For episode 3 of The Rebooting Show’s mini-season focused on modern B2B media, I spoke to Angus Macaulay, COO of Stat, the health-focused site that’s one of my favorite niche media brands. Please send me an email with any feedback. Also, please rate and review the podcast. Thanks to Niceguyappreviewer, who said The Rebooting Show is “such a valuable podcast for media entrepreneurs,” noting the “insightful, actionable and relevant information.” Thank you, Niceguyappreviewer.
Politico’s model has long been an aspiration of many niche media companies, even before Axel Springer shelled out $1 billion to buy it. The reason: Politico was able to pull off the “prosumer” model of providing in-depth, insider coverage of a niche (politics) that straddled the line of consumer impact but with the advantages of a B2B business model that typically affords an opportunity for high-priced subscriptions.
Stat, born out of the Boston Globe Media in 2015, wants to pull off the Politico model for life sciences. The site, which operates independently and has 70 people, had a breakout moment during the pandemic as the world’s attention by necessity turned to the issues that are squarely in Stat’s wheelhouse. Stat’s monthly traffic peaked at 23 million in March 2020 vs 4.7 million the prior month. The site’s revenue was up 40% in 2021 vs 2020, with subscription revenue up 24%.
“Before Covid, when we’d talk to people at conferences or to advertisers, it was either we know Stat and love it or I never heard of it,” said Angus Macaulay, Stat’s COO. “We were still a new brand. There was still an awareness brand. When Covid exploded, people in the healthcare industry were also trying to keep up on all the breakthroughs, and many in the ecosystem relied on us as a source. Our awareness in the healthcare ecosystem went through the roof.”
Here are five key takeaways from the conversation:
Find a local story with global impact
The idea for Stat came out of a dinner Boston Globe Media owner John Henry had with former Google CEO Eric Schmidt, who noted that while Boston didn’t have the tech scene that Silicon Valley has “you have the life sciences and the entire infrastructure with the academia in Boston as well.” While the Globe is mostly a local news company, the opportunity was to build a niche publication with global impact from the position of Boston’s outsized role in life sciences as home to over 1,000 biotech companies. “If you lived in Boston and Cambridge over the last 25 years, you can’t miss how life sciences has changed this area, it’s just exploded,” said Macaulay.
Use “stars” to establish credibility
Many news sites focus on keeping costs low, particularly early on. That often means hiring less experienced journalists who command lower salaries. With the backing of a larger media company, Stat was able to take a different path. Its founding executive editor was Rick Berke, a 27-year veteran of The New York Times, sending a signal of the ambitions Stat had, Macaulay said. “They didn’t find someone working at a niche B2B trade site. They wanted someone who understood high-end investigative journalism.” The site went on to hire several well-known reporters with deep experience in their fields, including Helen Branswell, an infectious diseases reporter who has covered pandemics for nearly 20 years, and Matt Herper, a former j-school classmate of mine who has focused on medical innovation for two decades.
Moving fast is critical
The startup life is often glamorized but comes with many downsides. The tradeoff for being able to move fast and try new approaches as the company figures out its product often comes at a cost of fewer resources and more chaos. Of course, being part of a larger organization means more process and bureaucracy that slows companies down -- and is often deadly for young companies in growth mode. With the backing of Henry, Stat was for the most part kept separate from the larger organization, carving out its own space within headquarters and building out its own tech stack. “It gave us the ability to do things quickly, do things differently, and not be tied to legacy systems or processes,” Macaulay said.
Email is an MVP
Email newsletters have long served an important role for B2B publishers. One of the less appreciated roles email newsletters have played is as a minimally viable publishing product. Spinning up a newsletter is cheap and easy, giving an opportunity to test a concept and begin learning immediately rather than going through a long planning and development process. Time spent planning is time wasted not learning. Stat used the development time in building out its site to launch Morning Rounds, which remains its main daily newsletter. “You get direct feedback, but also in the forms, you can start to build a profile of what kind of people you’re attracting and is that agreeing with your hypothesis,” said Macaulay. “As you build out the profile, you know these are the kind of people we’re trying to serve.”
Ads are a bridge to subscriptions
From the start, the goal of Stat’s business plan was to rely on subscriptions. But where you end up isn’t where you start. Stat spent its first year relying on advertising and sponsorship. Selling ads isn’t easy, especially for a new publication, but thanks to Stat’s experienced editorial team and big-name backing, potential advertisers could be assured the brand would have impact, Macaulay said. Subscriptions are a “longer haul,” as a publication builds brand credibility, habit and loyalty. “Advertising was the best first step,” he said. “It also gave us the run time to give us a year to build up readership, get them engaged with the brand and coming back without any of the friction of a paywall.” Since its launch, Stat+ has grown to encompass more of the site’s output, currently 60-65% of all content is exclusive to subscribers.
The reality of the media business is expenses remain constant but revenue has a lag. Silverblade Partners is dedicated to accelerating the velocity of cash flow to the advertising media sector. With access to over $1 billion in financing, Silverblade has the financial resources to solve liquidity challenges arising from outstanding accounts receivable for most media companies. Silverblade was founded by veterans of the media industry, with a deep understanding of the particular nuances of the business that your average bank simply does not have. Silverblade has built a cashflow solution that will finance accounts receivable and accounts payable on more flexible and favorable terms than an option like factoring from a bank. Find out more about how Silverblade Partners can work with you to create a strategic advantage from trade finance.
5 things to check out
We’ll likely see new types of media brands, built with a community not just at the center but as active participants. Troy Young smartly maps out how the shift from scale to community will necessitate the creation of collectivist brands that seek to have the benefits of individual creator brands while defraying the infrastructure costs. The trick to these brands is going to be less technological, in my view, but more getting the economics right.
All statistics are liable to be gamed, including subscriber numbers. Joshua Benton hits on the obfuscation going on in discussing the pivot to paid. Reporters are regularly mixing paid and free subscribers in trying to ascertain the progress tight-lipped publications are making. This FT article is a good example. But beyond that, many big subscriber numbers -- and these should usually be reported as subscriptions -- many are on cut-rate trial plans. These are closer to leads than customers.
It’s already media outlook time. On Wednesday, Dec. 1, I’m participating in the launch of the “Media Moments” report by the team at Media Voices, home to a podcast I recommend checking out. The Zoom starts at 11amEST. Register here.
One of those media trends is the continuing shift from institutions to individuals. This will only accelerate next year, particularly since we’ll start to see the emergence of decentralized autonomous organizations for purposes beyond buying a copy of the Constitution. I spoke more about this on my old friend Chris Cunningham’s Superpowers podcast.
Labor conflicts will likely grow worse. The Black Friday strike at The New York Times’ Wirecutter is likely a sign of things to come, as labor continues to flex its newfound muscles amid a tight labor market and continued inflation that hits wage earners the hardest. Many publishers will continue to reap what they sowed by treating the people who make the product as swappable widgets.
Thanks for reading (and listening). Be sure to check out our sponsor Silverblade Partners. Also, if your business is interested in reaching the people who are building sustainable media businesses, get in touch about sponsorship opportunities: firstname.lastname@example.org. You can find the details of programs here.