Enjoy!

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Just received this email from the W Washington DC. Short version: “Thanks for booking at W Washington DC. Now, are you sure you want to stay here? It’s pretty fucking awful…”

You’re set to escape to W Washington, D.C., Paul I’ve got to say, we’re as excited as you must be. Below are some tips for a wonderful time.

RECHARGE/  A MPLIFY
Sunday through Wednesday, W Washington, D.C. offers a more relaxing vibe / Thursday through Saturday…things around here are definitely more amped-up. And a word to the wise about weekends: nighttime music & post-party sounds can travel through the entire building.

We want you to rest assured that we respond to any concerns about parties taking place within the guestrooms and suites of W very seriously. Any reports of disruptive conduct on the guestroom levels of W will be immediately addressed.

If you aren’t convinced the vibe at W is the best fit, we can assist you with changing your booking to another SPG destination that might be a little more your speed. We would hate to see you leave us so W won’t charge you a cancellation fee – unless you have booked an online pre-paid rate (This is indicated both on our website & on your confirmation email that this non-refundable rate and charged at the time of booking).

POINT OF VIEW

Capitalize on night-time perspective only offered at P.O.V, the rooftop terrace and lounge at W Washington, D.C. P.O.V offers dynamic views, tapas-style cuisine, and craft-inspired libations. While everyone is welcome at P.O.V until 5 P.M., P.O.V goes 21-and-up thereafter (valid I.D. is required for all guests). Don’t forget: 1) Dress to impress and 2) For a table, reservations are highly recommended. To book a table or learn more information, visit pointofviewdc.com or dial 202 661 2478.

FRESH AIR

W Washington, D.C. is a completely smoke-free environment.  To ensure this is always the case, there is a fee $300 for smoking in one of our Wonderful, Spectacular, or Fabulous rooms; there is a fee of $500 for smoking in one of our Marvelous, Fantastic, or Wow suites. So don’t let that money go up in smoke…why don’t you plan to take it to the street.

GREEN STYLE

Staying more than one night – Go GREEN.  Make a Green Choice is exclusively offered by SPG at W Washington, D.C. Each day you go green by forgoing your daily room styling, we’ll throw 500 extra SPG Starpoints your way.

Thanks for taking time to become familiar with the wonder of it all at W Washington, D.C.! You are welcome to contact me directly with any questions. We look forward to welcoming you soon!

Enjoy!

If you have to send that email to every guest — before they even check in — then maybe there’s something wrong with your hotel.


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Clay Shirky Says NSFWCORP Has Unlimited Cash. Great! Now We’re Screwed

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scrooge
A few days ago, in an interview to promote his (genuinely excellent) co-written study/manifesto on “Post-Industrial Journalism“, Clay Shirky had this to say about me, and NSFWCORP…

“You get a lot of people saying that their model is the best and that everyone else has got it wrong. Or they are unwilling to admit what exactly their business model is. Take Paul Carr – I disagree with much of the content of his work, but he’s just a brilliant writer: He never says that nsfwcorp is bankrolled by Tony Hsieh. He doesn’t go out and say, ‘my organization works because a millionaire thinks I’m great and other newspapers cannot necessarily replicate that.’”

I can’t tell you how grateful I am to Clay Shirky for saying those words. Not just the kind ones about my writing (although, in point of fact, Clay, I’m not just a brilliant writer. I also cook a mean beef stroganoff) — but also for setting my mind at ease, apropos the Future of Journalism (With Jokes).

To think, for the past few months, I’ve lived the constant near-panic of a start-up founder: obsessing over cash flow spreadsheets (which I update sometimes a dozen times a day), tweaking and re-tweaking freelance budgets, agonizing over healthcare options and waking in the middle of the night from nightmares of having to close down the entire company because of some miscalculation I’ve made during commissioning or hiring.

And all for nothing! Because everything is totally fine. Thanks to our millionaire benefactor, Scrooge McHsieh (John D Hsiehafeller? Bill McHsiehates?), I can rip up those cashflow forecasts, tear down our paywall and pour the team another pint of Krug 1928. Happy days are here the fuck again.

Careful readers will have detected my sarcasm in the lines above. I wonder, though, if my anger and frustration are coming through clearly enough?

In just a few smug words, Clay Shirky, one of our most respected media commentators, dismisses the entire business model of NSFWCORP — our paywall, our print edition, our ebooks, Conflict Tower — as a gimmick, a fig leaf to distract from the comfortable reality: that NSFWCORP is nothing more than a rich man’s plaything. We’re not the future of anything, we’ve solved nothing. At best, we’re lucky; at worst, frauds.

That’s just the kind of cuttin’-through-the-bullshit tellin’-it-like-it-is statement for which Shirky is famous, and for which institutions like Columbia and NYU keep cutting him checks. And, by happy coincidence, it allows Shirky to neatly slot NSFWCORP into the broader premise of his report: that no-one has yet figured out a viable business model for journalism in the Internet era. But maybe — just maybe — if we follow Clay Shirky’s advice then one day we might. (There’s actually a name for institutions — media pundits, say — trying to preserve the problem to which they are the solution. It’s called the Shirky Principle.)

Few people are better informed on the collision of media and technology as Clay Shirky, even if he is a little obsessed with the idea that EVERYTHING HAS CHANGED. Likewise, he’s absolutely entitled to have his doubts about the viability of NSFWCORP. God knows, I share many of them (more on that in a moment). But there’s just one problem with his demand that I acknowledge his description of our financial position.

It isn’t true.

In fact, it’s embarrassingly, infuriatingly, dangerously wrong.

Shirky says I should be honest about how NSFWCORP works, that I should “go out” and explain how the company is financed and what exactly our business model is. Well alrighty then….

NSFWCORP has raised a total of $640k from three investors, including Tony Hsieh’s Vegas Tech Fund (VTF), all of whom invested on exactly the same terms, as covertible debt. VTF is by far the largest investor, responsible for $600k of that total (the other $40k came from CrunchFund and Judith Clegg. It’s all disclosed here.) VTF’s $600k takes us right up to the maximum amount the fund invests in startups, and the fund’s partners have made absolutely clear: that’s it. Indeed, when I last saw Tony and asked for advice on future funding, his advice was that we shouldn’t raise any money if we can avoid it but if we did need to, he could introduce us to another possible investor. That’s it. There is no more money coming from Tony or Vegas Tech Fund. We are not “bankrolled” by anyone, except in the same way as any other company that has ever raised a seed round.

(Another important point, and I mean this as a positive thing: since we started publishing I have not once had a conversation with Tony about the content of NSFWCORP. In that regard, he is absolutely the perfect media investor.)

How am I doing so far, Clay? Honesty-wise?

Great! Let’s go on…

NSFWCORP was founded with two goals: 1) to create a brilliant news magazine (with jokes) and 2) to prove that it is still possible to build an innovative, independently profitable journalistic organisation: one that treats its journalists well, allowing them to produce great work which readers are willing (eager even) to pay for.

Journalistically, I think we’re doing pretty great. Earlier this week, the chancellor of Appalachian State resigned, just days after we published David Forbes’ exposé on how the university covers up rape and sexual assault by athletes. On Wednesday, NSFWCORP’s Yasha Levine broke the story of how California parents are being “empowered” by billionaires to destroy public education. Our first print edition featured Mark Ames’ first-hand account of being spied on by the ADL — the same issue in which we published the definitive list of the 100 people most culpable for misinforming the public in the run up the Iraq war.

How about innovation? Our entire publishing platform was built in-house, including our paywall that allows subscribers to “unlock” paid content for outside sharing. We’ve launched “Desknotes”, allowing subscribers to eavesdrop on our internal editorial discussions, and Conflict Tower to ensure transparency for everything we do. We’ve launched a nightly radio show and a monthly print edition. And that’s just the start: our product road map reaches from here to the moon.

Financially — well, I wish we had a millionaire benefactor. To put our funding in perspective, the total amount raised (converted to/from 2013 dollars) would barely cover the New York Times’ weekly payroll in 1916, or the cost of producing a single issue of Scanlan’s in 1970.

And yet… our entire business is perilously close to breaking even, thanks to the thousands of people who have signed up for monthly subscriptions ($3 for web / $7 for web and print) or our Conflict Towers membership program. (Conflict Towers “residents” can buy a virtual room for anywhere between $3 and $1500 to support our work. Residents get a lifetime subscription to web and print and a public profile on the site. Starting this summer, we’re hosting a series of Future Of… dinner parties for Conflict Tower residents and their guests, in cities across the US and internationally. Buy a damn room already.)

This month, even after paying good salaries to our reporters, paying the hilariously high travel costs required for serious reporting, finally setting up a healthcare plan for full-time staffers and expanding into print, our burn rate will drop to under $25k. Three months ago it was three times that high. We only need to sell 4000 more print subscriptions, or a dozen or so more floors in Conflict Tower, and we’ll break even.

That — that, Clay — is the honest truth about NSFWCORP’s business. We, like every other publication since the beginning of time, have raised a relatively modest amount of start-up capital, mostly from a fund in which Tony Hsieh is a partner. But what we’ve built with that start-up cash is a real, fiercely independent journalistic enterprise, delivering scoop after scoop (with jokes) for a growing audience across multiple platforms (while, by the way, solving the problem of porous paywalls, and proving that print isn’t dead).

So all of the above is why Clay Shirky’s comments make me feel like being sarcastic. Now here’s why they make me feel frustrated, and angry…

As founder and editor in chief, I am terrified, TERRIFIED of fucking this up. The closer we get to profitability, the more terrified I get. We are so close to pulling this off. So close to proving that it is possible to pay brilliant journalists a good salary (with full benefits) to do great work, in a profitable, sustainable way. And yet, with no immediate prospect of raising more money (I mean, what? Is now a good time to ask Mike Arrington for more cash?), I’m acutely aware that we’re going to take this right down to the wire.

All it takes is one unexpected expense — a rise in print costs, a story that goes over budget, or any one of a thousand other calamities that I failed to account for — and I’ll have to close the doors and lay off the best team of people I’ve ever worked with, all of whom risked their careers to help prove that great journalism has a profitable future.

It’ll only take a few thousand more subscribers for us to reach profitability, but it only needs a similar number to think “oh, NSFWCORP doesn’t need my support right now… they have their own pet millionaire” in order to doom us. With the stakes that high, Clay Shirky’s blithe, inaccurate claims could become the precise opposite of a self-fulfilling prophesy.

So, Clay, maybe next time you smack me and my business in the face with a velvet-wrapped two-by-four, you could at least pick up the phone first to check that we’re really as rich as you think we are.

Or better yet, buy a Conflict Tower room and you can ask me in person at one of our residents’ Dinner Parties. Appropriately enough, the first one is themed around The Future Of Journalism. I suspect we’ll have a lot to talk about.

(This post also appeared on PandoDaily)

Illustration by Brad Jonas, NSFWCORP

 


* * * *

The only thing I know about the Michael Arrington allegations

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[Update: Since publishing this post, I have spoken to Julia Allison who asked that I clarify she did not at any time speak to a Gawker journalist or editor. She spoke to a friend who is affiliated with the site and who passed on her claims to reporting staff without being authorized to do so. I am very happy to make that clarification.]

I have now written and rewritten this post a dozen times. At one point it spanned nearly 1500 words. But, actually, I barely need half that many.

Here’s the nut: A few days ago, Gawker posted its latest story about former TechCrunch editor (disclosure: and current NSFWCORP investor) Michael Arrington. Specifically, they published allegations that Michael assaulted an ex-girlfriend back in 2009. I won’t name the girlfriend here because she’s asked me not to; instead I’ll call her ‘Z’. (The original version of this post called her ‘A’ but that turned out to be too confusing. To be clear ‘Z’ is not Jenn Allen)

The allegations came in the form of text messages sent to Gawker by Julia Allison, a friend (or maybe now former friend) of ‘Z’. Most of us who know Julia have heard her make these allegations before, although the details frequently change: sometimes the incident happened in a house, other times a hotel room, other times a moving car. Unfortunately, this time, Julia decided to mention my name, implying that I was aware of the incident and so implicit in a cover-up.

I don’t want to speculate too much on Julia’s motives here. Maybe she thinks she’s doing right by an old friend. Maybe she thinks it’s a good idea to insert herself into this story at a time when the rest of us wish we could do the opposite. Maybe she isn’t thinking at all.

Whatever the case, now that my name has appeared on Gawker in connection with this whole sorry business, I want to say a few words on the record to clear up any misapprehension or misinformation.

I was trying very very hard not to get involved with the recent “Bonfire of the Arrington” saga, not least because, until this past Friday, I hadn’t spoken to Michael in a year, since he was fired from PandoDaily. To say that I was angry with Michael for how he behaved as an investor, board member and friend, is the mother of understatements. When I read Jason Calacanis’ Facebook post about Mike the Bully, I found myself nodding along through much of it. By contrast, when I read Heather Harde’s spirited defense of her former business partner, in which she described Michael as “an example for the field of gender studies”, I nearly shot Diet Coke out through my nose. And when I watched Loren Feldman’s video in which he says he believes Mike is capable of at least one of the crimes he’s accused of, I understood why Loren believes that: Mike has treated a lot of people, particularly former friends, very badly indeed. So badly that you could believe him capable of almost anything.

But just because Mike can be a bully doesn’t mean he’s guilty of assaulting women, or worse.

Here’s the truth: I do have some inside knowledge of the incident to which Julia is referring. I have this knowledge because, unlike Julia, I actually saw ’Z’ that day. And, unlike Julia, I’ve since spoken to both Michael and ‘Z’, and compared their stories with those of independent witnesses to ensure I actually have all the facts.

Earlier drafts of this post included a full and unseemly account of the events of that day. But, the more I think about it the more I realise that the details of a private relationship between two private people are… well.. private.

So, and with the full blessing of everyone involved, I’ll just say this. On the day in question — the day on which Michael and ’Z’ broke up — there was a heated argument. It wasn’t in a hotel room or a moving car and it wasn’t even on the last day/night of TC50 as Gawker claims (I think the only detail Julia/Gawker did get right was the year). The argument began at the TechCrunch office and it ended at Michael’s home. The TechCrunch portion of the argument was witnessed by several people; the home part by at least one.

After the argument, and the break-up, ’Z’ was extremely upset — to the point where she said things about Mike that she now says are not true and she wishes could take back. I have no doubt she said similar, if not worse, things to her (then) best friend Julia. But, and this is the important thing: had any of us present that day witnessed anything like the behavior that Mike is currently being accused of, or believed it to have taken place at any other time, we would have immediately called the police, and never spoken to Mike again. Again: Julia Allison was not there that day. I was.

Speaking to me on Monday, ‘Z’ is absolutely adamant — and she is happy for me to repeat this here — that no assault or physical abuse took place and that she is not a victim of anything. (I asked her for permission to quote her verbatim but she insists that she doesn’t want to speak on the record about her private life. That’s entirely her choice.)

So, while I’m sure the rest of this sorry mess will continue to drag on, maybe even into a courtroom, let’s at least put this one claim firmly to rest.

Michael may have acted badly towards a lot of people, and I’m certain a lot of those people are glad to see him taking a fall. Maybe in my darkest moments, I’m one of them. But, whatever your feelings towards Michael, it’s important not to say things that aren’t true.


* * * *

Porous Paywalls Are Not The Answer To Anything. Cartoon Towers, On The Other Hand…

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Screen Shot 2013-03-27 at 9.28.39 PMThis post originally appeared on PandoDaily.

I’ve already shared my vision for a (consumer) media landscape divided down the middle. On one side will be the linkbaiters, the SEO-ers, the aggregators and the slideshow-ers: all free, all supported by ads. On the other side will be the publishers, the journalists, the writers: all paywalled, all the time. Both sides will happily coexist, trading content for traffic.

It took them a while but finally it seems like major news organisations have realised that I’m (always) right. In the past few days, everyone from the Washington Post to the San Francisco Chronicle (via The Sun, The Telegraph and Andrew Sullivan) has announced plans either to erect a paywall for the first time or to raise the height of their existing wall.

There’s just one problem: most of those publishers have opted for, or apparently plan to opt for, a “porous paywall” — journalism’s equivalent of the “freemium” model.

[An important note: everything I know about the economics of journalism is limited to the consumer market. I know absolutely dick-all about the economics of trade pubs like PandoDaily, Variety or Sheep!]

In George London’s wonderful essay “You’re Doing Fremium Wrong,” London points out the logical flaw in companies giving away their core product for free while charging “power users” for extra features…

“…in many freemium startups, the free product is the real product and the “pro” product is just a bunch of random tacked-on features that might appeal to power users. Instead, startups should remember that the premium product is the real product, and the free version is just a conduit to make people aware that paying money will actually solve their problem.”

This is the same mistake being made by the porous paywall crowd: allowing the vast majority of their regular visitors to read their content for free, then charging power users (power readers?) for reading more than, say, a dozen articles a month.

In huge organizations like News Corp and the Washington Post, this fear of locking out readers is understandable, especially after the failure of walled gardens like The Daily. Limiting access to a property with millions of existing readers is always going to be a tough decision: will the subscription revenue make up for the loss of advertising, and the drop in visibility? My gut tells me that some newspapers (the Telegraph, the Washington Post) will decide that, yes, a smaller, paying audience is a sacrifice worth making to keep being able to do serious reporting — and will keep building their walls higher and higher. Others meanwhile (the Sun, the Chronicle) will continue to choose pageviews over paywalls and will ever return to free, or go out of business. Or both.

For startups, however, there’s no need to wait and see.

Porous paywalls for journalism make as much sense as a coffee shop giving free lattes to anyone who comes in just twice a week but then charging fifty dollars a cup on the third visit. That’s a hell of a loyalty scheme, and a great way to encourage people to settle for just a couple of free cups of coffee rather than drinking more and having to pay. Andrew Sullivan seems to have realised this as he’s just lowered the number of free “read more”s his visitors get before hitting his paywall. Keep reducing, Andrew. When you get that free content down to somewhere around zero you’ll have nailed it.

At NSFWCORP, we offer no — zero — free articles on our front page. Our entire archive is locked down too, as our our ebooks and our extra features. You can see titles and a brief summary, but that’s it.

In the couple of months after we launched, that strategy had brought us 3,000 paying subscribers, each paying $3 a month. In other words, is was a success.

But then, around November of last year, I got nervous. Subscriptions were still growing, but I had no way of knowing how many readers and subscribers we were missing out on by not being more visible. Maybe everyone else was right: maybe a porous paywall was the answer.

So, for three months, we lowered the wall. Suddenly the vast majority of articles were available to the world, but power users could still opt to pay the $3 a month to see everything, and for features like the ability to eavesdrop on our editorial discussions.

Guess what? Subscriptions flatlined. Flat. Lined. Not many people cancelled, but the number of new subscribers dropped to barely double digits a week.

But, yes, our traffic skyrocketed. Went through the goddamn roof. The world and his dog was reading NSFWCORP: but neither man, nor dog was paying a dime. And, because we didn’t want to play the SEO game or start writing about Justin Bieber, we stayed below the 2-3m unique visitor level that Bryan Goldberg argues is needed to create a serious advertising business. The worst of both worlds.

A couple of weeks ago, we ended our dumb, cowardly “freemium” experiment. With the announcement of our new Print Edition, we also announced the return of paywall. In fact there would now be two paywalls: a digital-only paywall for $3 a month and a print + digital paywall for $7.

The result: our subscriber count immediately started rocketing up again with our total subscriber base back growing by around 10% a week. Which is ridiculous. More ridiculous still is the fact that over 50% of those new subscribers are opting for the highest priced subscription level. And the people who cancelled? They’re coming back.

But what about those “super users” — the small but steady steam of readers who would gladly pay even more than just a subscription fee, either because they like what we’re doing, or just out of a general desire to support the future of journalism (with jokes)?

Last night we launched something just for them. And the results have been pretty damn remarkable.

We’ve called it Conflict Tower: a virtual skyscraper housing everyone who has paid us more than a standard monthly subscription. Investors, supporters, power-users… anyone.

As a journalistic organisation, we’re ethically obliged to disclose those (potential) financial conflicts of interest, so we figured we might as well turn that disclosure into something fun, and profitable.

On the top floor of the Tower you’ll find cartoon representations of all our investors — including full disclosure of how much they invested. Below that, are 97 more floors of rooms, available to anyone who wants one. Rooms start at $3, and increase in $3 increments, right up to the most expensive: $1452 for a place on the 97th floor (update: sold!)

Everyone who buys a room (even if it’s just for $3) gets a lifetime subscription to NSFWCORP in print and digital, their picture on the front of the Tower (clickable to show a longer profile, including the amount they paid us) plus five extra copies of our ultra collectable print edition. We’re also planning a calendar of Conflict-only events around the world.

Honestly, when we set the Tower live at 7pm last night, I had no idea if we’d sell more than a few $3 – $12 rooms to our hardcore fans. But nothing ventured, nothing gained, right? Anything we can do to avoid having to raise any more money from venture capitalists (God love ‘em) can only be a good thing.

We sold our first unit (to an existing subscriber who spotted a link in the footer) in less than three minutes; barely enough time to complete the payment flow. Within five hours we’d completely sold out the first ten floors. At around 1am the next morning we sold our first $1000+ room. (I actually yelped out loud when that happened, like a small dog.)

In the 24 hours since launching the tower, we’ve sold nearly $20,000 in rooms — and the rate of sales shows no signs of slowing. Some people are even buying multiple rooms.

What’s really surprising is how many first time visitors are buying rooms, just to show their support for independent journalism (of course, those people immediately become lifetime subscribers too). It takes a lot to make our cynical team feel humble, but so many people showing that level of support for NSFWCORP has reduced us all to blubbering piles of gratitude. If we sell out the Tower (which is actually starting to look like a possibility) it’ll bring in a little over $350,000 in revenue. Which means we won’t have to raise another dime unless we choose to.

There are four big takeaways from all this:

One. Subscribers are the lifeblood of any serious journalism startup hoping to succeed in the consumer market. Strict paywalls are by far the best way to reward those subscribers for their support and to encourage non-subscribers to take the leap.

Two. Even with a strict paywall, there are a number of things publishers can do to keep their content visible to the outside world. For example, we allow subscribers to create 48-hour temporary links for articles they want to share with friends — but that sharing power always stays in the hands of paying subscribers.

Three. Power users are your most important ambassadors and can be your biggest financial supporters. Offering them something special — a lifetime subscription, special events, public acknowledgement of their support — in return for their support is the perfect way to encourage and reward that behavior without alienating regular subscribers. (And apparently, if you do it right, you can even turn non users into power users right from the start.)

Four: Conflict Tower and subscriber-driven sharing are our solutions to the challenges of paying for journalism in the Internet era. You might be able to think of something far smarter. But surely we can all agree that porous paywalls which reward casual browsers while punishing fans can’t possibly be the right answer to anything.

Right?

Right.


* * * *

Issue One

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