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. Read Part 3 of this intrview.
Over the summer Syntagma hosted a consultancy exercise by retail specialist Gerry Reynolds. You can read some of his conclusions here : # Since then Gerry has interviewed me for his new business magazine. Parts of the piece are published here with permission. Gerry : With Syntagma Media's second birthday approaching in October, what would you say are the qualities required to build a profitable 50-site content network? John : Tenacity, tenacity, tenacity. Gerry : Only three? John : To the power of ten. Gerry : What else? John : You need the experience to spot the winners and the frankness to deal with the losers -- of which there are many more. To be absolutely frank, the business wasn't really profitable until I cut down the number of writers we employed from 14 to seven, and the sites from 55 to around 40, which is where we are now. We had a choice -- to run a fat ship or a skinny one. In aiming for a fat ship, we hit a glass ceiling of scaleability. Getting through that would have required us to throw millions of dollars at the network, which would have meant attracting venture capitalists and selling a substantial part of the business. I would then be working for someone else. I can tell you, as a lifelong freelance writer, that didn't and doesn't appeal to me. I had enough of corporate boardrooms when I worked as a senior marketing manager for BT (British Telecom). Gerry : So what did you decide? John : I decided to run a skinny ship that looked like a fat one. Gerry : And that's what Syntagma is? John : We've always punched above our weight -- if you can bear yet another metaphor. In the online original content business, margins are not large, so quantity counts a great deal. A skinny ship with a skeleton crew -- I hope that doesn't sound too much like a pirate movie -- opens up the possibility of drawing down a six-figure dollar income. That then requires spending more time on content (writing) and less on innovation and what I call project-dreaming. Gerry : So Syntagma's second year has been less sexy than its first. John : Yes, and probably just as well. In the beginning there was a great deal of excitement around the space. "Blog" networks were springing up in droves and everyone wanted to know what you were doing. I got into long comment discussions with other network owners that took up half a day or more. In one sense, that was good -- I learned a lot from them. But in any writing function, your creative energy is limited, so you have to focus ferociously on the words that count -- i.e. that earn you money. If that sounds a bit mercenary, it's really the only way to survive in a small-to-medium business. Gerry : What then have been the highlights of your first two years? John : Mostly scaling back, it has to be said. The second year's business plan involved two massive retail portals, RetailzUSA and ShopShapeUK. They needed at least a couple of million to get them started. My decision to resist pulling in that amount of cash was based on a precise definition of cost-benefit. Would I be happier earning a six-fig income as CEO of a corporation in which I held a relatively small percentage of the shares and took orders from the money men, or drawing the identical income as undisputed boss of a smaller outfit that was totally in my hands? A no-brainer, obviously. The genie in the bottle, of course, was whether the business would sell out for the silly millions that the pioneering networks went for. My assessment was that it was unlikely. I haven't changed my opinion since then. In fact, the current credit crunch could hit valuations very hard, although I expect advertising will go on increasing even in the wobbly climate. In the end, I think I've retained my sanity in holding the business to sustainable levels, while concentrating on revenues in, instead of payments out. This October is a milestone for me because it signals the moment when Syntagma will support my lifestyle without any other source of income. I'm grateful for that, because tenacity doesn't last for ever. Gerry : But you still write elsewhere? John : I'm writing a few books -- I've always done that. But I'm much more relaxed about it all now. I can happily take time off without obsessing about PageRank or Alexa, neither of which have ever loved Syntagma. Now I know we don't need them that much anyway, so why bother? Also, there's a plan hatching for a local West Country of England subnetwork. As always, I'm taking my time and allowing the project to mature and gain some substance before inflicting it on the world. Gerry : You must have had other highlights apart from scaling back? John : Sure. The success of some of our sites has given me a higher profile. This year I've been approached by many media companies, national newspapers and film production companies to participate in various events. The recent 10th anniversary of Princess Diana's death focused attention on our Royal Anecdotes site. I was approached by Sky, Fox News and any number of print titles to get involved as a recognized expert. It makes it all worthwhile, because writing online can seem like an isolating business sometimes. Gerry : What lies ahead for Syntagma? John : Our business plan for the third year includes the launch of Syntagma TV. I've examined the profitability of this in great detail and I don't think it's on at present. That may change, of course, so it's on the wishlist still. But, just as I rejected Podcasting as non-profitable more than a year ago, and have been proved totally right, so I suspect IPTV still has a long way to go before it can roll in the dollars. When we have 100 Mb/s internet, maybe. Other than that, our third year will be much more relaxed. We'll concentrate on placing good content and on the projects that work. You can flog a dead donkey if you want to. I don't. Gerry : John, thanks for that. Greatly appreciated. John : And thank you, Gerry, for the work you've done on the Syntagma network and for inviting me along for this interview. Read the second part of this interview.
The old adage that potential customers need to see an advert seven times before they buy remains true even in our age of instant gratification. Which is why Syntagma is beginning its Christmas and Holiday advertising season right now. Advertisers old and new should get in touch with us as soon as possible to grab the prime spots for what promises to be a very competitive last quarter sales environment. Despite everything, we're holding our rates steady into 2008 so Syntagma is the place to be. Although we have specialized in text ads this past year, we also have many spots for display ads and any innovative medium our customers fancy. Just let us know. Basic information :
The Syntagma network operates as a continuously-updated, online, distributed publication, covering many topics of contemporary and commercial interest. Our weblog-based websites are all family-friendly and work within our ethos of "distinctive, high-end, mature (not Adult), non-divisive content". We offer text link ads above the fold at competitive rates. Also leaderboards, skyscrapers, plus mid-sized blocks in the sidebar.Start planning your campaign now by contacting us with your requirements :
I don't know about you but I always find it hard to slip back into full working mode in early September. Here in England we often get the best weather of the year -- as we have now -- and a load of neglected problems from July and August are piled up before you. On the positive side, it's more like starting afresh than in January, a month when immersion in work is something of a relief. Couple that with our projected move and there is a definite air of anticipation here at Syntagma Towers. All that is to say, if you are waiting for something from us, or are wondering why Phi and LifeTimes magazines were down over the weekend, put it all down to the season. We're picking up a bit of pace now and will soon be back to normal cruising speed. It also helps if you can write a post about nothing much at all. Hey ho. Mind how you go.