Start-ups and Publishers – a guide to successful dating
I recently spent a sunny Spring Sunday at the excellent LBF Digital Minds Conference in London, and one of the events that made it worth being indoors was a session that brought together representatives from two start-up companies and two book publishers to talk about the challenges in starting a meaningful new relationship in publishing. Having been involved with a digital start-up in the book world for the past year (Express Reads) much of the dialogue rang true to me.
So what did I learn about the perils of dating between start-ups and publishers? First it struck me quite forcibly that we are quite different types! Start-ups are generally small, often only two or three people. They are led by very young and ethusisatic entrepreneurs, many of whom have not previously been in the book business; they have little money but great expectations; they are evangelical and can’t comprehend anyone who gainsays their vision; and they’re in a hurry. Not only do they not have the money to last very long if they do not make rapid progress, but they are super fuelled with their belief and desperate to establish their first-mover advantage.
On the other hand, publishers are generally long established, with a complex infrastucture of existing processes, relationships and contracts; cautious about risks to their fragile finances; rigidly or even hierarchically structured with the consequent challenges to communication and collaboration, as well as to clarity of decision making. They are larger enterprises, which not only makes it harder to know who to talk to, but also means quite understandably that the scale of their risk is higher. The impact of disruptive change in their business could be worth millions. And everyone working in publishing is more than fully occupied with their existing day job so does not need yet another new item to add to their workload, especially when their performance is measured on their current remit, to which perversely this great new idea may even be a threat! While a start-up needs a publisher to sign up, support, or buy, the publisher may not feel any imperative to do anything. And certainly not as fast as the start-up!
The secret of successful dating between such two seemingly mismatched parties is to manage expectations. Start-ups need to think precisely and explicitly about what real value they are bringing to a publisher, and demonstrate how this will be achieved, even forecast how much that value may be. The publisher will only commit if they can quantify the benefit. In general it is also not enough to assume that innovations that have originated in other media industries can be applied in the same way to the book business, for example, without properly considering the differences that may apply.
Both sides need to be honest, open and realistic about timetables, and tell each other. Start-ups also shouldn’t assume that if there is initial interest that you’re then going straight to the altar to sign a full marriage agreement. Focus on a pilot in a specific area. Ensure that it is a “meaningful” pilot, where you can deliver an appropriate audience, and you have defined the KPIs you are testing. Anticipate together what actions you will take if the pilot is not a success – you need to be able to turn it off without real or lasting distress.
Start ups also need to be consistent in their communications. If you decide that your business needs to pivot in some way, let your partners know. They’re investing time in you and trust is undermined if you are not open with them. And publishers should ask start-ups what ideas they have to follow the initial plan – what is their vision for the next big thing? This will help you gauge the potential path of your partnership.
One of the most challenging issues for the publishers on the panel was to agree the best approach to dealing with their own internal communications, which of course is more relevant to the larger companies. How do they aggregate intelligence across the areas that are affected by the proposals? Do they convene group meetings with the start-ups? Do they separate their innovation leaders from normal business and let them pursue things apace? There are no universal answers to these questions. Suffice to say that it is essential just to keep talking, to share as much as practical with colleagues and the start-up.
By the way there seemed to be consensus from all parties on the main areas of the publishing business where start-ups are pitching new ideas and where publishers are seeking innovation. They generally comprise four areas:
1. Internal administration and production processes
2. Product or Content Creation services
3. Digital Discovery and Marketing
4. Digital Distribution and Consumption
The fact that this session was standing room only was an indication that start-ups and publishers are genuinely interested in the dating game, and learning how they can overcome any natural differences and forge lasting partnerhsips. Maybe it’s true that opposites attract!