8/21/2012

A proposal for a publishing startup accelerator program

(This post is in English, except for a slight introduction in Spanish)
A few weeks ago I had the chance to present at BEA Ignite along with other fellow publishing startup entrepreneurs. This is an Ignite-type pres where I had five minutes to present an idea. Instead of presenting 24symbols, I decided to reflect on one of the insights I've had during these months of continuous learning and challenges that is to have a startup. The result is the presentation you can see at the end of the post, but based on the script, I have written a small article about why I think an acceleration program for publishing startups should be built TODAY.
(Spanish) Hace algunas semanas tuve la oportunidad de presentar en BEA Ignite junto con otros emprendedores del mundo editorial. Ésta es una presentación tipo Ignite donde tuve cinco minutos para presentar una idea. En lugar de presentar 24symbols, decidí darle una vuelta a algo que me venía rondando durante estos meses de continuo aprendizaje y desafíos sin fin. El resultado es la presentación y vídeo que se pueden ver al final del post, pero, a partir del guión de la presentación, he escrito un pequeño artículo sobre por qué creo que un programa de aceleración para startups del mundo editorial es algo que tendría que crearse YA MISMO.



     As I wrote in the past, I believe the advent of digital is enabling a golden age for publishing, an age with so many options that the landscape is overwhelming and, obviously, a little scary (I never said "golden age" were a fairy tale!) If the current players in the industry want to not only survive but enjoy this moment and make the most out of it, there are many things we can all do. What I am proposing here is that we all need to sow some seeds of love between publishers and startups.

     The goal of building a startup is, according to Steve Blank, Eric Ries and others, to find a scalable business model, that is, a cash machine. And it achieves that by providing new technologies, new services or new business approaches that are not the ones bigger companies would typically do or experiment with. In many industries, startups have been seen as a challenge, and also a nuisance, as they try to "disrupt" the current status quo and become new entrants. From an industry standpoint, this is understandable. But from a historical view, many of the biggest changes and innovations come from smaller players that are able to solve previously unsolved issues, or to generate new needs for the final users. 

     Take 24symbols as an example (the best one I know!) Our case was showing how a pure cloud reader with social sharing capabilities and a new freemium-based subscription model (meaning, users are free to register and then convert to paying ones) would make sense in the publishing industry and obviously to the final readers. However, even though we were advised by some publishing experts, the first times we had to explain our concept and ideas to publishers, our 5-minute pitch would be quickly summarized in one word: "free". We had to quickly learn how to explain this in a way that were more compelling than the horrible and hated word. This implied a better and deeper understanding of how the industry worked, their assumptions, priorities and fears. In the meantime, we needed to manage a 10-people startup. In order to get to that stage, we met lots of interesting people, experts in their fields, and coming from the publishing and startup worlds. Because even though the founders' background was full of experience in how startups work, every startup is different and one is always learning after all. 

     This is where mentoring and acceleration programs come into play. In the last 4-5 years the success initially generated by Y-Combinator in the US has brought to life many programs offering a previously-unseen option to enable startups grow. The idea is very simple: let me help you grow by putting you in contact with mentors, services, and a contact network that no startup newbie could dream of achieving on his/her own. Of course, this comes with a cost, usually a percentage of equity in the company. As Y-Combinator's founder, Paul Graham, puts it, the value obtained by an accelerated startup can be potentially much higher than what they take from you. Of course, helping startups bridge the gap between a smart idea and smart execution is something almost every company would sign up for, right? But, does it really work? We have true success cases like Reddit, DropBox, SendGrid or Airbnb. But also many others that did not make it, and even some complaints about the usefulness of these programs. It is still too early to establish detailed comparisons and benchmarks, but we can see some of the challenges going on. The most important one is the feasibility of a specific program for a specific startup.

     Last February, 24symbols competed in Seedcamp London, arguably the most important european acceleration program. In addition to winning and the like, one of the key attractions for us was to have access to the mentor elite Seedcamp provides. This was a perfect opportunity for us to learn from experts, and to get a taste in the international arena. But it proved to be a challenge for everyone. We got great and honest feedback, but the truth is that after having worked on the project and on the company for more than a year, we had already thought about most of the comment areas A LOT. It was very difficult for a mentor to provide insightful feedback in 30 minutes along with other 4-5 mentors, about a company and a sector they did not truly know. But, was it the mentors' fault? 
     
     The question was quickly answered in another terrain. I am a mentor at startupbootcamp, another, rapidly growing pan-european startup and at startup spain, a startup school and mentoring program. It is an impressive experience for someone like me to help other startups but, hah! It proved to be as challenging to me as I guess it was to the seedcamp mentors. How can I be extremely useful to those startups I was mentoring? Again, the awful truth is that, though in some specific cases I was, for most of them the value I could provide was really minimum. 

     After thinking deeply about it, I clearly saw acceleration programs have a dilemma: they must have a big and deep pool of mentors to attract startup talent with the promise of great mentoring and help; but on the other hand, this mentoring should be laser-focused (which is almost impossible with 100+ mentors on the room). As startups evolve, the needs they have get more and more sophisticated; but, at the same time and by definition, startups are small and cannot afford to hire expensive consultants; and sometimes, coffee table conversations are just not enough. This dilemma is only currently generally solved when the startup and its founders are in very early stage, and therefore, mentors can provide basic but essential information and feedback to many of the areas of interest; or when a mentor and the startup can deeply engage, so the mentor can use his/her skills in a less standard, more focused way. But this is also a challenge, as I, as a mentor, may get involved with a startup just because I believe they have great potential, but where I cannot provide real value as hard as I may try. 

     Publishing startups enter an industry that is changing but with extremely established and specific actors and relationships. The reality is that the best mentor possible for a startup founder might be him or herself... in five years. With her experience, her knowledge, her mistakes made, her contact list, ... obviously this is impossible even if the Higgs boson exists, but how do we get as close to it as possible?

     The answer for me, lies in a premise. That startups add incredible value not just to "the publishing industry" as an abstract entity, but to publishing companies and stakeholders as well. And this is where what I think an almost-perfect collaboration between publishers, publishing companies, publishing experts and startups can happen under the umbrella of a publishing startup acceleration program. A place where the most relevant players in the industry return part of what they learnt throughout their careers by helping high-quality and potential startups to evolve and create value back. The program can have a standard organization via an initial startup school, where the basics of how a startup is run are explained and put into practice, going from an idea to a prototype, and then transitioning to the acceleration program itself, where those experts, along with the other typical services of a program like this, really make an impact on the publishing startups by providing actual, concrete and useful value. The startups will be chosen as they try to solve specific problems of the industry, experiments that are desired by those publishing experts, or, as any accelerator wished, more seasoned startups that are showing traction but that need a push before they can truly and realistically have an impact. This enables organizers to choose startups based on more realistic parameters (beyond the speculative "looks interesting", "will shift the industry" and the like). 

     The "publishing startup school", in addition to the business basics, introduces the reality of how publishing works. With enough investment on the program, this could be a quarterly course lasting for 6-8 weeks. But it could also be a set of videos that can be accessed by aspiring companies as part of their discovery and triage process. While it might seem outrageous to uncover the secrets of publishing to everyone, this is already happening in many other related industries, as it can be easily seen by, for instance, taking a look at what General Assembly is doing.

     The "publishing startup accelerator" would actually work as a typical seedcamp or startupbootcamp-like program. With or without incubation, with or without equity taken, but with publishers and publishing companies as main mentors and sponsors of the program, as well as with mentors that work outside of the industry; this is key, as pollination is critical for startups to make the most of being inside of the industry and, at the same time, coming as "techies" or "marketers". A set of non-competing, but related startups would become the class that will work along and sometimes together to create the next big market in publishing. Industry provides, therefore, the key assets that more generic mentors would have more problems to do. Specifically, some of the main ones are: 
          - Cultural. Any industry has its relationships, its codes, ... and learning about them as soon as possible is a key element for any outsider.
          - Legal. Publishing is a heaven for lawyers. But understanding the different types of contracts, negotiations, etc. is a nightmare for everyone else. An accelerator program will not transform a tech guy into a lawyer, but will surely help in providing a basic toolset.
          - Technology. Publishing is full of technology. From the different reading apps appearing in the latest years, to the workflow tools (title management, content management, distribution mechanisms, ...), knowing about the current reality of the technology systems in place help startups and publishing companies understand the main constraints and where new opportunities abound.
          - Networking. Publishing is a relatively open environment, where meeting their people is not as difficult as in other areas. Book fairs are perfect places to do that work, and conferences and events are around the whole world with the relatively same people networking. However, there is a huge difference between "meeting" and "knowing" someone. And mentors can do a great job by making the appropriate introductions.
          - Champions. One of the key elements here is that mentors can become champions. And in a vertical program, this means A LOT, since helping startups get inside of specific publishing companies can be the big difference between speed of execution and being stalled. The main example for most publishing startups, of course, is how important it is for them to get...
          - Content. Of course, this is the core of most publishing companies. And once books are digital, many startups are trying not only to "have" content, but also to be able to process it, massage it, and get additional value (i.e. services that appeal to final users). This access to content could potentially be divided between "content for prototyping" (e.g. value added services that require real texts for testing and early customer discovery processes) and "content for launching" (actual contractual relationships between the publisher and the startup.)

     This is a *drastic* change for publishing startups, even if they had a clear execution regime and some publishing expert onboard. The ability to rapidly iterate their business plan based on accurate feedback from the inside, and find partners in and outside of the industry can become THE clear competitive advantage for them. Only the competition required to get into the program would be worth it for everyone.


     So far this is just fabulous, right? But the main question is WHY. Why would publishers and publishing companies want to participate in programs like this? The answer is that we see a clear trend towards collaboration. Just a few days ago it was reported how MacMillan has created a $100M+ fund for investing in educational technology startups. And we have seen how BBC Worldwide Labs aims to accelerate media-related startups with the promise of potentially having commercial agreements with BBC in the future. We live now in a moment in publishing where *every* possibility is good. As Paris, France's Labo de L'edition, a government-led effort where publishing-related startups are accelerated by means of incubation offerings, workshops and many other activities. Or as UK's Technology Strategy Board IC Tomorrow, that helps publishers and startups get together by organizing the "Meet the Innovators" event. 

     But these initiatives are clearly not enough. Just three or four in the whole world does not encompass the whole potential of the publishing industry. Just a few companies involved, while beneficial, is just not what the industry needs. It needs a hub where publishers, startups, mentors and investors can work together to create new products, services, solve existing problems and generate business models. Many of them will fail. Yes. Even if such a program exists. But it will happen in a more controlled environment where difficulties, constraints and political issues will arise much sooner. And the great ideas will find greater options of success through championships and industry traction. A great mixture of entrepreneurship and intrapreneurship. 

     This is just a seed. As you can read here, creating a professional publishing startup accelerator takes time, effort, imagination and some money. But I believe there is a window of opportunity for publishing startups to provide REAL value to publishers. Accelerators could become the communication bus to make it happen.




2 comentarios:

@suniggurath dijo...

Bravo, totalmente de acuerdo con que sería necesario un programa semejante para acelerar el desarrollo tecnológico en nuestro campo, que es además muy específico y requiere mentores con gran experiencia en este mundo.

Justo Hidalgo dijo...

Gracias! Bueno, este es un primer paso mínimo, pero veamos por dónde se puede ir creciendo :)