Judging by my email in-box, the excitement of the moment seems entirely to concern the success or failure of the Springer Nature IPO. Not Stormy Daniels and the traumas that even money cannot take away. Not whether Theresa May can find the  Alice in Wonderland magic mushroom and thus become small enough to squeeze through the crack between the floorboards called “Brexit escape route”. And least of all, will two parts of the globe ignite in local thermonuclear disaster, allowing the White House Press Secretary to claim that these problems have now been chalked up as Presidential successes, on the grounds that they no longer exist?

But for many in this industry, the Springer Nature IPO has been such a long running saga. Any company that moves out of Bertelsmann into three stages of PE ownership is going to feel some friction around re-entry into the earth’s atmosphere. All the PE company investors did well out of Springer over the years, leaving  it now loaded with $3 billion in debt, some of which at least now needs to be cleared down. There has been constant date setting and cancelling since the last years of Emperor Franz Joseph (well, certainly since those of Dirk Haank). Now it just happened all over again. So what’s new?

Really very little. The IPO market in Germany is described as “soft” at the moment, though in recent months Spotify got away in Europe at $30 bn, and the markets seem to be enthused by iZettle, the point of purchase payment system. So maybe it is the story that is wrong, and which led to a $7 bn IPO to drop to a $3.2 bn  part IPO, and then disappear altogether. Like the smile on the Cheshire Cat, we know it will be back, but in the meanwhile, while I am keyboard in hand, indulge me while I offer a little advice to the IM writers employed by the great firm.

“Dear Morgan Stanley and JP Morgan,  I really do hesitate to speak up – your all-knowingness being celebrated in all quarters – but I really did want to ask whether you thought publishing was, well, “sexy”. You see Siemens got their medical technology division away in a good IPO in Frankfurt a week or so ago and that was thought to be pretty exciting, and, as you are Global Co-Ordinators to the Deal at Springer Nature I worry that this grand company may be seen by investors not as the sexy change agent who will set the huge and valuable global research market alight, but as the No 2 player in a very solid market of have-to-have information with a long run of good Ebitda performance (admittedly down from the palmy days of the Big Deal), coping with a few hiccups in recent performance (well, you have to recognize that OA dilutes Ebitda a bit ) and a long way in to the great story of digital transformation. Yes, I do know that investors have been spooked a bit by Elseviers little local difficulties in Germany. And the Digital Transformation is a bit of a puzzle  when you are writing an IM – since no one who has been transformed has grown revenues over print, investors do need to be persuaded that “smaller and more profitable” is the right direction.

So all this stuff about all the journals you have and how loved they are and how once the Elsevier  big deal goes through the library yours is normally next….. well, that may not be where the fire is now. When you come back with the 2019 IPO, try to find a bit of real allure. Try to see if the owners can find a bit of magic dust to sprinkle – any start-up with a web address ending .ai will do. Even better, say you are starting an incubator to develop the solutions to stream scholarly articles and data directly into the workflow of scientists, and using a revolutionary twist of Blockchain to do it. Make provision for future losses – they loved Spotify. Forget about content – its getting commoditized and anyway you can get it free in Kazakhstan and your investors know it. Talk about transforming the lives of end customers. And forget all this rubbish about library requirements. In fact, forget about libraries altogether. Talk about a company that is “in the forefront of revolutionising the workflow of the bench scientist “and” materially increasing the return on the global R&D budget.

I will not write more since I think you have my drift, and as you know this keyboard is always for hire and as a good advisor I do not wish to give away too much before I see the sums in your contract. Reflect that  I may be expensive, but I am a lot cheaper than pulling IPOs!  Ever your humble, etc.  David Worlock”

So you see, dear readers, this IPO thing is not for serious people like us. We are engaged in change, not in marketing If you have reached this point you may be asking why Springer Nature did not acquire Digital Science right back at the point of merger. But I only answer trivial questions about how you address investors!

 

Since I last wrote a piece here I am older by three conferences and an exhibition. And no wiser for having spoken twice on cyber-security, a subject that baffles me every time I stand up to talk about it. The simple truth is that the world is changing in the networks at a pace that bewilders, yet the visions we have of where we are going hang before us like a tantalising but currently unattainable vision. Thus, if you ask me about the future of education, I can spin you a glowing tale of individuals learning individually, at their own pace, yet guided by the learning journey layer out by their teachers, who have now become their mentors. The journey is self-diagnostic and self-assessing, examinations have become redundant and we know what everyone knows and where their primary skills lie. Or in academic or industrial research, projects are driven by results, research teams recruited on that basis, and their reputation is scored in terms of the value their peers set on their accomplishments. The results of research are logged and cited in ways that make them accessible to fellow researchers in aligned fields – by loading and pointing to evidential data, or noting results and referencing them on specialized or community sites, or by conventional research reporting. Peer review is continual, as research remains valid until it is invalidated and may rise and fall in popularity more than once. And so on through business domains, medicine and healthcare, agriculture and the whole range of human activity…

But at this point, when I talk about the growing commonality of vision, the role of workflow analysis, RPA, what happens next with machine learning, the eventual promise of AI, a hand shoots up and I find myself answering questions from the ex-CFO/now CEO about next years budget, and when will the existing IT investment pay back, and can this all be outsourced and surely we don’t need to do any more than buy the future when it arrives? And of course these questions are all very pertinent. We all need to assure revenues and margins next year if we are to see any part of this future. And next years revenues will come from products and services which will look more like last years than they do like the things we shall be doing in 2025, even if we had an idea of what those might be. It is one thing knowing something about the horizons, quite another to design a map to get there. So at every point we seek every way we can to buttress future-proofing, and at the moment I am seeing a spate of that in acquisitions. Just as last year putting the word “Analytics” at the end of your name (Clarivate, Trevino) added a billion to the exit valuation, so this year the dotai suffix has proved to be a real M&A draw.

But those big Analytics sales were made, and will be onsold to people who want to expand their data and services holdings. The .ai sales are transplants from the seedbed, and far earlier stages of transplantation are involved. Having worked for some years as an advisor to Quayle Munro (now, as an element of Houlihan Lokey, part of one of the largest global M&A outfits) I realise that smaller and smaller sales may not be considered a good thing, but I cannot resist the idea that seeking some future tech developments into your incubator environment is going to have some really beneficial long term effects. It already has at Digital Science. As Clarivate lerans from what Kopernio knows it will help . As the magic of Wizdom.ai rubs off on T&F, it will help there.

But, again, we are begging a hundred questions. Can you really future proof by buying innovation? Well, only to a limited effect, but by having innovators inside you can learn a lot, at least from their different perspective on your existing customers. Don’t you need to keep them from being crushed by the managerial bureaucracy of the rest of the business? Yes, but why not try to fee up the arthritic bits rather than treating the flexible bits? What if you have bought the wrong future tech? Even the act of misbuying will give you useful pointers the next time round, but if you have bought the right people they will be able to change direction. What if software people and text publishing people do not get on? They will need to be managed – this is your test – since if we fail the future will be conditioned entirely by software giants licensing data from residual fixed income publishers.

Are there any conditioning steps I should be taking to ease into this future? Yes, forget ease and go faster. Look first at your own workflow. To what extent is workflow automated? Do you have optimum ways of processing text? Are people or machines taking the big burdens on proof reading, or desk editing or manuscript preparation? Is your marketing as digital as it could be? Are you talking the language of services, and designing solutions for your users, or are you giving your users reference sources and expecting them to find the answers? Indeed, do you talk the language of solutions, or the ritual language of format – book, journal, page, article. Are we part of the world our users are entering, or are we stuck in the world they are exiting?  The exhibition I attended this month was the London Book Fair. I love it in all its inward-looking entrancement with itself, and its love affair with the title Publisher, the profession for which no qualification other than skill at explaining away unsuccess has ever been required. I can only take one day since I rapidly become depressed. But still there were very sparky moments – an impromptu discussion with the Chennai computer typesetter TNQ (www.tnq.co.in) about their ProofControl 3.0 service told me that these guys are on the ball. But moments like this were rare. More often I felt I was watching the future –  of the industry in 1945!

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