March Memo: Everything Is a Product Now - 1

March Memo: Everything Is a Product Now - 1

Maxwell Ryan
Mar 1, 2017

First of all, I want to start out by saying that I, and the whole executive team, felt that yesterday's Monthly Report was the best ever. Good work! While still carrying a breakneck pace and a bit more detail than is needed, it was, nevertheless, a paradigm shift in three ways:

  • The focus on shared Objectives and data showed real gains
  • The Big Picture of where we are strong and weak was super clear
  • Most importantly, the sense of ownership and the thinking ahead to next quarter was inspiring.

We will continue down this road and refine, refine, refine until it all becomes second nature. Improving how we operate is part of the "secret sauce."

What was also clear is that we are slightly behind in our major objectives this year, so we have our work cut out for us. We've aimed high and already in Q1 we are being TESTED. There were a number of success stories yesterday and we are learning, which is fantastic, so completing the Objectives we set for ourselves in this quarter and resetting for the next is an absolutely crucial next step.

To get us all started thinking about Q2, I want to share some general thoughts that have come as a result of a number of visits in the past month, most notably The Washington Post.


As if the digital revolution with all its disruption wasn't enough, we now have a completely disrupted political scene. Over the past month I've found myself seeking wise words. Warren Buffett has been among them. He has always taken the long view. Here is an excerpt of his latest annual letter to shareholders which he published a few weeks ago.

American business – and consequently a basket of stocks – is virtually certain to be worth far more in the years ahead. Innovation, productivity gains, entrepreneurial spirit and an abundance of capital will see to that. Ever-present naysayers may prosper by marketing their gloomy forecasts. But heaven help them if they act on the nonsense they peddle.

Many companies, of course, will fall behind, and some will fail. Winnowing of that sort is a product of market dynamism. Moreover, the years ahead will occasionally deliver major market declines – even panics – that will affect virtually all stocks. No one can tell you when these traumas will occur – not me, not Charlie, not economists, not the media. Meg McConnell of the New York Fed aptly described the reality of panics: "We spend a lot of time looking for systemic risk; in truth, however, it tends to find us."

During such scary periods, you should never forget two things: First, widespread fear is your friend as an investor, because it serves up bargain purchases. Second, personal fear is your enemy. It will also be unwarranted. Investors who avoid high and unnecessary costs and simply sit for an extended period with a collection of large, conservatively-financed American businesses will almost certainly do well.

If this is a scary period then we are the investors, pushing ahead and taking advantage while the winnowing happens around us. It IS happening. We have to be extra smart, however, and willing to transform how we've done things in the past while not spending money recklessly.

I am incredibly excited and optimistic about the opportunities in front of us. Let's take a look at them.

(I've been doing a little research in the past month)

The rise of all great media companies rely on a combination of key ingredients while tracking the rise of a generation or a generational shift. While the moments in time are unique - Post Civil War America, Industrial Revolution America, Post WWII America - the evergreen ingredients are:

  1. Clear reader focus: businessman, housewife, etc
  2. Clear category focus: news, homekeeping, cooking, business
  3. The aspiration to do or live better in the new era

These three are relatively easy to achieve and there is not much competitive advantage to gain here. Many will do this, enter the market and they will all live as long as the market is rich enough. Most, however, will simply be "advertising creations."

What is more difficult to achieve and what distinguishes good from great are these final two :

  1. Great writing & imagery - a distinctive and even disruptive voice with a clear perspective
  2. Revolutionary format/product & delivery - a new concept of how content is delivered and consumed

While saying that great writing and imagery is what distinguishes great media from good is hardly surprising, achieving it is not easy and MANY ad driven companies do not have an appetite for this kind of commitment or risk. What is more surprising is that it is this quality of content, paired with a novel new experience that brings real success.

Time magazine created short, zippy, smart articles that allowed the modern man, who had no time, to cover all the news in one hour. Their slogan? "Take Time–It's Brief." Later, Time Inc. worked with the US postal service to create "zip codes" to better speed delivery. Walt Disney's character Mickey Mouse was a smash hit in 1928 not simply because the character was great, but because it was the first cartoon to feature "synchronized sound." William Randolph Hearst recreated how newspapers we printed and sold:

Hearst experimented with every aspect of newspaper publishing, from page layouts to editorial crusades. His newspapers introduced innovations such as multi-color presses, halftone photographs on newsprint, comic sections printed in color, and wire syndication of news copy. Stories by Hearst correspondents from around the world were sold to other newspapers, giving rise to the Hearst International News Service and the Universal wire service.

Conde Montrose Nast (yes, there was a man named Conde, who founded his company in 1909 long before the Newhouses bought it in 1959) built new presses to deliver a brand new experience to his readers:

Nast remained committed to publishing the highest-quality magazines, and in order to ensure the finest printing for his magazines opened a state-of-the-art printing press in 1924. It eventually grew to become one of the finest manufacturing plants in the country (until it closed in 1964 to make way for more centrally located sites capable of producing higher volumes).

Adherence to those high standards continued even during the Great Depression, when Condé Nast introduced innovative typography, design and color. Vogue's first full color photograph was featured on the cover in 1932, marking the year when Condé Nast began replacing fashion drawings on covers with photo illustrations―an innovative move at the time.


The huge shift that WE now have to track is defined by a new, large generation, true globalism and the onslaught of everything digital. The Millennial Generation is inheriting a distinctly global world driven by remarkable technological innovation that is transforming our consciousness and our economies at a pace not seen since the Industrial Revolution. We are witnessing the end of once dominant Baby Boomer culture that tracked the glory years of American's rise after WWII, whose stories were told by great media companies such as Time Inc, Hearst, Conde Nast, and Scripps, as well as Disney, NBC, ABC, CBS and then later, the cable companies CNN, ESPN, etc.

The central disruptor is software. It has upended every facet of our daily lives and will continue to as everything that formed our environment in the physical world is translated into an entirely digital equivalent.

The Boomer generations have largely been disrupted by this shift, even though they could claim responsibility for kicking it off. However, it is the Millennials who are the first major generation growing up inside of it that will shape it and understand it best, not having known anything different.

From this perspective, I give us (or anyone willing to take up the charge) a good 50 year run, tracking this generation and the evolution of the United States as we work through it all, make sense of the changes and figure out to live life in this new world we're inheriting.

To Be Continued.....


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