SaaS Interviews with CEOs, Startups, Founders
EP 392: 3M Publishers Use Issu, 100,000 Have Paid with CEO Joe Hyrkin
20 Aug 2016
Chapter 1: What is Issuu and how does it generate revenue?
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Chapter 2: How did Issuu evolve in the digital publishing landscape?
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top of tribe good morning our guest today is joe herking and he is the ceo of issue the world's leading digital publishing and discovery platform connecting people to the content they love most joe's got more than 20 years of experience in startup and growth technology leadership from early stage through to ipo he's been the ceo led sales bd and product for some of the leading and most innovative companies in silicon valley backed by the likes of benchmark redpoint trinity floodgate
True, Baseline, MDB, DAG, among many, many other very prestigious and well-known venture capital firms. So, Joe, are you ready to take us to the top? I am, sir. All right, let's do this. Okay, so first things first, tell us what Issue is and how you guys generate revenue.
Chapter 3: What tools does Issuu provide for publishers?
Issue is really a modern media company that allows content creators and publishers to create really fresh professional level digital publications around areas of passion, from fashion, to food, to shopping, to travel, to more focus again around the areas that people around the globe have tremendous enthusiasm for. And we, from a revenue perspective, we have two key product lines.
The first is a set of tools and data analytics that publishers use to digitally distribute and monetize their content, meaning they're able to use the tools and services that Issue provides so that they can focus on their creation and then use Issue to get that content distributed across all digital properties. And that's a premium product.
publishers get access to a base level of tools and services for free and then pay us for access to additional data customization capabilities. So that's one and our primary revenue driver. The second is we sell ads to brands that want to reach these deeply engaged readers that are passionate about specific topics and kinds of content that are relevant to those particular brands.
Chapter 4: How does Issuu maintain customer retention and manage churn?
So we're unusual as a SaaS company in that we provide both a set of deep tools and services that publishers take advantage of and are able to use. And then we also monetize on issue itself.
And give us a sense of kind of size and scale. But let's start kind of from the beginning. What year did you found the business in?
So the company was started in 2008 in Copenhagen. Oh, very cool. and was started with a very deliberate focus to transform the world of publishing from being one that was at the time still dominated by print and old forms of distribution and monetization to a much more current, enlivened, thriving platform of digital publishing. distribution and consumption.
And Joe, do you remember what, I always love asking this because it's usually an embarrassing number, but that's okay.
Chapter 5: What is the significance of recurring revenue for Issuu?
Do you remember what first year revenue was on the business?
Well, I actually joined the company. I was recruited to run it about three and a half years ago. So about four and a half years or so into the company, I was brought in to be CEO. So I wasn't part of the original founding team and revenue. But, you know, we started off at zero. Just like everybody else. We started off at zero dollars and zero customers.
And really focused on using, the core focus was let's get great content in front of people who are passionate about that content and very deliberately started making
Chapter 6: What new subscription plans has Issuu introduced?
uh the tools and services available to publishers that uh that we thought would be excited about it and through that grew the business initially through word of mouth and and um uh and digital digital marketing so joe ignore the brands that you're selling ads to currently so the growth you've generated thus far how many unique publishers are paying something for issue currently july 2016.
So we have over 3 million publishers that have used Issue. We don't talk about the specific numbers of publishers that are actually paying because we have Some publishers are paying us on a monthly basis. Some are paying us on an annual basis for the core subscription services that we make available.
There are some publishers that are paying for one off capabilities that we make available around potentially. Yeah, Joe, that's all.
That's all fine. We know when we had Tim Draper and who makes a lot of these investments.
Chapter 7: How does Joe Hyrkin define success in the publishing industry?
And one of the things I always try and get to quickly is it doesn't, I mean, there's pricing experiments all the time, right? So you probably have 7,000 different pricing plans and legacy pricing plans on your thing, but as a measure of product market fit and a range is fine too. How many publishers have paid you at least a dollar?
How many, you know, publisher, you know, credit cards have put some kind of money behind your product. Yeah. Close to a hundred thousand. Okay. That's, I mean, so that's, that's, I mean, that's, that's a big deal. That's a lot.
So what is the, and has all your testing around pricing always been kind of a monthly recurring revenue model, a SaaS model, or the one-time kind of annual payment, or have you experimented with other pricing models?
Chapter 8: What advice does Joe Hyrkin have for aspiring entrepreneurs?
We primarily experimented with SaaS recurring revenue. We have played around with different different formats and different structures and different ways that we offer it. And again, we've had these two kind of concurrent themes. One is an ongoing payment for a set of services. The other is one-off ways to promote content or various elements. But primarily the business has been
oriented around around services. So if we, if we kind of bundle this up, I want, I want to understand the breakdown between, you know, SAS income versus selling ads to brand kind of income. So in, in, in 2015, what was kind of total revenue for the business?
We're not going to detail on the specifics of our revenue. So I'm happy to give you, you know, details on, on, you know, customers that are paying us and things like that, or breakdown percentages, but, but about 90% of our revenue is, is SaaS. Advertising makes up a much smaller percentage.
And of that 90%, that SaaS, I see you have the free plan, the most popular kind of premium payment plan at 35 bucks a month. And then they kind of the optimum plan at 269 per month. If you average across your entire customer base, what's ARPU average ARPU per month?
So the optimum plan is actually a new product that we rolled out about six weeks ago. So it's very new and the core of our publishers are in that that that's $35 a month range.
Okay. So that was really you, you, before this, this new optimum plan count, you really only had two pricing options, free or 35 bucks a month billed annually.
We also have, we, we have a couple of others that you can, uh, that we test. So we're constantly testing, um, uh, different ways that we're, um, making the services available. So we have a, this premium is a constant, but we do test different pricing models with different features added or removed and things like that.
We test in different markets in different countries really to, at the end of the day, what we're really focused on is making sure that Those publishers that need the additional tools and customization and analytics are able to do so for value for them.
So, Joe, in terms of getting a sense of kind of business size and scale to this point, is it as straightforward as taking kind of 100,000 ish customers and multiplying times 35 to get kind of monthly MRR? And if not, am I high or low?
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