This is another part of an interview I gave recently to Gerry Reynolds, retail analyst. The first part was published here yesterday. #
Gerry : Looking at the network in more detail, how did you get into online publishing in the first place?
John : About four years ago I started experimenting online. I had a free Blogger.com blog called, appropriately enough, Syntagma, in which I wrote anything that came into my head. Like most play blogs it jumped around all over the place. But it gave me a grounding in HTML and paved the way for what has happened since.
As an additional commercial project, I designed a static website, The Dial, in a magazine format, which attempted to make money out of books by direct sales. It did, but fell well short of challenging Amazon.
Then there was a forum about writing and editing as careers, with a monthly magazine called, Serendipity. Lots of work but zero financial returns from that one, although it became the basis for my subsequent educational publishing business.
Gerry : So you were basically messing around at that stage?
John : Yes, but building foundations sounds much better.
I wanted to discover if a full-time professional writer and journalist could make a living online. It’s taken two years, but now I know the answer — yes.
Gerry : But not quite in the way you do in the print world.
John : No, it’s a very different medium and requires far more technical knowledge about the internet and how it works. It’s a real nightmare at first, because you haven’t got a clue what you, or anyone else, is doing. You just have to learn by trial and error, and that takes time. After four years at it, I’m still learning — mainly because the technical side moves on and you have too keep up or be left behind.
Gerry : Would you recommend writers and publishers to come online?
John : I think they have to. You can’t avoid it now with the amount of convergence going on. Long pieces will always have a primary place in print because readers find books and magazines so convenient, but rapidly updating news has already moved online in ways that would astonish older journalists and publishers. Tech news is also embedded in websites now with newer tools, like Techmeme, sorting it all out according to relevance. So it’s a kind of massive, distributed magazine.
Gerry : But the money angle is crucial.
John : For a professional it has to be. If a piece of writing makes money for the author, it justifies the writing of it, partly because authors need the cash, but also because it represents a vote of acceptance from the reading public. Nothing improves an author’s mood more than brisk sales for their work. Don’t ever fall into the high-minded trap that writing for an undefined audience where money doesn’t matter is a “purer form of art”. It’s a soul-destroying exercise and usually masks the fact that the writer is not very good.
Gerry : What are the economics of an online income stream?
John : My bookselling days taught me never to sell directly from a website. Books are heavy to ship, and margins are terrible. So, avoid selling physical objects online, unless you have a successful bricks and mortar business which will underpin it. In that case, online sales supplement an already solvent enterprise.
Digital content networks rely almost exclusively on advertising for revenue, so that’s another technical hornet’s nest to get your head around.
I started experimenting with Google’s epoch-making Adsense system when I had my Blogger.com blog. Waiting to reach the magic $100 mark — the point at which the first cheque arrives — proved to be a minor eternity. Lately, though, just as I was about to give up on Adsense, the number of clicks has been picking up rapidly based on a few high-traffic sites. Adsense is now a valuable part of the overall mix.
Gerry : So you’re really an ad-space salesman?
John : Oh, yes, that’s what it’s basically about. The content side is there as a hook to hang the ads from, so you might think it’s less important. As a writer and publisher, though, I don’t see it that way, and I’ve always tried to give our advertisers value for money in terms of quality content.
Gerry : Therefore, you are writer, publisher, ad salesman, internet technologist …
John : Photographer, as well as bookkeeper, accountant (although these tasks are now outsourced to a professional) , entrepreneur, teamaker and general dogsbody. A bit like every other small business owner really.
Gerry : But with many tough technical skills to master and a great deal of flair needed?
John : You flatter me, Gerry. But I won’t disagree.
Gerry : Let’s look at the size of the business now. Will it expand from here?
John : I hope so, but in an organic way from the inside out, rather than bolting other bits on to the outside.
Gerry : No acquisitions then?
John : Not unless they are simple absorptions of complementary activities. Over-complication is the bane of the business world. Companies grow to a size where they are no longer responsive to market fluctuations. Then they have to demerge parts of the business to survive.
For me, Syntagma still has the feel of a hobby project. I still enjoy doing it and the business aspects don’t overwhelm it. If I don’t like doing something, I’ll drop it, or outsource it. But all expansion means shifting from specialist to generalist, and that can’t be changed.
Gerry : You’re not in a hurry to launch a Syntagma IPO, then?
John : Good God, no. Why do people do that? Prestige, big job titles, vanity, more money than they can handle. The fate of Icarus is always in the back of my mind.
Gerry : Would you say that you’ve reached your goals now?
John : If someone had told me I would be taking down a six-figure dollar income within a fairly short time, I wouldn’t have believed them. My original objective was to sell the business for a tidy lump sum and start again. I never thought it would make much of an income because all revenue was being pushed into expansion.
The epiphany was that there is an optimum size for a single-owner network, and that you can earn a good salary from it. The surprise was that you can’t sell networks now for $30million. You win some, you lose some.
The real decisive moment though, was settling for that. Why chase chimeras, when you can be content with what you’ve got?
Gerry : How is that resolved in practice?
John : If you set no upper limits, you’re really at the mercy of events. It’s no good having a $10m business if your costs are $11m. Mr Micawber defined that problem 150 years ago.
The trick is to set an upper boundary that gives you the best split between receipts and obligations, building in the vagaries of the tax system, of course, and depending on the amount of effort you can comfortably provide. Everyone will reach a different conclusion, but it has to be within your comfort zone. You are, after all, in this for the long haul.
Gerry : So you’ll not be selling the business?
John : I’ve personalized the business so much, it’s hard to see who would buy it now. But the idea of creating an empty shell of a company, with no branding, so that anyone can buy it, just isn’t how I do things. I’ve always preferred chocolates to boxes.
Gerry : Cheers, John.