As divisional director for Rupert Murdoch’s News International, Mike Anderson felt a growing frustration. He reveals why he left and what fuels his passion for application – or ‘app’ – development.
As divisional director for Rupert Murdoch’s News International, Mike Anderson felt a growing frustration. He reveals why he left and what fuels his passion for application – or ‘app’ – development
After a high profile departure from News International in 2009, Mike Anderson persuaded his former employer to become his first client after 20 years working for the media giant. These days Anderson is on a mission to bring order to the apps development industry.
‘We’re an apps consultancy – that’s how I would describe our business,’ he says of the Chelsea Apps Factory (CAF), the company that he launched in March last year. By the time Anderson left News International, where he was managing director of News Group Newspapers, overseeing The Sun and News of the World, he wanted to stretch his entrepreneurial wings.
‘I wanted to invest not just money but time. I wanted to be a practitioner in this space,’ he explains.
Having teamed up with Mel Carrie, who was working at Imperial College in an incubator business and is now managing director of the CAF, they began visiting businesses that were already developing apps.
‘We went open-eyed, expecting to get good and what we found, by trial and error, is that we’ve got a model, a model that is building apps for brands and agencies, and joining up with media partners.
”We take people through a well-ordered process but it doesn’t feel like you can’t be creative,’ he explains.
The company has designed apps for some high profile clients, including RBS and Vodafone. Its app for the World Economic Forum in Davos, Switzerland, which was held in January this year, was designed as an event guide, allowing visitors to the conference to access the speaker schedule and information about hotels and restaurants in the area.
CAF was also responsible for the game Tampopo, a ‘showcase’ app, demonstrating its work with developers that has so far recorded 80,000 downloads.
Anderson explains that while there’s enthusiasm and interest in apps and the industry in its own right, there is what he calls ‘disorder’.
‘I don’t think there are two yet that have been ordered by the same principal in an organisation. It’s a very disordered marketplace. So when we, say, go and sell apps consultancy, design and production, it’s very difficult to establish who in the company is responsible,’ he says.
That’s not the only aspect of the industry that requires ‘ordering’, according to Anderson.
‘One thing I like to bang on about is that I don’t think there’s enough real understanding about the frequency at which people will take up apps,’ he says. He cites the newspaper industry – a frequent reference point for Anderson, who spent 20 years in the media and publishing sector – where a daily paper is delivered on a daily basis and a weekend paper every weekend.
‘These are examples of rhythms in media. There’s a regular pattern to the consumption and to the behaviour. In this space the rhythms are not established yet. It’ll come and, as we put more analytics in, we’ll get a better understanding – the platforms allow you to collect a lot of information and data.’
Anderson and his team at the CAF, which is housed in an old factory building in Fulham, are also the ‘friendly face’ of the developer community – a sector he believes needs some direction.
‘We do try and immerse ourselves in the developer community. There are about 3,500 registered developers in this country with different degrees of capability and skill.’
Developers are offered a space at the “Factory”, rent-free, for a few months. During this incubation period, Anderson explains, they can receive commercial and technical advice from the company.
‘We want to work with that community as a potential investor, or introduce them to investors to help develop their idea and get it to market, or marry them up with media partners. That’s where I think we’re quite good as a go-between.’
Hearing Anderson talk about the apps development sector and how he’s trying to revolutionise it in his own humble way, while returning to his experiences in the newspaper industry, it seems like his career has been building up to this point. While he insists that investing his own money in the CAF is a risk, it’s an extremely well-calculated one.
At News International, Anderson played a crucial role in embedding the newspaper industry firmly in the digital age. He was behind The Sun’s entry into online gaming with Sun Bingo. He also has an enviable black book of media and business contacts that Anderson believes gives him a distinct advantage over his nearest rivals.
He manages to drop Rupert Murdoch into conversation, and name-checks Sir Martin Sorrell, CEO of advertising behemoth WPP Group, and Google’s UK chief executive Matt Brittin.
What Anderson found frustrating at News International, he explains, was the ‘fear’ of the impact that digital would have on the existing business.
‘There was a huge anxiety around, damaging the circulation of the newspaper. But, you know what? Newspapers aren’t gathering young people any more –they’re on the web, they’re on mobile devices’.
It’s a threat that’s felt by many traditional media organisations today, he argues, who underestimated the speed at which the demand for apps and digital content would develop.
‘I knew it was an opportunity. It’s very difficult for these organisations to allow you to be entrepreneurial when your investors are more interested in protecting the business because of the requirements to their shareholders,’ he says, suggesting it was this attitude that made him decide to leave the company and fund his own business.
Anderson had already taken a leave of absence from News International in October 2008 when his wife fell ill. She later passed away and he now brings up their three daughters.
He continues: ‘There are two aspects of being a media owner: one is to get an audience and the other is to monetise that audience once you have them.’
Although Anderson has found a way to make money from apps, it varies depending on the product and the client. One income stream is lead generation, another is the provision of analytics.
Clients will also pay for delivery of an app. And the app itself can generate money – for example, one that provides a gambling platform is a source of income. He believes that many media companies have so far failed to recognise the promotional value of apps.
‘My point is that people often focus on the problem and not the solution, and I think what we’re good at is looking at the solution.’
Anderson cites his old boss Murdoch as someone always willing to ‘embrace the new’.
‘Murdoch announced he was going to advertise newspapers on television – that was the enemy. The first newspapers to advertise on television were Murdoch’s and they grew in circulation. They embraced the competition. He’s the first publisher to spend millions of dollars producing an iPad-centric newspaper, The Daily.’
While Murdoch’s News Corporation has the luxury of a rather large budget and direct access to Apple’s Steve Jobs, Anderson has a point – he is leading the field where it matters right now.
Anderson acknowledges that ‘digital isn’t the answer to everything’, but seems to think it might be the solution to the publishing industry’s problems. However, he does voice his concern about the longevity of digital brands.
‘What is not yet proven is that they last as long, or that they resonate for as long with consumers because somebody has better technology that gets them there faster, or does it better,’ he says.
‘The Sun has been around for 30 years. It launches an online bingo game and becomes the biggest game overnight. We used the same technology but it had 30 years of heritage.’
Anderson may hark back to his career in publishing but he is firmly focused on the CAF and its future. He says there has been ‘good growth’, helped by a strong sales team comprising himself and three others, but admits there are challenges associated with ‘cash flow, timing your sales, creating a culture’.
He also has one eye on the company’s competitors – Grapple Mobile, TigerSpike, Golden Gekko –some of whom, he notes, are ‘doing significant turnovers’. ‘There are a lot of developers but there are very few specialist apps businesses with any stature,’ he insists.
When asked what’s next on his ‘to do’ list, Anderson reels off several projects: analytics, consumer behaviour, enterprise apps.
‘That’s where organisations want to have apps that help them communicate with their sales force and use it as a sales tool.’
He adds, ‘I want to increase the level of Android development because it’s a different platform and is growing very fast. Also, most devices now have Android capability and it’s very difficult to find good people in this area. I think those are important assets for the business to have.’
Anderson acknowledges that the Chelsea Apps Factory still has some growing to do and that there’s ‘enough to be getting on with’. ‘We want to be the app developer of choice – the race is on.’ As he and Mel Carrie joke, it seems as though they’re ‘in grave danger of making this work’.