Iterate or Die - SXSW 2011

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Iterate or Die How Media Businesses Must Adapt as Consumer Internet Startups Disintermediate Them Kim-Mai Cutler, Inside Network @kimmaicutler

Transcript of Iterate or Die - SXSW 2011

Iterate or DieHow Media Businesses Must Adapt as Consumer

Internet Startups Disintermediate Them

Kim-Mai Cutler, Inside Network

@kimmaicutler

We are a media, data and research company covering the Facebook and mobile ecosystems. We strive for high-quality, authoritative and

data-backed journalism on the space.

The technology companies of my parents’ generation were very different.

The media world was different too…

“Young journalists who once dreamed of trotting the globe in pursuit of a story are instead shackled to their computers, where they try to eke out a fresh thought or be first to report even the smallest nugget of news — anything that will impress Google algorithms and draw readers their way.” – The New York Times

Technologists are the ones giving voices to the voiceless. They can tie people in distant corners of

the world together in profound ways.

On Quora, the community is interviewing itself.

Is the Quality Gap narrowing?

• Companies that leverage the content their users create are getting better every year.

• Thinning profit margins are undermining the ability of paid media professionals to produce quality work.

• So what purpose does a paid “interviewer” or journalist have in mediating a conversation if a system like Quora can do it better?

There is a tension between scale and authority.

The Scale-Authority Tension

• All media properties make trade-offs between the scale and authority as they try to bring new readers in the door while hopefully getting them to move up to other products or paid experiences.

• “Do I publish the quick, sensational hit that gets lots of traffic? Or do I work on this long feature that wins me respect and trust in the community?”

Each business optimizes for the best mix as it feels around for a local maximum along the curve.

Characteristics of Communities That Can Support Niche Media Businesses

• Strong emotions or passion around a topic

• Aligned with a high-margin industry

• Community members are incentivized to misinform or even deceive each other

• Readers with high discretionary income

• Information has material value

The Risks of Scale as a Media Company

• Declining CPMs as inventory increases

• Your community gets too large and unwieldy. It becomes harder to move them into other products

• Like in any other industry, you get outside of your core competency and create an opening for a competitor.

• You lack the true ability to leverage scale like consumer Internet giants such as Google and Facebook.

• Stuck in the middle, you cannot realize the full benefits of either scale or authority.

The Consumer Internet giants: Economies of scale, new revenue opportunities like payments

The New Consumer Internet Startups Have More Sophisticated Incentives

• Asymmetric follow

• Social voting

• Social graph

• News feed

• Authentic identity

Disaggregating Journalism

Participation & Access

Curation Context Action

TwitterFacebookQuoraYouTubeInstagramFlickr

TechmemeHacker NewsTumblrFeedera

QuoraWordpressGoogle

VotizenGroundcrewMeetupFacebookTwitter

What’s Your Comparative Advantage?

• Do you lean toward scale or authority?

• Scale can be profitable, but it has risks. The risk is that in the end, masses of people writing about their passions and expertise (often for free) commoditize masses of low-wage writers churning out 10 posts a day on topics they know little about.

• Authority requires constant adaptation as you are constantly being copied and commoditized

• Startups that leverage user-generated content lower the barriers to sharing what people were already willing to share.

• A small, but significant part of journalism is about what people are disincentivized to share, or what is too costly or time-consuming to share.

We live in a really weird world. • People are willing to pay for virtual corn, but not for a song by their favorite

musician• The value of the digital goods that journalists, writers, filmmakers and musicians

sell can be experienced anywhere. You will be copied.

There is no “Business Model”

• Because media companies and consumer Internet companies are now reliant on the same source of income -- advertising, they must adapt in tandem.

• Media companies need to build in the expectation of constant change into their DNA the way that great technology companies do. Build a culture that fosters constant adaptation.

• Every six months to a year, expect a new company or startup that fundamentally challenges the product you are offering.

• Fear in the face of sudden death breeds ingenuity.

Media companies are more than content. They sell identity, too.

• We’re in a world where the speed of creative destruction is accelerating.

• Media companies need to have a mindset that is accepting of constant change and disruption to their current business models.

• Adapt or die.