Reader's digest files for bankruptcy

A sad news indeed.
I remember being a fan of RD as a kid. But it has succumbed, to the rise of internet, more than recession. Print media has been struck real bad by the free content on th enet.

And there is no looking back. I dont think there is anyway that people can be coaxed into reading, and paying for, something that they can read on the internet for free.

The younger generation, the ones who have seen computer from an early age, are often more comfortable reading off the screen than from a printed version. Add to that the ubiquitous nature of free content, you know that the print media is fighting a losing battle.
The only way print media can tide over to the profit side is by providing content on the net. Right now, most media houses have free content on the net.

But this is not sustainable - because it requires the same amount of effort to produce content for the net, as it does for printing. The first thing that media houses must realize s that popularity is not revenue. You might be the most popular news agency on the internet - but that does not give you anything. Sure, you can find some advertiser on the web - but arent there too many websites vying for the same set of advertisers? The law of diminishing returns sets in very soon in such a market.

The only way out for the media houses is to have a free and a premium section, where the free section drives the masses . And the premium section catering to specialized news requirements.

Business Scalability in the Manufactoring sector

As promised earlier, here's my post on how to shape your business for scaling up, if you are in the manufacturing domain.
Most of the articles that I have read talk about up scaling the business in the web or the software domain. None really talked about applying the same principles to achieve scalability in business in the manufacturing domain.

I strongly believe that the principles of business scalability transcend the boundaries of the business domain. When we say that we need to structure the business model for scalability, we need a revenue model that is self perpetuating. One first needs to find out who the customer is. The next thing to figure out (and this is the most important thing) is to figure out what is it that will further your product's demand. And create your revenue model based on these answers.

Now lets focus on the manufacturing industry, If lets say it is a electrical machines manufacturer - that specialises in precision control. The company would probably then want to create a assembly line type product chain. So that each product sold in the market would create demand for more similar products. (If you want to have a more detailed/customised revenue model, you will have to pay me)

Scalability of business

Just read Anurag Srivastava's note (on facebook) dealing with scalability of business and life in general.

He writes
" .... what keeps one going is not the regular earnings that you get from the business which in a typical year is predictable - but possibility that there can be a time when all things will go right and will payoff exponentially. Every one who gets into business does it with that hope - that if all things go right - there will be a windfall ..."

I am not very sure about the comment about the "typical year" claim - all of us have seen how the markets crashed within a very short time. We are talking about black swans here. He seems to look only for the positive abnormalities but (probably because he is a die-hard optimist) prefers to overlook the tough times.

Though the expectation part is very valid - no one wants to do something that will remain mediocre all along. Its only the faint hope of greatness that drives the men.

Further he adds
"... where the business scales up purely on creation of a design or an idea that gets replicated easily and you get paid for every unit that gets produced by anyone through a license. So the Chinese might have factories which make the Nike shoes and scale up production as per what Nike wants and make incremental profits - Nike has to design and market those shoes to make exponential profits without too much extra investment on capital or humans. Ideas and intellectual property is scalable , bodies are not. Running a hotel is not scalable but the format/franchises are ..."

Here he makes a very interesting point. All of us knew it somewhere at the back of our heads but it still is a revelation when one first gets to see it articulated. Its the idea that can bring a turn around. In my opinion, the distinguishing feature of a scalable business is the fact that an additional unit is not accompanied with diminishing returns.

PS- More on business scalability in the manufacturing sector here.