How do you create a scalable business that gets people ‘offline’?
That’s the original question I was asking myself back in 2011—the question that kicked off this whole adventure that, over the years, has become Offline as you know it today.
Today, we’re taking a huge step towards answering that question. In the process, I understand that we’re shaking things up for some of you who have loyally followed us for many, many years.
I personally love to understand why decisions get made, and I love to understand the first principals behind how things work— it’s in my DNA. I’m sure some of you are similar. This post is meant to shed some light on the first principals that led us here and why we’re so excited for the future! I hope you enjoy it.
Offline has always operated from a strong core mission. Here’s how I framed it in our founding article:
My goal from day one was to use the power of technology (instant access to information, personalization, etc.) to help us rediscover and reconnect with our physical communities in ways that were never before possible. In other words, to use technology for a nobler purpose. The metrics of success for many modern internet companies are time on site, “time on couch,” and daily usage. I envisioned a different company that measured success when it created a moment that brought people closer together in the physical world. I wanted a company that made your couch miss you instead of the reverse.
That journey officially started our incorporation, and really started to gather steam in 2015 with the launch of Offline’s original app. We realized that we could get you ‘offline’ by being your savvy friend in your pocket, a friend who knew everything about the city and could uncover and recommend curated places and events that you’d love.
The app was (and is!) awesome. I loved it. People loved it. It was a huge success right out of the gate. We launched in Raleigh and then quickly expanded to Durham, Charlotte and Nashville. We were going to be the app that people across the country used to explore their city. Or so I thought.
The business model
In the middle of 2016 when we passed 100k downloads and 4 cities, we decided it was time to make money. Up to this point, we had focused exclusively on building something that our audience loved, and we figured we’d monetize it later. After all, we had a bunch of different theories for how we’d make money.
One by one, our theories struck out: ticketing, deals, advertising, affiliate. By the beginning of 2017, we were running out of money with no scalable revenue model.
The one route that had seemed promising was advertising. Brands had shown interest, but we needed a much larger audience to make it work. So, in 2017, we decided that we would bet the farm on advertising and audience growth.
And it worked! We leaned into social. We leaned into video. We dramatically improved our emails and relaunched our website. I could recount some of our accomplishments here, but it feels a little self indulgent. Suffice it to say, we started reaching a lot of people. If you’re reading this, you might have been one of them. I thought we’d found the perfect overlay between the business model and the mission. I remember reading quotes from local businesses and users telling us that we’d changed their lives and opened their eyes to the city around them. It felt very impactful.
Throughout 2017 and 2018 we created incredible partnerships with brand advertisers like Kane, Diamonds Direct, Heineken, Bedlam, NCMA, and many others. We were excited about our progress and the impact we were having on the communities we were serving.
At the beginning of 2018, I took a breath and reflected on where we were. We’d become the largest and fastest growing media company in our category across multiple cities, and we’d built an exciting and growing business.
But something still felt…off.
At first I couldn’t put my finger on it, but eventually it bubbled up:
Our advertising business model was antithetical to Offline’s mission.
It’s well publicized that traditional local media has its problems. But since 2014, a new wave of local media companies has sprung up to take advantage of social media, email newsletters, and the snappier ways that younger audiences wanted to consume their content. Since 2017, Offline has fit into this mold, along with Charlotte Agenda, The New Tropic (Whereby.us), Spirited Media (now defunct), GVLToday (6AM City), and a handful of others.
This new wave of local media companies has done an incredible job attracting talent, building audiences, and fundamentally rethinking local media.
But, at the end of the day, they are all funded almost entirely by ads:
The ad model means you’re making money on clicks and digital attention, and the incentives are very, very clear: add up as many pennies (ad views) as you can. Period.
And monetizing digital attention is literally the opposite of what we set out to do at Offline. Literally the opposite.
I envisioned a different company that measured success when it created a moment that brought people closer together in the physical world.
For three years, we’ve done our best to keep our content authentic. We’ve only written about things that could lead to an experience in the physical world. We’ve said no to dating articles, no to politics, no to real estate, etc. We’ve focused on experiential content only.
But we’ve still felt the tension between doing what’s true to the mission vs what gets the clicks, eyeballs, and virality (sushi donuts, anyone?) that we needed to fuel advertising growth. We’ve needed a product to sell to make money, and that product has been your digital attention.
Which brings me to the third concentric circle: passion.
Not only did the advertising business model clash with our core mission, I’d also realized that it wasn’t something I was passionate about.
At 23 when I first had the idea for Offline, I didn’t really know what I was good at or what I enjoyed at work — it was all new and exciting. But at 31, I know that I love building products that are true to a concrete mission. And media isn’t really a product. Great media is a voice, a creative point of view. It’s always on. Always speaking. Always seeking out new ways to get in front of you with its voice. And while I enjoy that world, I enjoy it passively.
The birth of Premium
At the beginning of 2018, I came back to that same foundational question, with a slight modification:
How do you create a product that makes money by getting people offline?
This time, there was a different answer in my head:
In the short time between when we launched Offline’s app in 2015 and the beginning of 2018, subscriptions had exploded. Of course, digital content subscriptions like Spotify, Netflix and Hulu had already become central in our lives, but subscriptions were also starting to change the way we interfaced with the physical world. Classpass was changing the way people work out, MoviePass was making a dramatic run at the moviegoing experience, mealkit delivery subscriptions were rethinking the way we do dinner, and Instacart and Amazon Prime were continuing to change the way we shop.
One area was conspicuously absent from the subscription revolution: local experiences. Meanwhile, us “love to hate ’em” millennials are spending more money on experiences than any previous generation. There was something here.
How do you create a subscription that gets people ‘offline’?
What if you paid us instead of advertisers? What if you paid us, and in return we helped you get offline and experience something new in your city every month. How pure! How simple!
But what would you pay for?
Content, or experiences?
The simple answer to “the subscription question” at a media company is usually “paywall.” Give readers a taste of what we do, then paywall them and ask for their money. You’ll get a tiny, tiny percentage to pay, and that’s that:
But to me, that felt like it would create the same mission-centric challenges. Ultimately, we’d still be making money on content, not on experience. We couldn’t be sure that we were achieving the mission vs just entertaining you.
Offline’s subscription needed to move you. It needed to change your behavior and open your eyes to new experiences. And it needed to actually help the local businesses that Offline was known for covering.
With that in mind, I started meeting with some of you at coffee shops around Raleigh. I showed you a slide that said “Introducing Offline Premium. Starting at $9.99/m,” and I said, “I’m not going to pitch you on what this is. I want you to tell me what you’d pay for.”
Then we went and built what you told me.
Over the last 18 months, Premium has morphed and matured into a matchmaker between members and amazing local businesses in Raleigh and Durham, used most avidly by young professionals and people who are new in town looking for adventure. We recently asked our members “what’s the main benefit you get from using Premium,” and the answers were so cool:
We’ve become a community of thousands of paying members and a dozens of curated local partners interacting with each other thousands of times every month. Each month, an incredible 66% of our members try something new in their city. It’s tremendously exciting to see the good that we’re doing for members, for businesses, and for the community.
Most importantly, we’re making money only when we achieve our mission, and we’re building a product that we’re passionate about.
The next chapter
In 2019, with Premium taking off, we found ourselves simultaneously running two successful businesses, both with potentially bright futures.
But working on more than one business can kill small teams, or at least make them so slow and internally clunky that they’ll never grow quickly enough. Focus is everything.
When I first started Offline and I thought about being a startup CEO, I thought about the excitement of building a product, serving customers and creating something from nothing. What I’ve realized over time is that a lot of the job is actually just making decisions.
The best way to make decisions is to look at first principals: mission, business model and passion. I knew that if we focused only on Premium, we would jump out of bed in the morning ready to work hard for our members and our partners.
So, as of today, that’s what we’re doing. Today, our entire team will shift 100% of their time and energy to our paying members and our partners, and we will no longer support a media publication.
We will come to the office every day and work on making our paid subscription phenomenal. If you want to read a bit more about where the subscription product is heading, hop over to this post.
If you’ve read this entire post, I have to assume that you’ve been following Offline for a bit. Along the way, I hope you’ve grown to trust and appreciate our brand. I can promise that you’ll find the same (or better!) level of quality, innovation and fun in our subscription service.
If you haven’t already, I invite you to subscribe and join us on the next adventure. If you’re already a subscriber, thank you.
See you on the other side!
– David & the Offline team
Psst—still have burning questions?
If you still have questions or if something I said just doesn’t make sense, we put together a transition FAQ together here that you can check out.
If you have feedback for me or the team, you’re welcome to send it to us here. I promise I will read and reply to every single comment.