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How the Guardian will find the start-ups to take it closer to the new publishing business mode

How the Guardian will find the start-ups to take it closer to the new publishing business mode.

Tired of being disrupted by technological revolution, the Guardian is forging ties to the disruptors of tomorrow as part of a larger commitment to innovation it hopes will help unearth the publishing model of the future.

To do this, the publisher is investing in Founders Factory, an accelerator scheme also backed by L’Oreal and Aviva, over the next five years. In that period, the Guardian will be hoping the slew of initiatives it is working on to break even by 2019, a target that embodies the pressures on the business model to innovate and completely cut its legacy roots.

Internal innovation will only get it so far and if the business is to be less reliant on working so closely with the same companies that have already cost it so much then it needs to look beyond its own walls. Working with a company like Founders Factory makes sense given how unfeasible it is for a business – let alone a publisher- to navigate such a dense space like innovation on their own. From October, both the Guardian and Founders Factory will work with five companies for six months, giving the entrepreneurs access to experts from both businesses, spanning video specialists and commercial executives on the publisher side to marketing and strategy specialists within the accelerator.

What’s more, the initiative is backed at board level in the form of chief executive David Pemsel and chief investment officer Alan Hudson. Having those senior stakeholders on board is a sticking point that’s scuppered similar projects at other businesses in the past, and paves the way for the selected start-ups to work on broader briefs and access more specialists within the business.

Day-to-day the relationships will be handled by the Guardian’s investment and business development teams to ensure the start-ups are being developed by the right people, while Founders Factory, co-founder and head of business development, George Northcott will help evolve their commercial strategies.

“There isn’t necessarily a white paper model [for how this works] and depends on the business,” he continued. “The rough template is there is a video business we’re working with then we [at Founders Factory] encourage interactions with the video and advertising teams. We try and think not just about how the start-ups could grow the Guardian’s business on a standalone basis but also how they could benefit from the publisher’s audience. We try and work out where there is overlap and where there could be a fit.”

It’s an arrangement unlike other accelerator schemes, explained Northcott due to the fact that all parties have a vested interest in making it work; for the Guardian, it needs to make its investment in Founders Factory any which way it can, while Founders Factory needs to show both publisher and start-ups its expertise can have a commercial impact on their strategies if it is to continue to secure investment and talented entrepreneurs

“It’s very hard to know what are the sustainable business models for the publishing industry today,” said Northcott. “The way we test and learn with different types of business models and different technology is different in the sense that they’re not having to make a huge bet on video, micropayments or native advertising. The Guardian can actually test, learn and iterate, while seeing what models resonate with their core business and those that resonate with their audience and then really find the right solution in the long-term.”

Those entrepreneurs that will get to work with the Guardian will be sourced by Founders Factory through a mix of PR and direct outreach rather than solely rely on a flurry of applications being submitted. Each start-up is judged on a mix of criteria, chief among them the commercial nous of its entrepreneurs.

There will also be a pitch day where experts from the Guardian such as its head of video, head of native advertising and more work with the start-ups and are able to think about how they could support the business during the six months pertaining to their roles specifically.

The Guardian will not invest directly in the start-ups over the course of the scheme, and instead backs Founders Factory. This means that the start-ups remain independent, though Founders Factory will invest in their businesses. There is an opportunity for the Guardian, along with Founders Factory’s other corporate backers, to invest in the start-ups once they emerge from the accelerator scheme.