Recession may be looming, but now is a great time to start a magazine

Of course, financially it is a bad idea, as most of them fail, but, despite the current sense of doom on the stock markets, it appears now is the best time in years to start a magazine.

Just this morning I was reading about the collapse of Spain’s biggest property company Martinsa Fadesa, and thought to myself: my, this doesn’t bode well for Schibsted and Metro International, especially seeing that this probably won’t be the last such collapse we’ll se in the Spanish property market (if you wonder why Schibsted and Metro should be worried about this, have a look at their portfolios).

However, chance would have it that the next post I read in my newsreader was one by Swedish media blogger Vassaeggen, aka Olle Lidbom, who presented the rather counterintuitive argument that now’s a great time to start a magazine (I’m paraphrasing his conclusion in the intro).

The gist of his argument is that innovation is at a low-point in the big publishing companies after the massive wave of consolidation we’ve seen in Sweden (and Norway) recently, given that consolidation usually means rationalisation, and, statistically, good magazines launched during hard times have a bigger chance of a long life.

Lidbom pointed to this fascinating article in The New Yorker, Let the Bad times roll (2001), to support his argument. The article looks at several magazines and companies that saw daylight during very hard times indeed, including Business Week which was founded in September 1929, six weeks before the Great Crash. Two key points jumped at me in the article:

• During a boom, it's easier to raise money and easier to sell products. You'd think that would be a good thing if you were trying to start a business. The problem is that everyone else thinks so, too; when the economy is hot, everyone's an entrepreneur. The more companies there are, the less likely it is that one of them will be able to sustain a lasting competitive advantage, no matter how flush the marketplace is. Starting a business is like investing in stock: you want to buy low and sell high
• What's more, the easier it is for start-ups to raise and make money, the harder they find it to manage that money wisely. Companies need discipline—an ingrained sense of the relationship between effort and reward, product and profit. That's where a nice, brutal slowdown can come in handy

Now, I must admit I have my doubts about magazines, partly because, if they’re not related to my beat, I only find time to read them on flights. I’d rather put my money on a new e-zine, news site or something: lightweight, low-cost, the only overheads would be salary - but then, I don’t have any money to gamble with, so that’s all theoretical.

Talking about investing, a property in Spain once the market hits rock bottom wouldn’t be so bad either, if it wasn’t for all the horror stories I’ve heard about red tape and the country’s legal system. And then there are media shares of course…

As for light-weight, am travelling at the moment and the new composer editor in Typepad may be a lot fancier, but hardly light-weight enough (yet) to make it an agreeable travel companion (this may effect the formatting of this post)