When your online business reaches the stage where it needs some serious scaling up, what do you do?

You could try the VCs (venture capital providers). They are the helpful folk who will take 40 or 50pc of your business in return for funding your expansion. They’ll probably insist on bringing in a new (and expensive) chief executive, robbing you of much hands-on control.

They will also expect an exit payout of something like 20 times the amount they put in. This could only come from either a sell-off or an IPO (initial public offering). Either way, you’re going to lose your business progressively over a few years. Of course, you may get rich in the process, but not before making a lot of others wealthy too.

Then there’s the question of what you’ll do with the money. Spend it, of course. That, as Greg Gianforte points out in his book Bootstrapping Your Business, will just deflect you from selling your product to customers.

Human nature is such that when we have lots of cash we spend it on Wants rather than Needs. In business that translates to a fleet of white Rolls Royces emblazoned with the company name, each driven by a salesperson in a white suit. I once knew such a company. It went bust.

Podcasting
There’s a story doing the blogorounds today about a company called Podshow which has received $25M in VC funding. A number of commentators, including canny Jason Calacanis, are questioning the logic of the money stream : “What on earth Podshow is going to do with almost $25M in funding is anyone’s guess, but it’s not going to end well I can tell you that.”

Jason points out that to raise the cash they must have had “a $35-60M pre-money valuation”, which translates down to the VCs looking for a $300-500M exit at some stage. Revenues would need to be in the region of $30-50M for that to happen. Remember, we’re talking about podcasting here, a technology whose business case has yet to be proved.

He goes on to say that his own company, Weblogs Inc, raised only $100,000+ from VC Mark Cuban “and we never spent it–we made money”.

Alternatives
So what’s the alternative? If you’re a content provider like Syntagma Media — and most blog-type businesses are — there’s an obvious one.

Instead of selling half your business to strangers with half the money going back into their coffers (the money has to go back into the business of which they now own half), you could try looking for a complementary creative partner.

Content provision needs a lot of skills beyond fiddling with template code and pushing out a few posts a day. Having something worth selling and a means of finding buyers for it, require a step-change in skills from one’s first Blogspot days.

You might, for example, seek out an industry consultancy firm which could deliver great contacts and new possibilities, while also taking over crucial areas of the business operation.

That’s what we’re doing here. It’s a much better way to blast your way out from the initial stages of business construction than jumping into the arms of ravenous money-people — even if they let you.

Well, what is it? Let’s examine the problem first.

Blogs are about exchanges of information on the raw and cutting edges. The raw edge is where there’s controversy, or avant-guarde thinking, in politics. The cutting edge is where there’s innovation in tech and new media.

Blogs are like the pamphlets and chapbooks that were handed out on the streets of London from the 16th century. Usually hurriedly-written and scrappily produced, they served a real need in London then, and a similar one now in our rapidly-changing world. But they’re not commercial publishing, they are vehicles for ideas.

Blogs are not good for ad-based commercial publishing. The people who matter don’t see them that way — and they are the buyers.

When blogs are networked as content providers they are mimicking print magazines (whether they know it or not) and straying beyond their point of maximum effectiveness. Unless, that is, they go the whole hog and badge themselves as magazines, and bring in the publishing values of the print serial industry. Then they can approach the kind of advertisers who dominate printed magazines.

The difference between monetized blogs, based on Adsense, and commercial publishing is profound. The former is someone earning money (occasionally, quite a lot) from drawing search traffic through the use of keywords. The latter is a company publishing high-quality content in a mature marketplace.

The problem is both with the blog form, which is useful for highly transient content, and the perception of blogs by businesses which advertise.

Our stretching of the envelope is actually just recognizing reality, for what is the exit stategy of most blog networks? What do they want to become? Just a bunch of blogs tied together by common ownership or webring? What kind of entity is that? A hybrid. Neither one thing nor the other.

So what is the collective noun for a group of blogs? “Network” tells us nothing, especially as the synergy between blogs is often non-existent.

I’d go for “a vacuum of blogs”.

See also “What on Earth is the Blogosphere?“

Syntagma Media is delighted to announce our newest site, Horses and Events, especially as it has a sporting flavour seen through the eyes of a trainer and judge rather than a participant or spectator.

Our author, Jane Phillipps, is right in the thick of things at the major championships, like the Royal London Show and The Horse of the Year, while preparing her own horses for these events.

If you like horses and enjoy reading the views and advice of experience, Horses and Events is the one for you.

A rumour has reached us that Syntagma Media is in the process of being sold. This is not true, at least as a bare statement of fact. Since someone’s got wind of ongoing discussions, though, I may as well spell out some of the details.

For around four months we’ve been talking to a retail consultancy about a form of cooperation agreement. Initially, they were reluctant to get closely involved with a blog network. Blogs were what their kids did when they weren’t watching cartoons on TV. However, they liked our publishing ethos and the quality of delivered content.

Our move towards a magazine format has quickened their interest and we’re not too far from a deal. My preference would be for them to take a 40% stake in the business and handle the IT and advertising, leaving me to concentrate on the publishing side. It would optimize the expertise in-house.

They have huge experience of the retail business and a large number of high-powered contacts. Were this to happen it would put us in a prime position in the marketplace, especially with big stores and shopping malls.

Maybe now our small band of critics can see the full intention behind the magazine format and leaving behind the Blogosphere Game. To them I say, don’t jump to conclusions when you don’t have all the facts.

That’s a question often asked and served with a multitude of answers. So here’s mine.

The blogosphere is a swamp.

Now before you rush off in a rage and write hysterical articles about me, let me explain my point. Swamps are superb.

Out of the primeval swamp, we’re told, came all of life as we know it. The original Globigerina Ooze was the finest soup ever made because it contained all the ingredients to manufacture lifeforms. Hence my presence at the keyboard and yours reading this piece.

The blogosphere is a swamp. It’s a glorious seeding ground for phenomenally innovative ideas, both in thought and in action.

It also acts as a proving ground for new ideas, products and services, where they can be poked over by all manner of experts, dumbos and interested parties.

However, once the idea is pronounced “good”, what next? Clearly it can stick around and play the Blogosphere’s Game of tilting at windmills, baiting others for traffic, and monetizing to cover the bill at Starbucks or the Cafe Royal.

Blog networks are something excellent that emerged from the blogosphere and, with Weblogs Inc, powered out of it to glory.

And there’s the rub. Like the young of all species, the blogosphere’s best has to fly the nest if they are to make it in the big, wide world of grownups.

Blog networks have to drop the blog label if they are to attract a much larger clientelle and flourish in the commercial sphere.

Gadget blogs may well be an exception to this rule, because they automatically appeal to millions of techie gadget-fanciers, who may not be bloggers at all.

But for a network that seeks a broader commercial role than the Blogosphere Game permits, leaving is essential.

That doesn’t mean you can’t write home occasionally, even visit the old folks. It just means you have to make your valedictory speech and precipitate yourself over the side of the nest.

That’s where Syntagma Media is now. I suspect other networks are similarly placed. Tech people will find it hard to make the break. Publishers and authors like myself will find it much more congenial, especially when the slurp of the swamp orchestrates their departure.

So, blog bog-folk, wish us well. We’re going into the wide blue yonder where windmills are called turbines and serve a useful purpose. It was good knowing you and I hope your seedbed produces many more good ideas, like blogs and blog networks.

You can still read us here, but our voice may sound more distant than hitherto. Ciaou and mind how you go.

Mary Jo Foley, the doyenne of Microsoft Watchers, has left Ziff Davis Media to pursue her own interests, namely writing about Microsoft as a blogger at ZDNet.

In a farewell interview, she says : “Blogging is the future of journalism, in my opinion. More and more bloggers are not just reacting to — but actually breaking — news. I wanted to try my hand at running a business that was blog-centric from the get-go. So I decided to take my show on the road.”

She’s right, of course, all the top newspaper titles have realized they can’t beat the online journalists for speed of reporting. That’s why they are increasingly taking a more expansive line on news through op-ed columns and magazine-type features.

But I think she should style herself a little differently, as a Web-based journalist and analyst.

Mary Jo is a serious journalist who’s broken many a MySoft story in the few years I wrote about them. Together with Robert Scoble, Ed Bott and less than a handful of other sources, she was the one you turned to when the big cataclysms struck Redmond.

[Original source]

Politicos in the Westminster Village are probably laughing themselves silly with the news that Hurricane Gordon is set to hit the British Isles.

What’s funny? Only Scotland will be affected *.

Is this a mystic sign of things to come? You couldn’t make it up.

* Gordon Brown, a Scot with a Scottish Constituency, wants to be Prime Minister of England.

This is continuation of a comment reply from the previous post. It continues the argument about web and print magazines, their convergence, and how a native, online, distributed magazine industry can be created from the emerging embryonic phenomenon of blog networks.

A Native Industry
Broadband allows online content providers to take on many of the features of the traditional magazine — an amazingly successful innovation in its day. There is a definite convergence between on- and offline publications happening now, but at a slower pace than it should.

Many newspapers have given up the ghost on news delivery and become magazine lookalikes (op-eds, colour supplements, reducing to tabloid or Berliner size etc.), so it’s becoming a straight fight between paper and electronic “magazines”.

Having said that, it’s not really a fight at all because the market is in a long-timeline process of fusing its elements together through convergence and the breakout of even newer technologies.

Magazines, unlike books, are granular publications. They comprise lots of small pieces, some related, some not, bound together in a package that is sufficiently focused to appeal to a critical mass of readers. Magazines are therefore particularly suited to the online experience.

However, once magazines get online they benefit from the atomizing effect of web technology. For example, if you want to read your favourite print columnist, you have to buy the whole paper magazine. In a distributed online setup, you can go immediately to the niche site where the author is writing. You also have instant access to the whole of his/her archive in that slot — something not available from print mags. You can also “go wide” and explore other aspects of the magazine through the links provided, either by surfing around or by a determined search. This presupposes a central hub of some kind which mimics — and improves upon — the contents page of a paper publication.

To match the readability of print, without taking on its limitations, is what a true pixel magazine will achieve. It may not be rocket science, but it takes more than virtual turning pages and identikit graphics. Somewhere the technology has to make its mark, but without overwhelming rookie readers.

Let’s take the newly-refurbished Engadget as an example. Engadget is an astonishingly successful online magazine of the “deep” variety (one website for a broad niche category). It has succeeded because it attracted a much wider audience than the usual tech crowd in the blogosphere — almost everyone loves a gadget. In that sense, it came close to the conditions of a print mag.

It’s still successful, but has it moved on? Does it have to move on? Why spill the applecart when you’re selling apples like hot cakes?

However, competitors are now crowding in from all sides. Most “blog networks” have gadget blogs at the top of their list.

So how could Engadget move on? By going for a print version? No.

First, there isn’t the in-house expertise, although at a pinch they could call in Time Inc. But Time Inc is already closing down many of its niche, main market titles because they are struggling. It would be a counter-trend move. And that’s ignoring internecine rivalries in an organization as big as Time-Warner/AOL.

They’ve decided to revamp and redesign the whole site, and the results are now visible. My view is that it’s nice and open and bright and follows recent moves to increase white space and make the screen seem less populated than before.

But it doesn’t move directly into the gaping hole waiting to be filled online — the genuine magazine alternative to paper publications.

The first post was a technical manual of how to use the site and all the extra gizmos, widgets and headache-inducing extravaganzas of the Web 2.0 deadend.

Do we need a technical manual to learn how to use a paper magazine, or a newspaper? A contents list with page numbers is all we need. The technology of a web network magazine should be hidden away beneath the hood.

There was a time a few years ago when architects decided it would be cool to let it all hang out. Buildings were constructed with the innards displayed on the outer walls. Think Pompidou Centre in Paris, Lloyds HQ in London. Buildings began to look like factories or grain silos, and were even built of aluminium and steel.

It was a self-conscious display of the technology involved in modern architecture. It was also ugly, unnecessary, and met with hoots of derision from the paying public.

Web publications shouldn’t make that mistake. Readability is all, which means simplicity, intuitive ease of use, and with technology neatly tucked away out of sight.

So Engadget stuck to its origins in blog technology because it was reckoned that its audience of gadget lovers would not be put off. They’re right, of course. But they did have a chance to pathfind a way into the new field of online publications and steal a march on the printcos crowding in. That’s a task still waiting to be done.

… And we haven’t even started on the quality of the content yet.

David Carr, writing in the New York Times, spots more evidence that physical magazines are going through a bad patch and are eager to get online. The problem they have is drafting in the expertise and adapting current staff to new realities.

“On Tuesday, Time Inc. announced that it was putting 18 of its 50 magazines in the United States up for sale. Given the somewhat marginal publications involved — niche magazines like Popular Science, Yachting, Transworld Skateboarding — it is not as if the company is burning heirloom furniture to stay warm.”

Another interesting point is that mass market magazines are the ones mostly in trouble. Upmarket titles have it much easier :

“Time Inc.’s scale makes it vulnerable because the masses can access commoditized information for free while magazines that are more targeted at affluent readers, like Condé Nast magazines, are less troubled.”

But it’s not going to be a problem-free transition for even the biggest mainstream stars :

“In a phone interview, she [Ann S. Moore, the chief executive of Time Inc.] was wildly enthusiastic about the company’s growing digital prospects, but did not minimize the size of the task ahead.”

So we see two converging trends here. Print publications rushing for the perceived lower-cost shelter of an online presence, and online blog networks and others scaling up already Web-based products to stay competitive with the incoming competition.

Who will win this Goliath and David contest? Actually, I’ve never thought of this as a head to head, which presupposes some kind of limitation and a fight for space and readers. Both are almost unlimited online.

If we run out of western middle-class readers, just look at India, where a vast, educated and English-speaking middle class is growing at an enormous rate. They look to the West for their ideas, styles and consumption expectations, all within the purview of traditional magazine content. A typical printco would find it hard going to establish an operation in India. Online magazines are already world publications accessible anywhere. This is one of the many factors driving publishers to the Web.

The convergence is so complementary that mergers and especially acquisitions are inevitable, almost all of it financed from the print market. The task of the blog networks is to make themselves attractive to the incomers, both in terms of innovation, quality, brand, and existing readership. If the printcos have the money and the publishing skills, they are looking for sure-footed online operators who can meet them halfway on their own strengths and burnish their publishing portfolios.

Jeff Jarvis gets it in one: “Magazines could have had a unique benefit in the internet if they had thought of themselves not as slick paper but instead of networks of interest and information. … Sadly, not many in the business view it this way. They’re still thinking content and control. They’re still thinking centralized. Break out and think distributed and think community and new things become possible.”

Beneath that heady cattle market of big combines and smaller but sizzling internet fry, there will be a secondary layer of mid-sized businesses, acting more like print publications than blogs, for which we use the catch-all title of Web Network Magazines.

This is the area where most blog networks should be positioning themselves. It will be lucrative in itself, but will also catch some of the stardust falling from the conglomerates above. And who knows whose eyeballs may be watching.