TNW's Co-Founder Patrick de Laive Talks About The Future of Digital Media
Patrick de Laive is the co-founder of The Next Web (TNW). TNW is the most influential non-US-based technology media entity in the world.
Patrick is also one of the young leaders under 40 on the European tech scene. He is frequently asked to speak at international events and is seen as a visionary in the industry.
TNW was founded in 2006 by Patrick and Boris Veldhuijzen van Zanten. At that time the two were looking for a suitable tech event to showcase their new startup.
When they failed to find one that checked all their boxes they decided to create their own. During the organization stage of their work, they realized they needed a way to promote it, and thenextweb.com was born.
It later became a blog, which has since grown to the monolith it is today. Since 2006, TNW has grown its audience exponentially ever since and has launched some other interesting tech ventures.
"TNW was started to bring insight, meaning—and every now and again, the lulz—to the world of technology. But we didn’t want to stop there. Today the company has grown from those two parts to four pillars that brought forth TNW News, TNW Deals, TNW Conference and Events, our new tech hub called TQ and Index, our market intelligence platform." - TNW.
Patrick sat down with Interesting Engineering's Ali Diker at last week's TNW 2019 Conference to discuss his views on the future of digital media, and get his views on where companies need to diversify and change their revenue models.
He also discussed TNW's history, their partnership with The Financial Times, and shared his highlights from the TNW 2019 conference thus far.
The interview has been lightly edited for clarity in places or where the audio recording as not clear.
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Ali Diker (AD) - "First of all congratulations, it is a great event. I'm really happy to be here and [wish] it was longer.
The first thing I want to point out is your recent acquisition by the Financial Times about two months ago. I want to ask strategically what does it mean for TNW's future as both an event organizer and as a publisher?"
Patrick de Laive (PL) - "3 years ago we had a strategy session where we decided to diversify our revenue streams. In our view, the future of media is to have multiple revenue streams for the same target audience.
[It] is pretty normal for a publisher to have an advertising revenue stream and [also have some] events revenue streams. So, we added three new business units in 2016. We added TQ, which is a hub for startups, where startups can rent office space, and we help them make connections and introductions and help them in general with our partners to grow.
We have also added Index, which is a startup database. It was built to track what is going on in the startup scene.
The next thing is our consultancy service, where we help corporates and governments find their way in innovation and technology to help bring the right people together, and the right companies together.
So, those are the three new revenue streams we added in 2016. Last year we also created a 5-year plan. Basically asking 'where do we want to go'?
Out of that discussion, it became clear that we wanted to grow faster than our revenue allows us to do. For instance, if we wanted to open a new building that takes a lot of investment to do so. [It became clear that] we needed to look for a strategic partner.
So, we started talking to companies, and one of them was the Financial Times. That was a really good click; they are [afterall] the golden standard in publishing. It was a really big compliment to us [as a company] that they wanted to be part of our story. And from that perspective, it was a very good match.
They have a very different target audience, but it is complimentary. For instance, if you look at our events [and theirs], there is hardly any overlap between the two. They have great events, and so do we.
So you can see [a potential] synergy there.
Also, their access to large companies is unprecedented. That also helps us with our consultancy business called TWX. When we talked to them we basically explained to them that this is who we are, this is what we do, and this is our 5-year plan.
Based on that, they played around with it a little bit and challenged us in some ways. [They asked things like] 'can this be more efficient' or 'isn't that too low?', etc. Together we made some small revisions to the plan, but the [overall] strategy [remained] the same.
And that is what they finally bought into. That's a very long answer to a very simple question."
AD - "I was expecting that by the way."
PL - "So, the question was what will change, what impact will it have? I think from an editorial perspective, and also from the events side, the only thing we'll do is learn from each other. [Regarding] events, there will be cross-promotion as well.
[TNW] is still a standalone company, TNW brand is the TNW brand; people who work at TNW don't work at the Financial Times. [They] are still two separate companies.
We have our own culture and own way of doing things. So the way I see it is that it is more like we had a bike and now we have an electric [one]."
AD - "So, are things going as expected? What are your expectations [with regards] to growth, or employment, or your reach [since] you don't compete but have some overlap with the Financial Times?
Your audience is [also] mostly from English speaking countries so do you think you can get them [FT] more European traffic, or more US traffic, or more English speaking traffic? Are you promoting each other in that way?"
PL - "No, not in the content way, we are not necessarily promoting each other. It's very different; we have our own kind of voice. [It is also] hard to promote, unless you promote on your own.
Normally, if I want to share something, it's nice for the other person to be able to see it. But, its a great model in general in publishing if you are able to charge people money for your content.
In tech, I think it's harder, but obviously, there are some examples of companies that seem to do pretty with paywalls. For [FT] for example, though I don't know their numbers, from the outside, it seems the model is working for them. It’s a difficult model.
So we don't really cross-promote the content. There might be instances where a topic touches both audiences so we can contribute to it together.
AD - "Do you have any advice for special content publishers that recently started? Do you think this model might work? Would it work for tech-focussed publishers or tech-focussed outlets? Or, do you think you have a unique case here?
[Or to put it another way], as a publisher, especially as a digital publisher, it is really hard to only get revenue from ads and from sponsored content, etc, what would be your advice for growth and for revenue for newly started tech-publishers or people who want to invest in tech and science publishing sites? "
PL - "A few years ago we realized that the future was to diversify our revenue streams. You can do that in many ways. But I do think it's still true that you need to find other things beyond advertising in order to survive.
You can do it in many different ways, [but] that that depends on the kind of company you are.
FT recently acquired a couple of other companies [which provide] different revenue streams for them. But, these are more on the media side than the services side [like TNW].
So they bought a video production company, and research and thought leadership company. So it's more content production. In that way its the same thought [process as TNW] but different execution.
A year ago, Buzzfeed, announced something similar in how they see their future which is to diversify revenue streams. For them, it meant they added new brands like Tasty, for example.
[Tasty] is a cooking brand which creates cookbooks and stuff you can buy, so they went more e-commerce. I don't know if it works, but you never know with American companies.
AD - "Yes, but if Facebook changes an algorithm, for example, some companies can go bankrupt.
[For instance], a video production company, [I can't remember the name right now], was making viral videos and selling them. A company like that went bankrupt because of Facebook. So [with that in mind], what are the challenges, especially for content distribution, that you think publishers have to overcome?"
PL - "A few years ago a lot of media companies went full-on to Facebook, like 100%. Everything they had, they put it in there. A year ago [Facebook's] new algorithm [destroyed their income stream] almost overnight.
So, it's a big problem for publishers [whose] growth channel was FB, [so] they really had a problem. We [TNW] are obviously are on social [media], but we never tripled down [on it] and never hired down [for using it].
Mashable [for example], had about 15 [staff] working on social media, and they had like 3 people on Snapchat, 3 on LinkedIn, 3 on Twitter, and 5 on Facebook. So, obviously, that didn't work out very well for them. They also well all-on into video, which was very costly to produce.
But then, with the change to the algorithm, their view count was slashed by 60%. So, what's happening right now is actually quite interesting.
People don't consume their news anymore through Facebook and Twitter. Two years ago, it was either Twitter or Facebook; those were the only two ways that people consume their news.
Now, it's going back to the brands. [That is] until there is a new social platform that [appears]. [For example], Flipboard has been quite successful for some publishers; it is a good distribution platform. For others, Reddit is also very interesting.
But, I think there is an opportunity right now, the website is relevant [once again]. I don't know for how long but at least for now. That is quite interesting in the dynamics if people actually change their behavior, in the end... they still need to get their news.
So they go to the companies that they know.
AD - "So, do you think that in this case, your position with Financial times can help with your brand? Can it also benefit from this partnership as a publisher or even as an organizer?"
PL - "Having Financial Times as a partner raises your own profile... It raises the value of the brand. We can already see that just by having them as our partner, I think that a lot of companies expected this to happen, and now they are all happily surprised.
The talk with FT took ten months. They were here last year at the conference, that's where I met them for the first time. That was before we started to talk.
AD - "So do you know of any other stories like this apart from your own where two parties are meeting here and then creating long-lasting partnerships?"
PL - "Yeah, every now and then you get emails [from attendees about things] like they met their wife at the TNW event. Business partners have also met there.
Also, investors and startups [have met] through our matchmaking platform.
Over the next two days, we have over 3,000 meetings planned between startups and investors. There are also some MNA teams, not that many people know about it, [that] do some scouting here. But obviously, they don't want to advertise that.
That's what TWX does; it is basically to connect large companies with startups. That can be for new prototypes, but also for acquisitions. We do that for a couple of companies; we scout other companies that we think they should acquire.
And some of that is also happening here [at the TNW Conference].
Obviously, it's delicate, so I can't really go into too much detail.
To answer your question, we have quite a lot of history here. We have companies that have launched their product here. For example, Rapportive launched here about ten years ago and met some people from LinkedIn.
They were bought by LinkedIn three years later for a lot of money.
Shutl was sold to eBay, so yeah"
AD - "So it's really good for startups to show up here and show [investors] what they have."
PL - "Yes, that's our purpose. Our tagline is 'The Heart of Tech.' We 'inform, inspire and connect' people who love tech [including companies].
So, it's kind of like a marketplace because it's pretty inefficient; they are still human beings. [For example], today I was a bit late because I met somebody 'oh you should talk to that person' and then I brought them together.
[This] is not easily done online, because there is so much trust involved."
AD - "What you achieved there is excellent, in my opinion, this event is great and offers many opportunities for both individuals and companies.
So, in this year's event do you have any favorite moments, companies or individuals that you think have a great future here?"
PL - "Actually I have seen quite a lot of talks, normally I can't do that with my agenda. I have seen 4 talks yesterday, and today 2. That was really, really nice.
There was some really good content. I loved Guy Kawasaki; he was great. I also saw Andre Kuipers' [talk], an ESA astronaut.
[Andre] has a startup, [called SpaceBuzz], and you can invest in them. So, if you want your own rocket it's like 350,000 Euros. I talked to them yesterday evening, and they were overwhelmed with the [number] of people who were interested in what they do.
It's a great cause as well. There are a lot of people here [with] a lot of wealth that can do [that kind of thing]. They can just say 'give me a rocket in Columbia', because why not?
So, I think that that is a great initiative, its a foundation, but that is also a little bit of how I see the future of a lot of companies. It's not that I think all companies shouldn't make a profit, that should be the goal, but you can also be a non-profit foundation that makes a profit because that makes it sustainable.
[That gives you] more purpose in whatever it is you are doing. You see that a lot in the younger generation, you see a lot more young entrepreneurs that are really trying to have an impact on their local or greater environment.
And, I think that is super cool.
We [also] have a list; it's called the T500. These are the 500 biggest, most talented, people, in digital under 25 years old, and every year we select 500 people here in the Netherlands. We then invite them all here to the conference as well.
There are also a lot of entrepreneurs as well, probably half, they don't really care about building a nice simple tool [that can be used] to make a business out of. They really are more purpose-driven, which is really a nice way to position your company.
But I didn't really have a good chance to watch all the startups here.
We also have the Tech 5, I don't know if you know what that is, but it is an initiative where we search for the fastest growing companies in Europe. We have 100 companies from over 20 countries [and we find the Top 5 from them].
They are all under 5 years old and combined they have already raised over 3 Billion Euros. They are all great and are not really startups anymore. There are companies in there that have over 2,000 employees in three years.
One of the companies was here Glovo, from Spain, last week they raised 150 Million Euros! They are basically a [on-demand] delivery platform of anything. It could be food, your keys or anything you've forgotten.
They pick it up and bring it [to wherever you want]. It's a super-fast growing company.
One that I really liked, and I'm going there in a bit, is our startup pitches area. You see 10 pitches within an hour or so. It's fast-paced with really great ideas [but] most of them are further than ideas.
They are basically companies, some at Series A level.
AD - "[The] last question, do you think this event can get bigger? Could you expand it to different parts of the world like the United States or Asia? [Are you planning anything like that]?"
PL - "What we are doing here you can't copy [in] different countries. [That's because] it's unique in many ways, but also the way we organize it [is special]. We know everyone here, it's our city.
We know the owners of the venue., we know all the food trucks. That's something you don't get somewhere else. But [we also know] local artists or influencers etc., that's harder.
It's hard to copy the format that we have.
There was an American event organizer here on Tuesday. I showed him around the venue, and he said this is impossible to do in the US.
You can walk into the water if you want! In the US it would be too big a liability. If you get the permits, the whole production would be around 25 million dollars.
You can't copy that to the US; it's just too expensive. You should charge 5,000 Euros for a pass, or 3, but you would need to be way more expensive.
14 year ago it was more expensive for one day than a ticket it is today for 2 days. It used to be 700 Euros at our first event, and now, depending on when you buy, you will only pay 400 Euros. The normal price is 650.
700 Euros, 14 years ago, is now [with inflation] 900 Euros or so."
AD - "Do you think you will need a bigger venue next year or not?"
PL - "Next year will be on the 11th and 12 of June. It is going to be here, and we have already booked it in.
This was the first time that we were here [at this venue], and things turned out to be a little different than what [we expected]. [Next time] we can tweak it a little, but in general, this has everything that we need.
AD - "It's like a festival, but better than a festival!"
PL - "Yeah, well there are actually quite a lot of festivals held here during the summer."
AD - "Well I don't have any more questions so we can wrap up. I am sure next year will be much, much better than this year, even though this has been perfect. I had a lot of fun yesterday, and I will go out today and check a lot more startups."
PL - "Thank you, and I hope next year we will have a bigger delegation coming over from Turkey. And see some Turkish startups!".
AD - "Thank you."
PL - "Yeah, thank you so much. And enjoy [the rest of] your day!"
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