How Blockworks is building a crypto media empire
It started with podcasts, but now it's moving into text-based reporting.
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Michael Ippolito was not sold on the Bitcoin hype when his college friend Jason Yanowitz started pestering him about it. This was in the mid-2010s, when Ippolito still worked in management consulting and Yanowitz was in venture capital. “He was the first one to send me articles and podcasts [about cryptocurrency],” Ippolito told me recently. “And honestly I wasn’t buying it in the beginning. I was not convinced that there was something there, but eventually it struck a chord, and that's when we started going to events together.”
It was during one of these events that the two had the lightbulb idea of starting their own company. “It was an expensive event,” Ippolito said. “We both paid a bunch of money to sit in the audience.” And yet it was poorly run, with the programming all over the place. “So many events back then were Blockchain 101. They weren’t very useful because there were so many different types of people there.” Yanowitz was less charitable in how he described the community: “It's a bunch of 20-year-old tech bros screaming from the mountain tops that Bitcoin’s going to bring down the banks.”
Because of this dynamic, Yanowitz had been struggling at his VC job to get investors interested in the crypto space. “These were a bunch of gray haired 60, 70-year-olds,” he said. “I tried sending them all the good information that lived on Reddit and Twitter, but I realized that that was no way to educate the more institutional investment crowd about the emerging Bitcoin/crypto/blockchain/digital asset space. And so we launched Blockworks Group in May of 2018 with basically one goal, which was to help bridge the gap for the traditional financial community. We were creating something that wasn’t for your 22-year-old nephew who might want to buy $100 of Bitcoin, but rather the 50-year-old gray haired hedge fund manager who's considering allocating like $100 million to Bitcoin.”
Launching an events company
Blockworks Group started out purely as an events company, even though its founders readily admit now that they knew nothing about throwing events. “The original events were held at anywhere that would give us a free venue,” Yanowitz said. “It was just two guys trying to host after work meetups.” To find their first attendees, they put together a list of keywords and literally went through LinkedIn search, DMing thousands of people. When someone would actually show up to an event, Blockworks added them to an email list, and through word of mouth their attendance began to grow organically.
The company in those early days was pretty scrappy. They charged $25 a ticket and had no sponsors. “We didn't even know the world of sponsorships existed,” said Yanowitz. Each successive event, though, was more polished, and they gradually felt comfortable asking for more money. It jumped from $25 a ticket to $50 to $100. The first half of each event consisted of moderated panels, with remaining time left for networking.
Eventually, they learned how to find sponsors, and within a matter of months sponsorships made up the majority of their revenue. But some of the larger companies they contacted, while expressing interest, said their events were too small to sponsor. “That’s when we made the transition from monthly, smaller events to biannual, large conferences,” said Ippolito. “Those would be for 500 people, would go all day, have nine or 10 different panels, keynotes, firesides, all that kind of stuff, and then we’d host a cocktail hour at the end.” By that point, they were charging over $1,000 for a ticket.
Expanding into podcasts
At one of Blockworks’s earlier events, they invited a guy named Anthony Pompliano to speak. A former Army Sergeant and Facebook product manager, Pompliano moved into finance in the mid-2010s and became well-known on Twitter as a crypto enthusiast. “One day he called us into his office after we had him speak at an event,” recalled Yanowitz. “He said, ‘guys, I want to launch a podcast. Do you know how to do it?’ We both immediately said ‘yes,’ and then we went home and Googled how to create a podcast. And that was that.”
The result of that conversation, a show called The Pomp Podcast, was an instantaneous hit. “It shot up to number four on iTunes,” said Yanowitz. Even better, they landed a huge sponsorship deal for the podcast before it even debuted. “We were like, oh my God, not only can this be a great branding opportunity, but there's a lot of money to be made here,” said Ippolito. Through events revenue and podcast sponsorships, Blockworks brought in $2 million in its first year.
With a hit podcast on their hands, they now had the credibility to start approaching other podcasters and pitch them on joining the Blockworks Group network. “A lot of these folks are content creators, but there's zero interest in doing the backend production,” said Yanowitz. “They don't want to make the jingle. They don't want to create the graphic design. They don't want to sell ads. And so we would go out to these podcasts and basically say, ‘look, you've got a great show. You should come into our network. We'll take care of everything for you, and we'll do an ad split.’ And that model allowed us to never take venture money.”
In the company’s first year, both founders did a little of everything, but as the business matured they each took on more specialized roles. “Jason's a really talented salesperson and really good at building a social presence,” said Ippolito. “Whereas I love to live deep in the content and I’m pretty decent as a public speaker. So we split up duties pretty early on where I would focus on the finances and the content side of things and Jason would do the sales and growth.”
Building an entire media brand
Blockworks eventually amassed a network of about 20 podcasts. In just about every case, the podcaster owned the IP and had full editorial control, while Blockworks controlled most of the backend duties. I asked Yanowitz whether at any point he started to wish he actually owned the content. “It's kind of like herding cats,” he acknowledged. “But also there are zero fixed costs and it's a really nice way to generate revenue for a bootstrapped company.”
Still, the Blockworks team recognized that if the company wanted to truly scale, it needed to own its own content. By the beginning of 2020, they also began thinking about expanding beyond podcasts into an all-encompassing crypto journalism site, a more specialized form of Business Insider of Bloomberg. “I think that we always knew that there was a limitation on the size of the media company without an editorial site,” said Yanowitz.
Their plans were suddenly accelerated by the Covid-19 crisis. With all in-person events cancelled, the company’s revenue dropped 80% in a single month. Their first order of business was to stem the pandemic-induced losses, so they quickly rolled out a series of regular webinars that mimicked their conference panels in both subject and format. “The webinars are completely free to attend,” explained Yanowitz. “They drive a lot of newsletter subscribers for us, and then we also monetize them through sponsorships.” The signup forms require attendees to enter everything from their job title to employer, so each webinar creates a significant amount of first party data that Blockworks can both use internally and also turn over to sponsors for lead generation.
By August 2020, Blockworks had established an ongoing conveyor belt of new webinars and stabilized its podcast revenue, so its founders began planning out its website launch in earnest. They started with making a spreadsheet and adding in virtually every publisher in the finance space, spanning from more general newsletters like The Hustle to specialized outlets like CoinDesk. “What we figured out was that we don't want to be like a Morning Brew or The Hustle, where they don't actually put out their own content or break news,” said Yanowitz. “We think there's a lot of room to basically help investors understand the space by actually hiring journalists and putting out our own content.”
So they went on a hiring spree, bringing on journalists who have written for places like Bloomberg, Coindesk, and American Banker. In mid-January, Blockworks launched a revamped website that positions its article content front-and-center. Given that the site only employs a handful of writers right now -- it is still bootstrapped, after all -- I asked Ippolito what kind of coverage he wants to prioritize. “We're producing insights over commoditized news,” he said. “We want to provide analysis that contextualizes the space. This space is so complex, so the mission that we have is helping people understand it better rather than getting into gossip or scoops or anything like that.”
On the day that I’m writing this, Blockworks has published three articles. They’re all on the shorter side -- averaging about 300 words each -- with two of the three articles mostly relying on quotes and information from linked outside sources. The third piece, an article about how investment advisors are “feeling the pressure to get their clients exposure to digital assets,” contains an original quote from a financial services executive.
Blockworks also sends out an evening newsletter. “We actually send it out at seven or eight at night,” said Ippolito. “It’s a bit unconventional, but we serve a financial crowd that works long hours, and it’s a good roundup to read right before they sign off for the night.” He also believes there’s a competitive advantage. “Every newsletter tries to be the very first thing you read in the morning. There are very few that come in the evening.” The newsletter is longer and more conversational than the articles that appear on the site, and it links to both Blockworks content and outside sources. It also includes a short piece of branded content. “We don't really have plans to launch display ads anytime soon,” said Yanowitz.
I asked the founders if they had any desire to get into OTT streaming video, a la Cheddar or Bloomberg TV. “I actually haven't really heard about those being great businesses, to be honest,” said Ippolito. “I really believe in podcasts as a medium. I really believe in a video in terms of webinars and even YouTube. But a fully produced, TV experience that's being delivered online? It just kind of feels like you're taking the lessons from TV and trying to directly replicate it on the internet. And I'm just not sure it's that useful.”
The site is only about a month old, so it’s too early to tell yet whether it’ll become a must-read resource for investors, but both Yanowitz and Ippolito are convinced they got in early enough to plant a flag in the space. “Our core belief that we're founded on is that crypto is an entirely new asset class, and it's going to continue to grow,” said Ippolito. “And as the asset class grows and more money flows into it, it's going to look a couple years from now more like traditional finance than crypto does today. Investors will need a publication that supports that transition, and that's what we are.”
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