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Pando Goes Behind A Paywall

Startup 2 Comments on Pando Goes Behind A Paywall 682

Pando, previously known as PandoDaily, is a venture backed media startup that has been around approx. 3 years at this point.  It seemed to start as a webzine about the startup world, and over time has morphed into something with the tag line of “speaking truth to the new power”.  I guess it’s supposed to be populist arguments against the power of Silicon Valley elites, but it generally just boils down to exceedingly snarky posts laced with odd insults.  When I first ran across Pando a few years ago I genuinely liked it, then at some point the content showed a marked reduction in quality, and then when they moved to the whole “speaking truth…” mission for me I found it degraded into pure snark and bile with a dash of “news” mixed in to give it cohesion.

Why Pando is interesting to GBD readers is that apparently it’s been funded with just shy of $4 million.

Pando has raised less than four million dollars in funding,

As of June 22nd it seems that Pando has moved behind a paywall.  Up to this point they made money through ad revenue, and events, but this has not yielded the results they want.  At this point they have decided that having people subscribe to membership for $10 a month is a better business model.

I’m personally at a loss when I see this and will be surprised if they make it.  As someone who actually pays for news content $10 for a webzine is a stretch, and for the poor quality Pando offers seems far off base.  In comparison my Kindle subscription to the Wall Street Journal is $23 per month for a daily paper with exceedingly good content (As long as you don’t go near the opinion section), and my Economist subscription costs $10 per month.

They posit the argument that:

Those $10s quickly add up. With not much more than 5000 members we’ll be able to fund our entire newsroom without spending a single ad dollar or raising another dime of venture capital.

This seems like a pile of magical thinking from my perspective.  $50K per month revenue looks like a decent amount of money on the face of it, but this is a company based in the San Fransisco area with an insane cost of living which means you have to pay people enough to be able to live.  Beyond that the question of Client Acquisition Cost is huge.  How much do they have to pay to get someone to signup for $10 per month?  Once they have acquired subscribers what is their churn rate going to look like? It’s easy to say that “all” you need is 5000 paying subscribers, but actually signing them up can be a beast (For comparison my Client Acquisition Cost for new members of EverymanIT.com back when I had my videos setup as a membership site was $5 per new member, and that was for free educational content. For my computer repair business the cost was approx. $85 per new client.)

You can read their full post about the change in the following link. The thing to keep in mind is that the rules for creating content businesses in our new reality have not yet been fully written.  I would argue that this is the death knell for Pando, but the arguments for their action may be of use for you as you decide what track you will take if you try to create a profitable content endeavor.

https://pando.com/2015/06/22/welcome-new-pando/

 

Author

Eli Etherton

I am Eli "the Computer Guy" and have been in the tech industry for approx. 20 years doing all kinds of odd projects. I started as an electronics tech in the US Army, worked in corporate IT during the IT Boom, was an individual consultant and grew my tech shop to have numerous full time employees and supported small business clients with computer repair/ server maintenance/ web development/ surveillance systems/ telephone systems until the great recession. After that I started creating video training on all the topics I know and now have a YouTube Channel with over 500K subscribers. I am the founder of GeekBrainDump.com and my plan is to create a tech "news" site that I would actually find useful if I was still in the server room.

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2 Comments

  1. Jim Hodges June 23, 2015 at 8:49 am

    I would have to agree Eli. This makes it seem as if someone is out of touch with reality. I know I’m sure not going to pay to wade through what they have been offering to get to something useful to me.

  2. Niketan February 21, 2016 at 4:37 am

    agree with mike, altho the statement is a bit srotng in most cases, it’s not that investors don’t care in the absolute sense, rather it’s that it falls into the bucket of much lower priority than 1) other companies which are growing / executing, or 2) shiny & new investment opportunities, or 3) crisis / emergency / crazy shit that founders call us up about and ask for help, or 4) raising money for our own funds, or even 5) plenty of other shit that occupies our time and attention.while most investors do want to be helpful, a possible talent acquisition is usually still some amount of effort and negotiation for an uncertain outcome with modest return potential. if the founders or acquirers are motivated, then it can work but if either side isn’t really that interested, usually it will fall apart, and even if it doesn’t the recover of capital is modest.ultimately, if the founders decided to call it a day and take a small talent acquisition, there’s nothing wrong with that, and most investors don’t/won’t block it but at the same time, they have effectively failed at the agreed mutual objective of achieving a notable return (at least 3-5x on the low-end, ideally more like 10-20x or more on the rarer high-end), and as such it’s only to be expected that most VCs will focus on higher priority items.we do our best to help companies complete talent acquisitions if that’s what they want to do, but usually we’d prefer if they keep aiming for larger outcomes. but then again, we aren’t driving the car, and we respect the decision of any founder to do the right thing for their team, employees, and shareholders.on the flip side, I’d hate to think founders are doing talent acquisitions as a way to pimp out their resumes if they aren’t really psyched about the acquirer. it’s a pain in the ass to try and pull one of these deals together, and if you’re not ready to live with your partner for at least a year or more, then it may be a star-crossed marriage from the very beginning. as I tweeted a few weeks ago, I sure as hell hope no founder out there feels like they owe me something so much that they’d serve a year in hell (or purgatory?) for some bullshit acquisition that nets investors perhaps 10-20 cents back on the dollar (or even up to 1x). it’s just not worth the hassle. go take a few months off, and come back and try again.to the man in the arena, we salute you but aim for the brass ring, not the side door.

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