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What Media Companies Need to Learn From Startups

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By now, there are plenty of examples of mainstream media companies pumping out newspaper and magazine iPad apps that look exactly like their printed product — the San Francisco Chronicle just joined the crowd — as well as putting up paywalls, and so on. But few of these companies are doing anything different or innovative. Why? Because most large companies in an industry that is more than a century old simply aren’t equipped to really innovate. In a recent blog post, Activate Media partner and Expert Labs founder Anil Dash has some advice for media companies that boils down to: disrupt yourselves before others disrupt you. For some mainstream players, it may already be too late.

Dash says he put his presentation together to try and help the media companies that Activate deals with understand what is happening to their industry and how they can use the changes that are occurring to their advantage, instead of getting steamrollered by newer entrants. These new companies, Dash says, are free of the shackles that a legacy business imposes on mainstream publishers (including high costs), because they are digital-only. And they can grow from virtually nothing into category-killing giants virtually overnight, as the rise of Netflix (s nflx) and The Huffington Post have shown.

Obviously, Dash’s presentation is partly a marketing pitch for Activate’s services, since the company consults with media industry players on strategy (and helped design the unusual Gourmet iPad app for Conde Nast, which I wrote about). But I think he makes some good points, and one of the most important is about the attitude change that many media companies need to go through in order to truly take advantage of the online and digital worlds, social media and all the other disruptive events that are reshaping the industry.

It’s not enough to simply acquire companies and hope that they will somehow magically make you more innovative or competitive (this is a problem that Google (s goog) suffers from as well, as many of its acquisitions have shown), although Dash notes that some acquisitions have paid off, including Conde Nast’s purchase of the popular link-sharing community Reddit and MSNBC’s acquisition of Newsvine.

So what can big media companies do? Dash says they need to hack their own organizations, by disrupting the traditional structure — which in many cases will mean setting up a “skunk works” or lab-type entity outside of the company, or at least insulated from the usual bureaucratic and administrative handcuffs that stop innovation from happening (or slow it down substantially). And while this is hardly commonplace, there are some examples of it happening that show it can be done.

One example, although Dash doesn’t mention it in his presentation, is — the personalized newsreader based on your Twitter stream that Betaworks launched recently (I wrote about it here). Betaworks founder John Borthwick told me the idea for the app was developed by two staffers at the New York Times (s nyt) who were eventually brought into Betaworks to turn the idea into a real product. As part of the deal, the newspaper wound up with shares in Betaworks and a stake in the app itself. Whether takes off or not, this still seems like a smart move by the New York Times.

Another example of this phenomenon that Dash described is Idea Flight, a new iPad-based collaboration app that a team of developers and designers within Conde Nast came up with and recently launched. The concept has little or nothing to do with magazines or even publishing per se, but came up as a result of discussions among the publishing company’s staffers and was quickly released into the wild.

There’s no guarantee that either of these attempts at innovation will succeed, of course, or even exist a year from now — and there’s also no real way of knowing whether the process that led to them is going to help either the New York Times or Conde Nast build new businesses or disrupt themselves in any real way. But the great part about iPad-based apps or web services is that they can be created quickly and then experimented with, and the lessons learned can help the entire organization.

There may be no silver bullet cure for the kind of upheaval that the media industry is going through, but more innovation and experimentation certainly can’t hurt.

Post and thumbnail photos courtesy of Flickr user David Daniels

7 Responses to “What Media Companies Need to Learn From Startups”

  1. steve

    maybe this is why ‘digital first’ is being tossed around by nearly all legacy these days- it gives them hope (false?) the legacy business can/will survive.

    having justed been asked my feelings on the subject, i said “yes, i’m all for digital first… and only”.

  2. Great post, but why limit “Disrupt yourselves before others disrupt you.” to just dinosaur media?

    I don’t care what industry/market you are in, you need to fully grok the implications of Dash’s axiom, like, today!

  3. gregorylent

    were the buggy-whip guys going through all this angst a century ago? if so, we can say that it was soooo unnecessary …. same now.

    • Is it unnecessary though? I think if a smart buggy-whip maker started a little side operation making cranks for internal combustion engines or rubber tires or something like that, they might have done okay :-)

    • Yacko

      “were the buggy-whip guys going through all this angst a century ago?”

      Actually yes, the “old” side fought to hang on. And the “new” side of the equation was as equally chaotic. Horseless carriages, sound reproduction, radio broadcasting, electricity generation and distribution, publishing, all had patents, patent fights, copyright defense, new business schemes and new paradigms, schemes that didn’t pan out, bankruptcies, buyouts and acquisitions, personality clashes and more. It started with the recognition of commercial invention and snowballed into the Victorian era. It’s all happened before, human behavior being what it is, just the names and places are different. Delving into the history of that era is always enlightening.