Episode 142

The evolution of Blockworks

Blockworks CEO Jason Yanowitz discusses how Blockworks has evolved the company from an events business to podcast network to news provider to becoming a data and information play with media, events and franchises feeding the core data and research business. This kind of shift is hard to pull off. Among the issues we discuss:

  1. Using podcasts for broad reach and affinity
  2. News as a credibility driver
  3. Pulling back on B2C events to focus on B2B
  4. Using media to drive “negative CAC” for information services
  5. Implementing a “house of brands” strategy
Transcript
Brian:

welcome to the Rebooting Show, this is Brian Morrissey, here with Jason Yanowitz.

Brian:

I think I've done like three, this is the third podcast I've done you, Jason.

Brian:

I

Jason:

know if I have more to share.

Jason:

I think you've

Brian:

No, you do,

Jason:

me dry here.

Brian:

no, I didn't milk you dry.

Brian:

The reason I like to have people back on is because, we check in on the things they did before, so I was revisiting the podcasts we did before.

Jason:

did you actually do the things you said you were going to do, basically?

Brian:

Yeah, for the most part, but business has changed quite a bit from a couple of years ago, even when we first talked on the podcast.

Brian:

And, you know, for those who don't know, Blockworks is a crypto media company, one of the survivors in the space.

Brian:

Let's talk about that, how you guys started.

Brian:

You know, we're able to thread the needle and some others got over their skis.

Brian:

I think that's, that's inevitable media.

Brian:

but now, I mean, you've got a multifaceted media business that is kind of changing into a media and information and data business.

Brian:

Is that correct?

Jason:

Yeah.

Jason:

I think of us now as, so we've been around for seven years.

Jason:

Today, easily the largest and the largest media player in the crypto space.

Jason:

We are one of the big players in the data and research space.

Jason:

I now think of us almost more as a research and data platform.

Jason:

Less as a pure play media business.

Jason:

and we can get into this.

Jason:

Like, I, I think the beautiful model that we've been able to create, we've done a lot of things wrong, but one of the models we've been able to create really nicely as we have a.

Jason:

Basically a software business at the bottom, like a SAS business at the bottom, and we have this negative CAC.

Jason:

Negative customer acquisition cost, a payback model because we own a media company as well, so we can actually get and acquire subscribers while getting paid to acquire those subscribers.

Jason:

So that's, that's kind of the, that's the business today at blockworks.

Brian:

Well, that's the dream, right?

Brian:

Negative cac.

Brian:

Everyone wants the, everyone wants the data business.

Brian:

They want to be the Bloomberg of X.

Brian:

I mean, because the multiples are better, but you don't start there, right?

Brian:

You started in events with small scale events, right?

Jason:

I mean, we, we, we basically built a media company ass backwards, right?

Jason:

So the way you're supposed to create a media company is you go create a bunch of great content and then you get people to read your content and join your audience, and then you wake up in two years and you say, Hey, I got to, I got to make some money here.

Jason:

What am I doing?

Jason:

I got to make some money.

Jason:

So you either turn on subscriptions or you, you know, sell ads on your sub stack or something.

Jason:

We started with events.

Jason:

And, the reason we started with events is because we were going up against these Goliath businesses, right?

Jason:

The Bloomberg's wall street journals of the world.

Jason:

but also the coin desks and crypto publications of the world.

Jason:

And we thought the one place that we could win was institutional crypto conferences.

Jason:

The whole thesis of the business of block we got, again, we've got so much wrong at block works, but one of the things that we got really right was the early thesis, which is, which was just that crypto would eventually become this big institutional asset class.

Jason:

And as that happened, the number of people who came into the industry would grow by orders of magnitude, right?

Jason:

Like you used to not be in crypto.

Jason:

Then I saw you paying attention to like

Brian:

Yeah, yeah, I know.

Brian:

I moved to Miami and

Jason:

You know, now you're, now you moved to Miami and you're a full blown crypto bro.

Jason:

And, so it's like, okay.

Jason:

As crypto grows by orders of magnitude, the number of people who comes into the industry grows exponentially.

Jason:

And those people are going to demand a more sophisticated level of information and quality of information.

Jason:

And so that's what we're doing.

Jason:

We started with events.

Jason:

We layered on the podcast business.

Jason:

We layered on the newsletters.

Jason:

We launched, we hired journalists in 2020.

Jason:

Business in 2021, the like old school media with like news and journalism, not just podcasts and newsletters.

Jason:

and then, we launched the research and data platform in 2022.

Jason:

And then we just launched our advisory business a couple of weeks ago.

Brian:

Yeah, What I always wonder is because everyone goes back they're like, Oh, this was all planned all along.

Brian:

This is where we wanted to go.

Brian:

And you had mentioned in a podcast you did recently.

Brian:

That's when I reached out because I sort of resonated that you sort of have to know where you want to go.

Brian:

But there's a lot of steps between that.

Brian:

I mean, you were doing small scale events.

Brian:

And then you like went in, then you started building a podcast network, then you started doing larger events, and it was sort of bit by bit.

Brian:

But did you know that you always wanted to get to this position where you can be, you know, I guess to really credibly say that you're going towards being like Bloomberg, you know, of

Jason:

the idea was that.

Jason:

The last time finance underwent a massive transition was in the eighties and nineties when finance got digitized.

Jason:

And that was this huge opportunity for both software businesses, right?

Jason:

TD Ameritrade's and Charles Schwab's of the world, but also media and information.

Jason:

So there's all these huge media and information companies that came out of the digitization of finance.

Jason:

And we just thought, Hey, look.

Jason:

you know, crypto, I'm actually a little more pessimistic on the use cases of crypto and like, you know, maybe enterprise world or something like that.

Jason:

But I've always thought that all, all finance would move on chain.

Jason:

And that is just the re digit, almost the re digitization of, of finance.

Jason:

And so.

Jason:

We basically just said like, okay, there's going to be this, the biggest opportunity for, for media and information in 40 years, somebody's going to go build that if, you know, what, basically why not us?

Jason:

And so that was the original, the original idea was like that original, that early thesis I just laid out.

Jason:

Plus, okay.

Jason:

Finance is about to completely move on chain.

Jason:

And there's all these financial people, millions of wall street folks and VC PE, financial advisors, RIA, sovereign wealth funds, pensions, who have no clue what any of this crypto stuff is.

Jason:

That's our opportunity.

Jason:

And then on the.

Jason:

kind of buyer side of the advertising marketplace.

Jason:

You've got all these brands that want to pull AUM onto the platform, the Coinbases, Geminis of the world, but also the DeFi protocols, but also one day the financial institutions of the world we thought would offer crypto products, which seemed really crazy several years ago.

Jason:

But now you see.

Jason:

You know, BlackRock's got a, a Bitcoin ETF.

Jason:

And so, you know, that, that opens up a whole nother advertising base for us as well.

Brian:

would you compare the path you took to other, crypto media companies.

Brian:

I mean, because there was a, there are others, right?

Brian:

And I feel like you've taken a somewhat different, I mean, first of all, your focus is a little different than like a decrypt, coin telegraph, it seems like you're, you've obviously been moving more towards the institutional side

Jason:

actually started with the institutional side.

Jason:

I mean, there are three, there are three like real media companies today in crypto.

Jason:

It's CoinDesk, TheBlock, and BlockWorks in my opinion.

Jason:

really like professional buttoned up media businesses.

Jason:

with.

Jason:

Semi sustainable business models.

Jason:

I mean, we saw obviously CoinDesk in the block had to sell last year, which was tough, but, we started institutional, thinking that that was the most valuable audience.

Jason:

We said, there's this premier audience that nobody encrypt everyone in crypto wants to meet, but nobody knows them.

Jason:

And as the institutional crowd is the folks from Goldman and KKR two Sigma and that kind of crowd.

Jason:

And so we, we built this amazing audience from 2017, 18, 19, 2020, of just this institutional audience.

Jason:

And what happened was in May, 2020, so COVID hits March, 2020 in two months later, May, 2020, Paul Tudor Jones calls Bitcoin the fastest horse in the race.

Jason:

That coincides with massive monetary stimulus and the price of these things goes crazy, right?

Jason:

Bitcoin goes from, I think at the lows around 3, 500 shoots up to around 65, 70, 000.

Jason:

The whole industry went crazy in 2021, 2022.

Jason:

And what we realized was the institutional crowd was not actually the most valuable crowd.

Jason:

It was the deeply crypto native crowd.

Jason:

because those are the folks managing.

Jason:

Money on chain.

Jason:

Those are the folks with massive pools of capital.

Jason:

So yes, Fidelity might have a lot of money.

Jason:

They're this big organization, but they only want to spend 25, 000 on your deal.

Jason:

Whereas Arbitrum and Uniswap, and you know, I'm sure some of your listeners might have no idea of these companies.

Jason:

They have billions of dollars in their treasuries, billions with a B.

Jason:

So we said, Hey, look, if our, if those are our, you know, Advertisers are really those protocols.

Jason:

They have billions of dollars.

Jason:

There's a Digiday article.

Jason:

From maybe 2022, about how we were training our sales team to sell to protocols and DAOs.

Jason:

And for two years, that made completely no sense.

Jason:

But now, we've kind of shifted our audience from, this institutional crowd into the crypto native audience.

Jason:

and there was like a specific moment, moment in time that we decided to do that, which I can talk about if it's interesting, but it's opened up, it's kind of opened the floodgates to like, we are really the only media brand out there.

Jason:

Who has the scale to accept the dollars from these protocols and who has the ability on the sales and marketing side to actually sell into these protocols.

Brian:

Yeah.

Brian:

That's interesting.

Brian:

Cause I mean, I would have thought like I mean, I'm not like deep into the world, but, but there were a lot of like publications, particularly crypto is a weird market and that it's very insular.

Brian:

I guess maybe a lot of markets are, but there's like a vocabulary and everything among it's almost like there's a cultural element to crypto that doesn't exist in a lot of other, you know, fields.

Brian:

I don't know if people are still doing like DGN and NGMI and all that stuff

Jason:

Well, it's not just the culture and the, the language.

Jason:

Yeah.

Jason:

There's all the dumb Twitter language and

Brian:

I wouldn't say it was dumb.

Brian:

I'm not

Jason:

Well, it was like, it was cool.

Jason:

And now it's, now it's cringe,

Jason:

like whatever, but there's actually a totally different sales motion.

Jason:

So let me walk you through a deal recently.

Jason:

we closed a 960, 000 deal with a.

Jason:

L2 called arbitrum.

Jason:

And for the media company, people who are not into crypto, I'm first off, sorry that, I'm going to bore you for a couple of minutes here, but it actually might be helpful to explain.

Jason:

So like the analogy that I would use is there's all these L1s and L2s.

Jason:

Those are layer ones, layer twos.

Jason:

We're trying to scale the blockchain.

Jason:

The easiest analogy is these are just the cloud providers.

Jason:

So there's a huge fight right now for the cloud provider.

Jason:

So.

Jason:

Amazon AWS, Google cloud, Microsoft Azure, Alibaba cloud.

Jason:

They want one thing.

Jason:

They want founders and developers to come build on their platform.

Jason:

Same thing with all these blockchains.

Jason:

So there used to be a theorem.

Jason:

Now there's layer twos who kind of help scale a theorem.

Jason:

Then there's like Solana and app dose and like other and polygon and like other people like that, who've taken a different approach to scaling, but it's all one thing.

Jason:

It's just trying to scale a blockchain.

Jason:

So you can have lots of transactions on a blockchain and they want to reach the founders and developers.

Jason:

And so we just closed a 960, 000 deal with Arbitrum.

Jason:

However, there's no CMO that we sold to.

Jason:

We didn't actually go talk to anyone at Arbitrum.

Jason:

We didn't talk to a marketing team.

Jason:

There was no head of marketing.

Jason:

There was no CMO.

Jason:

We posted on the four,

Brian:

I'm like imagining you're selling it to like some sort of ape avatar or something.

Jason:

I mean,

Brian:

With no name.

Jason:

I don't know.

Jason:

I mean, we, that's right.

Jason:

That's right.

Jason:

I don't know if I can, share my screen on this thing, but it's, I mean, I'll send it to you afterwards.

Jason:

Basically.

Jason:

okay, Arbitrum is, is run by a DAO.

Jason:

The holders of the ARB token, ARB token, are the people who vote in the DAO and whatever gets voted on then moves, then basically happens inside of the smart card that, that then moves to then.

Jason:

change the smart contracts.

Jason:

and so we essentially lobbied and sold into not the head of marketing, but all of the delegates, the big holders of the ARB token who are people and individuals and organizations who have been delegated ARB tokens.

Jason:

So if I'm Andreessen Horowitz, I don't actually want to vote on arbitrarian things, I want to delegate my ARB tokens to someone who's deeper into the community than me.

Jason:

So anyways, we got this deal done.

Jason:

It moved on, it moved on chain.

Jason:

We then got people to vote with their arb for us.

Jason:

And we, we won a 12 month, 960, 000 deal with Arbitrum.

Jason:

And we've, we've won many of those, those deals.

Brian:

I mean, is that going to be the exception though?

Brian:

I mean, is this, is this going to be like the norm?

Brian:

I mean, DAOs are still pretty niche, you know, the niche.

Jason:

I mean, I don't think so.

Jason:

I don't think so.

Jason:

I think protocols will become the largest organizations in the world.

Jason:

They'll end up being bigger than any software business and bigger than any bank.

Jason:

and if I'm wrong, that's, that's all right.

Jason:

Well, you know, then we'll be wrong.

Jason:

And then we'll go back to selling to BlackRock and to Coinbase and to, you know, go work with some boring media agencies or something like that.

Jason:

But if I'm, if I'm right, there is no one in the world who can, I mean, it's going to take Bloomberg five years to understand.

Jason:

How to sell what we're selling or wall street journal, probably 10 years to understand that.

Jason:

So

Brian:

So you say now you think of yourself as like a, a data and research business.

Brian:

but the majority of the business is still in like media, like events and ads.

Brian:

And

Jason:

not anymore.

Jason:

No.

Jason:

Um, I mean this year, this year it's probably, so we, last year it was like percent research and data this year.

Jason:

It's 20 to 25 percent research and data.

Jason:

And next year we'll be on par with the events in the digital business.

Jason:

So next year, I think we could get to 33, 33, 33.

Jason:

Which is, you know, 33 percent of revenue coming from events, 33 percent of revenue coming from podcasts and newsletters and 33 percent of revenue coming from the research and data side of the business.

Brian:

Okay, so, long term, because you took a round of funding, right, after saying you had no plans to ever raise, which is the first step to raising funding is to say you have no plans to ever raise, right?

Jason:

go on the podcast that you want to, you want nothing to do with investors and that's how you, that's how you rate

Brian:

Exactly.

Brian:

but you raise money, and nobody wants to raise money from you.

Brian:

It's just a bad idea.

Brian:

I got an email the other day from someone who's like, I'm thinking about raising money, but I was like, stop now, stop now, don't do it.

Brian:

and just bootstrap it and that'll get you either you break out or it doesn't work, but whatever it's, it's media businesses.

Brian:

I think we've now realized it's not made for, for venture investing, institutional investing at all.

Brian:

but that's to build the data and research business.

Brian:

How, how do you think about.

Brian:

You're kind of operating a bunch of businesses that are related, but like they all, they have different dynamics, right?

Brian:

And I think it's interesting that you didn't do it all at the same time, because even if this is the way you sort of wanted to go, I don't think, first of all, you couldn't have done it back in 2020, say,

Jason:

I think we had to take these, the steps that we took.

Jason:

I mean, there are a lot of other, there are a lot of businesses in our industry and outside of our industry that look very similar.

Jason:

They just took a different path.

Jason:

So there are different research and data providers.

Jason:

But, you know, they, because they started with research and data, they never actually prioritize media.

Jason:

So they don't actually own the distribution that we own.

Jason:

So I think you kind of had to do it sequentially like we did.

Jason:

I mean, you say, so we are running kind of different businesses inside of block works, but none of them would actually work if they were by themselves.

Jason:

So we could run a research and data business.

Jason:

There's no way that thing would work by itself.

Jason:

There's no way we could run that business profitably.

Jason:

And the whole thing of like, we always want to stay profitable.

Jason:

So there's no way you could actually, I mean, you could raise boatloads of venture money and you could get on the VC hamster wheel, like, I mean, go, I mean, I'm not going to name names.

Jason:

There are several other research and data companies that run these like wildly unprofitable businesses, and they're just stuck on this VC hamster wheel.

Jason:

And I mean, it really doesn't look good for them.

Jason:

So, so we could go compete with them outside of it.

Jason:

But all these businesses serve different functions.

Jason:

So like if you, for, for Blockworks, so the news business builds a lot of trust in the brand.

Jason:

Like the news business is like real high trust, high, like a very high trust business that builds this like deep connection with our audience and deep trust in all of the things that block works does not just the news, the podcasts and newsletters are the distribution mechanism.

Jason:

So they serve.

Jason:

So page views are going to zero.

Jason:

Like nobody's going to go, nobody's going to visit a website one day.

Jason:

Pages are going to zero.

Jason:

So the news business, high trust, but like not actually a great business model for people who are stuck in news on a website.

Jason:

So we distribute the news through things like podcasts and newsletters.

Jason:

We've got five different newsletters business on that side.

Jason:

It looks kind of like an Axios or a morning brew.

Jason:

Then we've got a podcast business looks kind of, if you break down the numbers similar to like a Barstool sports.

Jason:

so we own the largest podcast network in the industry that serves distribution.

Jason:

All right.

Jason:

So you've got news, trust, podcast, newsletters, distribution, and cash.

Jason:

Events are the spit off a lot of cashflow, right?

Brian:

Yeah, that's what you said the last time.

Brian:

I was like doing some community thing and you corrected me.

Brian:

Like, no, no, no, the job of events

Brian:

is cash.

Brian:

That's always

Jason:

is to make money.

Jason:

If you're in the events business and they're not making a lot of money, you are, you should shut down those,

Jason:

those

Brian:

some sort of cliche and I appreciate that you

Jason:

I mean, because anyone who's listening to this, who hosts events, like.

Jason:

Like events suck to host

Jason:

their

Brian:

in one way or a worse than.

Jason:

total pain in the ass.

Jason:

So if your event is not spitting off a bunch of cashflow, like get out of the events business.

Jason:

So you've got, okay, events, serve cat arts, distribute cash, which you can then reinvest in other parts of the business without, so that you're not stuck on the VC hamster wheel news is trust.

Jason:

Podcasts and newsletters, this distribution, and then you're missing one super key thing, the enterprise value of the business.

Jason:

So the problem with media businesses and why one of the many reasons they shouldn't raise venture is like, they're just don't, don't get high multiples.

Jason:

They're like low, low enterprise value.

Jason:

So the research and data business serves as the Kind of the, the high multiple enterprise value type of that.

Jason:

But if we just did research and data, then you get stuck in a shitty SAS model where you're raising money, spend half that money on engineers and product people, half the money on marketing and sales.

Jason:

And now you've got a wildly unprofitable research business.

Jason:

So it all, it all needs to flow together.

Brian:

Yeah, it's interesting because I, you know, the, the whole negative cac thing, I think, you know, Craig Fuller was always taught.

Brian:

I haven't, I don't think I've done a podcast with

Jason:

You should have Craig.

Jason:

on.

Jason:

He's 10 times smarter

Brian:

But you're smart.

Brian:

but Craig is smart too.

Brian:

but you know, he, he split off Sonar.

Brian:

They split it off because it seems like they want to sell.

Brian:

I don't know.

Brian:

and, and depending on who's going to buy, they might look at like, I mean, that's, that's very compelling.

Brian:

I mean, your thesis is basically, I think the Bloomberg thesis really.

Brian:

in some ways, I mean, maybe it's a little different with, with podcasts being heavier, but

Jason:

yeah, Craig, you know, I haven't talked to Craig about this.

Jason:

They split it.

Jason:

So they, he had right.

Jason:

Freight waves and sonar, Sonar was the research and data plot.

Jason:

The data platform freight waves was the media business.

Jason:

And, you know, Investors are dumb invest not, not, not investors as in like one or two investors, but like the market, I would say not investors.

Jason:

Like the market is dumb.

Jason:

The market follows the market, the market follows the market, the market follows the herd, the market follows what the multiples that the market sets are.

Jason:

There's not really, it's not dumb is the right word, but like they just kind of follow like what the other people say, the market, the market multiples should be.

Jason:

So.

Jason:

why here's, here's a question for you.

Jason:

And this all ties back to Craig thing.

Jason:

Why are SAS multiples and ARR multiples like so, so much higher

Brian:

because they're recurring.

Jason:

because they're recurring because they're recurring.

Jason:

However,

Brian:

get a, once you get a Bloomberg Terminal, you don't get it back.

Brian:

It's

Jason:

That's right.

Jason:

So well, Bloomberg terminal is specifically amazing because it's a hardware product, but most software product it's yeah, they get these crazy high multiples.

Jason:

However, you can cancel a SAS product with one click.

Jason:

It's super easy to cancel.

Jason:

And actually the churn is relatively high.

Jason:

So what is like the silliest thing in the market?

Jason:

In my opinion, SAS is overvalued conferences and media are, are under, are undervalued because we,

Jason:

so,

Brian:

changing right now,

Jason:

so it's currently changing, but our whole thesis for like the last several years was, was that, was that SAS is SAS is overvalued media and events are undervalued.

Jason:

And the reason for this is because I'll, I'll show you two businesses on paper.

Jason:

They both have 90, 90 percent recurring revenue.

Jason:

One of them is going to get a 10 times revenue multiple.

Jason:

The other is going to get a 1.

Jason:

5 X revenue multiple.

Jason:

The conference is going to get 1.

Jason:

5 X revenue, multiple SAS products going to get 10 times revenue, multiple, but they're both recurring revenue because I could either, I could argue either they're both recurring revenue or neither are actually recurring revenue.

Jason:

The conference.

Jason:

I mean, if we, if our conferences have 90 percent of our sponsors renew.

Jason:

Year after year after year for seven years in a row.

Jason:

Why is that

Jason:

not

Brian:

it's essentially, I mean, well, that's why I like within the events business trade shows get different multiples, right?

Brian:

Because, I mean, trade shows, I, they're not for me exactly.

Brian:

I mean, I've never, I can't imagine like wanting to do that.

Brian:

But, you know, at the end of trade shows, sponsors line up to sign their contract for the next year.

Brian:

I mean, that's good.

Brian:

Like in the media, you don't get a lot of people lining up to like sign IOs.

Brian:

So, yeah, that's, that's a good business too.

Brian:

So talk to me about the events business, because like, as you said, total pain in the ass, right?

Brian:

and now you have, I don't know, how big is the digital assets summit?

Brian:

I know permissionless is big.

Jason:

digital assets.

Jason:

I'm in, so our next one is March 20, 25, 500 attendees, three

Jason:

day

Jason:

conference.

Brian:

are big events.

Jason:

We think of that, we think of that as small.

Jason:

So like we used to host, you know, permissionless with several thousand attendees, we're getting out of the several thousand attendees game because.

Jason:

Yeah, we're getting out of it.

Jason:

I mean, we haven't really publicly announced too much, but I mean, I can, I can share it here.

Jason:

It's like we had two conference brands.

Jason:

So we had digital asset summit, which is our very B2B buttoned up.

Jason:

It's like the only crypto event where people are wearing suit and tie Goldman KKR, Citadel, two Sigma, like that, you know, that kind of crowd, hosted in both New York and London.

Jason:

Then we had our very like crypto native shorts in a t shirt, several

Brian:

Some guy in an American flag thong.

Jason:

I mean, you say that Brian, but be careful what you wish for, honestly.

Jason:

yeah, so that was our more, it was, it was more B2C.

Jason:

B2C and B2B and crypto is weird.

Jason:

Cause like you will have these 24 year old kids who also manage like 30 million.

Jason:

So like B2C B2B, it's like not always the right distinction, but yeah, it was like younger crypto native crowd.

Jason:

We're getting out of that game.

Jason:

It's just not the, it's just not the game that we want to play.

Jason:

And we're moving permissionless to become more of a.

Jason:

B2B event, but for the deeply crypto, I keep using this word crypto native because it's what people in crypto say, but like crypto B2B and then there's like finance B2B I'd call it, for digital asset summit.

Jason:

So, maybe

Jason:

if I

Brian:

the strategic rationale from that?

Brian:

Is that this sort of like really differentiate yourself from the sort of let's let's face it.

Brian:

I mean, I joke around about it, but crypto does have like an interesting, fringe element to it.

Brian:

I mean, I could say this.

Brian:

I see it around Miami, and look the with the booms and the crashes, right?

Brian:

There's still a lot of crypto, you know, pessimists to the haters out there.

Brian:

and there are a lot of events in crypto.

Brian:

I don't know.

Brian:

Maybe it's just being on Twitter a lot.

Brian:

feel like some people who are in crypto do nothing but go to events in various places.

Brian:

maybe every space has a lot

Jason:

yeah, I mean,

Jason:

it's a lot of bad events.

Jason:

It's a lot of bad events.

Jason:

no, the crypto uniquely does have a lot of, there's an oversupply of events for sure.

Brian:

like big like party type events, it feels like.

Brian:

I don't know.

Brian:

sometimes I'm wondering like, I don't know.

Brian:

There's something, because again, there's a cultural, there's a cultural part of, of crypto that is different than most business categories, that's for sure.

Jason:

Yeah, there is.

Jason:

There is.

Jason:

the re the reason we're getting out of B2C is we are not the world's best B2C conference, like organizers.

Jason:

There are other big conferences, ETH Denver, Token 2049 in Singapore had 20, 000 attendees.

Jason:

consensus, right?

Jason:

Coin desks, consensus, like, you know, 10, 000 plus.

Jason:

So that that's one of the reasons, but there's actually just a much more logical quantitative reason, which is the only thing that could kill blockworks at this point is getting overextended on a large conference.

Jason:

So, at the beginning we had to take these risks.

Jason:

Like we bet we've bet the farm two or three times at Blockworks, where we put every dollar in the bank count into the big conferences and we had to make it work.

Jason:

And if it didn't work, the business was dead.

Jason:

We no longer have to do that and we no longer want to make those bets on the conference side of the business.

Jason:

So we'll still make really risky.

Jason:

Really, like get really extended, but more on the data and research side of the business, less on the conference that I don't, I don't want to die by a conference.

Jason:

And so what I see happening with big conferences is if you can hit the narrative with your event, you get really big, right?

Jason:

So you 10, 000 people and then 20, 000 people.

Jason:

And then what does everyone do internally at your company?

Jason:

No, nobody's sitting there saying next year, let's go smaller.

Jason:

So you say 20, 000, let's go 40, 000 next year.

Jason:

We're going to be in a bull market.

Jason:

Let's go bigger.

Jason:

All right.

Jason:

Well, we need to book a bigger venue.

Jason:

We need to outlay more costs.

Jason:

And by the way, a lot of those are fixed costs because you're a conference organizer because it's a conference.

Jason:

So boom.

Jason:

All right.

Jason:

Let's go bigger and then let's go bigger.

Jason:

And then, and then, but because it's crypto, it's an extremely volatile industry.

Jason:

So what happens is you are booking these events farther and farther out in advance cause they're getting bigger and bigger.

Jason:

And then you get on the other side of a bull market and you get trapped in a bear market where you've put up fixed costs.

Jason:

Like you're in a bowl, but really the sponsorship dollars are you're in a bear.

Jason:

And that's how you end up like CoinDesk where, you know, they made 50 million top line last year, but they lost 75 million or they spent 75 million.

Jason:

So, you

Brian:

still bad.

Jason:

your, your 25,

Brian:

The first one was horrific.

Brian:

The next one was still bad.

Brian:

It's

Jason:

top line, not that bad, 75 million costs.

Jason:

I mean, you're, I don't want, to lose 25 million in a year.

Brian:

the other thing is, look, events are really great about you know, generating cash, really quickly.

Brian:

And like, before you have that built in trust in the media brand, you can spring up an event and like make, make it work, without much of a brand really.

Brian:

It doesn't take like decade of building trust to build an event brand.

Brian:

I think one of the things that I've noticed with event brands is that they're very fragile.

Brian:

beyond the market conditions, think about technology.

Brian:

It's something like The major technology event, particularly big events, has, none of them have lasted a long time.

Brian:

I mean, CES, okay.

Brian:

Outside of those, like, you have marquee industry events that have a boom and a bust.

Brian:

There is a cycle to all of these events, I feel like.

Brian:

Yep.

Jason:

I care, I think of an event as a marketplace.

Jason:

and I think that like, you're basically, you're, you're creating a pop up marketplace for three days and then tearing it down.

Jason:

And so you're bringing buyers and sellers together.

Jason:

So conference organizers track these metrics, like.

Jason:

Attendees and revenue, obviously the, the basic conference metrics.

Jason:

The thing that I care about is if you're creating a marketplace, what's the marketplace metrics.

Jason:

So things like GMV, right?

Jason:

Like how much, how many transactions are happening on your marketplace?

Jason:

Those are the metrics that conference organizers in the B2B space should be looking at.

Jason:

It's not attendees and revenue.

Jason:

sponsorship dollars.

Jason:

It's how much business was getting done at your conference because it's the GMV of your event

Jason:

because

Brian:

it's hard to know, right?

Brian:

that's, that's the advantage of hosted buyer forum type events.

Brian:

And, you know, where you bring in a, you explicitly bring in a, a buy side, you know, you do whatever you have to do to get them there.

Brian:

And then you do a lot of matchmaking and then you can, you can sort of divine, you know, what, what kind of economic activity

Jason:

it's hard to do, but like you have to invest in things like a good app and not just like one of those, like, Hey, we'll sell you a good app and white label it.

Jason:

Like, you know, they're, they're the best conferences I know right now are building their own apps in house.

Jason:

They're building apps.

Jason:

They're getting the best apps on the market if they, if they exist.

Jason:

But I think a lot of them have to build it in house.

Jason:

You're doing followups that aren't like, Hey, here's a survey, Brian.

Jason:

What'd you think of the event?

Jason:

It's like, Hey, I'm going to schedule a followup call with your chief revenue officer in two months.

Jason:

Tell me if you've got any business from that.

Jason:

That's how you should track the success of a conference.

Brian:

Yeah, no, that's that's that's very true.

Brian:

I mean, because like I would always say it's like the stuff that goes on on stage is absolutely important, but the role it's not the value it is.

Brian:

It is a path to the value and the value of a B to B events is a matching up a buy and a sell side.

Brian:

And so, but you're totally right.

Brian:

There's usually no way of measuring that outside of, you know.

Brian:

Did you get the right people in the room?

Brian:

You don't know if they did any sort of transactions.

Brian:

But I also wonder, so the business is obviously changing.

Brian:

And I think when you sort of saying like, okay, we're going to pull back on the B2C events because you, you sort of use the events in order to be able to launch the media and to go deeper into the podcast network.

Brian:

and then eventually be able to, get to the place where you could build up.

Brian:

The data business.

Brian:

And now, if you were to look forward five years, I would guess that your forecast is for media to be a smaller, a much smaller part of the business.

Jason:

I mean, yes and no, I'd

Brian:

necessarily.

Jason:

so like, if you fast forward a

Jason:

couple years, I'd

Jason:

like to,

Brian:

is far smaller than Bloomberg

Jason:

so, so in 20, in 15 years or 10 years, probably yes.

Jason:

Yeah.

Jason:

I mean, yeah, obviously

Jason:

Bloomberg

Brian:

Media is a nice business.

Brian:

Bloomberg Terminal is a great business.

Jason:

argue.

Jason:

but you know, what, what are they doing?

Jason:

10 billion of recurring revenue with a hardware product.

Jason:

so for us, I mean, you know, first off, just taking the account, like the, we used to, you know, as of 2019, 82 percent of our revenue came from conferences.

Jason:

Then we shifted it down and down and down.

Jason:

And now we're at like, you know, next year we'll do probably 33 percent from conferences, 33 percent from podcasts, newsletters.

Jason:

33 percent from the data side of our business.

Jason:

Fast forward.

Jason:

I mean, the, the goal internally at the company is hundred million in revenue from the media side of our business, which the media and events.

Jason:

So I'd like media podcasts, newsletters, events to do a hundred million in revenue.

Jason:

I'd like the data side of our business to do a hundred million in revenue.

Jason:

So I don't really know what the conference versus podcast versus newsletter versus media breakdown will be, but that whole bucket.

Jason:

A hundred million in revenue.

Jason:

And then the research data side of the business, software, product, et cetera, that's a hundred million in revenue.

Jason:

So that's what I think it'll be like, give it five years and then yeah, look, 10 years, like you want, you want most of it coming from the SAS product.

Brian:

I mean, can you do a hundred million dollars in, in media and crypto?

Brian:

I mean, there's not that many a hundred million dollar in like revenue outside of like massive.

Jason:

Yeah, you can coin.

Jason:

I mean, CoinDesk got to CoinDesk got to 50 million in a.

Jason:

In the last market.

Jason:

And this upcoming, this upcoming market will be 10 times bigger than the last market.

Jason:

So, I mean, you've, yeah, it's, I think we could, I think we could do well, well above that.

Jason:

I I'm not saying in two years from now, but I'm saying in the not short term, not long term, like in the medium term.

Jason:

Yeah.

Brian:

Okay.

Brian:

So, last thing is like, what do you think are some of the, I mean, you survived the sort of crypto winter and, and this is a boom in a bus market.

Brian:

And I wonder like how.

Brian:

I, I think you could probably argue, maybe it depends on the election.

Brian:

Maybe it doesn't like probably still in, in, in this upswing that's, that's been happening in the

Jason:

I don't think it, I don't think the election matters as much as most people say.

Brian:

Oh, really?

Jason:

Yeah, I don't, I don't

Brian:

Oh, I thought everyone wanted Gary Gensler gone.

Jason:

he's gone either way.

Jason:

He's not staying.

Jason:

If he's not saying if Kamala wins,

Brian:

I wonder, does that change how you operate the business?

Brian:

And I wonder, like, does your.

Brian:

because I mean you had to like, you had to live through, everyone lived through that weird blip during COVID, but then all of a sudden a ton of money got dumped.

Brian:

It went from like, oh my God, the world is ending to, hey, things are great.

Brian:

but does the business, how tied is it to the crypto cycles, right?

Brian:

Like, I mean, you know, during the crypto winter, I'm sure your business like buckled.

Jason:

it's definitely tied, in the same way that any media business on a B2B media business is tied to their own industry, right?

Jason:

Like, you know, Sean, Sean's got, you know, construction dive.

Jason:

And if the construction industry gets whacked 25%, like his media business probably gets whacked.

Jason:

Like,

Jason:

I don't know, 10 percent or something.

Jason:

So, yeah, I mean, we're, we're tied to it, not as much on the subscription side of the business.

Jason:

More on the advertising side.

Jason:

So the dynamic there is when prices are going up, new users are coming into the industry, all the platforms want those new users to come onto their platform, to buy Bitcoin there instead of at their competitor.

Jason:

It's the same reason why, I don't know, I'm still using the same bank account that my mom signed me up for when I was 18 years old, like, you know, platforms are very sticky, right?

Jason:

So if I'm Coinbase, I'm like, I'm going to spend every last dollar I have to make sure that Brian.

Jason:

When he comes into crypto buys Bitcoin on my platform, not my competitor's platform.

Jason:

So that's why advertising dollars are so, robust.

Jason:

I would say in the bull markets, in the bear markets, nobody knew is coming into the industry.

Jason:

So the focus on getting.

Jason:

Investors to buy on your platform goes, goes basically away.

Jason:

However, there's a new, there's a different audience that becomes really valuable and it's developers.

Jason:

So the coin bases of the world, they tighten up their advertising budgets and bear markets, but the protocols, the like defy protocols and.

Jason:

Lend and borrow protocols and L ones and L twos and these arbitrums and Uniswaps and Solanas and Ethereum's of the world, they need to reach the developers.

Jason:

So they actually spend more in bear markets to kind of get those people on their platform.

Jason:

And so that's why we're turning permissionless into more of a B2B developer conference is to start to kind of recession proof the business.

Jason:

If we go into a downturn

Brian:

Right.

Brian:

Cause the more consumer focused ones, it's like, they get so much of their traffic and people just, it's like when, when the Bitcoin price is like up, everyone's

Jason:

that all dries up, that all dries up, but.

Jason:

We think we've done a pretty decent job of like in the next downs turn, which, you know, 27, whatever it looks like, like we, you know, we feel pretty confident.

Jason:

I mean, we'll probably, our numbers might go down a little bit, like we feel pretty confident that we're there.

Jason:

We're pretty bear market proof

Brian:

Yeah.

Brian:

So tell me about the advisory business.

Brian:

Why did you add that part?

Brian:

I mean, cause that seems more, it's not a data, but I mean, it's related to the data.

Brian:

So explain any of you, at least you put out there, like pretty, pretty bullish forecast for this.

Jason:

So.

Jason:

We launched blockworks advisory, a couple of weeks ago, which is a consulting business.

Jason:

if anyone wants to read more about it, you can type in like semaphore blockworks advisory or something.

Jason:

we

Brian:

Max called you something interesting.

Brian:

He called you a darling.

Brian:

I think

Jason:

darling

Brian:

crypto darling.

Jason:

We love that.

Jason:

Thank you,

Jason:

Max.

Jason:

Yeah.

Jason:

Never thought it'd be called a darling.

Jason:

yeah, I appreciate that, Max.

Jason:

so we launched our data platform in May of 2022, and we have 20.

Jason:

what's the exact number?

Jason:

I think we have 17 analysts full time in house at Blockworks today, research and data analysts at the company.

Jason:

We have 17 of them and they are deeper into the weeds.

Jason:

Of these crypto businesses than anybody in the world.

Jason:

They're deeper in than a lot of the founders.

Jason:

They're deeper in than their own investors.

Jason:

They're deeper in than employees who work at the businesses.

Jason:

And so what started happening is the blue chip brands.

Jason:

You know, Solana, Arbitrum, Uniswap, Optimism, Polygon, Athena Labs, like the really, really, really blue chip folks started asking us, they would come to us and say, Hey, you've got these analysts and your whole team is like deeper into the weeds.

Jason:

Then like half my company, these were the founders asking us these things.

Jason:

Can you help me, build an incentive program, build a grants program, help me with my go to market strategy.

Jason:

We started by saying, no, that's, that's actually not what we do, but I appreciate it.

Jason:

And after getting requests from all of these founders, we started saying, Hey, look, we've got these research analysts.

Jason:

Let's take like two or three of them and move them into more of like a services consulting type of business.

Jason:

And.

Jason:

Yeah.

Jason:

I mean, we've, you know, we did that a couple of months ago.

Jason:

We've brought in already seven figures of revenue from that side of the business.

Jason:

It drives the other sides of our business, right?

Jason:

So if someone comes to us and says they need help, we might say, Hey, yes, by the way, on go to market, you should spend money on ads.

Jason:

You should buy ads on our podcast.

Jason:

You should probably sponsor our upcoming conference.

Jason:

you should, your team to get smarter should probably subscribe to our data platform.

Jason:

And yes.

Jason:

We can sell a, you know, 600, 000 consulting project over here.

Jason:

and so that started happening more and more.

Jason:

And then we, we, we formalized it with the launch of block works advisory.

Jason:

So yeah, we think we can bring in several million dollars from it.

Jason:

yeah, next year in 2025

Brian:

And that's totally different, obviously, than the news part.

Brian:

Like, and I wonder where, where do you see the news news part, as part of the model, right?

Brian:

Like, I mean, you said it was like to establish trust, but then I wonder.

Brian:

Is it, is it, does it end up becoming necessary?

Jason:

news, news is at the backbone of the whole business.

Jason:

We, I think about news very differently than.

Jason:

Probably most of our competitors do like, I, I don't think about like breaking news and just covering like press releases and just like news stories.

Jason:

Like, I, I really don't see the value in that anymore.

Jason:

I think, Consumers just go to Twitter for that.

Jason:

And everyone's like, ah, yeah, but Twitter fake news.

Jason:

It's like.

Jason:

People go to Twitter for news.

Jason:

I'm sorry.

Jason:

Like you're just, your business is, is getting rocked by, by Twitter.

Jason:

if you're just in the pure play news business, what I like is more of the podcasting and newsletter business.

Jason:

I think that's a phenomenal business model.

Jason:

And I think if you talk to our journalists, they're some of the smartest people in the whole industry with the most unique takes, but their whole career.

Jason:

They've been told don't have personal opinions.

Jason:

Don't have personal opinions.

Jason:

Just put out the news.

Jason:

Just put out the facts.

Jason:

And, that's just a commoditized business.

Jason:

There's no value in that.

Jason:

And so what we are training and trying to teach and push our journalists to do is, Hey, you, you know, those unique opinions that you have, you know, how you have like really insightful takes, and you're deeper into like this part of the ecosystem than anyone, Hey, share that, that's a good thing to share, actually, that that's.

Jason:

Where our content is unique.

Jason:

not in our, you know, I don't know, news formatting, like, you know, smart brevity or something.

Jason:

I don't know.

Brian:

And it also seems like you're, you're, you're starting to build franchises, right?

Jason:

That's the other thing is, the dangerous place for media businesses is this like messy middle once, you know, you can have a lot of success scaling or starting a media business.

Jason:

Pretty easy to start a digital media business.

Jason:

The hard part becomes 50 employees and you're scaling past, you know, 20, 25, 30 million in revenue, you're Because you kind of enter this messy middle of like size where you're not big, like the New York times and Bloomberg, but you're not small where you're just like creating content that nobody else, like you're, you're, you're so niche.

Jason:

So we started to enter that messy middle and I was like, this is the danger zone.

Jason:

So what we started, what we actually did is we, in January completely pivoted the news and editorial and content strategy of the business.

Jason:

Broke the whole thing into what we call house, a house of brands.

Jason:

So we now have several different brands inside of block works that are targeted around very specific communities.

Jason:

So there are these really diehard communities inside of crypto that if you're outside of crypto, it all looks like one big crypto bubble or crypto bubbles, probably the wrong word there.

Jason:

But, anyways, one, one

Jason:

big.

Brian:

it looks that way

Jason:

Maybe it is all one big

Jason:

bubble in many forms of the word bubble.

Jason:

Yeah.

Jason:

inside of crypto, there's all these super unique factions of people and those factions are like diehard, almost like cult personalities inside of these communities.

Jason:

So we have built sub brands around these diehard cult communities.

Jason:

So there's the Solana community.

Jason:

They love Solana.

Jason:

If you bring up Ethereum.

Jason:

They don't want to talk to you diehard salon people.

Jason:

So we have a brand called Lightspeed.

Jason:

It's a podcast called Lightspeed.

Jason:

There's a newsletter called Lightspeed.

Jason:

And then we had an in person activation, which was the salon of founder summit hosted by Lightspeed at the permit at permissionless.

Jason:

There's.

Jason:

Xerox research.

Jason:

There's a whole group of like research analysts and kind of like analysts and nerdy people who like to get technical and stuff like that.

Jason:

We have Xerox research podcasts, Xerox research newsletter, and then we had like research, like the research track at the event.

Jason:

So we've got in person activations, podcasts, and newsletters inside of these cult communities with a brand layered on top of them, and that is how.

Jason:

You're asking about like a hundred million in revenue.

Jason:

Like, is that really possible?

Jason:

Like if it was just block works, probably not, probably not.

Jason:

but because we own these brands, that's, that's how we're going to get there.

Brian:

I mean, you have a very large niche.

Brian:

I don't know if, if crypto, would be called a niche, but, within that, I mean, you just end up like, you know, creating, you know, niches and

Jason:

that's the thing.

Jason:

It's like, you know, Stripe just acquired a stable coin company for 1.

Jason:

1 billion.

Jason:

Today.

Jason:

I think it's the largest acquisition in Stripe's history.

Jason:

Maybe.

Jason:

or maybe it's large, some sort of one of their largest, I think maybe their largest, there's a whole community growing around like payments and stable coins.

Jason:

So like when we things see things like this, it's like, All right.

Jason:

Probably not big enough yet, but like, boom, beautiful.

Jason:

So like community and audience to build a media brand around.

Jason:

And

Brian:

So then

Brian:

Blockworks is the, is the umbrella brand

Jason:

you start to look a bit like, you know, it's kind of the best parts of barstool sports combined with the best parts of industry dive combined with the best parts of like, you know, Like Informa's got all their, like Informa's not hosting Informa conferences.

Jason:

They're hosting like conferences around sub like small communities.

Jason:

That's actually what they're doing.

Jason:

Right.

Jason:

And so that's, that's our, that's our, that's

Brian:

but Informa is like a corporate brand.

Brian:

you know, like it's not a brand that.

Jason:

Yeah.

Jason:

Nobody's plugged into Informa.

Jason:

Nobody's that's probably a bad example, but, in the same like industry dive, I mean, Sean has been one of our advisors since day one, maybe No, it's a couple of years into the business.

Jason:

We started working with Sean, but he's, I mean, he's been more helpful than, I mean, he's on the short list of just people who have been really influential and helpful for, for Blockworks.

Jason:

And it's

Brian:

it's interesting the way, the way they did it and in some ways like Bloomberg is this way, right.

Brian:

It's like Bloomberg, this Bloomberg, it's a dominant brand, right.

Brian:

Whereas the house of brands is slightly different approach from like, just the brand architecture and that like, you have unique identities and I guess they're like almost endorsed brands, right.

Brian:

Because No, they're not endorsed.

Jason:

it's this, we talk about the stamp of approval.

Jason:

Like you could go launch a salon brand tomorrow.

Jason:

You're Brian.

Jason:

You love Solana go launch this a lot of rent.

Jason:

Boom.

Jason:

We've given it the block work stamp of approval.

Jason:

Like this is a trusted

Jason:

brand.

Jason:

And by the way, to tie the whole conversation back together, it's like the reason these, venture backed media businesses didn't work is a media company is nothing but trust.

Jason:

Like in one word, media is just trust.

Jason:

And if you throw too much venture dollars to, you can't use venture dollars to buy trust, right?

Jason:

You can use venture dollars to buy distribution and customers.

Jason:

In audience, but you can't buy trust.

Jason:

And so that's why I like, it really does just take several years to build one of these things.

Brian:

let's check in another couple years, Jason.

Brian:

Thank

Jason:

Oh yeah.

Jason:

No pressure.

Jason:

No, I got two boards and I got the board and then I got Brian.

Jason:

So, yeah,

Brian:

Okay, well, I think the other board's gonna be harder.

Brian:

All right, thanks.

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