Another week, another email newspaper. This time, the story is Punch bowlA politics-centric newspaper, recently founded by a crop of Politico alums including Jake Sherman, Anna Palmer and John Brignahan. Story of ben smith, As Maxwell Tani does in the Daily Beast Some more juicy details.
Why do we need another newspaper analyzing Beltway politics in the world of the Politico Playbook, Axios, The Daily 202 and a hundred others? In fact, why do we need voluntary production of a tech-oriented newspaper covering startups (by my count, there are at least several thousand newspapers covering our industry)? Why, in a media world that should have been about the long-tail, does it seem that every new media startup is repeatedly targeting the same place?
Gold flowers come from here. Media is not unlike many startup markets – there may be infinite requirements for diverse products, but only a few of these are requirements to which serious dollars are attached.
In the media, these are like VC coverage in our quirky little world of DC politics, or investment banking / M&A, or startups, where the winners get mass audiences and themselves in detail, largely from customers and advertisers On the dollar. There are thousands of others below, but they are affected by limited readers, users and recourse with revenue.
Put another way, these tournaments are markets where the winner can take all and where it is worth gambling for a small occasion on a large scale rather than a good chance of mediocrity. In medicine, “everyone” wants to treat cancer, not some neglected tropical disease (in which millions can recover who may benefit from treatment). After all, Nobel prizes do not go only for good science, they go for the biggest advances of the century that have the right level of notability. In Startups, the founders want to target the largest business and consumer markets, not small applications that may be useful, but will not become a juggernaut.
Unicorns are not born in small markets.
There are, of course, extremely negative externalities for this model for many markets. All competition to dominate the “first-read newspaper” along the banks of Capitol Hill or Sand Hill Road means that we are overwhelmed by similar analysis on similar topics rather than being able to choose from a wide spectrum of different options. We probably should have more coverage of emerging market techs or state capital than today.
At Startups, we have a lot of entrants in some extremely valuable layers of fintech. At least… there are 50? 100? Wealth-management startups and illiquid products that focus on automated investment in ETFs (so-called “robedivores”). Nevertheless, there is so much money in some of these layers, that every founder is prudently saying “I’ll take my chances for reward at the end of that particular road.”
You would think that the free market would only work in these niches. All competition in the DC media world or for money management users to pay attention to should eventually reduce costs and divide the pie enough that it becomes less attractive to new entrants and makes other niches and markets relatively more competitive .
It would be true if pie did Actually subdivided back and forth. Experience over the last decade has however proved to me that this is often not the case. DC politics is There are gold bars for political coverage, and one to three newspapers that will always dominate that beat. M&A coverage on Wall Street is The gold cauliflower of business journalism, and a handful of journalists are going to beat that by having the switchboard for all the most important sources. And VC coverage is The gold belt for startup media, which is why TechCrunch and some of our friendly contestants work so hard to cover every day.
New markets are invented and old markets expand and contract. There are startups that come from anywhere and dazzle us with their originality and ability to create whole new categories. Nonetheless, for every unicorn that makes its debut this way, there are 10 others that are manufactured in the current major markets and compete for a large prize to be given to the winner.
There is nothing wrong with investors who want to fund the fifteenth startup in a space. It makes sense – that where the rewards are, or at least, where we feel the rewards to be. What needs to be changed is how to make some of those other niches provide the same impetus for innovation. How can more markets offer gold shells? Is it even possible? Or are we scheduled to read 100 newspapers on McConnell and Schumer’s machine when we get Marx’s ads?