How small business owners can survive industry upheaval

Key Concepts

• Hybrid Publishing: A publishing model combining aspects of traditional and self-publishing, offering authors more control and revenue share.
• Thought Leadership: Establishing oneself as an authority in a specific field through content creation, like books, to attract opportunities and build brand recognition.
• Industry Disruption: Significant shifts in an industry’s structure, competitive landscape, or customer needs, often driven by technology or changing consumer behavior.
• Brand Importance: The critical role of a strong brand in attracting customers, building trust, and achieving business success.
• AI in Publishing: Utilizing Artificial Intelligence not to create books, but to enhance the publishing process and author platforms.
• Qualified Small Business Stock (QSBS): A tax benefit allowing investors in qualifying small businesses to potentially exclude gains from the sale of stock, incentivizing investment in small businesses.
• Dirty Unicorns: A term for significant mistakes made in business that provide valuable learning experiences.

The Power of Hybrid Publishing & Navigating Industry Disruption: A Conversation with Adam Woody & Jody Venarddale

This discussion, hosted by Elizabeth Gore, centers on navigating industry disruption, specifically within the publishing world, and explores opportunities for small business investment. The conversation features Adam Woody, founder and CEO of Advantage Media, and Jody Venarddale, Small Business Tax Director at H&R Block.

I. Advantage Media: A Unique Publishing Model

Adam Woody’s journey began with a serendipitous summer job at a publishing company, sparking a passion that led to the founding of Advantage Media in 2005. He identified a gap in the market: a need for a publishing model that wasn’t solely traditional or self-publishing. Advantage Media fills this space with a hybrid publishing model, offering authors greater control, faster timelines, and a larger share of revenue.

A pivotal moment for Advantage was the acquisition of Forbes Publishing in 2016. Woody described this as a strategic move, recognizing the power of the Forbes brand – a symbol of success and aspiration – to elevate the platform for entrepreneurs and CEOs. He emphasized that brand is not a luxury, but a necessity, crucial for building trust and connection with audiences. The combination of Advantage’s business model with the Forbes brand created a “magical combination,” offering entrepreneurs a premium publishing platform. Woody highlighted the importance of building authority and thought leadership through books, positioning authors as messengers of their business’s message.

II. The Human Element in a Digital Age

Woody consistently stressed the importance of the human connection, even amidst the rise of AI. He believes people “buy people,” and that authenticity and personal connection are paramount. He argues that AI will actually increase the need for human interaction, as technology becomes more transactional. He advocates for CEOs to embrace their role as ambassadors for their brands, drawing parallels to iconic leaders like Steve Jobs and Herb Kelleher.

III. Embracing Disruption & The Role of AI

Woody views industry disruption as an opportunity, particularly for entrepreneurs. He believes entrepreneurs possess a unique ability to adapt and innovate, unlike larger corporations. Regarding AI, he’s optimistic, seeing it as a tool to enhance books and the publishing process, not replace human creativity. Advantage Media’s philosophy is to use AI to “make books better,” not to create them. He emphasized that entrepreneurs must embrace AI or risk being left behind.

IV. Qualified Small Business Stock (QSBS) – A Tax Advantage

The conversation shifted to financial opportunities for small businesses with the introduction of Jody Venarddale. Venarddale detailed the benefits of Qualified Small Business Stock (QSBS), a tax provision designed to incentivize investment in small businesses.

Key requirements for QSBS include:

• The stock must be held for at least five years (with tiered benefits for 3 and 4 year holds under recent legislation).
• The company must be a C-Corporation.
• Gross assets must be $50 million or less.
• The investor must be an original recipient of the stock.

Venarddale explained that QSBS allows investors to potentially exclude gains from the sale of stock, offering a significant tax advantage. He highlighted the benefits for both investors (potential tax savings) and small businesses (access to capital). He emphasized the importance of community investment, allowing individuals to support local businesses and share in their success.

V. Lessons Learned & Entrepreneurial Mindset

Woody shared a personal anecdote about being fired from an early business partnership, emphasizing the importance of teamwork and people skills. He learned that building a successful business is a “team sport” and requires collaboration, motivation, and accountability. He also introduced the concept of “dirty unicorns” – significant mistakes that provide valuable learning experiences.

Woody also articulated a key principle: “The riches are in the niches.” He advised entrepreneurs to focus on serving a specific target audience with a clearly defined problem, rather than trying to be everything to everyone. He stressed the importance of discipline and surrounding oneself with “pessimists” – individuals who can provide honest feedback and challenge assumptions.

VI. The Enduring Power of Books & Human Connection

Woody concluded by reaffirming the enduring value of books, even in a digital age. He pointed to the prominence of bookshelves in successful homes and the importance of public libraries as evidence of the continued demand for knowledge and storytelling. He believes books are a vehicle for passing on wisdom and building a better future.

Notable Quotes:

• “People buy people.” – Adam Woody
• “If you don't like change, you'll dislike irrelevance more.” – Adam Woody
• “Brand is not a luxury. I believe that brand is a necessity.” – Adam Woody
• “Entrepreneurs are really good at addition and horrible at subtraction.” – Adam Woody
• “An optimist with experience.” – Adam Woody (describing a valuable perspective)

Synthesis/Conclusion:

The conversation underscored the importance of adaptability, authenticity, and strategic partnerships in navigating industry disruption. Advantage Media’s hybrid publishing model exemplifies a successful response to changing market dynamics, while the QSBS tax benefit offers a compelling incentive for investment in small businesses. Ultimately, the discussion highlighted the enduring power of human connection, the importance of building a strong brand, and the need for entrepreneurs to embrace innovation while remaining grounded in core values.