Buzzfeed Explained

I think it's safe to say that Buzzfeed remains an enigma to most people, even in the digital media industry. They do things so differently than everyone else [1] and in such a non-obvious way [2], and yet how is it that they are worth so much [3]?

There's been a lot of talk about their internal tools and platforms, but since no one outside the company uses them, they remain shrouded in speculation. How else can you explain Episode 40 of The Exponent podcast by Ben Thompson and James Allworth, two of the most respected tech and digital media analysts out there. At around 16:55 of the episode, James asks Ben, "Have you seen any of their tools? ... There's all this talk about the tools and the learning organization. I understand it conceptually, but if you're a writer sitting down to write one day at Buzzfeed ... what is it that the system gives you that gives you an edge over the competition?" Ben then hypothesizes that it's about making it easier to create a listicle, and then makes some other highly abstract conjectures about the tools, what works, what channels to use, ending with, "quite frankly I don't see how that's any different than a newspaper sharing its actual page with an advertiser. They're just sharing the tool, and the canvas. They're not sharing the actual writers ... " [4]

But Chris Dixon and Jonah Peretti sat down last August for a podcast, and did a pretty good job of explaining exactly how and why Buzzfeed works, in concrete enough terms that I feel like I finally get it. There's no need to explain how listicles and adorable cat pictures work, but I'll do my best to try and unpack the three parts of Buzzfeed that are perhaps less obvious based on what I've heard other say about them:

The Rise of the New Edtech

Edtech used to be this sleepy, backwards corner of the technology industry where idealistic entrepreneurs with fantastic ideas and even fantastic products would try to make enterprise sales to impossible educational bureaucracies – I saw this firsthand when I sat on the Wharton Technology Advisory Board, and we were relatively one of the best technology organizations out there - only to burn out or sell for disappointing outcomes in the best cases. 

In recent years though a couple of factors have pushed ed-tech forward to the point where LinkedIn would pay $1.5Bn to acquire Lynda.com:

Brokerage vs Fulfillment

A few weeks ago a marketing consultant named Tom Goodwin wrote the following opening line in a post called The Battle Is For The Customer Interface:

[In 2015] Uber, the world’s largest taxi company, owns no vehicles. Facebook, the world’s most popular media owner, creates no content. Alibaba, the most valuable retailer, has no inventory. And Airbnb, the world’s largest accommodation provider, owns no real estate.

The thing is, this isn't quite true.

The Power of Physical Words

The Holstee Manifesto

I went to a potluck dinner last night at Holstee, a business that describes itself as "a Brooklyn-based design studio offering sustainably made posters, cards, and frames that inspire people to live mindfully." They are known for the Holstee Manifesto, a declaration of what a successful life would like, which they wrote for themselves at the outset of their journey, with no intention of turning it into a product.

The mix of people included total newcomers such as myself, as well as two of the founders and a number of members of the Holstee "family," who had been there since the beginning (or almost beginning). I was sitting next to co-founder Dave Radparvar, who was talking with a couple of these Holstee family members about the Manifesto and its runaway success. They sell so many posters of this simple statement of purpose that it's become the economic engine that enables the rest of their activity. Apparently people even get it tattooed on their body. They have a whole page of Holstee Manifesto products, ranging from $12 for a 5" x 7" print, to $180 for a  48" x 64" wall decal; it's almost as if they've become a company that sells the Manifesto as its primary line of business.

On the face of it, this seems highly unlikely. Don't we lament the death of print, even while we argue that content should be free? Why would people pay for content that any five-year old who has used the Internet could find for free. Holstee themselves have a downloads page where you can get a high-res copy that you could print and hang yourself. So what's going on here?

IoT Is Not Mobile on the Wall

I’ve started listening to a16z podcasts during some meals. I recommend them if you're interested in the future of technology. About a month ago I listened to this fascinating conversation between Benedict Evans, Preethi Kasireddy, and Zal Bilmoria, though I'm just getting around to writing about it now (better late than never). Post-CES, they try to tackle the question of, where is this Internet of Things we keep hearing about? Is there an Internet of Things, or is it just “things connected to the Internet”?

Around 1:49 Benedict Evans makes the most compelling argument: our grandparents could have told us how many electric motors they owned: one in the car, one in the fridge, and one in the vacuum cleaner; and now motors are so common that the side mirror of your car probably has a dozen. But no one goes out and buys electric motors; they buy a microwave, a blender, a coffee machine, etc. – devices that solve a problem that just happen have an electric motor as part of the solution. So it is with the IoT: other than early adopters. it will enter our lives slowly, as we buy device that solve our problems by adding a bit more intelligence to existing devices, a bit at a time.

The analogy makes sense, but it has one fatal flaw: the functionality of electric motors is self-contained (with the exception of transportation, but we are discussing household devices here), whereas connected devices are not self-contained by definition.

Your Email Newsletter Is Not Spam, It's Just Information Overload

If you're like me you might have noticed that it's become really common for people to say something like "We hate spam too" when asking you to sign up for their mailing list. The problem isn't spam though. It's just information overload, plain and simple. I want to read Medium's suggested posts, and Twitter's relevant tweets. I'm really interested in the new feature your startup just rolled out, and I want to get your event updates, because you have some really cool speakers. But I just. Can't. Keep. Up. So you'll forgive me when I don't subscribe. It's not because I think your emails are spam. It's just because I need a diet.

Why Innovation In Payments Is So Rare

I think a lot about payments, even though I haven't worked in the sector for over five years. I just think it's mind-blowingly cool that this abstract concept we call money manages to work, everywhere around the world, in mutually recognizable forms, not with perfect interoperability but damn near close to it on a local level, with universal understanding that it is simultaneously a medium to measure value (a price); a medium to transact (making a purchase); and at a minimally higher level of financial literacy, a value store (an account).

Yet as cool as a concept as money is, retail payments in the US haven't changed all that much since the advent of credit cards. Your options are basically check, card, or cash. I was reading an interview this morning that StrictlyVC did with Todd Chaffee of Institutional Venture Partners, that goes a long way towards explaining why.