Edited by Julia Hanna

Michael Aft (MBA 2019) and Snigdha Sur (MBA 2017) would be the first to acknowledge that launching a digital media startup out of HBS is not the easiest of paths. But for Aft, cofounder and co-CEO of the New Paper, and Sur, founder and CEO of the Juggernaut, leading a new venture in an intensely competitive environment has been the best sort of challenge, calling on every one of their MBA skills. On November 3 they talked to HBS professor Bharat Anand, author of The Content Trap: A Strategist’s Guide to Digital Change, about the choices they’ve made and the hopes they have for their growing businesses.

Bharat Anand: First, can you give a brief description of your business?

Snigdha Sur: The Juggernaut is a subscription media company and community, backed by Y Combinator, for the South Asian diaspora and the South Asia–curious, that launched in 2017. It’s an open tent for anyone who’s interested in the region and its people, and most of our subscribers are currently from the United States.

Michael Aft: The New Paper is a subscription news company founded in 2019 and based in the United States. Our goal is to make fact-first news extremely easy to consume, by publishing a daily digest that covers the day’s most important stories stated factually, with any relevant context.

BA: Media businesses in general are struggling today. Why did you decide to launch one?

SS: One of the things I learned at HBS is that when something is hard, you ask why. Looking at industry data, I saw a ton of untouched white space in targeted media, which was common in New York back in the 1800s. You had a newspaper for German New Yorkers, another for Jamaican Americans, and so on. There was so much variety. What you’re seeing now is something similar, with the rise of media targeting specific communities that have been ignored under the “most eyeballs” ad model, which involves creating content that satisfies as many people as possible. I know media is hard, but that’s why it’s also so exciting.

Michael Aft: We exist because traditional media is struggling. There are perverse incentives tied to the ad-revenue model that have made it challenging to consume high-quality content, and that’s true for everything from general to very niche-focused news.

For a long time, news was easy to consume, with trustworthy, high-quality, fact-based content widely available. We’ve morphed into the very strange world we live in now; but that’s created opportunities for companies like ours to go back to basics, to what news and journalism were meant to be.

BA: Let’s dig a little deeper into the opportunity you both saw. Who is the audience you’re going after, and what was the gap you saw in the market?

MA: This is going to sound crazy but our target is the 200 million people who read the news online in the United States. The gap we saw is that staying informed and reading fact-first news are difficult to do. It takes several hours, and there is a lot of opinion masquerading as fact.

The media space is becoming more and more crowded every day, and in many ways that’s why we have to exist. We view ourselves as independent in a way that allows us to abstract one level above all of the different outlets. Instead of saying we’re the outlet that is the best at political news or at financial news, we provide access to the best and most unbiased reporting for any given subject material. We want to make fact-first news easy to consume for everyone, from a high school class in Vermont to a 65-year-old person in Southern California and everybody in between.

We think there’s a real appetite for this. With our initial free product, we got to over 100,000 subscribers in under 12 months. We’ve since shifted to a subscription model and seen tremendous growth there.

BA: What I’m hearing is that it’s hard to be all things to all people, but what you’re trying to be is one thing to all people—which is curated, fact-based news. How are you thinking about differentiation from outlets like Newswire or the Economist?

MA: We have great respect for the Economist, but for ease of use and consumption it’s not an accessible product for the vast majority of people who are reading the news online. Many respected news outlets don’t make it easy. Sometimes it’s a curation issue, where you’re getting a lot of volume. There can also be a legacy impact, meaning that even when an organization that has existed for decades claims to be impartial, there are different incentives and political systems that can come into play. Again, that’s not to say there isn’t a lot of great journalism out there; but at the end of the day, it can be challenging for an incumbent player to do something new, because they’re so committed to what they’ve already built their base on.

BA: Snigdha, who is your primary audience? And what is the gap you’re trying to fill with the Juggernaut?

SS: Our primary market is people of South Asian descent living in the United States. As we expand and put money behind editorial and marketing, I could see that expanding to the South Asian diaspora in Canada, the United Kingdom, Australia, Singapore, etc. Beyond that, you’ll see subscribers who aren’t of South Asian descent. They’re studying the region, their partner is South Asian, they’ve lived in the region, or they’re just curious because their business somehow sources from the region.

Ten or twenty years ago, a whole slew of people became China watchers. Whether you were of Chinese descent or not, you suddenly had to care about what was going on in China, to care about its history and context. South Asia is basically the next China. Increasingly, people will have to know about it. At the same time, 77 percent of newsrooms in America, according to Pew, are non-Hispanic white; most of the South Asian bureau chiefs at the Wall Street Journal and the New York Times are not of South Asian descent, which is fine, but many of them also haven’t studied the region.

When I look at some of the articles being published by major news outlets, you can tell they didn’t have an editor who really understood the issues. We’re creating the human capital on our end to be great editors; so far, the Guardian and FiveThirtyEight have partnered with us on South Asian American issues. When Kamala Harris was selected as the Democratic candidate for vice president, we saw so much nonsense analysis. This is the first year when I was fundraising in which I didn’t have to explain who South Asian Americans were. I think that’s a huge achievement.

BA: Can you give us a sense of the coverage on Kamala Harris and how your coverage might have differed?

SS: One headline following her selection was, “Indian Americans are now more important than ever.” Let’s think about that for a second. Indian Americans have been part of US history for hundreds of years, so when I read headlines like that, as a consumer and as an Indian American, I’m already skeptical: Why do you think my demographic matters now?

We’re doing some data analysis in partnership with FiveThirtyEight that looks at data from the Federal Election Commission and uses AI to determine whether a donor’s last name was of South Asian descent. Now we’re running an analysis on how South Asians finance campaigns—to understand where people are putting their dollars—that offers more nuance and context in terms of how South Asian Americans figured in the 2020 election.

BA: Okay, let’s talk about business models. Both of you are going for the subscription model. Can you speak to what triggered that choice?

MA: We think it’s best aligned with our company’s mission and the best possible consumer experience. I don’t think the ad model is entirely broken, but it requires media companies to go after as many eyeballs as possible, to Snigdha’s earlier point. We chose subscription because it allows us to focus 100 percent on the user experience, ease of consumption, and fact-first news.

SS: I felt the subscription model offered more optionality. I can cultivate a paid audience and also tell them, “Hey, on the other side, you’re paying journalists.” And journalists of color are often the ones who are laid off first, who are underpaid, and all of that nonsense. If you really want diverse reporting and storytelling, you have to help pay the salaries of journalists to do the reporting and build up their source networks.

Subscription is also much more predictable. You know what the levers are at each stage; the rug won’t be pulled out from underneath you just because an entity doesn’t like coverage or is experiencing a downturn.

The third thing I’ll say is that we are thinking about revenue diversification that is in line with our mission. We did four pilot events in New York, pre-pandemic, and all were sold out. That’s why I always say we’re a subscription media company and community.

BA: I want to come back to community. That’s something that deeply interests me in this space. But let’s talk about pricing. Snigdha, the price point you chose was about $3.99 a month, correct?

SS: Yes, if you’re on the annual plan it’s a little less than $1 a week.

BA: And Michael, yours is $5.99 a month. As both of you well know, what makes a business model work is not just the pricing but also the cost. What are you doing on the cost side to make your business viable?

SS: I looked up a lot of public 10-K forms of pure media companies like the New York Times and saw that they’ve been doing really well over the past 10 years as they’ve gone digital, with gross margins of 75 percent. Right now, we’re basically gross profitable, and we hit a gross margin of about 50 percent at one point before we chose to reinvest in editorial. Now I’m hiring two to three editors and more premium freelancers (we have a mixed full-time and freelance model), which means paying out even more. I’m hoping that’s going to lead to a virtuous cycle of more subscribers.

In terms of our pricing, we purposely went a bit low and modest. Not all South Asian Americans are the same, but a large proportion—about 80 percent—have three times the median income of the average US citizen, which equals about $490 billion in spending power. That’s an opportunity that many people don’t recognize. Our free-trial-to-conversion rate was above 80 percent for a long time; the industry average is about 33 percent. We think we have some pricing opportunity there but we’re probably not going to change that anytime soon. We want to get more people in the door first.

MA: We started from a point of wanting to make the price reasonable and accessible while still supporting a strong business model. We think there’s quite a bit of pricing opportunity as well; I think it’s a matter of going through the process of pricing discovery over time and optimizing for the best LTV to CAC [customer lifetime value to customer acquisition cost] ratio, which brings you to questions of scale. As of yesterday, we have over 8,000 paying subscribers, and we’re continuing to grow at a healthy clip. Our gross margins are 80 percent-plus, because our content is scalable and we’re not doing in-depth investigative reporting, although we may launch that in the future. For now, that model creates a virtuous cycle because we can reinvest all that capital into growth.

BA: With new media, the first thing you think of is mobile-first, but both of you chose to go desktop-first. I’d love to hear why.

MA: We’re actually platform-agnostic, although in many ways we’re mobile-first; we just chose a different delivery mechanism as opposed to an app. Our first and biggest paid product is a text message subscription service, which we chose for ease of use. Yes, we could have launched an app, but that’s not necessarily the easiest way to consume news, whereas everyone with a mobile phone has access to a text message platform. We also recently launched an email digest, but that’s equally consumable on a mobile device or a desktop. We want the news to be consumable wherever it is that users want to consume it.

SS: Technically, we’re mobile-first in the sense that our website is very much mobile optimized. Over 70 percent of our users access the Juggernaut through mobile, although that number has declined during the pandemic, now that we’re all at home more. We’re also very strongly invested in email, and we have an app.

BA: I’d love to hear more about community. You want to create stickiness, particularly with subscription models, but how do you do that by relying solely on content?

MA: Our mission is fact-first news; no opinion masquerading as fact, no conjecture, no analysis, and no prediction. On the one hand, community introduces the potential for a lot of those things, right? On the other hand, I think there could be an appetite for folks getting together and having a healthy discourse based on an underlying set of facts. We’re actively thinking about it but we have not yet built it.

SS: South Asian journalists often joke, “Don’t get the Brown community started on Twitter or Instagram.” An article we did on interracial Black and Brown love had 10,000 likes and over 100 comments. We could tell from the events we hosted last year in New York City that there’s so much hunger to meet other people. One person said, “I would never go to a Brown speed-dating event, but I would come to a Juggernaut event, because there’s cool people there.”

Our in-person community events were hit hard by the pandemic, but it’s forced us to be more thoughtful about what events could look like now. Do we do it on Slack? On Facebook? Do we build our own website? So far, we’re going to try Slack and seed it first with our lifetime subscribers.

BA: What are some of the most difficult learnings you’ve had as you’ve developed your businesses?

SS: Honestly, the biggest problems we’re having right now is that every time we scale, everything breaks again. Right now, we’re looking at how we can start documenting everything. How do I scale myself? I’m technically operating as editor in chief, so I see final copy, but I don’t want to be a bottleneck for my team anymore. So how do we hire really great people who will fit with our culture? You could bring an all-star reporter from the New York Times and they might fail at the Juggernaut, right? How do we create a culture that sets people up for success as much as possible, reduces bottlenecks, and allows us to keep scaling?

MA: I have a super-similar sentiment. It’s people; everything that you do is people, from interactions with your customers to content to product experience, user surveys, your internal team, hiring—all of it. It’s LEAD and TOM, in the sense that my cofounder and I are writing a lot of our content. So how do we scale ourselves? How do we instill processes that would allow us to drop any strong writer into the New Paper so they can produce fact-first content, which is really, really challenging?

BA: By the way, the only commentary I’d add is strategy does precede TOM and LEAD, as I think I’ve made clear over the last 45 minutes. [Laughter] What does success look like for each of you?

MA: We won’t think we’ve succeeded until the 200 million people who read the news start their day with a common set of facts. We believe that can and will be a New Paper product.

SS: Our primary objective is for the Juggernaut to be the go-to source on all things South Asia. How do we amplify, challenge, unlearn, and celebrate what is happening in this region’s history, politics, culture, and people? It also means having difficult conversations, because when you’re creating something for a targeted group of people, you can’t make everyone happy.

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