Solving for [Medium’s Business Model] Part 1
Preface: we began writing this article a few months ago, within a few weeks of Medium announcing it’s business troubles. However, time and life distraction left it in the unpublished pile. Since then, a lot of water has flowed under the Medium bridge, and yet the ideas in this piece still hold. We hope you enjoy the read
Bruce Wayne is dangling your mum off a skyscraper, he would drop her to the abyss unless you solve Medium’s business issues right now. What do you do? Huh? … Let’s backtrack.
Medium, the platform on which you read this (oh so meta) has a problem: it is not making money. It is one of the hottest content creation and publishing platforms out there, a default for most people who read and write about design, tech and politics. But, after being around for about 5 years and raising more than $130 million, it still hasn’t established a sustainable business model. Things have gotten so bad that it recently had to lay off 1/3 of its staff in order to keep the company afloat. Trying to solve the problem, Medium announced that it will try out a subscription model of sort [which it has since the writing of this article]. But, things are far from certain and putting up yet another online pay-wall surely does not sound like the promise Medium’s founders have made of ‘fixing the broken publishing model’
Two friends, we are sitting at the pool, talking shit, exploring business problems and concepts . The conversation takes a turn and we begin talking about solving big problems for companies. Genuinely we look at companies and industries we care and like. Such conversations often lead us to the likes of wikipedia, virtual reality and social entrepreneurship. This time the culprit is Medium, a platform that became a pillar for our education and embodying an ethos we cherish — “push-button publishing for the people”.
Hence comes about a thought experiment: “Bruce Wayne is dangling your mum off a skyscraper, he would drop her to the abyss unless you solve Medium’s business issues right now. What do you do?”
With our mother’s lives hypothetically on the line, our brains kicked into gear.
A few bad apples
The first bad idea came out pretty quickly, as bad ideas usually do; your mind’s way of getting rid of what is on the surface. What would it look like if Medium took a ‘99-designs’ approach for content creation. Businesses needing content for their marketing or blogs could post up a job and Medium could use its community of writers to bid for the job, with Medium clipping a ticket. A platform of this sort could indeed work however, such action moves away too far from Medium’s aim and for lack of a better word — feeling. It will require content creators to do something they are not naturally doing already. As a rule of thumb, you do not want to get people to do something that they don’t naturally do already. Something like this will probably bring about issues and frustrations and result in low engagement. A band-aid solution at best.
The second bad idea followed soon after. Could we use Medium to fix all existing, poorly written and designed content on the web? creating a more beautifully written web. People could apply for medium writers to ‘do-up’ their already existing content pages. Medium could even make use of certain algorithm to crawl the net in search of badly written content and reach out to the owners of the real estate to see if they would like it fixed. Not all too unlike the first idea, this one was not at all more inspiring.
As we discussed each idea and their related issues, a theme began to emerge, we were trying to work out how to leverage Medium’s existing assets. Asset utilising is naturally a good way in, but to do something truly interesting, we would have to pick-up our game.
A better idea: Medium University
In came the remains of a conversation we had a few nights earlier, about the broken model of universities. At the time, we remarked on how strange it was that universities have failed to develop a lifetime value (LTV) for their students. They knock them up with a one-off degree fee and move on to the next student, rather than develop some kind of an on-going subscription model where students pay for on-going trickles of education, for pretty much ever.
And that got us thinking — could Medium serve as that platform? A place for ongoing education
Technically speaking, it is already within the education space. Many of Medium’s readers (us included) use it to stay up to date and continuously learn. We read, share and discuss content from medium all the time, not unlike uni students discussing lecture content. Likewise, many of its contributors are thought leaders in their field who are out there, pushing the limits of what we know, finding a moment here and there to write. There appears to be a match between Medium and the education space, but is there really a need? Is this indeed a problem people are looking to solve?
Nano-degrees- so hot right now
For those not familiar with the term, nano degrees, or Moocs (Massive open online courses), are short online courses, where students can up-skill themselves/learn a particular topic, often offered for free or for a relatively low cost. They are accessible and they are on the rise.
As we speak, a few good friends are completing their month long courses on a whole plethora of topics from coding and design, to decision making and philosophy. Why do they do it? A quick facebook question to our networks suggested a few reasons: a strive to learn, a quickly changing workforce requiring an ever constant up-skilled staff, the intangibility of long and expensive degrees and simply the availability of great content. The need for ongoing education appears to be there, at least on the macro level. Zooming in onto medium’s eco-system we see the same trend. As mentioned above, people are coming to learn. They are sharing good pieces amongst them and discuss them at length. Offering a medium nano degree would just build upon this behaviour in an organised way. Taking an existing behaviour and productising it, arguably the best way to creating new products.
Let’s talk Tacheles, how is it going to work?
Do we really see Medium spending the time and effort creating curriculums and hiring teachers and lecturers?
We are not sure that such a thing is really required.
Remember the previous comment about existing assets? When looked through properly, Medium appears to already have all (ok most..) that it needs. It has quality content on specific topics going back a few years which could work as its course reading material. It also has a community of contributors who could double-up as educators. Most importantly, it has dedicated community of readers, its long term education-thirsty students. All it has to do, is organise itself a little.
Before we outline how the Medium University would work exactly, let us just delve a bit further into the basic components of a good education. One could argue that at its core, a good education is made of the following parts:
1. Learning a new piece of knowledge — the awareness of a new piece of content to consider.
2. Interacting with new knowledge- exploring it from various angles.
3. Questioning the new knowledge- delving deeper, challenging it and understanding its nature.
4. Synthesising, applying or building upon this piece of knowledge- building upon the work of others.
There could be many ways of doing so, from coursework to classes, videos to work experience but, at its core, all education is made up of these core parts. Here are a few simple ways that Medium could do so too.
Welcome to the 2017 January cohort of design based innovation
Let’s imagine that you and 100 other students have applied to take part in Medium’s cohort on design based innovation, looking to learn from the latest thought leaders on the topic.
Medium could simply collect the best 10–20 pieces of writing from the past 12 months and these will become its course material, content you must read, broken into a period of 4 weeks. Not a very hard task for medium, as it puts together such lists at the end of each year already. These will become the ‘new pieces of knowledge’ to introduce students to.
Medium could group together students in its cohort and drop them into an online conversation where their goal would be to discuss the content they have been exposed to and their opinions of it. It could group people according to location, connecting you to people near by, or it could connect people in opposite locations, putting students from around the world in touch with one another. Conversations such as these could offer as the method for interacting with the new content and considering it from various perspectives.
Educators — Q&A With Contributors
Medium does not need to run proper classes. It would be enough to find a handful of the top contributors and ask them to participate in a series of online Q&As or AMAs (ask me anything) with students. Imagine a weekly session where students spend 1–2 hours with the content creators, asking them questions about their respective writing pieces or their work in general. Already, a fascinating conversation could emerge around such questions. This could be Medium’s way to offer a space for students to question the nature of the material at hand and delve deeper into it by the questioning the contributor at hand.
End of Course Writing Piece
Imagine that at the end of each course all students must write about the content they have learnt and interacted with. The approach would be unstructured, where students could chose whatever direction they would like. For example, they could write an opinion piece about the subject, synthesise information across a few pieces of work, apply ideas they read about to a case study, suggest their own tools and approaches, and the list goes on…
This kind of unstructured, self selected content writing is typical of Problem Based Learning (PBL) educational frameworks where the freedom to be unstructured pushes students to be more creative and self directive. As for our educational recipe, an end-of-course-writing-piece could satisfy the last component — building upon previous knowledge. In fact it could provide quite interesting synergy; imagine if all these new pieces of writing would have to be published, adding ever more content on the topic within the Medium eco-system. Some which could even become the content for future courses.
With the 4 basic components of education made tangible, let’s take things a step further, what graduating a degree may look like and what value may it add?
I Graduated, Now What?
Upon graduating, participants would be issued a confirmation of graduating paper. Just like with all other degrees, this will confirm that they have indeed participated in the course and successfully completed it. In a society such as ours, one that constantly looks for external indicators of validation, it will provide some proof that this person has some background on the topic.
Phrased a bit more simply, a graduate could add this new degree to their CV and LinkedIn Profile. When they go for a job interview and are asked, “hey mate, what do you know of design based innovation?” they could say that [amongst everything else they have done and studied] they have completed a Medium University nano degree, one that required them to read the best Medium pieces on the topic from the past 12 months, most likely some of the latest most boundary-pushing pieces on the topic in general. They also spent time participating in weekly sessions with some of the world’s thought leaders on the topic, continued those discussions with fellow professionals from around the globe and then built upon that knowledge by writing and publishing their own work. As an addition to any other valuable background they may bring with them to the table, a Medium Nano degree seems to have the potential of adding one hell of a credential piece.
Key approaches in the system:
With the basic degree components and the aftermath of having such a degree in the job market made tangible, let us go back to the degree design and explore the over-arching approach
Away From Standardised Tests
The modern education system as a whole is cursed with an obsession for measuring. Often it measures the wrong thing and even when it measures the ‘right’ thing, it instead shifts education towards a mastering of the mark rather than a mastering of the learning. Medium, being a supplementary education system, i.e. an ongoing education platform post existing knowledge platforms, does not have to fall into this trap. It does not have the pressure of being measurable, and as long as it creates the space for the core education components to take root — and as long as people embrace them and feel that they are learning — it can play the game according to its own rules.
In fact if we wanted to play around with metrics and quality control we could utilise the metrics that Medium already makes use of today, such as user engagement and user rating. Similar to Reddit, if people see value in a piece of work it could be given a higher value. The end of the course publications could be published by Medium as the work of the class of 2017 and the user engagement and rating could identify which one is of higher value. The authors of the highest rated pieces of work could be invited to contribute or participate as educators in the following cohort.
Medium’s current dwindling resources could benefit from a minimum input and maximum output approach. A combination of human and machine work could allow for this. Almost everything suggested above could be automated. The reading list could be created based on an initial filtering by an algorithm (according to engagement and tags) and then be approved by an editor. The reading group could be aumaticlly generated according to digital and physical locations. The Q&A would need to be organised but it will be greatly self run and likewise the end of course writing piece could be automated and self run. The creation of a Medium University would require some new interface creation and some fine-tuning, but once established, it could run almost on its own.
Let the numbers do the talking
After assessing the match with Medium’s value, the need in the market, and the nature of the beast, its probably time to talk business. Is Medium University an appropriate solution for solving Medium’s Business Needs — Can it make money?
To solve for this at a simple level, let us just apply a-back-of-the-napkin calculation — a quick way to estimate market size and margin to identify potential profit. If the numbers are too small, it is probably not that interesting. If the numbers are large, it makes for a case for further exploration.
An equation for revenue
(Course Cost)x(Student #)x(# of Topics)x(# of months)= Revenue
- Cost of the course: Let’s place the cost of the course at $100, relatively low on the nano degree cost spectrum.
- Number of students: Lets say 100 per course
- Number of topics: say about 10
- Number of months: say 10 (i.e. running 10 cohorts, 1 every month).
The revenue calculation would be: 100 x 100 x 10 x 10= $1,000,000
$1 million is not a shy number, but we could probably do better.
A Bit Bolder With Our Assumptions: Say we keep the cost at 100, but we increase the # of student to 1k (a common number amongst Moocs), and the topics to 30 (medium has a lot of topics). The equation now sits at: 100*1000*30*10= $30,000,000. Already looking much better.
And if we estimate things a bit further. Say at 50 topics and at 12 months, we get to the likes of $60,000,000
Talking About Costs: Costs at this point would be minimal. Running costs would include, hosting, revenue to contributors (both readership and Q&A sessions), ongoing marketing and the work of a related team that will look after the operation, making sure its running smoothly. There will also be the one time cost of the development of the system and its related interfaces (with some ongoing maintenance and the occasional improvement and tweaking). Just for the sake of estimation lets say it would cost around 10 million, a huge number all considered, but hey we have to throw money on something.
Profits $$$: Take revenue and costs and we end up with a yearly gross estimate of about $50 million on a good year — about a third of what medium has so far raised from investors. And that is just with a very straight forward business model, without further complication and additions that surely could be built upon the platform. Online education is a huge industry, if you can crack it, without, you could potentially create a pretty good model for publishing :). A real, new approach within the publishing industry.
A First Draft
As per true design practice and lean startup nature, the concept as it is illustrated above — The Medium University — is but an initial draft. It is a first peg in the ground that further testing and fleshing-out could turn into something truly spectacular.
There is a limit to the time we had to invest in fleshing out the concept, and more so, there is a limit to what you would have read. But you get the gist, the direction is to turn Medium into an ongoing educational platform, augmenting existing platforms; where university graduates, autodidacts and professionals could get their day-to-day educational fix. The components explored above (reading content, study groups, Q&As and end of course writing piece) are but a few that could bring the system to life. Further fleshing out of those, and testing them with users could make for a pretty nifty MVP that if it hit the Product-Market-Fit point, could be further developed and become a pivotal part of Medium’s Eco-System.
We believe in Medium’s right to exist and we cherish the value it keeps adding to our day to day‘s pursuit of knowledge. Whether it is through pursuing this model or another, we hope that Medium will manage to crack its business issues and succeed in it’s vision of reimagining the publishing model. We hope the concept presented here be of help.
Afterword: Bringing The Medium University to Life
Talking and writing about the concept we became quite passionate about it and truly believe that it has value to be further explored. If you would like us to further explore the concept in another piece and perhaps even put together a basic mock-up to present to Medium, please let us know in the comments below. Oh and if you liked the piece, get ready, we plan to bring many more of these to life in the coming months. We Are Innovation Assassins; our aim is to Guide (the development of good concepts) & Kill (bad ones).