Bloggers are entrepreneurs at heart

I was reading Jeff Segal's post where he concludes that instead of acquiring a blog property, media companies should just hire the blogger. Sounds easy but misses the drive that makes a Mike Arrington or Om Malik or Nick Denton or Jason Busch start and nurture a blog.

I would suggest that it's not the aspiration of getting rich quick that drives them to hang their own shingle, but the negatives of working for a big media or analyst company - under-compensation of talent, and the stifling processes they impose.

I probably would have not left Gartner if the compensation more reflected my demonstrated contribution to revenues. I showed my then boss I was getting only single digits of the direct and indirect revenue I was bringing in. While sympathetic, he could not do anything it. Because almost 60% of revenues were eaten up by SG&A. The stars were salespeople, not the analysts. And the G&A part kept growing as the analysts got surrounded by more and more process.

No different than in technology. You see engineers and developers, far more than sales people (with clear exceptions like Tom Siebel) who turn entrepreneur. R&D gets a quarter or a fifth of what goes into SG&A.

And look how in spite of talk of industry consolidation, the number of software entrepreneurs keeps exploding.  The web 2.0 phenomenon and now the mobile ecosystem around Apple and Nokia and others will spawn even more start-ups.

In their own companies they may have a low shot of making it really big, but they at least have the chance.  And their personal compensation is often better, and they like the independence and yes, the ego trip.

So, till acquirers are willing and able to reverse the ratio of spend on content (or engineering) talent versus SG&A, the Nicks and Ariannas will likely stay independent. Or if they get acquired, will soon leave to start something else.

It took a court decision almost 40 years to force the creation of an independent software industry away from IBM. And has spawned a glorious track record of entrepreneurs in that sector. Something similar has started in publishing.

Comments

[Anshu Sharma]

Very nicely put.