A Trend to Watch: HubSpot Acquires The Hustle

by Alex Ford

HubSpot announced this week that they are acquiring The Hustle for what Axios has reported to be $27 million. The Hustle is a 1.5 million reader strong e-newsletter business targeting entrepreneurs and business owners. In commenting on the acquisition, HubSpot highlighted the overlap between The Hustle’s readership and parallels with the resources and audience that HubSpot has been building on its blog as well as the overall fit with its customer base.

Anyone who has considered HubSpot is likely well aware of the amount of best practice content they offer their customers and prospects. Adding an engaged audience of potential HubSpot customers and a distribution channel for that content makes tactical sense.

So why does this matter beyond what seems like a smart – albeit expensive – marketing play? I’ve long been a proponent of pairing Software as a Service (SaaS) businesses with content. And it’s a trend to watch as SaaS businesses become more sophisticated in their customer acquisition and deepen their value proposition beyond simply offering a software toolset.

Combining SaaS and content means including content as an essential part of a software product or by adding digital media communities or conferences to the front end of a SaaS business model. It was a major factor in the acquisition of the company I founded – Praetorian Digital – and its merger with Lexipol in the public safety learning and compliance space. In this case, The Hustle offers HubSpot content, a conference footprint and a fledging subscription data product.

For SaaS Businesses

If you follow SaaS businesses or have operated one, you know that the beauty of a SaaS business is in its clear metrics such as such as LTV/CAC (ratio of lifetime customer value to customer acquisition cost), payback period, and net churn that supports rapid scaling. Done right, adding digital media decreases CAC by creating an ongoing channel to a captured audience to which you can market your solution and builds brand authority and thought leadership. It provides a warm list for your lead or sales development reps to call and allows you to map lead capture to relevant articles even gating content that closely correlates with purchase intent.

More importantly, it also allows you to map content to all stages of the customer lifecycle, which  improves core metrics like usage and net churn. Taking this one step further, content paired with a SaaS platform presents opportunities for new product features or add-ons. For HubSpot, this could be a premium subscription for customers either at an additional cost or as a value-add to support annual price increases. Learning management system businesses have long applied this strategy by offering course content along with their platform and authoring tools. Finally, the data from content engagement can create intriguing opportunities to pair software usage data with industry trends. In this case, the Hustle already offers a data product – Trends – that will only grow in value within the HubSpot ecosystem.

For Digital Media Operators

Digital media has largely been struggling to find its way over the past several years to compete with social media and the rapid changes in content consumption. For digital media businesses in or around verticals where workflow tools are important, there are important implications. SaaS businesses, who may be some of your larger customers, could be future acquirers or could begin to compete as they build their own blogs and newsletter lists. Think differently about the SaaS businesses you have as customers and look for partnerships and deeper relationships to test the waters.

Alternatively, digital media businesses are in a unique position to swim upstream and add SaaS or workflow solutions to their offerings as I did at Praetorian Digital when we built an enterprise learning platform for first responders to extend our digital media communities. That effort ended up generating nearly half of our annual revenue. Doing so is a heavy lift and requires a major shift in culture and different skillset but is well worth the effort when comparing relative valuations and the opportunity to embed your business within your audience. And with software becoming easier to build and manage, the deep domain experience, engaged potential customer base, brand trust and content resident in any digital media or traditional media business presents a set of competitive advantages that will only become more important as we’re seeing here with HubSpot.

 

Alex Ford is an accomplished entrepreneur, angel investor, public speaker and executive. He served as Chief Executive Officer of Lexipol in 2019 and 2020 following the merger of Lexipol and Praetorian Digital, which he founded in 1999. Alex led the company to become the leading learning and content platform for first responders and local government leaders, driving 15+ years of profitability and more than 15% growth per year. Currently, he is operating partner at North Equity and strategy advisor to multiple companies.
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How Two Top Future plc Editors Are Taking Their Verticals to New Heights

“…what really makes an outlet stand out, especially now in 2020, is being able to establish all your writers as distinct voices—people that readers will want to come back to read whatever they write. That’s kind of one of my big focuses and goals—to make sure that our writers become [that] voice, and folks will want to read their latest stuff.”
Mike Andronico, editor in chief of Tom’s Guide for Future plc

How much personality and “voice” should writers for niche publishers put in their articles? The answers are certainly going to vary by the type of article and the writer, but in a discussion yesterday, we did flesh out a few guiding perspectives.

I asked Sherri L. Smith, editor in chief for Future’s Laptop Magazine, how she handles that.

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“I’ve always written that way [inserting her personality]. I just need to put a little bit of me into it. What I’m writing, especially for Laptop Mag, I like to think that I’m writing for my mother and my grandmother. And the easier it is to read, the easier it is to understand and the less tech support that I have to do. It hasn’t worked yet. I still have to do tech support every time I go home. But that is the overarching goal of the copy.

“But putting a little bit of personality into your copy helps in the long run. Who wants to read a boring review? You can do that on Amazon—oh, here are the specs, this is what it’s supposed to do. People want to know how the lived-in experience is. Tech, in a lot of ways as in tech reviewing, is an aspirational thing. Like Laptop and Tom’s Guide [another tech website there], we definitely do a lot of testing.

“[While] a lot of people don’t understand what [some techy terms] mean, what they do understand is, ‘I did all this multi-tasking, and the machine was still chugging along and I didn’t experience any slowdown. [But] it did get hot when I put it on my lap.’ Or in a game it didn’t stutter. Those are things that people understand, rather than okay, it transcoded this in two minutes. What does that mean to anyone but people who are well-versed in the industry?”

Greg Friese, editorial director for Lexipol, said that he often has to “remove some of the personality” of his writers because many are cops, firefighters and paramedics, and not actual writers. “Depending on the topic, a conversational tone may or may not work,” he said. “Some of their regionalisms and things that might be appropriate for the fire station might not work in an article for the world to see.

“We’re trying to show our writers that we’re giving them a pretty big platform and as such they might have to be a bit more formal than they think.”

Allowing writers to inject more personality could also help them become more of a personality for your audience—and that could lead to valuable speaking or moderating assignments at events and webinars.

The tone of an article is a difficult decision sometimes. I often inject one of my theater, film or sports references to play off of. But then sometimes I’ll go back after I finish writing a piece and cross out that “personality” lead because I’d just rather get straight to the point. Or put in what I think is a great quote as I did today. So it is definitely a balancing act.

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“I actively encourage writers to, not only write in their own voice, but write about the things they’re passionate about, as long as it’s in our wheelhouse and has potential,” said Andronico. “In fact, I kind of have a reputation if I overhear someone talking about, like something that happened with tech in their personal life, I’ll say, ‘Oh sounds like a story, you should write that up. Sounds like you just volunteered yourself.’ If you actively encourage your writers to write about their personal lives, write in their own style, their own voice…

“Our editor just did a great piece about getting the Apple Watch for the first time, his first few months with it, how it kind of changed his life, his fitness routine and all that. There are so many other great examples of that where we’re writing about the products and the topics that we normally cover but from a much more personal angle which I think people connect with.

I really like when we’re able to just write like everyday people,” Andronico continued. “As Sherri said, write things that your mom can relate to, your grandmother can relate to. So I always actively encourage that type of content. I actually make sure that we have a steady flow of it in fact because I think it’s one of those things that makes us stand out.”