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.