and – more importantly – to the investors, who have pumped millions into the company. And I don’t see the big problem with that.

It may be that Pinterest is putting affiliate links on your content without telling you about it, but so what? It’s not like they are linking to something different or taking away something which you have rights to – after all a link is a link is a link and thus very much a part of the public domain.

Many seem to think that there is such a thing as a free lunch. Well, there still isn’t, and there still never will be. There will always be someone who needs to pay. And if you don’t believe in getting your credit card out, don’t be surprised when services go about monetizing you in different ways; it’s what they do to stay in business.

And you want that, right? You want these services to be able to keep the lights on, don’t you? And you really think that will go on without some kind of business model however subtle it might be? That’s where the naivety comes in. It’s almost unbearable.

Grow up and move on. Please.