The VC Has No Clothes

Barry Diller had some rather sharp words for CEOs this week in regards to the recent spate of layoffs:

“The idea of a company that’s earning money, not losing money, that’s not, let’s say ‘industrially endangered,’ to have just cutbacks so they can earn another $12 million or $20 million or $40 million in a year where no one’s counting is really a horrible act when you think about it on every level. First of all, it’s certainly not necessary. It’s doing it at the worst time. It’s throwing people out to a larger, what is inevitably a larger unemployment heap for frankly no good reason.”

While I applaud the message, I’d say he’s directing it at the wrong target.  The real problem is the VCs.   Over the past couple months I’ve continually heard CEOs utter the words “the VCs wanted us setup for growth before the crash, and now they want us structured much more conservatively.”

Draw your own analogy, but the problem in many ways is the current crop of Harvard and Wharton MBAs who flit from board meeting to board meeting, offering cookie cutter advice as the velvet glove over their iron funding fist.  “Today we all wear our underwear on the outside” could as easily be the direction, and surely it would become the new fashion.

Are cutbacks evil?  Hell no, companies owe it to their employees to ‘right size’ in order to protect the many, just as employees owe it to the company to increase their efforts to make things work in bad times.  That even means that yes, it is okay to cut to maintain profits, but let’s avoid the Knee Jerk “Me Too” Box Parties.  After all, fear is a commodity that is best not crowd sourced.

Media Deathwatch: Tampa Tribune

Jessica DaSilva posted last week right after the Tampa Tribune Editor in Chief Janet Coats announced a major round of layoffs, and their embarkation for a trip in an entirely new direction:

Then she dropped the reality bomb:

“People need to stop looking at TBO.com as an add on to The Tampa Tribune,” she said. “The truth is that The Tampa Tribune is an add on to TBO.”

(Bold added for effect)

The questions from much of the newsroom apparently were the same old saws: “how will this affect profits” and “How will we compete with the other local paper” (quotes not verbatim, I wasn’t there, but are true to what Jessica posts).

I’m glad to hear they got it. Stop chasing a model that obviously isn’t working anymore. Instead of trying to support print as the end all and be all, with it’s incredibly costly delivery mechanism, start thinking about yourselves as content development. Find *all the delivery streams* that can make you money and optimize them. Forget about the ones that don’t make you money.

More from DaSilva’s post:

Janet believes in the news industry. She believes in holding government, media and the public accountable. And she knows there is not another job that makes such a huge difference and weilds such power. News organizations offer society so much, and that is why she cannot take another job – because journalism is her calling, and she knows there is nothing else she could ever imagine herself doing.

“It’s worth fighting for,” Janet said.

Out of all her quoteable moments, those were the words that stuck with me. It was that powerful statement that conveyed the hope, faith and prayers of all journalists worldwide. That maybe this industry can’t be demolished because of its importance and that maybe our love and passion for it could be enough to keep it running.

It’s going to be tough, and no, passion is not enough to keep things running in a broken model. If you combine passion with a willingness to change, to innovate and revolutionize (is that even a word?), you’ve got a much better chance.

To keep on doing what they were doing would be insane. To quote the Duke of Wellington at Waterloo:

They came on in the same old way, and we sent them back in the same old way

My best wishes to the Tampa Tribune staff, DaSilva and Coats that they can weather the storm.

More on Newspaper Outsourcing

CNBC posted on the newspaper outsourcing issue yesterday, and noted that not only is copy editing going overseas for a trial, one of the OC Register’s parent companies papers is now sending pages to New Delhi for layout.

Mindworks Global Media will copy edit some of the papers stories for a one-month trial starting next week. And a community newspaper owned by the O.C. Register’s parent company–it didn’t name which one–will outsource page layout to Mindworks, which is based outside New Delhi.

This isn’t enabling any layoffs–not yet. The company insists it’s just a test, and it won’t affect reporting or decision making and that O.C.-based editors will continue to oversee the month. Orange County Register Communications has been suffering through a rough patch. As its circulation tumbled, dropping the company from being California’s third largest paper to its fifth largest, the company has done three rounds of layoffs in the past year.

That’s big news – since paginators are typically members of The Newspaper Guild (I am fairly certain that Freedom Communications has a contract with them). And even bigger news is that this story has only been picked up in a handful of spots around the web. Either the stories in stealth mode, or perhaps there just isn’t anyone who cares anymore.