Jason Yanowitz on the Many Stages of Blockworks

Jacob: Let’s start at the genesis of it all. How did you find your way to launching a media company about crypto and what prompted you to jump in?

Jason Yanowitz: First things first, thanks for having me on the show, Jacob. Unlike most of the media operators that you’ve had in the past, I would call it for lack of a better word, we did this whole media thing as backwards. It was actually end of 2017, let’s call it September, October. I ended up going– I was working in venture at the time, and then at this data analytics company. I went to the Sunday event, and I had been into the Bitcoin space. I lived in Budapest and the Hungarian students out there love Bitcoin. I came to New York. I ended up going to the Sunday event, and I get there to hear about blockchain. I get there about 45 minutes early.

I listened to this guy, I think his name was Sam, speak about launching a consulting business. I get really fired up about a consulting side hustle. I listened to two hours of, I think it was this woman, Amanda Gutterman talk from who is the CMO of Consensus, talk about Ethereum changing the world. I come home, I was living with a few buddies at the time. I tell them that I’m launching an advisory firm to help Fortune 500s get into the blockchain space. That was the start of what originally was called Blockworks Advisors. We can get into more about how that whole thing transformed, but that was the genesis day, I guess you’d call it.

Jacob: Blockworks started as an advisory business. You expanded into events, then you added a podcast network, and then just recently you launched a news organization. Can you walk through the progression of the company and how it’s evolved over time?

Jason: Of course, yes. Going back to that one day I come home, I tell my buddies that I’m going to launch this advisory firm. I had one friend who was working in consulting, who’s now our co-founder, Michael Polito, and he said that’s a horrible idea. [chuckles] Why in the world would you launch a services-based consulting firm? Nobody’s going to trust you.

We’re both young kids in New York. I said, well, how do we get consulting clients? He said, well, we have to build a brand. I said, how do you build a brand? He said events. We start going to events in New York, learning about this Bitcoin blockchain space. I think Blockworks called the top pretty precisely in the crypto space.

This was December, October, or November of 2017. We go to a few events and this light bulb moment went off when we said, this is a horrible event, but there are 100 people in the crowd. They all paid $50. That’s $5,000. Why don’t we host our own event and just make it better? The budding young entrepreneurs that we were, we spun together an event. I remember December 10th, we incorporated the business. We went to Staples. We found a $20 whiteboard. We asked them for a whiteboard that was chipped off in the back so that we could negotiate the price down to $15.

We launched an event and we would wake up at 4:00 AM every single morning before our full-time jobs and just message people on LinkedIn, hundreds of people every morning.

Before we knew it, it was February 27th, 2018, and we had our first event. It was a 6:00 PM event. 225 people showed up. Everyone paid $20, $30 bucks a pop. That was the making of the events business. Then you were just asking about the progression. I guess you fast forward, we end up going full-time with it after that event, so May of 2018. Then in June of 2018, we had an event on Capo markets. I remember this guy, Anthony Pompliano, we really wanted him to come to the event.

Again, we didn’t really know what we were doing. We cold-emailed him nine times. No responses nine times. 10th time, again no response. 11th time, he responds, “Guys, if you stop emailing me about your damn event, I’ll come speak at your event.” Pomp came and spoke at our event, and that was the start of what became our first podcast, which was off the chain with Anthony Pompliano.

Jacob: You get Pomp to come to the event. He speaks, have the podcast, walk through then how you guys went from events podcast or representing a single podcast to having a network of what appears to be something like 20 plus podcasts, at least when I was looking at your podcast page to deciding that you really wanted to launch a news organization?

Jason: Good question. Today, we’re recording this February 1st, 2021, we have one of the largest financial podcast networks in the world. Back then we just had one show. Really when Pomp came to us, we realized one thing, which is the skillset required to build an audience is often not the same skillset that a creator needs to turn that into a business. What we’ve done and invested in as a core competency of Blockworks is to really help people that have that talent to create good content and build distribution, just shore things up on the production side of things, on the operation side of things. Really what we started with was just selling sales sponsorships.

Over the last two years, we’ve basically invested more in each core competency. It started as selling ads on the shows for different folks. We’d go out to different podcasts. We’d say, “Hey, look, big fan of the show, 10,000 downloads an episode.” I’ve never heard an advertiser come into our network. We’ll sell the ads, we’ll do a rev share. Then it became, we hired a production team, we’ll take on the production for you. Now a few years later, we’re able to go to folks and say, “Look, we have distribution as well.” When you launch that podcast, you’re not going to launch with zero downloads an episode.

You’re going to launch with 5,000 downloads an episode or look, you’re at 10,000 downloads an episode right now we can boost you, and double the size of your show. We’ve just over the last few years, invested more and more in the core competencies that it takes to build a podcast. We’re just starting to now explore building franchises on top of each one of those podcast hosts basically for those who are open to it

Jacob: For each of these podcasts, who owns the IP? Is it you guys or is it the individual creator? Then what are typically the economics of these deals?

Jason: Good question. We have two different models when it comes to our podcast. I think actually some helpful context here, we’ve never raised any venture money. Unlike a lot of our competitors who are funded by wealthy billionaires or who have raised tens of millions in venture money, we raised a whopping $100,000, friends and family around the day that we launched our business, and have never raised a cent of money after that. That’s been really important for us. The podcast business has enabled us to do that. I know everything in media is about the IP, but for us, our focus was building a profitable media business. That actually came first for us.

With our two different podcast businesses, two different podcast strategies, one of them is the sales, the front-end sales for these podcasts. For a few of our shows, we don’t own the IP. We let them keep the IP and that side of our business just spits off revenue. That revenue then allows us to invest in the IP-owned podcast that we actually build in-house. Not just invest in more podcasts, but it allows us to invest in other things like building our own distribution, launching our new website, blockworks.co that we launched a few weeks ago. Hopefully, that answers your question.

Jacob: Then how are you thinking about building out franchises from these podcasts? If we use Pomp’s podcast, for example, are you thinking about a franchise there or are you thinking about franchises with your wholly owned IP?

Jason: A little bit of both. Let’s take somebody like Scott Melker. When we met Scott, he had 30,000 followers on Twitter. We basically put a production team and a sales team behind him. The revenue that he generated and that we generated and gave to him through revenue shares, he started building out different basically distribution paths. He launched a newsletter, he launched a YouTube channel. He’s going to launch a few more things soon. We share in whether it’s the IP or the revenue, a few different things with some of these other shows. Our big focus this year is building shows in-house like the bar stool model where we might hire what– I don’t know what folks out there think of bar stool’s content.

Say what you will about the content, their business strategy of launching podcasts in-house. They own 100% of the IP. They’ll either launch it with in-house employees or they’ll go out and say, “Look, we want a media podcast in-house. We’re going to launch a media podcast.” Hey, Jacob, you’re a big media name come in-house we’ll give you a salary and give you maybe 10% of the upside on the show.

Jacob: As you are launching these shows that are owned by you, what distribution do you get from the other shows that are not owned by you, but are probably some of the larger ones in the network right now?

Jason: I think it’s everything with each new person that joins the network. It’s a nice little compounding effect. Let’s look at our launch, for example. We just launched our new website a few weeks ago on January 12th. We had hundreds of thousands of impressions, and folks actually viewing our stuff on the launch day because that one tweet that we sent out, that one newsletter that we sent out, that one LinkedIn post that we sent out, and the coverage and Fortune and Business Insider, that then gets amplified by 20 different influential people who– The one thing that we look at first starting our podcast is distribution.

Folks who have hundreds or dozens, 50,000 followers, hundreds of thousands of followers. Whenever we do something, they’ll amplify it, and they know that it’s beneficial for them because when they launch something, the rest of the network is going to amplify it. Essentially, what we’re trying to create by letting everybody be creative is not just these podcasters but full-time employees, is we’re basically building a PR firm in-house within the media company.

Jacob: Business Insider wrote when you guys launched that you were targeting a market that is comprised of more traditional finance readers such as institutional investors and fund managers which is a more B2B crowd. In a market like crypto though which is inherently consumer first, how do you think about covering the industry from a more business perspective rather than consumer?

Jason: Good question. It is consumer first, and it has been consumer first for the past 11 years, but we’re taking a bet that it won’t always be consumer first. One of the biggest problems in this space is that there’s just a lack of information, analysis, and insights for the more traditional crowd. If you’re looking for the best information in this space, it lives in places like Twitter. It lives on places like YouTube. There’s a funny story. Michael Saylor, the CEO of MicroStrategy. When he tried convincing his board of MicroStrategy, this public company to buy Bitcoin, he sent them eight different YouTube videos.

That’s just ridiculous because as this space gets– Right now you’re seeing folks like Paul Tudor Jones, and Ray Dalio and these more institutional players like BlackRock get into Bitcoin and crypto and digital assets. They have no interest in watching a YouTube video. What they want is a reputable source of information and insights that actually impact their business and actually gives them the insights and information that they can use to dictate their investments. Yes, we’re making a bet that obviously, this space is for real and that this thing lasts.

As the price goes up, more technology gets adopted more and more, more people come into the space, you’re spot on that probably 80% of those people if not 90% of those people will be retail. We capture that market through our podcasts, and we let other media companies talk to that audience through their articles and website and newsletters and stuff like that.

When it comes to our editorial brand, then our newsletter, our webinars, the content on our site, we’re entirely focused on this group that oftentimes gets bucketed as the institutional investor, but really breaks down into macro traders, hedge fund managers, private equity folks, venture firms, high net worth individuals, pensions, endowments, RAs, financial advisors, accredited investors. There’s this huge swath of folks that’s coming into this space, and they have no source of information for them.

Jacob: I want to keep talking about the relaunch because like we talked about before, Blockworks was originally a podcast network, an events business, and an advisory business, and now, it’s a news organization. Can you talk about what your thinking was that went into deciding to launch a news organization?

Jason: I will say, [chuckles] it’s probably the wrong way to put it. I’ll probably get in trouble for this. I wish we didn’t have to launch a news organization. News is a really tough business. I wish we didn’t have to do it, but when you look at the space, and actually what happened is, COVID happened, and we sat down and like a lot of other companies, we interviewed dozens, actually, over 100 of our customers and folks in our audience, and the one theme was there’s no good source of information for investors to learn about digital assets. Do I wish one of our competitors had done this and launched better information for investors? Of course, it’d make our lives a whole lot easier, but nobody had done it.

It’s a massive, massive opportunity and we couldn’t just sit there and not take advantage of it. Yes, since really March we’ve been investing in and building this new site and hiring a team of journalists from places like Bloomberg and ex-CoinDesk and ex-Cheddar, and Real Vision, and financial media outlets like that to launch this editorial team.

Jacob: Let’s talk about COVID because a few months ago you put out a really great thread about how Blockworks got through COVID. I remember March 2020 because I was working at CoinDesk at the time, and we were neck-deep in planning for a consensus, our biggest event of the year. Then that obviously got pulled. I know that you guys had an event planned during Blockchain Week. Walk through how you had to evolve the business and specifically how you had to evolve the events business since then. Then, looking forward, what are your plans for 2021 now that vaccines are being released?

Jason: Good questions. I’ll answer the first part. March 9th, we canceled. We started as an events business, and then we layered on the podcast business, and then now we’re a multi-platform financial media company. On the events side of things, events made up a pretty large portion of our business, less than 50%, but still a substantial amount and it was pretty devastating having to cancel our big May 2019 event. We canceled it on March 9th. Just to get transparent with some numbers here for the audience. Our revenue fell 80% month-over-month. January was a record month. February was a record month, and then in March, our revenue fell 80%.

We did what a lot of other companies did which was, again, we just sat down with our customers, and that’s when we figured out that a lot of them were stopped. They were just basically stopping spending any money on marketing from a brand awareness point of view, but they were going to continue to spend on lead generation and customer acquisition, and much lower on the funnel. We worked with then, did our first branded content and webinars, and that’s how these new products came to be. That was the genesis as well of this new editorial site. Hopefully, that answers the first part. In terms of the second part, our events strategy has I think been very different than a lot of folks.

I strongly don’t believe that you can just replicate an in-person event and turn it into a virtual conference. It’s an amazing lead-generation play. If you look at what you guys did at CoinDesk, and I know you’re no longer there, but with consensus, I’m not sure how many new leads you generated for your database, but there had to be 20,000 new subscribers or 15,000 new subscribers. That’s a massive amount, but when you look at the value that it provides to both the audience and the sponsors, I just can’t make the argument that it’s nearly as valuable as those in-person events. Actually, unlike most companies, we’ve just backed off. We haven’t even played in the virtual conference space.

We do webinars because we think those add a lot of value to both the sponsors and the audience, but when something doesn’t add value to both the audience and the clients, we just don’t do it. We actually don’t host any virtual conferences, but we do plan on hosting in-person again later this year actually. We have two events planned for later this year which I’m happy to talk about.

Jacob: I want to talk about two parts. First, the webinar business. Can you talk through the real mechanics behind that business? What are you charging for these? What are you offering to the partners because it’s a very tried-and-true tested product in the B2B space?

Jason: Of course. We charge roughly, between $12,500 to $15,000 a webinar. Each webinar is one hour long. The webinars will drive anywhere from 150 to 800 registrants. There’s really two types of webinars. There’s more higher-level webinars I guess you could call them. You’re a company like Coinbase, you want to reach some hedge funds who are looking at the space. We’ll run a webinar focused more on what’s going to happen with inflation, how does gold stack up versus Bitcoin? That’s more of a higher-level conversation. We’ll get 800, 900 registrants for those types of webinars.

Then when you look at what actually drives business, not that those don’t drive business, but why webinars are so amazing is if you run a webinar on staking for Ethereum, staking Ethereum 2.0, staking for hedge funds, you’re only going to get 100 People, 150 people. I bet 90% of the listeners on here have no idea what staking even entails, and that’s fine, they shouldn’t, but the hedge funds that are showing up to listen to that webinar are actively pursuing their staking strategy. That’s why I think the webinars are so powerful.

Jacob: Then when you do come back to doing in-person events later on this year, what is the breakdown of that? Is it primarily sponsor-driven? Is it attendee revenue? Is it both? Is it an expo? Talk to me what you’re thinking about.

Jason: We’re going to do hybrid events. We’re planning a New York conference later this year as well as a London conference later this year. Both of them will have a hybrid components, but no, they’ll be in-person events. As I’m sure all the media operators on here know a lot of event places and venues were desperate to get people in there, so we got some pretty good rates. Obviously, if COVID persists, that’s going to be unfortunate, but we’ll just push the event. In the case that it’s 1% not safe, we won’t do it obviously, but yes, we’re pretty bullish on in-person events coming back.

I think events are at their newspaper moment right now. A lot of in-person event companies are going to fail but there will be some event companies that can pivot and understand how to take their events to become hybrid events.

Jacob: Thinking about having to put all that money down for an event that could still inevitably get pushed because of COVID, have venues, and have other companies you have to partner with on these events started adding pandemic clauses to their contracts now that we’ve been hit by something as broad as COVID, or do the contracts still look relatively the same?

Jason: I’d tell a little bit of both. The contracts look very much the same except that there’s that clause in there. The clause basically just gets– I think at this point, everyone’s in pretty much in agreement that say we have an event in November of later this year which we’re doing, we’re doing a November London event, if COVID persists and COVID’s still around then the venue, we get to push the event and the sponsors get to either push the event or move that money into things like webinars, daily newsletter ads, podcast sponsorships, branded content, things like that. We leave it up to them.

Jacob: You mentioned a couple of other products that you offer. Can you go into more detail about the various other revenue streams that Blockworks offers, because, currently when you go to the website, there is no advertising on it at all?

Jason: Yes, we don’t run advertising on the website and we don’t plan on doing it anytime soon. Our main products right now are events which we just talked about has been on the sideline but we have been an events company in the past. Podcast advertising generates a substantial amount of our revenue. Webinars generate both a substantial amount of our revenue and they generate leads and newsletter subscribers. Branded content, we’re building out that. One of our advisors is Sean Griffey over at Industry Dive. We’re working with Sean to build out our branded content studio and see what that looks like. We launched a daily newsletter about two weeks ago.

It already has five figures of newsletter subscribers on it. We’ve got a bunch of different products just like I’m sure all the other folks on here do as well but our big thing that we’re working with the sales team on right now is just bundling that up. Instead of talking to a marketer and saying, “Look, come sponsor three different webinars,” we’re really trying to on running marketing campaigns for these folks, trying to really figure out what their needs are so that if you’re the CMO of Fidelity Digital Assets, you might have a custody business, your custody business has very different goals than BitGo’s custody business which has very different goals from Anchorage’s custody business.

You just have to figure out those goals. Our big focus right now internally is increasing the average deal size, which for us, means bundling different products together so that we can help our brands and the marketers that we work with actually run more cohesive marketing campaigns.

Jacob: Since you mentioned Sean, he is obviously one of the biggest proponents of media companies starting to collect first-party data as soon as humanly possible. How are you thinking about that with regard to the strategy behind your website launch and the various products that you offer?

Jason: Can’t mention Sean Griffey without talking about first-party data. It’s a big focus. You’ve written about it a lot, Jacob, and I think you will continue doing it. Media companies need to figure out their first-party data strategy. There are two different ways that we think about it. One is the very obvious way which is– I saw it that you implemented this at Morning Brew, Industry Dive, and Sean has this. A lot of folks who listen to the podcast will have this. When someone signs up for the newsletter, you just have to put in your email, then I see on Morning Brew when you sign– Then it takes you to a secondary page that says complete your registration, put in your company, your title, and your industry.

Sean likes to collect more data than that. That has crazily enough a 70% to 80% fill-out rate. For the folks listening here, that’s the first step I’d say for first-party data. It’s just get that secondary page up to, “complete your registration,” but the other way is more creative ways to do that. That’s when product comes into play. You had an amazing episode with the head of product at Bloomberg and that episode got us thinking about more creative ways that we could actually capture first-party data. For example, and I’m not saying that we’re doing this but just some things that we’re noodling with some ideas here on the product side is, what if you could log in to our site and track your portfolio, your crypto portfolio?

To do that, you have to put in first-party data. By putting in your portfolio, we could send you things like notifications or we could track your portfolio for you or if you are a big Ethereum holder and you don’t really like Bitcoin, we can serve you more articles focused on Ethereum using our new combination of our WordPress and OMeta which is our new customer data platform. We’re just thinking creatively about different ways to capture first-party data.

Jacob: Before we leave the business models, I have a couple of more questions. The first is, many financial B2B media companies look at subscriptions as major revenue drivers. You are a 100% marketing business. With the news product launching, do you have any plans on introducing a subscription?

Jason: We think about it but our biggest focus right now is just distribution, distribution, distribution. I think I understand why folks do subscription. It’s obviously all the rage right now, but there are ways to build media companies without subscriptions. You look at companies like Industry Dive, we were just talking about Sean Griffey, they’ve built a phenomenal business, tens of millions in revenue, very profitable, no subscription business. You look at Aging Media, John Yedinak and his brother, another phenomenal B2B media business, no subscriptions, all ad revenue. We think that there’s so much room to grow. We’re a fairly small business, we did three and a half million in revenue last year.

We’ll more than double it this year. We think that we can continue more than doubling that ad revenue year after year just on the back of ad revenue for quite a while. Now, at some point, of course, we’ll think about subscription revenue but it’s a completely different ballgame.

Jacob: You mentioned the three and a half million in revenue and the fact that you plan to double that year after year, when you think about that three and a half million in revenue, is that after your revenue shares with the podcast network? To build on that, is Blockworks currently profitable?

Jason: Yes, good question. Blockworks has been profitable since three months into the business, I want to say. Actually, my first job out of school was working in the venture space. The main thing working in venture taught me was don’t go raise venture as a media company. I think if we were a software company– I’m not against raising venture, but I’m very against media companies raising venture. I think it’s actually a horrible idea. Yes, Tim, long-winded way of yes, we’ve been profitable.

Jacob: None of this building of a media company is possible without the right people. Can you walk through the team composition, and then after talking about that, break down the percentage of business to editorial?

Jason: Of course, good question. We have 14 people right now. We just doubled the size of the company, so we were eight people going into December. We’ve doubled the size of the company. We have 14 people right now and we’ll double the size of the company again this year. Out of 14 folks, we have 3 full-time salespeople and they report up to our COO Julie Muroff. We have a 5-person editorial team including our co-founder Mike, a senior editor, and three journalists. We have two podcast producers, podcast and audio and video producers. Then a few folks on the operation side as well. A marketing manager, content coordinator to help run the campaigns, but yes, a pretty lean team.

Jacob: Looking forward, where do you see Blockworks over the next three years?

Jason: We have one goal, which is to build the best source of information insights for investors in digital assets. If I said sit down with anyone, they’ll see I’m pretty bullish on the space and so I think that there’s going to be hundreds of thousands of new entrants if not millions of new entrants from the more institutional side of things into this space. Right now, they don’t have a good source of information. There are truly no media companies serving them, and so we just want to be the best source of information insights for that crowd. When you look at how we build our business, it’s we think about two things. How can we help the audience more and how can we help our brands more?

On the audience side of things, I think we’ll continue building the editorial team. I think we’ll continue building the product team to serve this editorial team. We’ll look at things like data plays and data products and how data integrates into the crypto space when it comes to an institutional investor lens. Then on the brand side, it’s working to build a content studio and just actually help them, the brands, with more and more things that they want.

Jacob: I want to keep talking about this a little bit because obviously, I spent four years of my career in crypto media and it is obviously an incredibly volatile asset class to try and cover, and the people are nothing if not volatile themselves. Taking COVID out of it because this was truly an unexpected situation. How do you handle the ebbs and flows of the market and ensuring you’re not caught flat-footed if the market collapses out from under us?

Jason: There are some more exciting answers I could say, but the real answer is just cash flow. We have more money in the bank than we’ve ever had before. We have a pretty nice business model when it comes to cash flow because a lot of our costs are variable. We don’t have a lot of fixed costs. You look at our podcast business, a lot of our podcasts are not built in-house, which makes the costs variable and you can bring the cost down to zero instantly. Yes, you’re spot on. I think that crypto ebbs and flows in these three to four-year cycles. The good news is I think we’re entering into a pretty bullish cycle here, but yes, look, the boring answer for the media operators out there is it’s all about cash flow.

Jacob: All right. I want to finish the show now asking you the same two questions I ask every guest that comes on. First, looking at your career, what is a mistake that you have made and what did you learn from it that made you better professionally?

Jason: I think the mistake that I have made and continue to make, I’d say one thing that I’m working on is just hiring executive talent is one of the best things that you can do. We hired this woman, Julie Muroff, originally as a VP of events away from my old company, this company called Sisense, which was a data analytics firm. She joined as an events person. She then took over operations. She then took over customer support and client engagement with the campaigns, and now she’s our COO and run sales. She has been phenomenally helpful.

Our big focus this year, one thing that I’ve mistakenly not done enough of in the past is just hire top kind of executive talent to take things off of my plate and off of Mike’s plate, and so that’s a big focus of ours later this year.

Jacob: Then if you could offer current or prospective media operators some advice to succeed in media, especially because this was your very first attempt in the media business, what would that advice be?

Jason: Cold call. [chuckles] No, I would say cold call and cold email people as much as possible, but no, the real advice is don’t chase shiny things. I think being an entrepreneur and launching a company in any space, there are always shiny things, but specifically within media– Just within marketing, a media company, there’s SEO, there’s paid social, paid search, PR, social. There’s old platforms on social, LinkedIn, Twitter, Instagram, Facebook. There’s new platforms, Snapchat, TikTok, there’s referral marketing. Referral program. There’s buying ads and other newsletters. That’s just within marketing. I think you were talking about a subscription product. Is a subscription product a good idea? Of course, it is. It’s a great idea. You get recurring revenue, but that’s a shiny thing for us right now. At some point, it’ll probably make sense, but my biggest feedback or advice would just be and not that this is anything special, it’s just don’t chase shiny things. Find the one or maybe two things that you’re great at that you can build everything off of those and then just do that.