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Marc Benioff, founder and CEO of Salesforce, and his wife recently announced that they agreed to buy Time magazine. The next obvious question: why?
Many have put forward a story of a white philanthropic knight who was looking to save the business with a generous impulsive purchase. And one The exchange of text messages between Benioff and the New York Times has done nothing to dissuade us.
Benioff admitted just two weeks ago, he did not even know he would buy media ownership. Although he was quick to assert his long-standing passion for the magazine, his answers did not present a particularly important argument for his purchase and seemed rather superficial.
But it is unlikely that anyone with Benioff's success story can tackle Time magazine without thinking about it.
With this in mind, I was interested in a recent interview with Jeff Bezos, who also purchased The Washington Post in 2013. During the discussion, Bezos articulated the thought process that motivated his decision to purchase, a decision that he split in two.
Photographer: Andrew Harrer / Bloomberg
Why buy the Washington Post?
Donald Graham, son of legendary Washington Post publisher Katharine Graham, was the first to offer Bezos to buy The Post. Bezos, he thought, had the qualities required of a promising buyer.
Bezos countered this idea; he was not interested in such an investment. From the Bezos agreement, he was not trying to buy or invest in newspapers. He had no knowledge of newspapers.
Graham reminded him that there was no expertise in the newspapers, but the control of the Internet. Bezos said that he would think about it. "I had to do an examination of conscience … Is this something I want to involve myself in? If he decided to do it, he knew that he should put "a little heart and work in that direction."
The finances of the company were not promising. Bezos admitted that the case was "upside down". As a high fixed cost company, they were bleeding money. It was not an intrinsic operational problem, but the evolution of the landscape. "The Internet was only eroding all the benefits of local newspapers. All."
Instead, Bezos relied on his intuition to guide him.
1. Is this an important institution?
Bezos began to think about the meaning of the institution. Would the disappearance of this institution matter?
"If it was a business of salty snacks financially upside down, the answer would be no." But as soon as I started thinking about it that way, I started to realize that. East an important institution …
"It is the most important country's capital newspaper of the world. The Washington Post has an extremely important role to play in this democracy. There is no doubt in my mind about this. "
2. Are you optimistic about his future?
But Bezos did not want to buy it just to slow down the death of the institution if it failed. He did not plan to provide operational palliative care to the Washington Post. Instead, he realized that he had to believe there was a path to healing.
"I wanted [to be able] look in the mirror and be sure I was optimistic that it could work. If it was hopeless, it would not be something I would implicate myself with. I watched this and I was super optimistic. This had to translate into a global and national publication.
Bezos drew his optimism from a simple fact. The internet has destroyed most of the benefits that newspapers have built. But he offered "a gift: free world distribution".
With the help of Bezos, The Post has developed a new strategy to "take advantage of this gift". They set up a new business model. The old model was based on generating a high turnover per reader. Their new orientation would give up revenue per reader in favor of acquiring more readers. In other words, a volume plays.
The first signs of success indicated that the strategy worked. The Washington Post was quick to post a profitability and a growing newsroom.
Intuition Not Analysis
Bezos' approach to shopping The Washington Post was not exceptionally analytical, as he noted, "my decision-making process for something like this was definitely an intuition and not an analysis."
But intuition should not be misunderstood for the ego.
The popular story of the white knight can be a trap of vanity. And the risk of continuing to advance this theory is that others with money but no operational expertise or interest may think that they can also get started, throw money into a media and l & rsquo; # 39; send. The problem persists because other media properties, such as Fortune and Sports Illustrated, are still looking for a buyer.
The last thing media companies need is the tech bros who buy their properties as trophies. Media companies do not need a prince charming, they need an accomplice.
When Graham initially offered Bezos to buy The Post, Bezos was reluctant to do so. It was only after realizing that he had something to offer that he decided to do it. "When I'm 90, it will be one of the things I'm most proud of, that I accepted the Washington Post and helped them through a very difficult transition."
FFollow Stephanie Denning on Twitter: @stephdenning
And also read:
How Jeff Bezos Hires Great People
The key to Nelson Mandela's leadership
PepsiCo's Indra Nooyi on the compromises of being CEO
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Marc Benioff, founder and CEO of Salesforce, and his wife recently announced that they agreed to buy Time magazine. The next obvious question: why?
Many have put forward a story of a white philanthropic knight who was looking to save the business with a generous impulsive purchase. And one The exchange of text messages between Benioff and the New York Times has done nothing to dissuade us.
Benioff admitted just two weeks ago, he did not even know he would buy media ownership. Although he was quick to assert his long-standing passion for the magazine, his answers did not present a particularly important argument for his purchase and seemed rather superficial.
But it is unlikely that anyone with Benioff's success story can tackle Time magazine without thinking about it.
With this in mind, I was interested in a recent interview with Jeff Bezos, who also purchased The Washington Post in 2013. During the discussion, Bezos articulated the thought process that motivated his decision to purchase, a decision that he split in two.
Photographer: Andrew Harrer / Bloomberg
Why buy the Washington Post?
Donald Graham, son of legendary Washington Post publisher Katharine Graham, was the first to offer Bezos to buy The Post. Bezos, he thought, had the qualities required of a promising buyer.
Bezos countered this idea; he was not interested in such an investment. From the Bezos agreement, he was not trying to buy or invest in newspapers. He had no knowledge of newspapers.
Graham reminded him that there was no expertise in the newspapers, but the control of the Internet. Bezos said that he would think about it. "I had to do an examination of conscience … Is this something I want to involve myself in? If he decided to do it, he knew that he should put "a little heart and work in that direction."
The finances of the company were not promising. Bezos admitted that the case was "upside down". As a high fixed cost company, they were bleeding money. It was not an intrinsic operational problem, but the evolution of the landscape. "The Internet was only eroding all the benefits of local newspapers. All."
Instead, Bezos relied on his intuition to guide him.
1. Is this an important institution?
Bezos began to think about the meaning of the institution. Would the disappearance of this institution matter?
"If it was a business of salty snacks financially upside down, the answer would be no." But as soon as I started thinking about it that way, I started to realize that. East an important institution …
"It is the most important country's capital newspaper of the world. The Washington Post has an extremely important role to play in this democracy. There is no doubt in my mind about this. "
2. Are you optimistic about his future?
But Bezos did not want to buy it just to slow down the death of the institution if it failed. He did not plan to provide operational palliative care to the Washington Post. Instead, he realized that he had to believe there was a path to healing.
"I wanted [to be able] look in the mirror and be sure I was optimistic that it could work. If it was hopeless, it would not be something I would implicate myself with. I watched this and I was super optimistic. This had to translate into a global and national publication.
Bezos drew his optimism from a simple fact. The internet has destroyed most of the benefits that newspapers have built. But he offered "a gift: free world distribution".
With the help of Bezos, The Post has developed a new strategy to "take advantage of this gift". They set up a new business model. The old model was based on generating a high turnover per reader. Their new orientation would give up revenue per reader in favor of acquiring more readers. In other words, a volume plays.
The first signs of success indicated that the strategy worked. The Washington Post was quick to post a profitability and a growing newsroom.
Intuition Not Analysis
Bezos' approach to shopping The Washington Post was not exceptionally analytical, as he noted, "my decision-making process for something like this was definitely an intuition and not an analysis."
But intuition should not be misunderstood for the ego.
The popular story of the white knight can be a trap of vanity. And the risk of continuing to advance this theory is that others with money but no operational expertise or interest may think that they can also get started, throw money into a media and l & rsquo; # 39; send. The problem persists because other media properties, such as Fortune and Sports Illustrated, are still looking for a buyer.
The last thing media companies need is the tech bros who buy their properties as trophies. Media companies do not need a prince charming, they need an accomplice.
When Graham initially offered Bezos to buy The Post, Bezos was reluctant to do so. It was only after realizing that he had something to offer that he decided to do it. "When I'm 90, it will be one of the things I'm most proud of, that I accepted the Washington Post and helped them through a very difficult transition."
FFollow Stephanie Denning on Twitter: @stephdenning
And also read:
How Jeff Bezos Hires Great People
The key to Nelson Mandela's leadership
PepsiCo's Indra Nooyi on the compromises of being CEO
