When Elaine Kunda took over B5Media in 2009, it was a mess of unfocused blogs and a failing business model.
Less than two years (and a little help from Elizabeth Spiers) later, she oversees a thriving network of five sites — Crushable, The Gloss, Blisstree, The Grindstone, and Mommyish — that posts professional content produced by full-time editors.
In b5’s Flatiron office, we spoke with Kunda about the past, the present, the future, and becoming Vogue.
You came in and really remade the whole business strategy of B5. Can you talk about that a bit?
I consider us a restart. We started off as blog network that was unfocused and it didn’t work as a business model. It was a neat hobby but it didn’t work from a revenue perspective because it was too fragmented. What they did a good job of was write a scalable technology platform but no focus and really didn’t have any good content which, you know, makes for a challenging environment when you’re trying to sell advertising. When I was getting involved, I saw an opportunity in the women’s space, and while it’s crowded, it’s crowded without the same kind of noise. I wanted to create a women’s publishing network that focused on honest genuine content, topics that women are interested in, and in a way that women discuss things. You might find a great mummy blogger but not across all relatable topics for women. I met Elizabeth Spiers and she originally saw what B5 was and wasn’t interested. After a lot of discussion, she recognised that what I wanted to do is different from what exists and is in her wheelhouse of what she likes to do. We created three sites with the intention that this would be an expandable media company at some point. We hit the ground running. February 2010 was launch of our first one, which is Crushable. Not even two years, so I’m amazed with what we’ve accomplished in a short amount of time.
When you came in, your intentions were to blow up the whole model on the content side?
I always ask myself the question, would it have been easier starting from scratch or working with something that existed. It’s like renovation on a house. You think you have to tear down one room and then your realise you have to tear down the whole thing. That’s what happened. If you slowly make changes, it confuses people and hurts morale, so when we launched, the past is the past. It was kind of a switch and things changed.
It’s a pretty crowded space. How are you different from a Glam or a Sugar?
That’s a fair question and one we get often. The similarities with those examples are, we all reach women and discuss some pop culture topics. If you dig in, our content is much more editorially driven. Sugar is very image heavy. Ours is about perspective. It’s just like the news, some report and others have perspective on it. Our approach is much more opinionated, honest, edgy, then what you’re getting from Sugar or Glam. Glam is just a network of a lot of different sites. It’s like comparing an OK Magazine to Vogue. They’re both reaching women but put them on the table and they’re not at all the same thing.
Web publishing alone has a limit in terms of revenue. Do you have designs for e-commerce or something else?
The starting point for me and us is about engagement and creating content, and getting people to come and trust us and engage us. That was always our initial plan and it’s the hardest part. Once you have people who trust and believe what you have to say, you can layer on other things. E-commerce is definitely an area we’re interested in exploring. We are in discussions with various people about what angle we want to take on commerce. ShopStyle is one approach, and the whole discount type with Gilt and now you have OfAKind, which is more curated. There’s a bunch of different angles, and we’re trying to figure out what makes the most sense for our readers and our brand, but definitely commerce is something we have our sights on in the very near future. Another area is around engagement, and I can’t say too much, but we’re in discussions to also provide social media type tools that would allow people to share a lot more then they can on our sites.
But I agree, the straight ad rate, ad model, it doesn’t really work as a thriving business model. The value of our audience is so huge. You see companies like BirchBox and JewelMint, where you pay a fee and you get samples of product every month. Their biggest challenge is acquisition of clients. We have that, so there has to be some kind of merger of these interesting businesses that are popping up, but at the end of the day, what everybody wants is what we have, the audience. What I don’t want to do is disappoint them with anything I don’t think is of the quality or standards that we deliver on in our content, with some kind of cheap way of making money, so that’s why I’m being somewhat careful.
How many users do you have?
Just under 3.5 million across our sites. Our two newest are growing leaps and bounds, month over month. Then, we have our little orphaned male site, EveryJoe, that brings in half a million as well, so our network is 4 million. But on the woman’s side, it’s just under 3.5 million.
Are there plans to do anything with the Men’s side, or focus on the women?
I’m going to focus on the women for now. I see huge opportunity for the male demographic in lifestyle. No one is doing it very well,, and I think men would be interested. What I also find interesting is there are men who really like our content on our women’s site and comment quite regularly. It’s kind of a proof point that they’re interested in the approach to these topics, so I can only imagine what we could accomplish if we had a more male skew. But I have to say focused for now.
Are there plans for other verticals?
There are intentions down the road, but I would say in the short term we’re trying to build what we have. I like the home decor and design space. I think it’s an undeserved market online. That’s a big one. Beyond, there’s always an interest in food. I just think that’s a really crowded market, and I’m not sure how we could cover it differently. We’ll never go to market with the same kind of approach everybody else is taking. If you look at Mommyish, everyone was shocked we were launching a parenting site, but I can’t find a parenting site that’s even remotely close to covering the topics we cover, and that was the intention. It’s for the mum; it’s not about being the perfect mum or raising children. It’s a safe haven for mums to go to. It’s not service, over-earnest. If we can find a way to tackle a topic or vertical — the way we do, with a different angle — I’m sure there’s lots of other opportunities down the road, for us.
How about profitability?
We’re getting closer. With the launch of the two new sites, there’s the wrap up time, the cost of building them up and hiring, and they pull from the other sites being profitable. As we continue to expand, the challenge is that we’re growing our revenue but we’re adding costs. It depends on what our mandate is as an organisation: to grow or to get profitable in a shorter period of time. That’s what will dictate when we launch anything new. I definitely think the e-commerce will help as well.
So, what is that mandate?
I’d like to say it’s to grow at this point and I’m in discussions right now, putting together my plans for growth. I keep the board informed of expectations, and I want and need them to be supportive. They need to see we’re improving and as long as we’re going in the right direction, they’ll be supportive of that growth.
How about funding? Are there plans for additional funding or are you set with cash?
We have enough cash to grow but I’m going to need more. It’s an interesting process and it depends on the type of investor you’re talking to. Everyone wants different things, and it really depends on what they’re used to investing in and what their goals are. New York investors are different then Valley investors, then Canadian investors, and Boston is a whole other market where there’s money. Timing of the market, what’s hot at that point in time, dictates their appetite for different things. It’s really what they think has the best potential for success and what’s hot. Everybody jumps on that wagon. The Birchbox model seems to be really hot right now just like the whole Groupon model was really hot, and that’s proving to not be the smartest investment right now, so it doesn’t mean they’re always right. I think we’ll see a lot of consolidation in the women’s and beauty industry online, which I think needs to happen. I think there are a lot of startups that won’t get refunded in the next year, so out of desperation they’ll either reemerge or cease to exist, which is unfortunate because I think it’s the smaller companies who are doing the interesting, edgier, new things. It’s the bigger companies that have the money and can sustain themselves. The market’s being underserved because the money isn’t necessarily there. Unfortunately the advertisers don’t help because they stick with the one’s they know. No one is going to get fired for buying Conde Nast and of course I understand because they have their own mandates but to get new interesting products and opportunities for advertisers, they have to support the smaller companies because they’re the ones that are willing to work with them, and that’s the challenge right now.
Do you see this is a smaller independent operation? What if Conde said they wanted to pay X amount of dollars for it? Are you looking to flip, or is the idea let’s build it and see how it goes?
I always go with the approach of let’s build it. If Conde came along and said they wanted to pay what we think we’re worth, then I’m sure we would always be open to that discussion but that’s not our plan, per se. I think there are a lot of companies we would be a nice fit for. There are ways to buy smaller, more nimble organisations and have them stay that way. Not everyone does it right, but there are ways that you can, and I would be very open to that if it was the right fit.
Last question, I read that you said you used to look at 5-10 years down the road, then 2-5 years down the road and now you look 18 months. Where do you see this in 18 months?
We’ll be more of a full-blown media company. That’s my vision. I’m working on my presentation right now. I have my 90-day strategy, and then it goes 6 months out. It’s all focused on building out the social, e-commerce, event components. Rounding out the business and leveraging our audience and our influence, which is exactly what I think we have now, which is valuable. I go back to, when you have that influence, you have to be careful how you use it, so that’s why we’ve taken our time.
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