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A Conversation about Product Development - with Product Creators
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A Conversation about Product Development - with Product Creators
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Upload Date:
2022-04-28T00:00:00.0000000
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Language: EN.
Segment:0 .
SAM BURRELL: So hello everybody. Good to see so many people here. For those of you who don't know me, I'm Sam Burrell, and I'm the Society Street program chair Thank you very much for coming along today. And thank you to our speakers for agreeing to share their thoughts and experience with us. I'm really looking forward to this. On previous Society Street panels, we've always had a pre-meet,
SAM BURRELL: and the conversations on our pre-meets were always really, really interesting and challenging and we regretted not recording them. So here, fresh for 2021 Society Street, we're going with that vibe. Today's panelists are joining us ready to discuss income diversification for societies and to share their experiences of inventing products. And we haven't explored these ideas together as a group before, so I'm trusting that it won't descend into a brawl.
SAM BURRELL: A brief introduction to our guests-- if you could wave when I-- Simon Inger, you know from his earlier session, who describes himself, sometimes, as an inventor. He works with societies, both as the co-founder of Cadmore Media and as a consultant at Renew Consultants. Joining him today is Sam Herbert, co-founder and M.D. Of 67 Bricks, an organization that works with content rich organizations helping them to do more with that content, and -- Sam you might want to pick up and expand on that in a minute.
SAM BURRELL: Liz Heinberg, who is Chief Product Officer and co-founder of the recently launched Hum, which describes itself as purpose built to help associations solve their biggest challenges, including launching programs to grow non-dues revenue. And Mike Clarke, managing partner and consultant at Clarke and Esposito, who's been working with societies on solving problems with them for many years.
SAM BURRELL: Now, to kick us off, we all know that many society execs are sitting with income diversification on the top of their list of things to do. If it wasn't already at the top of the list before 2020, it certainly is now. Several of societies' traditional revenue streams are increasingly under threat. But before we dive into how societies can address that directly, I would just like to start by asking each of you to outline some of your experience of the process of developing a new product, specifically at the very beginning.
SAM BURRELL: I think if you're sitting there with this on your list of things to do it can be really intimidating, particularly if it's not something you've done before. So either pick on a particular example or more generically: where and how does this process start? Liz, I want to pick on you first because we talked-- when we got to have a little pre-chat -- we talked about this the other day, and I thought the experience of where Hum came from was really interesting
LIZ HEINBERG: Certainly. So I was brought in as part of a new product development team at Silverchair, which is-- you may be familiar with Silverchair's scholarly and professional publishing platform and company. And the leadership at Silverchair had recognized that they wanted to explore new product opportunities, and so they brought in a person who had been formerly an innovation consultant, and he brought me on board.
LIZ HEINBERG: And we went through a pretty exhaustive idea generation phase So the recognition was that, very often, opportunities will kind of come across your desk and people will respond to an opportunity and say, oh yes we should go do this thing. We should chase this new shiny thing, it's very tempting. But it was instead decided that we would pursue a comprehensive and more rigorous approach to evaluating opportunities.
LIZ HEINBERG: So we began by really just generating hundreds and hundreds of opportunities, and we used the word opportunity instead of idea because it is-- it's not just about-- it's not just about a good idea it's about, "is this a good business opportunity? " So we were using particular rubrics to say, "is this something that this particular company is well suited to do? "
LIZ HEINBERG: And that's one kind of area that we were grading against. We were looking at the total market opportunity, is this a good business opportunity? Is it large enough to be interesting and to be worth investing time in? And then is it is it reasonable, will the market believe that our company should be doing this thing? Does it align with the bigger story of what we're all about? And so, we began with hundreds and hundreds of opportunities and then at each phase, we would present this list of opportunities and decide as a group, based on those voting criteria, which opportunities deserved more of our time, more resources, more time and attention.
LIZ HEINBERG: We went back did more research on that bunch of opportunities, came back again. And so we had a number of meetings with all of the stakeholders in which we were presenting various opportunities at different levels of development. And until we got to the very end, and we had a total of what we called four, level four opportunities.
LIZ HEINBERG: And those had been much more thoroughly fleshed out. We'd done business model canvasses for the opportunities and we're able to show the estimated total market size and ideas of how we might approach them. And at that point, it went to a vote and we chose one opportunity and moved forward with that. But what was really interesting was it just-- it made us much more-- it was really helpful to be able to compare one opportunity to another.
LIZ HEINBERG: So you weren't just making the decision about, are we going to move forward with this kind of exciting new business opportunity? Because there were actually multiple, exciting new business opportunities. And it was more about choosing which one-- which one was better.
SAM BURRELL: Sam, does that reflect your experience at all?
SAM HERBERT: Yes, yes. I would definitely build on that. I think, the way I like to think about it is as an investment company, investment companies make bets. They make quite a few bets and they understand that some of them will come off and some of them won't. So I think I would agree with Liz on the process of identifying a bunch of ideas and not looking at an ind-- looking at individual idea on its own is that it always looks interesting, it always looks like a great opportunity.
SAM HERBERT: But it's always the prioritization, and what you say no to is just as important as what you say yes to. But then I think, that for me the next important step is to understand that it is like-- when you're talking about substantial change, and not just iterative changes. You're talking about significant new products, actually new revenue streams, that what you really need to do is to be able to-- you're not going to know-- well I don't think you're going to know, doing analysis, which of these are actually going to work.
SAM HERBERT: So you have to make a number of bets across it, across the portfolio, and understand that some of them will come off and some of them won't. But you start off by making smaller bets, and you kind of do some paper protyping around the 5 or 10 that you've identified as potentials. And what we've seen work really well is you kind of-- what you're really doing through that process is you've got to focus on testing assumptions.
SAM HERBERT: So you write a bunch of assumptions about the business, about the business idea about the product, and you say, these are our top six assumptions. If these assumptions are all correct, it's going to make us 5 million in revenue. Fantastic. And then you-- but then the process of working on that product is not building the product, it's testing the assumptions.
SAM HERBERT: And you're working out what's the best way to test the first assumption. The biggest in the most difficult assumption to test, let's test that one first of all, in the cheapest way we can. And then maybe that kills it off. Well yeah, that assumption's wrong, move on, move on to the next one. Or you learn something from it and then you test your second assumption.
SAM HERBERT: You're always moving up towards the position of it being a live revenue stream. And I think that's one angle to look at it. That's the kind of structured aspect of it. I think it's another aspect which is, that-- how do you give an idea of space and creativity to come up with something new and interesting? Which is, I think, a different question and then that's another interesting, difficult question to answer.
SAM HERBERT: But I'll let someone else--
SAM BURRELL: I was going to say, Simon, I'm going to pick on you to pick up on that, because I know that you and I have talked about the kind of space for creativity piece.
SIMON INGER: Yeah, that's going to be really important to allow people within, especially within a society environment where they're perhaps not very used to being allowed even to rock the boat and come up with anything particularly new. So it's often a difficult environment. And actually also picking up on Sam's point as well, they usually haven't got the bandwidth to pursue more than one thing in any depth.
SIMON INGER: So their process of logic at the earlier stages has to be, you've got to logic it through before placing that bet, because it can easily be another year or so before they have a chance to move on to something else. I think coming back right to the very start, and I think one of the things-- the reason why I find societies such interesting people to work with, and organizations to work with, is that they just have access to the most interesting minds in that space.
SIMON INGER: And they-- obviously teasing out from them, all manner of useful things that would be great for people who work in the space or for the science itself, It's-- from those people is actually just great fun. They not only have identified a whole raft of problems, they're often quite-- have some reasonable stabs of how to go about productizing the solution. So I think that's always very, very interesting, and of course they themselves, the people, the members of the Society themselves are a fantastic resource when it comes to building product, in many cases as well.
SAM BURRELL: Mike, do you want to pick up on any of that or maybe start narrowing it down to how this might apply to societies, or what the challenges for societies are?
MIKE CLARKE: Sure. I think that Simon touched on one of the big challenges with societies which is despite often being having a super abundance of ideas, often brought to them by, as Simon alluded to, their members and other constituents, often don't have the infrastructure. They don't have a product development team in many cases, some of the large ones do.
MIKE CLARKE: So part of it's resource and part of it's just I think the process that Liz described, that more formal development process, is fantastic. If a society has a dedicated team and resources to do that, by all means. In my experience, a lot of the good ideas and successful products at societies tend to be more of a bottom up approach as opposed that formal, top down, we're going to engage in a product development process.
MIKE CLARKE: It tends to be ideas that bubble up from teams and what one of the-- now those ideas tend to therefore, because they're bubbling up with teams that are working on journals or books, tend to be more journals or books, or other kinds of product line extensions. And so then I think the-- and those tend to often be very successful products because they're there addressing needs, they're working in areas where the society has experience.
MIKE CLARKE: It has channels, it knows how to develop those products, it knows how to sell those products. So I think the challenge for societies is not those kind of products, although they still need resources and process for those. But really it's stepping beyond that into adjacency or greenfield opportunities where more resources and more of a process, sometimes a formal process, are beneficial.
SAM BURRELL: So we've got our chief exec of a society who's been briefed with, and/or has decided for themselves rightly so, that revenue or income diversification needs to be top of the list. What would your advice be to them about how to move that forward? What's the, what's the-- where would you begin? And let's assume it's a medium-sized society rather than a particular big one who's already got a product development team on board.
SAM BURRELL: Mike, I've going to go back to you because you're nodding in a kind of, I have ideas kind of a way. [LAUGHTER]
MIKE CLARKE: I would focus on process and to go back to a point that Sam made, the-- as executive, you're not going to know which products necessarily are going to be successful. So the real important thing is to create a space to create products, a culture of product development.
MIKE CLARKE: That often is the most important thing, if you can just create a culture and an expec-- and not just stage a space but an expectation. You interact with some organizations and the expectation is, we're going to create a bunch of new products this year. Now we don't know what they are yet or we're working on them, they're in the pipeline, we're not sure they're going to be. But we know we're going to create products this year.
MIKE CLARKE: Other organizations, you talk to them and they haven't created a product in a decade. And so having that product culture, that expectation that we are an organization that's going to create products that's super important. And another one I think is, that goes along with that, is creating things-- it's things like creating an R&D fund, or a product innovation fund, whatever you call it, but a fund that sits outside.
MIKE CLARKE: It's not part of the-- it certainly cannot be part of the operating budget, it's got to be a separate budget, not part of the regular reserves. It can't be the kind of thing where in order to create a new product, you have to go to the board and get release a little bit of money in order to do the first phase. There needs to be a process around stage gating those ideas and releasing funds making small bets as you go but releasing funds in a process that's not too onerous.
MIKE CLARKE: And really putting some expectations and cultures and resources around product development. Some formalization I think it's good, especially for greenfield opportunities, new things to have a formal process. But all-- but also simultaneous to let ideas bubble up because often successful products are bottom up ideas.
SAM BURRELL: Simon what would you like-- oh, sorry Liz, go.
LIZ HEINBERG: I was just going to piggyback on that idea of culture note with the product I'm working on right now, Hum. It's a platform for professional associations and we help to-- one of the ways that we are encouraging associations to cultivate the non-dues revenue is to just think about content a little differently than may have been thinking about it previously. To think about it not just as something that is for members, but to think about other ways that they might be able to use existing content or leverage it further.
LIZ HEINBERG: Take a piece of content and split it into multiple pieces of content, and distribute it a little differently, and reaching audiences that they haven't previously reached. So I guess I would just add that it's-- and I think some part of the culture can just be to think a little bit creatively about the resources at your disposal and different ways you might use them outside of what has historically been the model.
LIZ HEINBERG: I know we saw a lot of disruption as a result of COVID and the traditional reliance on a once a year in-person event. And that really led to a lot of people needing to think a little bit differently. And even beyond just what-- beyond just changing that one event to a virtual event. How can you go from thinking about a more periodic kind of engagement to cultivating engagement in more of a year round way and making doing a better job of delivering the right content to the right person at the right time?
LIZ HEINBERG: That kind of personalization that is so important to-- we've all gotten kind of used to Amazon knowing exactly what we want and delivering it to us. And so finding ways to take what you have even, and just get it to a different set of people or to a more finely targeted set of people. And it's not-- it doesn't sound like a very exciting product as far as product development goes, but there are certainly things that can be done that are a little more novel in terms of just content forms.
LIZ HEINBERG:
SAM BURRELL: Sam, do you want to add anything?
SAM HERBERT: Yeah I wanted to agree with what's been said a lot. But what you're saying, Michael, about the difference between incremental and new products I think is really, really important. And I think with innovation, we have to understand the difference between those two types of innovation. Incremental innovation is really well done by people who currently manage the current product and work with existing users.
SAM HERBERT: They will come up with and they will hear little suggestions and they'll build that into the product, and that is that's great and that's really important, first sustaining or increasing the length of a current product, a lifetime of product. But coming up with new ideas about different ways is-- you have to recognize that it's a very different approach and you have to take a different approach to it. And so I think that creating space is really, really important, reducing friction around the testing of new ideas is very important too.
SAM HERBERT: There's that idea about having a fund, which can be dipped into and yet there are gates. And if you're before first gate, there's always-- there's $100 there just to try and do a bit of paper prototyping with someone and putting it in front of someone. And then I think in terms of-- what you find is it-- what we found really, really, really important is to find the right people in the organization.
SAM HERBERT: So as I said, incremental innovation, get the people or current product managers or working with the existing users. They're not always the right people and they won't always be the right people to do the kind of new innovation. But there's normally some people in the organization who are just dying to do this stuff and been waiting for this opportunity.
SAM BURRELL: [LAUGHTER]
SAM HERBERT: And as you give them a bit of space, give them as much leeway as you can and then allow them to-- and then there's some structure around it. But I think much, much less structure for the initial idea generation. Am I pulling together some structure around the brainstormings, you know, bringing user insight, understand business objectives, and technologies and kind of think about that as a Venn Diagram and where they overlap, but bringing lots of insights about these things.
SAM HERBERT: What are your current users doing? What are they complaining about? What are your business direct objectives right now? Where are you challenged? What are the new technologies that are available? What do they do? And then bringing it all in his insights and see where they clash and where they hit and then and then allowing these people who are already kind of wanting that opportunity to do this innovation, the freedom to do it.
SAM HERBERT: I've seen that work really, really well. Unfortunately, I've also seen the opposite. That connects that-- I've seen where that works really, really well. And then if I'm getting this, how'd you come up with three amazing ideas that could all be monetized right now. We've got a really strict process around this, make sure it gets monetized.
SAM HERBERT: And then two years later, those ideas haven't gone anywhere. But I think it's a difficult balance. I think for societies and traditional publishers as a whole are probably quite risk averse. Non-traditional and are very uncomfortable with this idea of just put something out there and see what it's like. For publishers generally, the idea of putting a printed book out that had some mistakes in it, you just don't do that, that's awful to the historic culture of publishing.
SAM HERBERT: You get it right before you release it. There is actually-- what you need to do nowadays is get something out there. Test it test it in some small way. Try it with someone, show it to five users, show it to 10 users, show it to 100 users, get some feedback, and learn from that. And that's a very different approach. But I think I'm agreeing with kind of the general idea of understanding that this is different and needs to be tackled differently and needs to put a budget aside for it to do that.
SAM BURRELL: Simon, do you want to add to any of that?
SIMON INGER: Yeah, I was just going to make an observation really-- this is another one of the things that's come from the pandemic-- and you're talking about adjacent opportunities. But I've also-- one of the things we observed from the Cadmore perspective when you're looking at what's happened to events is a lot of the expertise that the publishing people have is suddenly needed in events, because events have become all about metadata management.
SIMON INGER: And suddenly you've got a whole load of assets at the end of it, we've got a video asset that you didn't ever have before from the face-to-face, and you got to do something with it. We don't have to use it you can just throw it away, but there's another opportunity that comes from just having it. So that's quite interesting that suddenly, an opportunity for the publishing people with that structure, a process built in to operate in an adjacent area within the same society.
SIMON INGER: And the other thing I wanted to pick up on was actually about the finances and funding going all the way back to where we were. It should be an advantage that societies have, is that they don't necessarily have to show a profit in the same kind of timeline that you do within a commercial set-up. You may be very well funded if you're a commercial entity and have enough money in the bank to burn for a few years to get your product off the ground.
SIMON INGER: But more often than not, you're on a bit of a tighter budget. The society may not actually have those same financial pressures, it obviously has a long term goal But it actually always has the luxury of playing around a little bit longer. But again coming back to that, another earlier point about the appetite and the-- just having the environment in which people are used to creating products.
SIMON INGER: So I'm just thinking back when we were talking-- worked with a commercial publisher, with a mid-sized commercial publisher, who apologized to me when they said, oh I'm sorry it took us six weeks to launch this new journal, our plan was four. And then you take that same idea somewhere else and they think, well two years would be a good tight timeline to operate on. So it just does depend on who you're talking to as-- and to what seemed like a reasonable timeline as well.
SAM BURRELL: I want to pick up on something that everyone sort of alluded to, is around culture. And Mike that was one of your first points in that kind of the culture of expectation. My experience, particularly at the moment I'm feeling this quite a lot in some of the work that I'm doing, is the risk averse-- that there's kind of the risk averse nature of not all, but many societies and their governing bodies.
SAM BURRELL: That are quite fearful of looking like they're gambling with the society's future. And I wonder if there's a kind of tension. Does the pandemic offer us, them, an opportunity of kind of going, actually you must take this risk now because you've got no choice. And how can we collectively go about creating that culture within the learned society space where actually, this becomes a normal part of an organization's way of being?
SAM BURRELL: Sorry, that's quite a loose question but anyone feeling inspired to, go.
MIKE CLARKE: And it's a super, I think a super important issue and an observation and the point of the pandemic is it is exactly, I think, right. And because-- one of the things that I often observe is the risk aversion. Risk aversion is often risky because if you're not out there reinventing, it means you're losing market share, you're losing opportunities.
MIKE CLARKE: And you're also putting yourself in a position where, if something happens, like all of a sudden your big annual meeting is not going to happen for the first time in 100 years or whatever, you don't have a diverse portfolio to come back to. Going back to Sam's example of a investment portfolio, if your investment portfolio is two products that you published for the last 100 years, that's risky.
MIKE CLARKE: So I think it's-- there are different kinds of risks, there's the risk of, OK if we invest the specific amount of money in this specific product, is it going to produce a return? But I think-- and you can be risk averse about that, but I think taking a step back and thinking about it from a portfolio perspective it's incredibly risky to not be developing products and diversifying the portfolio.
MIKE CLARKE: And I think another thing that we didn't touch on, which I think kind of fits this theme is product reinvention. And so one of the-- a lot of times if you're not reinventing products over time, there's the risk that they're going to become irrelevant. And I think being in publishing and society publishing, this is not something that often comes up because we're dealing with a product format that's been around for centuries.
MIKE CLARKE: And every time somebody comes up comes up with the idea of reinventing a journal, everybody just turns out everybody still wants PDFs. But there are categories of products that really have needed to be reinvented and have done so successfully, and those are things like handbooks, which have turned into things like style centers and education resources. And if you didn't do that or-- then all of a sudden you see your handbook sales going down year on year.
MIKE CLARKE: Or another great example reference products that have-- reference series that turned into decision support tools or workflow products. Things like The Access Medicine Series by McGraw-Hill is a great example. Or my favorite one is bibliographies, which used to be these big, printed books that-- back in the 70s, then they turned into CD-ROMs, I remember those in the 80s?
MIKE CLARKE: And into A & I databases and now they're being reinvented into discovery tools. And if you think about it, something like Google used to be a phone book so one of the most successful products of all time is thinking about turning a phone book into-- literally taking the Yellow Pages and turning it into this search appliance. Or Facebook it is effectively the old White Pages and you turn it into this big product.
MIKE CLARKE: So product reinvention I think, is also part and parcel of thinking about this topic, both risk aversion and thinking about product development in general.
SAM HERBERT: Could I just add to that? I think the way I see that, and I think is really, really good point. The way I see that is that of change and disruption can come in the form of, or typically comes in the form of new user experiences. So we want to think about is this new product, but it's got a loose idea. But if you think about Google, if you think about Uber, you think about Amazon, what they did was they actually-- all they did was they improved the user experience of achieving an existing outcome.
SAM HERBERT: So the user has a goal, the user wants to get from A to B and Uber came along and said, well I'm going to make that experience a whole lot easier for you, a whole lot better for you. That's not changing the outcome, but it changing user experience. The same, as you said, with Google. The user still ends up with telephone number and there you have that first use case.
SAM HERBERT: They end up with telephone number. But it was the experience of achieving that outcome that completely changed whole industries. So I think that's a really important place to start to me-- any conversation around this has to include the conversation around users. But I think it's not about asking users what do you want or what product do you want or what new feature do you want?
SAM HERBERT: I think it's about understanding what are our users are actually doing? What outcomes are they achieving with our content and data? And then, beyond simply-- well, they read it. It's why are they reading it? What outcome are they looking to achieve by reading that content? And then trying to think about, well, how do we help them do that quicker, faster, better?
SAM HERBERT: And if you start from that perspective, then you're always going to end up with a product that meets an end user need, and you've got-- you know, and that meets an end user outcome. You've then got to both work backwards a little bit to make sure the commercials work for you but that's where you when you kill a few ideas, because they don't actually deliver you any money. But the ones where it actually delivers on an existing outcome but quicker, faster, or better, are typically the ones that will fly in the market, because that's what users in the end care about.
SAM BURRELL: Liz?
LIZ HEINBERG: I wanted to circle back to that idea of the risk aversion a little bit. And from an institutional perspective, I think it can be challenging, especially to do larger innovation as opposed to the incremental innovation, because you really enter a place of ambiguity. So it's not just about saying one time we commit to this funding-- this funding this new product.
LIZ HEINBERG: It's committing over and over again to this feeling of ambiguity. So for example, this new product, no we can't create a three year P&L for the product we're creating. That might be something that would make you feel more comfortable, to see a three year P&L, but it's not something that can be done at this stage, this early stage as we're in the testing and still shaping the product.
LIZ HEINBERG: So just a-- I think it can take some getting used to, to over and over again kind of recommit to this course of action. And I think it can be really helpful to frame it up as Michael did, as it's risking-- it's risky to be risk averse.
SAM BURRELL: Simon, did you want to layer anything on top of that?
SIMON INGER: Yeah, I just want to just take a very small sideways step into governance, generally. I think one of the things I found interesting is just-- recently we've been working with a US society whose membership is actually heavily -- although it is a scholarly society, definitely in research communications. Its membership is very, very much biased towards industry and the officers of the society largely come from industry, and of course you get a very different approach to risk.
SIMON INGER: They obviously are going to operate the best way for the society, but all this-- at the same time, they are used to being in an environment where it's always about pushing the product forward, and so on. So I think it's interesting that they're getting some of that into a society is useful. We definitely also come across societies who're increasingly appointing people outside of their subjects space specifically people just from within industry or just from a complete lay perspective.
SIMON INGER: That can add a little bit of salt to the debate that's going on and just give a completely outsider's objective view. And I think they also help to create that atmosphere of being questioned so the status quo is frequently questioned.
SAM BURRELL: I think we could talk about this for hours, and I'm really enjoying this conversation, but I'm also really aware that I'm meant to be keeping a tight time limit on this that we don't take up all of our days. So I guess what I-- we're back to our theoretical chief exec of this society. Where would you suggest they look? What kinds of things could they think about? What parting piece of advice would you give them about what they do with this brief that they've got, do you think?
SAM BURRELL: So, Sam you like you might have something to say.
SAM HERBERT: Well I think you have to see the big picture. I think you can't think about this as a one-off, as a OK I'm just going to assign a little bit of money, and we'll do a little bit of innovation and that'll solve all our product problems. I think-- product diversification problems-- what I think you have to understand is that you need to-- societies and publishers at large have to change and transform who they are as a business.
SAM HERBERT: And that includes lots of things we talked about, that you have agility, flexibility, willingness to take small bets, putting in place a culture of learning. Everything we do we learn from a culture of testing and trialing. I think that's the big that's the big picture that needs to be understood is that to live in a time of constant change, which we are now in and maybe 30, 40 years ago that wasn't the case, but we are in now.
SAM HERBERT: And to survive in that kind of environment, you have to have a portfolio of products. And you have to recognize that some of them are going to disappear over time and some new ones are going to come out. But to be able to have a portfolio, you have to be a different type of organization. And you have to have flexibility, of different capabilities, you have to have a better understanding of data.
SAM HERBERT: So it's a long, long, long goal a long objective to get to that point, and it's a journey to get to that point. But that's the direction of travel you have to-- I think you have to go and to be relevant in five, 10 years--
SAM BURRELL: Yeah Liz? What's your parting-- parting shot?
LIZ HEINBERG: I think empathetic listening is a real superpower, and so the idea of listening. Note that we've mentioned solving problems, doing things better, faster. And I think in order to understand what problems or what opportunities there are, really listening to hear what people want. Or what they're not even saying or seeing what they're doing and building from there, using that as a jumping off point.
LIZ HEINBERG: It's just so easy to keep doing what you're doing and delivering the thing that you believe has value but it's not just whether you believe it has value. It's what is the end consumer believe.
SAM BURRELL: Yeah, good point. Michael?
MIKE CLARKE: I think from the executive level, echoing some of Sam's points, the important thing is to focus not on specific opportunities but on creating the culture and the process and the environments to support ongoing product development. Put it-- make some funding available, set some expectations, provide some infrastructure and some light governance and get out of the way.
SAM BURRELL: Simon?
SIMON INGER: And I think one of the other things that is there, and needs to be addressed as well, so I agree with everything that's been said there, is that we come across societies that can feel somewhat apologetic about charging for things. And it's because, oh our mission is to support the scientist or whatever it is and this is-- we're asking them to pay for this product, and that's awkward. So surely we'd be bundling it in with our membership. We're giving it away.
SIMON INGER: So I think there's also this thing about-- being comfortable about whether-- who you're charging, whether it's something that you are building that needs to be part of memberships somehow, to shore up membership, which is often the conclusion. Or can I separate out it enough so I do feel it's OK to make money out of it as well? Because I do see too many societies building too many things that they then just throw into the membership pot for five bucks and doesn't really get them anywhere.
SIMON INGER: So I think there's that as a little message too to be comfortable with who your clients are.
SAM BURRELL: Is there anything that anybody wants to add in some way or anything else that I didn't cover that should have been covered, or are you all OK with--
SAM HERBERT: I'm sure we could all talk for hours-- [INTERPOSING VOICES]
SAM HERBERT: --could talk about it--
SAM BURRELL: I'd love to the pub with this group actually and just go [INAUDIBLE] [LAUGHTER]
MIKE CLARKE: Simon I think you just touched on a important point for the next one, which is who's the buyer?
SAM BURRELL: Yes.
MIKE CLARKE: I cannot tell you how many pro-- clients we started working with who had some product concept and you start-- in which somewhere along the development spectrum, you start talking to them and you go, OK well, who's going to buy this? And do you know how to sell it to them? Because if you're selling to the library or to your members, and now all of a sudden you have to sell to the IT department of the university or the Office of Research, you need a whole sales force to do that.
MIKE CLARKE: And if you don't have that, you're not going to be successful. So there's that-- just thinking about not just who the potential end user is, but the who's--
SAM BURRELL: Who's going to pay for it. [INTERPOSING VOICES]
SAM HERBERT: And that's a great conundrum-- that's one of the conundrums of innovation though, is because the more radical it is, the potential more benefit because it will be developing a new revenue stream with a different audience or in a different way. But the more radical it is, the harder it is to do all the other bits about it, to sell to them, to reach them, to support the product. I think that's a really difficult problem for societies to work out.
SAM HERBERT: If I do incremental innovation in my existing products, that might get me a little bit of a boost but really not by much. Whereas if I do something for the same audience that actually utilizes the same content, then that's very clear as a product opportunity. But again, are they going to be willing to pay for something that essentially is giving them same content? And each time you go away, a different degree of separation gives you more opportunity, but more problems.
MIKE CLARKE: Yeah, exactly.
SAM BURRELL: I think that's a really big challenge and I think societies-- Simon touched on the point about I think they're very uncomfortable. There's a slight uncomfortable about charging for anything in the first place, actually. Going this product, whatever it is, adds value to-- it's being very certain about the value add and who it's adding value to and being comfortable in charging money for that.
SAM BURRELL: And partly I think, it's because they haven't done product development on the whole very much, very often. So those questions about, is what we're doing valuable? Is what we're doing worth the money that we're charging for it? Is there potential to do something else? I think the point about culture is really important, the kind of-- thinking about product generally is not-- for some, it's entirely new territory.
SAM BURRELL: Not for all for sure, but for some.
SAM HERBERT: Related to the first bit you said there, I-- is really-- I want to ask the question. So what does society see as their value or their purpose? And I think maybe 10 or 20 years ago, they would have been very clear about that and very confident. You can kind of yeah, I'm doing-- we're providing a real value service here. Nowadays, I feel like they are less certain of that-- or what is our value?
SAM HERBERT: What's our purpose? Why we actually here? And I think we have to get to a new realization of what the value is, what their purpose is. And that to be able to kind of sit back and broaden their shoulders and said, well obviously there's a value in this and there's a cost base to pay for this. But I think that becomes-- only comes with transformation and realizing that what it is, what did you do and why did you do it?
SAM HERBERT: And then what you-- but what you're going to do in the future? And why you're going to have-- what's your purpose going to be in the future, and how do you deliver that value in the future?
SIMON INGER: We always bring that into our work now. It's become a bit of a thing. If we end up-- asking the big question is, are you here for the science or the scientist? And it was really interesting when you asked a question that way, the reaction you get. [LAUGHTER]
SAM HERBERT: Yeah.
SIMON INGER: Because it's actually quite hard to be both.
MIKE CLARKE: And it's interesting. You can see the organizations that have thought about that over the years and at their founding because they'll either used the word of or for--
SIMON INGER: Yeah, exactly. [INTERPOSING VOICES]
MIKE CLARKE: -- of the science or for the scientists. And that of-- I always look for the of versus for because that tells you which direction, at least at their founding, they were thinking.
SAM HERBERT: Language is so important, isn't it? The use of language really defines us. Really defines who we are--
SAM BURRELL: But Sam, I think that's also something about-- I think there's a fear there. So I think the fear is that because they're not sure about the value that they bring, if you actually ask the question it is fear and then and the other way that that plays out. I mean I saw the other day and article about shadow boards, the idea of putting together a board that reflects your board and does what your board does except it's made up of people who were in their 30s or younger.
SAM BURRELL: To see how they address the same questions because actually, they'll come up with completely different answers. And I think again that's something that my experience anyway, of working with kind of society leadership, is the lack of engagement with younger people. And this kind of like, oh but that's just all fancy stuff and it's millennial snowflakes and that's got nothing to do with us because we're sensible scientists.
SAM BURRELL: And you kind of go eh-- really--
SAM HERBERT: The science is done in a different way, though--
SAM BURRELL: I know.
SAM HERBERT: --people read things. Yeah exactly, absolutely, and people read things in different ways and they get access to answers and questions in different ways now. And I think that-- yeah.
SAM BURRELL: So it's quite a fundamental question, I think, in some ways, the kind of revenue diversification piece is adjacent to the other question, which is what is you're doing exactly again?
SAM HERBERT: Yeah [LAUGHTER] yeah because the product is always just the manifest-- I mean, but the purpose probably stays the same. But you have to come back to it. But the product has to be a manifestation of the current environment and how do you deliver that purpose, not the historic version of how do you deliver-- because the product is an the evolving thing that might disappear and appear. It is only relevant for a particular point in time.
SAM HERBERT: How do you help this group of scientists do better science? Well, you probably don't distribute your paper-- a paper based journal anymore, you do something else.
SAM BURRELL: That was really great. Thank you, everybody. I'm sure that all of our listeners will have lots of questions and hopefully they will be joining us to talk to us about this later on. Thank you so much for all of your time everybody.
Segment:0 .
SAM BURRELL: So hello everybody. Good to see so many people here. For those of you who don't know me, I'm Sam Burrell, and I'm the Society Street program chair Thank you very much for coming along today. And thank you to our speakers for agreeing to share their thoughts and experience with us. I'm really looking forward to this. On previous Society Street panels, we've always had a pre-meet,
SAM BURRELL: and the conversations on our pre-meets were always really, really interesting and challenging and we regretted not recording them. So here, fresh for 2021 Society Street, we're going with that vibe. Today's panelists are joining us ready to discuss income diversification for societies and to share their experiences of inventing products. And we haven't explored these ideas together as a group before, so I'm trusting that it won't descend into a brawl.
SAM BURRELL: A brief introduction to our guests-- if you could wave when I-- Simon Inger, you know from his earlier session, who describes himself, sometimes, as an inventor. He works with societies, both as the co-founder of Cadmore Media and as a consultant at Renew Consultants. Joining him today is Sam Herbert, co-founder and M.D. Of 67 Bricks, an organization that works with content rich organizations helping them to do more with that content, and -- Sam you might want to pick up and expand on that in a minute.
SAM BURRELL: Liz Heinberg, who is Chief Product Officer and co-founder of the recently launched Hum, which describes itself as purpose built to help associations solve their biggest challenges, including launching programs to grow non-dues revenue. And Mike Clarke, managing partner and consultant at Clarke and Esposito, who's been working with societies on solving problems with them for many years.
SAM BURRELL: Now, to kick us off, we all know that many society execs are sitting with income diversification on the top of their list of things to do. If it wasn't already at the top of the list before 2020, it certainly is now. Several of societies' traditional revenue streams are increasingly under threat. But before we dive into how societies can address that directly, I would just like to start by asking each of you to outline some of your experience of the process of developing a new product, specifically at the very beginning.
SAM BURRELL: I think if you're sitting there with this on your list of things to do it can be really intimidating, particularly if it's not something you've done before. So either pick on a particular example or more generically: where and how does this process start? Liz, I want to pick on you first because we talked-- when we got to have a little pre-chat -- we talked about this the other day, and I thought the experience of where Hum came from was really interesting
LIZ HEINBERG: Certainly. So I was brought in as part of a new product development team at Silverchair, which is-- you may be familiar with Silverchair's scholarly and professional publishing platform and company. And the leadership at Silverchair had recognized that they wanted to explore new product opportunities, and so they brought in a person who had been formerly an innovation consultant, and he brought me on board.
LIZ HEINBERG: And we went through a pretty exhaustive idea generation phase So the recognition was that, very often, opportunities will kind of come across your desk and people will respond to an opportunity and say, oh yes we should go do this thing. We should chase this new shiny thing, it's very tempting. But it was instead decided that we would pursue a comprehensive and more rigorous approach to evaluating opportunities.
LIZ HEINBERG: So we began by really just generating hundreds and hundreds of opportunities, and we used the word opportunity instead of idea because it is-- it's not just about-- it's not just about a good idea it's about, "is this a good business opportunity? " So we were using particular rubrics to say, "is this something that this particular company is well suited to do? "
LIZ HEINBERG: And that's one kind of area that we were grading against. We were looking at the total market opportunity, is this a good business opportunity? Is it large enough to be interesting and to be worth investing time in? And then is it is it reasonable, will the market believe that our company should be doing this thing? Does it align with the bigger story of what we're all about? And so, we began with hundreds and hundreds of opportunities and then at each phase, we would present this list of opportunities and decide as a group, based on those voting criteria, which opportunities deserved more of our time, more resources, more time and attention.
LIZ HEINBERG: We went back did more research on that bunch of opportunities, came back again. And so we had a number of meetings with all of the stakeholders in which we were presenting various opportunities at different levels of development. And until we got to the very end, and we had a total of what we called four, level four opportunities.
LIZ HEINBERG: And those had been much more thoroughly fleshed out. We'd done business model canvasses for the opportunities and we're able to show the estimated total market size and ideas of how we might approach them. And at that point, it went to a vote and we chose one opportunity and moved forward with that. But what was really interesting was it just-- it made us much more-- it was really helpful to be able to compare one opportunity to another.
LIZ HEINBERG: So you weren't just making the decision about, are we going to move forward with this kind of exciting new business opportunity? Because there were actually multiple, exciting new business opportunities. And it was more about choosing which one-- which one was better.
SAM BURRELL: Sam, does that reflect your experience at all?
SAM HERBERT: Yes, yes. I would definitely build on that. I think, the way I like to think about it is as an investment company, investment companies make bets. They make quite a few bets and they understand that some of them will come off and some of them won't. So I think I would agree with Liz on the process of identifying a bunch of ideas and not looking at an ind-- looking at individual idea on its own is that it always looks interesting, it always looks like a great opportunity.
SAM HERBERT: But it's always the prioritization, and what you say no to is just as important as what you say yes to. But then I think, that for me the next important step is to understand that it is like-- when you're talking about substantial change, and not just iterative changes. You're talking about significant new products, actually new revenue streams, that what you really need to do is to be able to-- you're not going to know-- well I don't think you're going to know, doing analysis, which of these are actually going to work.
SAM HERBERT: So you have to make a number of bets across it, across the portfolio, and understand that some of them will come off and some of them won't. But you start off by making smaller bets, and you kind of do some paper protyping around the 5 or 10 that you've identified as potentials. And what we've seen work really well is you kind of-- what you're really doing through that process is you've got to focus on testing assumptions.
SAM HERBERT: So you write a bunch of assumptions about the business, about the business idea about the product, and you say, these are our top six assumptions. If these assumptions are all correct, it's going to make us 5 million in revenue. Fantastic. And then you-- but then the process of working on that product is not building the product, it's testing the assumptions.
SAM HERBERT: And you're working out what's the best way to test the first assumption. The biggest in the most difficult assumption to test, let's test that one first of all, in the cheapest way we can. And then maybe that kills it off. Well yeah, that assumption's wrong, move on, move on to the next one. Or you learn something from it and then you test your second assumption.
SAM HERBERT: You're always moving up towards the position of it being a live revenue stream. And I think that's one angle to look at it. That's the kind of structured aspect of it. I think it's another aspect which is, that-- how do you give an idea of space and creativity to come up with something new and interesting? Which is, I think, a different question and then that's another interesting, difficult question to answer.
SAM HERBERT: But I'll let someone else--
SAM BURRELL: I was going to say, Simon, I'm going to pick on you to pick up on that, because I know that you and I have talked about the kind of space for creativity piece.
SIMON INGER: Yeah, that's going to be really important to allow people within, especially within a society environment where they're perhaps not very used to being allowed even to rock the boat and come up with anything particularly new. So it's often a difficult environment. And actually also picking up on Sam's point as well, they usually haven't got the bandwidth to pursue more than one thing in any depth.
SIMON INGER: So their process of logic at the earlier stages has to be, you've got to logic it through before placing that bet, because it can easily be another year or so before they have a chance to move on to something else. I think coming back right to the very start, and I think one of the things-- the reason why I find societies such interesting people to work with, and organizations to work with, is that they just have access to the most interesting minds in that space.
SIMON INGER: And they-- obviously teasing out from them, all manner of useful things that would be great for people who work in the space or for the science itself, It's-- from those people is actually just great fun. They not only have identified a whole raft of problems, they're often quite-- have some reasonable stabs of how to go about productizing the solution. So I think that's always very, very interesting, and of course they themselves, the people, the members of the Society themselves are a fantastic resource when it comes to building product, in many cases as well.
SAM BURRELL: Mike, do you want to pick up on any of that or maybe start narrowing it down to how this might apply to societies, or what the challenges for societies are?
MIKE CLARKE: Sure. I think that Simon touched on one of the big challenges with societies which is despite often being having a super abundance of ideas, often brought to them by, as Simon alluded to, their members and other constituents, often don't have the infrastructure. They don't have a product development team in many cases, some of the large ones do.
MIKE CLARKE: So part of it's resource and part of it's just I think the process that Liz described, that more formal development process, is fantastic. If a society has a dedicated team and resources to do that, by all means. In my experience, a lot of the good ideas and successful products at societies tend to be more of a bottom up approach as opposed that formal, top down, we're going to engage in a product development process.
MIKE CLARKE: It tends to be ideas that bubble up from teams and what one of the-- now those ideas tend to therefore, because they're bubbling up with teams that are working on journals or books, tend to be more journals or books, or other kinds of product line extensions. And so then I think the-- and those tend to often be very successful products because they're there addressing needs, they're working in areas where the society has experience.
MIKE CLARKE: It has channels, it knows how to develop those products, it knows how to sell those products. So I think the challenge for societies is not those kind of products, although they still need resources and process for those. But really it's stepping beyond that into adjacency or greenfield opportunities where more resources and more of a process, sometimes a formal process, are beneficial.
SAM BURRELL: So we've got our chief exec of a society who's been briefed with, and/or has decided for themselves rightly so, that revenue or income diversification needs to be top of the list. What would your advice be to them about how to move that forward? What's the, what's the-- where would you begin? And let's assume it's a medium-sized society rather than a particular big one who's already got a product development team on board.
SAM BURRELL: Mike, I've going to go back to you because you're nodding in a kind of, I have ideas kind of a way. [LAUGHTER]
MIKE CLARKE: I would focus on process and to go back to a point that Sam made, the-- as executive, you're not going to know which products necessarily are going to be successful. So the real important thing is to create a space to create products, a culture of product development.
MIKE CLARKE: That often is the most important thing, if you can just create a culture and an expec-- and not just stage a space but an expectation. You interact with some organizations and the expectation is, we're going to create a bunch of new products this year. Now we don't know what they are yet or we're working on them, they're in the pipeline, we're not sure they're going to be. But we know we're going to create products this year.
MIKE CLARKE: Other organizations, you talk to them and they haven't created a product in a decade. And so having that product culture, that expectation that we are an organization that's going to create products that's super important. And another one I think is, that goes along with that, is creating things-- it's things like creating an R&D fund, or a product innovation fund, whatever you call it, but a fund that sits outside.
MIKE CLARKE: It's not part of the-- it certainly cannot be part of the operating budget, it's got to be a separate budget, not part of the regular reserves. It can't be the kind of thing where in order to create a new product, you have to go to the board and get release a little bit of money in order to do the first phase. There needs to be a process around stage gating those ideas and releasing funds making small bets as you go but releasing funds in a process that's not too onerous.
MIKE CLARKE: And really putting some expectations and cultures and resources around product development. Some formalization I think it's good, especially for greenfield opportunities, new things to have a formal process. But all-- but also simultaneous to let ideas bubble up because often successful products are bottom up ideas.
SAM BURRELL: Simon what would you like-- oh, sorry Liz, go.
LIZ HEINBERG: I was just going to piggyback on that idea of culture note with the product I'm working on right now, Hum. It's a platform for professional associations and we help to-- one of the ways that we are encouraging associations to cultivate the non-dues revenue is to just think about content a little differently than may have been thinking about it previously. To think about it not just as something that is for members, but to think about other ways that they might be able to use existing content or leverage it further.
LIZ HEINBERG: Take a piece of content and split it into multiple pieces of content, and distribute it a little differently, and reaching audiences that they haven't previously reached. So I guess I would just add that it's-- and I think some part of the culture can just be to think a little bit creatively about the resources at your disposal and different ways you might use them outside of what has historically been the model.
LIZ HEINBERG: I know we saw a lot of disruption as a result of COVID and the traditional reliance on a once a year in-person event. And that really led to a lot of people needing to think a little bit differently. And even beyond just what-- beyond just changing that one event to a virtual event. How can you go from thinking about a more periodic kind of engagement to cultivating engagement in more of a year round way and making doing a better job of delivering the right content to the right person at the right time?
LIZ HEINBERG: That kind of personalization that is so important to-- we've all gotten kind of used to Amazon knowing exactly what we want and delivering it to us. And so finding ways to take what you have even, and just get it to a different set of people or to a more finely targeted set of people. And it's not-- it doesn't sound like a very exciting product as far as product development goes, but there are certainly things that can be done that are a little more novel in terms of just content forms.
LIZ HEINBERG:
SAM BURRELL: Sam, do you want to add anything?
SAM HERBERT: Yeah I wanted to agree with what's been said a lot. But what you're saying, Michael, about the difference between incremental and new products I think is really, really important. And I think with innovation, we have to understand the difference between those two types of innovation. Incremental innovation is really well done by people who currently manage the current product and work with existing users.
SAM HERBERT: They will come up with and they will hear little suggestions and they'll build that into the product, and that is that's great and that's really important, first sustaining or increasing the length of a current product, a lifetime of product. But coming up with new ideas about different ways is-- you have to recognize that it's a very different approach and you have to take a different approach to it. And so I think that creating space is really, really important, reducing friction around the testing of new ideas is very important too.
SAM HERBERT: There's that idea about having a fund, which can be dipped into and yet there are gates. And if you're before first gate, there's always-- there's $100 there just to try and do a bit of paper prototyping with someone and putting it in front of someone. And then I think in terms of-- what you find is it-- what we found really, really, really important is to find the right people in the organization.
SAM HERBERT: So as I said, incremental innovation, get the people or current product managers or working with the existing users. They're not always the right people and they won't always be the right people to do the kind of new innovation. But there's normally some people in the organization who are just dying to do this stuff and been waiting for this opportunity.
SAM BURRELL: [LAUGHTER]
SAM HERBERT: And as you give them a bit of space, give them as much leeway as you can and then allow them to-- and then there's some structure around it. But I think much, much less structure for the initial idea generation. Am I pulling together some structure around the brainstormings, you know, bringing user insight, understand business objectives, and technologies and kind of think about that as a Venn Diagram and where they overlap, but bringing lots of insights about these things.
SAM HERBERT: What are your current users doing? What are they complaining about? What are your business direct objectives right now? Where are you challenged? What are the new technologies that are available? What do they do? And then bringing it all in his insights and see where they clash and where they hit and then and then allowing these people who are already kind of wanting that opportunity to do this innovation, the freedom to do it.
SAM HERBERT: I've seen that work really, really well. Unfortunately, I've also seen the opposite. That connects that-- I've seen where that works really, really well. And then if I'm getting this, how'd you come up with three amazing ideas that could all be monetized right now. We've got a really strict process around this, make sure it gets monetized.
SAM HERBERT: And then two years later, those ideas haven't gone anywhere. But I think it's a difficult balance. I think for societies and traditional publishers as a whole are probably quite risk averse. Non-traditional and are very uncomfortable with this idea of just put something out there and see what it's like. For publishers generally, the idea of putting a printed book out that had some mistakes in it, you just don't do that, that's awful to the historic culture of publishing.
SAM HERBERT: You get it right before you release it. There is actually-- what you need to do nowadays is get something out there. Test it test it in some small way. Try it with someone, show it to five users, show it to 10 users, show it to 100 users, get some feedback, and learn from that. And that's a very different approach. But I think I'm agreeing with kind of the general idea of understanding that this is different and needs to be tackled differently and needs to put a budget aside for it to do that.
SAM BURRELL: Simon, do you want to add to any of that?
SIMON INGER: Yeah, I was just going to make an observation really-- this is another one of the things that's come from the pandemic-- and you're talking about adjacent opportunities. But I've also-- one of the things we observed from the Cadmore perspective when you're looking at what's happened to events is a lot of the expertise that the publishing people have is suddenly needed in events, because events have become all about metadata management.
SIMON INGER: And suddenly you've got a whole load of assets at the end of it, we've got a video asset that you didn't ever have before from the face-to-face, and you got to do something with it. We don't have to use it you can just throw it away, but there's another opportunity that comes from just having it. So that's quite interesting that suddenly, an opportunity for the publishing people with that structure, a process built in to operate in an adjacent area within the same society.
SIMON INGER: And the other thing I wanted to pick up on was actually about the finances and funding going all the way back to where we were. It should be an advantage that societies have, is that they don't necessarily have to show a profit in the same kind of timeline that you do within a commercial set-up. You may be very well funded if you're a commercial entity and have enough money in the bank to burn for a few years to get your product off the ground.
SIMON INGER: But more often than not, you're on a bit of a tighter budget. The society may not actually have those same financial pressures, it obviously has a long term goal But it actually always has the luxury of playing around a little bit longer. But again coming back to that, another earlier point about the appetite and the-- just having the environment in which people are used to creating products.
SIMON INGER: So I'm just thinking back when we were talking-- worked with a commercial publisher, with a mid-sized commercial publisher, who apologized to me when they said, oh I'm sorry it took us six weeks to launch this new journal, our plan was four. And then you take that same idea somewhere else and they think, well two years would be a good tight timeline to operate on. So it just does depend on who you're talking to as-- and to what seemed like a reasonable timeline as well.
SAM BURRELL: I want to pick up on something that everyone sort of alluded to, is around culture. And Mike that was one of your first points in that kind of the culture of expectation. My experience, particularly at the moment I'm feeling this quite a lot in some of the work that I'm doing, is the risk averse-- that there's kind of the risk averse nature of not all, but many societies and their governing bodies.
SAM BURRELL: That are quite fearful of looking like they're gambling with the society's future. And I wonder if there's a kind of tension. Does the pandemic offer us, them, an opportunity of kind of going, actually you must take this risk now because you've got no choice. And how can we collectively go about creating that culture within the learned society space where actually, this becomes a normal part of an organization's way of being?
SAM BURRELL: Sorry, that's quite a loose question but anyone feeling inspired to, go.
MIKE CLARKE: And it's a super, I think a super important issue and an observation and the point of the pandemic is it is exactly, I think, right. And because-- one of the things that I often observe is the risk aversion. Risk aversion is often risky because if you're not out there reinventing, it means you're losing market share, you're losing opportunities.
MIKE CLARKE: And you're also putting yourself in a position where, if something happens, like all of a sudden your big annual meeting is not going to happen for the first time in 100 years or whatever, you don't have a diverse portfolio to come back to. Going back to Sam's example of a investment portfolio, if your investment portfolio is two products that you published for the last 100 years, that's risky.
MIKE CLARKE: So I think it's-- there are different kinds of risks, there's the risk of, OK if we invest the specific amount of money in this specific product, is it going to produce a return? But I think-- and you can be risk averse about that, but I think taking a step back and thinking about it from a portfolio perspective it's incredibly risky to not be developing products and diversifying the portfolio.
MIKE CLARKE: And I think another thing that we didn't touch on, which I think kind of fits this theme is product reinvention. And so one of the-- a lot of times if you're not reinventing products over time, there's the risk that they're going to become irrelevant. And I think being in publishing and society publishing, this is not something that often comes up because we're dealing with a product format that's been around for centuries.
MIKE CLARKE: And every time somebody comes up comes up with the idea of reinventing a journal, everybody just turns out everybody still wants PDFs. But there are categories of products that really have needed to be reinvented and have done so successfully, and those are things like handbooks, which have turned into things like style centers and education resources. And if you didn't do that or-- then all of a sudden you see your handbook sales going down year on year.
MIKE CLARKE: Or another great example reference products that have-- reference series that turned into decision support tools or workflow products. Things like The Access Medicine Series by McGraw-Hill is a great example. Or my favorite one is bibliographies, which used to be these big, printed books that-- back in the 70s, then they turned into CD-ROMs, I remember those in the 80s?
MIKE CLARKE: And into A & I databases and now they're being reinvented into discovery tools. And if you think about it, something like Google used to be a phone book so one of the most successful products of all time is thinking about turning a phone book into-- literally taking the Yellow Pages and turning it into this search appliance. Or Facebook it is effectively the old White Pages and you turn it into this big product.
MIKE CLARKE: So product reinvention I think, is also part and parcel of thinking about this topic, both risk aversion and thinking about product development in general.
SAM HERBERT: Could I just add to that? I think the way I see that, and I think is really, really good point. The way I see that is that of change and disruption can come in the form of, or typically comes in the form of new user experiences. So we want to think about is this new product, but it's got a loose idea. But if you think about Google, if you think about Uber, you think about Amazon, what they did was they actually-- all they did was they improved the user experience of achieving an existing outcome.
SAM HERBERT: So the user has a goal, the user wants to get from A to B and Uber came along and said, well I'm going to make that experience a whole lot easier for you, a whole lot better for you. That's not changing the outcome, but it changing user experience. The same, as you said, with Google. The user still ends up with telephone number and there you have that first use case.
SAM HERBERT: They end up with telephone number. But it was the experience of achieving that outcome that completely changed whole industries. So I think that's a really important place to start to me-- any conversation around this has to include the conversation around users. But I think it's not about asking users what do you want or what product do you want or what new feature do you want?
SAM HERBERT: I think it's about understanding what are our users are actually doing? What outcomes are they achieving with our content and data? And then, beyond simply-- well, they read it. It's why are they reading it? What outcome are they looking to achieve by reading that content? And then trying to think about, well, how do we help them do that quicker, faster, better?
SAM HERBERT: And if you start from that perspective, then you're always going to end up with a product that meets an end user need, and you've got-- you know, and that meets an end user outcome. You've then got to both work backwards a little bit to make sure the commercials work for you but that's where you when you kill a few ideas, because they don't actually deliver you any money. But the ones where it actually delivers on an existing outcome but quicker, faster, or better, are typically the ones that will fly in the market, because that's what users in the end care about.
SAM BURRELL: Liz?
LIZ HEINBERG: I wanted to circle back to that idea of the risk aversion a little bit. And from an institutional perspective, I think it can be challenging, especially to do larger innovation as opposed to the incremental innovation, because you really enter a place of ambiguity. So it's not just about saying one time we commit to this funding-- this funding this new product.
LIZ HEINBERG: It's committing over and over again to this feeling of ambiguity. So for example, this new product, no we can't create a three year P&L for the product we're creating. That might be something that would make you feel more comfortable, to see a three year P&L, but it's not something that can be done at this stage, this early stage as we're in the testing and still shaping the product.
LIZ HEINBERG: So just a-- I think it can take some getting used to, to over and over again kind of recommit to this course of action. And I think it can be really helpful to frame it up as Michael did, as it's risking-- it's risky to be risk averse.
SAM BURRELL: Simon, did you want to layer anything on top of that?
SIMON INGER: Yeah, I just want to just take a very small sideways step into governance, generally. I think one of the things I found interesting is just-- recently we've been working with a US society whose membership is actually heavily -- although it is a scholarly society, definitely in research communications. Its membership is very, very much biased towards industry and the officers of the society largely come from industry, and of course you get a very different approach to risk.
SIMON INGER: They obviously are going to operate the best way for the society, but all this-- at the same time, they are used to being in an environment where it's always about pushing the product forward, and so on. So I think it's interesting that they're getting some of that into a society is useful. We definitely also come across societies who're increasingly appointing people outside of their subjects space specifically people just from within industry or just from a complete lay perspective.
SIMON INGER: That can add a little bit of salt to the debate that's going on and just give a completely outsider's objective view. And I think they also help to create that atmosphere of being questioned so the status quo is frequently questioned.
SAM BURRELL: I think we could talk about this for hours, and I'm really enjoying this conversation, but I'm also really aware that I'm meant to be keeping a tight time limit on this that we don't take up all of our days. So I guess what I-- we're back to our theoretical chief exec of this society. Where would you suggest they look? What kinds of things could they think about? What parting piece of advice would you give them about what they do with this brief that they've got, do you think?
SAM BURRELL: So, Sam you like you might have something to say.
SAM HERBERT: Well I think you have to see the big picture. I think you can't think about this as a one-off, as a OK I'm just going to assign a little bit of money, and we'll do a little bit of innovation and that'll solve all our product problems. I think-- product diversification problems-- what I think you have to understand is that you need to-- societies and publishers at large have to change and transform who they are as a business.
SAM HERBERT: And that includes lots of things we talked about, that you have agility, flexibility, willingness to take small bets, putting in place a culture of learning. Everything we do we learn from a culture of testing and trialing. I think that's the big that's the big picture that needs to be understood is that to live in a time of constant change, which we are now in and maybe 30, 40 years ago that wasn't the case, but we are in now.
SAM HERBERT: And to survive in that kind of environment, you have to have a portfolio of products. And you have to recognize that some of them are going to disappear over time and some new ones are going to come out. But to be able to have a portfolio, you have to be a different type of organization. And you have to have flexibility, of different capabilities, you have to have a better understanding of data.
SAM HERBERT: So it's a long, long, long goal a long objective to get to that point, and it's a journey to get to that point. But that's the direction of travel you have to-- I think you have to go and to be relevant in five, 10 years--
SAM BURRELL: Yeah Liz? What's your parting-- parting shot?
LIZ HEINBERG: I think empathetic listening is a real superpower, and so the idea of listening. Note that we've mentioned solving problems, doing things better, faster. And I think in order to understand what problems or what opportunities there are, really listening to hear what people want. Or what they're not even saying or seeing what they're doing and building from there, using that as a jumping off point.
LIZ HEINBERG: It's just so easy to keep doing what you're doing and delivering the thing that you believe has value but it's not just whether you believe it has value. It's what is the end consumer believe.
SAM BURRELL: Yeah, good point. Michael?
MIKE CLARKE: I think from the executive level, echoing some of Sam's points, the important thing is to focus not on specific opportunities but on creating the culture and the process and the environments to support ongoing product development. Put it-- make some funding available, set some expectations, provide some infrastructure and some light governance and get out of the way.
SAM BURRELL: Simon?
SIMON INGER: And I think one of the other things that is there, and needs to be addressed as well, so I agree with everything that's been said there, is that we come across societies that can feel somewhat apologetic about charging for things. And it's because, oh our mission is to support the scientist or whatever it is and this is-- we're asking them to pay for this product, and that's awkward. So surely we'd be bundling it in with our membership. We're giving it away.
SIMON INGER: So I think there's also this thing about-- being comfortable about whether-- who you're charging, whether it's something that you are building that needs to be part of memberships somehow, to shore up membership, which is often the conclusion. Or can I separate out it enough so I do feel it's OK to make money out of it as well? Because I do see too many societies building too many things that they then just throw into the membership pot for five bucks and doesn't really get them anywhere.
SIMON INGER: So I think there's that as a little message too to be comfortable with who your clients are.
SAM BURRELL: Is there anything that anybody wants to add in some way or anything else that I didn't cover that should have been covered, or are you all OK with--
SAM HERBERT: I'm sure we could all talk for hours-- [INTERPOSING VOICES]
SAM HERBERT: --could talk about it--
SAM BURRELL: I'd love to the pub with this group actually and just go [INAUDIBLE] [LAUGHTER]
MIKE CLARKE: Simon I think you just touched on a important point for the next one, which is who's the buyer?
SAM BURRELL: Yes.
MIKE CLARKE: I cannot tell you how many pro-- clients we started working with who had some product concept and you start-- in which somewhere along the development spectrum, you start talking to them and you go, OK well, who's going to buy this? And do you know how to sell it to them? Because if you're selling to the library or to your members, and now all of a sudden you have to sell to the IT department of the university or the Office of Research, you need a whole sales force to do that.
MIKE CLARKE: And if you don't have that, you're not going to be successful. So there's that-- just thinking about not just who the potential end user is, but the who's--
SAM BURRELL: Who's going to pay for it. [INTERPOSING VOICES]
SAM HERBERT: And that's a great conundrum-- that's one of the conundrums of innovation though, is because the more radical it is, the potential more benefit because it will be developing a new revenue stream with a different audience or in a different way. But the more radical it is, the harder it is to do all the other bits about it, to sell to them, to reach them, to support the product. I think that's a really difficult problem for societies to work out.
SAM HERBERT: If I do incremental innovation in my existing products, that might get me a little bit of a boost but really not by much. Whereas if I do something for the same audience that actually utilizes the same content, then that's very clear as a product opportunity. But again, are they going to be willing to pay for something that essentially is giving them same content? And each time you go away, a different degree of separation gives you more opportunity, but more problems.
MIKE CLARKE: Yeah, exactly.
SAM BURRELL: I think that's a really big challenge and I think societies-- Simon touched on the point about I think they're very uncomfortable. There's a slight uncomfortable about charging for anything in the first place, actually. Going this product, whatever it is, adds value to-- it's being very certain about the value add and who it's adding value to and being comfortable in charging money for that.
SAM BURRELL: And partly I think, it's because they haven't done product development on the whole very much, very often. So those questions about, is what we're doing valuable? Is what we're doing worth the money that we're charging for it? Is there potential to do something else? I think the point about culture is really important, the kind of-- thinking about product generally is not-- for some, it's entirely new territory.
SAM BURRELL: Not for all for sure, but for some.
SAM HERBERT: Related to the first bit you said there, I-- is really-- I want to ask the question. So what does society see as their value or their purpose? And I think maybe 10 or 20 years ago, they would have been very clear about that and very confident. You can kind of yeah, I'm doing-- we're providing a real value service here. Nowadays, I feel like they are less certain of that-- or what is our value?
SAM HERBERT: What's our purpose? Why we actually here? And I think we have to get to a new realization of what the value is, what their purpose is. And that to be able to kind of sit back and broaden their shoulders and said, well obviously there's a value in this and there's a cost base to pay for this. But I think that becomes-- only comes with transformation and realizing that what it is, what did you do and why did you do it?
SAM HERBERT: And then what you-- but what you're going to do in the future? And why you're going to have-- what's your purpose going to be in the future, and how do you deliver that value in the future?
SIMON INGER: We always bring that into our work now. It's become a bit of a thing. If we end up-- asking the big question is, are you here for the science or the scientist? And it was really interesting when you asked a question that way, the reaction you get. [LAUGHTER]
SAM HERBERT: Yeah.
SIMON INGER: Because it's actually quite hard to be both.
MIKE CLARKE: And it's interesting. You can see the organizations that have thought about that over the years and at their founding because they'll either used the word of or for--
SIMON INGER: Yeah, exactly. [INTERPOSING VOICES]
MIKE CLARKE: -- of the science or for the scientists. And that of-- I always look for the of versus for because that tells you which direction, at least at their founding, they were thinking.
SAM HERBERT: Language is so important, isn't it? The use of language really defines us. Really defines who we are--
SAM BURRELL: But Sam, I think that's also something about-- I think there's a fear there. So I think the fear is that because they're not sure about the value that they bring, if you actually ask the question it is fear and then and the other way that that plays out. I mean I saw the other day and article about shadow boards, the idea of putting together a board that reflects your board and does what your board does except it's made up of people who were in their 30s or younger.
SAM BURRELL: To see how they address the same questions because actually, they'll come up with completely different answers. And I think again that's something that my experience anyway, of working with kind of society leadership, is the lack of engagement with younger people. And this kind of like, oh but that's just all fancy stuff and it's millennial snowflakes and that's got nothing to do with us because we're sensible scientists.
SAM BURRELL: And you kind of go eh-- really--
SAM HERBERT: The science is done in a different way, though--
SAM BURRELL: I know.
SAM HERBERT: --people read things. Yeah exactly, absolutely, and people read things in different ways and they get access to answers and questions in different ways now. And I think that-- yeah.
SAM BURRELL: So it's quite a fundamental question, I think, in some ways, the kind of revenue diversification piece is adjacent to the other question, which is what is you're doing exactly again?
SAM HERBERT: Yeah [LAUGHTER] yeah because the product is always just the manifest-- I mean, but the purpose probably stays the same. But you have to come back to it. But the product has to be a manifestation of the current environment and how do you deliver that purpose, not the historic version of how do you deliver-- because the product is an the evolving thing that might disappear and appear. It is only relevant for a particular point in time.
SAM HERBERT: How do you help this group of scientists do better science? Well, you probably don't distribute your paper-- a paper based journal anymore, you do something else.
SAM BURRELL: That was really great. Thank you, everybody. I'm sure that all of our listeners will have lots of questions and hopefully they will be joining us to talk to us about this later on. Thank you so much for all of your time everybody.
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