The future of business is in ecosystems

Posted on 12. Nov, 2009 by .


Last week, I said that the future of news is entrepreneurial (not institutional). Today, a sequel: The future of business is in ecosystems (not conglomerates or industries).

At the Foursquare conference last week, I was struck by the miss-by-a-mile worldviews held by the chiefs of big, old conglomerates and the entrepreneurs starting new, nimble companies. The conference is off the record, so I won’t quote anyone by name. And in truth, these are the same conversations I hear often elsewhere. Having these different tribes conveniently in the same room merely focused the contrast for me.

In one moment, a very successful mogully man was slack-jawed in amazement at how little money – “$50,000!” – one of three entrepreneurs had used to start another fast-growing enterprise. The big man thinks big – that’s what made him big. The small guys think small and get big by using existing platforms and depending on their users to like and market them. To the new guys, it’s so obvious.

Here was the key moment for me last week: In a discussion about the importance of distribution, some start-up guys – each the creators of new enterprises that took off like gun shots – were asked by a representative of the big, old club which company they would most want to do distribution deals with. The start-up guys cocked their heads like confused puppies. Why would we want to do that? they asked. What was unsaid: Doing a deal with one company would be so limiting. We get our distribution through customers and developers, through embedding and APIs and social connections. That’s how we grew so big so fast for so little. Don’t you see that?

No, they don’t.

This week, we see this contrast, too, in Rupert Murdoch’s threat – he thinks it’s a threat – to cut off Google. Nose. Face. Cut. Spite. Murdoch – whodoesn’t use the internet – does not see how distribution works today. He does not understand that being open to the link economy brings him free distribution, free marketing, great benefit. That’s because he, like his fellow old machers, won by taking control rather than giving it up. This new world is utterly inside-out from the world they built. It breaks all their rules and makes new ones (which is what I tried to analyze in What Would Google Do?). That’s what makes it so damned hard for them to understand it.

In our New Business Models for News at CUNY, we saw quickly that a big, old newspaper company was not going to be replaced by a big, new newspaper company but that instead, news would come more and more from ecosystems made up of scores of companies operating under different means, motives, and models, each dependent on the others to optimize their success. That is why we built in networks that enable separate sites to join, creating critical mass they can sell to advertisers. That is also why we factored in the benefit of platforms, cutting their infrastructure costs to near-zero.

And there, I believe, is the structure of the future of business in the new, post-industrial, decentralized, opened economy. Oh, sure, every economy has always been an ecosystem made up of interdependent relationships. But they were based on zero-sum arithmetic: take and control so others cannot. They work at arm’s length. They negotiate every relationship.

Sure, even in the huggy ecosystem, companies fight and compete. But in an ecosystem-based economy, companies benefit – they find efficiency and growth – by working collaboratively. As I see it, the new economy and its opportunities will be built in three layers:

1. Platforms. There’s tremendous benefit in building a platform and the more people use to succeed, the more the platform succeeds. Google, YouTube, Facebook, Twitter, Amazon, eBay – you know all the examples.

2. Entrepreneurial enterprises.
Thanks to the platforms, it’s incredibly inexpensive to start new companies. It’s also a helluva lot cheaper to fail (and try again). This is why I believe that the future of news – and many other industries – is entrepreneurial: because it can be. It’s not just media and its bits. It’s manufacturing (because you can use others’ factories and distribution channels and your own customers as your platforms).

3. Networks. It is still necessary to gather the smalls together into bigs: audience brought together so advertisers can buy access to them more easily; purchasing brought together to get better prices. So there is business in creating and serving these networks.

For the sake a PowerPoint, a diagram of the three layers of an ecosystem-based economy:


In our New Business Models for News Project, this is how I (crudely) drew the ecosystem for news.


How do you draw the conglomerate-based industry? With boxes, each separate, with arrows pointing to each other at a distance. Simplistic? Sure, but the change in the worldview of the new economy looks that basic when you hear the two tribes trying to understand each other.

And if you haven’t had enough of my silly charts, here’s another on video.

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Livestream: NewBiz Conference

Posted on 11. Nov, 2009 by .


Our third annual summit on the future of news is getting started. Today it’s all about local. We’ll be tweeting all day, too. Hit us up with questions and comments, the hashtag is #newbiz. Conference details and schedule are here.

UPDATE: For those of you who are wondering, here is a link to the models that are being discussed this morning.

And, here’s the livestream for your viewing pleasure:

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NewBizNews Conference Schedule: 11/11/09

Posted on 10. Nov, 2009 by .


Take a look at the latest lineup for tomorrow’s New Business Models for (Local) News Conference and HyperCamp.

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Tough love for news media

Posted on 06. Nov, 2009 by .


Here’s video version of the talk I keynote talk I linked below for the Munich Media Days conference a week ago. I gave them tough love, saying I was concerned about the protectionist talk I’ve heard from Germany media, not unlike one what can here in the U.S. and elsewhere. I also talked about the New Business Models for News Project. The reactions from the audience of 500 German media executives surprised me. (Carta also put up a transcript.)

Jeff Jarvis: “Google is not an enemy, Google is a model” from Carta on Vimeo.

(The New Business Models for News is funded by the Knight Foundation, MacArthur Foundation, McCormick Foundation, and Carnegie Corporation.)

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Updated Schedule for NewBiz News HyperCamp

Posted on 04. Nov, 2009 by .


We’ve added some excellent speakers to the upcoming New Business Models for (Local) News Conference and HyperCamp, scheduled for November 11 at the CUNY Graduate School of Journalism. Take a look at the updated lineup.

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A checklist

Posted on 03. Nov, 2009 by .


Robert Niles at the Online Journalism Review provides a good checklist for people starting their own news sites.

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The future of news is entrepreneurial

Posted on 02. Nov, 2009 by .


The future of news is entrepreneurial.

There’s a lot in that statement. It says: The future of news is not institutional… The news of tomorrow has yet to be built…. The structure – the ecosystem – of news will not be dominated by a few corporations but likely will be made up of networks of many startups performing specialized functions based on the opportunities they see in the market…. Who does journalism, why and how will change…. The skills of journalists will change (to include business)…. We don’t yet know what the market will demand and support from journalism…. News will look disordered and messy…. There will be more failures than successes in the immediate future of news….

That statement also holds many implications for sectors of the economy and society: investment (put money into the new, not the old)… public policy (don’t protect and preserve the incumbents but nurture the startups by creating a fertile and level playing field)… education (how do we train journalists when everyone can do journalism? – how do we train everyone?)… marketing (advertising won’t be one-stop shopping anymore and that means it may support news less)… PR (influence will be no longer be concentrated)… technology (there are opportunities here)…

Finally, that statement does not say some things. It does not say that the incumbents’ institutions will necessarily die, only that they have proven not to be the source of innovation and growth in news.

One more point: The statement is essentially optimistic. It says there is a future to be built.

This is not the discussion we hear about the fate of news journalism. That discussion defaults too often to current models and old realities, to protection over creation, to fear over opportunity.

Columbia’s Reconstruction of Journalism report, in my view, gives up on the business prospects for news and resorts to what I believe are desperate measures – namely: the public option for news. The Washington Post has run two opeds lately endorsing tax-supported journalism (pardon me for asking, but are things that bad there?). Alan Mutter reported on a Harvard confab last week that “gravitated to the predictable yadda-yadda: foundation funding, federal subsidies, subscription schemes and a smattering of random ruminations about revenue.” That’s hardly uncommon; it’s all we hear.

Bit by bit, I’ve separated myself from that worldview, first by teaching a course in entrepreneurial journalism at CUNY, then by directing the New Business models for News Project to research and propose sustainable futures for news. But I didn’t boil down my essential worldview to this – the future of news is entrepreneurial – until now.

If you buy this view – and, I know, many won’t want to – then it affects so much, as I’m learning myself. Last week at CUNY’s Graduate School of Journalism, I presented to my colleagues our New Business Models for (Local) News (the segment of the project funded by the Knight Foundation, which we’re also presenting at a Nov. 11 event here that will be streamed) and the discussion turned afterward to one aspect of what we do: what we offer students in career services. No longer is that just about getting job interviews at big publications – though, of course, it still will include that as long as it can! – but it now should expand to giving students who are starting businesses the services of an incubator (which we are doing for my entrepreneurial students who are now launching businesses) and perhaps to giving them the training they need to be proprietors of journalistic businesses: We’re teaching them in our January intersession how to build their own brands online. Should we give them a workshop to help them with billing and business? I’ve asked the heretical question about teaching hyperlocal blogging: How will they learn to sell ads? These are questions raised by the entrepreneurial worldview.

The public policy implications of this view for government are many. Last week, I gave a Skype talk [I’m still not traveling, post-surgery] to a session assembled in London by MP Sion Simon looking at government’s possible role in the future of news – what it should and should not do (see posts here, here, and here). Here in the U.S., the Federal Trade Commission is holding sessions starting in December (where I’ll appear on a panel with folks who don’t agree with me about all this) and the FCC appointed Steven Waldman to continue the work of the Knight Commission looking at the information needs of communities.

As my Guardian column this week makes clear, I get hives at the notion of government interference in news – in speech of any sort. I especially fear government taking a role as a nonmarket player competing with not only the weak incumbents but also with the tender sprouts of entrepreneurial ventures. I also fear talk of governments – in the U.S. and Germany – extending copyright just to protect incumbents. What should government do? Broadband for all. I’d start – and stop – there.

For investors, the entrepreneurial worldview says not only that it’s time to get their money out of old media companies – that, given their market caps and bankruptcies, has already happened – but also that it is time to invest in new and innovative ventures. That requires investors to believe, as I do, that there is a robust and growing market demand for news and that there are new opportunities to meet it efficiently and profitably. But until we start proving that, investors will be shy. This is why I wish that the capital that has gone into not-for-profit news ventures in cities across the country had gone instead into creating for-profit enterprises: so we can prove the market, so we can learn how to make news sustainable. That is god’s work.

For other industries that work with news – advertising – I would have scouts, laboratories, and pilot projects staying on the forefront of entrepreneurial developments in news and even encouraging it with marketing dollars. Ad agencies and sponsors have tremendous opportunities to build relationships with customers in new, more targeted, more effective, and more efficient ways but they must shift spending to online to learn what works and create it; their old habits of one-stop-shopping with big media only leave them behind.

As for technology, there is much development of news already occurring in startups (I’m a partner in one such effort, Daylife, and I advise others; we are seeing some sprout already alongside our New Business Models for News Project). But the technology giants can also play a role. I’ll write more about this another time, but I believe Google should be packaging what it already has to help create a framework for anyone – anyone – to build news enterprises (and it should stop wasting time trying to make friends with the dinosaurs who only want to find enemies to blame for their problems). I also want to see it help support labs to develop its tools – especially Wave and Marissa Mayer’s notion of the hyperpersonal stream – for news; this, I believe, will force us to rethink our fundamental assumptions about what news is and that, in turn, will lead to new opportunities.

Where does this leave the incumbent institutions when I say the future is not theirs? I’m no longer the only one holding them accountable for their lack of innovation in the last 15 years – even Ken Auletta is. But what’s done is done and looking back, I now see it was probably my mistake to think they could have reinvented themselves. I talked with someone recently at an old, large media company who said he believes it is impossible for them to remake themselves for this new, much smaller entrepreneurial world. There’s just too much shutdown cost and pain involved and the people inside these towers don’t think like people in garages. Still, I see opportunity for them. That’s why, on this blog and at the Aspen Institute this summer, I pushed the idea that when journalists leave those towers, their companies should invest in their futures as entrepreneurs: Set them up with blogs, sell their ads, promote them, and continue to reap the value of their experience and brands (without the cost). The Washington Post should fund the next Politico in town, not see its talent walk out the door to start it elsewhere.

And what of these journalists? Well, that’s why I’m writing this. That’s why I teach what I teach. I believe journalists must become entrepreneurs. They don’t all need to be sole proprietors of hypersomething blogs. But they need to make smart business decisions when they decide where to put their effort. They need to sense and serve the market. They need to work with innovators. They need to see a future for journalism that looks different – better, even – than its past.

The future of news is entrepreneurial.

* * *

Most people use their blogs as the laboratory to try out ideas. Lately, I’ve been using appearances and columns to test notions, leading up to this blog post. Here are a few instances lately when I’ve talked about news’ entrepreneurial future.

I gave a talk via Skype-video to Medientage München (my talk, in English, starts at 22 minutes in) in which I tried to be tough and tell the audience of 500 German media machers that the old models won’t work in the new world and that it is time to face this reality bluntly, leaving politeness behind. (The talk lasts about 25 minutes; I’d listen to the last 10 when I’m questioned by the editor of and the audience surprised me with its reaction to tough love.)

Get the Flash Player to see this player.

I also talked about this last week in Coventry University’s session that asked whether journalism is in crisis:

And here is a link to my Media Guardian column today, in which I used this line and it was, I’m glad to see, promptly tweeted. In it, I said:

The future of news – and there is a future – is being built by entrepreneurs who in change see opportunity, not crisis. . . . Instead of declaring surrender to changing market forces, we should embrace them. Crisis? I see no crisis, only inexorable change.

* * *

Based on all this, you’d think I’d disagree with a post headlined Why I Don’t Think Journalists Need Business Skills. But I don’t. In it, Philip John argues the need for networks and services to perform business services for journalist entrepreneurs. I agree. That’s why we projected such a framework in our New Business Models for News Project. That’s what Mark Potts plans to build with his startup, Growthspur. And I think Philip proved my point by writing a post that’s very business-savvy.

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NewBizNews HyperCamp Schedule

Posted on 28. Oct, 2009 by .


We’re looking forward to the New Business Models for (Local) News HyperCamp, scheduled for Wednesday, November 11th.

The conference schedule is now available here and as a google doc. The day-long event will be held at the CUNY Graduate School of Journalism — 219 West 40th Street, 3rd Floor, NYC. Coffee and registration begin at 9:00 AM and the morning program gets under way at 10:00 AM. We’ll break for lunch at Noon and start the HyperCamp workshops at 1:00 PM. We hope you’ll stay for cocktails and networking following the last session.

We’ve already received over 120 RSVPs from a great mix of people — hyperlocal bloggers, journalists, website owners, entrepreneurs, investors, publishers, technologists, media executives and more. We look forward to sharing experiences and best practices as we explore new business models for journalism. Most of the day’s events will be livestreamed and we’ll use the hashtag #newbiz. (Space is somewhat limited so if you’ve RSVP’d “yes” and are unable to attend, please contact David Cohn — [email protected]).

Please visit our website in the coming weeks for further HyperCamp updates. And take a look at the Project’s business models. We urge you to download and modify our spreadsheets by plugging in your own assumptions.

The CUNY Graduate School of Journalism is grateful to the Knight Foundation for funding our work on the New Business Models for News Project, which we presented in August at the Aspen Institute Forum on Communications and Society. We also thank the McCormick Foundation, the MacArthur Foundation, and the Carnegie Corporation for their support of this important work to sustain journalism.

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Giving up on the news business

Posted on 19. Oct, 2009 by .


Before reaching their dangerous conclusionrecommending government supported journalism in a report called the Reconstruction of American Journalism – former Washington Post editor Leonard Downie and Columbia journalism prof Michael Schudson make some basic and, I believe, profoundly mistaken assumptions, namely: “That journalism is now at risk, along with the advertising-supported economic foundations of newspapers.”

Just because newspapers put themselves at risk, it does not follow that journalism is at risk. Newspapers no longer own journalism. As too often happens in this discussion, they focus only on the revenue side of the business ledger of news – advertising falling from monopolistic heights – and not on the cost side and the efficiency new technology – and thus collaboration – that technology allows.

As Downie and Schudson themselves point out in their Washington Post op-ed, there is now a flourishing of new outlets and means of gathering and sharing news.

Journalists leaving newspapers have started online local news sites in many cities and towns. Others have started nonprofit local investigative reporting projects and community news services at nearby universities, as well as national and statewide nonprofit investigative reporting organizations. Still others are working with local residents to produce neighborhood news blogs. Newspapers themselves are collaborating with other news media, including some of the startups and bloggers, to supplement their smaller reporting staffs. The ranks of news gatherers now include not only newsroom staffers but also freelancers, university faculty and students, bloggers and citizens armed with smart phones….

That is a basis for a new ecosystem of journalism, one we begin to outline in our Knight Foundation-funded New Business Models for News Project. We believe there is a sustainable and profitable future for news and they only way to confirm that is to try to build it but that will not happen if we declare surrender and defeat in the hope that the market can support the news a community needs.

Downie and Schudson give up on news as a business and, in their consequent desperation, make this drastic proposal:

American society must now take some collective responsibility for supporting news reporting — as society has, at much greater expense, for public education, health care, scientific advancement and cultural preservation, through varying combinations of philanthropy, subsidy and government policy.

Collective responsibility. Socialized journalism. This is the ultimate in broccoli journalism: You are not only forced to read what journalists say is good for you but you are now forced to pay for it through taxation.

They make other suggestions with which I have no complaint: Journalism students should report not just for their professors but for the ecosystem and we see that beginning. If philanthropists want to do more to support news, I’m not going to burn their checks – but they are no white knights riding in to save the day. Public broadcasting can do more local reporting and we see movement in that direction from especially NPR and also public TV – though I would be loath to think that we should have government mandate of that. And we want more transparency; I belong to that religion.

All this comes from that dire assumption that journalism is dying with newspapers. That is not and certainly need not be the case. I disagree with Downie and Schudson’s key assumption: There is no crisis. When you start there, you don’t just reconstruct the past of journalism but see the possibilities to build a new journalism.

: Even The New York Times’ David Carr is somewhat incredulous.

: Mulling over the full report on my train ride in this morning, I realized that my problem with it is this: Downie and Schudson are addressing the business problem of news without doing reporting on the business.

The report is a cogent, comprehensive, well-documented summary of broadly held conventional thinking on the history and current state of journalism in America, but it is all stated from the journalistic perspective – no surprise coming from two distinguished journalists.

If this were handed in to me as a term paper in my class, I’d give it back for more reporting and rethinking. I’d tell the students that they made huge assumptions about the business state of journalism – both on the revenue and cost sides of the P&L – without giving me reporting on that. I’d advise them to look at the true cost of the accountability journalism they cherish, at the inefficiency of the business today as it produces commodity news, at whether there is sufficient advertising revenue to cover the journalism that matters once news organizations rid themselves of their inefficiency, at verifying the public demand for the kind of journalism they think the public needs, and at the issues journalism has had with trust and quality. Then, if they still came to the same conclusions – which I doubt – I’d urge them to get more balanced reporting on the risks behind each of their recommendations, particularly involving government subsidies, direct funding, and mandates on journalism. I think they did half the story, the half we’ve already heard (and which they quite ably summarize again). They should have given us the business story since that is what they really wanted to address. I wish they had.

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Hyperlocal Boston

Posted on 16. Oct, 2009 by .


Now that The New York Times Company has decided not to sell the Boston Globe, wonders whether the company should convert Boston to a hyperlocal-based business.

Well, our Knight Foundation-funded New Business Models for News can be a roadmap. Indeed, the 5-million-person hypothetical market we worked on looks an awful lot like Boston (because, truth be told, it is Boston).

We suggest that a new news organization working collaboratively with a large base of independent sites and companies can establish itself at low cost and risk because much of the news is produced by people other than employees. The company would be much smaller but it would be profitable, potentially at impressive margins. Getting smaller would be painful, of course, but if the Globe doesn’t do it, some kid in a Harvard dorm room could.

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