Latest / Beyond Fulfillment Podcast / Redefining Access to News: How Entrepreneur Adam Koehler is Disrupting the Publishing Industry

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Redefining Access to News: How Entrepreneur Adam Koehler is Disrupting the Publishing Industry · Beyond Fulfillment Podcast

• 0:05
  So not only do people have subscription fatigue and they're canceling their subscriptions with the help of Experian, Rocket Money, all these other businesses, but now you also have the zero click search problem which is killing their ad revenue.
• 0:21
  Today we sit down with Adam Kaler, a powerhouse entrepreneur whose impact spans multiple industries.
• 0:29
  Adam is best known for co founding dotloop, a groundbreaking real estate software company that he helped scale during the 2008 housing crisis, all the way to a nine figure exit with Zillow.
• 0:42
  In this episode, Adam shares the inside story of dotloop's rise and what it was like to build and sell a major tech company.
• 0:51
  But we also dive into his latest venture, Content Credits, which is turning heads in the digital publishing world.
• 0:58
  Adam breaks down how this new platform is addressing the subscription fatigue that's plaguing readers and giving publishers a fresh way to monetize their content.
• 1:08
  Think micropayments and pay per article access.
• 1:11
  If you're curious about disruption in media, the realities of entrepreneurship, or how to spot opportunity in times of crisis, you won't want to miss this episode.
• 1:22
  As always, if you found value from this content, please like and subscribe.
• 1:27
  All right, Adam Kahler, welcome to Beyond Fulfillment.
• 1:30
  Thanks, Dave.
• 1:31
  Appreciate it.
• 1:32
  Thanks for having me on today.
• 1:34
  Yes, sir, we're excited to have you.
• 1:36
  So, Adam, you've been an entrepreneur for quite a long time with numerous ventures, and we really want to get into your latest one, Content Credits, which you founded, which is really shaking things up within digital media.
• 1:52
  But you prior you had a very successful exit with a company you founded called Dot Loop.
• 1:58
  Could you just walk our viewers through the story of that company and how you exited?
• 2:02
  Yeah, yeah.
• 2:04
  So this was back in 2008, 2009, when the housing crisis was happening.
• 2:08
  We decided to start a real estate software.
• 2:11
  So people would think that that's not a good time to start a company like that, but actually it's a really good time because when people are making money and they got it coming out of their pockets, they don't
• 2:21
  need to listen to your story, they don't need to listen to your pitch about your software.
• 2:25
  But when people are struggling in an industry struggling the way it did during the housing crisis, people are much more open to the idea of gaining an edge any way they can.
• 2:35
  And if you have a good pitch and a good product and something that they think they can use, then it ended up working out.
• 2:41
  So three guys sitting in a Panera Bread up on University of Cincinnati's campus come up with an idea and then you know, 18 months later or something, we had a product and kind of one thing led to the
• 2:52
  other.
• 2:52
  And next thing you know, Zillow came a knocking and in 2015 we sold that business and it was a nine figure exit.
• 2:59
  It was the first nine figure exit in the city of Cincinnati for a startup which brought attention from the coast.
• 3:05
  That was, that was a big thing for us was, you know, you needed a win like that to show investors that there was money to be made here if they, if they invested and you know, Zillow came in,
• 3:17
  they, they added more employees, they invested in the city, they expanded the space and you know, Cincinnati was on the map.
• 3:24
  Wow.
• 3:25
  So that's interesting.
• 3:26
  So three guys from the University of Cincinnati sitting at Panera Bread in the midst of the housing crisis, come up with a software idea that six years later turns into a nine figure exit to, to Zillow.
• 3:40
  That's incredible.
• 3:41
  Yeah, well, well, one of us actually went to University of Cincinnati.
• 3:44
  I went to art school.
• 3:45
  And I can't remember where Matt went, but Austin Allison, it was his idea and he was about, I think he was 21 maybe when, when he came up with the idea and then he, he, he pulled me and
• 3:56
  Matt into it and gave us some equity and you know, he pretty much ran the company.
• 4:00
  It was his idea.
• 4:01
  But yeah, I was glad to be a part of it.
• 4:04
  Glad to, you know, be a co founder.
• 4:07
  That was awesome.
• 4:07
  And, but yeah, you never know what stuff's going to turn into, you know, and you hear all these people, everybody wants to offer you some equity in their company now for, you know, dev work or design or whatever
• 4:18
  your skill is.
• 4:19
  Right.
• 4:20
  And a lot of people turn that down nowadays because, you know, the failure rate of startups is so high.
• 4:24
  I mean, it's, you know, 75 to 90% in a lot of cases.
• 4:28
  So, you know, people don't want to take the risk.
• 4:30
  But you know, I'm glad I did.
• 4:32
  I'm glad I was naive enough to think that, you know, this company could turn into something huge and next thing you know it did.
• 4:39
  Sure, sure.
• 4:40
  And you, you bring up a really good point there too, in terms of starting the company during the housing crisis because, you know, you always hear that cliche line about, you know, the, the, the amount of successful companies
• 4:53
  that were started during a recession or a depression and that, that type of thing.
• 4:57
  But like the, you make a really good point as to why is like when the market's up and everyone's making money, right.
• 5:04
  There's this air of almost complacency with a lot of people where you, like you said, they don't need to listen.
• 5:10
  Right.
• 5:10
  Because they're already doing well.
• 5:11
  Where it's a lot easier to capture attention when you have a product that could potentially give someone an edge in a down market.
• 5:19
  That's right.
• 5:20
  And we're seeing the same thing in publishing right now.
• 5:22
  I mean think of all the negative news around publishing right now.
• 5:26
  Fake news this, fake news that nobody wants to buy a subscription, nobody trusts the media.
• 5:34
  I mean there's so much happening right now.
• 5:36
  I mean you think of zero click search.
• 5:38
  If guys, if you don't know what zero click search is, it's when you go into Google and you type in something and it gives you the answer right there.
• 5:44
  It scrapes the news websites and just gives you the answer.
• 5:47
  So you never click over, which is killing their ad revenue.
• 5:51
  Right.
• 5:51
  So not only do people have subscription fatigue and they're canceling their subscriptions with the help of Experian Rocket Money, all these other businesses, but now you also have the zero click search problem, which is killing their ad revenue.
• 6:03
  So subscription grow, you know, part, if you look at their, their revenue stack, sometimes donations, right?
• 6:11
  You got donations, you got ad revenue and you got subscriptions, right.
• 6:15
  And depending on the organization, they may have more subscriptions than ad revenue.
• 6:19
  But right now those top two sources are getting eaten away.
• 6:23
  So the industry is in very similar dire straits to what I saw in, in, in, in the real estate industry in 2008, 2009.
• 6:32
  And, and they need an edge.
• 6:33
  And, and here we are with content credits.
• 6:35
  Yeah.
• 6:36
  So excellent segue into your current company content credits.
• 6:40
  So just tell everyone what that is.
• 6:43
  Yeah, so we did a 100 page research study.
• 6:46
  It was a focus group with regular readers and, and with New York Times, specifically readers.
• 6:53
  And they overwhelmingly told us that they were sick of subscriptions and that they wanted another option and if we could give them a way to pay per article instead of getting a subscription, they would prefer that.
• 7:08
  Right?
• 7:08
  Now you do have a segment of society.
• 7:11
  If you think of the New York Times, for example, they mostly sell their subscriptions to, you know, east coast generally upper middle class or wealthier individuals that want to feel like they're in touch with what's going on, right?
• 7:27
  So the people that can afford subscriptions essentially, and those people are going to read a bunch of articles, you know, every time it comes out, they're going to really get into it, right?
• 7:36
  So this may not make sense for them.
• 7:38
  And it's the average reader, the guy who gets A text message from their friends.
• 7:44
  The lady who sees a New York Times article on Facebook or Instagram, clicks through, gets a paywall, and then just gets frustrated.
• 7:51
  I mean, it's actually the only industry I know that actively scares its customers away.
• 7:57
  Like you get to the paywall and then they tell you you're too poor to read their stuff.
• 8:01
  Which I would assume completely goes against what the New York Times claims to stand for and other publications.
• 8:07
  Right.
• 8:08
  They want to give you the news.
• 8:09
  We live in the information age, right.
• 8:10
  We live in the knowledge generation.
• 8:13
  You know, information, it leads to wealth, it leads to, you know, you need to access information to do better in your life.
• 8:22
  And you know, they claim to have that, but they're not, they're not distributing the news in ways right now that most people can afford or want to pay.
• 8:31
  So paper article content credits are tied to their 25 cents.
• 8:36
  So pegged at 25 cents and, and the publisher can decide how many content credits they want to charge.
• 8:43
  And that's something we can learn over time.
• 8:44
  Maybe it's just one content credit for article, but maybe there's something really cool like an infographic or some really in depth research that they see as more valuable.
• 8:53
  Maybe that's a dollar or $2, but it's really up to them and we give them tools on every one of their articles to be able to adjust that.
• 9:01
  Okay, so you see this issue with the publishing industry to where like you said, there's this problems and the subscription fatigue and their ad revenue is getting killed and they're alienating their readers.
• 9:13
  And clearly something, it's, it's ripe for disruption.
• 9:17
  You have this idea for content credits and, and this paper article type system which seems, seems great idea, right?
• 9:25
  Where it can, it can help the reader, it can help the, the publisher monetize in an easier fashion.
• 9:31
  But what happens next?
• 9:34
  Like how do you go to actually building this and turning it into a real business?
• 9:38
  Yeah.
• 9:39
  So we, through our research, you know, we looked at why, why aren't micro payments working in publishing?
• 9:46
  Like why haven't people tried them?
• 9:48
  Well, they're afraid that it's going to cannibalize their subscriptions.
• 9:51
  So one thing we decided was if you're a reader, one of the things that keeps micropayments from happening is they don't hit you with the offer at the point of fomo.
• 10:01
  So the point of FOMO is the paywall.
• 10:04
  The pain of hitting that paywall and feeling disappointed is generally worth more than a quarter to most people.
• 10:11
  And like 90% of readers try to find any way they can to pirate that article and get around the paywall.
• 10:18
  But my time is worth more than a quarter.
• 10:20
  If somebody gave me an option to just pay a quarter and not have to go through the next half hour trying to figure out how in the world I'm going to pirate this article, I just pay a quarter
• 10:29
  and get past it.
• 10:30
  So what we did was you essentially pre fund your account and any of our articles, any of our publishing partners on the web, on their paywall, they can just simply put a button that says pay with content credits
• 10:43
  $0.25 or pay with one content credit or two content, whatever they want to do.
• 10:47
  So you have the option when you hit the paywall to subscribe or use one of your content credits and just unlock this article.
• 10:55
  So we provide them with an SDK or if they have a WordPress website, we have a WordPress plugin that we can give them.
• 11:01
  And a lot of it requires some integration with their paywall service.
• 11:04
  So it may take a week or so to actually get this off the ground for them, but once they're integrated, they're integrated.
• 11:12
  We keep a nickel of every quarter.
• 11:15
  And sometimes there may be some sort of affiliate involved.
• 11:19
  Like it could be a university.
• 11:21
  We have a university program where if universities get their students signed up, they can earn a credit in perpetuity off those accounts, $0.01 for every $0.25 delivered to the school.
• 11:32
  So the school can literally make money off these accounts if they become an affiliate.
• 11:37
  So, you know, that's, that's kind of part of the business.
• 11:39
  So it's a win, win, win for everybody.
• 11:41
  We see.
• 11:43
  Okay, and so when you've been pitching this to publishers, Right, because this is, this is, I guess it's still startup phase.
• 11:52
  When did you launch the company?
• 11:54
  We officially made it a company about a year ago.
• 11:58
  Then we, you know, finished building our software probably I'd say six months ago.
• 12:03
  Then we had to go through the patent process and before we told the world, we wanted to make sure we could at least get our provisional patent done.
• 12:09
  That took us probably another two months, three months to get that together.
• 12:13
  And then, you know, that led us up to about maybe two or three months ago when we really started kicking this off.
• 12:20
  Okay, and so what, what's been the response so far from the publishers?
• 12:25
  I would say every single publisher says that this totally makes sense and they want it to happen and they could see the benefits of it, but they don't want to be the first one in.
• 12:35
  Right.
• 12:35
  They don't want to be the first kid in the pool to test the water they want us to find, like get some traction before we come back.
• 12:40
  These are the bigger publishers I'm talking about, but those are the ones we want to get to.
• 12:44
  If we can get a couple of the big ones on board, New York Times, Wall Street Journal, everybody else will fall in line, especially if we start showing that this is really gaining some traction and they're making money.
• 12:57
  So, you know, when we went to the sub summit a couple weeks ago, we met up with one of the largest, fourth largest publisher by subscriptions actually in the country.
• 13:07
  And they were intrigued.
• 13:09
  So we flew out to New York last week, we sat down with their team and we hashed out a plan.
• 13:14
  And literally before I got on this call, I was finalizing our proposal to them.
• 13:19
  Ah, okay.
• 13:20
  Okay.
• 13:21
  Excellent.
• 13:21
  So things are really taken off, what you mentioned too, with the bigger publishers.
• 13:26
  Right.
• 13:27
  There's kind of this, no one wants to be first type of.
• 13:32
  You know, attitude.
• 13:33
  Yeah, attitude towards it.
• 13:35
  So what, what other challenges have come up when you're basically, you know, building this and bringing it out to the market?
• 13:43
  Well, I mean, obviously there's going to be some technical integration hurdles we have to jump through.
• 13:48
  And whoever that first person is, which I hope it's, it's this one, we can work through some of those things.
• 13:54
  You know, they've got some pretty complicated technology that we have to work with.
• 13:57
  But I own a, a, a, a digital ad agency.
• 14:01
  I mean, well, I have 16 developers on staff, all of them with different skill sets.
• 14:07
  And I think, you know, with, with the talent I have here in my agency, we can overcome whatever technical issues that someone might have.
• 14:16
  So we're not a typical startup.
• 14:17
  I mean, I've been doing this for a really long time.
• 14:19
  I' ad agency for 14 years, all digital stuff.
• 14:23
  I mean, I've kind of grown up with the Internet and with technology and so have a lot of the people that work with me, you know, and with the past successes working in industries, I, you know, at the
• 14:32
  end of the day, I see an industry that's in trouble.
• 14:36
  You know, I see less hurdles implementing something like this than I see not implementing it.
• 14:41
  I mean, you're, you're kind of playing with fire with everything that's going on right now.
• 14:44
  If you're a publisher and there's just too many things working against the industry right now, and they need to find new ways to, to new essential monetization layers that they can add into that revenue stack.
• 14:55
  And if they don't, you know, they're going to be in trouble.
• 14:59
  Yeah.
• 14:59
  And so what, what, what's your, your vision for content credits and kind of, where do you, where do you see that going in, in the coming years?
• 15:07
  Well, I'd say the first year or so we're going to be working with publishers and trying to build up that, that portfolio of partnerships because the more that you have, obviously, you know, the more valuable it's going to
• 15:19
  be.
• 15:19
  So generally, you know, if someone's conservative, they tend to read more of the conservative papers.
• 15:23
  They're liberal, they read more liberal ones.
• 15:25
  But if I can get, you know, five or six of the liberal papers together and they don't have to get individual subscriptions, each one of those, but they're bouncing around and they're spending their content credits, that becomes more
• 15:35
  valuable to that particular reader.
• 15:38
  You know, some people may just use it on one website, which is probably great, you know, for whoever runs that website.
• 15:44
  Right.
• 15:45
  It's funny because the, the candy industry, Mars in particular did a, a research study a while back because there was this whole portion control thing that was going on and people were demanding smaller bites of chocolate.
• 16:01
  They didn't want the big bar because they felt like a gluttony.
• 16:05
  So the smaller bites actually increased their profits by about 50, 50% their profit margins because they could sell the smaller bites for more in those bags.
• 16:15
  Right.
• 16:15
  Per ounce.
• 16:16
  They were making more money.
• 16:17
  Then they found out that if you put those smaller bites at the office, front desk or on your kitchen counter, they actually ended up eating more chocolate than they would have if they would have just bought a big
• 16:30
  bar.
• 16:31
  Right.
• 16:32
  So they actually made more money and they didn't have to reformulate.
• 16:35
  So we kind of see content credits as that and we see the paywall as the candy dish.
• 16:41
  And I think what's going to end up happening is, is because people have the flexibility to spend where they want, they're actually going to consume more of that content than they would have if you just forced them into
• 16:53
  a subscription.
• 16:55
  Ah, okay.
• 16:56
  So it sounds like giving people the flexibility where they can just pay per article, they can pre fund their account, they can get rid of the paywall and having to buy the subscription.
• 17:06
  And where these subscriptions are typically yearly.
• 17:09
  Right.
• 17:09
  You talk.
• 17:10
  Oh yeah.
• 17:11
  What are the like 30, 40 bucks for a year for some of these?
• 17:14
  Oh, no, some of them are $400, $500 a year.
• 17:17
  Some of the, like you think of the Wall Street Journal, the New York Times.
• 17:19
  These are not cheap for most people, you know, and I'm in Cincinnati like in Northern Kentucky, we're in the Midwest, you know, people don't have the kind of money, you know, they need it.
• 17:29
  And plus, you've got crazy bounce rates.
• 17:31
  I mean, some of these publications have upwards of a 97, 98 bounce rate.
• 17:35
  Like, imagine that traffic that you're getting coming to your site and all the work you do to get that traffic to your site just to tell people they're too poor to read your stuff and then they leave and
• 17:46
  then they never come back.
• 17:47
  Like, that is terrible branding, right?
• 17:50
  Like, I, I, I, you're training me as a consumer not to come back.
• 17:55
  Like, Bloomberg has a hard paywall.
• 17:57
  When I see their.
• 17:58
  And they have great headlines and great, great articles and everything.
• 18:02
  But the problem is, is when I go to, when I see one of their posts on Instagram, they've already trained me not to click on it because I know there's going to be a paywall.
• 18:11
  So why not give me an other option to access that kind of content?
• 18:16
  And that's the whole purpose behind this.
• 18:18
  And, you know, somebody's going to take the leap.
• 18:22
  They're going to be a first adopter and they're going to benefit from it.
• 18:25
  Okay.
• 18:27
  All right.
• 18:27
  And if, Adam, if people want to find out more about content Credits reach out to you and get involved or contact you for any other reason, what's the best way that people can reach out to you?
• 18:38
  So, you know, go to content credits.com, you know, learn about it.
• 18:42
  If you're a library, we have a library program.
• 18:44
  If you are a publisher, you know, we have a tab at the top of our site for publishers also.
• 18:50
  Or if you're a reader, just take a look at our site and see if, if you want to sign up, people can sign up now.
• 18:56
  The minimum payment is $10 and you get 40 credits for that $10 that you can use on our website.
• 19:02
  Right now we've got a website called the Cincinnati Exchange.com where, you know, most people nationally probably aren't going to care about news in Cincinnati.
• 19:10
  But, you know, we're using it as a test site right now with hopefully more sites on the horizon here.
• 19:16
  And one that's, that's really good as long as they, they sign up here.
• 19:20
  But, but yeah, I think we're gonna have a lot of momentum.
• 19:23
  You can also find me on, on LinkedIn, Adam Kaler, and it's spelled K O E H L E R.
• 19:31
  And you'll see me on there as a, the founder of Content Credits.
• 19:34
  But yeah, I'd love for you guys to reach out if anybody has any questions they want to just, you know, learn more about what we're doing.
• 19:42
  You know, we're, we're actually, we just opened up a round.
• 19:45
  This whole thing has been self funded by me up to this point.
• 19:48
  And we got 250k from the state of Kentucky, which is matching funds.
• 19:53
  So I think I would have just kind of kept rolling with it if I hadn't gotten that, that matching funds thing.
• 19:58
  So now we have an opportunity for people to invest if they want, obviously, accredited investors only.
• 20:03
  But.
• 20:04
  But yeah, I think it's a really good opportunity for people if they want to see this come to light.
• 20:10
  Okay.
• 20:11
  And we'll link all that in the show notes for everyone.
• 20:14
  All right, well, Adam, thank you so much for taking the time to be here and sharing the stories and all this valuable wisdom from your journey with our listeners.
• 20:22
  We greatly appreciate it.
• 20:23
  Dave, I appreciate you and thanks for the time.
• 20:25
  All right, that's all the time we have for now.
• 20:27
  We will see you next time.