Marketing Week (MW): What lessons have you taken from your first role as a marketer to your present position as chief executive of ASmallWorld (ASW)?
Sabine Heller (SH): My first job [at now-defunct entertainment website UGO Networks] took four years of my life and defined my career. Technically, I started my career in marketing, but I knew it would ultimately be more than marketing. I joined in 1998 at the start of the internet era. I fell in love with the possibilities of the digital space.
I was a founding member of the management team at UGO Networks. We raised a lot of capital, but then the dotcom bubble burst and the internet market crashed. One in 100 companies survived, and we were that one. We restructured, cutting staff from 250 employees to 34. We kept our revenues flat then re-stabilised before selling the company to Hearst for $100m (£64.2m).
ASW was built on ‘house of cards’ [adaptable and evolving]. Film mogul Harvey Weinstein, [who became a majority shareholder in 2006. Patrick Liotard-Vogt acquired the majority stake from Weinstein in 2009 and is now chairman of the board], raised lots of capital and made ASW big. But in 2008 the financial markets crashed, so we shifted from house of cards thinking to building real value.
This is a shift I have been through twice in my career. The first time I was mentored by the smartest people I’ve ever worked with, the second time I did it on my own.
I’m lucky that I had a dry run. It gave me a lot of blind faith because whenever someone said ‘this isn’t possible’ I could say ‘yes it is because I’ve done it before’.
I’ve restructured ASW three times, and I’m going to do it again. It’s a skill in itself. Getting the best out of people when you’re paying them little and their future isn’t certain is another skill.
MW: Why did ASW move away from being a social network, as it was when it launched?
SH: ASW launched at a time when the term social media was still open for definition. In the beginning some called it ‘Facebook for the few’, which I think was lazy because the functionality was so different. It was about members, content and services. People were using ASW as an international jobs and real estate board, and while the travel recommendations mimicked Trip Advisor, they were relevant and contextual
to our audience.
In a bricks and mortar establishment, it is accepted to have all these things going on, but online it is very difficult to have that kind of diversity. It led to a less than pleasing user experience, as well as a definition that misled the member as to what the value was.
Even when you get to be a CEO, it can still be challenging. There is a lot of sexism in business
MW: How are you rebranding ASW now?
SH: We’re doing a rebrand that follows the natural evolution. We were leading-edge coming in as a social network in the beginning and now we’re leading-edge in getting out of being a social network.
We are a travel and lifestyle club with a social networking element. The website has a services component and a membership card that gives you benefits with partners all over the world. We also have a foundation, an events programme and a nightlife concierge service.
MW: Why did you decide to introduce a membership fee instead of using the purely ad-funded model?
SH: At the time when Harvey became the majority shareholder, a decision was made to make advertising the main revenue stream. It wasn’t well thought out. The salient assumption was that because we’re hitting the top tier of the world on a global level that we would do great, but realistically ad sales are done on a local level. Plus we’re competing with platforms with a lot more eyeballs – we had one-tenth of the audience of the competition.
Advertising will still be a secondary revenue stream for us. We’re not eliminating it altogether, because what we don’t have in quantity we make up for in quality. We’ll only work with companies that are working on a global level, on top-line strategic sponsorship. We’re getting away from CPM [cost per thousand] campaigns.
MW: Celebrities such as Tiger Woods and Lindsay Lohan have been dropped from your membership and there has been a backlash from those who did not make the grade. How do you decide which members are most valuable to the business?
SH: We started with 850,000 members. We’re now capping it at 250,000 and inviting only our favourite members back.
We use a complicated algorithm to help us determine the value of a member to us. If a member has a lot of inbound attention and very little outbound [so lots of members are contacting one person for travel tips, for example], it means they have some value within the community. On the other hand, if it’s a man that has a lot of outbound attention, only to women, then you can tell a little bit about his behaviour as well.
People get upset [when they don’t get invited back]. I had my first experience of cyber bullying on our Facebook page from people whose accounts had been terminated. People really take it personally. But we’re a club.
MW: Matt Bushby, head of Friends Reunited, said ahead of the site’s relaunch last year that social networks today need to find a niche. ASW has always been very targeted, but what other trends have you seen emerging?
SH: Inevitably in media things go from mass to niche. The two trends you can count on are mass to niche and ad-based to subscription.
Untrammelled growth is another issue plaguing the industry. Facebook has aggressively sold out to advertisers because that’s what it has to do to make money.
An existential alienation has happened in the digital space. People are more connected digitally but less connected on a human level. Where social media is driving people away from the human experience, we’re driving people to meet. Our social media component is a bouncing board to get people to meet each other in the real world. We’re not interested in keeping people online.
If we had reinvented ASW as a social media platform, we would have failed. It wasn’t appropriate for us, but more than that, it didn’t make sense. There is no way to do it. MySpace and Friendster have shown that it is just not possible.
MW: As a female chief executive do you think enough is being done to get senior women into top management roles?
SH: No, I think nothing is being done. It’s unpopular to talk about how difficult it is for women, but it is. I never predicted that. I’m a vocal woman and I’ve not found it difficult in the US particularly, but it has been hard on an international level. I’ve found it difficult in the German-speaking world, for example, and in the UAE. There is still a lot of work to be done.
Even when you get to be a CEO it can still be challenging. There is a lot of sexism in business. That definitely surprised me, and still does.
MW: It’s unusual to have an all-female management team, was that by design?
SH: It wasn’t by design, it was by result. It was a result of the fact that we went through a difficult time where I had to essentially take our team through the process of going into the unknown.
There is something about women that stick with you and get behind the idea that is so remarkably unselfish, and that’s what I found in my management team. It is just the most incredibly dedicated group of women, who have literally put everything on the line for this. It wasn’t by design, but the qualities that have made us succeed are definitely qualities of these women.
Sabine Heller’s top three career challenges
Variety of roles
Because I’ve done such a variety of things in my career, at times I have felt like I’m a jack of all trades and a master of none. But over the past two or three years, since taking up the chief executive role at ASmallWorld, everything I have learnt previously has come together and now it all fits. My experience writing for Vogue Italia, for example, weaves directly into what I’m doing today.
Being a woman
The female factor has definitely been difficult, and still is today. If you put me in a room with one of our male shareholders, the questions will be directed towards him. I find it unpalatable but inevitably that’s what happens. It happened in the UAE at the global Abu Dhabi Media Summit. It was two days of literally being ignored. It frustrates me, but you’ve also got to be careful not to fall into the emotional stereotype.
Working in a very tough and unpredictable landscape like social media has been difficult. The current of social media is so strong and unruly; it completely has a mind of its own. MySpace has tried desperately hard to reinvent itself and failed, but when the current comes and goes for social media platforms you feel completely helpless.