Kill your darling

Kill your darling when your idea does not work in practice. I use a hypothetical Spotify for news to show why you also need to work through suppliers’ economics and their reasons for saying yes.

If it does not work, kill it and get started on something better! Best wishes, Martin

 

Kill your darling: A good idea must work too

I have been a judge in a startup competition about new media and related ideas. There were 12 teams and around 100 people working from Friday afternoon until late Sunday. I cannot remember the precise name of the event, but I was very impressed by what they achieved.

For example, one team had made a ball with a sensor and an iPhone app that could record how many times you kept the ball in the air. From an idea on Friday to hardware and an app on Sunday. Many entrepreneurs could learn something from that.

But another idea got me thinking about something important: you can become so fond of your idea that you forget to check whether it can actually work. These are my thoughts from April 2013.

I would buy a Spotify for news myself

One team wanted to create a service where you could subscribe to news across media outlets, a little like Spotify. They talked about a limited package for DKK 49 a month and a bigger one for DKK 99. The bigger package would let you read articles from several Danish media outlets.

From a user’s perspective, I think it is a really good idea. In the past, many people subscribed to a single newspaper and paid a few thousand kroner a year. Now Twitter, RSS and other entry points make it easy to follow stories around the web. I read a little on Berlingske, a little on Politiken, some on Jyllands-Posten and Børsen, then move on to international media.

The Danish media perhaps make up a quarter of my total news flow. If I must pay for a full subscription everywhere, it quickly gets expensive. In the video, I estimate my current reading habits could cost DKK 3,000–5,000 a year, and I do not want that.

Even a subscription to one of my favourite outlets feels expensive if it covers only a small part of what I read. I know the media company has costs, but as a consumer, I judge what I get for my money.

That is why I would love a combined service for DKK 99 a month. I would sign up immediately. The other judges liked the product too. Even so, the idea did not win and ranked some way down.

Who needs to say yes on the other side?

In my view, the team had not worked enough on the other side of the business. It is not enough that we, as readers, want to buy. You also need editors-in-chief and executives at the major media companies to join.

My view of the industry at the time is blunt. I think many media executives spend too much energy looking in the rear-view mirror at the money they have lost instead of figuring out what the future business should look like. They try to save what exists.

I also think costs must change. In the video, I argue the media cannot simply continue with expensive addresses such as Kongens Nytorv or Rådhuspladsen, lots of managers and all the old perks. I use journalists’ pay and holidays as pointed examples and say that, in my opinion, they should move closer to a nurse’s salary of around DKK 30,000 rather than DKK 50,000, have five weeks’ holiday instead of seven, and work more efficiently. That is my argument about costs, not documented salary statistics.

I compare Ryanair and SAS. I think the future model will be closer to Ryanair’s low cost base. At the same time, I say Ryanair can be ruthless and that I hope it is required to treat employees better. The comparison concerns my view of business models at that time.

Do the sums from the media company’s side

As a hypothetical example, suppose 300,000 Danes buy the bigger package for around DKK 100 a month. That is a lot of people, but it still only produces around DKK 30 million a month to be split between the media outlets and the service.

Compare that with the costs of major daily newspapers. In the video, I say I have been told Berlingske’s property section could previously generate around ten million kroner in revenue on a Sunday. I also mention around 1,600 employees at Berlingske. That is the information I use in my argument at the time, presented here as my account, not figures I verify in the video.

If a media company receives a quarter or a third of the service’s revenue, that is much less than the whole amount. I use around DKK 100 million as an example of an annual share and ask how much of a large organisation’s costs it actually covers.

The point is that a price that is fantastic for readers is not automatically enough for suppliers. You must work through their incentives, not just your own idea.

Existing subscribers will want the good deal too

When I asked these questions, part of the answer was that the offer was for people who did not already subscribe. But why would existing subscribers keep paying much more for a single outlet if they could get a good product with several outlets at a lower price?

That is an important problem. You cannot simply assume the new service brings extra customers while the old business continues unchanged. Customers will compare the offers.

I was also sceptical about whether the few major Danish media companies would accept the model. At the time, I thought they seemed angry with the internet and more concerned with protecting the old model. That was my assessment of the resistance the entrepreneurs would face.

I saw a kind of catch-22: if the service is not successful, why would media companies spend time on it? If it is very successful, it could also push customers away from more expensive subscriptions. You need a proper answer to that.

Perhaps keep some elements, but change markets

My advice is to understand the facts and work properly through all sides of the business. When you discover the original model does not add up, you must be able to let go.

That does not necessarily mean all the work is worthless. Can you use parts of the idea in another segment? Could it work in another country? In Denmark, there may be three or four key media companies that all need to agree. In a market such as the US, there are far more, and perhaps you can start with a few and bring others in later.

I use Spotify as inspiration for that thinking: once you get some rights holders involved, others may want to join because they do not want to be last. That is the kind of route in you should explore rather than sticking to a model where everyone must say yes from the start.

So kill your darlings now and then, even though it is frustrating and hard. I am still very impressed with the teams from the competition. They did great work. That is precisely why it is important to spend the energy on a model that holds up beyond the presentation.

You can find more of my experiences of testing ideas and building businesses in Iværksætter til jeg dør.