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Aug. 16, 2017, 10:54 a.m.
Business Models

Inside, the collection of industry newsletters, continues to bet on email, the “largest social network”

Closing in on a year, the company founded by serial entrepreneur and investor Jason Calacanis now has around 300,000 subscribers across 30 newsletters, and average open rates just above 40 percent.

Email, not Facebook, is the largest social network.

That’s the view held by the team behind Inside, a company focused entirely on growing and monetizing its motley collection of newsletters. Closing in on a year, the company founded by serial entrepreneur and investor Jason Calcanis — known for Weblogs Inc. and his early investments in Uber, among other things — has around 300,000 subscribers across 30 newsletters, and average open rates just above 40 percent and click rate of 10 percent across all the newsletters. The collection includes the Jason Calacanis newsletter, a general interest daily news briefing, and quirkier offerings like Inside Space (on outer space and travel), Inside Trump (on the president of the United States), Inside Streaming (for “cord cutters”), and Inside Beer (for sellers or brewers).

“We looked at the way news is consumed today on social media, with Facebook being the number place where all of that happens. A lot of publishers are talking to Facebook right now, but none of them know what Facebook is going to look like — it’s a platform controlled by a public company that has a lot of shareholders and other forces they need to answer to,” Austin Smith, Inside’s general manager, said. “Email will never be controlled in that way, and people are just as engaged with their inboxes as they have always been.”

It’s recently launched its paid subscription options for the newsletters at $10 a month for premium access to one newsletter, or $25 for premium access to an unlimited number of Inside verticals — a paid subscription removes ads and gets you…well, more emails. The more popular newsletters in the network average a “couple of hundred” paying subscribers; the smaller newsletters have around 50.

The newsletters also take ads: Either a company pays for a monthly sponsorship and gets a logo and callout in the newsletter, in addition to access to an Inside premium subscriptions bundle for their company, or advertisers can pay for more one-off native ads inside a newsletter (Inside doesn’t have an ad sales team so isn’t “super aggressive” about running them). Between ads and premium subscriptions, the company is not yet profitable (that’s “within eyesight,” it’s said) and may or may not be looking to raise funding in the meantime (“no comment”). Early on it had focused on metrics like opens-per-week, but with the rollout of subscription offerings, “enough readers are paying us so we don’t necessarily need to focus on volume as much as if we were only ad-supported,” Smith said.

Inside staffers float ideas for new topical newsletters to join the family, and readers “vote” by signing up to the potential newsletter with their emails; Inside will assign a writer and start a newsletter for ideas that collect at least 2,000 addresses (or attract a major advertiser to sponsor it). Some of the newer Inside newsletters such as Inside Trump, Inside Space, Inside Internet of Things, and Inside Beer all launched after hitting that minimum. Inside Bitcoin, for instance, went from the 2,000 pre-subscribers it had before anything launched to 7,000 subscribers a few days later.

“We found before we had the pre-subscribe feature, the most challenging thing for us was to get the first thousand, two thousand subscribers,” Smith said. It’s hard to get that word-of-mouth going when there’s nothing to build off of, and word of mouth is best way these things grow.”

Most of the company’s five full-time staffers and around 10 freelancers currently putting together all of Inside’s newsletters are tech-oriented generalists who have to cross multiple disparate beats. The team is still trying to figure out how much — and what — to offer premium subscribers, the right mix of original versus curation/aggregation, and the volume of new newsletters the team can handle. Several of the newsletters, such as the ones on Amazon and VR/AR industries, come out daily. News out of the Trump administration is so frequent that the twice-weekly Inside Trump digest has issued breaking alerts. Right now, Inside newsletters average about 60 to 70 curated content from other sources and up to around 40 percent original content, according to Kim Lyons, managing editor at Inside.

“Our current mix is working, though I’d like to get us to even more original reporting. But I’m interested more in doing the deeper dives rather than the breaking stuff, since there are a lot of news outlets that do that really well already, and trying to duplicate that with the size of the staff we have is not practical,” Lyons said. “Our sense is that we’re not writing for a completely beginner audience. What’s interesting to subscribers is, which drone companies are doing new things, what are the new regulations everything in this space is struggling with right now, how is that administration policy change going to affect my business?” At the moment, Inside’s audience is about 80 percent U.S.-based and mostly concentrated in the Bay Area, which makes sense given the industries it covers.

Premium offerings vary across newsletters. For some, a premium subscription comes with a occasional special research reports (e.g., Inside AI, written by angel investor in the space Rob May, compiles a monthly one). For others, it might mean one original article blurred out in a newsletter. (Inside’s newsletter CMS is built to handle toggling between paid-for and free content.)

“We try to make sure we don’t just have news of the day but news that you may have missed and is not getting attention elsewhere, and will take time to get our hands on an important issue that people are still only peripherally aware of,” Lyons said. “The most pushback we’ve had is from non-premium readers when they see an article they can’t read inside their newsletter, which we always knew was going to annoy some people who just don’t want to pay.”

“It’s still a process, building all this. But it’s super cool though to see readers actually do want to pay for it,” Smith said.

POSTED     Aug. 16, 2017, 10:54 a.m.
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