Next Media Accelerator: the German Press Agency accelerating media and marketing start-ups in Hamburg
“But working with start-ups can never replace doing innovation within your own company; you need both,” says Meinolf Ellers (dpa).
Next Media Accelerator is an independent industry accelerator initiated by the German Press Agency (dpa). Founded in 2015, it aims to offer media and marketing start-ups a place to succeed and provide its 190 stakeholders with strategies for managing the digital transformation at hand.
As dpa is a media company itself as well, they are not only the initiator of the Next Media Accelerator, but also work with their start-ups and participate in test-runs to find solutions themselves:
“NMA may be the most radical and foolish initiative we’ve ever taken in terms of digital transformation at dpa,” says Meinolf Ellers, managing partner of the Next Media Accelerator and in charge of digital operations at dpa for the last 23 years. “But working with start-ups can never replace doing innovation within your own company; you need both.”
Scalable tech and business models
The idea for the Next Media Accelerator came during a trip to the United States where Meinolf met Matter VC, a media start-up accelerator with offices in San Francisco and New York City:
“They were a little bit a blueprint for us. When we visited Silicon Valley in 2013 and we came across this initiative we wondered why nothing like this existed in Europe.”
Matter VC supports initiatives around storytelling and the future of journalism, and initial funding came from the Knight Foundation. The Next Media Accelerator would rather focus on scalable tech and business models:
“We don’t need innovation in storytelling in Europe. On the other hand, there is a big need for scalable technology and sustainable business models.”
Media companies as investors
Different objectives call for different sources of financing. So it made more sense for the Next Media Accelerator to set up a launching program than to apply for funds.
Ten investors from the German media industry – including Axel Springer, Die Zeit and Der Spiegel – each paid 200k, financing the first two years of the NMA. In return, NMA guaranteed them to build a portfolio of 20 companies offering media and marketing solutions. They succeeded and closed this round last summer:
“Since the first of July 2017 we are in the next round, NMA 2. We have extended the fundraising period until the end of March 2018. Currently we are 25 investors and we have raised 7 Million so far, but we hope to get a little bit closer to 8 Million. And we’ll use this money to run the program until 2022, so for five years this time instead of two.”
Although there are KPIs for the start-ups, the investors seem most interested in the contribution the programme makes to their digital transformation:
“Some of our investors, especially those that were already our partners in the first round, decided to join NMA2 and even with a higher investment. Not because it’s an investment that means a lot of profit for them in the long run, but because it’s a strong tool for their transformation strategy. It’s like an outsourced R&D unit.”
The freedom to pivot
By positioning itself an independent industry accelerator, the NMA aims to distinguish itself from corporate accelerators:
“We believe that corporate accelerators are a model of the past, because in a corporate accelerator you’re limited to the views and the strategic input of one company. And that is never helpful for a start-up that needs to pivot. Pivoting can often only be effective if you have access to very different views on what you’re doing.”
For the same reason, the Next Media Accelerator only accepts applications from start-up teams that have the software architect as one of their founders:
“It’s a kill-criteria. If you have to completely overhaul your technical structure, the software architect needs to be at the table from the beginning. And not as an employee, but as an entrepreneur.”
New opportunities for content distribution
So far, two especially successful solutions came out of the accelerator: Contentflow and Spektrum.
“Spektrum is a big success story,” Meinolf proudly announces. “The German tabloid Bild was the first one to use their messenger application for a service on soccer transfers. During the winter break very often players are sold and bought and so you could apply and register for your club, and whenever they were involved in a transfer, you’d be notified.”
There was only one bump in the road. Just when this service by Bild went live, Whatsapp had changed its rules overnight. So many people who applied for the service were rejected:
“But due to our contacts we were able to convince Facebook to allow Spektrum to be the first and experimental partner to use the Facebook messenger API for content distribution.”
Part of the innovation ecosystem
This case illustrates the value of being part of an innovation ecosystem:
“The core of the NMA is matching media-related startups with media and marketing corporates and enable them and moderate a process where they do prototypes and test-runs together. And I believe that this is maybe the secret sauce of the NMA,” says Meinolf.
“Since we have this huge network of media and marketing players of different character and start-ups from all different directions, we can on the one hand provide the start-ups with dozens of different opportunities to test their product and on the other hand see where exactly it fits into the market and where it solves problems of the industry”
This network is international. The NMA has partnerships with media accelerators in Belgium, the Netherlands, Scandinavia and the Baltic States. The old Hanseatic League network still seems to share a similar business mentality, which makes it pleasant to do business together, according to Meinolf. But the innovation ecosystem is global and so they are also working with start-ups in Israel and are planning to set up similar initiatives in New York.
On a local level, the NMA is supporting two ‘sister’-accelerators that have emerged in Hamburg since 2015: a Next Commerce Accelerator and a Next Logistics Accelerator.
“Hamburg is a port-city, it’s the centre in Germany of logistics and trade, and it’s the centre of media and advertising. So this is the strategy for Hamburg now: Take the concept of the industry accelerators and put them on top of all the industries where Hamburg has a very strong position in the market.”