This post is by Christine Schmidt from Nieman Lab
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When some people start reporting a story, they start by googling the topic. I start by searching it in the Nieman Lab archives. Sometimes you find a plot twist. Pico came on my radar with some emails from the cofounder, Jason Bade, and the news that the Lenfest Institute was providing the startup with $50,000 to test marketing experiments for publishers. As a CRM for media companies, Pico is trying to fill the tech needs that publishers have in building relationships with reader revenue (and the readers behind it, of course). It also recently raised $4.5 million from Stripe, Axel Springer, and others. The only — until I hit publish on this [ahem, you mean “my editor” —Ed.] — piece mentioning Pico on our website includes this bit, a not particularly auspicious debut:
Any startup you work with is going to have its own problems. The Austin tested micropayments with a startup called PennyPass. But once the trial was up, there was no way to store the customer payment data it had collected easily or securely. “From that experience, PennyPass has since pivoted to solve that pain point for publishers, rebranding itself as Pico and pivoting to become a customer relationship management platform.” That’s fine, but it’s also a reminder to be skeptical about startups that come your way pitching their solutions.Bade and his co-founder Nick Chen — brother of CNN correspondent Natasha Chen and friends with Bade since childhood — had indeed worked with a nonprofit outlet in 2017 to test micropayments, then realized they couldn’t easily store the customer payment data. And thus, the startup evolved — goodbye micropayments — and rebranded into Pico in mid-2017. “What publishers really needed was a funnel to some sort of reader revenue, and we had been too prescriptive about that type of reader revenue,” Bade, who has a background in behavioral economics, said. “When we finished the [micropayments] pilot, very few users had converted into subscribers, but we had this big spreadsheet of leads. We asked them: ‘Where do we put it? Do you have a format you like it in?’ They said: ‘We don’t have a CRM. We have a plugin that manages who’s paid, and we have Mailchimp to email people.’ Honestly, that moment when they said ‘send us a CSV,’ we realized this was nuts.” Now Bade and Chen handle those recurring payments for its client news sites, along with email signups, user logins, and other fun customer-relations stuff. Pico also aggregates engagement data on each of a site’s registered readers that can help you judge someone’s propensity to subscribe and what the right path to that outcome might be — things like how often they’ve hit your paywall, what sort of stories they like to read most, how they typically arrive at your site, whether they’re blocking your ads. Pico is working with Civil’s First Fleet newsrooms and now services customer relationships for two dozen publishers, including The Establishment (now defunct, stung by Medium’s pivot; Bade says their story inspires Pico to make sure a newsroom could continue on without being so reliant on an outside company), local business news site BoiseDev, Elon Musk-news site Teslarati, and drinking hobbyist company VinePair. (Pico is free to use until you get 500 registrations; it charges between 2 and 5 percent on payments after that.) “You have to have a website and an email client like Mailchimp, and you have Pico,” Bade said. “Pico connects your Stripe account to the website and connects Stripe and the website to the email service provider, and that’s the triangle.” Pico isn’t the only startup trying to edge into this space: GroundSource is going through a reinvention period as a “loyalty engine,” The News Project is developing a news-business-in-a-box, membership manager Steady has emerged from the outlet Krautreporter in Berlin, and the News Revenue Hub and WordPress.com are beta-testing a toolkit for local newsroom and a “maestro that will arrange and conduct an orchestra of plugins.” We’re keeping eyes on all of them, though Pico’s Lenfest-funded experiment is worth an extra eye. Here’s Lenfest’s reasoning (it’s also given money to Newspack and GroundSource, the latter via the Community Listening and Engagement Fund):
As publishers become more reliant on subscriptions and memberships to support themselves, it’s increasingly critical for them to successfully market themselves to readers and to make smart decisions about where to put their marketing dollars. We’re interested in learning whether Pico’s model can successfully increase subscriptions. We’re also excited to expand on this model of providing subsidized services to small newsrooms. We’ve experimented with this as part of the Community Listening and Engagement Fund and want to see how we can grow the model.Publishers — swimming in advertising losses — aren’t spending enough money on advertising themselves, Bade argues, and this project is intended to test that hypothesis. Phillip Smith is coordinating the advertising experiments and results should come in at the end of the summer, I’m told. While the $50,000 is great, Pico has a more significant recent deposit in its bank account: the $4.5 million venture funding courtesy of Precursor Ventures, Stripe, Bloomberg Beta, and more. “We want to invest our resources in helping the space expand,” Bade said. This involves “building better tools to help: analytics, helping people set prices so they don’t have to shoot in the dark and guess a reasonable price, when they should have a popup offer, when to send a marketing email to offer a trial.” News outlets are relying more and more on readers to support them — but the question of how news outlets help readers has been a little more up in the air lately. Yes, informing them is important and needed, but how are news organizations expressing that to and impressing that on potential consumers? How are they inviting users to actually build that relationship? Pico is one of several industry attempts to help make that art a little more like a science.