????Change within large organizations must be centered around drastic actions. Large companies with practices built to support large organizations are difficult to transform quickly without radical personnel changes. At Myspace, we instituted several shifts in personnel and organizational structure. We found that while each change brought greater efficiencies in decision-making and product development, they weren't radical enough to accomplish the enormous task in front of us.
????Do not underestimate how deeply muscle memory is embedded in the company's processes and staff -- so much so that even significant staff changes often do not result in the desired increase in efficiency. It was only through major change, a full disruption to the system, that we were able to galvanize the organization around new goals and begin seeing increased efficiencies. Slow behavioral change creates slow process change. Large behavioral change creates a drastic process change.
????Single front door = single point of failure. Many large Internet businesses, such as Myspace and Yahoo, have a single "brand" front door, in that users have one point of entry into the site. Behind the door, users will find multiple product lines. Unfortunately, a single front door means there is a single point of failure in consumers' minds -- even when the product lines behind it are robust.
????After the Myspace relaunch, we were able to stabilize many of the primary metrics and start to show growth in certain areas of the product and user behavior. We were beginning to see a clear split in old vs. new user behavior. However, because we had a single front door, we couldn't easily demonstrate clearly defined momentum that was applicable across the entire site.
????Netflix (NFLX) faces a similar challenge. Its legacy DVD business was weighing down the perceived momentum of the streaming business and the company overall. So Netflix tried to differentiate the two business lines and create separate websites for each. They've since reversed that decision, but it the long run, separate website may end up being the right answer.
????A few parting thoughts for future turn-around investors, boards and executives:
????? In the digital world, new brands are easier to create than fixing momentum issues with historically large brands.
????? A huge single site / single front door is wonderful when it works, but hedge your strategy with offsite revenue, and if applicable, multiple points of customer entry.
????? There are no bad people, only bad processes. To fix them, create radical cultural change, don't attempt a slow cultural shift.
????The Internet is still an adolescent industry. The ability to show new life in more mature businesses is crucial to long-term success. This is a problem we all must embrace and solve for. And when we do, I believe we will find that building new businesses on top of older businesses of scale is the best formula to rapid growth and audience renewal.
????Michael Jones is an Internet executive, a long-?‐time entrepreneur, investor and advisor located in Los Angeles. Most recently, Mike served as the CEO of Myspace. In this role, Mike oversaw global business strategy and operations for Myspace, Myspace Music, and Myspace Mobile. During his tenure, he was responsible for the relaunch of Myspace, one of the most high-?‐profile turn-?‐around challenges in the industry. This included stabilizing a historically negative traffic and user trend, reducing the operational cost of the business by nearly 90 percent and pivoting the product from its legacy as a social network to a social entertainment destination. A serial Internet entrepreneur, Mike has founded and sold numerous businesses, including agency PBJ Digital, application platform Userplane, which he led from startup to its acquisition by AOL, Tsavo Media and Myspace. Mike continues to be actively involved with early-?‐stage start-?‐ups as an investor, advisor and board member.
