This story was originally published on SeekingAlpha.com by Brad Thomas and is republished here with permission.
Today I want to talk about a digital media company launched by several C-level executives with an incredible track record leading multi-billion public media companies. Their latest public venture is called Maven (OTCQB:MVEN) and there’s an opportunity for investors to get involved at an early stage in their development - I’ve already done so.
Maven seems to be leading a movement among independent publishers, with its holistic approach to meeting professional publisher needs. The combination of transparency, fair revenue share, world-class tech platform, curated “invite-only” approach (expert, authentic, passionate category leaders) which includes equity -- has attracted dozens of channel partners thus far; among them are NYT best sellers, Pulitzer and Emmy award winners, Youtube and Facebook stars and globally impactful foundations and nonprofits. That list also now includes me.
Investors who have followed this team over the years understand their experience and track record of growing this business model specifically, as well as other market-changing platforms like Myspace, Hulu and Yahoo!.
A few weeks ago I traveled to Seattle (where MVEN is based) to meet with other “mavens and the company’s CEO, James Heckman. At the conference, Heckman explained Maven’s eventual goal to build partnerships with more than 1,000, hand-picked independent media channels across twenty verticals; operating within their model refined over the last 20 years.
In short, one business and technical infrastructure to manage distribution, advertising and publishing platform - and all partners working together in a mutually supporting network. Maven manages operations, while channel partners control their own content and community.
I sat down with Heckman recently to address questions in the marketplace, to provide insights into their game plan and specifically, learn what is involved in launching the network, after the platform unveiling in May at the Maven Founders’ Conference in Seattle.
Full disclosure, after spending seven months personally diligencing the company, doing a deep dive into their technology and business model and discussing business strategy with their team, I’ve decided to become a publisher on the Maven. It's clear, after listening to their executive team - and seeing everyone’s reaction to their vision - Maven is onto something.
So I’m not only a believer, I certainly am proud to disclose I now have a commercial relationship with Maven, and am an equity holder as well. So let’s hear from CEO Heckman so investors understand what attracted me to their business model and leadership team:
Q: It was exciting to meet my future partners in Seattle. What is the status of the network’s growth and expected timing of full network launch?
A: We’ve averaged 8-10 partner signings per month since last January, and expect to continue this pace and hopefully slightly accelerate, once the platform is live and driving revenue. There’ve been lots of rumors about our timing and we’ve intentionally been quiet on the issue but we’re simply launching one channel at a time, and with 50 in the queue, awaiting integration.
We hope to reach 1,000 channels within the next few years but these conversations and partnerships cannot be rushed. We are methodical and calculating in our approach with partners. It's critical we find the entrepreneurial teams who believe holistically in our mission.
There’s a balance of integrating them technically into a cohesive platform, while ensuring they maintain independence and control of their audience and content. It’s totally different than simply pulling together an ad network - it takes years of experience and several layers of technology we’ve perfected over the years.
Q: What does it mean to “launch” a channel (post signing).
A: Securing a channel agreement is the initial step. There are 10 more steps to launch, including SEO analysis, content migration, training, adding social platform and team, video integration, lots of secret sauce and finally a launch of the partner’s new home.
It’s a process that can take 30 days and we’re a victim of our own success right now because we have a 50 channel backlog. So, we’re spending our summer integrating our founding partners. We expect over half of these channels to be live during September. Over the years, this discipline and our methods have ensured all of our previous networks are still operating today, profitably and with partners producing significantly more engagement and revenue than before joining our model. Of course, investors understand past performance ensures no future results.
Q: What does this mean for revenue?
A: As most are aware, our senior leadership team has led billions of dollars of revenue over the years and have always driven new ideas and new value to the market. From Rivals to Hulu, to Accuen, to the huge ad network the three of us put together with Yahoo!, MSN, AOL and dozens of major media companies (5to1), the commonality of all of these business is bringing to market professional digital media coalitions.
The key each time, is a fully integrated, single point of contact and platform. We believe as enough channels are deployed, the scale, engagement and quality will be a perfect match for marketers, who are today trying to figure out how to build brands in the middle of a sea of fake news, amateurism, ad-farms and fraud. We believe our network, comprised exclusively of hand-picked experts with high social engagement, will fill a material need in today’s market.
To be clear, we’re not an open platform and so will never compete with Facebook or Google. We’re simply a boutique of expert channels offering marketers and viewers a specialized experience. We plan and look forward to partnering with both Google and Facebook to find new audiences and introduce them to our authentic content.
Q: So when should we expect material revenue?
A: “Material” will be gradual, as we build out the network. We believe, if we continue a similar pace of signings, followed by deep integration, that relevant scale can be demonstrated to the ad community at CES this January. Until then, expect revenue on a channel-by-channel basis, as each one comes live.
Q: I noticed a certain number of new shares of stock will be unrestricted. Can you explain the details?
A: Investors participating in the private placement last April, holding 3.7MM shares, will soon be registered and unrestricted. The “PIPE” was not offered to unknown investors but were hand-picked by senior management - close personal friends and industry colleagues, who understand and support our business and as a group and continue to accumulate shares on the open market. These long-term investment partners are a great asset for this mission.
An additional 5.4MM shares are registered but restricted, owned by board members and other insiders, while the entire management team and key employees hold over 12.5 million shares that are also subject to long-term vesting requirements, have restrictions and much are tied to incentive targets.
There are roughly only 5 million shares of stock not closely affiliated with management - but they were registered long ago, and make the current market. The important thing to remember is that only 3.7 million shares are newly registered and unrestricted and these are investment partners we brought to the table.
Q: Back to the business; who do you consider your competitors?
A: Well, I’ll tell you who we don’t consider competitors - Ad Networks, CMS platforms or open social networks (FB/YT/T). We don’t believe any ad network survives to compete with Google and Facebook and we don’t believe the CMS model makes sense in a world where media software continues to consolidate and be offered at no cost. We feel the same about open-social platforms; competing with a duopoly with that much cash, talent and data doesn’t make a lot of sense.
So our strategy is closed/invite-only, professional, boutique and holistic - to provide an end-to-end closed platform, which includes distribution, advertising, unified brand power and scale as well as business and technical infrastructure. By maintaining our position as a network of invite-only professionals, we can afford to offer intense service while we intentionally stay out of the way of Facebook and Google. We will never open our platform.
Our model is to host and assist 500 - 1,000 channel partners, while Youtube and Facebook literally host billions. It’s not an easy task but it’s the only way to succeed in a consolidated, commoditized marketplace. We offer a real partnership within a mutually supportive network.
Q: Why do you think the timing is right for Maven?
A: We think it’s obvious there’s a need for a new, efficient, professional media network and we believe major media doesn’t have the technical capabilities to effectively pivot. We also don’t believe a sustainable model exists in the current marketplace based on traffic-buying off someone else’s platform.
Link-bait headlines landing on ad-farms which generate commodity-based content is not authentic and viewers feel tricked not satisfied but more importantly, it’s simply not possible to build a long-term media business that depends on arbitraging Facebook or Google - feels like a ponzi scheme. In my view, most media numbers reported to investors are misleading - because they are not in the least bit organic. It’s unsustainable.
Our model requires us to create enough value - that our partners are thrilled to remain in the partnership and those unified partnerships create actual, organic scale. At the same time, our partners maintain ownership and control of their audience and this positive, collaborative approach is proven over the past two decades to be sustainable.
Our plan is to extend our proven model to 20 categories. We’ve been thinking about it, training, testing and dreaming about this expansion since the 90’s - and thus far, the strategy seems to be gaining momentum. Our plan is specifically limited to independent, professional media business owners - not long-tail or major media. That’s been our sweet spot over the years - and so we’re sticking with it.
Q: What is the upside of this model?
A: We believe this strategy, over time, is capable of reaching more than 100 million monthly viewers across 20 content verticals and so the revenue opportunity is material. Execution tactics are simple to us, because this exact leadership and engineering team has been refining this platform for twenty years.
An end-to-end solution is hard to get right (e-mail, CMS, App, video platform, network harmony, branding, advertising, total technical and operational infrastructure, with trains running on time) but is certainly worth pursuing, given our positive experience and proof points. If we get it right, it’s a formula for scale and profitability.
Q: What kind of market-cap can we expect?
A: We certainly can’t predict the future but I’ll promise you one thing, our intense focus on winning until we reach our goal is unmatched. Last summer, our brilliant, veteran team demonstrated our loyalty to each other and willingness to go to whatever length to win together and now we’re perfectly positioned, properly backed by trusted investors, tested and aligned without distraction to build a great network.
To bet against this team, at this early stage, I’m not sure makes a lot of sense for any investor - because we’re just starting and have tremendous momentum. The feedback for our offering is certainly better than I’d hoped and timely, given the media landscape. It’s no accident our great digital media pioneers and engineers have come together in common cause. Who knows what that means, from a market-cap standpoint, but we’re thrilled we can offer an equity opportunity to the general public. It’s seldom an average citizen has an opportunity be involved early in something with this much potential, operated by a team like this.
I am a publisher and investor in MVEN. This company is a micro-cap stock so shares are more volatile than many of the stocks that I generally recommend. For more information on the Maven, visit the website.
I am also on the Advisory Board of NY Residential REIT.
Note: Brad Thomas is a Wall Street writer, and that means he is not always right with his predictions or recommendations. That also applies to his grammar. Please excuse any typos, and be assured that he will do his best to correct any errors, if they are overlooked.
Disclosure: I am/we are long MVEN.