We had a visit from Chris O’Brien of the Mercury News today, and it was very insightful. He talked mostly about the efforts they are making to transform the way the newspaper works, with lots of slides showing practices at Ideo and other new newsrooms around the globe.
As I was listening to this I picked out a couple big pain points:
- Newspapers are saddled with debt from acquisitions, which puts them at a competetive disadvantage with newer media. They are also weighed down with union contracts and physical capital that isn’t an asset today. It seems clear that a new player that isn’t hemmed in by old commitments and rules will destroy these older organizations in a few years.
- In my view it’s not the internet that is hurting the Mercury as much as a combination of the internet and CNN. US Newpaper circulation actually peaked in the eighties, well before the advent of the browser.
- Print side advertising dollars are still 10x what online ads are. It now seems more likely to me that print rates will gradually decline to current internet rates. This represents a problem for the newspaper business, who have lost their oligopoly on information, but it is a boon for advertisers who now can narrow-cast their message to particular users, track which users receive that message, and know exactly where their advertising dollars are going.
Let’s stop lamenting the decline of traditional newspapers and figure out how to do something completely new.
Who wins in the new information economy:
- CNN
- Google
- The Daily Show (News as entertainment)
- Thousands of bloggers
And oh yes, readers…
Notes from Guy Kawasaki’s talk at our class:
Future business model - one or two guys sitting in their underwear cashing advertising checks. Example business:
Online feed aggregation/bookmarking. Easier than google reader.
Trick question from VCs - why is this market defensible?
- tech no, patents no - no resources to litigate
- good answer is: we’re going to work harder, fix it faster, relationships
- defense is critical mass before anyone else
Key to sucess for business is the quality of the implementation of the idea.
Entrepreneurship is all about making the playing field unfair.
Promotions: advertising through rss feed readers.
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Q: scale of internet business - # employees/viewership per employee
Two guys in a garage: 100k pageviews /day 3M/month 250k/yr with high CPM
With full business: 1M per day
The aim at these small scales is to develop an interesting property and be bought out by a bigger player with a complementary organization.
Big ideas:
- The media revolution of the internet is in the same stage as TV was in the early 50’s just at the beginning of TV’s adoption.
- Erik Barnouw
- Example about remote controls - period of experimentation
- Example about the printing press and how trashy novels were one of the first applications of the printing press
- Blog is not sustainable (pampleteering)
Quips:
- “Venture capitalists sleep like babies - they wake up after 2 hours and cry”
- “Failing forward”
- “One sure fire way to tell if something is going to take off is that it alarms parents.”
- “Most stuff on the web still looks like a page”
- Three things determine success - who you know, how fun you are to work with, top quality work
- Any company that is a control freak fails
