decisions to move Nana home and enjoy her last days (that is, return a
shitload of cash to investors).
David Carey, CEO of Hearst Magazines, is one of the few CEOs I’ve
seen make the transition from visionary to operator to pragmatist. It’s
not a shocker that magazines are in structural decline. David hasn’t
given up hope and regularly launches (surprisingly successful) new
titles and has developed profitable digital channels. However, this is
pushing a rock up a hill, and he knows it. Much of the innovation
David brings to Hearst is around cost-cutting to return cash to the
mother ship: for example, putting one editor in charge of multiple
titles, leveraging the scale of the organization, recycling content
through multiple channels and titles, and demonstrating discipline
concerning head count.
The result? Hearst titles steal back share from digital marauders,
and David rides Cosmopolitan (a big Hearst title) off into the sunset.
Right? Well, no. Hearst Magazines will likely be a shadow of the
shadow it is now in ten years. However, Hearst will be fine, as it finds
and retains managers who understand the business life cycle. They
know how to harvest so they can plant new trees—which they will
harvest well before they become mature.
On a risk-adjusted basis, you are better off bringing an
entrepreneurial mind-set to a company that has already survived its
birth pains (think not A–C, but D–F). That’s because the infant
mortality of new tech start-ups (basically, before the Series A venture
round) is greater than 75 percent. Sure, your plucky start-up might
find its lane and make you rich, but it probably won’t. This denial is
key to our economy, as some of this crazy turns to crazy successful and
fuels key parts of our economy.
Long/Short Tail
In tech, many long tails are atrophying. Take digital advertising, for
example. Facebook and Google accounted for 90 percent of U.S. digital
advertising revenue growth in 2016. You are better off picking (if
possible) one of a handful of winners (Google/FB/MSFT) or firms in