Awesome. So this is the invasive part of the examination, Angus. I just wanna prepare you. Okay? [upbeat music] Welcome to the Rebooting Show. My name is Brian Morrissey, your host.
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This week I am talking with Angus McCauley, who is the COO of Stat, which is one of my favorite, uh, modern B2B media companies. Stat's focused on the intersection of health, life sciences, and tech.
This is absolutely a great area considering the explosion of innovations happening right now on so many fronts, whether we're talking about an mRNA or new cancer therapies to gene editing to maybe actually having a treatment for Alzheimer's.
I'm here, might not be, but a lot of progress being made on so many different fronts. And obviously the pandemic, um, brought this issue very much to the forefront, and, uh, Stat was right there.
It was literally on the story, I... when, like, the first chatter was coming out of China in that December 2019.
The other thing that makes Stat unique and why I wanted to have Angus on was that it was born out of a larger media company, the Boston Globe Media Group.
I'm always skeptical of s- consumer publications being able to pull off, uh, B2B titles, but every rule has its exceptions. Angus, welcome to the Rebooting show. Thank you, Brian.
Uh, great to be here, and glad to have you back on the airwaves. Yeah, I know.
I think we, we were doing this little, like, video show at Digiday right when the pandemic hit, and I believe we, we discussed this when, when I was in exile in suburban Pennsylvania.
Um, and now I'm in exile, uh, in Miami, so it's great. [laughs] Making progress. Exactly. Uh, I always like to start with origin stories, and I always like to ask people, um, to make them mostly true.
Talk to us about how Stat came to be. I, I believe it was back in two thousand and fifteen and, and you did the, the assessment. Ex-explain exactly the origins about how it happened. Sure.
So it's actually, it goes back to fall of twenty fourteen, and I was in New York at the time, and a, a longtime friend of mine had been approached by Mike Sheehan, who was then CEO of Boston Globe, uh, Media, and he had worked with Mike before to do a market assessment.
And that friend of mine reached out to me 'cause I had worked in media companies before, and s- they want to explore a vertical, and, um, they wanted to do a market assessment.
And the origins of- Wait, let me just jump in. Let me just jump in, Angus. Just a vertical. Yeah. Just like any vertical. He said a vertical until we were brought into the loop and told what the specific vertical was.
They knew exactly what they wanted to do.
And the origins of asking for that market assessment was at a dinner with our owner, John Henry, and Eric Schmidt, where they were talking about how tech had shifted from Boston to San Francisco decades before.
But Eric Schmidt said something effective, "Yes, but you've got life sciences, and that has...
and the entire infrastructure with all of academia in Boston as well, and obviously the size and scope and impact of that is substantial, and it's going to be ongoing, and incredible breakthroughs and so forth."
And at the same time, if you lived in Boston, Cambridge over the last twenty-five years, you can't miss how life sciences has changed this area. Yeah. It's just exploded.
And, and it's something that is had a huge impact here, and there is the ecosystem there that feeds it from academia, but with a global impact.
And at the time, obviously, the Globe was reporting on a lot of this stuff and the realization there were these incredible stories and incredible breakthroughs coming from life sciences, and was there a high-quality news journalism, news-focused covering these in a very high-quality way?
And that was the original impetus to say, "Let's see what the market looks like. Let's see what the competitive landscape looks like."
So we did the market assessment in the fall of twenty fourteen, presented it actually the week before Christmas in December of twenty fourteen, and the data showed a lot of things that people knew intuitively, obviously.The economy, healthcare is already a big piece of our economy and projected to continue to grow for the next several decades.
But the other thing that was interesting was when we looked into at other data sources like Bureau of Labor Statistics data when you look back over a decade, the job growth in life sciences just continued year after year, and that that recession in two, two thousand and eight to two thousand and ten just didn't exist for life sciences.
So you s- you could see that there was a resilience to this market because one, it's growing, but also the product development life cycle is usually about ten years.
So you have startups, biotech companies that- Yeah...get their funding, and they've got a long runway. So that was the market assessment.
They decided they wanted to do it in March of twenty fifteen, and Rick Berk was hired as the executive editor.
He spent a long time, twenty, I think, twenty-seven years at The New York Times, so a phenomenal pedigree and phenomenal background as... And his hiring set the tone for the journalistic ambition.
They didn't find somebody who was working at a niche B2B trade site. They wanted somebody who really understood high quality, high-end journalism, investigative journalism.
And then I joined in April, or was hired in April, started in May, and we launched in November of twenty fifteen. So explain why it was separate from The Globe.
You could say that The Globe should be covering this story, like, as part of its regular remit, particularly since a lot of these companies, what is it called, the corridor there. Kendall Square.
It's like the biotech corridor. It's, it's, it's known for a lot of these companies, and it's obviously a big driver of the local economy.
A couple things, one of which was when we actually started, it was John Henry's idea of keep it separate, so you guys, so we can be fast and nimble and, and operate like a startup and really have the flexibility to make decisions quick, to shift quickly as we need, to hire quickly, and just build up the business in our own bubble and not, frankly, get slowed down by the larger bureaucracy of a much, much larger organization.
And so while we were in the same building, we were tucked off in a corner and really left to our own devices to go. And we had our, and we still do, have our own engineering team.
We would make our own decisions about software, about other products we were using.
And it did give us the ability to do things quickly, do things differently, not be tied to legacy elements or legacy systems or, or processes. What were the advantages of Stat being born out of a larger organization?
Because we talked about protecting and not wanting to be part of legacy systems. I don't know what the CMS is like at The Boston Globe, but every newspaper's CMS is horrific, I just assume.
And there's all sorts of things that, that come with being part of a l- but what are the advantages of not being, I don't know, like bootstrapped or just funded with seed funding to do this as an independent entity?
That's so obviously that's the, the biggest one, which is we knew we had funding, and we knew we had... The lights were gonna stay on, and we obviously had very aggressive goals we were expected to deliver on.
And from the get-go, there was an expectation that we were gonna build a profitable susta- self-sustaining business in a relatively tight window of time.
While the pressures were there to deliver financially, we didn't have to spend time and energy to go out and raise capital in the beginning or even a year in or two years in.
We were able to focus exclusively on building up the product and building up the customer base and so forth. And there's other benefits.
There's, you already have things like healthcare plans and, and the like already- Yeah...built in for your teams.
And again, things you don't have to go figure out as you're also trying to figure out what the core product is or what you're trying to do day in and day out. Yeah.
So when you were doing your market assessment, did you s- did you identify it as a B2B property, or, or like how do you look at it? 'Cause I call it like B2B 'cause I think the business model is particularly B2B.
But obviously Rick's, like you said, like his background at The Times and stuff, he's, he has the very consumer sensibility, and I do think that you can have that at a trade publication, but that's okay.
Explain how you see it. Do you guys see yourselves as a B2B publication, or is it more like prosumer? We do certainly from the business model standpoint. Yeah.
Um, and I think probably the, the closest correlation and definitely one that we, that was part of the origin story in terms of thinking what would this product look like was Politico. Yeah.
Where you have Politico, where there's the free version of the site, where there's stuff that is for, for you or I to read 'cause we're interested in current affairs, but then there's Politico Pro, which is for the insiders, people who are in the world of politics, in the business of politics.
So that was definitely one that we looked at where we said, "Okay, that's the type of business where there are-- Health is like politics.
Health is a topic where there are people who, there's a lot of people who work in the industry.
It's an enormous industry, but it obviously is something that touches all of us, as we've all seen the last couple years, and all of a sudden the interest level goes up.
But even without a pandemic, any one of us have personal stories of either our own health issues or family- Yeah...people with, family members with health issues.
So it is one of those things that when you're talking about, for example, a, a breakthrough in Alzheimer's, it's not just the, the people at, you know, Biogen who care about it or the VCs who care about it, but the patient advocacy groups are huge, um,
people who are, have huge clusters of people who are focused on and paying attention to the new developments.
So it is this topic area where you could call it prosumer, but our business model was very much based on, we're gonna put the paywall on the content for the people that's focused on the audience that's in the industry.
Yeah. I- Uh, and from that standpoint, it very much is more in the B2B realm. Yeah, and that's what everyone wants to pull off is the Politico.
You get the consumer reach and impact, and you can support that through advertising.
But then at the core, people are going B2B, I think, at this time because there's a lot of advantages to these business models when it comes to being able to charge a lot of money on subscriptions, high-priced events and stuff.
So let's get into the execution part of it.
Be- A-as you said, being, having John Henry's backing, I don't know, I don't know his bank account, but it's good that at some point you, you're def- this definitely needs to be a profitable enterprise, but you had oxygen for at least a year to not rush things.
So explain the approach taken to building this into a sustainable independent business.
It was, it was interesting 'cause we did have the runway, but we also, again, felt that pressure of we wanna get something up and running quickly.
So when my-- I joined inAgain, in May, Rick started building out his team, and, and we built the site quickly with the idea of let's get...
We wanted the thing up within that calendar year, but the first thing we did was launch a newsletter.
We launched Morning Rounds in that-- early in that fall which is still our flagship newsletter, as a, as basically a, a catchall of all the big news each day that's happening health and medicine, and a way to start to build a database of folks to see who we could start to capture as readers.
But as he started building his team, the initial focus, because we knew we were building a product that was ultimately gonna have a paywall and had to be...
subscriptions had to be the core of our business plan, both 'cause we believed it, but also our owners believed passionately that's what would make journalism sustainable in the long run.
Rick really focused on hiring journalists with a lot of pedigree, authority, knowledge, expertise, and big social followings.
And at the same time, mixing with some, some younger journalists who were the stars of their journalism schools and so forth, and having a nice balance, but definitely having a handful of those folks who were known as experts in their space.
Helen Branswell, who has been at the absolute forefront of our COVID coverage, which we can get to in a bit, was one of our very early hires because he knew public health had to be a piece of this because there is a greater good reporting we need to do, and everywhere he went, people said, "Helen Branswell, you have to get her.
She is the person you need- Yeah... um, to give you that credibility in public health."
And we did the same with our pharma coverage and elsewhere, and that gave us oxygen in terms of m-the marketplace because those folks were followed not just by people who were interested in reading their stuff, but frankly, other journalists who would share their stories or reference us or link to us.
A lot of the expertise of those journalists not only gave us, uh, incredible reporting, but did give us access to their followings. Yeah.
And their followings came because they wanted to read Ed Silverman or wanted to read Sharon Begley or Helen Branswell. Yeah. And that's just like you...
I, I would guess like once Rick came in, then that gives, like, that immediately gives credibility to STAT versus just being like, oh, some B2B site in Boston. That gives you credibility.
And then he reports, then you bring in Helen, what's Helen on, like her seventh pandemic or something. Um [laughs] Exactly. And then, yeah, and so then the influence grows. Talk to me a little bit about starting with...
'Cause I always think a lot of times people go to email now as, like, a finished product, but I've always thought it's a really good minimally viable product. Okay.
A lot of people talk about minimally viable products, I think, in, in media and, and use this cover for it being shitty. Except- Yeah...
I think I'll call the first couple episodes our minimally [laughs] viable product podcast. Not because of the guests, but because [laughs] of my editing.
But talk to me about that because I think when starting a publication, there's one thing to have, like, the plan and stuff like this, and every plan, once the bullets start flying, things change.
But it's really good when you can learn with, to me, with an email newsletter because you get direct feedback. Yeah.
I would say, essentially, 'cause after we went through our first year and a half, we started to do, obviously start planning out, like, okay, where is our future growth gonna come from?
And we started thinking about other adjacent areas of coverage. And in some of those instances, we would take our first signals from some stories we'd written. So for example, health tech.
We'd st- we'd started writing some stories around health tech, and we would start to see that they would do, um, they would do well at converting subscribers, they would do well at engaging subscribers, so that was the first- Wait, I have to interrupt you 'cause this is now, like, are we talk- we're talking about email subscribers, free subscribers.
Yes. Sign ups. Yes. Yes. Okay.
We do need to clarify, uh, based on- 'Cause I'd see some people are like now, like a mini, like it's like the nerdiest of like media business echo chamber discussions about people mixing in, like, email subscribers with paid subscribers.
Yeah. So this, we will be talking about free people for right now. But starting off seeing some coverage on the site to see, okay, within our existing readers, do we get some traction with that?
But then, absolutely, launch a newsletter because it does a couple things.
One, it, you do get direct feedback, but also, especially if you ask in the forms what industry sector people are in and any other details, you can also start to build a profile of what kind of people these are attracting, and is that actually s- is that agreeing with your hypothesis or different than what you had hypothesized?
And as you start to build up that profile, then you start to know if we're gonna build out the coverage area, these are the kinds of people we are ultimately trying to serve.
And then in our case, as we then put some of that content behind the paywall, when those newsletters go out, some of the content that it links to is free, and some of it is behind the paywall, and it becomes that conversion tool as well.
So it very much is a, for us, I look at it as very much an early on product where we can really get a sense of a market, and it's also something that can have sponsorships.
So we, in the case of our health tech newsletter, we had the first year of that underwritten by a sponsor, so it also at the same time generated its own revenue purely from that.
So they can do a lot of different things, and obviously- Yeah...
they obviously serve a critical piece on the ongoing basis of capturing new readers, capturing new leads, um, nurturing them, and ultimately converting them. Yeah. I like that you used the word hypothesis.
I used to always go [laughs] to that because I think a lot of times people talk about vision, and they talk about execution, and there's an in-between, and just because you have a vision doesn't...
Vision without execution to me is delusion, but like a lot of people have visions. David Koresh had a vision. But like you have hypotheses, and you have to have the courage to test your hypotheses, 'cause guess what?
A lot of times you're wrong. Like- Yep... and you've gotta have courage for that, and it doesn't mean that, that the vision is off, it just means that you need to just adjust a little bit.
But talk to me a little bit about using advertising as a bridge.
'Cause I always think like a lot of times people, I don't know, I get it, like with, I wrote about simplification today, so in order to simplify a very complex world, a lot of times people just go into dichotomies like subscriptions or ads and stuff.
But advertising, e- even if the end goal is to have subscriptions as the base of a business model, advertising is like natural gas. It's a bridge technology [laughs] to some degree t-till you get there. Mm-hmm.
So talk to me about using that because you didn't come out with, "Hey, this is all behind a paywall. You gotta pay."
A- and a bridge is a perfect, perfect description because it wasUh, we knew even after the market assessment, when I was actually interviewing with Rick, one of his questions to me was: How would you feel if we wrote a top investigative piece about an advertiser?
I said, "So long as subscriptions are still part of the business model, I'm fine with it, because the long... in the longer game, it'll be fine." But we used advertising to begin it. It's, one, it's easier to s- to...
I, I don't wanna say spin up, but it's easier when you're selling an ad, selling advertising to a client, you're talking to them directly, you're gonna have multiple conversations.
And especially in a vertical space, a lot of them knew the reporters we were hiring, so they knew intuitively that this was gonna be something of interest, and they can show up decent chunks of revenue.
Subscribers, you have to build the brand. They have to know it starts with they're gonna see Stat. And yes, they might follow a reporter or two. It's definitely a longer haul.
There's also the accounting thing of splitting the money up, of course, over twelve months, and you're not charging nearly as much per customer. So it's, um, I don't wanna say it's easier, but it definitely...
it felt like for the first year at least, to generate some revenue, advertising really was the best first step. It also is...
it gave us the t- runtime to give us a year to build up a audience of readership, get them engaged with the brand, get them coming back without any friction of a paywall, so that they start to rely on us, and they- Yeah.
And we can also start to see, are they coming back multiple times? Will they come back multiple times?
And, well, to be honest, as we started building out the model and our plan for a paywall, what we started to look at was what topic areas are people coming back for multiple times within a week?
What reporters are people coming back to or back to read within a week?
And that started to frame, okay, when we launch the paywall, we're not gonna immediately go to fifty or seventy-five percent of our content behind the paywall.
We're gonna start with ten percent, so we're not gonna risk the ad business. But we can also...
we can already see through the data where the mo- where the stickiest sort of topics are or reporters are, and start there and then just incrementally build out, especially not just on the team we had, but as we add new reporters and new beats, um, they then come in knowing that we're trying to build out a subscription business and this Stat+ product.
And also, I think organizationally, not trying to do too much at, at the same time is really important, and it's really difficult to get.
This is something I wrote about this morning, so it's fresh in my [laughs] mind, is y-you need to... It can be easy to overwhelm an organization a-and with good reasons. You can be, like, ambitious and stuff like this.
"We gotta do this, we gotta do this, we gotta do this." But pretty soon, things are just... you're spreading the peanut butter too thin.
And i-it's good to, I think, to, like, sequence things, and it's hard to get timing.
But the first year it was, you gotta figure out who you are and test out your hypotheses and, and see what is resonating, and then keep it simple, like, on the business front.
So I assume you were not doing tons of summits and stuff the first year. No.
And, and in fact, there's another piece of this too, which is it's easy to say right now if you launch a brand now, "Oh, do a paywall right away," because this is twenty twenty-one when users, whether they're B2B or consumers, are seeing a lot more pa-- a lot of paywalls now.
You're bumping into paywalls all over the place.
But again, when we launched back in the fall of twenty fifteen, The Wall Street Journal, the big brands had a paywall, but there were not a lot of smaller brands that had pa- had paywalls.
So one of the things we also looked at early on was understanding what else our readers were reading to see are they already bumping into paywalls or not.
And then if they are, what price points are they getting for those brands and so forth, because now is a different world in terms of people's willingness to pay for content versus twenty fifteen, twenty sixteen.
So it was also something to baby step in. And the other piece was the infrastructure. There weren't as many companies out with third-party platforms to implement a subscription system, so we ended up building our own.
But it wasn't as easy as saying, "Okay, I'm gonna pull in vendor X, and I'll have a paywall in three weeks." It was also thinking through and building that piece of the business. Yeah. That's bold, building it yourself.
We could get to [laughs] that later. I was like, anytime at Digiday we did anything involving building our own software, it was almost always a disaster. Kudos to you.
So tell me a little bit about, like, when the Stat+ started and building to that. 'Cause I think you make a great point about you gotta build loyalty first.
You gotta build habit and then build loyalty, and I think, you know, a lot of times, yeah, people can go directly to subs, but you hit a wall pretty soon. You convert the, the sort of true believers.
But until you have a bunch of people that are habit, you can't move them down the funnel if you don't have a top of a funnel. Yep. Yeah, and that's what...
So that's what we were looking at that first year was where are we seeing the repeat habits, and are... is what we're seeing something that can be separated as a plus product, as our premium product? And we did.
And we presented... So we had launched in November twenty fifteen.
In July of twenty sixteen, we presented our plan internally to, to do this and launch it in Decem- And kudos to our engineering team because they did build that paywall that summer and fall, and in December, we launched with the paywall and a subscription product.
And again, we, we... right now we have anywhere from fifty to sixty, sixty to sixty-five percent of our content behind a paywall. But when we first launched it, it was ten to fifteen percent.
It was, we were definitely dipping our toe in it because we, we weren't sure it was gonna work. But- Let me ask you this. Which w- How did you decide the ten to fifteen?
Or I know you didn't, but Rick did, but you can probably speak to it. Like, how did that get determined?
Because I think one of the difficult things is when you have a hybrid model where you have free versus paid is you get a lot of people who are like, "I don't understand why I gotta pay to see this, but I don't gotta pay to see this."
And it might make sense internally, but it doesn't make sense to, to externally. Like, I've- Yeah... I get people at BI that all the time. I'm like, "I have no idea how you guys decide what to pay.
It's just random to me." It's, there's definitely both an art and a science to it, and I think if you talk to anybody on our edit team, they...
when they see a story they know it's, "Yes, this is a plus story, this is a free story."
But I think if you looked, if you went through our lineup of stories in any given two or three-day stretch-That you can see the stories that are getting really in the weeds that are really industry-focused stories versus broader public health stories.
And from the get-go, we had some of those reporters, Ed Silverman, who we hired from The Wall Street Journal and covers pharma for us.
He has been a long-time reporter on the pharma industry with a huge loyal following, and he is really in the weeds in terms of industry knowledge and important stories for people who are in the pharma industry.
And it was that kind of content that we knew was going to be behind the paywall.
So intuitively, that's where we focused, but also with certain topics like pharma or biotech, most of those stories were very deep science or business stories that we knew weren't gonna be a general interest story, but would certainly be so interesting to somebody who might be at a venture capital firm or at another biotech company or pharma company or a policymaker.
And then the corollary to that was our public health coverage.
And prior to this, vaccine stories were a very different type of story, but our general public health stories, whether it was about Ebola or H1N1 or measles outbreaks, they're important stories, but those are not stories people in the industry are gonna say, "I need to read that to do my job."
Yeah. So is that the, is that the test like that I need-- not like this story, I need to read this to be informed about public health, but then I need to do-- I need this story for my job. Is that the sort of test?
I guess in a, in a basic way, yes.
But there's some of our investigative pieces that are important for the broader healthcare ecosystem that you-- that we put behind the paywall because they're important stories that have ripple effects in a number of different ways.
And we did a lot of very early reporting and actually had a lawsuit to unseal records around Purdue Pharma literally within six months of launching, and that obviously had a significant broader public impact.
But a lot of our reporting for that was behind the paywall and very tough investigative reporting. So it's-- this is again where health is it can be an industry story- Right.
-but it can also have a much broader impact on the general public. Um- So in going from fifteen percent behind the paywall to sixty-five percent, it's not like the coverage shifted that like- No. Okay, got it.
You just in-incrementally put more behind the paywall.
More behind the paywall, and also as we just added to-- as Rick added to his team, it was now with the knowledge that we are building a business where we're trying to build a subscription business.
And one of the Boston Globe media genuine philosophies is high quality journalism and that readers need to pay, and we need to, with that, become a sustainable business.
And he was adding to his team, and as he was doing so, everybody was joining knowing we're trying to build a subscription business. We're not gonna be going, you know, after masses of traffic and rely on advertising.
As he built this team, it was with that vision and that, and that plan. Okay, so let's fast-forward to COVID for a minute.
Now, I don't wanna say COVID was good for you guys, but it, it certainly brought the importance of, of health to the forefront for all of us. I don't remember talking about spike proteins, um, much before, personally.
Perhaps you, but not me. Now I'm like an amateur epidemiologist after reading Twitter for a good, like, almost two years.
So talk to me about that 'cause when we talked afterwards, you guys obviously saw an explosion of traffic and, and readership and impact, honestly, because I know, like, I, I referenced, like, Helen was on the story from the jump.
It, it has been an incredible story, an incredible ride. And her first tweet was on New Year's Eve twenty nineteen. Her first story was January fourth.
And by the time the national emergency was declared in March, she alone had already written forty-one stories.
So she was very much on it, and obviously we as a staff, broadly speaking, were on it once she tipped the world off to it. To give it numbers, we were averaging about a million and a half uniques in twenty nineteen.
In January, we hit two point five million, February, four point seven million, and then in March it exploded to twenty-three million uniques. So it just- Wow. -went insane.
And that was a-- a lot of that was the world recognized what was happening, and a lot of other news organizations had not built up teams to cover it.
And but a lot of those journalists knew us, so a lot of stuff was getting pointed towards us, and our reporting was getting referenced, and then after that it's tapered off.
But it's tapered off and leveled off between five to seven million uniques for us in twenty twenty-two or twenty twenty-one. So it's-- there's definitely been a carryover effect that's helped us.
The biggest impact, it's certainly impacted us in terms of generating awareness of us as a brand and reinforcing what we had hoped was by building the team we did that people would recognize us as a leading or the leading authority on health and medicine.
And, and it's definitely that team that has done that. But it's-- what it-- where it helped us in our business was
we were still, before COVID, when we would see people at conferences or talk to potential advertisers, it was either, "I know Stat and I love it," or, "I've never heard of it." Uh, we were still a new brand.
People s-- there was still an awareness- Yeah. -big, uh, challenge that we were as a new brand still working through within our healthcare ecosystem.
When COVID exploded, people in the healthcare industry were also trying to k-keep up on all the breakthroughs in the news and so forth, and many who were in the ecosystem relied on us as a source and were sharing our stories and sharing our reporting.
So our awareness within the healthcare ecosystem went through the roof. So all of a sudden, even the salespeople went from having that challenge whether they knew us or didn't, now it was never a question.
Everybody knew us. When you went in on a sales call for advertising, there wasn't a question of what Stat was.
So from a business standpoint, that's probably been the biggest effect, and that also carried over in the subscription business where we saw, yes, our traffic overall exploded, but most of that was one-time visitors, and it still is the case where a lot of our visitors are still one-time visitors bec- we write a story on CO-- or Helen writes a story on COVID, or Drew Joseph writes a story on COVID.
We do really well in search with those. We get the one-time visitors, and they don't come back.But we also track, obviously, traffic to our paywalled stories, and that traffic went up considerably as well.
And that has stayed significantly higher than it was, again, back in twenty nineteen, which is that broader healthcare ecosystem now knowing that we exist.
And again, we continue to expand the breadth of our coverage so they are now finding more and more stories of interest or reporting of interest for them and, and ultimately converting over as subscribers. Awesome.
So this is the invasive part of the examination, Angus. I just wanna prepare you. Okay. Okay. We're gonna talk about numbers. [laughs] Come on, Brian. Don't worry. Just, just relax. I'm happy to share percentages.
[laughs] God. When I started this podcast, I was like, "I'm not gonna have anyone on who's not gonna talk real numbers." And we're in, like, episode, like, three, and I'm like, "Oh, for three." All right.
So let- That was last week, last week's episode, so I had to bring it up. Let's get into it. How many people is Stat right now?
I know that you, you shared Rick sent a email around that you're gonna be 80 by the end of the year, but, like, where are you? We're at 70 right now.
We have, I think, about seven jobs posted right now, uh, that we're trying to fill across, um, the organization.
We've got another 10 to 15 we wanna add next year, and across all areas: reporting, engineering, product, sales, marketing. Got it. So everywhere. All right. So you're not gonna give me the overall revenue number.
I'm not even gonna even try for that part. But give me the breakdown of the portfolio of where subs are versus events versus ads. I don't know how you break it out. So it's, um...
What's interesting is all areas have been growing, and so as you saw, and we grew, and it was reported yesterday in Axios, we grew 40%.
We saw growth year over year, and we had significant growth in twenty twenty versus twenty- Forty percent-... twenty nineteen... in, in revenue? Yeah. Okay. And,
but it's, uh, but it still breaks out fairly, you know, close to fifty-fifty between subscriptions, and then I lump together advertising and sponsorship. And that's events. Is sponsorships events? Yes. Sorry. Okay.
Event sponsorships.
Ironically, last year we saw our largest percentage growth in events, where we had pivoted, like everybody did in twenty twenty, to virtual events, and which involved pivoting two summits, which were our sort of one or multi-day, and then some smaller ones that we s- flipped over to virtual conversations.
And then we just doubled down on all of that in twenty twenty-one.
We added a third summit in July, and then we added every two weeks single topic virtual events, and then every week virtual conversations with our subscribers. And we sold, pretty much sold out everything.
And we found an enormous appetite, higher than we had budgeted by a- Per year... fair amount. So wait, the virtual- Yeah... events were... 'Cause your costs are way lower. There's no croissants to buy, for instance.
But the, always the problem with virtual events is the monetization is typically far lower because the market-priced virtual events, most times it's zero, which sucks.
And then the sponsors, a lot of times, so the networking is the main draw of a lot of events. It's hard to do virtually. Sure. It is.
I would say I'm, I'm proud of a lot of things we've done as a biz- on the business side.
Our summit in November of twenty twenty, we renewed every single sponsor for twenty twenty, which I was really proud of because it was a big event to try to pull off virtually. Um, it was a three...
Well, actually it was a four-day event last year, and we cut it down to three days. Um, we were able to hold rates with sponsors, but I think we charged a fair price from the get-go. Mm-hmm.
But the main driver of it was maintaining an incredibly high level of the people we were bringing into the events as guests. And that's all we...
In our space, that's the draw, is they want to hear from CEOs and, and heads of R&D. They wanna hear from the top policymakers, and we're able to draw that talent.
And that goes back again to the very original premise of bringing in journalists who have the relationships with- Yeah... the important influencers. And one of your former J
s- J School colleagues, Matt Herper, joined us- Oh, yeah... to lead our event efforts.
And he, you know, came with the intention of taking what he had done at Forbes and being able to just amplify it in a multitude of different ways.
But what he also brought with him is a great ability to put together an agenda and really understand how people on stage are gonna interact together and how that's gonna make interesting, an interesting conversation, but also frankly the ability to deliver just a phenomenal litany of, um, the important influencers in the industry.
Yeah, that's a great example. Matt and I went to Columbia together many moons ago, and for 20 years he's been covering the intersection of business and science. So- Yeah...
he's doing a great job of it, so thank you, Matt. So where, how many subscribers do you have? Come on, Brian. We're not gonna sneak in numbers. Okay. We have... I'm not gonna share the numbers, but we- More than 10,000?
Oh yeah, we passed that. I, I had actually, I think, in fact, it- All right, we're getting there... today's story. Less than 20,000?
[laughs] Uh, uh, where the information had hit 10,000 in three years, and I thought, "That's a great brand that I actually watched very closely from their origins and listened-" Yeah...
"carefully to what they were doing." And I think they hit 10,000 in three years, and that became a, a nice external benchmark that we, we surpassed faster than three years, and we're well past that at this point. Okay.
How... Let me ask you this, 'cause a lot of people ask this. How did you decide on pricing? 'Cause I think a lot of times people, like, they make it up, and they're just like, "No, I just..."
You just look around, and you just take a number. I don't... People act as if there's a science to it, but I, I really honestly think that for most people they're just making up the, the science part of it. It, it was...
It goes back to when, when we had surveyed our readers, and part of the surveying was to find out who they were, uh, and why they were reading us, trying to get a sense of how many are reading us for professional or personal reasons.
But we also asked them, "What else do you read?"
And we littered it with a lot of general news brands like The New York Times, Wall Street Journal, Washington Post, but then also a lot of medical journals, other B2B sites.
And-What, what we looked at was where else are people hitting paywalls that are potential subscribers of ours, and what are they being charged for those? And so we would start because they're going to...
If The New York Times is charging X and we wanna charge five X, that's not realistic because they're seeing X for The Times. But we looked at things like The New England Journal of Medicine. Yeah.
What are-- When people subscribe to New England Journal of Medicine, which is a great brand, an important read and a must-read for many people, where do we fit versus them if they bump into The Economist or Politico Pro or The New York Times?
So we're looking at all the different brands, not that we're doing paywalls, but that, again, our prospective subscribers were bumping into, and we could sort that like any survey by customer segments and so forth to come up with what we thought was a reasonable price.
And then we pushed it a bit because we thought it's gonna be easier to, to push a higher price than try to catch up with a lower price early and raise prices throughout at two ninety-nine, and we're now at three forty-nine- Okay.
-for a year. Yeah.
Uh, but the other thing we did on pricing was we focused on monthly, uh, but also really tried to emphasize annuals, which is again, different than consumer media, with the simple idea that people are gonna expense this and- You don't have to do the games.
You don't have to do the games of the dollar- No. -trials as much. But I think you, you make a good point about you do your research, and I think that's a good way of zeroing in on it. Yeah. But the important last step
is take that number and then make it ten to fifteen percent higher 'cause you always need to charge more than you think that you... And particularly in, in B2B. Like, it's just... I just think that is generally the
rule of thumb. And, and that actually, that advice came from The Boston Globe subscription team. You asked one of the bene-what are the benefits of having a bigger company? Yeah.
Well, there's people that you can bounce things off of, and they...
The suggestion to me was like, "Look, whatever your price is, bump it up a bit or push to what you think is the highest you'd feel comfortable asking because if you go lower than that, it'll be really hard to get your average subscriber price up over time."
Yeah. It just is. And especially because your first people are the people that have already been with you now for a year and are frankly the most likely to jump on board.
Whereas three or four years down the road, you're gonna be trying to convert somebody who isn't as familiar with your brand, they haven't been reading you as, and you might have to do some offers to get them on board.
So final thing, and then I wanna wrap it up, trying to get through these podcasts under an hour. I'm a little rusty, Angus.
I noticed you guys did a documentary with Nova, and I thought that was interesting with pushing the brand in, in that direction. And so that's like top of the funnel kind of stuff.
But then also I'm interested in these data products that it seems like you're building with TrialsPlus and, and Applied XL. 'Cause again, data products are one of those things that, like,
it can be a massive business, but I would always be wary a-as, like, 'cause it's a different skill set. But talk about each of them and the jobs that they do.
So multimedia is an interesting element of our business, and I think it's, it's been really beneficial for us for a couple reasons.
And the first of which is, and we'll talk about the movies in a second, but we, we have a team that we don't use... We'll use some stock imagery, but we'll also use original photography.
We'll go out and do a photo shoot for a story. We'll use original illustrations for a story, for some of our key big stories.
And I think as we launched our brand, it added a tremendous element to our visual identity and frankly the quality of the... By having that element of, of visual branding, um, call it, but visual journalism- Mm-hmm.
-um, that usually when you start, you're like, "All right, let's just use stock imaging because we can save some money and we can put it somewhere else."
But it really, I think, helped put a stamp on us visually being significantly different than a typical B2B brand, and again, presenting ourselves as high-quality journalism equivalent to any of the best in the business.
But that also morphed into having, uh, video from day one. And so we did one short documentary around the opioid crisis called Running, which was about twenty-five minutes, I believe. And then this one morphed.
It started as something that was gonna be smaller, and the story just kept on unfolding and ended up being a feature-length piece that Nova has picked up and will be featuring this coming winter. It's exciting.
It's, it's a compelling story about how technology can genuinely get you to rethink how medicine and science can really change things in- And it can get the...
It, it'll get the stat name out there, brand in front of the- Yeah, it'll get it out there, and a lot of people, it's on a different platform. It's kind of...
It's funny, we're on Apple News as well, and that's, it's not-- That was never really about let's... We make some money from it and get some newsletter subscribers.
But when you open up Apple News and there's The Washington Post, The New York Times, and Stat- Yeah. -it's also...
I've had CEOs of companies say, "Oh yeah, I was reading Apple News this morning and saw some of the Stat stories."
It, that, it's, that's anecdotal, but it does help with the brand positioning and identity to have those kinds of associations- Yeah, it's a halo. -and have people seeing you in those kinds of things. Absolutely.
Absolutely. Uh, so talk to me about the data. That's, that would be massive. Explain, is this a big bet? So, so there's two areas we're actually expanding into in twenty twenty-two.
One of wh-- And both involve, obviously, we do a lot of great journalism, which is producing a story and then pushing it out to folks, and they read it.
And the next step for us i-is getting people engaging on our platform, and that's data products and it's community. And from a data product standpoint, it's fairly straightforward.
How can we give them tools that allow them to find the information in the format or structure that answers the question that they're looking to have answered? And we've experimented with some things.
We did actually our COVID tracker we did with this company, Applied XL. It was a really, and it still is, a really slick and really interesting, great tool.
So yeah, we're more to come on this, but we are going to be doing a product with them next year around clinical trials. And where we are starting to experiment and why we chose to do it with a partner is exactly that.
It's enabled us to experiment a lot quicker than us hiring and building an entire team to build our own products.
Let's dip our toe in.See what the whole process is, see what the market adoption is, the sales cycle, the marketing cycle, and so forth.
But we've got a number of other products that were built that'll be part of the Stat Plus subscription as well that will be an update.
For example, we've got a CRISPR tracker right now, which is basically an embedded Google sheet, but- Mm-hmm. -we're gonna completely redo that.
But that's obviously a phenomenal technology where there's constant developments and have an interactive tool with that and some others around biotech- Yeah. -and, and health tech finance information. So
more to come in those areas, and then community- But is the goal, is the, is the goal-- let me, before you get the community, is the goal- Yep. -to be charging thousands of dollars? Three hundred and fifty, it's good.
Thirty-five thousand is better. [chuckles] Yes. Okay. [laughs] Good. And, and it's- I think that's a good strategy.
And it's, you know, there's-- we are gonna continue to build our brand by adding new things, whether it's products or areas of coverage. We did this. We, we do standalone reports as well. We do six of those a year.
Another el-- stage of our evolution this year is to start to be more aggressive at bundling these things together.
That's another piece, where if somebody is buying the next year, we'll do live events but also live streams. If they're gonna buy a live stream to one summit, let's give them a package to buy all three.
If they're gonna buy one report, let's sell them six. Sure.
If you're gonna do an enterprise subscription, let's bundle everything and, and work to get more of those products in those folks' hands, but also obviously, uh, increase our average revenue per subscriber, per customer.
So final thing, just go back to the community piece- Yeah. -'cause I jumped in. Yeah, so and the community piece is the other piece, which is, and a lot of industries have this.
Obviously, we do in the publishing industry or media industry, but the biotech or medicine industry does as well.
And the JPMorgan conference in January is the epitome of it, where San Francisco, at least when it used to be held live, is basically inundated with, uh, pharma executives who want to meet biotech companies that can be added to their pipeline, biotech companies looking for pharma partners, VCs looking to fund these deals, consultants looking to help strategize those deals.
So you have this incredible ecosystem that wants to connect and needs to connect. And that applies also to the people doing work in labs and academia that wanna commercialize something.
We have this-- we've built this incredibly trusted brand with the authoritative voice, and we have a really good readership of these industry leaders and influencers.
And how can we take that next step and have our brand, whether it's live in person or on the platform itself, have the opportunity to connect and find each other and be a conduit to not just informing people, but also making the connections between people so they can continue to move medicine forward.
So that'll manifest itself in a number of different ways, not only on the site in terms of being able to find or connect with people, but also as we do events, finding opportunities to not just have the programming where people are leaning back and listening, but either adjacent events or other opportunities where the focus is on app-- an opportunity for people to connect- Yep.
-uh, and meet and network. So- Powerful. [chuckles] Yes, very powerful. Okay. Angus, thank you so much. I really appreciate you taking the time and, um, walking us through this. Appreciate it. Absolutely.
Always great to talk. Thanks, Brian. Thank you, and thank you all for joining us. Uh, we will be back next week, uh, with a new episode. Thank you to J. Ray Sparks, our producer, and we will see you soon. It's a podcast.
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