I Hate VC Firms

A special post by Michael Biggerstaff, Chief Inspiration Officer of Nxtbook Media:

As it was reported on the Folio Magazine website on March 29th, our long-time competitor, Texterity, has been acquired by Godengo. That same day, actually hours later, a venture capital firm contacted me and ask if I had heard the news. They then wondered if they could help me “keep up with the great things that Texterity and Godengo were going to do together”. The question made me pause and take stock in what indeed had happened. Then it brought a smile to my face. 

 

In my opinion, venture capital is definitely one direction a company can go when you need money and are growing a company. Many great companies have started that way and went on to do great things. However, I also believe this same strategy is a reason many companies have failed over the years. What follows the influx of cash from VC firms is generally a call to grow the company via customer acquisition, with little regard to making a profit. The model dictates that if you only get more customers, the rest will take care of itself.

Unfortunately, it doesn’t work that way. Profits are really what allow that company to pay back investors or make the company so profitable that the venture capital people will get the payday they so desperately seek.  If and when that doesn’t happen, then you are expendable and subject to a merger, with the goal of the repackaged asset looking more valuable than it was before. 

My partners and I determined long ago we were going to grow our business organically; taking anything we made and pouring it back into the company to grow Nxtbook into what we know it could be. It’s not always easy to do that, given the promises of easy cash that can be achieved now through VC funding. 

Since 2003, I have received calls or emails from 27 different VC firms, most of them multiple times over the years. These calls hit a frenzy in 2008 when we were named 303 on the Inc 500 list of fastest growing companies in America. Calls ranging from, “I just wanted check in and see if Nxtbook was ready for an investment yet”, to “We will stay out of your way and let your team run the business” and my favorite, “You won’t even know we are around”. Each time we turned them down because we knew what the investment would ultimately mean; we would lose control over our own business. 

Like any industry but especially prevalent in our industry, most of our competitors are funded by Venture Capitalists and seem to work hard at customer acquisition while not working at all to generate a profit. I draw this conclusion based on how many are providing software almost for free or charging very little for their product. Obviously customer acquisition is paramount to their play, since they long ago abandoned profit as a core to their business.

This lack of profit translates directly into a lack of customer service. How can you have any customer service, much less good customer service when you aren’t making money to pay the people who provide it? Over time, this results in the changing of what was once a feared competitor. That change begins when the people who were the core of the company leave or are asked to leave because the company can no longer afford their talents.  These people leave and the knowledge they have about the company and the industry is lost forever. Who sees it most are the customers who expected certain service levels to be maintained, yet those levels certainly erode over time.

I strongly believe that as a company your business life is made of choices, what you do and how you grow is all part of your business, your core fundamental belief in where you will travel as an organization. We as a company are here to make a profit. Not a crazy rich profit but one that provides an ability to grow as a company and keep up with the demands of the rapidly changing technology sector. We make that profit simply because that profit allows all things to be. Without it, we would be just another failed digital supplier being combined with another company with the hopes of something relevant coming out the other side.

We know that we are relevant right here and right now. Our customers depend on us to have a great product backed up by service that is second to none. I’m not saying we always hit the target exactly in either area but I assure you we have and will continue to do our best in both regards. That is what makes us a great company, always striving to be the best partner to our very valuable clients. 

Our employees depend on us to be around a long time and provide great benefits and good solid living potential for each and every one. This is a responsibility that we don’t take lightly. They commit to give us with their best and they certainly deserve the same consideration in return.

Lastly, our community depends on us to be a light or shining example of a technology company right here in Lancaster, PA.  We have no intention of shying away from that responsibility. We work in the community to show young people what is possible in technology without having to move away from home. We provide students job-shadowing opportunities, fund classrooms, and provide speakers to classes or invite teachers to Nxtbook to see us for themselves. 

We feel all of these things are important to us as an organization but most important to us are you, our customers. We want you to know that we will continue providing strong product offerings backed up with customer service that is the best in the business. We are built for the long haul and I want to personally assure you that we will be here for you as our industry continues to move and shift. We won’t let you down.

Michael Biggerstaff

Chief Inspiration Officer

Say What? Engagement Matters More Than Clicks?

ComScore recently released research suggesting that engagement (demonstrated by users hovering their mouse over an ad) and viewability is more important than CTR when it comes to buyer conversions. You can read the full study here and see if you agree metrics showing engagement and interaction are more compelling than pure click-throughs. 

"’My key takeaway,’ said Pretarget founder and CEO Keith Pieper, ‘is that optimizing to viewable impressions or hover time is a better proxy for a brand advertiser than a click-through rate.’" — quoted from AdAge

Far be it from us to insinuate that website and digital publishing is a similar medium. (In fact, click here to read this week’s post on that.) However, until comScore studies the power of increased engagement in digital magazines, this study can still point to the power of engagement in ads delivered to users’ screens.

So how do you optimize ads for maximum engagement and value? Some quick ways to get started include making full page ads in landscape formats for easy screen reading and visibility. More advanced users might add light animation to draw readers’ attention or interactive elements to elicit reader participation with the brand. Advertisers hoping to gain from a digital campaign can position their products directly next to relevant editorial: fortunately, with digital publishing, they won’t need to worry about possibly appearing "below the fold" in order to achieve that.

The power of engagement isn’t new. Rather, as the industry matures and publishers and advertisers alike learn what to expect, publishers can begin to capitalize on it with greater confidence.

Webinar: Future Proofing Your Digital Edition

Staring at the title of our upcoming webinar, "Future Proofing Your Digital Edition" I thought, "Yikes, that’s gutsy." Can someone really declare that this is it, this is the future of digital publishing, and if you follow this plan your publication will survive the flux of technology and time?

We’re throwing down the gauntlet by saying the new technologies we’d like to demo to you will take that necessary step to getting your publication in the right space at the right time so you’re securely positioned for the future. But, while we believe we’ve got the solution, we’re more interested in knowing if you agree with us.

So here’s the deal: we’ll take an hour (May 9, at 2:00) to demonstrate where we think things are going, and then you’ll take about fifteen minutes in the future to tell us if you agree or disagree.

The first step is simple: click here to register for the webinar and choose a follow up interview time.

The second step is equally simple: tune in to the webinar on Wednesday, May 9th, at 2:00 pm ET.

Let us know what you think!

What’s It Mean?

Since news of Texterity’s acquisition a few weeks ago, others in the industry have asked what it means for Nxtbook. After all, they reasoned, we’re similar companies in a similar space doing similar things. But as this infographic shows, we’re actually quite different.

 

Can Your Website Do This?

In looking at total Nxtbook data over the past 30 days, we’ve seen a huge jump in engagement time. The average Nxtbook is viewed for more than 8 minutes, which is likely 8 times longer than your website and more than thirty seconds greater than what we’re used to seeing. Whether or not y’all put out better content this month or people find our new interface makes it better to stay inside the Nxtbook is up for debate, but how about we both take credit for it?

Wasn’t This Supposed to Be the Year of Android?

After all, that’s what we heard last year; that the oncoming slew of Android products would take a deep bite out of the available tablet and mobile marketshare. But here we are and as of now, that’s not happening. This article explains better than I about why that’s the case and why it’s not likely to change.

"This year, thanks to an expansion of carriers, the story is reversed. Now Android’s market share appears to be dead in the water, and Apple is back on the rise.

Couple that with the aforementioned problems — waning developer interest, pissed off handset partners, a super fragmented operating system, and carriers preparing to support Windows — and suddenly you can see that Android, which looked like it was ready to take over the world, is suddenly on uneven footing."

 

Congratulations to the 2012 EXCEL Award Winners

It is the time of year when we celebrate excellence in association publishing with the EXCEL Awards. These annual accolades highlight those who are successfully publishing in both the print and digital realms. Nxtbook clients have always had a good showing in these awards, and this year is no different. However, rather than listing the winners, here are some subtler takeaways from the awards:

1. All elements are celebrated, not just the end product. No single piece of the magazine industry can be removed from the equation, so it makes sense to give awards in every category: design, content, promotional campaigns, media innovation, etc.

2. Digital (or Online) publishing does not equal whatever you post online. There are separate awards for blogs, websites, digital magazines, etc. as each platform is different and requires different kinds of content to make it successful.

3. There was only one magazine to win in the Media Innovation: Digital Magazine category. This one. Someone is doing something right.

Practice What You Preach: UK Communication Company Going Mobile

"If you look at Vodafone Global Enterprise, it’s an innovative, exciting young organisation. It has a lot of big customers that want to do really exciting things." — Transform, Issue 6, page 16

When your company is known as being innovative, exciting, and all about global mobile options, there’s a level of expectation for all of your materials to match that standard. Vodafone Global Enterprise is a classic example of a large company with high expectations, and they meet these expectations in spades with their digital magazine, Transform. The B2B magazine features articles discussing hot topics surrounding business and the growing mobile market.

More importantly, Transform reinforces Vodafone’s brand image as innovative and tech-savvy with engaging animations on every spread. Sometimes they are simple: text crawling across the screen or video tucked behind a camera icon. Sometimes they are more complex: charts which expand to a percentage or numbers that scale up or fish wriggling on the page. In every instance, there is potential to delight readers with ordinary pieces put into action, and the opportunity to keep them engaged with the material longer.

And of course, since this magazine details mobile issues, it is readable on the web browser of mobile devices.

Add a little innovation to make sure your materials are sending the right message about your brand and your services.

And I Thought I Was Negative

This post at Digiday laments the early failures of magazines on the iPad, saying, "It’s probably as good as it’s going to get."

Though the authors and those quoted in the story should know better, the fact is this: our best days are certainly in front of us. Imagine, if you can, what it would be like to fit a well-designed magazine sized to fit each mailbox you put it in. It would be difficult. Very difficult. So your first move would likely be to make one that looks good in one mailbox, and hope it looks good enough in the others.

That would work for a while, but not long-term. But it also wouldn’t matter for a while, because imagine that mailboxes were still being invented and not everyone had one. You’d probably wait for mailboxes to go mainstream, but while you were waiting, you’d be thinking about how to make your product gorgeous AND fit inside every possible mailbox. Well that day is coming, and Nxtbook will be ready for it. 

As Ed Harris says in Apollo 13 just before splashdown, "I think history will remember this as our greatest triumph." Or something like that. 

Here’s Where Things Start to Get Complicated

So when the new iPad was announced, some people said digital magazines would like better than ever. Other people (like us) said you better be careful about file size on a product that already struggles with… file size.

But as you can see from this graphic (which might be premature), the new iPad’s traffic is small compared to the other iPads already in the market. This means a couple of things:

1) If you’re thinking more than a little about this new retina display, which is now a sliver of a sliver of an audience, you might be thinking too much.

2) If you really do care about that audience, just make sure you have lower res versions of the product at the ready, so that people with the original iPads don’t complain more about your file size.

3) Just use Nxtbook, because we’re prepared for this type of market confusion. 

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