In reflective Saturday mood, I want to continue the discussion of the last two days on digital networks. This time not singling out specific networks or people. I’m also restricting the networks to those that start off as microbusinesses and build to at least mid-market positions.

This is the question : How do we measure success in a digital network?

The simple response is : against the goals set by the founders when the network was started.

That’s a bit fuzzy because goals can change; ambitions can grow or recede; new horizons can beckon; the original goals may have been unattainable or too easy because of lack of experience in the founders.

So we need an objective measure. I believe there are two :

1. The network sells to a deep-pocketed buyer, leaving the founders rich and satisfied.
2. The business becomes a viable company, paying salaries and fees to others, and a tidy income to the founders, while also growing asset value as time passes.

I suspect many an online publisher would settle for either, whatever way their initial preference leaned.

There are other measures too. For example, a business may not make much money, but gain credibility and respect among the audience it serves. The founders may then launch ancillary careers as consultants or advisers. But here we’re concentrating on publishing income from content delivered, so we’ll eliminate these sideline activities.

I’m guessing that anyone who becomes an online publisher starts out with one of the above two objectives as their main goal. What then do they need to do to reach digital Nirvana?

1. If you’re rearing a business for sale you are essentially a digital farmer. Agricultural methodology should be built into your plans.

For instance, be aware of the weather, by which I mean the internet climate, which can go from euphoric (1999) to dustbowl dismal (2001) in very short order. Sniffing the digital wind should be an important part of your day.

At present there’s a general feeling that Web 2.0 is in a mini-bubble state, with no-one currently launching IPOs on their startups. There’s also a dangerous belief that Google, the classic 2.0-timer, will protect everyone else in the space with its long coat-tails. Not a good frame of mind to adopt.

You also need to get your product right. Is it a generic thing made to be branded fully by someone else after purchase? Or is it an exotic offering that needs good branding now? I can think of examples of both out there as I write.

If it’s a shell of an idea, it will fail or succeed by the state of the market at the time and should be brought to sale as quickly as possible and in the right conditions. Such mass market fruit ripens quickly and begins to rot before you know it.

If it’s the exotic variety, it requires a unique selling point to carry it into the arms of an eager buyer. In many ways this type of network is more suited to Objective 2 than to 1. However, it can be very attractive if its branding is well-thought through and admired in the marketplace.

So, as a digital farmer you’re either selling raw chicken carcasses or chill-counter Chicken Kiev. You definitely need to know which it is, or you’ll end up giving someone indigestion.

2. If you are incubating your network as a viable business you should attend to all the things that such businesses require, from infrastructure to branding and product excellence.

This is the slower path as your objectives are longer-term. But it’s the traditional path. Few people in the past built businesses to sell under bubble conditions, catching the big wave as it forms. Only the surfing, internet generation has specialized in this kind of California dreaming.

Conditions are never less than dangerous for those who venture out into the swell. Such people really do need a gameplan for when it all goes horribly wrong. Like an alternative business plan that allows them to morph easily from Objective 1 to Objective 2, with scarcely a flutter of attention from eagle-eyed onlookers.

In the interim, success is measurable by where you are now in terms of the market conditions, the grasp you have on the situation, and the positioning you’ve achieved in the light of the outcome aimed for.

If that sounds complicated, it’s so because, until the wished-for outcome is met, you are still in no-man’s-land, that messy hinterland where the future is dark and the present edgy.

Taking home a good paycheck is some consolation for these uncertain times. In its absence, it should at least be imaginable sometime soon, or you’re in the wrong business.

And Syntagma Digital? Where do we stand? … Maybe I’ll tell you one day.

The former editor of The Blog Herald, Abe Olandres, has had to relinquish his post because of an allegedly malicious legal case brought against his small web hosting business. The fault was not his, but has already cost him the price of a house in legal fees.

There’s a fund being set up at The Blog Herald to offset some of the pain of this case. If each BH reader sends $10 via PayPal, it would go a long way towards that. Syntagma Media has contributed $100 to the fund. If you want to contribute, the PayPal address is:

theblogherald(at)gmail(dot)com

Here’s Abe’s story :

I run a fairly small start-up web hosting here in the Philippines. One of our former clients runs a forum that we used to host. Several members of that forum were throwing vindictives against a their former employer. That employer sent us a demand letter thru their law firm demanding that we terminate the site or be charged with libel as well. The client moved out from us the following day. However, the employer/complainant has now filed several libel law suits against us claiming that we are the owner of the domain and the operator of the site. The site is still up and running though hosted somewhere else, the domain was also transferred away from us. Still, the complainant is alleging we should have enforced some sort of regulations or control over the content when it was still with us.

It could happen to any of us who publish user-generated content on the internet.

If you read my piece yesterday : Twenty Million Bucks to Build a Digital Network, you’ll be aware that Jason Calacanis has sharply critiqued the “b5media model”, which is a wide, distributed, multi-domain network of “blogs”, divided into 14 channels by niche overlapping.

Jason commented : “b5 media has great people, and I don’t mean to pick on them, but it’s the wrong model. I know this because I tried it back in the early days of WIN.”

Jeremy Wright countered with an excellent, and lengthy, review of b5′s philosophy and business strategy. Essentially, he says : “… the truth is that both Nick [Denton] and Jason came at this as a publishing play. Which is fine. That’s their background. It’s how they do things. It’s worked in the past, and it worked this time around. … When we started b5media, we didn’t do it as a publishing play. We did it as a community play.”

At the risk of sounding like a Calacanis groupie, I’ve got to go with Jason on this one.

A while back I critiqued b5 for lacking publishing skills, basing itself purely on geekery, and lacking proper branding. “What is a b5media, Mommy?”

Believe it or not, I did this as constructive criticism, not oneupmanship, as I’m sure Jason did yesterday. It’s very easy to get tunnel vision when you put so much of yourself into a project that you couldn’t bear to retreat and start again from a System Restore point. At Syntagma, we’ve done that a few times already.

However, I’d like to take up Jeremy’s distinction beween a “publishing play” and a “community play”. What does it mean?

We’re all online publishers, so the distinction falls at the first hurdle, except that if you ignore the publishing part, as b5 has to some extent, you end up with a bland, brandless, savourless soup of a project.

In terms of community, what does that mean? Jeremy divides it into three :

1. Community of Bloggers. The b5 approach leads to a daily tidal wave of exciteable internal communications. I know, I’ve been there, and my inbox still has the stretch marks.

If the authors are putting so much into internal squabbling, they are losing force for their real work, filling up the webtitles. Syntagma has avoided this road by taking on serious, professional writers who plan their time and have no interest in endless forumizing.

2. Community of Readers. Communities of readers build for a variety of reasons. We have sites which haven’t had a single comment since the last Ice Age, and probably won’t till the Earth melts. That’s their nature.

One of our strongest webtitles, Royal Anecdotes, which gets up to 20,000 unique visitors on good days, has been hijacked as a forum by its readers. If you scroll through the posts, you’ll see many with 100 or so very passionate comments.

We never set out to become a “community play”, it just happened because the material struck a chord with a sizeable niche audience.

3. Community of Advertisers. Well, somehow I don’t think of advertisers on specific sites wasting time forumizing amongst themselves. Not sure what this means, other than having good relationships with your ad space buyers. All successful publishers do that as a matter of course.

So a “community play” is an artificial distinction and a bit of a luxury for a business. It may even divert energy from its real needs, and is a false category when set against the craft of publishing, which is what b5 does, whether they think so or not.

I still hold my ground on the point that b5 doesn’t pay enough attention to its publishing side and its overall image and branding. Jeremy is an ultra-smart guy. He won’t be unaware of the constructive critiques out there.

Someone said at a conference recently that certain brands should never invite user-generated content because they would be desecrated in the ensuing material. He cited AOL and one or two other big names.

It’s a demonstrable fact that b5media also invites a lot of hostility from its peers and other less well-informed people. Jason’s remarks on b5 are just rubbing in his conference point — for it was he who made them.

Syntagma Digital is delighted to unveil the latest webtitle in our 21st-century Phi network magazine. It is Global Warming Latest, a sceptical/skeptical look at all things climate change.

The author of the site is Andrea Paulsen, who takes a keen interest in global warming and the blood-curdling pronouncements of scientific opinion. She agrees that this is a hugely interesting area of research, but that all is not always what it seems.

Anyway, I’ve had my say here in Syntagma, so it’s over to Andrea for a more forensic, in-depth coverage of this fascinating subject.

Read Global Warming Latest.

After the initial rush of blood to the head about “blog networks”, we at Syntagma have settled into a cautious optimism about what I now call digital networks.

However, I’m sometimes accused of selling the “industry” down the river when I criticize common assumptions on these hybrid creations. I’d prefer to be realistic about the content business in general, and build out steadily from solid ground than snowboard on the pistes of popular enthusiasm.

So I’m always interested when a voice of real experience — in print and digital — speaks out on the subject. Jason Calacanis has been interviewed by Businessweek in connection with John Battelle’s Federated Media, a “repping company” which sells digital advertising space in return for 40pc of the gross.

First, how are blog networks developing?

” … three ways: everyone is doing [it], advertisers love it, and consumers have embraced reading them on a daily basis. … only two networks ever reached any scale: Weblogs, Inc. and Gawker Media. The other blog networks are not even close to the traffic of the two winners.”

That is undoubtedly true. We’ve seen many a quick, noisy startup fade noiselessly away. Why have so many failed?

“I think what’s happened now is the window for a network has closed as the top slots in gossip, tech, autos, video games, etc. have filled.”

I’ve been saying that for a while now. Look at Autoblog and Engadget and imagine trying to compete. So how many blog networks have scaled up?

“Weblogs, Inc. and Gawker are the two biggest. Nothing else even comes close. I mean, B5 Media raised some money [$2m] but can you name their top blog?”

How much would it cost to build a new Weblogs, Inc?

“It would take a $20M investment to build a network to compete with Weblogs, Inc. and Gawker. I don’t see anyone investing that much. So, I think the window is closed for a scale blog network.”

I totally agree with that and have been saying so for quite some time. For example, when we decided to aim exclusively at the big retail markets, even teaming up with a retail consultancy for a while, the costs of market drive were horrendous, with no guarantees of success.

We discovered a thick glass ceiling between being a successful mid-sized network and blasting into the mainstream with heavyweight, stable advertisers.

Syntagma Media had a few offers of creative partnerships to take the project forward, but my innate caution about bubbly markets made us turn away from them in the end.

So, what should be the future gameplan for a mid-market digital network like Syntagma?

1. Differentiate yourselves from the pack.
2. Drop all the nerdy names that go with the territory.
3. Forget “blog” network, become a digital network.
4. Replace blogs as a unit and talk about webtitles.
5. Never mind “channels”, carve out network magazines that everybody will understand.
6. Do this slowly and thoughtfully, not grabbing at the straws of fickle opinion from people with a vested interest in selling you stuff.
7. Above all, use careful cash-flow techniques to amass your strength.
8. Don’t sell your creation in bits for money that must be spent, however few the opportunities.
9. Back up the digital with a print presence so that each can support the other with joint projects.
10. Always aim to be exceptional.

You won’t end up with Weblogs, Inc., but then that always was a deceptive model, since it was built around a handful of powerful weblogs started when there was no competition.

But as publishers, both Jason and Nick Denton of Gawker have proved their worth, as you would expect from people arriving from the print world. What they also proved is that, ultimately, being the Next Big Thing is more trouble than it’s worth.

Update: Jason adds to his critique of the “b5 model” in a comment over at The Blog Herald : “b5 media has great people, and I don’t mean to pick on them, but it’s the wrong model. I know this because I tried it back in the early days of WIN.”

Strong stuff, but it underlies my points above that wide, blog networks need to evolve into something different to stay ahead of the game.

Update 2: Jeremy Wright has replied at great length to Jason’s critique of the b5 model. It’s well worth a read. “… the truth is that both Nick and Jason came at this as a publishing play. Which is fine. That’s their background. It’s how they do things. It’s worked in the past, and it worked this time around. … When we started b5media, we didn’t do it as a publishing play. We did it as a community play.”