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The News Lens closed a $2 million Series B round in March 2017. In the first three months of this year alone, it did something rare in Asia’s anemic media startup market: It acquired two media startups.
The acquisition of Inside, a tech site, helped the company take its first step forward in becoming a “Vox” of Asia — a media company with multiple verticals. Recently, they closed their second acquisition — Sports Vision, a site for sports fans.
The News Lens derives about 70% of their revenue from advertising. The rest of the pie comes from annual events and content licensing. They’re also considering a membership plan this year.
I spoke to Joey about his strategy, and advice for media entrepreneurs. This interview has been edited for brevity, clarity and flow.
Let’s start with how you’ve built this business. You’re not a journalist by training. How will you describe your career path so far?
We have two co-founders, so there’s myself and Mario Yang who’s the media guy. I’m not the media person. After college, I went to the U.S. for business school, so I was going down the post-MBA career path.
I interned for Polo Ralph Lauren in New York. I worked for Sanrio, the Japanese media company that owns Hello Kitty. I worked in San Francisco for a year. I was sent to LA for a year, and then the company sent me to Shanghai for two years, where I was GM of the China office.
By the end of the fourth year, it was time for a change. The good thing about a Japanese company is if you don’t really do anything wrong, you can stay there for the rest of your career as it’s a very safe place. But it was my first job. I thought it was a little bit too early to be thinking about staying someplace safe until retirement.
On one of the weekends, I flew back to Taipei. I knew Mario because he was in charge of online content for a business weekly in Taiwan. I wrote a few books that were published by the business weekly, and I occasionally write columns for them too. So that’s how I knew my co-founder.
I decided it was time to leave my job. Do I go into financial services? Should I go back to the U.S. Should I go to Hong Kong or Singapore?
So Mario and I were talking about the media environment in general. In Taiwan, the running joke here is that the media industry is probably one of the most hated industries because they’re either very political, very blue or green, or left or right, or sensational like Apple Daily.
Mario was thinking about this too, but he thought about it from a content standpoint since he’s an editor. I was thinking about it from a start-up standpoint. What’s the valuation? How do you find investors? We brainstormed this for maybe 30 minutes and at the end, I was going to fly back to Shanghai, so we agreed to sleep on this for a month.
In the meantime, we’d talk to people we know, and we’d do some research. We would Google every single thing about digital media and whoever came before us. Why did they fail in Taiwan and Hong Kong?
We did this for a month. We agreed that if at the end of one month we found just one reason as to why it would absolutely fail, I’d continue down my corporate road, and he’d continue being an editor.
So I Googled all the case studies. I found a lot of challenges. How do you monetize? How do you find an investor?
Yes, a lot of challenges. But I didn’t find one absolute reason from a business standpoint that I thought meant we definitely shouldn’t do this.
It's a rare feat for a media startup but Taiwan's @thenewslens is scaling by acquiring other startups.
How would you describe the company?
There’s about 70-75 people in our Taipei office. We have about 7-8 people in Hong Kong, so it’s roughly about 80-ish people. The average age of our employees is around late 20s or early 30s.
Today, if you walk into our office, it’s positioned very much like a startup that you would see in Silicon Valley. Everything is Ikea. We don’t care if you come to work at nine or 10 as long as you finish your job.
Everyone in their 20s, 30s and 40s here complains that the media is crap. It is full of bias. You can’t trust anyone; they all have an angle. They’re all very sensationalist. They’re all very trivial.
When you were looking up case studies and what was out there, what did you look to as a reference — either inspiration, or something you knew you definitely weren’t going to do?
I went to business school so I look at everything analytically. I would argue most of these successful case studies for digital media startups at that time were from the U.S. So we followed Huffington Post, TechCrunch and the other new media companies that were emerging at that time.
But in Hong Kong or Taiwan, your population is only one-twentieth of the U.S. We have a harder time persuading people to pay for content, so all these different demographics actually work against you.
The key finding was most of the previous digital media startups in this region failed. They were usually started by someone in their 40s or 50s who left legacy media — they ran a newspaper or used to run a big media company, had some money, had some very good credibility, but left to start their own digital media startup. But that was also the problem. When you’re in your 40s and 50s, you’re used to a certain quality in terms of your colleagues, in terms of your standard of living.
So you have a much higher burn rate to start a business, but you’re also treating your new business very much from a strategic traditional publishing standpoint. You’re basically treating a startup like legacy media, except it’s online. That was our biggest warning.
We wanted it as clean as possible. We’re not going to spend a single dime or anything. We don’t need no fancy office, no fancy Macs. I was 30 that year. Everything was meant to be as painful as possible.
So we weren’t going to spend any money until we were sure we could eventually catch up. We didn’t want to burn $2 million in our first year. Not going to happen. It’s all about suffering because you basically have to use as little money as possible, and just as fast, build up your audience.
So your advice for anyone entering his space with such a model is to keep costs as low as possible so you can get to the point of having size and scale.
Well yes, but there are two exceptions to this. Number one, if you seeded or if you’re started up by a very huge conglomerate legacy media, that’s a different story. They’d basically care about burning cash to get market share right. That’s kinda like Uber.
But our belief was different. If you really want to be an independent media company, then the faster you self-sustain, the better. I don’t want to be at the mercy of my investors.
Were you fully self-funded for the first year?
Yes. All of the startup capital came from the savings of my partner and I. It was meant to last us 18 months. So the idea was that if we couldn’t get to a certain scale where we could attract outside investors or self-sustain in 18 months, then we’d give up on this.
"If you really want to be an independent media company, then the faster you self-sustain, the better. I don’t want to be at the mercy of my investors." — Joey Chung, @thenewslens
So what was the first role you hired for?
IT. On day one, we had three people in the office: my partner who did all the content, I handled all the operations, and an IT guy who basically created the website.
When did you realize it was time to add writers and reporters and sales people?
The website went live in about 40 days after we started work. At the end of the first month after the website went live, we hired our first editor.
I’d say for the first six to nine months, don’t even worry about hiring sales. There’s no point in hiring sales when you don’t have enough of an audience base yet. We didn’t hire our first sales until about a year old. By then we had about two million monthly uniques.
I handled everything else that I could — payroll, banking, operations, partnerships, free marketing, that kind of thing.
So when did you go for a seed round? When did you realize that’s what you needed?
That was seven months after we launched. We were always actively thinking about it.
I mean if you have cashflow and burn rates where you have eighteen months ahead of you, then to be safe, you should be able to score or secure your first outside investment by the end of 12 months. That process itself takes about 3-4 months.
You don’t want to be in the last month of cashflow and about to run out. Logically, if you have eighteen months, you need to know where you are by month 12.
So, by month 3, when we passed 1 million monthly uniques and were headed toward 2 million monthly uniques, that’s when things started getting a little interesting. That’s when the outside VCs or angel investors start noticing you and they’ll start coming to you and gauging your interest for outside investment.
At least in this region, many of the early investors who would find you — and this is a dilemma and a paradox — are the people who are most interested in a media company. So early on, these are the same people — huge families and huge conglomerates — that have some kind of agenda.
My job is to get the best valuation for the company.
And as an independent media company, your best valuation most likely comes from the investor, or the group that has the most to gain from owning digital media. That’s the irony. You’re often forced to take the worst valuation because that usually comes from the person who actually understands media but has no agenda, so therefore won’t give you a premium.
When you hit 1 million monthly actives, was that the goal that you set for yourself as a green signal that the business is viable?
Not exactly. We had written down that our goal was to hit 1 million by the end of six months. But the operational goal within those 18 months was to get to a point where we could get enough sales to self-sustain, which we knew was very hard because we were spending the first two years building audience.
We knew it was impossible to build audience and achieve immediate profitability unless we were extremely small, like three to five people.
Our biggest milestone was to get to a scale where we could attract our first strategic investors.
So when did you start the Hong Kong operations?
Around the end of year two. We have a team there now, but initially it was just one person working from home. It’s 7-8 people now. It’s still very small. So everything we can do in Taipei, we’ll do — IT, accounting, accounts payable. Hong Kong is just too expensive.
The Hong Kong team is 5-6 editors, one social media manager. They create content for the Hong Kong market. Everything else is in Taipei.
How do you think of about your expansion plans? You have Hong Kong, a Southeast Asia edition and an English-language international edition. What made you expand outside of Taiwan?
It just seemed like a natural, organic next step. After two years of running the Taiwan edition, Occupy Central in Hong Kong happened and that’s how we knew we had a lot of readers from Hong Kong. They don’t trust their own media because a lot of Hong Kong newspapers are owned by huge families or businesses that are either pro-China or anti-China. So when we said we’re from Taiwan, that’s a good thing — it’s a plus. We have no political agenda.
We decided to experiment with Southeast Asia because of its economic growth. We don’t have an office there — we run it out of Taiwan.
And we also realized that after Taiwan and Hong Kong, the U.S. was our third biggest market. If you look at where the overseas Chinese are — U.S., Canada, UK, Australia — we have about half a million readers per month from these territories. So that was a logical next step.
The English edition is only manned by two people. It’s almost like a feeder to convert overseas Chinese into becoming one of our readers. I’m perfectly fine if they find us first through English and that links them to the mother site.
The Reporter is rising above the political polarization of local media, split down pro-China and pro-Taiwan lines, to produce award-winning investigations.
Tell me about the acquisition of Inside earlier this year. How did you come to that decision?
By 2017, we were hitting our peak in terms of traffic. If you do the math, we were close to the ceiling. When you look at legacy media in Taiwan — Dongsen, Sanli, Apple Daily — they average 10-13 million monthly uniques. That’s mass media with their fluff pieces. We don’t have any of that and so we knew we weren’t going to be bigger than them.
But we have international investors. We’re run much like a startup; this isn’t a mom-and-pop store. So we knew we needed to keep growing.
There are two ways: International expansion, which we’ve been doing for two years, but that’s slow and expensive. The other way is verticals — like the Vox model in the U.S.
By the end of this year, I want to have 5 or 6 different sub-brands. The common theme is that the spirit and brand equity is all the same: that we’re all clean — no bias, nothing sensational or trivial — and we’re trustworthy and newsworthy.
We started having these conversations in summer 2017. I had a list of the top tech sites, the top female interest sites, the top sports sites for Taiwan, Hong Kong, Southeast Asia or Greater China.
The Inside deal was our first one — they’re among the top 3 tech sites in Taiwan. They have about 1 to 1.5 million monthly uniques.
We didn’t have anything in terms of tech. It would take us at least two years to build that.
It’s also necessary for digital media to consolidate — you can’t have 5 different tech sites for one market like Taiwan. Everyone is losing money and burning cash.
What about your latest acquisition, Sports Vision? How does that fit?
We just closed the acquisition for Sports Vision. They’re in a very similar situation to Inside. They’re 5-6 people and 3 years old. They cover all sports, like Japanese baseball, or even soccer. They’re the second biggest digital media sports startup here but they cover the entire world. The number one player was focused on marathons and running — too niche for us.
So all in with these acquisitions, we’re getting to 8-10 million uniques. We’re edging closer to legacy media size.
Maybe we’ll do one more deal. It may be female interest, or gadgets — whatever we’re missing in our puzzle.
What’s your advice for someone starting up in the media space today? What was the best lesson you learned in this journey?
First, it’s going to be a longer battle than you imagined. Second, many of the inherent characteristics — what you think are revenue, valuation — are very different or opposite.
The people who give you the most money — investors or even advertisers — are often the people you can’t say yes to. Once you say yes, you’re in a different stream of problems. But at the same time, if you said yes, your problems will be over for now.
If you really want to do this, you have to have a passion or really believe in why you’re doing this. It’s very different from starting your own coffee shop, or an app company, or a tech startup. There are so many complicated political, corporate landmines. You have to carefully maneuver everything without stepping on anyone’s toes.
"The people who give you the most money — investors or advertisers — are often the people you can’t say yes to. Once you say yes, you’re in a different stream of problems." — Joey Chung, @thenewslens
What do you lose sleep over these days?
By year four, I am forever stressed out, except I don’t feel it any more because it’s every day. Stressed out is my normal now.
I think, can we finish the acquisition before Chinese New Year, so I quickly create synergies? Can we monetize? Can we grow and hit our sales target this year without selling our soul?
When will we find new investors that will recognize the valuation without trying to kill us? The underlying theme: Are we getting there? Are we getting safer, or more stable?
I don’t want to make a wrong step. I don’t want to piss off the wrong people. I need to be very, very careful. As the stakes get bigger and bigger, all of a sudden something’s going to come from left field or from far-right. You’re constantly worried that someone’s going to come in and kill you from behind so only the paranoid survive, as Andy Grove at Intel said.
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