Originally published in March 2020 here
During my time at BCGDV I have helped to build and launch 7 businesses so far. Worldwide BCGDV has even built over 100 business since its start a few years ago. But to be honest: not all of them were businesses I would love to build :)
Don’t get me wrong: this does not mean some of those businesses should not have been built: we thoroughly check every opportunity based on its desirability (do the potential customer want it?), feasibility (can it be built with reasonable cost/time?), viability (can you make money with it?) and from a strategic perspective (does it make sense for the corporate partner?). Due to this and its unique execution capabilities BCGDV has a pretty amazing success rate of 3-4 times the industry standard.
However the reality is that there is a fifth filter when selecting ideas: What do our corporate partners want to build? At the end of the day the business model of BCGDV is to co-invest but not to lead the investment - so in the end it’s the corporate partner who will decide what to build.
So while I also privately build my own business on the side (the team collaboration tool Alldone.app), I also would love to build the following businesses together with our corporate partners. Mostly because i think those businesses would have a positive impact on the world and are likely to succeed. Obvious disclaimer: the views described are my own and in no way "official" BCGDV opinion or advice. Also please note that I have not looked deeper into desirability, feasibility or viability for these models. This still needs to be done. I will start by describing one BILB below but since I have a pretty long list I am planning to publish more of them in the following weeks & months. So dear potential corporate partner: If you read this and if you like or even love one of the ideas as well - contact me via LinkedIn and let’s build a BILB :)
BILB Idea #1: “Netflix for news with a twist" for media companies
What's the problem?
The fact that somebody like Donald Trump can be President of the United States of America is also a symptom of a trust problem in the media industry. Yes his lies and actions are regularly exposed by all/most major news outlets but in previous times this would have lead to him having to end his political career. However these days a big part of the population either does not believe the "mainstream-media" anymore or is no longer paying attention. How could this happen?
The answer to this is obviously complex - however in my mind part of the blame belongs to the media industry as well:
- If you measure success in "number of clicks" you will optimise for "clickbait" headlines. What you don't measure is that with every misleading headline you erode the trust of the reader.
- If you optimise for engagement and virality on your sites you will make everything a big drama, even if it isn't. Breaking news anyone? Also you make 10 stories out of something which should have been one. Again this will make you lose the trust of your readers.
- If you get paid by advertising then it requires heroes to go after your corporate partners - the ones who are actually paying you. Not all of your employees are heroes and therefore you will lose trust again.
If you think about it - the last point is the source of the evil here: the business model. Every company will always optimise for revenue & profit. If you get revenues via advertisement from clicks & engagement you will eventually optimise for it - and since you have to go after the next quarterly result (and your personal promotion) you will do this rather in the short term than considering the effects this may have in the long term on the trust of the readers. This is a similar problem facebook has: they are optimising their newsfeed for engagement and therefore push way too often "very engaging" content like lies and propaganda.
So in order to fix this we need to find a business model where quality is being rewarded which eventually will help build trust again. If only there was a business model in the media industry where quality is rewarded ... but luckily there is: The Netflix model. Most people would agree that thanks to Netflix, HBO & Co "TV" is currently in a golden age. My argument would be that this is due to a change in the business model from mostly advertisement to a monthly subscription model. In this model you need quality shows to make people subscribe and to prevent churn. It needs to be significantly better than the free advertisement based content. Since you get your money from the viewers you actually optimise for the viewers. Simple as that.
But I guess this is not really news to our potential corporate partners: for years they have been trying to make their offering premium - and for some outlets like the New York Times it is actually starting to work. Still why is it so hard to convince readers to pay? Why is even the most famous newspaper in the world struggling to get enough subscribers? Looks like we have not really found product-market fit yet. So let's try something new!
So what's the solution?
What if we offered a new portal with a monthly subscription for about 5 EUR / month (which can be cancelled monthly!) which lets users combine their favourite authors from most/all news sources? Take a sports writer from ESPN, Joe Rogan for interviews, MKBHD from YouTube for tech news and Paul Krugman from the New York Times for economic commentary to create your own personal premium news outlet. Basically you create a marketplace for curated authors/writers/creators (not media outlets!) who people can follow directly.
In a way Medium.com (or https://substack.com/) is already running on a similar model - you can directly follow authors and over 100m people read it every month. The big difference is that the content on Medium is mostly generated by amateurs: they have over 20.000 articles published every day. Therefore I am not really surprised that only around 200.000 people are paying monthly for subscription generating around 12m USD in yearly revenue - not bad but not where we need to be.
Here is where I would propose to be different to Medium.com: Our offering should only have the best authors on the planet. Not all authors have to participate in the beginning - you can just link to their existing outlets. However the same way Netflix has started to create their own exclusive shows you also need to get some of the best authors on board to write/create exclusively for you. Next to exclusive content/authors another important part of the value proposition is that all articles are "peer reviewed" by experts and that this is transparent to the reader. Participating authors should be paid on “quality adjusted views/reads”. Quality is determined based on peer review. Therefore for all important topics we would need to have a network of “peers/experts” - both journalists and real experts on the field. Those experts get paid to do the peer review. We also need to rate the reviewers based on how well they find mistakes etc. Overall this is not much different than what good newspapers are already doing within their editorial staff - just done virtually and made transparent for the reader. Based on the peer review every author builds up a quality rating over time - this will then over time be the badge of honour for every journalist.
I believe with this approach we can bring a great value proposition to our users:
High quality news from the sources you trust!
- News directly from the authors - people you trust
- Curated & peer reviewed in a documented way - you see the changes from the peer review on the site
- including all types of media - from writing over podcast to video
- Less is more: optimised to give you the most important information in the least time and number of articles. This is only possible when your business model is not advertisement.
I would buy it :)
Why would I love to build it?
To be honest i wanted to build a similar model like the one described already for over 10 years - click here if you want to check out probably one of the ugliest presentations ever made from 2009 ;)
That being said I would think that it is more important than ever to "fix" the problems we have in the media industry. Democracy is in trouble due to the rise of social media and the influence of people and states playing with the weaknesses of social media. I love the proposed model because it solves some of the the problem at it’s core. We will not get out of fake news without changing the business model. We need strong and transparent curation back or people will remain in their filter bubbles. Either the media industry (or facebook itself) needs to solve this!
The big question is if the value proposition is good enough so that users actually sign up for the subscription. However I do think it can work because it really brings a strong value to the users and it plays along nicely with the trends of the times: people are more willing to subscribe (as long as they can cancel anytime), people are used to follow/personalise their experience and people trust people not companies.
Why together with a corporate partner?
Media companies still have the biggest possible asset for a concept like this: They have the best authors under management and the reach to make such a platform relevant. They also have experience in setting up the "peer review" or editorial process to make sure the quality really is as high as advertised. Social networking companies like facebook could also build a platform like this - basically leveraging the trust the authors have and combining it with their own reach.
So I hope you like this idea as much as I do: contact me and let's build this :)