Insights from Mike Germano, Chief Digital Officer at Vice Media
An ongoing curiosity at NYC Media Lab is how established media companies organize themselves to take advantage of new technologies. Many corporations pay special attention to startups, in the hopes that “startup pixie dust” will help to generate new ideas and boost their bottom line.
The answer to what exactly that “pixie dust”is an oft-discussed topic: people point to everything from building unique products to adapting an agile approach. Mike Germano, Chief Digital Officer at Vice Media, took a broader view in remarks at Innovation Enterprise’s Digital Publishing Summit in NYC recently: what differentiates startups from established media companies is the nature of fear in each. Here are some take-aways from his talk:
Failure is NOT okay
Contrary to the popular belief in Silicon Valley, failure is not good, said Germano. There’s simply too much at stake, from the money invested to the careers of the people involved. Fear of failure is a powerful motivator. But it works differently in established companies than it does in startups.
In established companies, said Germano, executives are often asked to protect and improve upon legacy products; in many cases, a fear of failure leads to inaction. But in the startup world, inaction is not an option. You either act or you run out of money and you’re out of a job. Germano calls this dynamic “the most important driver” for innovation in startups. Fear forces startups to take risks and explore all solutions, including changing the approach entirely.
Fear shapes how we work
Why is it that startups can build a product in less than half the time it would take an established company? Fear has the peculiar effect of “shortening time,” said Germano: “When you’re that fearful, you don’t focus on anything else. There is nothing else.”
Another effect of fear is its ability to shape strategy. “Startups think about behavior first, and then business.” They will develop a product and test it before thinking about business models or economics; it’s essentially the lean approach.
Invest in startups or die
Established companies “can no longer just acquire rising digital media companies,” said Germano. Startups are after more than a check: they want to keep their teams in jeans and stay in their offices (ping-pong tables optional). The cost of attracting these employees has become too high.
But there is a lot to be learned from these nimble companies, and the opportunity to work with them is still there. Established companies can become the “biggest, best investors in the space,” and should. Investing in startups can expose companies to a range of benefits, including:
- Access to data on users and competitors
- Positive economics
- The ability to acquire new features
- Insights on the future workforce
- Entrepreneurial energy
But competition is growing fierce. “If you don’t invest,” Germano warned, “someone else will.” Many large enterprises from outside of the media sector are hungry to work with digital media startups. Germano pointed to some of the many brands developing their own venture arms to invest in digital media such as Unilever and 7-Eleven. It’s an arms race, he said, and the time to invest is now.
Justin Hendrix is Executive Director of NYC Media Lab.
Image credit: CC by Miguel