October 20, 2020

The Dodo Enters The Pet Insurance Business

When it comes to commerce, there are a lot of different ways that a publisher can tackle that strategy. Most look at creating physical products or, in some cases, building a robust affiliate marketing business.

The Dodo, owned by Group Nine, is different. According to The Wall Streeet Journal:

Group Nine, itself backed by Discovery Inc., has taken a minority stake in Petplan, a pet insurer headquartered in New York that was acquired by private-equity firm Warburg Pincus LLC last year. Financial terms weren’t disclosed. Group Nine’s chief executive, Ben Lerer, will join Petplan’s board of directors.

The deal includes an equity stake, as well as a brand-licensing and marketing-services arrangement through which Group Nine and The Dodo will be paid to promote Petplan’s offerings.

The pet insurer will be renamed “Fetch by The Dodo” in May 2021.

Developing a commerce business is about identifying opportunities for products that your audience is going to need. If you didn’t get a chance to listen to the recent podcast with Hodinkee’s Ben Clymer, we also discussed the insurance business through the lens of giving your audience what it needs.

We try to solve problems that exist. I’m a watch collector. Insuring your watches no matter where you live is a freaking pain in the ass, man. You have to put it on a homeowners or renters policy. It’s really very convoluted and it’s not fun at all. If you’re really into watches, you’re probably active, you’re wearing one at a time and so you don’t need to be paying for insurance for things that are sitting in your safe or your bank vault. We wanted to create something that was incredibly user friendly, that was dynamic so you could change your policy from your iPhone and we wanted to build something that was really crafted for our audience, which is younger.

This all makes sense…

In the case of Hodinkee, it had a very niche audience of people that likely owned watches. Therefore, the natural extension was to create a product that would help them while simultaneously building a deeper commercial relationship.

The important thing to qualify here is that this business is highly dependent on trust. When your sole focus is on creating content for a specific audience, you develop that trust over time.

The same can be said for The Dodo. On the surface, The Dodo is all about social pet videos. I, personally, don’t subscribe much value to that type of content.

However, when you start to dig into the website, you find a section of the site called DodoWell. This entire section of the site is all about helping pet owners with questions they may have about taking care of their pets. That sort of content builds trust.

When you think about the brand through this perspective, the insurance business makes perfect sense. It’s a brand likely over indexed to pet owners that has spent years delivering information.

This is obviously not a monetization stream that can be applied to every single media company out there—if you focus on collectibles, it’s an interesting one—but the strategy behind it is one that all companies should be trying to think about.

If you run a media company, what are problems that your audience might be dealing with? Those are opportunities to create new lines of business that you might not otherwise have considered.

I would guess that Food52’s Five Two strategy is based entirely on this approach. When it embarks on creating a new product (like those amazing dish towels; yes, I’ll never stop talking about them), it brings its readers into the process. It identifies where there is need for something and then it creates it. Creating with the end-customer clearly in mind is the right approach. Solving problems is the right approach.

Build trust and then solve problems. If you do that well, there’s likely a commercial opportunity there.

Come for the content; stay for the community

Hunter Walk over at Homebrew put out a short piece yesterday that sums up nicely what is becoming a trend with these creator-led businesses.

Over the last year I’ve started paying more indie creators directly for their work — heavily biased towards podcasts and newsletters/blogs. The other night I was wondering which ones I’d likely still be subscribing to a year or two from now. The “absolutely yes” category was dominated by creators who had branched beyond their initial piece of content and created some persistent space for the community to aggregate. Most typically in Slack, Facebook, WhatsApp or Discord. What they’ve done is use their content to assemble an audience and then create a space for that audience to create content with each other — aka community.

This is similar to what I wrote about a couple months ago regarding membership and the multiple layers of community that can build on top of that.

The nucleus of these businesses will always be grounded in the content. It sets the stage for what will be discussed. But what helps make the membership more valuable is the desire to stay active in the community. Some of the best content is the discussions that can happen serendipitously.

As Hunter says in his piece, “his newsletter subscription is auto-renew because I don’t want to lose access to the group.” He came for the content, but he’s going to pay forever for the community.

Right now, we are seeing a lot of the community products being built as digital-first. That makes sense all things considered.

But what really excites me is the opportunity for these online products to go physical. Since Hunter uses Lenny’s newsletter as an example, let’s imagine a small, 200-300 person event just for product managers with Lenny as the organizer.

You’d know what you’re getting because you’re already reading that newsletter. But more importantly, you’d know who to expect when there. Because people self-select these niche communities, you know you’re going to find people with similar ambitions and problems as you.

I can tell you that when Covid is behind us, I’ll host an event for premium members of A Media Operator. It not only makes sense both from a community perspective, bringing together a few hundred media operators, but it also makes commercial sense.

We all should spend more time thinking about ways to use the content as the foundation for a more robust community offering. It might not work for every media company, but if you can be in the business of connecting people, you become a necessary tool.

The New Yorker’s event strategy

It’s about this time that many companies would be planning their 2021 events strategy. And many were likely hopeful that there would be a reprieve from Covid and a return to normalcy.

Unfortunately, that doesn’t appear to be the case. That means we’re likely left with another year of virtual conferences. The New Yorker appears to have developed a strategy that is working. According to a Digiday story on the brand:

This year’s The New Yorker Festival ticket prices for a single session are about 60% to 75% lower than what they were in 2019. The cheapest ticket this year is $19, compared to $49 or $79 for a single session ticket in 2019. About 50% of ticket sales came from existing subscribers who received 40% off their purchase.

Getting people to tune into a virtual event, let alone pay for one, is a challenge that many publishers are facing right now given the abundance of similar virtual events being rushed to market by publishers eager to recoup lost in-person programming revenue.

Indeed, according to Gillin, the reason for only doing 17 sessions was that there is a “noise problem” with the number of virtual events options and entertainment options available right now. 

That last paragraph is really critical. There is this idea with some event planners that more is better. I just don’t see that being the case. Gillin’s point is true… There are too many other event and entertainment options out there.

Therefore, the way to win with these virtual events, in my opinion, is to be incredibly focused and push fewer, higher quality sessions out. Respect the attendee’s time. When they came in person, they were sort of stuck there. But with virtual, it’s just too easy to do something different.

What worked in person—suits on stage, serendipitous conversations in the hallways, etc.—just doesn’t work in the virtual sense.

It’s good to see The New Yorker figuring out how to charge for event sessions and develop strategies to make them more engaging. It’s necessary because my guess is we’ve still got a long time before in-person events come back.