Profitability or Bust: Introducing Pando Patrons!

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Almost exactly four months ago, we announced that Pando was moving from an ad-supported model to one primarily supported by subscribers.

Since then, many of the trends we cited as catalysts for the move have become even more evident: Dwindling independent voices covering the tech industry, signs of an impending ad-pocolypse and – above all – the continuing increase in the power and wealth of tech companies.

Worries of a downturn notwithstanding, tech companies and their CEOs are only getting richer and more powerful. As Aaron Levie pointed out, in 2005 the top five tech companies were worth a combined $ 760 billion. Today, the top five are worth $ 2.15 trillion.

So how are we doing in our mission to Speak Truth to that New Power? According to our recent reader survey: Pretty well. We’ll publish the full results soon, but here’s a preview screen grab of some (unfiltered) responses from the question “What one thing do you like most about Pando?”

A better performance indicator is the fact that the people we write about continue to threaten to sue us out of existence. In the past two years we’ve faced down over $ 300m in threatened lawsuits, and haven’t lost a single one. Still, simply responding to those who would silence our reporting is a costly business, not least because we promise to indemnify our writers, for life, against any lawsuits resulting from their Pando reporting.

Then there are the non-financial threats: The most high profile one being, of course, the time a senior Uber executive boasted of a plan to “go after” Sarah’s family in order to stop us reporting on the company. Aside from the armed guards who briefly had to escort Sarah and her kids to Yo Gabba Gabba Live, we kept working exactly as before. 

Anyone confused why tech companies would threaten such extreme steps to silence journalism need only refer back to that $ 2.15 trillion number And that’s just five companies. With so much to lose, the cost of a nuisance lawsuit — or “spending a million dollars to hire four top opposition researchers” to “target” reporters’ families — starts to look like chump change.   

Still, no matter what’s been thrown at us, we’ve kept a simple promise to our readers: We won’t back down, and we won’t quit or put ourselves up for sale just because the going gets tough. The next year is going to be a brutal year for tech companies – likely prompting all kinds of desperate boardroom behavior – and we’ll be right there, covering the worst of it.

There’s literally only one thing capable of stopping us: Running out of money.

An expensive business…

Journalism is expensive, and that’s before we have to build a war chest to safeguard against legal (and other) threats. Our goal, as we explained back in June, is to sign up the 5,000 paying members required to cover the cost of our newsroom operations, and so make our journalism entirely independent from ad funding. As of this morning, with a little over two months left of the year, the membership counter sits at a fraction over 3,100.

Of course we’re delighted to be so close to reaching our target, and grateful that so many of you believe in what we’re doing. But, with 1,900 new members still to gain before we become finanically sustainable, what we’re definitely not is complacent. The theme of the next few months is profitability or bust.

Today we announce our newest plan to help get closer to our goal. And – you guessed it! – we really need your help.

Profitability or Bust…

Another thing we learned from the reader survey is that there are two groups of members, or potential members, who are frustrated by our current membership options. 

The first is would-be members who, for one reason or another, can’t justify spending $ 10 a month on Pando. That group includes bootstrapped founders, students, those who are unemployed and, of course, many of the underpaid workers who make up the crowdsharing economy. Ironically, those are many of the same readers who stand to gain the most from Pando’s reporting. 

Some of you suggested that we might offer a cheaper or pay-as-you-go membership option. That seemed like a good idea until we realized that anyone who can’t afford to give us $ 10 a month, probably shouldn’t have to pay us anything at all. Journalism certainly shouldn’t be anyone’s unaffordable luxury.

By contrast, a second group made itself known in the survey: Members who would be very happy to pay more – in some cases a lot more – than $ 100 a year to support Pando’s journalism and to help keep us in business. More than one respondent asked if we could double or even triple their yearly payment. Somehow that didn’t seem fair either, nor did any kind of two-tier VIP membership. A Pando member should be a Pando member.

But thinking about the two groups gave us an idea: What if the people who are keen to pay more could sponsor free memberships for those who can’t afford to pay the standard membership fee?

Imagine a kind of Pando Patron program where for, say, $ 500 a year, individuals or companies could buy themselves an annual membership while at the same time sponsoring four free annual memberships for others. Much like the Conflict Tower idea we came up with at NSFWCORP, each Pando Patron could have their face or logo added to a public page of Patrons, showing their support for independent journalism.

The sponsored memberships would be given out in batches to deserving groups: College students, library users, sharing economy workers – whoever would seem to benefit most from access to our reporting. We’d also have a pool where anyone who wants a free membership could put themselves on a wait list.

Actually, don’t imagine any of that, because we built it, and it launches today.

Introducing: Pando Patrons

You can grab one of the 100 available Pando Patron slots right now for “just” $ 500. Your payment gets you a full one year membership to Pando (or an additional year added to your current subscription) and also pays for four more subscriptions for those who can’t afford them. You have the option to display your picture/logo, bio/promo message and a link on the Patron page, or you can opt to remain anonymous.

(For an optional additional $ 500, our in-house illustrator Brad Jonas will create a custom profile illustration for you, for use on the Patron page and anywhere else you like.)

Most importantly of all, every new Patron gets us five memberships closer to financial sustainability, at a time when our kind of reporting on the tech industry is more important than ever.

There are 100 Patron slots available and, once they’re all sold, that’s it for an entire year. No more will be made available.  

Honestly we have absolutely no idea how popular this will be. It’s one thing for people to say they want to support us by paying more, but quite another for anyone to actually do it. If we sell half a dozen, we’ll be pleasantly surprised. Fifty and we’ll be delighted. If we sell out all 100, that will mean an additional $ 50,000 in revenue and 500 more subscribers towards our target.  

Today we’re also opening registration for the sponsored membership giveaway. There are two ways to apply for a sponsored membership: The first, and easiest, is to sign up to our daily email newsletter using the box at the bottom of the Patron page. We’ll be giving away four sponsored annual memberships every day, starting Monday.

The second way, if you represent a group that would like to request more than one sponsored membership, is to drop us a note at [email protected] explaining how many memberships you’d like and for what group or institution. This is the option to use if you’re representing a school, a non-profit or some other organization that could benefit from free Pando memberships.

We’ll also be awarding batches of sponsored memberships to groups who we think might benefit. If you have suggestions on that front, email [email protected] and let us know who you think deserves free Pando membership.

To start the ball rolling…

When our ad sales team told Braintree – who sponsored our “Don’t Be Awful” event earlier this year –about our “profitability or bust” plans, CEO Bill Ready said his team would love to be involved.

Long story short: Not only has Braintree agreed to help us build some exciting new payment products for Pando to get us closer to break-even (more on that soon), but they’ve also agreed to become our first “Super Patron,” sponsoring a frankly ridiculous 1,000 free annual memberships. You’ll notice their logo in one of the big “Super Patron” squares at the top of the Patron page.

(If you’re interested in grabbing one of the remaining three “Super Patron” squares by sponsoring 100 subscriptions or more, email [email protected] and we’ll tell you how. Super Patrons also get free subscriptions for their employees.)

Ok, that’s enough explanation. Let’s see how this thing goes.

Whether you’re a regular member, a newly-minted Pando Patron or the recipient of a sponsored subscription, we’re really glad to have you here. It’s usually a flattering exaggeration when people say “we couldn’t do this without you,” but in the case of Pando’s ongoing mission to Speak Truth to the New Power, it’s literally true.

Thank you for all of your support so far. We really, really can’t do this without you.

Become a Pando Patron

SPONSOR MESSAGE: We handle the payments. You handle everything else. Learn more about Braintree.

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25k dresses: Weddington Way finds growth and profitability by adding social shopping to the wedding ecommerce brew

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wedding

On any given year, there are 2.5 million weddings in the United States. At an average cost of $ 25,200 per event, that’s $ 63 billion in commerce. But weddings remain one of the few multi-billion dollar industries yet to be disrupted by technology. Brides and grooms plan their weddings much like their parents did. Sure there are minor tweaks like Pinterest inspiration boards, email RSVPs, and the occasional photo sharing platform, but when it comes to money changing hands, little has changed.

It hasn’t been for lack of trying. Millions in venture capital and tens of thousands of woman- and man-hours have been poured into this problem, but with largely underwhelming results. The problem, according to Ilana Stern, a former Bloomingdales buyer and founder of bridesmaids dress marketplace Weddington Way, is that most market entrants have attempted to solve weddings as a commerce issue rather than a social problem. Sure brides and grooms need tools to discover and consume wedding-related content and merchandise, but simply offering a prettier and fancier digital mousetrap, even if it’s arguably “better,” has proven inadequate to disrupt the legacy offline industry.

Weddington Way’s secret weapon has been to incorporate social elements into its commerce experience and, in the process, extend its focus beyond brides. It will always be the bride’s day, but as anyone who has ever seen behind the scenes of a wedding can attest, it takes an army. Moreover, brides want to share the decision making burden and overall enjoyment (and madness) of this process with their closest friends and family. Weddington Way addresses this by letting its users browse the site together, sharing comments and messages about merchandise, and making decisions collaboratively.

“This is how millennials live their lives,” Stern says. “The way we communicate, connect, and consume media is different than our parents did – so why hasn’t wedding planning changed?”

This wasn’t always obvious. When Weddington Way started, Stern and her team were focused on protecting their brides’ privacy and control, and initially locked down much of the social toolset that is available today. Sharing was only one-directional, from bride to other group members, but not the inverse. The loud and clear customer feedback was that brides wanted as much input as possible and were bypassing the site’s design by sharing login credentials. Stern was quick to make the necessary change in user experience.

Engaging other wedding participants, specifically bridesmaids, has a secondary benefit for Weddington Way that serves to set the company apart from other weddings-focused startups. While brides are generally thought of as one-time customers, bridesmaids often participate in multiple weddings within a multi-year period (typically their late 20’s and early 30’s), including their own. As a result, Weddington Way’s cost of customer acquisition and lifetime customer value is much more attractive than its industry peers, Stern says. Also, because the company sells four dresses to the average wedding, the first transaction resulting from the acquisition of a single bride is rather large.

The company sold more than 25,000 dresses in 2013, grossing more than $ 5 million in revenue for the year, Stern says, calling it a “real business.” Under three months into the new year and it’s operating at a $ 10 million annualized run rate. The company is cash flow positive but remains more focused on growth than profitability. Another unique element of this business is the ability to forecast sales with great precision. Because Stern knows her brides’ wedding date, that the average purchase is made eight months before the wedding, and her purchase conversion rate, she can map out her existing pipeline.

Other product features have contributed to Weddington Way’s success. Stern points to the site having the largest assortment of wedding fashions online “shoppable in the way brides think,” meaning according to color shade, aesthetic, and theme. The site also sends new users fabric swatches to deliver a tactile solution missing in so many ecommerce experiences and offers every user access to a personalized stylist. But it’s the platform’s collaborative social experience that has done the most to set it apart from the dozens of wedding etailers that have come before.

Weddington Way’s big new initiative is the launch of its private label collection. The company is starting with a few select styles in six colors and a wide size range. In this way, it’s able to offer its customers more flexibility, quicker fulfillment, more affordable pricing, and more flexible returns than is available through existing national retail and specialty boutique brands it traditionally carries. It also lets the company reduce inventory risk and shorten product cycles.

Stern believes her team has made some smart design decisions that will make these dresses favorites even among competition from better known brands. This includes using a custom couture fabric – it’s soft and matte, rather than the stiff and shiny bridesmaid standard – and incorporating pockets into all designs. It’s the small things like somewhere to put your lipgloss and cell phone that can make or break the day, she says.

Feedback from early customers suggests this private label could be a win-win. But manufacturing brings with it its own risks and challenges. Just because Weddington Way has proven itself capable of acquiring online shoppers and delivers a social shopping experience doesn’t mean it will succeed at creating product from scratch and efficiently delivering it to consumers. Stern is wise to start slowly and build up its private label business over time. The last thing her company can afford is to get distracted or otherwise interfere with the good thing it has going.

As Weddington Way expands its brand awareness and grows its list of satisfied customers, Stern intends to broaden the scope to become a comprehensive wedding fashion platform – that could include things like footwear, jewelry, and accessories for bridesmaids and even expanding to serve brides and groom fashion needs directly. Existing weddings ecommerce players like The Knot and Loverly are more akin to lead-generation sites, driving traffic to third-parties rather than owning the entire vertical experience. The company’s true competition is not other startups and ecommerce players but offline retailers and glossy print publications that have for decades served the needs of brides and wedding planners.

Stern has grown the Weddington Way team to 20 people, all based in San Francisco near Stern’s business school alma mater Stanford . The company raised a $ 2.5 million Seed round in 2011 (structured as a convertible note) with backers including Battery Ventures, Felicis Ventures, Trinity Ventures, Bonobos founder Andy Dunn, and other angels. A Seed extension last summer (of undisclosed size) brought on more cash and strategic advisory muscle, including JetBlue Chairman Joel Peterson and Asurion founder Jim Ellis. Stern anticipates heading out for a Series A round later this year.

Weddington Way is still early in its lifecycle, and while the data looks good today it has a long way to go to prove that this could be a sizable, sustainable business. History proves that the wedding industry isn’t one that is easily disrupted. But tackling the problem from a social-first perspective makes Weddington Way unique within the category.

Judging by early results, it may be enough of a wrinkle to flip the script on “wed-tech” and prove there’s money to be made by bringing wedding commerce online.

[Image via ThinkStock]

  1. Weddington Way, a social shopping site for wedding parties, is the fastest growing ecommerce business in the $ 14B wedding fashion industry (a beachhead into the $ 100B U.S. wedding market). Weddington Way uniquely solves the problem of outfitting bridesmaids by offering the largest assortment of dresses that are easy to shop in the way a bride thinks (by color palette), a collaborative shopping experience for the group (through a shared online showroom where everyone can add dresses, like and comment on them and track each other’s activity) and data-driven personalization to tailor the experience to each customer and group of friends (across channels – desktop, mobile, email, text, etc.).

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