By Jack Love
Internet Retailer was introduced in 1999 by Faulkner & Gray,
a company I started 20 years ago with one newsletter. F&G grew into an $80
million publisher with two dozen magazines, many started from scratch and built
into leadership positions in financial and health care markets. Recent F&G
start-ups had bright prospects in electronic commerce and data networking. I
was privileged to lead a team of dedicated managers, who crafted growth strategies
they executed with brilliance. Most had been associated with Faulkner &
Gray for a decade or more. When I left F&G two years ago, after purchasing
Internet Retailer and starting a new company to publish it, it was like
parting with family.
I left after I became convinced that the publishing conglomerate that owned
F&G no longer wanted to nourish publications aimed at new markets. The events
at F&G since my departure support this conviction and strengthen my belief
that entrepreneurial managers rarely find safe harbor in large corporations.
I am certain that Internet Retailer, which receives frequent praise for
the useful information it provides, would no longer exist if it had not been
rescued from Faulkner & Gray.
This conclusion is inescapable when you understand the sad demise of Faulkner
& Gray. For two years I watched as F&G, once my pride and joy, was gradually
dismantled by its corporate parent. In wave after wave of reorganization, virtually
every senior manager I relied on to build Faulkner & Gray was terminated.
Promising products that looked to future markets, such as e-commerce, were shut
down because they failed to scale today’s margin hurdles. In the process
many of the company’s brightest editors and sales managers were put out
on the street. A thriving corporate culture, dedicated to identifying new markets
and creating publications to serve them, was destroyed.
Indeed, Faulkner & Gray itself no longer exists, having been merged with
a half-dozen other publishing entities that likewise lost their identities in
a search for efficiency. This unnatural assemblage of unrelated products was
put up for sale last year, but when buyers looked at the hodgepodge that had
been thrown together in a recession, they walked away. Now, the senior managers
who oversee F&G’s remaining businesses are less familiar with them
and the people who run them. What once was a great place to work—F&G
veterans will tell you it was the best job they ever had—became a fountain
of cynicism.
Why did this happen? The corporate explanation is surely that consolidation
of many businesses into one focused on core products is more efficient. I prefer
other explanations that are all too familiar to those who watch large companies
destroy the long-term promise of businesses they acquire. It happened because
senior executives of F&G’s parent were not as committed to trade magazines
as they were to other publishing properties. It happened because it is easier
to kill fledgling products in a recession than endure start-up losses, especially
when those losses are written off below the line that reads “profit from
continuing operations.” It happened because corporate managers often choose
short-term profits over long-term market values and the welfare of loyal employees
who built the businesses being put on the chopping block. It happened because
big corporations have no stomach for recessions nor the courage to weather them
whilst protecting their most important resources—the human ones.
I exchanged that corporate environment for this entrepreneurial venture I own
in partnership with friends of long standing. Here, the long-term vision and
commitment to products and people—once a hallmark at Faulkner & Gray—are
still alive, and Internet Retailer’s very existence is proof of
that.
jack@verticalwebmedia.com
