With the help of hack days and boot camps, media company Hubert Burda Media is attempting to drive business with topics that go way beyond print products and the Internet. Natalia Karbasova, Digital Assistant for publisher Hubert Burda, tells us how this approach is a valuable asset to business model development.
Ms. Karbasova, what do you see as the biggest challenges for Burda when it comes to new business models in times of digitalization?
All companies suffer from “The Innovator’s Dilemma”, a concept published in a book of the same name by Harvard Business School professor Clayton Christensen. For a start, it’s very difficult to predict the sales potential in new markets where business won’t take off for perhaps another five years. In addition, new ideas are easier to implement with an existing customer base.
And what’s more, large corporations are expected to record certain rates of growth, which – with a new idea or product – is often difficult to achieve right from the start. The result is a paradox: the larger a company, the more difficult it is to rely on disruptive business models. These companies prefer to invest in what they’re familiar with, and miss future opportunities for growth as a result.
The larger a company, the more difficult it is to rely on disruptive business models.
How is Burda dealing with this dilemma?
Well, for starters we’ve evolved from a publishing house into a media and technology company, and at the same time have fuelled innovation and diversified our business models. Apart from the fact that we produce hundreds of magazines around the world,
Burda is also involved, for example, with the business social network XING, invests in e-commerce and technology start-ups like Etsy, Vinted, or the Vietnamese search engine Coc Coc, and establishes its own start-ups like Cliqz. In addition, we have sought and adopted new approaches such as hack days and boot camps where we can try out new working methods, develop products quickly, and discover talented young people.
Hack events as a creative measure
What for example do you do at a hackathon?
The term is derived from the words “hacker” and “marathon”, so it isn’t about classic business development. Instead, we enable young people with a predominantly technical but also design and economics background to work together for a day and bring their software and business ideas to life. With just one condition: their concepts must have something to do with our business. That way, we can test out potential innovations quickly while keeping the time and effort involved to a minimum. Generally, however, people at a hackathon don’t expect their ideas to be implemented immediately.
Those taking part are motivated by something else, too: they want to get to know new people, try out new technologies, and push themselves to their limits by developing new products under extreme time pressure. There aren’t many cases where they want to continue working on their ideas. One example that did live on, however, was the start-up NeonTrading. Established at our hackathon, it ended up in the business accelerator program at the bank Comdirect.
That way, we can test out potential innovations quickly while keeping the time and effort involved to a minimum.
So what are the boot camps about?
In 2014, the “Burda Bootcamp” created a lab where prototypes for Burda brands like “bunte.de”, cooking Web Site “Das Kochrezept”, and women’s magazine “Lisa” were developed. For two months, ten young people in Web and app development, data science, and design worked in small teams at Burda and, with the support of more than 20 mentors, they put a number of new ideas into place. We tested a lot of ideas and also discarded a lot. For example, we came up with ideas for the fair fashion start-up “
” and the coding platform “CodeConnect”, which are currently being developed further. Sofal
Furthermore, two start-ups that won our “Startup Night” event are currently working with us directly –
Kaia Health, which presented an app that helps prevent and treat chronic back pain, and Baristina, which has invented a tin that contains water and coffee powder and can generate heat and pressure, making it possible to brew an espresso on the go. It’s too early to tell whether these projects will develop into concrete business partnerships with Burda. But we’re not ruling it out for the future, either.
Hack days and boot camps are good for core business
Before, you mentioned the several hundred media titles that make up Burda’s core business. Do you also use the experience gained from programs like hackathons or boot camps as additional training for your journalists?
We drew upon this experience for the final project at the Burda School of Journalism in 2015, and 20 prospective editors and 12 students (coders, designers, and economics students) took part. They developed several ideas together and took them to minimum viable product (MVP) status within nine weeks.
As a part of this process, our trainees worked in interdisciplinary teams on user-centered products and became more familiar with modern product development methods like design thinking, rapid prototyping, and lean startup. We are currently planning the next boot camp together with the school of journalism, and this time we’ll gear it more towards existing media brands. That way, the ideas that come up – if we believe they are promising enough – can be pursued afterwards.
From your experience, why do you think these programs work?
The best projects arise while talented people are exchanging ideas. That’s also one of the reasons why we support informal meet-ups – i.e. meetings between like-minded people, usually in the evening over a beer – on various topics like start-ups and coding. What’s more, we are also involved with external events like start-up weekends where new start-up ideas are brought to life and tested in the space of a few days.
These events aren’t just about learning something new (for example new programming languages or marketing methods), but above all about networking. That’s one reason why Silicon Valley is so successful – the people there are in constant contact with each other, they share and criticize ideas. Everybody knows everybody else and is willing to help out.
These events aren’t just about learning something new, but above all about networking.
Rethinking business model development – an investment in the future
All these activities sound like a lot of hard work. How is this being received within the corporation? How much is Burda investing in these efforts – and does the company expect this investment to provide a quick and good return through new business models?
The executive board supports our activities – almost all of the members of the executive board have been to our project presentations, either in the audience or as a jury member. Our colleagues are equally enthusiastic about what we’re doing. Anyone who has been to one of our events always wants to come back – also because our workspace and work methods are more reminiscent of a start-up than a large corporation.
The investments are mainly for the time we spend on the projects, and we have a team of three people who work exclusively on them. We also fund a lot of these projects through cooperation programs with partners, for example for the Burda Hackdays. From the corporation’s point of view, the investments are therefore manageable. The outcome will only become clear in the long term. However, we don’t see these projects as business models but rather as an investment in the future.