When someone flies you to speak at a conference, there's nothing like trashing the theme of the event in your first slide to help you win friends and influence people. Sensitive soul that I am, I took that risk this week in Auckland, when I told an audience that the whole concept of Commercialising Ideas is back to front, writes Hugh Mason.
"Cross Media, Cross-Cultural and Cross-Disciplinary". That's how Megan Elliot and Brendan Harkin, the organisers of X|Media|Lab, explain it to newcomers. Cross-dressing is not yet on the agenda, but I am sure someone looking for inspiration to build a digital business around that would be welcome, if they can think up an innovative business model.
Here's the recipe for X|Media|Lab:
- Persuade about fifteen speaker/mentors from around to fly half way around the world unpaid
- Give them 20 minutes each to talk to an audience of several hundred people
- Add beer and stir vigorously, leaving no room for tedious Q&A.
- Over the next two days, match-make said speaker/mentors with early-stage enterprises selected from the audience for one hour each.
- Sit back and wait for inspiration to happen, giving free rein to bloggers to document it all.
If it sounds kind of intense and a jumble, it is, but it works. I've been a speaker/mentor twice now and on both times have come away feeling I've got so much more out of it than I put in. The good thing is, so did everyone else, it seems.
At a time when social intercourse (and the other kind) seems to be being reduced to a series of mouse clicks, X|Media|Lab was a great reminder that it's only when we creatures of flesh and blood actually meet that the fun really begins. However, in the run up, I had some good questions from journalists so I've posted my responses below.
First to contact me was Keith Barclay, New Zealand correspondent for Screenhub.
Keith: How do you monetize?
Hugh: You turn the theme of this conference on its head. You absolutely DO
NOT set out to Commercialise Ideas. Rather, you find something that is
keeping large numbers of ideally wealthy people awake at night and you
create ideas that fix that. Successful businesses are like paracetamol.
They kill a headache and that's why we pay for them. You might make money out of selling a nice-to-have vitamin pill, but fixing someone's immediate headache is the sure-fire way to persuade them to open their wallet.
Keith: Can you give me an example of a company that is in profit?
Hugh: Yes, every single one of our digital investees/clients is in profit, For example:
- Manchester, UK based StarDotStar are turning away clients;
- live|work is doing fine despite the recession;
- The Conversation Group's portfolio is exploding
The general pattern is that everyone who let go of tired old "so-last-millenium" business models is doing well, whereas the folk who are stuck in traditional media (for example) are totally stuffed. It's about moving on and really understanding where you can add value.
A good example in Singapore, where I'm based, is Media Freaks. When I met them a couple of years ago they introduced themselves to me as an 'Animation Studio' but the more we talked I could see that the special thing these guys really did was rights development and brokering. Making animation is kind of a mug's game, unless you have very deep pockets and/or lots of cheap labour. But managing Intellectual Property Rights creatively is full of opportunity.
On which subject, another great example would be our client Rights.tv which is doing very well just now. Look back through history at every gold rush and you will find it is the people selling shovels, not the gold-diggers, who made the money. Our business is no different. Pitching creative ideas is fun and, just once in a while, someone breaks through and makes a fortune. Those are the stories that get told again and again, not the stories about the back-breaking labour of digging through the dirt to get there.
Cathy Aronson, Editor of The Big Idea, also got in touch.
Cathy: What is exciting you most right now in the digital arena?
Hugh: Ideas that can get off the ground and start generating revenue / demonstrating that they have real traction in the marketplace WITHOUT requiring huge upfront investment.
Cathy: What are some of the challenges of ‘commercialising ideas’ in the current economic climate?
Hugh: Nobody is willing to punt big money on projects that don't demonstrably fit a market need. That is a problem for anyone trying to do something truly innovative: by definition if you are doing something different you don't know yet for sure whether the market will actually buy it.
Cathy: What is your “Big Idea” for 2009?
Hugh: Don't try to get 'Big Ideas' funded all in one go. Rather, stage
the energy you put into ideas into a series of phases where you just aim to get
to the next milestone in each phase, not to do it all in one big go. So:
- Create something on paper / powerpoint first that you can go round and try out on potential customers to see if they get it
- When you know what customers want (which is unlikely to be exactly what you wanted to create), build a quick and dirty online service (probably with no real functionality - it could even use people behind the scenes to execute the service functionality while volumes are low) to see if you can hook in paying customers.
- Use the evidence generated by your first paying customers to raise seed funding to build a 1.0 version of your service and demonstrate that revenues are building towards profitability.
- Only then go for a second round of big money if you really need it.
One of my mentees, Sanchita Saha, just raised GBP260k following exactly this path. She is now at step four on that list. It's a formula that works, even in times of recession. But that's only part of the reason she's succeeded.
Truth is, Sanchita didn't start out with an idea and try to commercialise it. She spotted a commercial opportunity and then created an idea to satisfy it. Like any true entrepreneur, she knows that only Fine Artists with patrons have the luxury of waking up every morning and asking themselves"Hmmm ... what shall I create today?"
Question 1 that the rest of us need to ask is "What problem can I fix for someone who's got cash to spend?"
Question 2 then becomes "And how can I get to that person?"
Only when those two are answered is it worth thinking up an idea.
It's called "market focus", "listening to your customers", "being demand-side driven" lah-lah-lah, you've heard it all before, pick your favourite guru. If you want your idea to be anything more than an idea, JFDI.
To my mind, that's why the whole concept of Commercialising Ideas is "a bit previous," as they do say in Brizzle. Unless you've found a sugardaddy, you're in the business of fixing headaches, just like the rest of us :)
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