The Skinny
Facebook, Google and Apple have cannibalized the media business and taking back control of the media space requires a disruptive approach that combines three elements - Technology, Content and Network Effect - to grab user attention before users enter the Facebook or Google funnel.
We propose a Joint Venture - Catalyst - between three leading media companies and Pirates to beat Facebook, Google and Apple.
The media companies bring the content and Pirates brings strategy and technology to the JV. The stakeholders will work together to create a network effect.
Catalyst will build a series of apps that utilize the content of the media companies to catalyze daily moments in a user’s life. These are the moments that are monopolized by FB and Google today and capturing the user’s attention in these moments will be the key to regaining market share.
The herd competing with FB and Google
3 Standout Strategies
There are three strategies that have succeeded in creating worthy competitors to FB and Google.
Protected initial market - Bytedance
A real innovation - Snap
Content and content delivery - Netflix
The Bytedance model
Bytedance built a signficant market share in China with its news aggregation app Toutiao and short video app Douyin. Since then it has successfully acquired/built apps like Tik Tok, Musical.ly, Flipagram and achieved massive scale both in China and globally.
Bytedance’s strategy has been to scale rapidly in China with the relative absence of competition from global players and then expand abroad through acquisitions.
The Snap model
Snap has created a true competitor to Facebook and before Instagram copied Snap’s features, Snap looked like stealing even more user attention.
Snap did this by creating an app for a real need among younger users to send messages that didn’t leave a trail. Snap has continued to out-innovate Google and Facebook in how to engage younger users. Now that they’ve opened up their API to advertisers and app developers, their growth will accelerate.
The Netflix model
Netflix became a Godzilla in capturing user attention by pretty much inventing “binge watching”. They did this by syndicating and creating premium content and offering it all as a subscription service.
In markets where Netflix doesn’t have access to premium content, Netflix struggles. For instance, in India where Netflix lags a far distance behind Disney’s (Fox’s) Hotstar.
The Disruptive Idea
Compete in their wheelhouse
The goal of Catalyst is to compete with Google and Facebook at the heart of their core businesses - Social and Search - rather than to compete in the media space.
In order to capture user attention before it is captured by Google or Facebook, Catalyst will build a series of products that will catalyze users’ daily moments.
These products will combine disruptive ideas from Pirates with content from Condé Nast, Hearst and Meredith to capture users’ attention.
Why Pirates
A large network of startups that create the best ideas
Deep expertise in Disruptive Innovation process to help smaller enterprises compete with goliaths.
Technical competence on par with Google and Facebook
Why all three Media Cos?
Premium content from all three media companies combined with user generated content will create a content pool big enough to rival FB and Google
Focus on competing with FB and Google rather than with each other for market share
First Product
A social network on the move
Backpack
Backpack breaks down our daily life into small journeys - hanging out with a friend, pitch meeting with a client, killing time on the subway, couple of free minutes on the elevator - and enriches these journeys with content and community.
Content from Condé Nast, Meredith, Hearst and user generated content are combined in a seamless way to create an enriched set of daily journeys.
Second Product
Moving the cost of print magazine subscriptions from readers to brands
Tilt
Several popular brands publish print magazines as a tool to engage their community and a marketing tool.
Tilt is a platform that connects users and brands which want to have print magazines. It empowers millennial readers to vote on content that they like and make it a part of a fast growing brand’s transition to a larger market.
For instance, when enough users vote on articles from an upcoming Vanity Fair issue and they are matched to Soul Cycle, then those users can pick up a copy of Vanity Fair at Soul Cycle. This helps Soul Cycle transition from a spinning company to a health and wellness company.
Launching Catalyst
Ownership
Condé Nast, Hearst and Meredith will each own 30% of Catalyst
Pirates will own 10% of Catalyst
Initial Investment
The initial investment will be used to engage Pirates to build an MVP and get some initial user traction for the first product - Backpack.
Condé Nast, Hearst and Meredith will each invest $150K, totaling $450K.
Each new product built by Catalyst will be built by a new investment pool.
Decision making
Condé Nast, Hearst, Meredith and Pirates will each have one board vote for decision making.
3-6 months
The initial goal is to prove that Catalyst can build a product and build some user traction in a 3-6 month period to show that market share can be wrested from Google and FB.
Condé Nast, Hearst, Meredith and Pirates can come together to disrupt Facebook and Google
