This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights… If you want to learn more, keep an eye out on our site for more interviews. Today’s Three on Three is with Michael Crosby, the Chief Operating Officer at The Deal, part of TheStreet, Inc.
Q: When conceiving of a subscription-based model, initiative or product, where should you begin strategically?
A: The answer to this is no different than any business idea. You look for a problem that exists in the marketplace. For us, it comes down to some information gap that exists amongst our clients and prospects.
Secondly, we look to whether we have an answer for that problem. Can we provide insight or analysis the fills that gap? The first two questions are the theory part, and the last two are the monetization ones.
Third, are there users out there that care about having this problem solved in the way we are solving it? And, are there enough of them to scale the revenue? For The Deal, we are fortunate that we serve a client base–bankers, lawyers, fund managers–that traditionally pay for quality information. So, determining information gaps in the marketplace and how we could fill them is the bigger question for our firm.
A: The most exciting one we are working on right now is called “Connections.” Our clients are forever looking for new M&A and restructuring deals. We’re in the business of coming up with ideas for their next deal through our editorial insight. Often, when we write something, our clients want to quickly figure out how to get “connected” with a company mentioned in an article.
“Connections” does just that: It lists how a user is connected to a company or person mentioned in an article. It accomplishes this without requiring the user to enter any information. We are very excited about the service and have a patent pending on it. We are in the process of launching it and client feedback has been phenomenal. This finally answers the question, “How am I connected to that person” directly without a user having to email their entire office.
Q: What advice would you give in terms of approaching subscription models creatively?
A: I believe everything starts from having great product. Whether that is principally your content, data, or application layer, you need some combination of those that a user would deem “must have.” Obsessive focus on the user experience with your product, and understanding how it fits in with their daily workflow is the starting point to ensuring that a user needs to have your service.
Once you have that figured out, getting the right subscription model is based on what you have done in the past; what your competitors are doing; and how valuable you are. One of the toughest things to do is reposition a brand and product to a new subscription model. The bigger the gap, the more work you will need to put into sales and marketing. If your users know you as mostly a free ad-based model with great content, and now you want to be a paid subscription model, you need to do a lot of work to have them change their perception of you. One of the ways The Deal did it, when we shifted from majority ad-based to majority subscription-based, was doing a massive amount of user outreach where we presented a well thought out concept of where we were going. We find clients are great at giving us feedback on incremental change, but if you want to make a major shift, you have to clearly spell out your vision and have them respond to it.
Lastly, you can’t talk to enough people: your team; clients; prospects; industry players; advisors et cetera. Most subscription-based businesses operate in a competitive space so even a great strategy can be ruined by poor execution. Constant communication and belief that you can continually improve – that you are not doing everything perfectly – puts you in position to achieve success.
Michael Crosby is Chief Operating Officer at The Deal, part of TheStreet, Inc. Michael is responsible for strategy and day-to-day operations of The Deal, a transaction information service used by 45,000 bankers, lawyers, hedge fund managers, and private equity professionals. He was instrumental in transforming The Deal’s business from ad-based to a subscription model, achieving 22 consecutive quarters of revenue growth and guiding The Deal’s sale to TheStreet, Inc. Previously, Michael was a Managing Director at Thomson Reuters where he was responsible for starting their hedge fund business and transforming their buyside client model.
Note: This Q&A is part of OPA’s “Three on Three” series where we ask three industry executives the same three questions on a topic to uncover actionable insights.
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