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Case Study: Building the Base

Illustration by Edmon de Haro
The idea for the Portland, Oregon–based digital media startup News Bling was born out of the late-night hours of November 8, 2016, when Nupur Patel (MBA 2017) rubbed the fog of disbelief from his eyes and saw that he had completely misjudged the results of the presidential election. A media junkie as far back as his middle school years and more recently at Nickelodeon’s strategy department, Patel realized he (like many others) had been consuming media that only confirmed his own political bias.
Patel founded News Bling in 2017, the initial step in his quest to help readers—particularly millennials and Gen Zers—better understand how the news is spun. The company’s launch product is a free daily newsletter that aggregates headlines from both the left and the right, with analysis that underscores sources of disagreement and common ground. After establishing an audience, then adding targeted ads and affiliate marketing, Patel aims to build a “commenting platform 2.0,” he says. Media companies could license the product to enable more robust user-generated discussion within the body of any given news article. Imagine the thinking reader’s alternative to the cesspool of anonymous comments at the bottom of a news story. With at least 70 million millennials in the United States, Patel is optimistic about the market. “Even if we were able to capture interest in 1 or 2 percent of that, we’re conservatively looking at a million potential subscribers,” he says.
News Bling has been focused on growing its audience, believing it would need to reach at least 50,000 to confirm market fit. Without any paid advertising, the subscriber base has reached 2,000, Patel says, with a 40 percent open rate—a modest but devoted following. Now he wonders if the medium is holding them back. Survey respondents have expressed interest in short-form audio, which is not surprising given the rise of political podcasting. Should News Bling pivot to produce a digital-first news destination—a millennial-centric mash-up of traditional political reporting, analysis, and video? If News Bling could establish itself as the major news outlet for the digital generation, the product and market would dwarf its current vision. But investing in video would also require venture funding. Should News Bling stay focused on building the base audience for the newsletter before changing course?
If News Bling wants to establish itself without taking on funding, I would consider an intermediate strategy, particularly with a 2,000-person subscriber base. Their product sounds like it would be perfectly placed in audio, and given its popularity, I’d suggest they combine a newsletter strategy and opinion for more in-depth audio. That would allow them to gain more of the market via the new medium, without the extensive investment required for video. They could do A/B testing to see how video performs and make investments based on that iterative process, rather than jumping in with both feet to create a comprehensive digital platform from day one.
—Darria Long Gillespie (MBA 2005)
Given all the political turmoil, News Bling should stay the course, build the basic product, and attract the base audience. It’s tougher in the beginning, but it gets easier. Are there any large deals to be made that could solve cash flow issues?
—Johan Pensar (OPM 41, 2011)
I think this is a clear example of mistaking a better product with market fit. Patel identified his MVP quite clearly: a newsletter that he (correctly, I believe) needs to grow to around 50,000 subscribers to show traction. Of course, his current subscribers would like a more premium offering, which might draw in more users. But this is the classic entrepreneur’s dilemma: If the base product cannot show reasonable scale potential, it is not worth investing in the better version. Yes, you will hit a bigger number, but you are still capped by an inherently limited product-market fit that you have yet to solve. Patel needs to focus on growing the newsletter. Only when he has found the right mix of content and engagement to build this following should he consider how to improve and expand the platform.
—William Collis (MBA 2011)
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Charles Philp (MBA 2006) and his business partner launched Sneakz Organic in 2013 with one product: a shelf-stable chocolate milkshake so tasty that children might not realize nutritious whole foods like vegetables had been snuck in there too. Within two years, Sneakz’s distribution had grown to more than 1,000 stores, including biggies like Target. As retailers’ enthusiasm increased (and ditto in revenue), the founders felt hamstrung by having just one flavor. In 2015 Philp turned to Bulletin readers for advice on funding the launch of a second flavor and the resulting growth that they hoped would tip them over the $1 million mark in revenue.
As a short-term solution, the founders made personal loans to the brand to launch a vanilla shake, which made Sneakz a more legitimate contender in the consumer products space, Philp says. For a longer term capital solution, they ultimately connected with a private investment firm focused on the consumer products sector to help grow the brand.
“The trade-off was that the investment resulted in their having a majority stake in the company and ultimately taking control of it,” Philp says. “For me it was a positive experience in the sense that we launched a brand and found an exit for it. Since then I’ve been offering consulting services to natural and organic food brands, so the learning from Sneakz put me on a path that made a lot of sense.”
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