© Newsgrape

Start-ups
03/30/2012

Newsgrape Secures New Funding

Vienna based news and publishing platform Newsgrape sits down to discuss their new funding, origins, goals, and how they’re striving to revolutionize the online publishing world.

Like many new startups, Newsgrape was born from a necessity.  In the case of Leo Fasbender and Felix Häusler their need was to find and form a new way for writers and readers to truly connect.  In the summer of 2009 the duo set up a small online magazine and began pushing out content.  Despite 13 co-authors and plenty of content, they both realized that between the time invested in producing a great article was equal to or lesser than the amount of time put in promoting the piece and the platform.  Not to mention that the revenues generated from Google advertising was next to nothing, Leo and Felix realized that another crucial element was missing: interaction.  Something had to change.

Fast forward 14 months, 140 backers, and $16,055 raised via Kickstarter, a not-quite-alpha, but not-quite-beta version of Newsgrape as we know it was born.  In typical startup fashion, this pre-beta phase was all about testing, fixing, listening, adjusting, testing, and repeating.  Once the team was satisfied with the progression of the platform, on June 10, 2011, Newsgrape officially opened the doors to all with an open beta.

"Newspage based on your interests"
So at it’s heart, what is Newsgrape?  “We’re developing a semantic system, where you can create your own newsflow, or newspage based on your interests and your preferred sources,” comments Häusler.  “For example, you can say, I like sports, but I don’t like soccer, and my preferred sources are The Guardian, The New York Times, and Der Standard.  We give you this, in real-time, generated newspapers, which we gather through a crawler we built ourselves.  However, we’re not just an aggregator, we’re combining it with online magazines and blogs as well.”

“Sure, there are a lot of startups trying to solve this problem in this way, but we can be slicker, and there is still nobody that’s even brought the attention of RSS readers to the casual internet browser.  I think we have a quite easy approach; you log in, your get your main categories you’d get in every newspaper, and you get the stream, but also the opportunity to comment on the current articles,” adds Häusler.

What the team hopes to accomplish through their easy-to-manage, yet very powerful customizable news platform is to offer users the opportunity to see the big picture.  “There is a big lack of perspective currently in the news world.  You have a lot of sources, but the casual user has two, maybe one, news site(s) he’s going to, but in the web, you still have to search a lot, and Google doesn’t solve things very nicely, just the tip of the iceberg when you’re searching for perspectives on different issues.  That’s where we thing we can come in handy.”

Gamification mechanism
Noting that most commenting and discussion systems on major online publishing platforms, “Usually suck,” Fasbender and Häusler are banking on users flocking to a system and method that will allow them to have their own say in an organized and meaningful way.  And while commenting and discussing news is fine and dandy, the Newsgrape team also realizes that those that contribute would like some recognition, more so than just replies and a pat on the back.  To this end, Newsgrape has included a self-built gamification mechanism that seeks to promote do-gooders, and demote the trolls.

“The idea is making news reading an addicting process,” says Häusler.  “Not only do you get the related articles that fit precisely to the article you’re reading, but the gamification rewards users for doing the right thing within the community.  We don’t reward simply commenting and spamming the system, but rather, we reward writing an article that a lot of people like and rate as positive, and offering feedback.  Through this reward system, users are able to ‘level up’ and once they do, they’re rewarded with greater functionality within the site.”

“The gamification of Newsgrape is really about two things: Increasing the users’ engagement, and hugely important, promoting quality across the platform,” adds Fasbender.  “You can only give a negative vote from a certain level on, but when you do, you’ll actually lose points.  What this does is force users to think twice before you actually provide a negative rating.  We believe this will help solve the problem of finding truly good content.  Faced with large amounts of content, you’re always facing the problem of how to filter out the few percent that are actually interesting, and that are worth reading, because let’s be honest, 80% of blogs are usually rubbish.”

“It’s a read about it, talk about it situation”
Now, to be fair, there are a number of similar services out on the market, those that provide a publishing platform, as well as rope all of your favorite topics together and present them to you in a variety of different graphical interfaces.  However, at the very core of Newsgrape, the team is still focused on their original premise: socializing the news, be that through commenting or writing a counter article.  “It’s a read about it, talk about it situation,” says Häusler.  “Our core aim has always been building this online publishing and blogging platform,” adds Fasbender.

So if Newsgrape is a publishing platform, how would it be any different from any other free online publishing platform (I’m looking at you WordPress)?  “We realized this would be a challenge from the beginning.  People want to run their own blogs, and then having to come to Newsgrape and do the manual cross posting, let’s be honest, is just not something that people really want to do.  To combat this, we’ve developed a really simply way to connect two blogs, in a much deeper and stronger way than any other article platform on the web is doing,” says Fasbender.

This deeper and stronger connection loops back to Newsgrape’s commitment to not only providing targeted, and meaningful content to the user, but also the back-and-forth discussions, and additional content generated from user interaction.  To make the connection between individual writers’ blogs and the Newsgrape system, the team is now developing a WordPress plugin that allows for a two-way conversation to be had between the two individual platforms.  Meaning, once a user has set up the WP plugin, the minute they hit the publish button, the article is mirrored at NewsGrape, allowing thousands of eager news hounds the opportunity to dig deep into the publishers article and hopefully spark a spirited round of discussion.
 
"Today’s web is much like television"
Further discussing the state of today’s web, social media, and the mountains of content floating around on the web today, both Fasbender and Häusler agree that today’s web is much like television.  “You go inside, you kill time, and afterwards, sometimes you feel like you just wasted time,” says Häusler.  “In a way Facebook is like the village square were you meet up to discuss your neighbor’s whatever, but we’re trying to create the coffee house, somewhere where you meet and have discussions of topics of value,” comments Fasbender.

Given that Newsgrape is a newsreader, publishing, and discussion platform, the team is looking at a massive uphill challenge given that they’re speaking to a niche market.  That’s not to say that we don’t all consume news, but there are a select group of individuals who truly dig deep (and have the time) into articles and want to further their comprehension, as well as debate topics with others.  However, the team is confident in their model that there are those individuals out there, they’ve just yet to discover a welcome home at Newsgrape.

“We’re after a better way to present the news.  After about a half a year of development, we’re now five to six weeks away from being able to launch the semantic analyzers, starting with about two-thousand sources in America, a couple of British and Australian content providers.  By using semantic queries, a system that is getting smarter on a daily basis, and the much deeper connection with the blogs, we’re building an entirely new way of information consumption” says Fasbender.  “We show you what you want to see, but we also show you what you need to see.”

And it’s exactly these types of innovations and different ways of looking at, and presenting, the news that attracted the attention not only of the Kickstarter community, but also that of Milan based venture incubator 99 Fahrenheit.  A relative newcomer to the investor market, 99 Fahrenheit recently opened a London office, and Newsgrape has the distinction of being the group’s first non-Italy based investment.  Earlier this month, the firm invested 150k EUR in Newsgrape, helping them further develop their technology and platform, and is enabling the team to release the aforementioned semantic analyzers (and other features) in five to six weeks.

Three ways to make money
When it comes down to the all important, “How are you planning on making any money?” question, Häusler elaborates, “There are three ways.  We are planning on running advertising slots, we also offer users the opportunity to place banners into their articles, and later on, we are planning on a more automated feature whereby we want to work with Microsoft or Google advertising solutions to automatically create a monetization option for bloggers.  This means, you log in, your write your article, you already have an account set up, nothing to install, no ad words account to create, etc. and you get informed when you reach a cashout goal.”

The overall goal here is to leverage the power of the community to benefit all.  Meaning, individuals who publish often receive little to no compensation for running ads on their site based on a variety of factors, but traffic being one of them.  By collectively presenting their case to either Microsoft or Google, the Newsgrape team can effectively provide a higher advertising rate for the platform as a whole, far better than a individual publisher could.  Win-win.

Newsgrape will also feature premium subscriptions that allow users expanded functionality across the site, including additional topics, faster news ticker refresh times, and a advertising banner free presentation.  The revenues generated from subscriptions will then be split between the platform at those blogs and articles that the paying subscriber reads, thus driving revenues back to the original content creator.  “It’s very democratic.  If I read twenty articles by one author and one by another, the percentage of revenue shares will be adjusted accordingly,” says Fasbender.

The third revenue stream that Newsgrape will tap into arrives via text advertisements.  “We saw an increase of text advertisements grow around 80% last year, mainly because people are looking into PR and social media campaigns,” says Häusler.  “The idea is that advertisers can insert clearly marked advertisement articles which get displayed, and we can even push to users’ blogs, should they want to take part in gaining additional revenues.  Clearly, there’s a real industry emerging from PR firms, writing real articles about products, movies, reviews, etc.  Increasingly, these articles are being displayed on more and more blogs.  Currently, this exists only in the state of emails, and is hugely inefficient,” adds Fasbender.

Advertisment articles clearly marked
Now, if you’re thinking what I was thinking, then Newsgrape might run the risk of becoming a paying advertisers, spam graveyard.  To combat this, Newsgrape requires all advertisement articles to be clearly marked, only those subscribed to the original publisher (the advertiser) will see the article, or those visiting the advertisers’ profile.  In other words, you’ll never see an advertisement piece, unless you specifically go looking for it.

Again, Newsgrape is by no means alone in a highly competitive field.  However, in today’s app and social media driven technology landscape, presenting users with a  platform that not only gives them what they want to see, but what they should see, as well as creating a collective meeting point for bloggers and fans of their associated writers, if handled properly, Newsgrape could be on the cusp of cashing in on a new way of information consumption on the web as we know it today.