4. Having a "build-our-own" mentality. This is something that plagues not only print and TV media companies but many companies. Instead of utilizing the excellent tools that are available online -- often for free -- companies decide to undertake technology initiatives to build their own online tools. These projects are usually costly, time-consuming and totally unnecessary. There are very few legitimate reasons, for example, for a company to build its own blogging platform when there are a multitude of white-label tools that work just as well as any blog tool that could be built proprietarily. This causes profit to be lost to overhead and technology costs, and frequently results in inferior products. (Hat tip to Eric Lundquist for the core of this idea.)
Until the print and broadcast outlets get these basic business-model issues sorted out, no amount of quality content or dedicated audience is going to solve their online problems.
Melissa Chang is the founder of Pure Incubation, an Internet incubator based in the Boston area. She blogs at 16thletter.com.
More news, commentary, and predictions from The Industry Standard:
What strong financial institutions have in common: the "Windward Rule"
Could predicting what makes a financial institution safe be as simple as knowing what attitude it takes toward reporting software?
Consider – 33 financial services companies, including Citigroup, Goldman Sachs, Royal Bank of Scotland, and Macquarie, all use the same reporting product. Not a single financial institution that has purchased Windward Reports has declared bankruptcy, been sold for pennies on the dollar, or been listed as in serious trouble. Not one.
On the flip side, every single financial firm that has failed (including Lehman Bros, Fannie Mae & Freddie Mac, Washington Mutual, Wachovia, Fortis) actively looked at Windward but did not buy.
Now, this correlation doesn't necessarily mean causality. But the correlation may be based on the mindset a financial institution takes toward understanding its data.
Employees investigate how Windward works and learn they can quickly and accurately get the reports they need.
Those who then install the system – the Citigroups of the world – get effective reports.
Those who don't are told "we already have a system and you will use it." This mindset, that employees don't need better information, is a good indicator of the company's overall attitude, and it shows up in its financial health.
If this link sounds absurd to you, consider another – and much more famous – correlation, known as the Golden Arches Theory of Conflict Prevention.
Thomas Friedman came up with this after realizing that no two countries with McDonald's had fought a war against each other since getting their McDonald's. The reasoning behind it was sound; the presence of a McDonald's correlated with a country's approach to the world.
And that's what we think is at play here. A company's approach to the business world is key in how it ultimately performs, and the approach is reflected in how the business looks at its data. If employees at a company investigate Windward because they need better information, but they're told they can't use it, well, we think this is an indication of a company's financial strength.
To be able to bank on a business, first take a look at how it approaches its data. If a company is smart enough to invest in solid reporting software, it will be smart enough with its investments to remain solid.
Dave Thielen
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