What an Italian grocery cooperative says about the future of media

I’ve spent the last week in Italy. Today, in a TRB Pro member’s piece, I draw inspiration for the future media businesses from Italian grocery stores.

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One of the continued benefits of travel is it forces you to recognize that others organize their lives differently. Something I’ve noticed in Italy is how different their grocery stores are, in particular the many different types of Conads you’ll find everywhere. You can be at a large format Conad in a major city like Milan and a tiny bodega-like corner store in a village in Sicily.

This kind of flexibility is a result of Conad organizing completely differently than American grocery conglomerates, organized for scale and efficiency. This is what America does best. Conad is different. It’s a decentralized cooperative model that dates back to the early 1960s as mom-and-pop stores felt pressure from the encroachment of supermarket chains. Even in Italy, efficiency exerts itself.

Conad organizes over 3,000 independent owners across the country, with regional and . The cooperative handles retail infrastructure like supply chain, branding, tech, real estate and back office. But the stores are run by entrepreneurs. And those entrepreneurs in turn own the cooperative as members.

This provides a middle ground between a command-and-control system like an American grocery store chain and a bunch of inefficient independent shops. Procurement is best centralized. Local owners know best what works in their communities and are owners, not managers. There is sufficient flexibility in a cooperative to ensure the stores are fully localized, including on the product level, since local tastes are critical.. 

There are many tradeoffs to this approach. Any cooperative can become like an HOA with plenty of bickering, slow decision making, uneven execution and overall inefficiency. It’s a safe bet that McKinsey wouldn’t recommend the Conad approach. 

Yet the command-and-control corporate system is completely contrary to value shifting in the market to individuals. A cooperative model respects autonomy and flips the institutional model on its head: the centralized entity exists to serve the creators rather than extract value. In a Conad model, the individual store operators are the ultimate shareholders, not outside investors.

Henry Blodget is one of the few winners of the last era of digital publishing. He built Business Insider into a formidable company and, critically, knew when to take the money in a home-run exit to Axel Springer for a still-mindboggling 9x projected revenue. I’m glad Henry is not just staying in the media business, but has gone back to making media himself. He’s putting in the miles and hitting publish on his Regenerator Substack. It’s scruffy enough that the URL is Regenerator1.com. It’s very much him. It has a nearly doe-eyed optimism about it. I’m glad he’s experimenting. 

Henry assured me this was not just a hobby when we spoke three months ago on The Rebooting Show. He’s now taking the typical newsletter path by expanding to a podcast through a partnership with Vox Media.

Solutions is a podcast that will follow a similar curious and optimistic theme about solving the many challenges that face us. It’s something of a riposte to Late Business Insider, which became something of a Lord of the Flies situation with aggrieved young reporters hunting for scalps. I get the sense Henry regrets in some respects that turn, even if he won’t say it because he’s too polite. The closest he’ll come is to say he stopped writing because his analysis would contradict the pessimism of the newsroom. 

I find more people like Henry in the media business that do not wish to build typical media companies, not in this environment. It’s not just a matter of risks. The energy of the media business has shifted decisively against the command-and-control organizations of institutional media to independent entities built around personalities.

The industry used to have BuzzFeed envy, and now it has Scott Galloway and Kara Swisher envy. They’ve both built wildly profitable independent businesses that are extremely lean. They’re not spending the bulk of their time dealing with HR and negotiating with unions over air fresheners in the break rooms. 

There’s less talk of the Thousand True Fans model. There are, to be sure, ways to scrape together a living as an independent publisher. You better have a valuable niche, ideally in B2B, otherwise there’s a severe power law in effect that follows the current winners-take-all economy. Many on the independent path are hitting a wall on growth and building sustainable monetization models. Attention is the last scarce resource as the amount of content scales to infinity. Burnout is common.

The time is right for a cooperative model.  

It would coordinate all of the essential tasks of publishing that benefit from scale. That’s more than just technology. It’s sales, design, events, marketing and growth. Those essential functions are unlikely to be solved by a tech-only approach that becomes one-size-fits-all by its very nature. Most independent media operators I know do not want to sacrifice autonomy. They don’t work at companies for a reason. Yet many also do not want to build a traditional company, often for practical reasons. You end up spending all of your energy on organizational matters rather than making the product.

Vox is inching into this territory with its podcast network, which is striking talent deals with people like Henry, Kara, Scott, Peter Kafka and others.  In the past era, publishers like Vox would cosplay tech companies in order to establish differentiation in the market. Even BI had a CMS named Viking. The real differentiation in these companies now will come from business models. Vox’s embrace of talent-management-style deals – the ever-transparent Pivot hosts are getting 70% of the ad revenue generated – is a competitive advantage in a market that’s bifurcated between the creator class and creaking institutional media companies that will inevitably bleed top talent. 

The way out is to find a middle ground between institutions and individuals, only most times this is organized as the same extractive centralized model with some creator frippery added. The starting point needs to be with the individuals, not the centralized entity organizing infrastructure and services. This is a crucial point. It’s the antithesis of the PE model that is built around efficiency rather than building resiliency combined with autonomy. Being part of a cooperative is a fair trade of some autonomy, particularly since the individual is an owner in the collective. 

In my own business, I’ve seen this need up close. I’ve decided not to rebuild the same infrastructure of a typical trade publishing company, even if The Rebooting does many of the same things as a B2B publisher. I don’t believe in the correlation between the number of FTEs and progress. Instead, I’ve relied on partnerships with groups like Clear Sky Collective and a fractional approach that’s both more efficient and allows for greater specialization. I would always find at Digiday we would have real business needs that didn’t add up to 40 hours a week, so we would smush together multiple jobs. The result was someone great at one of the jobs and so-so in the others. 

This will be the essential challenge for many. The Substack approach has a low ceiling. Building a traditional company infrastructure is both impractical and, honestly, uninspiring. The entire point of the independent path is to do the things you’re best at doing and find the most rewarding. We all have to do things we don’t like; it’s being a professional. The real risk for many I speak to in this area is running out of steam. That requires infrastructure support. 

The entire economy is changing and moving to more flexible work and infrastructure. I just finished Patrick McGee’s excellent “Apple in China.” Beyond the geopolitics, Apple crafted a new way of manufacturing that wasn’t a pure OEM outsourcing model but also wasn’t running its own factories and directly employing millions of workers. The media organizational model needs modernization to follow this middle-ground direction because I don’t see the models of the past working for the most part in the future.

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