How Blockworks survived the crypto winter

“We don't go a mile wide and an inch deep"

I have a pair of podcasts today. One is a conversation with Blockworks CEO Jason Yanowitz on building a crypto media company, and the other is a conversation about how Gen Z is exerting its influence on the workplace and beyond. First up, a message from House of Kaizen.

The best product-led businesses are customer obsessed and it stands to reason that the most sustainable media businesses are similarly audience-first. That means segmenting, understanding and experimenting to meet the needs of each audience at every decision point in the delivery of their experience. Aligning business success with their moments of success to keep them coming back, on their own, without platforms as intermediaries. House of Kaizen works with publishers, subscription and recurring revenue products of all kinds to do just that. House of Kaizen has a proven track record built upon a growth framework that puts audiences first to grow revenue from advertising, commerce and subscriptions. 

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How Blockworks survived crypto winter

In addition to scams, the crypto market is defined by volatility. As a new asset class, this is somewhat normal, although like most things, crypto has taken it to the extremes, as the price of Bitcoin has wildly oscillated since it arrived on the scene in 2009, not to mention the rise and fall of the array of shitcoins the sector has produced. 

Blockworks, founded as a crypto events company in 2018, has rode these ups and downs. It began in the face of a crypto pullback. As crypto recovered and headed into a bull run that accelerated during the pandemic into what I’d consider a bubble, Blockworks expanded from events into podcasts and news. 

Mostly bootstrapped, Blockworks focused on its thesis that crypto would become a new asset class that would enter the mainstream market, and financial firms would need a trusted source of information and data beyond an anonymous Twitter account with an avatar monkey shooting lasers out of its eyes.

“We've got a lot wrong over the years, but one thing we got right was the thesis, which was that crypto would become this huge institutional asset class,” Jason told me on this week’s episode of The Rebooting Show. “As that happened, the number of investors who came into the industry would grow by orders of magnitude. And those investors were going to demand a much more sophisticated level of information about the industry and the asset class, something that looked and felt a little more similar to a Bloomberg or Wall Street Journal, instead of the anonymous blog that gets posted on Reddit.” 

Blockworks used events to generate the cash flow needed to expand. Jason is realistic about events: Beyond any airy notions of community, the job of most events is money. You can generate far more money from events than you can through selling newsletter and podcast sponsorships. 

“The main goal of a conference is not to build a community,” Jason said. “That's this nice byproduct. The main goal of a conference is generating a ton of free cash flow” that can be put to work growing other parts of the business that typically accrue higher multiples, like recurring revenue.

That approach let Blockworks escape the wreckage that came to many peers during the crypto winter. Consider the tally:

• The Block was thrown into disarray by a scandal in late 2022 in which its CEO was secretly taking payments from Sam Bankman-Fried, the crypto villain who has apparently become quite dashing in jail. Earlier this year, The Block cut a third of its staff and ousted its interim CEO.

• CoinDesk cut 40% of its editorial staff in August to prep for a sale by parent company Digital Currencies Group as it was embroiled in a legal tussles over its bankrupt subsidiary Genesis. It even brought in a former Trump impeachment lawyer.

• CoinTelegraph last month caused the price of Bitcoin to skyrocket by erroneously reporting that the long awaited Bitcoin exchange-traded fund was approved by the SEC. It wasn’t.

Of course, all digital media has had a tough comedown from the pandemic and ZIRP sugar high. In the days when crypto brands were splashed on sports stadiums, consumer-facing crypto publications would see traffic rise with prices. The opposite holds true. Advertisers looking to reach retail investors either went out of business or severely curtailed spending. But Jason says Blockworks has fared comparatively better because crypto-native infrastructure platforms continue to need to reach builders. And despite many tourists moving on, crypto builders have continued to build.

Blockworks, on the other hand, closed a $12 million Series A round in May, at a $135 million valuation, to build out its nascent data and insights arm. (Blockworks is not alone in the category. More consumer-focused crypto publication Decrypt has raised $10 million in May 2022. It’s betting on a Web3 publishing platform it’s building out.) Rather than look for subscriptions revenue in individual subs at a modest price, Blockworks is going big with an enterprise product geared to institutions with seats costing $2,500. It’s a big bet to build pretty much the digital equivalent of a company like CapIQ or Factset. Blockworks Research focuses on research, data and analytics and “protocol governance.” 

The media business operates at the top of the funnel, the events in the middle and Blockworks Research at the pointy bottom. The product is squarely focused on decentralized finance, or DeFi, rather than the entire crypto universe.

“We don't go a mile wide and an inch deep,” Jason said. “If you are an investor or financial institution, whether you're Morgan Stanley Visa, Stripe, a crypto fund or a traditional fund investing in DeFi, you have to subscribe to Blockworks Research.” 

I had a brief, mostly unhappy experience with a publishing brand in the bordering fintech space. I didn’t know much about the area, and I quickly realized that the industry was too sprawling for a micro-brand. By that, I mean that fintech is shorthand for tech that is impacting the financial services industry, a sprawling global behemoth that represents a quarter of global GDP. It wasn’t just fintech, it was regtech, insurtech and so on and so on. The attraction of the market was it’s big, the problem was it was too big.

Blockworks focused on the B2B story, even when the frothy days would invariably pull brands into the consumer side as people got the vapors by seeing eye-popping run-ups in prices. Time and again, the lesson is learned that even big companies end up starting with a small addressable market. That’s because massive markets mean massive numbers of competitors, as Peter Thiel preaches.

Blockworks is well-positioned now as crypto is sneakily back in some ways, as the price of Bitcoin has risen 113% this year and is even talked about by Blackrock CEO Larry FInk as part of a “flight to quality.”

Listen to the full conversation on Apple, Spotify or wherever you get your podcasts. Thanks to House of Kaizen for sponsoring this series of episodes focused on how publishers are integrating subscriptions into sustainable business models. Check out their audience-first framework for aligning business goals with audience needs.

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Gen-Z is built different

Every generation likes to complain about new generations. We were subjected to endless stories about millennials killing all kinds of things while having an odd obsession with avocado toast. Gen Z, the label affixed to those born in the late 1990s up until 2013, is the latest generation to get the tsk-tsk approach from older generations. This is growing more acute now that Gen Z is reaching adulthood.

On a new episode of People vs Algorithms, Troy and I discuss the role of new generations questioning how things are done, and why older generations with too much to protect always push back. This was highlighted in the person of 9-5 Girl, who is working her first job and cannot believe the insanity of the 9-5 work day. Young Boomer podcasters were not impressed. But then again, she sorta has a point. The 9-5 work day was a product of Henry Ford’s manufacturing innovation of the assembly line. Many of our structures today were put in place for a completely different era.

I was last in an office in March 2020, and while I miss working with people – the biggest downside by far of the individual path – I absolutely do not miss the office. It was a blunt tool for organization. I’d see people come in and sit at their desks all day with big headphones on. It struck me that many of the airy notions of creativity fostered by constant interactions were also convenient excuses for control. Anytime you have someone taking attendance, it’s a tell. Many young people are pointing out the obvious: More often than not, the office is a detriment to work getting done.

The generational divide is stark over complicated socio-political issues like the war between Israel and Hamas. Younger generations are far less likely to support Israel as Boomers. There are many fingers being pointed to young people being brainwashed by woke college professors and radicalized by TikTok. Maybe. But I also can remember hearing how video games, heavy metal and 2 Live Crew were warping young minds when I was growing up. This is a generation that puts a lot of emphasis on representation and inequality, so even when I’m surprised, I try to take their viewpoints seriously and literally rather than sweep them away as being ill-informed or under the sway of others. 

Listen to the episode on Apple, Spotify or wherever you get your podcasts. True to his European nature, Alex was on vacation this week, but he’ll be back next week. I’m hoping we can discuss the future of Condé Nast.

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Thanks for reading and listening this week. Send me a note with feedback or any other thoughts by hitting reply.