13 reasons why TED is such a successful business

13 reasons why TED is such a successful business
26 September 2017

Talks published on TED.com are among the most popular – and beloved – content on the Internet. They are now viewed more than 2 billion times per year. That’s about 5m views each day.

At least among a certain demographic, you’ll be hard-pressed to find anyone who doesn’t know what TED Talks are. It’s a global super-brand and one that is known and respected by all the right people. Bill Gates and even Pope Francis have given TED Talks, and some TED Talks are must-see videos if you work in certain industries (e.g., Dan Pallotta’s “The way we think about charity is dead wrong” if you work in philanthropy).

It took the organisation just over a decade to rise from relative obscurity to worldwide prominence, widespread admiration, and considerable financial success.

A phenomenal growth story

If you go back to its founding era, you’ll learn that after the very first TED Conference happened in 1984, it took the then-owner another six years before he got the second conference off the ground. The first conference produced a considerable financial loss, which is why the entire undertaking was mothballed for over half a decade.

Success didn’t come quickly for TED. As recently as 2001, the yearly TED Conference attracted a mere 70 paying attendees. By 2012, it had reached an annual revenue of $45m; though it’s owned by a foundation so technically it’s not a for-profit enterprise. No doubt its revenue has leapfrogged further since then. It’s hard to estimate what TED would be worth if it was a for-profit company, but an estimate of anywhere between $1bn and $3bn doesn’t seem out of the question. This compares to the current owner buying the conference for just $6m in 2001.

To the best of my knowledge, no one has ever made an effort to analyse in detail what management decisions led to this meteoric rise.

TED is now known as an extraordinary growth story, built on the back of a turnaround that required an ownership change and a new management taking the helm to utilise new growth opportunities and unlock its potential.

TED presentation

To the best of my knowledge, no one has ever made an effort to analyse in detail what management decisions led to this meteoric rise. I searched the web high and low but did not find any in-depth analysis of TED as a business. Because the organisation is privately held, there are only the rudimentary and rather cryptic figures provided in regulatory filings in the public domain. When the media does report about TED, it’s usually about their unique format for presentations or other aspects of the actual products, but not about the organisation’s management.

This article is an effort to collate and consolidate the scarce and fragmented publicly available information on what enabled the organisation to grow to this size so quickly while generating rapidly rising revenue.

Why I researched this article

I am myself involved with managing the turnaround and subsequent growth of a conference business.

Since 2014, I have been managing the Master Investor Show; a yearly event hosted in London. It originally aimed at giving private investors access (for one day, on a Saturday) to some of the world’s investment experts as well as to CEOs, CFOs and board members of public companies that they can invest in.

The event sat within a small media company that published magazines, newsletters and a range of specialist events. First launched in 2002, it grew quickly but then hit bumps in the road. It subsequently filed for insolvency in late 2013, though most of its assets were rescued by Jim Mellon, the self-made billionaire investment expert, and trend-hunting book author.

In August 2015, Jim asked me to take the helm of the company and “do something with it” (that was, literally, my briefing!).

Fast forward two years and the Master Investor Show has doubled its audience, nearly tripled its revenue, and gone from having no sponsor at all to Fidelity International having signed up as Platinum Sponsor for the 2nd year running.

What feels right now like a nice little turnaround success story to add to my CV, also brings with it some challenges.

We now live in a world of cheap capital, unprecedented possibilities for growing businesses, and human talent requiring ambitious goals to be kept excited enough to stick around. Within that context, I have to figure out how to take the Master Investor Show from being a successful yearly event in London to something that creates ripples around the entire world; throughout the entire year; and with revenue growing sufficiently to eventually be more than a rounding error in the personal balance sheet of the business’ owner.

“Do something with it” went from being a turnaround challenge to a challenge of having to achieve transformative growth during the coming years.

With that particular riddle on my desk, I figured it’d be worth looking at how others have done it.

Hence, my interest in studying TED not for the format of its presentations, but as a business.

A fortuitous trip to New York

I am a strong believer that your life is a result of the people you surround yourself with and the places you spend your time in. The energy of people and places rubs off on you.

Facing the task of having to do some deep-thinking for writing a strategic plan for Master Investor, I decided to decamp to New York City for a week.

Much as I view London as the definitive capital of the world when it comes to anyone and everyone who is someone passing through it regularly, I believe New York has a more aggressive liking for hyper-ambitious plans and blue-sky thinking. It’s a city that is about getting things done and getting it done on a big scale.

A few days before flying from LHR to JFK, I coincidentally noticed a TED Global event was to take place at exactly the time that I was going to be in New York.

After buying a ticket on the black market, I had a chance to observe from close up how TED Curator, Chris Anderson (pictured with me in the photo at the top), hosted and managed the event.

TED programme

Chance would have it, I’d even bump into him in the lobby later that evening.

Though as far as the conclusions of this article go, these are all based on herding up the publicly available material; sifting through Chris’ recent book about giving the perfect presentation, and building on my own experience of being a TED user of many years.

13 clever management decisions by TED’s team

Here is what I believe has contributed significantly to TED’s success (and I welcome readers’ emails if you feel I missed something):

1: Break the model

In 2001, TED changed to the private foundation of Chris Anderson, the magazine editor best known for “Business 2.0”.

At the time, Chris was recovering from the painful experience of seeing his 2,000 employee publishing company go bankrupt and him losing about $600m in the process.

That same company had bought TED for $14m in 1999, then buying out its founder and larger-than-life owner, Richard Saul Wurman. The Sapling Foundation, which Chris had set up in 1996, bought TED off the bankrupt publishing company for $6m.

In the years following, Anderson engineered what I would describe as a fairly conventional turnaround.

  • He moved the conference from Monterey to a much larger venue in Long Beach.
  • A new, restrictive door policy meant you had to be invited or fill out a humiliating application soliciting proof that you were a TED-calibre human.
  • On the back of these changes, ticket prices were doubled.

Revenue quadrupled, which by anyone’s standard made for a successful turnaround.

However, it wasn’t until a controversial decision taken in 2006 that the organisation started to experience hyper-growth.

“On the face of it, it was a crazy idea,” is how Anderson describes it in his book (from which the following quotes are taken unless otherwise identified). On 22 June 2006, TED placed six of its talks on the Internet by publishing them on a relatively young website called YouTube.

“Quite apart from the still barely acceptable quality of online video, there was no proven revenue model for it. Could it really make sense to risk giving away our content? Wasn’t that the only reason people paid so much to come to the conferences in the first place?”

Even Anderson was initially opposed to the idea of publishing the talks online, according to several media accounts.

“At the time, Ted.com was getting about 1,000 visitors per day, most of them just checking details about past and future conferences. We dreamed that the release of these talks might kick that number up fivefold, yielding maybe 2 million talk views over a year, a massive boost in our overall reach. …. The first day we had about 10,000 talk views. … Within three months we’d reached a million views, and the numbers just continued to climb.”

In March 2007, the website was relaunched with hundreds of talks being made available online.

Even Anderson was initially opposed to the idea of publishing the talks online, according to several media accounts.

The latest available figure speaks of 2 billion website visits per year.

Notably, demand for the conferences didn’t decrease but increased. “Our attendees were thrilled they could now share great talks with their friends and colleagues.”

TED went from being a conference organiser to being a multimedia giant built on the back of a series of conferences.

Without the (at the time) daring decision to give away content for free on a relatively unproven platform and at the risk of endangering the existing revenue streams, TED would never have experienced its rapid ascent to a global media organisation.

TED was creative enough to do something no one had done before. It was daring enough to put its existing revenue at risk. Anderson must have known that if you only ever pursue conventional strategies, you’ll never be anything but a conventional company. By breaking out of the mold, he capitalised a huge growth opportunity and created his own product category. In retrospective, it all appears very straightforward. But one can imagine the difficult internal discussions this must have involved at the time!

2: Ownership structure matters

Everyone knows how important it can be to incentivise staff through stock options and other schemes.

Overall though, the positive and negative effects a company’s ownership structure can have on the organisation still gets too little attention.

E.g., TED opted for an ownership structure that is quirky and certainly not for everyone, but which helped propel TED to what it is today.

Anderson doesn’t own TED himself but through his family foundation.

“Removing the profit motive from the table sent a clear signal of intent. It made it much easier to credibly say to the world, come and help us build a new approach to discovering and sharing ideas. After all, we ask attendees to pay a lot of money to come to our main conferences, and we ask speakers to come without being paid. It’s much easier to do that if people can see that they’re contributing to the public good as opposed to someone’s personal bank balance.”

I had mentioned other aspects of ownership structure elsewhere already. E.g., my article about VC funder Russell Buckley included a comment about some angel investors trying to be “clever” by getting as high an ownership percentage off a founder as possible; only to find later on that funders for the next rounds will deem a company with too low a founder’s stake as unfundable. Not everyone is sufficiently experienced to realise that counter-intuitive moves can be highly advantageous, e.g., aiming to own 1% in McDonald’s is vastly preferable to owning 50% in the doner kebab stall on the corner.

When it comes to your company’s ownership structure, try to give some careful thought which non-obvious options there might be. You might yet settle for something fairly conventional, but you should double-check there aren’t some creative structures out there that will work to your advantage.

3: Respect your heritage

When Anderson bought TED, he could have easily chosen to change the conference’s name.

When it was first launched in 1984, TED stood for “Technology, Entertainment and Design”, which was consistent with its origin in Silicon Valley. Specifically, it wanted to demonstrate the convergence between these three industries.

By the early 2000s, TED had moved way beyond these three fields and included scientific, cultural and academic topics. Also, there was never-ending confusion if the conference was owned and run by a Mr Ted.

There would have been a viable argument in favour of changing the name.

Respect your heritage, but be creative to make sure you also communicate clearly and accurately who you are, what you do, and why you do it.

Anderson kept the name, and with it the history and evolution dating all the way back to the organisation’s origin in the early days of what has since then grown to be today’s Silicon Valley.

Instead, Anderson added the slogan “Ideas worth spreading” to the logo. With just three short words, this made it clear what the organisation is all about.

Respect your heritage, but be creative to make sure you also communicate clearly and accurately who you are, what you do, and why you do it.

4: Employ people that are cleverer than you

On Medium, you can find an article written by someone who was TED’s employee #38. She joined in 2010.

Asked to join the company for a position they had advertised, she advised TED that this position would really only utilise 10% of what she could offer.

TED’s executive director listened to her and changed her job description to be a better match for what the new hire felt TED needed and was able to get out of her.

No egos trying to get it exactly their way, no corporate nonsense to defend the work someone in HR had done. Just total focus on hiring the brightest talent and making sure everyone contributes in the best possible way to a well-defined strategy.

5: Don’t spend money on marketing

Everyone is bombarded by about 15,000 marketing messages per day. No matter how well funded your enterprise is, chances are it’ll be outgunned by large corporations with virtually limitless advertising budgets. It’s always been my belief that much as some targeted advertising can make sense to support a company’s growth if you had to rely quite heavily on marketing you’d be almost certain to fail.

Case in point, TED achieved its phenomenal growth on the back of very limited marketing spending.

As Anderson put it in a 2012 interview: “It’s not like there’s any big giant marketing budget or anything like that driving it. It’s more been through word-of-mouth. Through online word-of-mouth. Largely email referrals, sharing and more recently social media, Facebook as well. So that’s the thrilling part. There are enough curious people in the world that are getting excited about learning to the point where they’ll watch something and then pass it on to their friends and family.”

I would advise any company to carefully considering investing into a full-time position for someone who spends the entire day (and evening and weekend) thinking about how to create content and products that spread through word-of-mouth and social media.

This is a huge challenge in itself and requires someone with the right personality and skill-set, as well as the time to research, think, and experiment.

Different things work for different companies. I’d give it a high likelihood though that such a position will eventually pay higher dividends than to plow large amounts of money into advertising.

6: Pay (some) staff with something other than money

TED now employs more than 150 full-time staff, but its real secret sauce is an army of 40,000-50,000 volunteers around the world. They organise TEDx Conferences and provide translations of TED Talks into some 100 languages.

Their remuneration? Zero.

They do it for a love of TED and all that it stands for, for the community spirit, and to get a valuable brand association.

In a world where conventional journalists are finding it ever harder to make a living because a growing number of experts are willing to write for free, every business needs to think about how to use new, cheaper mechanisms for getting people to work for you. Being visible on a platform, building your personal brand, being associated with a powerful and positive brand are all reasons why someone might do work for free when in previous times it would have required paying someone a salary.

A penny saved is a penny earned. If you can have people work for your company for free, it can pay off mightily. Imagine how much work 50,000 people get done and what it would cost if TED increased its current headcount of 150 people?

7: Appearances matter

If you have recently checked the TED.com website or, even better, followed its evolution for some time, you’ll have noticed how much effort their team puts in getting both design and functionality exactly right.

As the New York Times put it in 2014, “TED’s new website, rolling out this spring, is aiming for style points. It adds chic white space but also footnotes, links to further readings, discussion boards and updates on TED speakers.”

The website really does have just that: Incredible attention to detail.

No doubt this attention to detail has contributed significantly to the growth of the web channel.

Also, TED always invested heavily into curating its content and making sure it’s presented in the best possible way.

TED presentationVideos are shot using multiple camera angles, Hollywood-quality lighting, meaningful close-ups, and crisp sound. Any online audience is exquisitely vulnerable to distraction, and any content that is presented with less than world-class standard will be a lost opportunity.

The same sort of quality control applies to the speakers. No matter how prominent a speaker, TED exerts huge control over how the content is delivered and sometimes spends months with speakers on preparing for the talk.

Humans are attracted to visual beauty. The importance of delivering your content – both at conferences and online – in a visually pleasing and crisp way cannot be over-estimated.

8: Offer your customers something truly extraordinary

The organisation has built such a powerful following that being featured in a TED Talk can transform someone’s life.

A 2012 long-read article about TED in NY Mag quoted “a journalist who, since speaking at TED, could earn a living solely from speaking gigs. ‘It’s impossible to overestimate the impact it’s had on me.'”

It also described the example of Hans Rosling, a Swedish professor of international health who at first turned down speaking at TED because he considered their approach frivolous. He subsequently agreed and gave what was to become one of the most popular TED Talks of the time, not the least because of a data visualisation software his son had coded and which he used to bring otherwise boring infant mortality statistics to life during this talk.

Very unusually, he ended up giving a further eight TED Talks. “Rosling has calculated that his TED Talks have garnered more “hours of attention” than his entire preceding life’s work. He has largely given up teaching to work full-time on his non-profit, non-advocacy Gapminder Foundation. “TED changed my life,” Rosling says. And not just his: After Larry Page saw Rosling’s first TED Talk, Google acquired the software and ended up hiring Rosling’s son.

TED has created a new tool for self-actualisation. Whereas one used to write a novel to be someone, now everyone has the fantasy to give a TED Talk. It turns ordinary citizens into best-selling authors and lecture-circuit Godzillas.

9: Establish product discipline

From the outside, the myriad of products offered by TED can be confusing.

TED makes money through conference attendance fees, sponsorships, foundation support, licensing fees and book sales. There are also partnerships and sponsorships, as well as ads on online videos.

The range of sub-brands now includes TED Talks, TED Conferences, TED Global, TEDx, TED-Active, TED Prize, TED Fellowships, TED-Ed and probably a few others.

As the New York Times once put it, the product range of TED “now has more angles to it than a Mandelbrot set.”

Prices for tickets range from $100 to $125,000 for the most elite, five-year “patron” ticket. Companies can even buy a $1.5m custom-made TED event for their employees (the ultimate “Away Day”).

However, it’s obvious that TED’s management is running a tight ship:

  • It grew these different sub-brands, categories and pricing models over a period of over a decade. I doubt this involved off-the-cuff decisions.
  • From what I have been able to ascertain the organisation doesn’t compromise. A client trying to push down the price of a product or asking for the organisation to deliver something outside of what it would normally deliver will be politely turned down.
  • Where outsiders are allowed to use the TED brand, it’s tightly controlled.
  • Having been to a large TED event myself, I can attest to the organisation having built the operations team to ensure perfect delivery.

TED has built a culture of continuously bringing superior products to market. The organisation doesn’t compromise even if customers push it, and it insists on premium pricing. In turn, customers can expect nothing but excellence on all levels.

That’s product discipline or you.

10: Create your own category

Conferences are a competitive business. There are more conferences taking place every year than anyone can keep count of.

Nevertheless, TED managed to create something that has defined its own category.

TED programme

TED events have been described as “the Oscars of public speaking”, the “gathering of the global ideas meisters“, and “a high-powered schmoozefest.” Giving a talk at TED is now considered “a rite of passage for an Internet-age intellectual.” In The Muppets movie, the character Scooter is updated to be a Google employee and TED attendee.

Some of the conferences that come close to being competitors to TED are PopTech, FOO Camp, and Solve for X (Google’s conference for “moonshot thinking”). Beyond these higher-profile events is a lengthening tail of gatherings you’ve never heard of like the Feast, Do Lectures, the 99% Conference, the Mountain Summit and Techonomy.

TED events have been described as “the Oscars of public speaking”, the “gathering of the global ideas meisters“, and “a high-powered schmoozefest.”

Overall though, no one beats anything replicating TED, i.e., the combination of:

  • Excellent events with AAA+ speakers.
  • Juggernaut online presence.
  • Game-changing effects for speakers.

If what TED offers you is vaguely of interest, you don’t really have any alternative to go to.

11: Have a (moral) compass

Anderson claims the world is too fast-changing to have a five-year business plan.

Instead, what he aims to have for running his organisation is a “compass”: A mission statement and a strategy, combined with a sense of openness towards making changes along the way as needed.

Obviously, he has a big advantage in that regard. TED is 100% owned by a single entity; it’s well-funded; and it has had stable, focused leadership for over 15 years. There is no risk of too many cooks pushing the organisation into different directions, different funders asking for different strategies, or similar risks.

Though at the heart of it all lies one simple fact. TED has decided what it wants to be, and what it doesn’t want to be.

12: Don’t let nasties distract you

Success inevitably attracts detractors and adversaries.

In the case of TED, the funniest anecdote probably is that of someone setting up a jokey stalker conference. Someone set up a conference called BIL (as in “Bill and Ted”), which started in 2008 and was held at a venue near TED on overlapping dates.

A reason to be upset? In the end, anything that tries to emulates TED is only a compliment to the original and creates yet more interest for the real thing.

Another annoying aspect TED has had to deal with has been the difficult relationship with Richard Saul Wurman, the original founder of TED who sold out in the late 1990s.

As NY Mag summarised it in the article already linked further above:

“In the years since Wurman sold TED to Anderson, their relationship has been high drama, with alternating acrimony and rapprochement. While Wurman is quick to credit Anderson for his achievements (“I am amazed truly at what he’s done”), he has continued in interviews and speeches to issue backhanded compliments (“I think TED is the greatest conference of the twentieth century”) and front handed insults (saying the eighteen-minute format is now “ungenuine”). Anderson, somewhat understandably, has been antagonized. Last year, Wurman, having gotten his TED ticket and booked a hotel room, suddenly found himself disinvited. “He won’t let me back in,” Wurman says. “I love TED. I was very hurt not being able to go last year. I’m unforgiving about that.”

Wurman has since then tried to get no less than five new conferences off the ground:

  • “Prophesy-2025”
  • “Geeks and Geezers Summit”
  • “old. fedmed”
  • “WWW Conference”
  • “55555”

These are just the ones I was able to find; there could well have been further attempts. All of them were aimed to somehow out-do TED (which none of them succeeded at).

Ongoing feuds with former employees, founders, envious competitors and other nasty characters are a reality of business life. TED did what any sensible organisation would do. It just ignores them and focuses on building its operation.

13: Give it time

Now that TED is a multimedia colossus with consistently high growth rates, it’s tempting to describe it as an overnight success.

The fact is though that overnight success is a myth.

TED required:

  • A failed 1984 conference after which nothing happened for six years.
  • Virtually the entire 1990s to build up its brand.
  • A change in ownership that took three years to settle.
  • An initial four-year period to build a new model before the online talks were introduced.

Even after TED cracked the Internet’s popularity code, it still took years to get the current website built into what it is today.

When you are endeavouring to build a great enterprise, keep in mind it is likely to take 5 to 10 years before people will call you an “overnight success.” That could easily turn into 10 to 20 years. Then you can lean back and enjoy your “overnight success” that so many others will envy you for but for which few people are willing to put in the investment of resources, time, and sweat.

Quite a model to learn from

For the reasons I set out above, I have spent quite some time recently researching what makes for a great conference business.

In the course of this research, I realised that TED makes for a unique and useful case study.

If I have missed out any major aspects, please do send me an email. I realise there is a huge TED community out there, and I’ll be perfectly happy to either amend this article or to write a second one further down the road.

Outside of that, I can only say that I am by now convinced that TED has only just scratched the surface of its ambition.

Last but not least, use TED itself to learn!

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