Why newspapers should manage more like Twitter and less like GM
Set aside for a moment whatever feelings you have for or against Twitter. (It’s amazing how visceral many journalists’ hatred of Twitter is. It has even more of a barbarians-at-the-gate feel to them than blogging did circa ‘03.)
But take a minute and read this piece on how Twitter was invented, by one of the original developers, Dom Sagolla. And while you’re reading, compare the environment they were working in to the environment of today’s newspapers.
Twitter had its origins a few years ago at a company called Odeo, a Silicon Valley startup that focused on podcasting. You could use Odeo to find podcasts; you could use it to listen to podcasts; and you could use it to make podcasts. I remember using Odeo back then; it was a nice product.
Unfortunately for Odeo, two things happened. First, podcasting didn’t take off as much as some had hoped; it was then (and remains) a niche interest. And second, in 2005, the biggest player in digital audio — Apple — added podcasting support to iTunes, which was already installed on the computers of every single human being who knew what a “podcast” was. So things were not looking good for Odeo.
So what was Odeo’s response?
Our board was not feeling optimistic, and we were forced to reinvent ourselves.
Note: “Reinvent ourselves.” Not: “Cut back on our staff a bit more every few months and hope the current business model can survive.” Not: “Maintain a belief that we had a good product, damn it, a valuable product, and there will always be someone who wants it.” “Reinvent ourselves.”
“Rebooting” or reinventing the company started with a daylong brainstorming session where we broke up into teams to talk about our best ideas.
Note: Their best ideas for new products. Not: Their best ideas for salvaging the old one.
One of those ideas was an early version of Twitter. Each brainstorming team presented their best ideas, and Twitter was among those picked to prototype. A few Odeo employees are chosen to build it; meanwhile:
The rest of the company focused on maintaining Odeo.com, so that if this new thing flopped we’d have something to fall back upon.
Note again: The old in-trouble business isn’t the focus; the new business is the focus.
Look: Twitter still doesn’t have a business model and maybe never will; a failing podcasting concern is not equivalent to a multi-billion-dollar newspaper industry. I’m not drawing a one-to-one comparison here. But what comes across in Dom’s story is the entrepreneurial spirit.
It’s: Let’s Find a New Idea. Let’s Be Willing To Shift Models. Let’s View Investing Into the New As More Critical Than Propping Up the Old.
And while Twitter doesn’t have a business model, someone did, not too long ago, try to buy it for $500 million — which would buy about 10 McClatchys at today’s stock price.
I see a lot of newspapers cutting back. And while I hate to see it for all my friends who work in their newsrooms, I can at least understand the rough calculus behind cutting costs.
What I don’t see is a lot of investment in what comes next. What I don’t see is a lot of “reinvention” — the skunkworks, the R&D labs, the incubators for small online startups. What I don’t see, at least in a lot of organizations, is an honest acknowledgment that, no, this isn’t just the recession and, no, things aren’t going to turn around in a few quarters. Of the people who run newspapers today — brilliant as many of them are — there are very few people who have experience with reinvention.
And that, I fear, is going to be a bigger problem for news organizations’ long-term survivability than all the bureaus they’ve closed, all the reporters they’ve laid off, and whatever inflated price newsprint is selling for these days.
Agreed, from my experience not a hell of a lot of innovation takes place within most media companies, at least not compared with how tech startups operate.
But is that really any surprise? Organizationally and culturally, newspapers are set up to report and charge for news using established principles. Effectively, they’re built to protect the status quo. Unlike a startup, they don’t exist to challenge that status quo, to deconstruct the practices and biz models of yore and come up with a better one.
The mindset you propose–Let’s Find a New Idea. Let’s Be Willing To Shift Models, etc–is a hallmark of entrepreneurial thinking. As you say, that ethos is largely (if not entirely) absent in media. And that’s because it is FUNDAMENTALLY threatening to the existing order. And when people (and their careers) are threatened, they tend to cling to what has made them successful in the past.
I’m not quibbling with your fundamental premise: newspapers are bad at change. But so are most industries. The history of technology is replete with industries that have struggled to adapt to the evolving “techno-economic paradigm” (as the theorists say). Take your pick–steam, rail, electricity, autos, telecom, PC–technological revolutions engender massive, messy shifts that inevitably leave lots of corpses in their wake. The Internet and the breed of innovation it spawns accelerates things, yes, but the kind of large-scale changes afoot in media today will take years, or even decades, to play out.
Well said, especially “Take your pick–steam, rail, electricity, autos, telecom, PC–technological revolutions engender massive, messy shifts that inevitably leave lots of corpses in their wake.”
The problem is that railroads had a window of opportunity until there were airlines. Once those were in place, their window closed and they were reduced to fighting for government support. And we’ve all seen how well that’s worked out.
The question for newspapers is not what is the next thing? Rather it is how long is this window going to stay open, what are the emerging competitive players and are we going to be reduced to niche players in the communication ecology.
Michael J:
Railroads had warning. After all, it was a long time between Kitty Hawk and scheduled passenger service. And yet I’m sure they spent a lot of time pooh-poohing the idea of “flying in an untried aeroplane” versus the tried and true solution of speedy rails.
But I think there are several valuable lessons from where railroads ended up:
1. They repurposed to survive. Today, the vast majority of US rail traffic is freight.
2. Location matters. If you’re trying to cross a 3,000 mile-wide country, an airplane looks better and better as prices drop and speeds increase. But if you’re in the congested northeast US corridor, even today a trip between Washington and New York is easier and — depending on delay factors, travel times to and from the airports from city centers and security lines — faster by rail. It’s probably also a factor in the continuing success of rail in Europe, where the distances are shorter (though I’m out of my league here and speculating).
3. What was once dominant is now a niche for commuters, enthusiasts and John Madden. Perhaps the same will be true of newspapers — a niche product serving a smaller, but still passionate, audience.
Tim–Yep, agree railroads are instructive. I would extend your comparison to say that newspapers are 1) Trying to repurpose in order to survive; 2) Keenly interested in locating themselves online; 3. Likely to occupy a smaller role within media.
What differs in any fundamental tech change are the levers of innovation. With trains, for eg, it was things like the development of the steam engine and machines that could make standard parts and, more broadly, the growth of industrial cities. For newspapers, it’s stuff like global communications, market segmentation and the advent of knowledge capital.
What historically has remained constant is the pattern of technological diffusion and consequent industrial shifts. Interestingly, even as tech has sped things up, the rate of integration of any new tech in society has remained fairly constant. Whether you’re looking at looms, trains, electricity, cars, etc., that pattern has taken roughly 50-60 years from the moment of innovation to full maturity and deployment, varying largely according to patterns of investment in tech and macroeconomic factors.
So there’s reason to think that the convulsion afflicting media is likely to continue for many years to come.
Tim-
The idea that I was trying to highlight is that time is limited. If the appropriate repurposing doesn’t happen sooner rather than later the danger of a start up coming in to grow in the space they are abandoning is not insignificant.
Printing is a commodity and getting cheaper and faster every day. Journalistic talent has never been more plentiful. Locally focused news web sites are growing faster and faster. The last piece is logistics and analytics. And appropriate focus. If I see it, you have to bet there are lots of people in lots of garages that also see it.
The cost of entry is very low. The risk of failure is very small for start ups. The experimentation is all around us.
There is no doubt in my mind that journalism, journalists, and Newspapers are going to grow mightily. What I am not sure of is whether the present cast of characters are going to find themselves playing IBM to a plethora of start up Microsofts.
Among many questions, the folks at Odeo probably asked themselves: “What do we want to be similar to?”
At Odeo, they were in a some-to-many communications business. “What do we want to be similar to?,” they asked. How about texting?
Twitter is kind of like texting, but different. It’s not one-to-one; it’s few-to-many and few-to-few and many-to-few and many-to-many.
I don’t think newspapers are asking, “What do we want to be like?” They want to be like newspapers, but online. If you know any newspaper executives, you’re not surprised at the lack of imagination the industry has shown so far.
What if newspapers were like movies? A movie is a project in which producers raise money and hire a slew of artists and technicians to create a product to be shown on screen. When the project is complete, it disbands and the participants move on to other projects. Maybe something like that is the future of news gathering.
What else could newspapers be like? Car companies? Video game makers? Cable TV? Heck, I dunno, but they should ask themselves this question.
Holden,
I think newspapers are trying to be newspapers. It’s just that what newspapers were no longer works. They used to be in the information infrastructure business. It’s like when there were three networks for TV, or the railroads before the national highway system. You keep making profits almost no matter what you do.
Since they can no longer stay in the information infrastructure business, Google et al have that pretty much wrapped up on line, they should be a combination of Costco for middle of the pyramid going up and WalMart for middle of the pyramid going down.
Easy enough when you pick 1 success story and sing praises for them. Twitter was able to make the switch because they had no real existing business to protect. So they had to make the change or simply cease to exist. While it is a very popular service, it’s questionable whether it’s actually a good business.
Yes, I know newspapers need to make a change but they do have a real business, albeit a shrinking one. They need to both figure out a way to better leverage their current assets as well as look to find a new direction.
For every Twitter “success” story, there’s thousands regretting not sticking to their core business and wondering off to the reinvent themselves.
@Alan,
“What differs in any fundamental tech change are the levers of innovation.”
Exactly. The new innovations in Print tech allow for niche publications of 100, 500, 2000 and 10,000 at production speeds and getting very close to production costs.
Internet techs and engineers have both a blind spot and a dismissive attitude to Print. I think they are going to be blind sided as this new tech continues to scale in the market place.
As it becomes practical to print newspapers for audiences of any size, a massive under served, naturally replenishing market of local advertisers are going to run to Print.
The sales offering will be to sell a Print ad and a web ad to locals at the same time. Those who believe in the Print version – most local business- the web ad will be a “nice to have” The real action will be what it has always been, the Print ad.