Like the KISS principle, the obvious sometimes evades me entirely until some kindly soul points it out. So it was out on the road this morning, listening to a BBC Radio documentary about start-ups while waiting in line for my share of the privilege of using Britain’s highways, that the scales fell from my eyes. Of course, the world of the Network is indeed an Ideology. While it is not nearly as advanced as the Church of England or the Communist Party once were, it is still more all-embracing than the insipid political parties of the day in Europe and the US. Think for a moment. What do you really believe in? The inalienable right of Old Etonians to rule England? Or your ability, through a protocol you and I barely understand, to use a tiny device to reach and speak to anyone in the world. The ability of a Bush or a Clinton to hold a post-imperial power together? Or the ability to find and check any information anywhere? Will the EU save us, or Open Access? What is more important to the future of Mankind – the UN or the W3C?

We can take this to extremes, of course, but just at the moment I would judge that if you threatened Europeans and Americans with loss of network access, even to a service like Twitter, as happened two weeks ago in Turkey, then the great and the good would simply refuse the command, find alternate access points, use satellite internet, and find every possible way of remaining in contact – as so many middle class Turks did, until it was obvious even to their government that this would not work. And this goes even more to the point for business access: arguably there is no going back from immediate communication for anyone making, buying or selling anything above the purely local level. And the great thing about the Connectivity faith is that, like previous religions, it subsumes everything that was there already. Some of the most passionate capitalism on view is displayed by network start-ups. Some of the most idealistic exponents of Open Access, Data and all other Opens, belong to sects that would make the Diggers and the Levellers look right wing. All human kind is here, subscribing to the basic rules of connection, mark-up, content organization and retrieval. This is probably the greatest number of people all subscribing to the same rulebook that planet Earth has ever seen.

Within the world of connectivity, dynamic networked new businesses will be built, and you do not need to be in Shoreditch or Silicon Valley or any other “cathedral zone” of the new order, to succeed. But we all need to recognize that the nature of business in the new order may well be different, so perhaps we now need to gather up some of the lessons, after 25 years of observation of how a networked society increasingly behaves, and see how we may apply them to what comes next. Here are some contributory thoughts in that direction:

* Many of tomorrow’s businesses will be smaller than their real world expiring counterparts, both in terms of revenues and staffing. This is partly because they are virtual, partly because we are paying small amounts for fractions of transactions in the network.
* Very many of today’s real world businesses will not survive the real world convergence with the network. Permanent job loss will scar many lives.
* Network trading will be very profitable, with smaller enterprizes realizing better margins than their real world counterparts. Increasingly network margins will stay in the network, and by the time we reach Bitcoin III the network will have moved from a microcosm of the real world into being the …real world.
* When the history is written, we shall note that by 2014 net citizens were already reading, per person, a great deal more than any previous human generation. This trend continues as more and more people realise that they need a far better basic education to survive in a networked world, and that those educational outcomes could be achieved very effectively by self-learning in the network.
* New levels of public and private trust will need to be created as more and more people “meet” for the first time online – and never meet in person. Close work colleagues may never physically meet. The signals given by voice and video will be closely examined as each of us strives to recognize “trustworthy” behaviour and indicate it to others. This will be part data analytics, part screen and keyboard performance analytics, and part, as now, pure hunch.
* Collaboration is the order of the day on the network. As individuals, as companies, we seek to get closer and help. This is because no one is vertically self-sufficient any more, and in a networked world that demands solutions we have to band together to create them. Knowing who your potential collaborators are becomes more important, for the first time since the Neolithic, than knowing who your competitors are.  As competition becomes more of a contest for public (aka user) trust and attention, and less a struggle for product and pricing differentiation.
* There is no part of human life on the planet that, in an Internet of Things as well as concepts and ideas, is beyond the range of the networked world. The priesthood which emerges could pose a threat or expose an opportunity, but at present we seem to have opted to live in an “ungoverned” network world. Certainly we will want to avoid any nation “controlling” the network , but there will be increasing clashes with nation states, both the most sophisticated and the most primitive, as their proponents seek to restore nineteenth century notions of rule and control. Only the mass can resist this, and only by acting as a mass.

The triumph of the network is not inevitable – and yet there seems at present no counter force. And already we have icons – all hail, Steve Jobs – and soon, no doubt, we shall have that priesthood mentioned above. I think I shall apply for a minor archimandrite-ship, or even a role as a Hermit!

In the days when everyone did everything, few people did everything well. But I loved it. Editors in magazine companies moved from the Meat Trade Journal to the Retail Jeweller in a moment. I myself was transmogrified in a 3 line memo from running educational publishing to leading the charge in building a law publishing empire. We were in Publishing, we were Men (sadly, mostly) for All Seasons. “These are just businesses” we used to say. “You don’t need to be a lawyer to run publishing for lawyers”. And part of me still believes that, except nothing can now forgive how arrogantly little we knew about the needs and behaviour of the good people buying our publications.

These thoughts came to mind two weeks ago while reading this press release: “The company plans to complete its portfolio rationalization by exploring strategic alternatives for McGraw-Hill Construction, a leading provider of essential data, news and insights to better inform construction professionals’ decisions in the United States. McGraw Hill Construction has approximately $170 million in annual revenue and stand-alone operating margins approaching 20%. The business has shifted away from legacy print products to new, innovative data and analytics offerings, which are generating double-digit growth. Evercore Partners is acting as a financial advisor to the Company in this matter” ( It reminded me why we built these curious portfolio companies in B2B in the first place, as well as confirming my view that most press releases mean the opposite of what they say (“complete” in the context of the above note must be taken in the context of a complete review having broken the corporation into two and divested Education!).

We reached this place through a long experience of periodic recessions – at least that has not changed. We got here because we argued that a balanced portfolio gave us assets which would not all go down at the same time, and a balance of early first-in, first-out victims, recession proof activity (that is how we saw law publishing in the 1980s!) and quick recovery vehicles would proof us against all eventualities. Add in a blend of other qualities – some selected for high growth, others for cash generation, a few for high margins and we convinced ourselves that we could really get “balance” in a portfolio. But all of those traditional craft became waterlogged in a recession which was like no other in information marketplaces. As we emerged it became clear to all but the recidivist publishers that publishing, as experienced in the previous 50 years, was just about over. When we could pry people’s compulsive attentions away from their smartphones in order to ask them what they wanted, people did not generally say “book” or “newspaper” or “magazine”. In other words we were left asking Format questions which did not satisfy answers expressed as “solutions”, or “excitement” or ” learning without teachers” or even, “answers”.

Last week I was at a European Union workshop in Luxembourg on what we are going to do about stimulating the Creative Industries in Horizon 2020, the Commission’s workplan for 2015-2020. Only the nice lady from FIPP used the word “publishing” on any of the sessions that I moderated or attended, and even then with a sort of apologetic bashfulness. So it does not surprize me that the great portfolio conglomerates built in the publishing space of yesteryear are crumbling away, but it is worth asking why, and what may replace them. Companies change mission over time – think only of Pearson, a late Victorian builder’s merchant from Yorkshire which exploded into growth as an oil explorer in Latin America before, in late cycle, using the accumulated capital to become a brand portfolio in the post – war years. Now it is a single market entity once again, with just one of its brand acquisitions, Longmans, the eighteenth century bookseller/publisher, becoming the path to a remarkable twenty-first century market leadership. This is an odd story but not an unusual one. Portfolio is part of a cycle.

So what did Pearson need when they went single market in education? Well, specialist educational expertise is part of the answer. The single market specialists do seem to have a layer of market expertise which is very different from the jack-of-all-trades tradition that I noted above. And managers can talk tech talk and know what they are saying, while technology investment has become the key marker for many. Can you put a portfolio on a single platform is the “how many angels can you get on a pinhead” question for the industry rationalist schoolmen. Truth is, I believe, that new platforms and greater data concentration and increasing semantic analysis and domain ontologies increase specialization. For the portfolio players this raises a problem of choice and investment. Sometimes the answer, and this may be the case at McGraw-Hill, is not to invest further but to dispose. You could call this the D&B Gambit, as it retreated from portfolio ownerships over the last decade onto a core specialization. Sadly the pieces it sold are now worth more than the bits it retained, which is another warning to portfolio dismantlers.

Pieces of stucco have broken off some of the best regarded frontages in the industry in recent years and gone crashing to the pavement. Think of Penton Media in the US, now mercifully under management with a new plan. The McGraw announcement along with the break-out of Axios, itself a mini-portfolio, from UBM tells me that this is speeding up. And the units going now are not unprofitable, just not investable in the holding group context. And they are going to market now because markets are receptive to this kind of M&A in a way that we have not seen since 2008. So put your head back into the portfolio dominated world of 17 April 2008, when the market leaders included UBM, Informa, McGraw-Hill, Reed Elsevier, Wolters Kluwer, and Thomson Reuters, which was created on that day. Now, tell me which players will specialize in what as the ice thaws and the Big Portfolio Break-Up begins. Answers on an email please to

« go back