Today SmartCompany celebrates its third birthday, and we’re talking with founder and publisher SmartCompany Amanda Gome about the highs and lows of launching a new online news publication, the joys of selling with no skirt on and best things about being an entrepreneur.
Amanda, happy birthday.
Thank you, James.
We are now three years old, did you ever think the business would make it to this point? Lots of people have tried to start small business publications and failed. What went right with SmartCompany?
Well, when I did start I had a number of people ring up and say “are you crazy, no one’s ever done this in Australia before, started a high-quality publishing business who aimed to build a community of small and medium businesses”. So I’m very proud to have reached three years old with more than 150,000 unique visitors, profitable, cashflow positive from day one and nearly 18,000 entrepreneurs and SMEs get our email every day.
One thing we’re thrilled about is the loyalty that our community has. Was this a community that was out there and waiting for the right product to rally around?
I don’t know, it’s a very disparate community. Australia doesn’t have a large population and you might ask what does a small retailer have in common with a large private business that makes widgets that operates around the world. So what we did is we honed in on that one thing which all great companies are passionate about and that is growth. Our whole community is centred around creating a business that’s profitable, sustainable and gives to the community, is innovative, creates new products and services. So having that common goal and passion was a kind of lynch pin of pull the community together. But from the start we also began with events, then we launched into webinars, eBooks, great lists and we’ve constantly sought comments and participation as well. All of those things have been instrumental in building the community.
Looking back over the three years, what were some of the big challenges you’ve faced?
The biggest one has definitely been cashflow. Of course, having written about entrepreneurs for 20 years, you would think I would know this, but no. Several times we got caught out with not enough money in the bank and I remember one Christmas, even though we had I think over $100,000 owed to us, it was in the middle in the GFC and no one paid. And we sat there over Christmas absolutely sweating even though we were quite profitable. So to get caught out low in cash in that way was a real shock, especially as we had run our accounts properly, we had done all the right things, we had chased debts – it was just that people sat on that money and we never expected that. That was certainly one of the biggest challenges.
Were there any sort of big mistakes you think you made, I guess particularly early in the piece – when I wasn’t there of course?
The biggest one was when we started. It wasn’t really a mistake, but we started with a model where people paid for subscriptions, but half the site was free – so it was a try-before-you-buy and then you’d come along and buy a premium subscription. We got a pretty normal conversion rate of probably about 8% of people that were trying. But what it did was meant that there was suddenly very few people on half of the site and we’d been very successful in getting advertisers to join as partners and sign up to some good deals and large deals. Suddenly they saw the traffic had plummeted on half the site and we actually realised literally overnight we are an advertising model.
And that was quite hard, because we’d of course developed some agreements with the CPA and the industry associations for discount subscriptions. Then, maybe two months old, we had to ring all these people up and say “sorry, we’ve just launched but we’ve just changed our business model”. They were fantastic and they said “good on you for realising it and we’ll still do whatever we were going to do together, we’ll just drop that discount subscription bit”. And I must say the support we got through industry partners, government, all of that has been fantastic in getting the word out, especially in those early days.
Now I actually sat next to you when I started on my first day in journalism back at BRW. The jump from being a journalist to a business owner and entrepreneur – was it a natural thing for you to learn how to do things like selling and having sleepless nights worrying about cashflow and all the other things that an entrepreneur has to do?
Definitely not on the cashflow, spreadsheet side. I can’t bear that side of the business and in fact the first person I hired was a bookkeeper. My investors said to me you should learn to do that all yourself because it brings you really close to the business and I said are you crazy, you want me sitting here sweating over some spreadsheet when I could be out selling or out getting fantastic stories?
So the first person I hired was a bookkeeper and I said to her I need everything perfect, I need my cashflow done perfectly, I need my profit and loss and I need my management accounts monthly as soon as the month ends. We set it up properly from the start because as I said we are SmartCompany and that’s what we must always be perceived as. The last thing we ever want is the tax department ringing us up and telling us that we’re not smart, we’re actually dumb.
Now selling is an interesting process and one that lots of people struggle with no matter what industry they are in. Tell us about a story that occurred when you were out selling in Sydney one day.
Dear reader, James wants me to tell you the story of the day I went to Sydney, got dressed in the dark at home, got to Tullamarine Airport in the middle of winter at 5.30am, got out of the car and thought oh it’s a bit blowy, it’s a bit breezy. And looking down I saw that I’d forgotten to put my skirt on. I had many appointments that day that I had to reach and I did have a coat on, but it didn’t quite do up. So I rushed in to meet my sales director at Melbourne Airport and said look I’ll buy a skirt somewhere in Sydney. Well of course I couldn’t find anywhere to buy a skirt and I spent the whole day clutching this coat that didn’t quite meet with my legs very tightly together, creeping in and out of meetings.
Did that help or hinder your sales efforts that day? Did anyone notice?
My sales director was appalled and I haven’t been able to forget it to this day.
We’re both from print backgrounds, but online is a very different ball game and very exciting. How have you found that transition and what really excites you about the online space?
I love the immediacy of it. I love the fact that you can get news up as it breaks. I love the fact that people can comment and there can be a sort of bat and ball thing happening rather than the old arrogant gatekeeper stuff that was very paternalistic really and I could never stand. So that’s what’s been fantastic about online. I’m not naturally technically gifted.
No.
But I’m very good at picking people and I’ve managed to bring in the likes of Campbell Corser and Amelie Mills to back him up and of course you James are really good online. So bringing in great people to really develop that online capability and of course now we’re experts at it. Often when hire we think well where can we poach someone from and we think, who’s doing what we do better than us? So we have to take people in and train them.
It is amazing how it changes, 12 months ago we were sort of only feeling our way on Twitter but now it’s a really important part of how we distribute our stories and get out to the community. What do you see as some of the next online trends?
The next online change probably in media will be step backwards for many publications in that they’re going to change their models and introduce pay walls and charge for content. And I think that’s going to be fantastic for models like SmartCompany as people will still be able to get their daily, high-quality information and news in those niche areas without having to pay. But I think too that that will change our business, we’ll see opportunities from that. I think social networking is just going to grow. The way we’re seeing things like LinkedIn changing the recruiting industry, all that social media is going to start to change a number of industries including marketing and PR.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
