Nov

29

Mile High in Denver

Filed Under B2B, Big Data, Blog, data analytics, Industry Analysis, internet, online advertising, Publishing, Reed Elsevier, Search, Uncategorized, Workflow | Leave a Comment

Living at high altitudes is often credited with changing brain activity but until I read a piece by an esteemed Outsell colleague, Chuck Richard, (Outsell Insights “IHS to sell GlobalSpec” 24 November www.outsellinc.com) last week, I had not realised some of the fuller implications of that. But then again, all companies come to decisions in their own ways, and the manner in which they explain them does not always align exactly with the reasons for making them.

Yet I am still shocked. When IHS bought GlobalSpec in 2012 I hymned them with tributes (A Stroll Down Utopia Road, 13 June 2012). I had followed GlobalSpec since its foundation in 1996. Owned by Warburg Pincus, it did truly belong to the age when it was tough to sell subscriptions to engineers. But it amassed a unique collection of 10 million design briefs and specifications, as well as a library of 50,000 supplier catalogues, 70 e-newsletters and 15 online shows. I thought, in my ignorance, that this was a free workflow directed service just ready for IHS, with all their skills and specialization in engineering markets, to add some analytics and a real workflow productivity element and win hands down. How many of GlobalSpec’s then 7 million users needed to be converted and how much cross selling would take place with the existing IHS engineering strengths I thought was grist to the mill for the ever-active IHS acquisition team. After all, in a world where RBI had moved from over 200 subscription products to less than ten subscription-based, data-fuelled, workflow orientated, focussed information services and solution areas in B2B, and IHS was seen to be working in the same strategic framework, what could possibly go wrong?

The lines in the Investor Day presentation (7 October 2015) which remove GlobalSpec from the IHS roll-call are terse to say the least. On a slide which notes that the plan was to “transition” the company from an advertising-based to a subscription-based revenue model, appears this “Were not able to achieve this objective as market not ready to transition from advertising-based to subscription-based revenue models”. Did investors, hearing this, start to sell RELX shares on the grounds that Knovel could never succeed for Elsevier? Or did they ask what value had been added to those design specs to entice users out of the free into the value-added?

No, I suspect they were wholly unruffled. GlobalSpec, although a real prospect in 2012, has been massively overtaken in the annals of IHS by further waves of acquisition in fresh industrial and commercial areas. Indeed engineering itself is now heavily camouflaged and not mentioned in the deck as a business focus in its own right. A decade ago this company, having burnt its fingers as a portfolio player, decided in the time of Charlie Picasso to redefine itself as a focussed player concentrating on energy and engineering (the latter being very much where the group roots lay). Energy is still there, but a steady stream of important acquisitions over the past five years, culminating in Polk, seem to have distracted attention from engineering. This is now again a massively diversified player with outcrops of activity all over the place. Was there focus in this activity? Perhaps indeed they simply forgot they had GlobalSpec?

Well, we smile at such thoughts, but I can testify to the power of the new in corporate portfolios. Nothing was more powerful than the magnetism of the latest buy in Michael Brown’s Thomson Corporation in my adolescence in this marketplace. These companies had the best leadership practices, the best strategies, the best business models and the best sales plans, and this much was self evident… because we had bought them. Six months later, when the discredited leadership had departed and their successors were trying to explain why it was impossible to to reach the forecasts they had been committed to make, it did not seem to matter – after all, we had usually bought something even newer and shinier in the meanwhile!

Is this what happened to GlobalSpec? Maybe. But whatever the answer what happened to those 7 million registered users. Surely IHS changing the name from GlobalSpec to Engineering 360 did not entirely throw them off the track, even if it wasted the brand asset developed since 1996. And what happened to all that delicious data. Since all of those specifications and design briefs were deposited by users, and all those catalogues submitted and updated by suppliers, it could be said that the data acquisition model came out of the user community. Was none of that data useful in the engineering workflow platform which IHS has built and of which it is justly proud? Before engineering took a back seat to other sectors more newly acquired we might wonder whether any attempt was made to see where the data now to be sold off formerly worked so well in the working lives of engineers, and how it might be re-energized in a value-added service model.

And finally lets turn to all of these engineers who were “not ready” for a subscription-based world. I wonder how such readiness is measured. Is there a formula available in the management schools? Did Netflix have to apply it at the point of deciding whether they could compete with free to air advertising-supported broadcast TV. Or did they simply say “We are confident of a value so powerful that people will want to have it to enhance their lives”. Or, in the case of GlobalSpec, their jobs. Building that have-to-have value is not easy, and takes some of that detailed appreciation of how people work for which IHS was once famous – in engineering. Buying GlobalSpec and selling it again within three years does not represent a failure of markets to recognize what they should do; it represents a failure of management. Either that failure was down to buying the wrong asset in the first place, or it comes down to not deploying it effectively and getting the reward from the investment. Rather than one line on a slide investors might have reasonably expected a “mea culpa”.

Nov

15

StartUp and MidTerm investor Heaven

Filed Under B2B, Big Data, Blog, data analytics, Education, Financial services, healthcare, Industry Analysis, internet, mobile content, news media, online advertising, Publishing, Search, semantic web, social media, Uncategorized | Leave a Comment

Yes, it was the sixth Noah show in London on Thursday and Friday last week. The poet may have referred to them as “brokers roaring like beasts on the floor of the borse”, but seeing Europe’s investment bankers, VCs and PE funds filling three floors of Old Billingsgate (surely over 2000 this year) was a joyous sight. These people clearly love Noah, and the way they tolerate two days of constant bombardment is testimony to this: they eat and drink and meet and… roar at each other all day long and go to the Noah party at night, but from 8.30 am to 7.30 pm they absorb some 200 presentations on three stages in a positive orgy of claim, comparison, analysis and counter-argument. Presiding over this like a genial Godfather is Marco Rodzynek, and having attended these shows since the first in 2009 in the Hilton, Park Lane – only 100 or so people but the catering was excellent – I feel, from a TMT perspective, that it was almost worth Lehmann going down to get this show started in the sector.

Of course, much has changed. Huge global volumes of devices and users have altered the meaning of our early definitions of proof of concept and usage as a measure of success. You can now have sector and geography specific plays that command larger audiences than the global marketplace in 2009. NOAH covers Europe, with a strong flavour of the stand-out start-up cities – London, Berlin and Barcelona, as well as a useful input from the influential Israeli industry. There is also a NOAH event now in Berlin and I shall hope to cover that in 2016. These events are simply the best way I know of touching the pulsating heart of innovation in Europe, at all the stages covered from start-up to near-mature businesses looking for the next investor. Because there is always a next investment stage, and NOAH, as leading advisers in the sector, are crucially aware of the work-in-progress aspect.

I could generalize about innovation for the rest of this blog, but it may be best to give you a flavour from some extracts from my notes. Bear in mind that these come from a few hours on one day on one stage: I would hesitate before trying your patience with the full output!

….

Inquisitr Every service vendor now has a news service, from Google to Facebook Notify. This is a response to these new ways of presenting breaking news. Requirements – speed, luck and authority!…..
Mubi Quality -based video streaming. Began on PlayStation in 2007. Now in a JV with Sony delivering quality movies to PlayStation. Founder says it took 149,000 nights to become an overnight success!….
TeamViewer. Fremium model in which private viewers go free and corporate viewers (now integrated into Outlook) pay. Remote support software aimed at remote access, monitoring and sharing services. 1 billion installations, 20 million online at any one time, 200m corporate customers, 300 million accounts, 30 languages. Customer range – from a hospital group sharing images to an artist mounting a global exhibition of his work….
Pipedrive (a NOAH investment) CRM for SMEs. “aimed at the salesman and built for mobile use”. “42% of CRM software is never used” Gartner. Developed for people who never had CRM before. Estonia, and now US….
Scyti Barcelona-based global supplier of election software. 42 countries Online voting platform with 24 solutions ranging from registration to results tallying. Security is key element. Market worth $500m Has done 4 rounds of VC investment, raised $100m last time…
Deezer streaming music 6 m customers. 35 m tracks. Subscription model. Big business in cars. Some ads but subs is future 2007. Collects 240 m data points from customers daily. Sends lyrics. Download is dying, discs are dying…
SimilarWeb. Visitors and performance of every web service. Rank. Like Nielsen for websites .Not downloads but usage. Alexa but better and global. Multi source data…
Statista. Largest market research portal 20 m Rev 35% margin. Market research bigger usage than Nielsen, lpsos. Info graphics is marketing device….
Mall of Africa. ECommerce goods for aspirational markets. Address verification. 300 m middle class internet users on mobile. Amongst 1.2 bn people. Nigeria and Kenya as hubs… MoovIT, 90min. Israel
(soccer, user created)….
Badoo Largest dating social media? 270m registered users generating 40m messages a month. Transition from web to mobile. Founded 2007, profitable 2009…

Just a flavour, but also i hope an indication of why this is so fascinating, and why the wide differences between different styles of venturing , and widely different results in different geographies makes this important, not just for investors, but for everyone of us as creators of network – based services of some sort or another.

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