As a self-appointed member of that exotic species named “internet entrepreneurs”, I was interested in Fraser Nelson’s article in the current issue of The Spectator.

The summary of the piece states: “… the Conservatives are taking their cue from the West Coast of America: the land of Google, Stanford University and venture capital. They want to rebuild Britain in California’s image: dynamic, high-tech, green and ‘family-friendly’.”

That is a good idea … up to a point.

California has its exhilarating high points for sure. It also embraces deep pits of madness. As a melting-pot State with many right-on East Coast emigres, plus millions of Hispanics up from the South, mostly illegal, it lacks the sense of cohesion Britain once had, and still does in some parts of the country.

California has an annual income roughly the same as the UK’s. Recently it was said to be overtaking Britain and would soon be the world’s fourth largest economy, taken by itself. We won’t know if that’s really true until the dust settles from the current depression.

On this side of the duck pond, we tend to see only two aspects of the State: Silicon Valley and Hollywood. Both conjure up images of starlets on roller skates, propelling themselves along wide pavements against a background of endless sun, sea and sand to the sound of the ululating Beach Boys.

We blank out the forest fires, the frequent earthquakes, the smogs, boot to bumper car jams, crime, and the cute chaos of the place. It’s a young person’s environment, maddeningly obtuse about lots of things, always eager to jump on any passing whimsy that offers a new thrill.

Incubator of the future, yes, but also progenitor of a million tried and rejected poppycock schemes. The Brits who wash up there are usually attention seekers, like actors, singers and graduates of Performing Arts schools.

California is also hard work. Michael Arrington, who built up TechCrunch from nothing, has had a series of health problems from overwork, including exhaustion, nervous and heart complaints. He recently received serious death threats and was spat on in a public place, requiring a month off work.

TechCrunch.com is a blog-based content network that evaluates startup enterprises and their products. It’s no place for the fainthearted apparently.

Duncan Riley, who originated The Blog Herald from a quiet corner of Western Australia, graduated to TechCrunch and spent some time in the Valley. His observations on the crazy greed of the place, its supercharged way of life and general attrition against human health and sanity, contributed to my own decision not to move there at the height of the boom.

And yet the lessons of the Valley and of the Californian and Seattle-based tech scenes can be learnt and imported by a new Tory administration.

Britain needs to manufacture more, especially high tech equipment and derivatives. Silicon Valley specializes largely in internet-based software and services, but it doesn’t make the hardware. The metal and plastic bits are cheaper to produce and assemble in the Far East, and that will remain so in the future.

The operating software, which the Valley does so well, is deferred design and therefore part of the manufacturing process. No-one will buy a generalist box of tricks with no room for applications.

There is also a third level in the making of computer technology, that of application writing — the creative bit. The operating software contains a series of APIs (application programming interfaces) which allow outside creators (programmers) to add products and services to the basic design.

Increasingly, these services are being dangled from “the cloud”, a magical place in cyberspace where software applications and APIs reside for public use. Software on hard drives is going rapidly out of fashion at the punchy end of the market.

The British happen to be very good at these secondary and tertiary levels of the manufacturing process. One thing holds them back.

The national curriculum and the educational establishment relentlessly discriminate against “abstract thinking”, the basic skill for succeeding in these areas. Universities are encouraged to subvert their course lists in favour of cottonwool subjects like media studies and sports management.

In Britain, you can select students for State schooling only in areas of music, sport, and other physical and dexterity arts. You can’t select for mathematics or disciplines which require abstract thinking, like philosophy, theoretical physics or logic.

Stupidly and destructively, the Labour party has created all manner of taboos against it, raising any proposer of academic selection almost to criminal status. So far, the Conservatives have gone along with this for a quiet life. They fear the demonizing power of the left, which is far nastier than they are.

That amounts to national suicide, especially for a country that was, within living memory, responsible for 55 percent of the world’s primary inventions and discoveries.

If George Osborne wants to mimic West Coast Silicon Valley or Seattle, let him sort out that problem first. Britain needs to train its own software engineers, not import them from India and the Far East.

Globalization will take a long time to recover from its recent catastrophic fall from grace. We need to look carefully at ourselves and incubate the future here at home. Empire building abroad can wait … for now.

John Evans

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Syntagma’s designer, freelance Thord Hedengren — he designed this site and all our others — has been appointed editor of the Blog Herald by its owners, Splashpress Media.

He follows blog superstar Tony Hung, who also happens to be a medical doctor, so we can assume his time is at a premium.

The BH was started way back in 2003 by Duncan Riley, now at TechCrunch. In blog terms 2003 is the equivalent of 1903 for a print newspaper.

Thord also blogs on his own network in Sweden and on his site, tdhedengren.com. I’ve found him to have a detailed knowledge of the current internet scene, plus gossip and tech news around the blogosphere.

We wish Thord great success in his new gig. The Blog Herald, like all new media outlets, needs to stay fresh and vital with a stream of lively, world-class content.

With TDH at the helm it’s off to a flying restart.

It must be a quiet day for news when people start showing you pictures of their desks. It could be a lot worse, of course, so we shouldn’t complain. Duncan Riley did it yesterday, and I’ve seen any number around the blogosphere.

My excuse is that it’s been raining here for days so I can’t fulfil last week’s promise of pics taken along the Devon coast. I also get a bit twitchy when I can’t photograph anything. I know that sounds like an addiction but I call it Window-On-The-World Syndrome.

So, yes, here’s a snap of my desk in the Syntagma Towers’ office :

The box on the left is a Windows Vista machine, which I use nearly all the time now. On the right, is the old XP box. There’s still a lot of stuff left on it which I can’t move over : programs incompatible with Vista and mountains of Word and Excel documents.

Incidentally, I’ve discovered a good way of transferring material between computers without fitting a cable between them or burning a disk. Just put it in a Gmail attachment — you’re allowed up to 20MB now — and email it to yourself. Switch on the other computer, and there it is waiting for you. But I expect you knew that.

The boiling question of the day is, what does your desk say about you? Is it cluttered or uncluttered? And if you think that’s a silly inquiry, one business guru wrote an entire book about cluttered desks. I suppose it was a gap in the market.

In case you missed the first pic, here’s a wider shot showing a bit of context. Not much, but you can’t have everything :

But I’ve entertained you long enough …

The Syntagma Story (continued)

Straws in the wind are important signals for digital farmers. They tell them crucially which way the wind is blowing, its strength, and something about the season/cycle.

There are now a lot of straws in the wind for digital networks (or, for purists, blog networks). BlogNetworkWatch no longer covers blog networks. It’s become a sort of mini Blog Herald. Many networks have shut up shop or are quietly getting on with their business underneath the radar.

So what is the state of the digital network business in these apparently doldrum conditions? As I’ve been writing here for a time, waiting for a knock on the door from the Business Development Officer of Yahoo/AOL/Google, whatever, is a sterile career move, and always was.

When Jason Calacanis announced Weblogs Inc was doing $1m a year on Adsense, followed quickly by its sale to AOL for $25m and a seat on the board, networks of content providers became the new Klondike. Lots of people moved in, including Weblog Empire (Duncan Riley) and b5media (Jeremy Wright and other names from the starry firmament). I worked for both before moving quickly on to form Syntagma Media.

Even then there were two ways you could play a digital network :

1. Build infrastucture and content platforms quickly so it stands out against the competition. Go for size and scale before anything else. Then, with a bit of luck, the BDO will come knocking on your humble door. Bingo! Blogging bliss.

2. Optimize the network for income — remember WIN was making $1m a year from Adsense alone before it sold out.

Here at Syntagma we followed Route 1, aiming always to reinvest income in exchange for size (55 sites and rising), and pushing the envelope into new fields, like network magazines and large retail portals. The business plan also included a move into IP-TV in 2008.

However, a major rethink has been forced on us through a number of events. Not the least is a lucrative publishing offer landing on my lap and, yes, straws in the wind. There are no big buyers of digital networks out there now, and even those that are sold have to settle for a bit upfront followed by a share in the income thereafter — in effect turning the owner into a salaryman of the buyer.

The really interesting point though, is that once you go from Route 1 and start exploring Route 2, something highly beneficial emerges. When you stop pouring all of your treasure into endless expansion, you discover that you can start paying yourself a handsome income just by running the network as a normal business, capping the size and scale, and going for quality and depth, rather than extension and constant revolution.

A network like Syntagma can easily pay its owner a six-figure salary (and rising) from a steady-as-she-goes policy of improvement and quality delivery. That assumes the business is around two-years old (we’re two in October) and has a bunch of mature inventory.

In the end, what you get out of a project is more important than prestige, size, or future bonanzas, real or imagined — try explaining it to your bank manager.

So that’s the subtle shift I’ve made in the running of Syntagma. From a network that, at its peak, employed 15 authors, with five vacancies outstanding, to a trim 30 to 40 sites with maybe six high-quality freelances working. We are now a medium-sized digital publisher aiming for depth and quality. One that pays its owner a decent salary, allowing him to spend time on the book deals.

I’m guessing that many network owners have already come to the same conclusion. It’s not astro science after all. If Route 1 seems like a distant dream, even a total mirage, then Route 2 holds some surprises in store. It’s the old bootstrapper’s adage that, the lower your costs, the less you have to turnover to get into the comfort zone. Syntagma is now officially a Route 2 business. Our motto is :

Mind you, if any BDOs are in the area, do drop into Syntagma Towers for a cup of tea. (The champagne has already been auctioned off).

As I’ve written many times here, the entrepreneur’s nightmare is to lose control of your business creation during the expansion process and then find yourself dumped by the incomers.

Whatever happened to Duncan Riley, for example? Now thriving at TechCrunch, he wouldn’t be a man you would want to lose in a hurry.

That is the cautionary tale of JPG Magazine, an online and print business that morphed into 80/20 publishing which resulted in disaster for its founders.

The story is told at some length by Derek Powazek, who describes himself as a thinker, designer, and writer in San Francisco.

His conclusions from the experience are :

If it’s any help to other entrepreneurs, here’s what I’ve learned.

1. Make no assumptions when it comes to roles and responsibilities. Like my dad says: “Someone’s gotta call quittin’ time.”
2. Communication between partners is mandatory. And you cannot communicate with someone who is not communicating with you.
3. Decisions aren’t decisions if you have to keep making them. Set on the course and stick to it. If you keep talking about things that have already been decided, nothing will ever get done.
4. When someone says one thing, but acts in a contradictory way, you have a choice between believing their words or believing their deeds. Believe their deeds.
5. Never let anyone tell you what you want. When someone says, “You don’t want that,” what they really mean is, “I don’t want you to have that.”
6. Don’t stay where you’re not wanted, respected, or happy. Even if it’s your company.

That goes without saying, but it’s still worth reminding people that business is a tough environment unless you hold the best cards.