How to Make Money on the Internet - Part 1
Blog: Secret Online Goldmine
Should digital media businesses listen to the strong words from investors, board members, or Rupert Murdoch to charge for their content?I've spent most of my digital career (since the 90's) working with some of the premier media brands (WSJ, Time Magazine, United Media, NYTimes, Better Homes and Gardens, Ladies Home Journal, etc.) on these business model, content, and operational challenges. I also ran a sizable digital subscription business for Rodale Interactive (MensHealth.com, RunnersWorld.com, Prevention.com, SouthBeachDiet.com, etc.) and raised capital, co-founded and launched my own digital business that relied on a hybrid digital business model. That said, I thought it would be helpful if I shared my list of items that executives need to be thinking about when evaluating their digital business model strategies.
Before I go through my list, it should be noted that I have a bias against a single business model. I've witnessed the many iterations of digital businesses and participated in think tanks and conferences on the topic of digital business models. Net net, over time, the pendulum swings in both directions (great advertising market and a poor ad market) and in order to sustainably compete, media companies need to identify strategies and operational effectiveness that allows for delivery and business model flexibility given market conditions and macroeconomics.
Staff Teams with Smart Left - and Right-Brained Thinkers - You will quickly find out that the secret sauce for one media company's success is not likely the secret sauce that will propel your business. You will need creative thinkers and quantitative experts working together, challenging each other, to interpret the data and test new thinking and execution. Success is achieved through synthesizing many variables... an art and a science.
Incentivise Performance with Equity and Real Dollars - I do not believe sales people are the only ones that get motivated by financial incentives. That said, I am a fan of a quantitative (some qualitative can be good as well) quarterly incentive plan that financially compensates effective thinking and successful execution. Please do not cap financial incentives. If your team over-delivers that is a great problem to have and not something to use to discourage motivation. Actually, use it to find better ways to give performers more cash for even better performance.