I was on Cheddar TV, a Seeking Alpha partner, yesterday. They were curious about the Investor Marketplace. Here's the video (fast forward to 54 minutes):
When we quietly launched the Seeking Alpha Investor Marketplace a bit less than two years ago, I made a deal with the small team who built it: When we hit $100K in annual recurring revenue ("ARR"), we'll go out for dinner.
When we ended up going to dinner the week following the launch, I thought we might be on to something.
Fast forward two years:
- Over 100 SA authors have now launched Marketplace services. 20 new contributors joined in March!
- Combined, they are doing $3.2M in ARR! We split revenues 75% (them) / 25% (us).
- 9 authors have exceeded $100K in ARR.
- More than half of the authors have 20+ subscribers.
- More than 90% of reviews are 5-star, with reviews representing more than 10% of active subscribers. For sample reviews on our top 5 services, see 1, 2, 3, 4, 5.
In 2011, Seeking Alpha began paying its authors. The model has evolved over time. Today we pay authors $35 per article published plus $10 per thousand desktop views. For an article that gets, say, 5K pageviews, the author earns $85.
To my knowledge there is no other open platform that has an author incentive program to rival ours. We are proud of it, and closely track how much we pay out to SA authors every year. It's currently about $4M.
Still, I felt we could do more.
Years ago, we met with a large publicly-traded company that had expressed an interest in investing in SA (it didn't work out, but that's a story for another time). They asked us an interesting question that I've never forgotten: When will SA pay enough for its authors (=investment analysts) that it will compete with Wall Street for talent? At the time, it seemed like an impossible aspiration.
Today, not so much.
Within a few months, payments to Marketplace authors will leapfrog our traditional author payments. By year end, we expect Marketplace authors will be earning more than $7M in ARR. And it looks like we will have our first "million dollar service" within the year.
That's $7 million that will go to support high-quality equity research. Many SA authors invest intense amounts of time and energy in what they do, and it's very rewarding to see them succeed like this.
Why has Marketplace been so successful, where other paid services have struggled?
There are a number of factors, but there's one that stands out above the rest: It's all about the authors and the communities they've built.
Content does not "want to be free" as the popular saying goes. People gladly pay for high-value content, especially when it helps them make money. But "high-value content" is tricky to quantify. Instead of trying to figure it out ourselves, we crowdsourced the challenge. And, as has been our experience, SA authors have done a terrific job of figuring out what delivers real value that users will gladly pay for. Look no further than the brief descriptions of the 100+ Marketplace services and you'll find a dazzling and sometimes surprising variety of value-added offerings.
Which is why I believe the Marketplace has implications for the future of high-quality content and community. "Content wants to be free" is not a philosophy. It's a poorly-articulated reflection of the fact that the internet has made it so easy for anyone to self-publish that we are now flooded with lightweight content and wouldn't dream of paying for it.
People have always paid for value, and will continue to do so - content or otherwise. But the value must be real, and the value proposition must be simple and direct. The Marketplace model, which forces authors to build real followings on Seeking Alpha, and then offer those followers membership in their private community for a monthly fee, has no shortcuts. Take your readers seriously, and understand what they value, or you fail.
I would not pay for the vast majority of what I read on the internet (and for 0% of what I find on my Facebook feed). But there are some things that I gladly pay for. Without fail, it's about the author. Gain my trust, and deliver consistent value, and you've got my credit card.
So for those who aspire to make a living through their writing and online presence, know this: it's doable, but there are no shortcuts. Focus on your users, deliver value every day, improve and iterate relentlessly.
In the comments, I'd love to hear what you think about the Marketplace. I'll be watching comments closely, so feel free to ask any questions there and we'll answer them.
If you're an SA author and would like to consider hosting a Marketplace service, send us a brief pitch to email@example.com and we'll get back to you. And if you'd like to become an SA author, contact us at firstname.lastname@example.org.