Tag Archives: Finland

Sanoma Digital to boost transformation on three fronts: growth, innovation and capabilities

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nu-labSanoma recently announced the planned launch of Sanoma Digital as part of an overall accelerated transformation program.

We see many opportunities in digital and have in the meantime built a substantial and growing digital business.  We intend to boost digital by creating this new business unit which will focus on pure-play digital assets in consumer media in Finland and The Netherlands, and will include brands such as oikotie.fi, NU.nl and kieskeurig.nl.  Digital brand extensions such as hs.fi and libelle.nl will be run directly by Sanoma Media Finland and The Netherlands. Sanoma Learning will drive all Learning activities.

Focus

A core element of the overall transformation program is to bring more focus to the business and to ensure that each part has a clear mandate and objectives.  This also holds true for Sanoma Digital.  Growing and innovating pure-play digital businesses in consumer media is a different assignment than transforming a portfolio of magazines, winning viewers for television, taking newspapers to their next level or building digital workflow solutions for learning.  Each of these assignments needs dedicated management attention to focus on making it happen.

Digital enjoys a unique role within the portfolio and will for that reason also work very closely with the other platforms to enable cross-media solutions for consumers and advertisers – shared sales, insights & analytics and ICT teams will help us to achieve that.

Goals

Sanoma Digital will have three main goals:

  1. The first goal is to grow.  growthWe intend to significantly grow the digital consumer media business in the next 5 years. Part of that growth will come from working closely with the local business in Finland and the Netherlands, including adding new verticals, new media (mobile and video) and new services to our performance-based (lead-generation, e-commerce, online classifieds) and pure-play digital content businesses. Another part of the growth will come from scaling successful concepts created in The Netherlands and Finland to new markets.  We have been investing in the early part the product pipeline recently with quite some new launches in the final quarter this year.  We expect this to bear fruits during the course of the coming years.
  2. The second goal is to boost innovation and to strengthen skills across the organisation on lean development methods. Commerce-Accelerator-logo To achieve this we will establish a new innovation lab which will nurture the winning concepts borne out of our ongoing series of innovation accelerators.  Furthermore, we will continue to invest in external digital enterprises via Sanoma Ventures. We want to fill the pipeline with new business lines – to plant the seeds of the next generation Sanoma.
  3. The third goal is to strengthen our capabilities on data insights & analytics. We will bundle our resources on insights and analytics, boost them, and deploy them across Sanoma, to help the whole company to succeed in the digital transformation.

Positive outcomes

From the perspective of digital, we hope this will position us to better serve our customers. If we are successful, we will grow digital and this should help us to provide attractive new opportunities for employees and improved returns for shareholders.

Two passions

From a personal perspective, my next assignment is to establish Sanoma Digital. I’m excited about this and believe setting up Sanoma digital is a good step to boost the digital transformation. We’re now in the process of setting up a new team to drive this agenda.  I’m really proud of the talented people who are joining this team and who will work at Sanoma Digital!  During Q1 next year I will succeed Jacques Eijkens as CEO of Sanoma Learning.  My two passions are digital and learning.  Sanoma has a strong and successful international Learning business that is also going through a digital transformation.  I hope and believe that I will be able to contribute to the further success of Sanoma Learning by boosting the leadership of digital and innovation there.

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