Pando

“I’m a dirty realist”: Why Paul Berry killed RebelMouse’s free product

By Sarah Lacy , written on July 27, 2016

From The Disruption Desk

Back in 2012, I got an early glimpse of RebelMouse, a mix between a social media aggregator and a content management system for the average Joe.

I was a big fan of it. It wasn’t a surprise the product was great, because if founder Paul Berry-- of the Huffington Post Mafia-- does one thing well, it’s go deep into the fucking weeds on the magic of content management software and distribution.

You just fell asleep didn’t you?

Maybe you’ve never run a newsroom or blogged for a meaningful amount of time, but those categories are dominated mostly by lousy software. Berry sees it all as an art.

He told me at the time he started RebelMouse, because post-HuffPo everyone wanted him to build a CMS for them. It was a way to scale those requests.

What jumped out at me when I first used RebelMouse was how smart the software was at reading social signals. It could understand which of my social posts mattered, which @-replies mattered, how to make sense of it all in a way other social aggregators couldn’t.

My number one use case, for instance, was pulling everything about Eli into one social feed, parents and friends who weren’t on Facebook or Twitter could keep an eye on. And it was brilliant at that. A no-mess, no-fuss digital scrapbook.

One slight problem: I had a second baby and a growing company and all that shit just went out the window. I stopped Tweeting “as Eli,” never really started Tweeting “as Evie.” Part of that was time and part of it was how nasty Twitter progressively became. I didn’t want my kids pictures there. Instead I just defaulted to Instagram and Facebook and Snapchat for more personal family moments.

It turns out a lot of RebelMouse die hards were like me: Wondered how we’d ever lived without this product until… we just started to live without it. Berry admits as much: “People saw themselves in it, and it was like, ‘Wow!’ This magical moment,” he says. “But we started to see fatigue quickly. People didn’t want to see all the Tweets from Southby.”

So the company announced yesterday a seemingly major pivot that has been years in the making: It’s phasing out the free product. In its place are a series of products that can run an entire CMS to smarter social tools that bolt onto existing systems. All are aimed at helping brands or content companies find audience, since we no longer live in a world where you can count on the audience coming to you.

Conceptually, it’s very much an extension of what Berry did at HuffPo, only now for a social, mobile, autoplay video world. It’s a parallel journey to his fellow HuffPo Mafia member Jonah Peretti who is applying HuffPo’s SEO playbook to Buzzfeed with the same social and video trends.

When I got the email my RebelMouse Eli shrine was going away, I was sad for a moment. And then realized I hadn’t even been to any of my RebelMouse pages for years. And then I remembered what I said to Berry that very first time he showed me what he was working on some four years ago: “I know it’s less sexy, but you should just charge for this and not even waste time with the free product.”

I was wrong and right. Startups are never straight lines, and mistakes lead to successes in ways you can never tease apart. If I had to do Pando all over again, I wouldn’t start as a subscription site. Our larger ad-supported newsroom helped build our brand and reader loyalty. Similarly, Berry says the free product helped prove what RebelMouse could do. But at some point in every startup’s life, it has to shift from proving what your technology can do to hunkering down and building a sustainable business.

His timing is good and not only because funding is getting harder to raise for non-unicorns. His software has always excelled at parsing the logic behind social. And there are several test cases RebelMouse has worked closely with to prove its value. This is certainly a straighter line towards a profitable business than the company has had before. But the question is how big it can become, and if RebelMouse might be stronger as part of another company like SquareSpace or Medium.

I spoke to Berry yesterday about the shift from the trendy “freemium” of the last few years to paid. Here are some excerpts from the conversation.

Paul Berry: My background and the genesis of RebelMouse was that I love when things go viral. I’m a traffic junkie. It was so important in building HuffPo, understanding how you could make things go viral by understanding how to do better in distribution.

We had a choice as a company to compete with Twitter or Facebook, but for me one thing that set the company apart was the need to be a Switzerland for the social giants.

The Dodo reached 35 million uniques in the last 31 days through the platform we’ve built. Publishers have to get hyper efficient at cost and focus on what they are good at and understand distribution.

If you look at the timeline of the Internet, there was nothing and then there was Yahoo with human-curated categories. If you knew someone there, you could do great. Then came Google and it took a while before SEO became an industry. Social optimization is way behind that.

This distributing publishing thing is real now. The new world really finally came.

Sarah Lacy: At the price point of thousands of dollars a month, how many customers are out there for this?

PB: It’s a mix of departmental budgets or a brand launching a campaign and content companies. Agencies are getting it. Disney just launched one with us. We can launch a site in a few hours. Or there are companies we can work really deeply with. There are companies where I personally spend a lot of my time, like the Dodo. That’s not a highly scalable business; our goal is to do five to ten of those.

We want to help publications that are doing stuff worth sharing.

SL: How do you define “what’s worth sharing”? Because that mindset has lead to a lot of clickbait and gimmicky headlines and quizzes in the past.

PB: From a writer’s perspective, it’s about spending an extra five minutes before you post to make sure something is optimized. The point for them is not to change what they are writing and put a dog on a skateboard. You wrote something you really love, and you want people to see it. The right people. It’s about moving content towards traffic when it’s done right. You stand on your voice and content, and then find the people who will really resonate with it. That doesn’t mean you click-baited them. It doesn’t have to be a big audience, but the right audience.

SL: What do you make of the mania around video being everyone’s savior? I’ve been part of so many online video efforts that burned through a lot of capital and ultimately failed.

PB: I’m long on readable video. At the Huffington Post we produced this high cost video with low reach. But now that we have the software and autoplays and automutes, readable video is a way to tell that story.

We knew quizzes were a fad, but Gifs had legs. I think readable video has legs too. Quizzes were this viral annoyance that was going to flameout. Upworthy pushed their luck on those headlines, but I think readable videos are going to be here to stay.

SL: I get that the world is going to distributed reach, but when so much of that relies on Facebook’s algorithm, that’s scary for publishers.

PB: The thing is i’m a dirty realist. Whether Zuck had a plan to rule the world or not, for me, I ignore all that. User behavior changed suddenly. We used to search for content. We did that on a desktop computer, then on a laptop and now we don’t search. So you have to go where people are finding content.

It’s not about a game of trust with Facebook; the refusal to play the game is missing out on where everyone is. I don’t think anyone should trust them because no one person can control them, even the most powerful person within Facebook.

SL: From a business point of view, I get the shift away from free. But how do you feel about it emotionally as the founder?

PB: I think it’s hard to tell fully, because it’s all about survival. I don’t think I could tell you I knew I could build something bigger than Twitter, but I just didn’t want that. I think if I saw we had a real chance to build something like that and get the traction, I would have gone in that direction. But I think I would have been an Ello.

That wasn’t really the mission I set out for. If I set out to do that, and it didn’t work, I think I would feel different. But what I love is moving the needle for people and writers and reporters and content creators and be able to be used by so many different companies.

[Yesterday] was interesting emotionally. A lot of people popped up. A lot of people who did amazing projects on the free product. To be totally honest, I hope a year or two from now there’s a way you can start a project on Rebelmouse for free and end up making money on it. You never had to pay us and we pay you. But I know it’s going to take us time to get to that point, to get to that scale.

We are so focused on where we are going, solving distributed publishing and it’s happening right now. It’s no longer something that’s going to happen in the future, it’s “OMG, it was yesterday, and I’m behind and I better go solve it now.”

We can’t just infinitely raise rounds, we have to care about the burn. To be totally honest, we have put very few resources and timing into the free product in recent years. We didn’t feel like they were getting the business we’ve really been working on. We are best of class at this other thing and that’s what we need everyone to know us as.

SL: We experienced this at Pando, it must be nice to just finally get paid by people who love what you do.

PB: [RebelMouse investor] Eric Hippeau is so celebrating the end of free. [Hippeau is also a Pando investor via Lerer Hippeau Ventures.]


But I don’t regret starting with free. The first thing you have to prove with software is it’s worth people’s time, before you move straight to it being worth their money. I’m glad we had that. I’ll tell you what I regret was the $9.99 a month idea. That was so stupid. We wanted to get $5,000 contracts from these big companies and they’d be like “No, the $9.99 product is great! We love that thing!” Meanwhile, the small businesses it was intended for were like “$120 a year! That’s so much money!”