During the heady summer months I led 4iP's investment in Newspaper Club. The wonderful team at Newspaper Club are building a tool to help people make their own newspapers. And by ‘newspapers’ they mean anything you can make with ink on newsprint.
They've been documenting 'the start-up dream' on their blog which I suggest you read but if you're a joyless, number crunching, fact loving capitalist you might prefer this investors summary.
Now, despite their best efforts to manage users' and investors' expectation by constantly reminding us that ‘it won’t be as good as you’re imagining’ they've been getting on rather well. In fact they're getting on slightly better than I had hoped for. Here's why.
Firstly, they've hit their beta revenue targets prior to actually launching their beta. Investors like this. Cynics amongst you may make the point out that Russell Davies is the master of disappointment management only to swoop in at the last minute to over deliver and delight! But the revenue targets weren't set by NC they were set by 4iP's investment manager (see scowl here). Generating revenue is a good thing for all the obvious reasons and because I believe start-ups that generate revenue early-on will show more financial discipline from an earlier stage. This is even more important when a company is funded rather than bootstrapped. Hey now they're spending their money and ours!
Secondly, it seems that this newspaper idea is proving rather popular. Yes, they may be in alpha but they already got a lovely selection of paying customers. In investor land we call this traction or product / market fit and we love it. 4iP loves it a little less than most but that's because were odd and put product first. 4iP literally fizzes with excitement when the club's newspapers pop up at events like Playful09 and Wired's Intelligence Briefing. Don't even get me started about the data newspaper.
Finally, I value management integrity and openness above almost everything. 4iP can do it's bit to bring in external directors, advisors and specialists but this no substitute for competence and maturity from those running the show. I never leave Newspaper Club with the feeling that I'm not 100% in the know. Yes, they make mistakes but they don't pretend everything fine when it isn't and give a balanced view of how things are going without my having to dig too hard. I can see this openness flowing through to the customers convince people that they'd like to spend their money with them.
Get ready for the beta..!
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