A couple of days ago a Kickstarter to launch the new longform-only science magazine Matter popped up. Less than two days later, the project has already reached its goal of $50,000. In the meantime, I found myself intensely curious about the business model of Matter, because (I realize now, rightly) the project’s Kickstarter page did not include an explanation of how Matter will make money beyond this initial bolus of money.
Similar thoughts inspired Stephen Morse to write “Why I will not donate to this Kickstarter campaign that purports to save journalism and why you shouldn’t donate to it either.” It’s a systematic error of screed-writers (I’m one of them) to assume that a flaw in a project is inherent in it rather than in our perception of it, so rather than pile on I reached out to Bobbie Johnson directly.
“What’s your business model?” I asked. Here’s his response. I’ve highlighted the parts I find most interesting.
There are a few particular things we are going to keep under our hats because we think they’re going to be our secret to doing really well, but sharing the central part of it is something I’m happy to do — not least because, frankly, it’s not rocket science.
We’re going to sell the stories and a small, discreet amount of advertising. Stories will be available as e-books, on tablets, and maybe apps later on if it makes sense. The stories also live on the web behind a wall for a short period, before going out into the free world when our right to exclusivity with the writer ends.
It’s not crazy: The Byliner and The Atavist have blazed a trail to some degree. There are plenty of others looking at this space in the same way. And we think if we can get the economics all in the right place, and build out now — rather than wait until it’s so blindingly obvious that everyone and their brother’s doing it — we can bring in enough revenue to remain afloat.
Now, of course the basic contradiction is obviously the cost of production versus the amount of income you can claw back. Stories need to bring in more money than they cost us. And sure: big, investigative pieces cost money. But in fact, if you choose the right people and the right investigations, you can get enough hits to keep you in the hunt.
Through the research and intelligence we’ve gathered we have a very good idea on what we think strong, timely, well-written stories sold in the right places (Kindle Singles, ibooks, etc) will do. We have worked hard to bring the costs of producing stories down. That’s made easier by the fact that, say, we don’t have legacy infrastructure to service, we have a very focused amount of output, we don’t have an existing print business to compete against (like many magazines and their websites), we hire writers and editors in small teams on a project-by-project basis, and we pay competitive — but not insane — rates. Plus we don’t plan on pulling a salary unless it’s highly successful.
Including all of our extras, legal bills and so on, we think we’ve brought our unit costs down to a point where MATTER can wash its face by selling a reasonable amount of stories. And we think over time the market is going to grow larger, giving us the chance to pull some extra levers… all of which makes doing it now a smart move.
To be honest, that’s it. There’s nothing more complicated than working really hard to know the market and understand where we can find efficiencies in production… and then actually trying.
Of course, it’s no surprise that people are going to take potshots. But they’re mainly based around a set of false assumptions. We don’t think it’s going to be a mainstream smash; we don’t think it’s going to change the world; we don’t think we’re going to out New Yorker the New Yorker; we don’t think we’re going to be billionaires. But we do think, done right, we can offer something valuable and remain sustainable in the medium term.
The other big error is mistaking the Kickstarter appeal with an investment pitch. Going on KS was not meant to be a validation of our business model: we’ve done plenty of that with the smart business people we’ve spoken to. It was meant to be a litmus test, for ourselves, of whether there was appetite in the market for what we want to do. I think we’ve proven that point well enough.
We’ve spent thousands making a slick video to sell snake oil? No. We just realised that success on Kickstarter takes some hard work and a coherent campaign that doesn’t waste time banging on about business model shit when what people really want is to get a feeling of what they’re buying into.
That’s not scamming anyone, that’s not being too slick: that’s knowing your audience… which, frankly, is what this whole endeavour is about.