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July 25, 2019, 8:12 a.m.
Audience & Social

Five years after crowdfunding, here’s how Krautreporter is keeping its members engaged (and building tools for you to, too)

“You don’t feel like you’re trying to convince people you’re not lying.”

Five years ago this summer, Europeans had recently showered a pair of nascent news sites with money. De Correspondent had crowdfunded $1.3 million in the Netherlands through crowdfunding in 2013 and Krautreporter was in the home stretch of its campaign in Germany which ultimately raised $1.38 million. Both planned to turn the reporting model on its head, infusing journalism with members of the audience that paid for the news and expected a voice in the process as well, though neither had published really anything besides promises before the financial contributions came in.

Half a decade later, each site has developed deep relationships with its members and turned its sights on expanding in new ways: De Correspondent as The (English-language) Correspondent in another $2.5 million-raising campaign, and Krautreporter in the way that its leadership built a second startup to service other outlets’ membership needs.

“We pretended we were these experienced product people we weren’t and it cost a lot of money and led to frustration [from] our members,” Sebastian Esser, cofounder of both Krautreporter and the startup, Steady, said. “A lot of colleagues came to us after our crowdfunding and asked ‘I want to work with my readers directly — how do I set this up?’ After we told them, they never came back, because it’s really complicated.” (Krautreporter also recently received funding from the Engaged Journalism Accelerator in Europe to develop a trust funnel framework and playbook for other membership businesses.)

Krautreporter had grand visions for how to integrate their members in their reporting process, but the team needed the tech to actually be able to do it. In its first year, Krautreporter added a paywall, shifted from a freelancer network to a physical newsroom with staff, soon introduced a co-op model for readers to chip into the ownership stake, and — one of my favorite parts — started asking each of their members to share their areas of expertise as potential future sources during the on-boarding process. They also survey members regularly, asking “What is it that you don’t understand?”

“We have made it our policy that before you start your work on a new topic or article, we should always look into our [member] phone book and database,” Esser said. The organization has seen net growth since the beginning of its second year.

It’s now a client of Steady — named for the ongoing payments of members — which Esser launched with Krautreporter cofounder Philipp Schwörbel and others in 2016. The team has now raised $975,000, not including funding from the Google News Initiative to build the initial product, and sees two percent churn on the 80,000 members of the more than 450 publications each month. Steady also added a seed round of “a small seven figure number,” according to Esser, in April. Here’s the full list of clients, including a fanfiction portal (with 444 members at €2 to €9 per month), a podcast about growing up in a family of Vietnamese immigrants in Germany (with 103 members at €2.50 to €10 per month), and BILDblog (with 882 members from €3.50 to €10 per month). Steady pays out some €200,000 every month, according to Esser, and takes 10 percent of the revenue plus payment costs.

Steady and Krautreporter are entirely separate operations, but the infrastructure now facilitates the monthly payment of the outlet’s 11,000 members. (17,000 had chipped in for Krautreporter’s 2014 crowdfunding.) Members pay either €5 or €9 per month, with a 10 percent discount if they pay annually. The second tier was added on when members wanted to give more (though less than half do), Esser said, and it includes their limited-run print version, inspired by a member who is a typographer and who had helped renovate the old press the magazine is now printed on.

Of course, you need solid material that people want to support to make that money in the first place.

“I think the moment that really made me fall in love with this project as a journalist was when my first article went online and I read the comments,” Theresa Bäuerlein, Krautreporter’s co-editor, said. She joined the team as a contributor in 2014 during the crowdfunding campaign and now has “totally changed the way I work as a journalist and cannot imagine doing it in a different way. Sometimes I’m not sure I could go back.”

In addition to helping lead the newsroom, Bäuerlein writes about people who are breaking stereotypes and different ways of life, from sex workers to eating meat. She uses surveys, the Krautreporter Facebook group, newsletters, the comment sections, and regular old emails from readers to help decide what specifically to focus on.

In response to a post in the Facebook group soliciting story suggestions, “someone posted a comment, ‘I want to understand why people eat meat even if they know animals are suffering.’ It’s really at the heart of the debate, but nobody’s answering it or posing it that directly because it seems too obvious,” Bäuerlein said, adding that the debate is much more heated in Germany than in the U.S. “I decided to experiment with that and passed that question onto our community with a Typeform and sent it out in my newsletter.” (Each Krautreporter writer has their own newsletter, and there’s also a general one checking in with members on Sundays.) She received some 200 responses, a typical amount, and spent two days reading through them and categorizing them. “It was five answers that kept repeating themselves…so I wrote an article presenting the categories and it was very successful,” she said. “They really felt heard and continued the discussion in the comments section.”

“In the work at Krautreporter, it’s important not to assume things, not to think that an answer’s obvious, and [remember] that people have very complex thoughts on many subjects where you’d take the answer for granted,” she added.

Sure, some topics might feel wacky to an outsider, but the people who feel heard are probably going to be the ones who give you money. Krautreporter’s team is made up of six women and 15 men, though Esser said the members are generally 50-50 split by gender. Most members are in Germany and many, but not an overwhelming share, are in Berlin (there is one New York City-based writer). Most are highly educated, ranging from 20 to 70 years old. And they definitely connect over an “outlook to the world that is very open,” Esser said, though they don’t necessarily all lean the same way politically.

Krautreporter’s writers have also recently reported on the nutrition of kindergarteners, the economics of Germany’s weapon exports, how Democrats in the U.S. reframed the terms of debate without talking about refugees, why and how people should stop flying because of the environmental impact, smartphone addiction and how to counter it (Google Translated at the bottom: “I will actually try out Newport’s method and take a thirty-day break from ‘optional technologies’ followed by digital clearing. I’m curious to see what comes out: Will I really gain much more time? A lot of phone calls, instead of sending messages in all directions? Learn to play harp out of boredom? I will report in my newsletter. Here you can subscribe.”), and a kind of lovely crowdsourced advice column about dealing with fellow train commuters behaving inappropriately that I thought would be much prissier than it was (my American bias showing), with input from a train conductor and other members. Writer Susan Mucke asked members to vote on which question they all should focus on next at the bottom:

Which question is the most interesting? You can choose more than one option.

A) How do I make it clear to my Muslim father that having a non-Muslim daughter like me is okay? (Question from Nawina)

B) How do I protect myself from negative people who seem to have the right to complain? (Question from Jessica)

C) What is the best way to counter conspiracy theorists? (Question from Reni)

[Near a spot to enter your email before you submit:] Should I inform you by mail about the result of the vote, my research and the answer? Should I inform you by mail about the result of the vote, my research and the answer? As a writer, I send you occasional news about my contributions. Krautreporter never shares your address.

Members lead the way editorially, and an even more invested group of members have the reins financially in a co-op setup. 433 people have put in at least €125 as a one-time investment to become part of the co-op, in a meta membership — separate from a regular membership to Krautreporter — that established a security cushion for the organization. “If something happens or if we see an opportunity to invest or grow something worthwhile editorially, we can treat that money as the money under our pillows or mattress and make sure somebody can’t just sue us into bankruptcy,” Esser said.

Co-op members each get one vote, regardless of the size of their investment, and can participate in the yearly general assembly to elect the organization’s leaders (who are Esser and Schwörbel). There’s a second, three-person body that acts as the overseer of Krautreporter’s business decisions and financial paperwork reviewer.

Krautreporter’s membership model helps them bake in transparency — and trust — from day one.

“You don’t feel like you’re trying to convince people you’re not lying,” Bäuerlein said.

POSTED     July 25, 2019, 8:12 a.m.
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