I had a chance to be interviewed with Fred Wilson by Dave Morgan of Simulmedia (and Tacoda and and and…). The video is fun and ranges around from OpenCo to the future of the Web, so I thought I’d share it here:
I was interested to read today that Esquire is currently experimenting with a per-article paywall. For $1.99, you can read a 10,000-word piece about a neurosurgeon who claims to have visited heaven. Esquire’s EIC on the experiment: “…great journalism—and the months that go into creating it—isn’t free. So, besides providing the story to readers of our print and digital-tablet versions of the August issue, we are offering it to online readers as a stand-alone purchase.”
I predicted that payment systems and paid services/content were going to take off this year (see here), but this isn’t what I had in mind. But it did get me thinking. What if you added social and elastic elements to the price? For example, the article would initially cost, say, $1.99, but if enough people decided to buy it, the price goes down for everyone. The more people who buy, the cheaper the price gets. It’d never go to zero, of course, but there’d be some kind of a demand/price curve that satisfies the two most important things publishers care about: readership (the more, the better) and revenue (ideally, enough to cover the costs of creation and make a fair profit).
The tools to do this already exist. There are plenty of sites that crowdsource demand to create pricing leverage, and sites like Kickstarter have gotten all of us used to the idea of hitting funding goals. And the social sharing behaviors already exist as well: Nearly all content has social sharing widgets attached these days. Why not combine the two? Those who initially paid the highest price – $1.99 say – would be motivated to share a summary of the article with friends and encourage them to buy it as well. They are economically incented to do so – the more friends who buy, the greater the chance that their initial $1.99 charge will decrease. And they’re socially incented to do so – perhaps they could get credit for being one of the early advocates or tastemakers who recognized and surfaced a great piece of content before anyone else did.
Let’s break down the economics to see how it might work. A really great piece of long form journalism in a magazine like Esquire pays around $15,000 (sometimes more, sometimes less, depending on the author, subject, length, and title). But for this model, let’s say the payment to the journalist is $15K. Then you need to factor in the cost of the editor, copy editor, production, sales and design, as well as general overhead of the publication per piece. Let’s call that another $5K per piece (I’m spitballing here but probably not too far off). So for this article to make a profit, it needs to make $20,000 – or sell roughly 10,000 copies. Of course, the article is also monetized through the regular magazine and tablet editions, so the real number it has to hit is probably far less – let’s cut it in half and say it’s $10,000. Now to clear a profit, the article really just needs to sell 5,000 copies at $1.99.
Let’s not forget that Esquire also shows advertising against its articles. If it maintains a healthy $25 CPM, and shows two “spread” (two-page) ads between those 10,000 words, that’s roughly $100 per 1000 readers that Esquire can make. If it indeed does sell 5,000 copies of that article, that’s $500 of advertising revenue earned. And if it gets more readers, it can earn more advertising revenue – and decrease the paid content price in some correlated fashion. (No matter what, Esquire wants more readers – both to increase its advertising revenue, but also to accomplish its journalistic mission – all authors want more readers).
Perhaps a model could work like this: The piece costs $1.99 for the first 5,000 articles sold, garnering $10,000 in revenue (Ok, $9,500 for you sticklers). Once that threshold hits, the price adjusts dynamically to maintain at least $10,000 in overall revenue, but adjusting downward against the paying population as more and more readers commit (which also earns Esquire additional advertising revenue). A “clearing price” is set, perhaps at 50 cents, after which all profits go to Esquire. In this case, the clearing price kicks in at 20,000 copies sold – everyone would pay .50 at that point, and it’s a win win win for all.
Just spitballing, as I said, but I think it’s a pretty cool idea. What do you think?
Last week I was fortunate to be in New York City over the weekend, accompanied by most of my family. I had meetings with senior marketing executives at companies like Coke, Citi, and many others, and they stretched from the previous Weds. all the way into Monday of last week. I hate being away on weekends, and my wife is from New York, so she brought my daughters to visit their grandmother, who lives right in the middle of Manhattan.
Now, a weekend in New York with your family is special anytime, but last weekend was particularly notable because of the annual Pride Parade. This celebration of LGBT rights is one of the largest in the world, and this year’s was historic – just the week before, the Supreme Court had voted down the Defense of Marriage Act, a major civil rights victory for the gay community and, by extension, for citizens across the country. Last Sunday, our family joined tens of thousands of others who cheered the parade down Broadway, marveling at the exuberance and yes, sometimes at the show of skin as well.
But what stuck out with us was the pure joy of the day. Both my daughters, one fifteen, the other nine, joined in the celebrations, waving flags, cheering, and slapping high fives with passersby. Everyone was so happy, and the party snaked down Broadway for hours. What really struck me was the diversity on parade – gay fireman and policemen (that can’t be an easy world to live in) marched in uniform, followed by politicians like Mayor Michael Bloomberg and Sen. Charles Schumer. There were community centers on floats blasting dance music, and a long assortment of “firsts” – the first gay married couple in New York, the oldest married couple in New York, etc.
And then there were the brands. Yes, the brands – sponsoring the parade, and marching as part of it. I was prepared to be disappointed, and even cringed when I saw the first banner announcing a brand – I think it was Vitamin Water, a Coke brand. But instead, I was inspired. I had just met with many of the brands that were represented, and it made me proud to know the folks who had the courage to stand out and stand up for what was right.
As I watched the parade I was struck at how deeply and how honestly these brands were part of the celebration. Sure, Vitamin Water gave out free drinks, but the real story were the legions of employees – from Citi, L’Oreal, Wells Fargo, Coke, Delta and many more who marched, proudly wearing their company’s logo, proud of their individuality, proud of their voice, and proud that their businesses have stood behind them on their journey to this historic day. It felt very real – these companies clearly had backed their people on the long road to full civil rights, and their employees were proud to celebrate their brand connection – they very much believed that in their lives, the brand on their t-shirt had made an important difference. It was a very honest moment, and that’s not always the case when it comes to sponsorships and marketing. It should inspire all of us in the media business to follow the path of true human connection in our work. It certainly inspired me.
This short Slideshare deck, an extremely clever satire of the now infamous NSA slide deck, should be Slideshare’s marketing calling card. It’s a promotional gift to the service, timely, clever, and leveraging the product perfectly. If this ever happens to you, use it in your marketing!
Faithful readers will recall that about three months ago, I announced my return to FM as CEO. I also mentioned that the projects I’d been working on – notably OpenCo and The Book, would have to be retooled given my new commitment to the company I started back in 2005 (when I last wrote a book). In the post, I wrote:
I love the book I’m working on, and I don’t plan to abandon it (I’m bringing on a co-author). And I love the conferences I do, and I’ll still be doing them (though I’ll be hiring someone to run them full time). But my first love is the company I started in 2005, whose story is not only unfinished, it’s at the height of its running narrative.
I’m very, very pleased to announce that I’ve found that co-author – her name is Sara M. Watson, and she’s simply the perfect partner for me to be working with on this book. You can read her post about it here. Sara and I met over Twitter, after she noticed the theme of the CM Summit – “Bridging Data and Humanity.” We spoke on the phone and I learned that the intersection of society and data was her passion – and that her background was an awful lot like mine. She started her career as a liberal arts major from Harvard (during the time Facebook was just a dorm room project), toiled in the narrative fields of enterprise IT, became fascinated with the story of information, and decided to head to graduate school to study it (she’ll finish her Masters from Oxford in a few months). After Oxford, Sara has some amazing plans lined up (I can’t talk about them yet) that dovetail perfectly into our shared work.
I started my career as a liberal arts major from Berkeley, wrote about enterprise IT for a few years, then followed my passion for the digital narrative into graduate school as well (also at Berkeley, the Oxford of the West, or perhaps, the Harvard – sorry Stanford!). My first project out of grad school was Wired magazine. Sara’s is going to be our book. I’m honored to be working with her. Last week in London I got to meet her for the first time and spend some quality time together.
The past 12 weeks have been a whirlwind, as I’ve gotten my arms around Federated, executed four conferences in New York, Cincinnati, and London, and lucked into finding great partners for the projects I’m passionate about. Not only have I found the perfect collaborator in Sara, I’ve also found a CEO to run OpenCo, which recently had an amazing London pilot and a successful debut in New York as well. But more about him later. For this post, I want to welcome Sara to the Searchblog community, and I expect the our partnership will result in a lot more writing coming through this channel in the near future.
Here’s a video of me talking about the themes of the book, and announcing Sara as well, at Le Web last week.
Waaay back in the late 1990s, I started a conference called the Internet Summit. My co-producers were Bill Gurley, who remains one of the giants in venture over at Benchmark, and Mary Meeker, who was at that point the best analyst in the Internet space, at Morgan Stanley. The Internet Summit had its last event in July of 2001, and the space was taken over by Kara Swisher and Walt Mossberg, who went on to launch All Things Digital, which has thrived to this day. I went on to launch the Web 2 Summit in 2004, and it was at that event that Mary started presenting her annual Internet Trends deck. I put her in one of my typical “High Order Bit” slots, ten minutes max, and each year Mary would lobby for more time, and cram more and more data and insights into her alloted time (by the last time Mary did it with me, it was 15 minutes and about 90 slides).
I stopped doing Web 2 in 2011 (OpenCo is the new black, natch), and Mary migrated her job to Kleiner Perkins and her presentation to All Things Digital, both great moves. Last week she unveiled her latest work, and I notice it’s gotten up to 117 slides. I missed All Things D due to a client event at P&G, but I bet she got more than 15 minutes to present it!
This deck is always worth the time to review. You can download it on KPCB’s site, and I’ve embedded it below.
Last week LinkedIn asked me to post a commencement speech, if I had given one, as part of a series they were doing. Turns out, I’ve given two, but the one they wanted was at Berkeley, my alma mater. If you want to read the one I gave at my high school, I’d be happy to post it (I think it’s better), but since I already have the Berkeley one at the ready, here it is. I want it to be on my own site as well, just for the record.
Back in 2005, as Web 2.0 was taking off, I was honored to be asked to give the commencement address at UC Berkeley’s School of Information Management, or SIMS. It was a perfect day, and the ceremony was outside at the base of the Campanile, which is Berkeley’s proudest monument. As a double Cal graduate, and three-generation legacy, this was a crowning moment for me. Below are some excerpts, edited for clarity given the time that has lapsed since.
I have a feeling that I was chosen to make these brief remarks because I deeply believe in the following statement: The field you’ve chosen is the most important and interesting line of inquiry to be found at this great University, and one of the most important new schools to emerge since the rise of computer science in the middle of last century.
Of course, it’s also misunderstood, miscategorized, and poorly defined, but that’s to be expected. Just 10 years ago, “information management” was still a fancy way of saying “librarian.” While librarians knew better, many others had not caught on to this basic truth: the most valuable resource in our culture is knowledge, and as SIMS graduates, you are not simply becoming knowledge workers, you are becoming builders of knowledge refineries—the architects who drive how knowledge itself is created.
SIMS suffers from something of a definition problem, doesn’t it? Is it computer science, anthropology, or journalism? Is it library science, architecture, design? Of course, this is the same problem that plagues the Internet—what exactly is it, anyway? It seems there is no area in our culture that is not touched, changed, even swallowed by the Internet. It’s both medium and message, mass and personal, social and solitary. Like SIMS, the Internet is a study in interdisciplinary mechanics.
At various times, the world has declared the Internet dead. Fortune 500 executives— particularly in the media and communications business—were thrilled that their monopolies were safe from what appeared to be a very real threat. They and the press declared the revolution stillborn. They wrote the Internet off as just another distribution channel and, for a while, it seemed that was a pretty safe assumption.
But a funny thing happened around the time this graduating class applied to SIMS—Google began turning a profit. Yahoo, Amazon, and even Priceline shook off the snows of 2002 and began to grow again. And the collective wisdom of thousands of geeks began expressing itself in myriad and wondrous ways—in new photo tools like Flickr and in new social networking applications like LinkedIn.
And millions of people kept using the Internet, and millions more joined. As they used it, they changed it, making it their own and building a medium not only in their own image but in the likeness of the culture they were becoming. It’s a culture driven by knowledge and shaped by relationships and community. In short, while most folks weren’t paying attention over the past few years, the Web was reborn, not as a repository of information, but as a creation engine of knowledge.
Most graduates face the world with an equal sense of optimism and trepidation—this ceremony, after all, marks a major transition for you all. But now comes the rest of your life, and with it uncertainty and the terrifying joy of starting all over once again.
My advice to you, insofar as I can give any, is simple: Hold onto this feeling you have right now. Rinse and repeat as often as you can. Get used to it but don’t take it for granted—it’s how the world is evolving. Every few years, if you’re not leaping into a new project, a new and challenging startup, or a new challenge at a larger company, then you’re not really exercising the skills you all so clearly demonstrated with your Masters projects. The world wants more projects like yours, and it stands ready to fund them, tweak them, embrace them, and inspire you to build them again and again.
You are, all of you, entrepreneurs, deciding what vision to follow and what path to take toward it. It’s a rather addictive feeling, and I, for one, hope you keep making new stuff for the rest of your sure to be very long careers.
As I said earlier, the world of media and business you are entering is very different from that of just five years ago. The Web 2.0 world is defined by new ways of understanding ourselves, of creating value in our culture, of running companies, and of working together.
Companies in this world are run more like artist studios or graduate projects—they are lightweight – they leverage the work of thousands that came before them and potentially millions who use their products or services over the Web. Craigslist, for example, is challenging the entire newspaper industry not by hiring thousands of workers and taking on publishers on their turf, but by reorganizing how people find, create and use classifieds. How they turn information into actionable knowledge. A very simple idea, but also very powerful.
These companies thrive by innovating in assembly—they find new ways to sort, organize, and present options to their customers. Information is a commodity, after all. Knowledge is king. If you can help someone refine information into knowledge and if you help them make sense of the world, you win. And it takes a special kind of person to do that—a knowledge architect—exactly what you all have chosen as your field of study, and, I hope, your careers.
I’ve noticed that the best companies and ideas are driven by these knowledge architects who realize that in an information age, the best business to be in is that of refinery.
Each of you has the chance to make this your life’s work. I say, well done—and don’t let us down. For as Nikola Tesla, hero to Google co-founder Larry Page, once said:
Of all the frictional resistance in the world, the one that most retards human movement is ignorance, what Buddha called “the greatest evil in the world.” The friction which results from ignorance can be reduced only by the spread of knowledge … No effort could be better spent.
I’m very proud to announce “Behind the Banner“, a visualization I’ve been producing with Jer Thorp and his team from The Office for Creative Research, underwritten by Adobe as part of the upcoming CM Summit next week. You can read more about it in this release, but the real story of this project starts with my own quest to understand the world of programmatic trading of advertising inventory – a world that at times feels rather like a hot mess, and at other times, like the future of not only all media, but all data-driven experiences we’ll have as a society, period.
I’m a fan of Terry Kawaja and his Lumascapes – Terry was an advisory to us as we iterated this project. But I’ve always been a bit mystified by those diagrams – you have to be pretty well steeped in the world of adtech to grok how all those companies work together. My goal with Behind the Banner was to demystify the 200 or so milliseconds driving each ad impression – to break down the steps, identify the players, make it a living thing. I think this first crack goes a long way toward doing that – like every producer, I’m not entirely satisfied with it, but damn, it’s the best thing I’ve seen out there so far.
I am deeply grateful to all the folks who helped us make this happen, in particular Jared Cook at Adobe, and a legion of leaders in the industry who reviewed early versions, including Walter Knapp, Bill Demas, Ned Brody, Brian O’Kelley, Ann Lewnes, and dozens more who helped me research and imagine what this might end up looking like.
So take a look and tell me what you think. It’s far too complex to embed here, so we have it running over on the CM Summit site. If nothing else, it should get folks talking, and I hope you’ll help us make it better by leaving a comment here, or sending me mail with your thoughts.
Oh, and while you are at the site, check out the conference lineup. We are almost sold out of tickets, and it’s going to be one heckuva conversation, so please join us!
In case you have any interest, here’s a short clip of me opining on Google Glass and the upcoming OpenCoNYC, which is going to be HOT. More on that soon.