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).