Category Archives: Learning

SanomaVentures helps develop young enterprises in digital information, entertainment and education

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Digital technology is driving fundamental change in media and learning markets.  Sanoma is responding to this by a) transforming core brands to play multichannel and b) building new digital brands.  I’ve recently posted about the accelerators at Sanoma and the role they play in the (early-stage) innovation portfolio.  In addition, the company has established SanomaVentures (www.sanomaventures.com) to support early-stage (external) businesses looking for growth funding following initial market success.

Herman Kienhuis, Investment Director at SanomaVentures

Herman Kienhuis, Investment Director

I’m enthusiastic about SanomaVentures.  I think it brings Sanoma a lot on this journey of discovery to the digital future. Clearly it will not be an answer to all of the opportunities and challenges we face, but it is an important piece in the overall puzzle.

This week I caught up with Herman Kienhuis (@kienhuis), Investment Director of SanomaVentures about their approach.  I believe in Herman and his team.  I think he’s smart and professional.  He’s proactive and takes initiative – he’s out there in the network.  He’s commercial and has sharp analytical skills, and thinks creatively about negotiating attractive deals for both parties.  And I like him – he’s a decent chap.  I respect his support for microfinancing organization Kiva.org and he’s very sporting with his annual Movember action.  Here’s what he had to tell.

Why was SanomaVentures launched?

We had five main reasons to go for this.  It gives us access to new sources of innovation and entrepreneurial talent.  It creates new avenues for growth.  It’s a vehicle that allows us to spread our investments across multiple new ventures, also making use of media as part of the investment currency.  And we felt the time is right, partly because of the fundamental shift in consumer, advertiser and learning behaviour and partly because of the rise of the start-up and venturing communities in our markets.

What’s your investment scope?

We focus on areas where the strategic fit with Sanoma is the strong – specifically, digital consumer services; online video and connected TV; advertising, marketing services and e-commerce; mobile & tablet apps; e-learning & personal development.

What are your investment criteria?

We invest in enterprises that are entering their first growth phase, where cooperation with Sanoma can add value through our media, network and expertise.  Within that scope we make our assessment based on five criteria namely a high quality team, revenue & profit potential, sustainable competitive advantage, international scalability and strategic fit with Sanoma.

What does Sanoma have to offer?

Typically, we invest € 100 k – € 500 k as a combination of working capital and media, with the mix depending on the needs of the enterprise.  Sometimes cash is king.  In other situations the reach and exposure of media offers a significant value to boosting the brand, engagement and conversion.  We have found both cash and media to be useful and valuable currencies.  We also bring online expertise; Sanoma has highly successful digital operations, including NU.nl and Kieskeurig.nl in The Netherlands for example.  And access to our networks – not only advertisers and consumers, but also to other expertise.

How does the process work?

We spend a lot of time networking and orienting ourselves in the start-up community. When we identify opportunities where the fit is good we make an assessment of the venture against the investment criteria mentioned earlier.  If the opportunity is attractive we negotiate terms in preparation for decision-making by both parties.  If the investment case gets the green light, we then proceed to due diligence, contracting and closing.  The entire process typically takes about 3-4 months from first contact to closing.  We then move forward with the funding and access to media, and supporting with any agreed expertise.

How is SanomaVentures organized?

We launched in The Netherlands, with two Investment Directors (Antoine Hendrikx and me), an Investment Associate (Sjoerd Huitema) and access to two Legal Directors (Marije van Akkerveeken and John Vogel).  In the meantime we have also extended the concept to Finland with Investment Director Ville Varis.

Have you closed many deals?

To date we’ve made investments in nine ventures: Vault79, a designer fashion auction; Fashionchick*, a fashion storefront; VirtuaGym, an online fitness platform; Peerby, a local P2P sharing platform; Scoupy, a mobile couponing app; Truly Yours, a beauty products discovery subscription; brandkids, a kids fashion e-commerce platform; Nosto*, e-commerce personalization and recommendation tools; and Fosbury, a passbook campaign management tool.   We see a lot of potential and promise in these investments and are proud to be working with these entrepreneurs.

Good start.  See any challenges ahead?

Sure, opportunities and challenges always go hand-in-hand. A couple of areas come to mind.  In the first year we have been focusing on making the initial investments.  Moving forward we have to combine scouting and deal-making with supporting the growth of the ventures – that’s a more complex task.  Also, we expect that about half of our investments will fail – we will have to make tough calls on which ventures should get additional funding and where to take a loss.  Given the relatively early stage of these ventures those calls might not always be clear-cut.  Maybe the first year was the easiest; now the hard work starts.

How do you look back on the first year?

From a professional perspective, I think we have been successful in establishing the SanomaVentures brand in the market.  We’ve made some very promising investments.  We’ve built a good investment team and established strong links to some great entrepreneurs.  And there’s been a positive buzz about SanomaVentures, both inside and outside the company.  From a personal perspective, it’s been an exciting and demanding period in setting this up, well worth it.

Thanks for the good update Herman.

*The investment in Fashionchick was made prior to the establishment of SanomaVentures and the investment in Nosto was made by the Finnish team

What’s next in the accelerator pipeline at Sanoma?

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I have recently shared my views on why Sanoma is sponsoring intrapreneurship and how we deploy innovation accelerators. In this post I would like to explain the next steps we are taking with the accelerator program.

#commerceaccelerator goes to college

One of the three core customer groups served by Sanoma is the advertiser: we provide effective solutions to advertisers based on our reach and consumer insight. We plan to further boost our innovation in this domain by running a #commerceaccelerator in the Autumn this year – an accelerator with a difference.  The core process and principles of earlier accelerators remain in place.  But this time we intend to work with a group of leading European universities; about half of the participants will be students. We believe this will further enrich our idea and talent pools and give opportunities to potential new employees.

#contentaccelerator goes to bootcamp

Feedback at the end of a day at bootcamp. Thanks for the photo Lassi.

Feedback at the end of a day at bootcamp. Thanks for the photo Lassi.

Earlier this week we selected the five concepts that will go to the #contentaccelerator bootcamp to be built as protoypes. They include i) a service to hear the news in a new way ii) a content marketplace iii) a fashionista community iv) a service to help parents to discover the talents of their children and v) a learning solution that mashes up the real and virtual worlds.  Project leaders will join us for four days in Amsterdam, coming from Poland, Belgium, Finland and The Netherlands to build their prototypes and to make their pitch to establish a new venture.  Congratulations to them on having won a place and good luck to them in Amsterdam!  We are all super-excited about the bootcamp and I expect that we will create one or more new ventures as a result.  I feel energized and upbeat just writing about it.

#mobileaccelerator goes to work

Four “mobile first” concepts have received funding as new ventures following the #mobileaccelerator and we are prototyping a fifth concept too. The teams for these ventures were formed at the beginning of April and given funding and coaching for an initial period of 12 months.  At the end of that period we will decide whether to boost, continue or terminate the venture.  Alongside the intensive coaching, we track the progress against Key Performance Indicators at the end of each quarter.  The first round of these formal reviews takes place at the end of June.  The teams are enthusiastic and are moving forward fast.  I am very curious what we have learned and what the results are – where we stand in our goal of bringing these new ventures to market.

Thanks for joining us

So that’s where we stand today with the innovation accelerators at Sanoma.  I would really like to thank everyone who has joined us on this journey so far and helped to bring it to life, either as a participant or facilitator.  Respect to you for standing up and showing your ambition.

This is the final posting in the series.  Thanks for reading.

How does an innovation accelerator work at Sanoma?

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In my previous post I elaborated on why Sanoma is sponsoring intrapreneurship and the role of innovation accelerators in that. This time I write about how an accelerator works at Sanoma. The approach is quite simple. It’s driven by our goals of i) developing new business lines and ii) training new skills that can be used in supporting the transformation of the core.

Talent first

Pitch training at the Amsterdam kickoff. How to explain your idea in a simple and elegant way in just one minute? Thanks for the photo Lassi.

Pitch training. How to explain your idea in a simple way in just one minute? Thanks for the photo Lassi.

We start by recruiting about 150 talents from across our businesses in Europe, both media and learning. In the first program, nominations were made by management. This was good but left a lot of pent-up demand. In the second program we allowed (self)-nomination, which brought an additional richness of talent.

Participants are invited to a kick-off at one of our main digital hubs: Amsterdam, Helsinki or Budapest. The main purpose of this is to inspire and excite the teams – our program leaders Lassi Kurkijärvi (Director at Sanoma) and Joris van Heukelom (Partner at Makerstreet) are truly excellent at this. People like these events a lot. We even had one aerophobic guest take the bus from Gdansk to Amsterdam to join us this Spring!

Active Learning

Next we run an intensive seven-week ideation and training program. Participants are asked to generate about ten ideas on a certain area. These ideas are further developed through an active learning experience, punctuated by a weekly webinar. They learn new skills on digital in general and “lean” development methods in particular. (I learned a lot too!) Each week there are practical assignments about building, testing and improving the ideas.  The business model canvas and creating and testing minimum viable products are really useful tools on this journey. We don’t ask them to create a powerpoint deck. We ask them to test their ideas with customers. It’s liberating (not only to me).

At the end of this part of the program we select five leaders and ideas that will go to bootcamp to be built as prototypes. Selection is by a combination of the wisdom of the crowd and a Dragon’s Den. Tickets to the bootcamp are highly coveted. People get excited about it. The competitive element brings an extra edge.  If you want to win, you have to compete. Your idea has to be great and you have to sell it and yourself convincingly.

Off to bootcamp

At the four day bootcamp we build working prototypes with the selected teams, together with external designers and developers. The pace is fast. It’s demanding. Customer testing continues.  Energy and enthusiasm fill the room. By the end of the bootcamp we have created five prototypes. The Future Media Team of Sanoma then proposes to CEO Harri-Pekka Kaukonen, which of the concepts to turn into new ventures.

What focus?   #mobileaccelerator?  #contentaccelerator?

The first program, launched in Autumn last year, was the #mobileaccelerator. We see a significant shift of media consumption to mobile devices. In many cases we have been very successful in creating mobile versions of core brands.  For example, about 2/3 of the usage of NU.nl, the strongest media brand in The Netherlands, is now mobile. Mobile revenues at Sanoma are growing fast. We wanted to give an additional boost to “mobilizing Sanoma”.

The second program, launched in March this year and currently running, is the #contentaccelerator. Here we are focusing on new ways of consuming content, on cross-media concepts, and on new learning content.  Next week we will select the five winning concepts that will be sent to the #contentaccelerator bootcamp.

How have the accelerators performed?

Both programs have gone further and better than my best hopes. Regarding the #mobileaccelerator – we measured engagement (critical to learning) and observed that it was both broad and deep –  there was at least one person from Finland, The Netherlands, Learning, Belgium, Russia and Hungary (our biggest operations) on the leaderboard top-20 for both ideas and reputation. The content and facilitation of the program have been excellent.  And we came a long way in a short time – from a blank page to 5 prototypes in 10 weeks and that’s basically unheard of at Sanoma.  I’m really proud of how the teams performed.

Four “mobile first” concepts have received funding as new ventures following the #mobileaccelerator. We seconded on average four people from their regular jobs to each venture for one year to take the concept to market launch.  In this year they get funding and coaching. The #contentaccelerator is still underway, is going very well, but at this stage I can’t share too much about it.  I daresay there will be some tweets about the bootcamp selection on Tuesday evening.

What have we learned from the accelerators so far?

On the positive side: there’s no shortage of ideas or talent or enthusiasm for innovation at Sanoma and we can move fast on innovation when we want to. From a development perspective: we sometimes have a skills gap and tools such as business model canvassing, lean development and testing MVPs, are very effective in helping to bridge the gap – we could make more use of them in the core business too. Also, we need to move faster, be more agile and to innovate closer to the customer. And we could sometimes value learning, experimentation and growth more highly and be more tolerant of risk and uncertainty.  Actually, we see a lot of potential in areas where we should be able to make a positive change.

Following posting: I will share our ideas for next steps with the program.