Hi Zach! Thanks for having me.
I was sharing articles inside Seeking Alpha about what other startups were doing, so we could discuss them. I realized that if I posted the articles on a blog, the usability would be better and I'd be able to share them with people outside Seeking Alpha as well. It's fun helping other people who you've never met. There are now over 3,000 email subscribers to the blog, and I think most of them are entrepreneurs and VCs who are trying to help entrepreneurs.
I care most about the article excerpts, not my comments. So curation + notes seemed the right format. Often, the most important note is to point out that the idea I'm quoting is similar to another idea from someone else.
If someone were writing one of those articles about a tactic or strategy that Seeking Alpha used, what would you tell them to highlight?
Meaning, what is one thing (you can give more) that Seeking Alpha is doing that other start-ups would do well to copy, or at the very least blog about and discuss?
First, we're very rigorous about goals and metrics in Seeking Alpha. We require every team leader to write a one page monthly report. The "one pager" is a structured template, which makes it easy to fill in. You have to report your key metric (with a link to the time series chart), provide an honest assessment of how you did that month, and discuss your plans for next month. The monthly reports are shared with everyone in the company.
The second example is board meetings. We've avoided many of the pitfalls that lead to bad board meetings: using PowerPoint (which lacks rigor and leads to bloat), allowing dial-ins, and worst of all -- making the core of the board meeting a presentation by the CEO, when the attendees should have read the material in advance so you can use the time for discussion.
I don't usually blog about what we do, but I described how we do board meetings in two blog posts: Board packet — why we send a letter instead of slides and How we run board meetings at Seeking Alpha.
There's a line in a recent post on your blog about engagement versus page view chasing. I can't get it out of my head:
"The problem is that high quality general news sites don't have meaningfully higher engagement than sites which feature slide shows, link bait and viral content, because they don't help users make decisions. They just have a higher quality audience."
I've watched TV shows & movies and read books and articles that are very entertaining -- even if they didn't necessarily help me make a decision. Why is it so important that content help users make decisions?
There's nothing wrong with entertainment. The question is: If you're a content provider, do you want to be in the entertainment business? Well, the entertainment business is tough, because there's tremendous growth in supply of video, photos, music, text and games for desktop and mobile users. It's hard to charge for content when lots is freely available, and ads have low engagement when the user is there for entertainment.
There's an alternative for content providers: to be in the business of helping people make decisions. For example, our goal at Seeking Alpha is to help you make better investment decisions. When you're helping users to make important decisions, they're more willing to pay. And if an advertiser can suggest a compelling solution for what the user is trying to do, that's valuable.
Some people think they're not in the entertainment business, but in fact they are. Newspapers and news websites often fall into this category. They're largely event-driven, and often focus on personal experiences and slip into simplistic narratives and memes -- because those things create an engaging and familiar story-line for readers. They're in the "infotainment" business.
If they were in the "we help you to make decisions" business, they'd operate very differently. They'd be more focused on data, provide more context around events, spend less time on personal experiences and anecdotes, and increase their coverage of societal changes rather than events. And they'd be more willing to embrace complexity when simplistic narratives don't fit all the facts.
And the content would be better.
I don't know if you hear these same rumblings, but there are industry people who believe that the web will shift from existing as we know it and morph into a few mobile apps: FB, Twitter, LinkedIn etc. For instance, I had one investor tell me that he would like ReplyAll more if we had built it as a FB plug-in and I had another investor tell me that he thought the blogosphere and content sites would disappear altogether.
As CEO of Seeking Alpha, you've got to be bullish on the future of web content. What gives you that confidence?
I think there are two distinct user needs:
(1) "I want to know what this person is doing or saying", and
(2) "I want to understand and discuss this topic".
These two user needs provide the opportunity to build great businesses. You can build a great business doing either one. I just don't think you can do both.
Facebook, Twitter and LinkedIn dominate the user need to follow people. But they won't dominate the second user need to follow topics, because they're fundamentally architected around people. However hard they try to address the user need around topics, it's not their foundational DNA.
So there's still an opportunity for content companies to dominate vertical categories or topics, and to build communities of people around them. I'm very bullish about vertical content businesses that are focused on doing that.
I'm less bullish about content businesses which are trying to attract the largest number of readers without providing a strong topic-oriented user experience and community. If you're not addressing the user need to understand and discuss a topic, you're competing with Facebook, LinkedIn and Twitter for users and ad targeting, and that will be tough.
The challenge for content entrepreneurs is that investors and journalists often measure success by monthly unique users, a truly lousy metric. This pushes entrepreneurs to run their businesses to optimize for monthly uniques, which means they publish content to attract the largest number of one-time users. They're pulled outside their vertical, and that dilutes their community.
Here's an example: Henry Blodget (who is remarkably talented) recently announced that Business Insider hit 35 million monthly uniques (note the metric!), and claimed that this made it "the No. 1 business news and information site in the country". But as I write this, the most-viewed headline on its home page, which over 650,000 people clicked on, is "The most ridiculous outfits at Sunday's Grammy Awards". Is that a business headline?
This means that Business Insider is a general interest website, not a business website. It means it's in the general interest = entertainment business, not the "help me make a decision" business. And that means it's competing with Facebook for users and ad targeting.
I think the New York Times and many other general interest content businesses have the same challenge.
1. There is a very popular football site called ProFootballFocus, which does exactly what you describe: provide users with content that helps them make decisions. PFF's target is professional teams, scouts, football writers and people who gamble or play fantasy football. It's a Seeking Alpha for people who "invest" in American Football, but it's not crowdsourced. Their content is heavy on analysis and data. The site does very well and (this will not surprise you) uses a premium subscription model. They have even discussed getting rid of their free version altogether, despite the fact that they are wildly popular with free readers. It's interesting that your model can work for less lofty purposes than stock market trading (with all respect to the NFL).
2. I wonder if "decision-informing content" will coincide nicely with the trend of brands and businesses becoming publishers. Businesses are not looking for uniques or pageviews because they don't rely on advertising dollars. They are looking to help users make decisions, namely, "buy my product."
Thanks for the tip -- I hadn't heard of ProFootballFocus.
On brands becoming publishers: Some companies are great at producing content. But others aren't good at it, and their content comes across as advertising with a thin veil. The jury's out.
My other nightmare scenario (and one I've heard from industry insiders) is that the written word gets written off (pun intended) and video becomes the dominant form of content. I don't even believe the current hype we're hearing now about the growth of podcasts (I'm convinced it's a phase), never mind video. I'm betting big that video/audio do not replace text, but I would be lying if I told you it's not something about which I worry.You're also heavily focused around text, so what's your thinking on this issue?
Here's what we're seeing in financial media: The current enthusiasm for video is driven more by revenue than by a sense that video is great for users. Many of the financial media companies we talk to are sold out of their video ad inventory. They're trying to figure out how to get users to watch more video.
Well, it's not surprising that prices are high for video ads, and demand from advertisers exceeds supply. If you force someone to watch a pre-roll ad, you have 100% of their attention. You'll get sky high CPMs for that. The problem is that pre-roll ads are a horrendous user experience. Pre-roll ads are like going back to TV before DVRs. And they're a lot worse than ads on web pages, which don't stop or delay users from reading an article.
It gets worse. Many users want to watch short videos, so the ratio of the pre-roll ad time to the effective content time (before the user abandons the video) is often extremely high.
I think this explains why there's huge advertiser demand for video, and not enough users watching it.
That's not to say that video can't be great for users, if we fix the ad problem. Video can provide context and important information that you can't really capture with words. (Did you see the videos of the tsunami?) And video can be a great browsing experience.
But video isn't great for everything. It won't replace the written word, because there are too many use cases where the written word is simply better. One example is comments. Video comments never took off.
A stronger example, from our area, is real-time financial news. Investors want to digest financial news as quickly as possible. There are two things they care about: (1) brevity, and (2) high signal to noise ratio. So we've made our Breaking News product as brief as possible -- each story is just a headline and bullet points. We now have over 3 million people getting email alerts containing these stories, giving us #1 market share in short-form financial news.
Imagine trying to do this with video.
You know my opinion on this. I have written a detailed article about why I think the advertiser & publisher enthusiasm for podcasts is misguided because audio will always be more difficult to produce than written content, and require more submersion to consume. There's a reason there are 150M active blogs and only 100K podcasts.
I hate to shamelessly plug ReplyAll, but we think that while there is a great audience appetite for conversational content, the ROI for text-based conversations is so much higher than video and will continue to be that way. The written format, while not as sexy as video, makes it easier to create for the participants and easy to consume for the audience.
But, that's coming from me, CEO of a 5 person company (which is heavily invested in text). It's definitely comforting to hear someone who is running a company the size of SA support this position.
Have you noticed that a bunch of websites have removed their comment sections? Popular Science said that "Comments can be bad for science. That's why... we're shutting them off". And Re/Code claimed that "social media is the new arena for commenting, replacing the old onsite approach".
But we're seeing the opposite at Seeking Alpha. Many of our readers say they value our comments more than our articles. A team of researchers at Purdue University found something remarkable: when comments on a Seeking Alpha article disagree with the article (measured by average sentiment), the comments are more predictive of the future price of the stock being discussed than the article.
So why is there so much pessimism about text discussion on the web, and why are sites shutting off their comments? I think there are a two factors which determine whether your comment community will be valuable.
The first is: what do your users really come to do? Many people simply want to feel good about what they already believe in. So they come to websites to read articles they agree with, and to have shouting matches on behalf of their "team" with people they disagree with. They're not open to learning or being persuaded. This phenomenon afflicts areas like politics and climate change. The comment sections on those sites become toxic. I think this was Popular Science's problem. In contrast, most Seeking Alpha users are open to other people's views if it means they invest better. Investing isn't about dogmas.
The second factor that determines whether comment communities will be valuable is that they need to be nurtured. I think many websites get this wrong. They think that once you have comments, every commenter has a right to free speech on your website. They don't. You need to view a comment community as a party you're having in your home. Someone's right to free speech doesn't mean they can walk into your party and ruin it by shouting at your guests.
Moderating comments requires a meaningful resource commitment, which you'll only make if you deeply believe in the value of comments. We always made the resource commitment to comment moderation at Seeking Alpha, because our mission is to crowdsource equity research, and we view comments as a critical part of that. I think Re/Code didn't have that commitment.
BTW, the experience of using ReplyAll in this interview has been great. The type of discussion it enables is valuable. And it's been intuitive and easy to use.
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