Google and Facebook are the biggest tech companies in terms of advertising and biggest traffic sources for publishers, but they still only account for less than 5 percent of publishers’ digital revenue, a new report from publisher trade group Digital Content Next shows.
I’m launching a new business here in Minneapolis to help companies execute their digital transformations better. Meet Fähren LLC.
We’re starting Fähren to make it easier for company leaders to get the short term, executive-level digital leadership they need. Our model might seem familiar. There are plenty of firms that provide interim CFO’s, CMO’s, or other executive leadership. I don’t see many that do the same for senior digital talent: VP of Digital Marketing, Chief Digital Officer, VP/Dir of Digital Product Management. So, we’re building it.
Ultimately, we’re in the talent business. We’ve got it, we’ll make ours available to you, we’ll help you find some to hire and we’ll help you develop your own.
We’ve got a couple broader, longer term ambitions (ask me about my new cryptocurrency for the talent market), but for now it’s a good old fashioned professional services company.
How hard can that be?
Just kidding. We know how risky starting a new business can be, but we think this is the right business at the right time.
Why Now? The Transformation of Business is Still In the Early Phases
We believe there’s never been a better time to be building digital products, marketing brands, or building teams of creative technology experts. Businesses have incredible new opportunities in front of them, whether it’s new business models, new product/offering opportunities, new ways of working, and a wealth of data to guide their decisions.
But it’s still early. We believe we’re in the first era of a longer revolution in how people organize themselves for work, how companies operate and how organizations solve everyday problems with digital technology. To use a baseball analogy, i think we’re in the 2nd inning of a nine inning game.
What We’re Seeing in the Market
It’s a pretty topsy turvy marketplace to enter into. But, we’re building this company for leaders who are being challenged a couple macro-trends.
Digital Transformation: We’re seeing an enormous amount of energy and money going towards, broadly speaking, the digital transformation (1) of most organizations. Globally, companies spent $23BB with management consultants on their digital transformation efforts in 2016, with over 52% seeking faster growth (as opposed to efficiency). When you include costs of technology and system integration, the total market size for “digital transformation” is huge: According to Zion Market Research, it will be over $400BB by 2021. This catch all category doesn’t include the rapid conversion of media budgets towards digital, the rise of e-commerce and the investment companies are making in the training and education of their most valuable leaders.
Insourcing Transformation: While much of the attention around “Digital Transformation” has focused on the spend with consultants and technologists, we’re seeing some of the best results come from companies that are bringing their transformation efforts in-house. Whether it’s through “labs”, innovation programs, or developmental experiences for their key leaders, smart C-level leaders are investing in bringing the transformational stuff in house. Even the marketing capabilities that had been outsourced – media buying, creative, strategy – are coming in house as a way to push digital advantage.
The Rise of the Gig Economy: We’re betting that the best talent would prefer to be working for themselves. Working for yourself may make more sense financially than that 9-5, or perhaps you don’t want to put your faith in someone else’s company. We believe some of the best talent wants the flexibility and the autonomy that come with consulting, but would like to avoid the hassle that comes along with being independent.
The Real Opportunity: A Leadership Gap
There’s still so much to do and that’s exciting to us. This is an enormous moment in human history, but history gets made by people willing to take a chance, to employ new tools, to work differently. Inside every forward thinking company is a motivated leader that knows that with the right team they can change the course of their organization. For those leaders to be successful, they need experienced talent around them.
We’re building our company for them. We’re here to help leaders position their companies to grow and win in a time of accelerating change. We do that by helping them get access to the talent they need to go faster with confidence.
Where we’re starting
We’re building a small team of senior consultants who can fill a gap we see in the consulting marketplace: those who have strategic digital leadership experience as well as operational experience. Think: Sr. Director/ VP level leaders.
We’re going to help our clients with a few specific needs:
- Interim Leadership – Orgs looking for experienced, talented leaders who know digital and can fill a role on an interim business. Maybe it’s covering a maternity leave, or filling in when there’s an unexpected absence. Some efforts can’t miss a beat.
- Extra Talent – We’re seeing organizations seek extra talent to help drive strategic digital efforts that can’t or shouldn’t be outsourced. These projects may take a couple months or a whole year and the leaders want the work done in-house, but they don’t have the internal talent to do it. They’re looking for experts that can be part of the team, temporarily.
- External Catalyst – We’re seeing organizations look for ways to engage individuals who can bring unique perspective, desired skills and viewpoints to bear on a high performing team. One person said to me “It’s like adding Kyrie Irving to your D1 basketball team. Everyone gets better.”
We’re Organizing for Talent
We plan on starting small and building a team over time as we find the right talent to fit our needs. To attract and retain the best talent, we’re building a unique financial model for experts who want to go indy, but who are looking for ways to share in the upside of a growing organization. Operationally, Fahren will designed to ease some of the burden of going solo: We’ll provide key business support for legal, accounting, marketing and business insurance.
In the future, we plan on offering training and professional development programs for our clients, our consultants and the public. Think of it as the kind of nerdy community education you always wanted, but couldn’t find.
Let’s talk! We’re up and running, sending invoices and proposals, but we’d love to hear about what you’re working on and see how we might be able to help.
(1) I realize that’s become such a generic term that it doesn’t mean much, but i’ll share our take on it soon.
Great quote from the VP of Lyft Marketing on their relationship with W&K. If you lead an ad agency and you haven’t been focused on the digital experience, you’ve missed the boat. Great marketers look to their “creative” partners to help guide the total experience, not just the ads/messaging. Or, to put it another way: The experience IS the message.
She describes W+K’s “world-class creative” as “table stakes,” adding, “I need a strategic partner who is embedded in our business every day, helping us with product decisions and helping us with the way we design our service experience—not just making ads.”
The background to this patent is informative as it helps explain how far reaching Amazon’s thinking could be, and how they plan to keep lowering prices for consumers. One major difference between e-commerce and in-store purchasing is that loss-leading—selling goods cheaper than what they cost—doesn’t work in e-commerce. When customers visit a physical store, they have invested their time to get there so stocking up on additional items is worth it. This doesn’t happen online. So this patent levels the playing field, allowing sellers to offer discounts to online customers based on their investment in time.
Every entrepreneur who starts their own venture better have a clear idea of why they’re doing it. With a clear “why”, it will be easier to navigate when the inevitable obstacles pile up. If for no other reason than to get my own thoughts straight, here goes:
I’ve got Some Personal Motivation
I’m a small business guy by birth – I grew up the son of a second generation entrepreneur. My grandfather took a huge risk in 1916 and started a car business. He never made it to college, but i benefitted because he had the right combination of courage, vision, perseverance and a super supportive wife. He sent his two boys (my dad and uncle) to college, gave a ton back to his church and community, and sold the boys a successful business. They managed it well and grew it so that their combined 11 kids could go to college and grad school. I can’t count how many of their employees sent their own kids to college, or bought their first homes or a cottage on a lake or were able to retire because they were paid well by dad’s small business. It’s in the hundreds. So, i’m a believer in main street. I think the world needs more successful small businesses. We probably have enough Facebooks, Googles, and Twitters.
I want to build a great culture – I was having coffee with Amol Dixit, the brains behind Hot Indian Foods and he told me that his goal wasn’t to get into the restaurant business. His goal was to build a great company and a great brand, first. The restaurant business was just the fastest way in. When he wakes up in the morning, he’s thinking about how to keep the business growing so the people that work there can get where they’re trying to go, professionally. I hope that, in my small way, the little company i create can be a place where others can get their start on a new career or at least a new phase in their career.
Create More, Consume Less – I try, everyday, to focus on creating. Whether it’s words on a page, music, or even a dumb sketch, it’s critical to me to put something good out into the world to balance out all the consumption i’m doing. Business is the medium where i think i can be the most creative (should have practiced my guitar more) and this is a time where creativity in business will be rewarded. I hope when i’m done working someday, i’ll be able to look back and feel proud of what we all created together at my little company.
Put it into Practice – I’ve been blessed to have worked with some amazing leaders. Whether it was learning how to manage through rapid change at Ameriprise, or learning how to build excellent brands at General Mills, or how to build an amazing professional services business like Ciceron or GoKart, i’ve been around inspirational folks my whole career. I owe it to those leaders to try to do something special. I want to see if i can put it into practice.
It’s time – I started out as a small business guy, but then found my way – through luck and being in the right place at the right time with the right knowledge – into corporate America. My whole rationale for going corporate was to learn enough to sell some digital marketing into big companies. My longterm plan was to go start my own business; i just needed a little corporate experience first. As i look ahead and make my plan for the next 10 years, this is the best way to get where i want to end up.
Why this Particular Business?
We’re starting a company that will make it easier for companies to find the talent they need to innovate and change. It’s a professional services business, but not an agency. We’re going to have a pool of talented consultants who can provide interim leadership and support for your most strategic digital initiatives. They’ll have experience at the senior levels inside big corporations and agencies and could step into your VP and Director level roles. I’ll save the particulars for another post, but the general reasons for this business are going to be pretty familiar:
- The market size is huge
- There’s a gap in the marketplace
- There is long term opportunity
- I’ve got a unique way to help address some market needs
More on that later…
But, beyond the financial and business rationale, there’s a deeper reason. The transformational change that most companies are pursuing will come about through hard work and courageous leadership. That change will be driven by technology, but it will ultimately be a cultural change, where the company vision, mission, values, incentives, ways of work, tools, leadership behaviors, communications and customer experience will all be challenged.
It’s going to come down to great leadership. It’s going to take vision, courage, resilience and persistence. And – we think – partners that work like we do.
The Middle is Where the Change Gets Real – This kind of change will have to be supported at the “top of the house”, the C-Level folks. And, the execution has to happen everywhere, from the entry level folks on up. But, the leaders in the middle – the Directors, the VP’s – are where the real change happens. Or, I should say, where the change gets real. Those people are in the tough spot of trying to influence up (to the C-Level), across (to their peers) and around, to their teams, their vendors, their functional partners. They’ve got to bend and dismantle the old ways of working to create the space for the new ways.
While we will probably be hired by “senior management”, we think we can make the most impact by helping to lead from the middle. So, we are building this organization to to help at the Director and VP level, the ones who have to make the change actually happen. The ones taking the risks to innovate where their peers are playing the game, the ones who are trying to create something new or pioneer new techniques instead of following the path laid out by their boss.
This might be one of the best times in American history to start a new business. It’s also the best time for existing business reinvent themselves. And, it’s an amazingly interesting time to be a business leader. If we work our plan and this business evolves the way we want it to, we’ll be doing our little part to help those great companies – and the leaders inside – reinvest in their futures and reinvent themselves.
At this point, i’m not a fan of Ajit Pai and I believe his focus on “fixing” the net neutrality is probably not motivated by making the internet better for users. But, what *is* missing is a healthy debate about what, in fact, he’s trying to achieve through the regulatory changes he’s driving. This is a long take by Ben Thompson, but it’s worth a read if you want a challenge to your reflexive take on “keep the internet free”.
This is a really positive step forward
The Brave browser provides an ad-free YouTube video experience. It also enables a direct monetary relationship between the content creator and their audience. Compensation for YouTube creators no longer needs to be based on vague rules or mercurial algorithms, as users can decide who to compensate. This new ability will especially benefit YouTube creators who have under 10,000 lifetime views, as they do not receive ad revenue from YouTube.
We’re about to enter another great era of digital creativity. When you look at the tools that are coming at us to make digital things – voice contral, AI, gestural interfaces, presence indicators, smart devices – it’s clear we’re going to have to rethink a lot of things. That means, unlocking creativity and imagination as we explore what the technology can do. My kids (who both are interested in technology) will have the same chance to sandbox with AI, voice interfaces, and other cool stuff like i did with HTML and visual basic.
What an amazing time we’re in.
Spirited Media has decided to downplay site-direct ads in favor of events, consulting and other membership programs. I think this is smart, in the long run.
Part of the reason we needed that longer runway was that success in display advertising in early 2017 led us to plan for revenue goals we didn’t achieve. We had other challenges, too — we’ve never spent money on marketing, and relied on all-organic traffic, which left us subject to the whims of algorithms that determine how often our articles get seen. So our sales staff wasn’t given the best conditions to operate in, and, all things considered, did pretty well. But it became clear to us that chasing advertising dollars — which has never been our primary revenue source — wasn’t producing a very good ROI for us.
Its gotta be enormously difficult to compete against FB, Google, Amazon and some of the ad exchanges to get on media plans. But, in the long run, great brands are, essentially, community builders, especially media brands.