CRAIG FULLER – ACQUIRING FLYING MAGAZINE AND BUILDING A MEDIA PLAYBOOK - EP. 79
My guest on this episode is Craig Fuller. Craig is the founder of FreightWaves, a data and media business focused on freight and supply chains. FreightWaves is a VC backed company with $19 million in revenue with editorial content, a data product, job board, video content, and multiple podcasts. Prior to FreightWaves, Craig had no background in media but has built quite a playbook for media businesses with a data component. Craig, as of a month ago, is also the new owner of Flying Magazine, an iconic, blue-chip publishing brand in the general aviation community which we discuss extensively in this episode. For a deeper background on FreightWaves, I highly recommend his episode on A Media Operator, which we’ll link to in the show notes.
During our conversation, we discuss his fascinating background in his family’s trucking business, starting a tech business before FreightWaves, launching FreightWaves, and his acquisition of Flying Magazine and his plans for growth and improvement.
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I’ve been super excited to have you, Craig, on the podcast. Ever since Preston mentioned that you could come on, I’ve loved studying FreightWaves and then seeing your acquisition of Flying Magazine. I’d love for you to just take us through the one minute version of zero to starting FreightWaves, and then acquiring Flying. Can you give us your background in a nutshell.
Super excited to be here. It’s interesting because there isn’t enough resources out there for small businesses. There’s a lot of conversation about venture capital and what’s happening. You can find plenty of content out there. The challenge is if you’re a small business, someone thinking about buying a business, there aren’t a lot of great resources for you. It’s not a very sexy conversation for many people. So it’s an underserved part of the market. I certainly applaud you for building this and hopefully this conversation brings resources for people and guidance.
I’ve been around business my whole life. My father was an entrepreneur and started the company and went from a bootstrap company, he didn’t raise capital. He ended up taking it public in 1994 and then ended up buying it back and taking it private. Very large company. So I sort of saw my father effectively bootstrap a business and it got to over a billion dollars in revenue. So he was my big mentor in my life and I always dreamed of taking over his business one day. But it wasn’t our fate. My older brother ended up becoming the CEO and I didn’t want to work for my older brother. So I decided the only way to sort of do something was to get outside of family business and start something myself.
So I went out and took a business that was a part of my father’s business, which was in payments, and spent five years trying to figure out how to build a technology company without very good guidance. I didn’t have a board. My father had ran a trucking company, very successful one, but he wasn’t prepared to sort of lead a technology company, which is very different. The motion and the way to run a technology company is quite different. And so I had to learn a lot of things the hard way. And this was in 2005, 2010, where there weren’t a lot of really good venture resources. It was sort of a net wall between the dotcom rush and sort of the 2010s, the post great recession environment where people were still cynical about startups. We hadn’t seen what we’ve seen in the last decade, particularly technology startups.
And so there wasn’t a lot of great resources out there. So I had to learn a lot of things the hard way and I made a lot of mistakes. But I ended up selling that business in 2012 and stayed on as part of it for two years. Just wasn’t a great employee. We had retained a piece of the business and I worked for my father as part of that engagement. Being a technology company, it struggled. So my dad ended up firing me in 2014, which was really difficult for me.
If you’re a founder of a company or you’re an entrepreneur, not only are you spending a lot of time in your business, but oftentimes your social network is defined by your business. And so the company was effectively out of cash. When my dad fired me, I couldn’t really tell my side of the story, which was we ran out of money. Basically my father resented me, blamed me largely for putting the company in that position, but I couldn’t go tell anybody that. So I just sort of disappeared. I knew at that point that I could never work with my father ever again, just the foundation was broken there. He would never support anything I did financially at that point, sort of like burn a bridge.
And I think if you’ve ever been a part of a family business, this dynamic is very real. A lot of people who are sort of multi-generational businesses, the fathers want the sons and the daughters to go work for them and you’re often unprepared to go find a real job or go start another business because you didn’t see that happen. And that was sort of my situation in 2014 getting fired was basically everything was gone. And so I had to start over, and I thought I would be an employee. I found out really quickly I was a really bad employee. Like when you’ve been running your own show for 10 years, even though it’s been funded by my dad, I just didn’t know how to be an employee. Instinct isn’t built into me.
I also knew that I couldn’t rely on my father for any kind of funding or support. So I had to go do it on my own. And I was sort of at existential crisis. I was very depressed. I felt like I had lost everything in my life and was really, really down; as low as any person could possibly be. I realized after taking a job that I hated, even though I was getting paid really well, not working very hard in my opinion but getting paid really well to do what I thought was very little, I ended up deciding I want to go start my own business and that’s when FreightWaves came about.
Yeah. Can you talk a little bit about what FreightWaves is for those that don’t know and how you decided to start that?
FreightWaves, I was day trading. So in addition to doing this job that I really didn’t enjoy and company didn’t really need me, frankly, I was doing some day trading on the side to keep my mind sort of working. I became really enamored with financial markets. The way the stock market works. This is[redacted]Commodities were crashing in ’15. Oil prices were crashing. Everything was sort of melting down in the commodities within the industrial side of the economy in[redacted]And CNBC, which I would keep on all day long, was talking about the global shipping market as the barometer for economic activity. And I thought coming back from trucking, because that’s where I had started, my dad’s business was in, I couldn’t understand why they didn’t talk about the trucking industry, which is actually a more important component of the domestic economy. Well, freight moves the trucking.
So I came up with this idea to basically create a data business and a media business dedicated to freight movement and that was really what started FreightWaves. Day one I didn’t think media was sort of in the components, but the data piece of it was, and that’s what I set up to start. And at that point I was making six figures on a job I hated, but I was like, I’m going to burn my bridge. I had enough. I had burned through all my money that I had saved my entire life day trading unsuccessfully. I had a credit card and had no debt at that point because I had sold my house and basically was just like living through everything I had ever saved or had made trying to day trade myself to like literally gambling my future.
My wife, who we weren’t married at the time, had just met, she’s like, “You have to stop this day trading madness. You’re going to run through all your money.” She wanted me to do something else. But I didn’t want to stay as an employee at this company or an employee for that matter. I said I want to go start something. I didn’t know what it was. I knew that was my inspiration. So I sort of put this idea of what I was doing for day trading alongside the sort of reality of starting my own business. I came and told her I was going to start and I was going to leave and I gave notice in job that I didn’t have to quit but I felt like it was unethical for me to stay making this money even though I did not care about the company. I did not love the company. I just didn’t feel right sticking around there. So I gave notice and told them I was quitting.
It took them three weeks to get rid of me on the payroll, which was really weird. I was like, I’ve just given you notice, like why aren’t you firing me right now? I would get paid but I’d feel guilty. It was really strange to me that they just didn’t resign me immediately, which is weird, but they didn’t, so they paid me for a couple more weeks. And meanwhile, I just hammered it. I went out and started FreightWaves and the first thing I did was went on social media and started network. My take, I always told founders this is that if you’re going to start a business, the first thing you should do, starting out in a new industry that you’re not familiar with is go find advisors of the business that you want to be when you grow up, like let’s imagine 10 years forward.
Go out and start networking to people who’ve worked at companies that you sort of dream of what your business would be in 10 years. So if it’s super successful and it’s the unicorn and you’re on the face of Fortune and Forbes magazine and you’re this really successful CEO, what does your business look like in 10 years? And I said, go find… I tell founders to go find those and that’s what I did is I basically just hammered LinkedIn. I networked with anybody and everybody at the highest levels of the biggest companies and I was shocked at how responsive these people were. And I was very direct. I think one of the things that I get a lot of inbound interest on LinkedIn and people are like, “Hey, I want to pick your brain.” It’s just not that interesting to me. I’m like, look, I’m starting this business. I want to spend 30 minutes with you. I just want a couple of advice and that’s it. And if you’re interested in an advisor, here you go.
One of the things that I did was I gave my advisors a really small piece of equity, which at the time they probably just did it because they wanted to be a part of something. I get invited to be an advisor in a lot of companies. And I sort of look at it as I would be doing a lot of this stuff anyways, sort of talking to founders and sort of figuring out the journey. But if I get something in return, that’s great. As I’ve had more success, I’m more discriminating on what I do. I have to expect something from the founder, which is a little different just because I have a finite amount of time and my time is very valuable to me.
But in those days, I think a lot of the people who did it were just like, “Hey, this is an interesting idea. I just want to be a part of the journey,” not thinking it would be worth much. Now I look at how much their value has increased. It’s actually we’re talking a lot, six figures and higher for just some of them basically a couple of emails. That’s all they ever did. Some of them were far more involved and appreciative, but many of them were there. And look, I’m a happy they sort of believed in it, gave me a couple of ideas and maybe a couple of introductions. It was worth it in those days. And so I don’t ever regret looking at the capital or the equity that I’ve given up in a business because at the time that I made those decisions, they were the right decisions.
I don’t think you can sit there and dwell over the fact that someone has made a lot of money because they believed in you. This seems really… I always hear founders sort of complain about that. Unless somebody has effectively taken advantage of you by lying to you or being disingenuous, it’s always sort of difficult for founders to go back and are like, “I can’t believe that person has 20%.” Yeah, but remember your business, nobody believed in you in those days. You had nothing and they helped you. And so yes, they have 20%, but that’s deserved. That’s for the price of showing up and taking your phone call.
Anyways, I gave equity to some advisors and it worked out really well for them and they made a lot of introductions. They were able to sort of open up a lot of channels for me and they helped validate the business and also give me a lot of advice on how to build it. And so I’m very grateful for the work and effort and energy that they poured into it.
One book recommendation you gave at an earlier podcast or interview that you did was Bloomberg by Bloomberg. I remember you said you followed that playbook pretty closely and reading through the Bloomberg book, he talks about starting the data end first, and then adding media later, that was supported with his data. With FreightWaves, it sounds like you did both at the same time. Am I misunderstanding, you started one before the other?
The media business came out of necessity. One of the other realities was when we set up FreightWaves, which in those days was not called FreightWaves, but the business that we set up, I tried to get a lot of press. I wrote a press release. I’ve never had a problem getting media press in my old company that I ran. And so I couldn’t understand why none of the publications would cover the story. Even the local newspaper like Chattanooga Business News didn’t even pick it up and I’m like, “Come on. There isn’t that much happening here in Chattanooga.” But they didn’t even take it. I ended up hiring that editor a couple of years later and he ended up working for me and I gave him a hard time for the fact that why didn’t you ever take the press release?
But the reality was our business, nobody really believed it would be successful. So I started looking at PR agencies and I always resented the PR agencies because they feel like oftentimes they don’t do very much. I think a tendency for a founder is to go sign a PR agency and a public relations firm doesn’t have a lot of accountability in how well they do. I think it’s pretty consistent. I never really wanted to hire one, but I felt like it was the only way to get any type of interest in the products that we were building and credibility was to get. And I turned down the two, so this is sort of blackness success.
I came across a third that said, “Hey, I’ll take you on, but it’s $40,000 a month retainer.” And I’m like, “Well, I can’t afford $40,000 a month.” I think he was just being nice. He thought my idea was ridiculous. And so rather than being like, hey, your ride is ridiculous, he had put a really high price out there that you won’t accept. And so of course I didn’t accept that and he said, “Hey, if I were you, your story’s going to be very difficult. You should go hire someone to write content for you and develop your own organic content.”
Being insulted and really frustrated with the lack of anyone taking me serious, I decided to go create my own content. And so I posted an ad for a social media engagement writer, which I don’t even know what that means. A journalist at one of the other big trucking publications joined FreightWaves and as part of that, I realized really quickly that if we were to drive engagement, we couldn’t just write stories about how great this business idea was, that the software of this data business was. We had to write stuff that people really wanted to read, which was about the logistics industry, which is what we cover.
The great thing is that this industry that is $9.6 trillion and employs tens of millions of people around the globe, is 12 and a half percent of global GDP, is also going through a massive technology renaissance where Amazon is there in the freight market, you have drones, you’re dealing with Tesla rolling out a semi. All of this stuff is happening. And this was not even when we had massive supply chain dislocations, which we have now. This is pre sort of massive supply chain dislocations. There’s a lot of interest in what was taking place and not great resources. And so he started writing content and people started reading it. I was really proud we got to 50 or 60,000 page views a month, which was a big accomplishment for one writer to go from a cold start.
And then he went on vacation and the hurricanes hit Houston. This hurricane sort of pummeled Houston, and it was a big deal. I had happened in my past life, working for my father, ran FEMA’s disaster logistics operation. Well, the writer was on vacation. And so I started writing basically about what to expect when expecting a hurricane was sort of the headline. I wrote this sort of firsthand account of preparing for a hurricane. I used his name, was written in his name, which he was very upset about, I wasn’t a great writer. But I noticed on the site we were getting 10, 20, 30,000 hits. So all of a sudden we went from 50 to 60,000 a month or on average 1,000 to 2,000 hits per article to like this thing was blowing out of the water.
And I realized people reading liked what I had to say, is non edited. There was no copy editing in those days. It was just somebody like really engaged with this person understands what’s kind of happened with this hurricane. And so I started writing a couple more articles and people were reading my content. I’m like, well, okay, we’re on to something. And that really began this realization that what the freight and logistics industry wanted was information about what was happening from a firsthand sort of operator standpoint. Somebody who’d been on the front lines. The way that the media business had been in our industry was taking press releases and repurposing them. Content that wasn’t really highly opinionated.
But one thing that a lot of publishers struggle with in media businesses is they don’t write anything that could offend an advertiser. And so they’re afraid to sort of write these really sort of deep investigative journalism stories about your industry. That just didn’t exist, but we didn’t care because we had nothing to lose. We didn’t have a media business. It wasn’t even in our business plan. In fact, when we raised our first institutional round, the media business didn’t even make the pitch deck. It wasn’t even something we considered important to the business. But people were reading it and then people were wanting to advertise with it.
And so all of a sudden we realized that this is a really interesting way to build content. So we had launched this media brand sort of accidentally and we decided that we needed to put a conference together. And so we created this conference and the first one we created had like 150 people show up. We knew nothing about running a conference. It was the worst conference I’d ever been to. Like we didn’t have badges pre-printed. We didn’t even have refreshments. We just didn’t know what we were doing. People were like, “Hey, I’m happy to be here.” It was my own conference, but I’m like, I’m never going back to that conference ever again. If my team were to host a conference, Craig were to host another conference, I’m never going to this conference is what I’m thinking of myself.
And so we said, why don’t we create something really, really awesome. We can get people here. And so we launched a conference that was bringing technology companies together. And I had seen this in payments where you have a lot of companies that do like live demos on stage, PowerPoint is banned. And I was like, that’s really cool. Can we create live demos on stage that are not PowerPoint, not pre done, inside of a live audience of decision makers that are buying technology. And that was how we created an events business. And so all of a sudden we had raised some money and we have this media business which was starting to grow. We had this event business which is doing exceptionally well.
We then finally get to the point of launching our data product. Our data product was sort of incubated for six months. And then we launched it at our conference, we launched it at our event. That was sort of how it all came together. So within time that we raised our first institutional capital, which would have been October 2017, and we had ran out of money. I literally had spent every dime. I had taken out a credit card and wasted all my money day trading. And to start what’s now FreightWaves, I had good credit. So I’d taken out a credit card and opened up a zero APR credit card with Bank of America. I had a credit line of $50,000 because at the point when I started this, I was still employed. So they gave me a pretty nice credit line.
I ran up the $50,000. Bank of America zero APR credit card funded Freight, the original investment. We raised a little bit of angel funding, but we ran through it. My wife and I were getting married in September of ’17. I literally had no money to even go on our honeymoon. We were out because everything had gone to the business and we couldn’t make payroll. We just got lucky because we found a $75,000 investment with an accelerator out of Atlanta and an institutional fund that took our series C and put $3.4 million in because they believed in me and the team that I have assembled, and that was it. And so we raised the money. They gave us the money to go build the product. And we meanwhile had this media business that was evolving and launched this user conference without users.
People did not realize when we hosted our first event. We had 750 people show up. And these were like C-level executives of some of the largest companies. They didn’t realize we wanted a user conference. They had no idea that this was our launch party. We didn’t sell it as a launch party. We didn’t describe it as a launch party. We had 30 other companies demo and we put ourselves in the middle of the demo stack and we gave ourselves seven minutes like every other company that demoed. And so people thought they were going for that. They were really watching, it was all about us. I wouldn’t say all about that, it was certainly a springboard to become what we became. And so that was how we launched our data product.
Being new to media, what sorts of things did you not expect going into creating a media business?
Our media business today, half of our revenue is media. The money in our media business comes from advertising. So it’s free content. The data business, it comes from subscriptions. But when you launch a media business, the thing I didn’t sort of appreciate about media is, A, that people would read content. I just didn’t understand that if you put out content on a consistent basis, that people read it. One of the things that I think is often sort of underappreciated is the secret to doing content is cadence. I think this is very hard for individual contributors. I have the utmost respect for you putting this together because it is very difficult to be inspired every single day or weekly with something new. After a while comes a drain of a lot of energy.
And so one of the things that we’ve found or I’ve found is that the secret to media businesses is constant cadence. One of the things that I think a lot of contributors in media or anybody putting out content, they always get scared they’re going to say something or there’s going to be a troll that takes them. You need to get over that. If you’re going to write content, it’s such a reality of doing it. You’re going to upset people. People are going to attack you. If you’re really big at it, they’re going to find… It’s like a guy in the jail yard where you get shanked the old saying. You go, if you’re really successful, somebody wants to punch the really big guy in the yard because it gives them credibility. Oh, they’re going after this person. So the bigger you get, more trolls you’re going to invite.
I think a lot of founders or anybody that’s doing media gets concerned that if they write something and it’s not well written or they write something and it’s not good, then people are going to attack them or judge them. And that isn’t how it works. The great thing about Twitter and society, this modern media age is if you read horrible content, you’re going to forget about it. And if you read something that really sort of creates tension or you have a problem with the content, it’s actually a good thing from a content contributor standpoint because people remember you. They’re like, “Oh, well, this person is wrong for all these reasons.” That’s the best thing. What you don’t want in the content business is being forgotten. That is the absolute death for a content producer is to be forgotten. So it’s better to put something that’s polarizing out than not putting anything at all.
But one of the things that we’ve learned is having cadence is setting up constant content, which is very difficult to do unless you’re committed to it and basically slave in it out every single day and every single week. And what I see is oftentimes in our industry a lot of people in the logistics industry which have sort of tried to emulate what we’ve done with putting out content. They’re committed to it for a couple of months, maybe even a year where they create a new podcast brand and they create new content and they invest a lot of money in it and they’re not getting the returns. It doesn’t sort of ignite. It’s a slow sort of flame if you will, a slow fire. It’s a very slow burn for them. And they just become disenfranchised with it because it’s not all of a sudden they’re super successful and all of a sudden they’re super well known. It doesn’t achieve their goals quickly. And so they sort of lose patience with it and give up.
If that were us, then we wouldn’t have been here because we also, it took six months before we found a voice. It took a while before it sort of caught fire. And so you just have to stick with it. The other thing is cadence is very important. One of the roles I have with FreightWaves and now Flying, which I acquired, is when you go to the site, it needs to be fresh content every single time. Now, that’s hard to do. It takes staff and it takes resources and it take something unique to say, but if you’re going to build a scaled media brand, you need to have something fresh. If you think about that from your own life, if you’re into sports or you’re into just news generally, or business news, if you go on to espn.com or you go on to CNN or Fox or MSNBC, whatever, your leaning of choice, your destination of choice, and it’s the same content day after day, you’re not going to go there anymore.
I think a lot of companies, they get a piece of content and they’re very successful with it, it just stays there indefinitely. The site becomes very bland. The media companies, ESPN and CNN and Fox and MSNBC for that matter, have figured out that they have to constantly be refreshing the content. Maybe take the same story and do it five different times, slightly different but it’s effectively the same story, that’s what makes successful content.
The other thing I often hear, even by the media people who come from a print publishing background, is that I’ve already covered this story. I don’t need to cover it again. And I’d say actually not true. You should be covering it. Or they go back and re-edit the old blogs. So they give us new story and they go back and put additional content in. That’s a different piece of content. You should be writing something new so that people know it’s a new take.
The other thing about media that I would say, closing thoughts on that is that what drives successful traffic in our digital age is the headline and the photo. Those are the two most important pieces of real estate you have in a content business is what is the headline? Is it interesting enough? And what is the clickable photo? A lot of people use click art. They use clip art that they get from sort of Shutterstock and stuff. I actually think that’s not great because people are always constantly resurfacing the same photos and they look very obviously as Shutterstock images. Whereas if you took an image that was not just from your phone and you posted it, that it was unique, that is more likely to be successful than something that looks like it was Shutterstock. I think that’s always difficult for people to understand.
At the end of the day, you have to remember if you’re doing content, you’re competing against all of the other things that grab people’s attention. People want to be engaged. They want something unique. They want something that pop, that creates an opinion or an emotion out of them. And so it has to be interesting enough for the person to click on it and share it. And you could only do that if you have the right headline and the right piece of photography or art that is different than everything else that is out there in somebody’s Twitter feed or Facebook feed.
Yeah. Certainly. I’d love to dive into Flying Magazine and just talk a little bit about the company you purchased. Can you describe Flying Magazine and then some of the attributes that you found really attractive about the company?
Yeah. Flying Magazine was started by, again, Ziff-Davis, which was sort of this iconic magazine publisher, sort of like if you look at past, it’s sort of the one of the 20th century leaders in media and print media. Pulitzer is there. You also have like Condé Nast business is sort of an iconic publisher. Ziff-Davis was one of those as well. So he found a lot of success in building lifestyle magazine, just special interest publications. Popular science is one of the most successful ones that he owned or started. But actually Flying Magazine or what has become Flying Magazine was his first go at it was he was inspired by Charles Lindbergh’s flight across the Atlantic ocean and decided that aviation was going to go through this renaissance because it was now 20 some odd years after the Wright Brothers and it was starting to become and create a whole new society or the way we think of society.
I think you cannot take the airplane out of the past 100 years. You cannot understand history without the airplane over the past 100 years. Without the airplane, much of what we know as society would not exist. And so that is what is so amazing is that this magazine, Flying, was his first sort of go into developing aviation content, became the largest and most loved. And I will tell you, I bought it a couple of weeks ago and when I acquired it, I bought it because I love the magazine. It had an emotional response from me. It was one of the first magazines that I ever bought when I started flying as a teenager. And so I had this just really high affinity, very similar to someone who probably is a big sports person would have the affinity for Sports Illustrated or have for sports team like the Yankees.
If you’re a Yankees fan, your chance to own the Yankees is often has nothing to do with financial metrics but ought to do with the fact that you get to own the Yankees and you get to sort of tell your friends you own the Yankees and a proud trophy. And I think this is how I felt about Flying is that Flying to me was something that I was gifting to myself. It was a trophy purchase, like a piece of artwork, but it was the brand for an aviator.
It was started in 1927, had a really successful run as a print publisher. And then in the last decade, as print publishing had sort of sidelined and really struggled, the investment was not made to really bring Flying up to sort of the digital age. Yes, they have a great, highly engaged website and a highly engaged audience, but from someone who comes at it fresh as a media executive, as a digital media executive, it’s not a standard that I would expect for a digital media property by hand. And the reason I know that is I had started flying when I was 13 years old. I had stopped in college at 20. Being a pilot in my early days was consuming a lot of content and Flying was a go-to sort of brand for me as a magazine. And then I had stopped.
And so earlier this year I had picked up my aviation hobby again, decided I’d had this really successful one with FreightWaves and think about running a venture backed startup. If you’ve raised capital and you have a board, the board is constantly encouraging you to effectively fire yourself. The board wants you to replace yourself as the founder. And so I had done that, basically taking every job that I ever had at the company, had found people who were much better at those jobs than I was. And so I have become effectively chief evangelist of the company, a strategist, but from a time standpoint, that’s a hard thing to do.
It doesn’t take a lot of time to do strategy, like you do at the shower, you do it in traffic, or you do it at night, whatever that is. And then being an evangelist, this is something we’re wired to do as family. But it’s not very time consuming unlike starting a business from scratch and doing every job you can. And so I just got bored. I was no longer able to just sit and do nothing. I’m like, okay, I need to go find something else to do. And the company, FreightWaves, was running really successful. I had a really great management team. Company is growing quickly. At a point of cash break even for a VC backed company, that’s really important, especially if you’re growing triple digits as fast as we are.
And so I just got bored and I’m like, I need to go back and do the one hobby that I always love doing, which is flying. I want to get back into it. So I got back into it and I started to want to consume the content. And so I started looking around the internet for aviation content and I was so unmoved. I was unmoved with Flying Magazine. I was unmoved with a lot that’s out there. Not to say there isn’t good content. There’s a lot of great content, but it’s all distributed in lots of different places and a lot of it is just pilots posting stuff on YouTube or aviation evangelists posting stuff, but it’s not what I would consider the top. A lot of it’s not written with editorial publishers and written from what I would consider a really sort of high quality media brand would do.
I realized that Flying itself still has this affinity for me. I love Flying as the magazine, the brand. Like I said, this is like the Yankees or Sports Illustrated. It’s something that I’m proud that I’m a part of the community. I always felt like I was. I had read this article written in a media publication called Flashes & Flames, which is a guy named Colin Morrison writes this. It’s written for executives. It’s probably got a very small distribution, a couple of thousand executives, but the most influential executives across media, whether it’s the head of media for Bloomberg or the head of the New York Times. It’s written for a very small, highly cultured audience and he wrote about how magazines have become the trophy assets for billionaires.
He was talking about Steve Jobs’s wife when he passed buying the Atlantic. He was talking about Marc Benioff buying Time Magazine. He mentioned Jeff Bezos buying Washington Post. That basically these media publications with a lot of history have become somewhat trophy assets. They’ve become sort of benefactors and people buy these publications because they love the publication not to necessarily make a profit. And I thought, first of all, I can’t afford to buy Bloomberg. That’s my go-to, right? If I were to have a publication that I would want to own and I was starting up flying again at the same time, it would be Fly Magazine. This is the Sports Illustrated of the aviation industry.
And so I decided I’m just going to reach out to the CEO. I went on LinkedIn, I found him and I sent him a note. I said, “Hey, I would like to buy Flying Magazine.” Straight up I was like, look, he’s probably not going to respond to me, but I’m not going to waste my time by saying, hey, can we talk? I’m going to tell him exactly what I want, which I think is really important. If you’re a founder and you aren’t well-known, being direct is really important for people who get… I get a lot of inbound inquiries because now I’m in media and we have a large distribution. So being very direct and precise of what your intentions are with that conversation is really, really important. And so I said, “Hey, I’d like to buy Flying Magazine.” He reached back out a couple days later and said, “Hey, let’s have a conversation.” It’s not for sale, but we’re happy to have a conversation. We did and a couple of months later, I ended up buying it.
Are you willing to chat a little bit about some of the things you’re looking to add to Flying or improve with Flying?
Yeah. Look, I think magazine publishers oftentimes don’t understand digital. I think Flying is… Oftentimes what you see, and this is true in Flying’s case, is you have a tendency to basically protect print. And so there’s a desire that you have this revenue and subscription stream from print and the concern is that if you’re putting all the content on digital at the same moment you put it on print, that you’re going to dilute your print subscriptions. I think this is the same thing that the movie studios have struggled with around releases of movies where they usually go to the theaters and they would sort of release it in the theaters 45 or 60 days before it ends up on a streaming device.
Print publishers think the same ways where they’ll create a magazine, say the August edition of this, and the whole back content for the August edition or the December edition, in Flying’s case we’re going to focus on jets. I mean, I’m completely making it up, but a jet edition is going to be in December and we’re going to hold back all the content for jets until that December edition. So you’ve gone out for six months and sourced all this great content and you prepare it and you get it ready for print. That’s how we print publisher things.
And then after it’s out in December, you wait four months to then release it on digital. Well, guess what? A year potentially has passed since you’ve prepared those articles and if it’s news, which oftentimes is sort of something that publishers do a lot of, then it’s not even time worthy. The conversation’s already happened. And in an age where Twitter and Instagram and Facebook and YouTube, you name it, and Reddit forums are universal and ubiquitous, if you’re not the first, you’re the last. And that’s the thing that I think a lot of magazine publishers struggle with is they try to protect the print by holding back a lot of the real-time content and they miss this massive window to be the first and primary source.
The other thing that I think ends up happening is that there is an under investment in digital. If you’re print focused, you focus on everything about the print subscription and everything about the print magazine and you’re not putting the type of investments you need in digital. It’s not that it’s not there. It’s just that there’s a different sort of DNA to it. I think if you’re going to run a media business in the modern news cycle is you almost have to treat the products as separate.
The thing that I’ve learned is that people like myself love Flying Magazine. Like I get those every single day where someone goes, “Hey, I love Flying Magazine.” People that know me that are in my network that I found out or discovered were pilots, but also random people are like, I love this magazine. Even our editor at FreightWaves who had no idea, even knew what Flying Magazine was, told me that I had bought it. He’s like, “The only thing that I’ve ever been able to do in terms of knowing what to get my dad for Christmas is a subscription to Flying Magazine.” And actually he’s the first person that said it and I’ve heard it from a couple of people.
And so there’s just such a really, really super engaged audience that wants to be a part of the journey with you or with me in this case where they’re like, okay, here’s a digital native that’s investing in the publication and we love it so much. But what it also tells me is that you have this opportunity because you have people that have such a love of the brand, children that love Toys “R” Us, right? Think about that. Like when Toys “R” Us closed, my son who was seven or eight at the time, he cried because he was afraid toys…. He hadn’t discovered the internet at this point, but to have walked into the toy store and seen isles of toys was magic. It was like Christmas every time he went to the toy store. He was like, this giant sort of room of toys.
I think for a lot of people in these affinity publications is the same thing. One of the things that we’re doing is we’re saying why don’t we reinvest in print but differently than we do digital. And so we actually segmented it off. What we’re trying to do is what I call aviation porn. Like the reason people subscribe to Flying is because of the beautiful photography, the highly long form evergreen articles that they can keep, and the fact that they can put them on the coffee table and when their friends come over or the family comes over, they see the aviation publication.
I think pilots in many ways it’s not something that is… It takes a lot of work and effort to become a pilot. You have to constantly stay after it to keep your skills just up to par to stay safe. It’s really a lifelong commitment. People that are pilots are super, super dedicated to it and they want to show all their friends. They’re like doctors that have… It’s like a hobby. And you know this, people that are in the motorcycles love to talk about motorcycles or people that are hunting and fishing, they want to talk about hunting and fishing. People that are in the aviation love aviation.
And so for us, we’re going to be doubling down on print, but we’re not going to treat it the way a magazine news would treat it. We’re going to treat it as a coffee table, something that is almost a frameable piece of art. So when people see it, it’s the any letter that’s of beautiful photography. Any Little Bit’s books are like a couple thousand dollars for like photography. She does like celebrities and stuff, but people spend thousands of dollars for print books because they showed around. And I think we have the same ability, not to charge thousands of dollars, but the same ability to sort of build on the fact that people in the aviation community want to show off the fact that they have this love for this community. They’re curious about what’s happening. They love the airplanes. And so it’s all about doubling down what is already great about Flying, which is this wonderfully beautiful brand that is the brand in the industry. We’re just going to double down on that.
And I think the other thing thinking about like acquiring businesses, I chose aviation and flying because I love it. I’m a diehard pilot and that really resonates as I’ve sort of talked about buying Flying and my message to the readers in the community was I’m a pilot. This is a passion project. I’m one of you. I’m not a professional pilot by any means. I don’t fly for an airline and I don’t even have enough hours to be an instructor, but I’m one of you, really I love aviation and it really resonated with community. I think that there’s a lot of these similar assets out there where you have a strong, connected community and maybe even a long-term legacy community. It’s been around for many years that the magazine has sort of not had a lot of attention or love from a publisher, that you could pick up for not a significant amount of money relative to the business metrics and you could build something amazing with it. I think that’s what I’m most excited about this.
Yeah. There’s so much you can do there and it’s really exciting to watch. You’ve now started and acquired a media business. Is there one that so far, at least, I mean, you’re only three weeks into Flying, but is there one that you prefer? You’re starting not from zero with Flying, but there’s a lot of practices that have already been in place for a long time that are maybe harder to change versus on your own. Is there one version that you prefer over the other?
I think if we’re talking media specifically, buy every day 10 times, because the thing is like starting a media brand or a contributor brand in FreightWaves was, like we were a cold start. It took a long time for people to take us serious and it took a long time before contributors would come on to even do even interviews in print or even respond to emails. It took a long time before. And even today, there are times when the legacy publishers, the people we compete with at FreightWaves don’t take us serious, they don’t consider us as credible. Now, the broader world does, the broader world because those are more credible than they are. But in this community at times you get this sort of like, well, you guys aren’t real. You’re going to flame out at some point and go out of business. No, but it’s hard building a real media brand.
I think we got lucky in some ways. We started in the mid 2016, 2017. Our industry hadn’t invested a lot in content historically, so there was sort of a big gap in it. Now there’s a lot of people that are doing it in our industry and I suspect in a lot of other industries, so it’s much more difficult to sort of cold start something, uphill battle. This was also at a time when Facebook was very easy as a publisher. This is sort of the period when Facebook loved media content. They absolutely loved media content. And then they went through this weird thing in ’17 or ’18 where they started to deprioritize media content. I think post-election ’16 election really did this to them and they started to prioritize your community, your friends. I think they’ve sort of now moved slightly more towards media-friendly content.
But having said, it was right time, right place, right set of conditions that enabled us to sort of really scale quickly and our competition wasn’t great. I think it’s difficult. It is a lot of work and a lot of effort to do that. It’s not impossible and there will be successful outcomes of people that are developing content. There’ll be some great brands that come from it that I can tell you in having Flying, I’ve had it for three weeks, CEOs of the largest aircraft manufacturers, household brands have sent me personal emails. I mean, these are big companies that are iconic companies, even from my wife’s iconic company.
I had a COO of another large aircraft manufacturer who has become my best friend. I’ve never met the person, but in text exchanges, I had one phone call with them and basically I now know a lot about his background. I think he texted me all night a couple nights ago. My wife was like, “Who is that?” Like she’s thinking it’s some girl that I’m back and forth with, it’s like, “No, this is an executive of an aircraft manufacturer.”
And so what’s the most part about taking an existing brand is if your story is I am buying this because I love it and I am one of you, then it’s so much easy to sort of grab that and build on it. The audience already loves what that brand is all about. So I think media assets, and we’ve seen recent news, The Hustle got bought by HubSpot, Morning Brew got bought by another media brand. But The Hustle, you’ve seen Barstool Sports get bought by Penn Nationals sort of ignited this whole world of sports and gambling combined, sports content and gambling combined.
I think we’re going to see you in the next decade there’s a renaissance of people realizing that there’s a lot of noise out there, a lot of people putting out content, but there are these very specific brands that have such engaged communities that you cannot replicate that with the internet. The history of what they’ve built over the last 100 years and the multi-generations that these brands represent I think is going to be something that people wake up and realize that media brands attached to another type of business that is got to be in the core audience, they’re just going to be so valuable. And I think that’s what we’re going to see. I mean, Hustle’s a little different because it’s a sort of modern media brand bought by a modern technology company. I do think we’re going to see an opportunity for these really strong affinity-oriented brands to become very valuable assets for the right community or the right network because they are content machines.
Everyone’s investing in content market. The most effective content marketing in the world is someone who is a media brand covering the stories. The thing that I often tell people who want to go into content marketing is that don’t go hire marketing people. I know this is offensive to a marketing person that I’m actually having conversation with this. Marketing people typically are not great journalists and journalists are not great marketers. That is a feature, not a bug. Ultimately, a journalist is all about engagement and stories. They don’t really care about marketing your product because they won’t sell out and they’re online. They want to tell the story. But they’re the ones that know how to drive people into your content. They know how to tell the facts and be credible. Marketers aren’t very good at that.
The other thing just sort of as a side is a journalist doesn’t typically become a journalist because they want to make a lot of money. They do it because they want to tell stories. And so you do see this big sort of arbitration in price of what a really good marketer that can be a storyteller is going to cost you as a business. It’s probably two to three times what an equivalent journalist would take. Now, the issue is getting a journalist means that you as a business owner are going to have to sort of give them the freedom to be a journalist, shut back away from wanting to only have your product pushed. But if you’re willing to do that, then you have this amazing opportunity to take their natural skill in telling stories and breaking stories and driving engagement combined with your brand. And I think it’s just magic.
What college class would you teach if you could teach about any subject you wanted?
Technology, probably would be venture capital technology startups, entrepreneurship and the type of business, those are always fun. I’m just always enamored with technology. I think that those are… Like what the future in the next decade looks like is always interesting to me. I really enjoy that. Now, I think if I were to teach a class that I think I could offer a lot of value to, it would probably be in a content marketing side of the world talking about that. But there’s a lot of things that I think content and media is really interesting. I’m still a student at it. I do supply chain news and media. This is my full-time job, if you will. Flying is sort of a side hustle.
It’s interesting because I don’t consume a lot. People assume that I read every article, I’m on the weekends watching freight media or freight rate stuff. Not at all. Like to me, as a work, it’s not much fun when you’re doing it all day every day. For me, this isn’t my diversion. For me, what I really enjoy is learning about media businesses, learning about startups, learning about the trials and tribulations. I always love when founders talk about how they failed and the business almost went under and they sort of pulled it out or didn’t, and you’re like, okay, this is a really interesting topic. And so those things are always fun to me to talk through.
But I’m a big fan of financial metrics. I mean, the area I spend a lot of time is looking at valuation metrics. A lot of people sort of want to discriminate finance from business. They’re like, “Well, I don’t want to talk about valuations. I don’t want to talk about balance sheets or profit or income statements or cashflow.” Then why are you running a business, I ask, because those are all that matters. Like at the end of the day, innovation matters, product matters, yes. But if you go up against someone who’s better financed or has access to better financing than you, they can eventually outspend you and beat you.
So yes, having good product is important, but you need to also understand finance because if you don’t understand finance, you will not understand opportunities. And that’s what enabled me woken up Flying specifically. I understood what valuations were going out in media and I made a very nice offer to the publisher, but I also understand what valuations are going out in technology businesses. Looking at FreightWaves, if I could combine the two, we just raise money at 15 times revenue. Media businesses run at about sort of upper end most important properties at four times revenue.
So a massive arbitrage from 15 to four. So if you can sort of take that, and that was all of FreightWaves. That included media, which is half of our business, and SAS. And SAS metrics is like 28 times, but we won’t go there. But if you can sort of combine the two efforts of saying, okay, now I need to go find some technology businesses to sort of add to this community, then you have this really nice arbitrage. And so I love valuations because I think finance, even though I don’t prepare FreightWaves financial statements, I’m not an accountant, I love looking at our financial statements because that’s no different than looking at a sports record. It’s all stats, right? This is my scorecard and I think founders could do a much better job of trying to understand how their industry is constructed from a financial standpoint, how valuations are going, because I think they’d be much more successful and frankly find opportunities that they probably wouldn’t be obvious to them.
What strongly held belief have you changed your mind on?
That’s difficult because I’m a pretty fluid person. I don’t know that I have super strong beliefs that can evolve. I know I do have biases. I think the thing that I’ve learned most of all is that I can be comfortable. This is something I’ve learned about myself. I can be comfortable not being involved in every decision in my company. I can basically not know a lot of what’s happening. I think there’s a tendency of a founder who did every job, which I did, to want to be involved in every decision. And we get a little insecure about it. Even though these people work for me, you get a little insecure when they’re making decisions without you because you’re like, what if they make the wrong decision? But is it really just they make the wrong decision or is it your own ego talking?
I’ve had to learn, particularly in a work-from-home environment where we all work from anywhere and we’re not in the office, that it’s harder to know as a founder or as a CEO or whatever your job is, it’s hard to know through osmosis what’s happening. The nice thing about being in an office is information flows. Like there’s a lot of signals of things happening that you just sort of instinctually pick up without even having to ask. You don’t need reports. In a work-from-home environment, that doesn’t exist. And so in a work-from-home environment, you are very dependent upon people that are responsible for moving parts, sort of the organisms of the business to feed information to you. And they’ve got to be, A, willing to do that, but you also have to be willing not to know everything.
And I think it’s hard to do that as a founder. You have a sense of guilt because you don’t feel like you’re working very hard, at least that’s how I felt. You feel left out, which makes you a little insecure. And I think as founders, we have this sort of egos, at least I do, where I want to be the hero. You’re the underdog when you first start your business. No one believed in you. At least that’s my case. And so I had something to prove. Nothing gave me more pressure in the early days of being like you were right, or you did this, you’re the best at this.
The reality is not that. The reality is when your business is successful, you’re able to bring in much better talent than you will ever be at any one of your jobs. You sort of have to let it go. You have to sort of let those people run. And as long as you have a good foundational relationship and there’s very clear lines of where you start and you stop and they start, where you’re sort of maintaining some degree of control over the outcome and it’s not easy for them or you, then I think it can work really well and that’s exactly what we have at FreightWaves.
I like it. What’s the best business you’ve ever seen?
Prologis industrial real estate. They’re an investor in FreightWaves, but it’s a real estate business. So you have all the sort of luxuries of being in real estate, but they’re investing in warehouses, which on the surface sound like a really boring business. But when you understand that warehouses are not subject to as much during the down cycle, particularly with e-commerce. When the economy struggles, people are still making substantial investments in warehouses. E-commerce is driving that. It’s a real estate, so you have nice going cashflow. You own the land, so if things go really south, you still have asset. I just think it’s a real estate business. Buying warehouses sounds like a boring business, but it’s a cashflow machine.
And the fact that you can lever it up and acquire these businesses through debt, again, I love finance. I love debt financing. Something magical about being able to raise at 2% or 3% interest rates and generate 15 to 20% terms, I just think that’s so cool. And so the warehouse side of the world I think is just, industrial real estate is just a really cool business that generates a lot of cashflow and you’re building something. It’s a box. That’s what it is. That’s all it is, a box that stores stuff, but it’s a really profitable box.
Yeah. A box full of other boxes.
And they make a lot of money managing boxes. They build these warehouses which provide large footprints. They’re doing all the stuff that people typically don’t want to deal with, like local municipalities, they don’t want trucks moving in and out. It’s a cashflow machine and as long as they put the boxes in the right place, they lease this building out, they get to finance it for 30 to 40 years and they get all the cash flow coming in. Just who doesn’t love that business? Like it’s great. Like it is a lot less work. I don’t mean any disrespect for Prologis or any other real estate person, there’s a lot less work that goes into something like that than what we as other founders have to meet as a constant drive. It’s sort of you’re a slave to it in some ways. The warehouse business is just great because you build it, your tenants pay your money, hopefully they’re financeable and bankable and boom, you’re done.
I love it. This has been awesome, Craig. Thank you so much for sharing your time on the podcast. I love learning about different media businesses and especially yours as you take over Flying and start making changes and improvements. I’m so excited to watch it and hopefully be a part of it in some way, at least as a subscriber. That’d be fun.
Well, Alex, we would love to have you. I mean, let me know and enjoy that, and really appreciate your time.