This post is not about Fintech. It is about digital media, specifically digital media within a niche domain such as Fintech.
I started Daily Fintech exactly one year ago when I made the commitment to write every day about a business that I knew very well and which was entering hyper-growth.
Here for the record is the first post. It is worth a read and as it had only a handful of page views it is quite possible that you missed it.
Daily Fintech was not much more than a hobby at the start. In fact it was not called Daily Fintech when I started; that seemed a bit presumptuous, because I did not know whether I could maintain the daily writing commitment. Fintech fascinated me and I had to scratch that itch and blogging was a way to learn more and connect to others in the market; that was the extent of my strategic plan at the time.
All I I knew was that if I kept to my daily writing schedule that it would lead me to somewhere interesting.
It did. A year later, the audience is growing strongly each month in both page views and engagement (email subscribers and people reaching out to the writers who don’t simply want to push a press release onto the media). This is a niche audience. It is not a populist subject and we don’t chase hot news, but it is a very influential audience – founding teams, VC Partners, heads of Innovation/Digital at big Financial Institutions, senior execs at big tech firms moving into Fintech.
A few months ago, I started to bring on board other people to write regularly. They are like me – entrepreneurs who blog rather than professional bloggers – and experts in segments within Fintech. Our tag line is
“written by entrepreneurs for entrepreneurs”.
Daily Fintech should not work in theory. We create original content that takes a lot of effort to produce. We then give it away free. Our content is free, open and ungated. Many choose to leave their email address in order to get a daily email, but we don’t push that in any way and it is certainly not mandatory. However Daily Fintech does work in practice because it leads to insights and connections and that leads to fee based projects and investing opportunities.
If something works in practice but not in theory, it is interesting to figure out how it works in theory.
The Daily Fintech media experiment is about how to monetize quality writing/analysis. This question has fascinated me ever since I was COO of ReadWriteWeb in 2009.
Which is more valuable:
- A post that gets 500 views from CIOs and VC Partners spending $ millions who influence how huge markets develop?
- A post that gets 50,000 views from people who spend very little and have very little influence?
Logically, the answer is A. However the digital publishing business, monetized through advertising, has a very clear answer. It is B.
In short, the digital publishing business is broken. The business of writing software to aggregate free content is doing very well (Facebook and Google are worth $ billions). It is the business of writing content that is broken. The word “content” annoys writers because it implies fodder for the ad beast – but that is the reality.
There is only one currency online – page views – that get converted to money via advertising. The problem is that companies who do not pay for content (such as Google and Facebook) set the conversion rate from page views to money (aka online ad rates). Writing has become a low paid job that you can outsource via Mechanical Turk (or program a writing bot to automate it entirely). This is like the 19th century artisans losing to the factory machines – except that writers can write about the problem ad nauseam as an alternative to smashing the machines.
I did not know how I was going to monetize Dally Fintech when I started. The early blog entrepreneurs such as Michael Arrington (Techcrunch) and Arianna Huffington (Huffington Post) and Richard Macmanus (ReadWriteWeb) cashed in early enough to not have to worry about how to monetize quality writing online. One company in the B2B niche of tech blogs – GigaOm – raised Venture Capital and worked all the angles (such as paid reports and events) and did it with great intelligence and diligence. The founder – Om Malik – loved the craft of great writing/reporting. Still they failed.
Digitization is remorselessly slamming all of the niche B2B media monetization techniques:
– Advertising: ad rates are set by giant platforms that don’t pay writers (Google, Facebook etc). Niche means small audience = small $. Getting the balance right – paying writers very little and still getting quality content, chasing page views and still getting quality content – is very, very hard. Adblockers going mainstream takes a sick patient and gives it a big whack over the head.
– Paid Research Reports: Somebody who has a market research business told me that there are two types of research. One is “know to tell”. The customer wants a big brand (Gartner etc) to validate what they want to do (never underestimate the CYA motivation in corporate life). Unless you are a big brand you are in the “know to act” game, aka actionable insight. This is when customers buy market research reports and don’t care about the brand; they just need it to be accurate and actionable. Entrepreneurs think this way. The problem is that entrepreneurs watch every $ of spend like a hawk and are good at aggregating all the free content online. So Paid Research Reports is viable but hard.
– Events paid by Sponsors and/or Attendees. MeetUp is the digitization truck hitting this revenue line. There is still value in the mega events but these are expensive to create and only a few can be successful. You have to invest a lot of money to create events that people will pay to attend. This is not game for bootstrapped startups, nor does it have the highly scalable revenue model that VCs seek. So Events is viable but not easy.
What the digital media business has failed to do is monetize offline influence. You can track online influence through tools such as Klout. However you only have to think of a few hugely influential people who have no Klout score because they don’t self promote online. So I discarded the idea of trying to measure the influence of the Daily Fintech audience. The Daily Fintech Experts (aka Writers aka Entrepreneurs) know the influence by the quality of people who reach out. So, it works in practice. It does not work in theory because there is no way to measure the real influence of people who interact with online content. Some entrepreneur will crack this problem; if you have the solution, I am happy for Daily Fintech to be an early adopter test case.
There is one example of a site where quality niche content is monetized very well without any of the normal media monetization techniques. That is a blog called AVC written by Fred Wilson (a Partner at Union Square Ventures in New York). He writes every day and has been doing that a long time. His daily writing commitment was my inspiration. I am sure he explains why he invests so much time in one his archived posts (which are a treasure trove for entrepreneurs). From the outside I can see that it works for him in two ways:
- He gets more qualified deal flow because entrepreneurs can understand what he thinks about various subjects before they meet.
- The “people formerly known as audience” provide crowdsourced research.
I am not running a VC Fund, so I don’t benefit from 1. However Daily Fintech is definitely working as a crowdsourced research tool.
This is the counter intuitive thing I learned during my year as COO of ReadWrite (formerly ReadWriteWeb or RWW). The business side of ReadWrite was not exciting – get in enough ad revenue to pay the writers. So I agreed with the Founder (Richard Macmanus) that I could write about any tech subject whenever I wanted. I learned from this that if you have a high quality audience (which ReadWrite did) and if you do enough research to not look silly, the real experts will pop up out of the woodwork and tell you what you missed. They then become part of your network that you can reach out to when you need insights into that specific subject. As the old saying goes “it is not what you know, but who you know”.
That is why I refer to the “people formerly known as audience”. Audience implies a passive, lean back, traditional media experience. I could just say “community” and that does sort of capture it, but the term has become over used.
I now call Daily Fintech a “market intelligence platform” as a way to describe the value we get from this crowdsourced research. We use this platform as part of our Daily Fintech Advisory services. The content is the free in freemium.
This is only my baby’s first birthday and I don’t yet know what it will become as it grows up. Like any startup, it is an experiment to find product fit to market and I can only promise to keep iterating on that journey – and to report back on the second anniversary.