Howard Owens gives a great explanation of what makes his journalism venture successful. But he mistakenly extrapolates to some rules about what other entrepreneurs should not do.
I recommend reading Howard’s post Forget “value-added journalism” — Think, disruptive innovation and Kevin Anderson’s post Journalism: What added value will add revenue? Howard was responding to Kevin, so I suggest reading Kevin first, then Howard, then coming back and finishing this.
Howard understands correctly that his venture, The Batavian, is succeeding with a simple formula of providing lots and lots of community news. He isn’t “adding value” with many feature stories or investigative journalism that would take considerable time. Instead, he says, he is following Clayton Christensen’s disruptive innovation formula by providing just “good enough” quality, but lots of it.
To explain the “good enough” point, Howard links to a video in which Christensen explains disruptive innovation, using the example of steam ships. We’ll come back to the steam ships shortly and to The Batavian, but first, I need to explain what I know about Christensen and disruptive innovation.
Christensen, a Harvard business professor, is the world’s leading authority on disruptive innovation. His books, The Innovator’s Dilemma and The Innovator’s Solution, are valuable reading for any entrepreneur.
When I was at the American Press Institute in 2005, we entered a partnership with Christensen to help teach newspaper organizations how to apply his principles in developing new business models for the digital age. We called our project Newspaper Next. I read Christensen’s books, attended a symposium he led for newspaper industry leaders and a later workshop in which his associate, Scott Anthony, was teaching API staff how to teach the principles. I worked closely with Steve Gray, managing director of Newspaper Next, who spent most of a year working with Christensen, Anthony and other associates on the project. For much of 2006 and 2007 and the first half of 2008, my primary job was teaching Christensen’s principles to the newspaper industry at conferences and seminars and in blogging and a report.
Newspaper Next did not succeed in leading a transformation of the newspaper industry. I regard that as a reflection of the industry’s unwillingness to change, rather than our failure to teach or any weakness in Christensen’s analysis of the challenges and opportunities facing newspapers. I am certain of this much: I am quite familiar with Christensen’s principles. And Howard is overlooking an essential piece of his formula (at least in his blog post; I think he got it right in launching The Batavian).
Howard uses the steamship as an example of “good enough.” And yes, the early steamships were not yet a threat to the sailing ships on the high seas. They were good enough to navigate rivers and lakes, so that was where they started out. But the steamship’s formula for success was not simply “good enough” (which has a connotation of not being very good). The steamship added value to shipping with a power source that didn’t depend on the weather. It didn’t get by just on a good-enough formula. It revolutionized inland navigation with its added value, then revolutionized navigation on the open seas after it worked out those good-enough issues to become excellent.
Christensen likes to use the mobile phone as another example of disruptive innovation. (So do I, always crediting him, but giving it my own twist.) In the ways that we measured the performance of wired phones (reliability, audio quality, cost), the early mobile phones were just good enough, and, in truth, barely good enough. But from the first cell phones, mobility unquestionably added value. You tolerated the huge phone, dropped calls, lousy sound, lame battery and high cost only because of the mobility. Without that added value, all those good-enough features weren’t nearly good enough. You just had a crappy phone. Of course, as time went on, all those good-enough features improved significantly. And the phone makers kept adding more value: cameras, email, browsers, games, news, an endless stream of apps.
In fact, we saw the good-enough/added-value balance playing out again with the camera aspects of cell phones. The first cell-phone cameras produced mediocre photos, but they were good enough, because of the added value of always having a camera in your pocket or purse. And, of course, the makers of mobile devices (it’s just not accurate any more to call them phones) kept improving the good-enough qualities and adding value with video, cameras that face either way, photo-editing software and ability to post immediately to the web, choosing between large, high-resolution files and smaller good-enough photos you can post more swiftly.
The good-enough factor was critical: If the early phone developers had waited until they perfected all the features, their entrepreneurial efforts would have grown so expensive they would have died in the cradle. Good-enough lets the entrepreneur get started and in the game. But the added-value factor was even more critical: Mobility was the foundation of the business. And as the business matured, new value-added features (correctly described by Howard as sustaining innovations in Christensen’s terminology) built customer loyalty and disrupted lots of industries (land-line phones, cameras, wristwatches, calendars, the news business).
Similarly, with journalism ventures, you need to know what is going to add value (what is your “mobility” factor?) as well as where you can (and must) settle for good enough, rather than loading your project with killer costs trying to pursue top quality in every respect.
Howard and I argued on Twitter this week whether ESPN was disruptive. I remember some of the early broadcasts, which certainly followed the good-enough standard he espouses. But ESPN added new value for sports fans, expanding our selection again and again, and forever disrupting the broadcast networks’ control of sports programming.
Sports is just one of many niches where disruptors have launched businesses by figuring out how to add greater value in the niche than legacy media, particularly newspapers, can provide with their bundled approach of trying to do everything. From national players focusing on classified ads, weddings and obituaries to local players focused on restaurants and neighborhoods, entrepreneurs are providing value that people aren’t finding from traditional media.
Now, let’s look at Howard’s notion that his success at The Batavian is rooted in his good-enough approach, rather than in adding value. In other blog posts, Howard has written about the need to provide value for his advertisers and about his insistence in providing a more pleasant commenting environment.
In his good-enough post, Howard had this passage:
But I don’t think there is anything “value-added” about what we do.
We’re serving a market that wasn’t served before, and that market is the one that asked the perpetually unanswered question in most markets, “What’s going on in my community right now?”
How is it not adding value to serve a market that wasn’t served before? Howard’s giving his community news it wasn’t getting before. That’s a different value than Kevin was writing about (Kevin mentioned “smart analysis” as an example of journalism that adds value). But if people in Batavia weren’t getting sufficient basic news about community news, events and issues, about what’s happening in the community right now, The Batavian is a business based on providing new value.
If journalism is going to find a prosperous future, as I believe it will, that future will be built on multiple business models. Some will focus on basic community news, as The Batavian does. Some will focus on in-depth news, as California Watch does. Some will be nonprofit organizations. Some will be profitable businesses. Some will be small operations like The Batavian. Some will be larger operations like TBD.
And all of them will find success by balancing this dual challenge of providing good-enough service in some respects while delivering some type of value that is new to the marketplace.