In today’s episode of The Unmakers, Tim Burrowes talks to Austin Mackell, CEO of Write In Stone.
A foreign correspondent for much of his career, Austin now leads a team building the Stone transparency platform.
The platform allows journalists to capture every stage of their research so that readers can see how an article was put together.
Write In Stone is seeking investment of around half a million dollars, valuing the company at $5m. As you’ll hear, the conversation takes an unexpected turn when Mackell informs me: “Fuck the investors.” Later, he explains what he means by that.
Below is the full transcript of the interview. Today's episode of The Unmakers was edited by Abe's audio.
Transcript: Austin Mackell of Write In Stone
Tim Burrowes: What problem are you trying to solve?
Austin Mackell: Trust. The crisis of trust in the public sphere in journalism. And sometimes I say fake news and I kind of think the two things are flip sides of the same coin. It's about the problem is directing news, consumers towards reliable news. And there's a lot of people worried about this problem. And I think we've got a pretty unique approach to it.
Tim Burrowes: So, how are you solving the problem?
Austin Mackell: Well, our slogan is “research is valuable, make it visible”. And we mean that quite literally. Make the actual research process that goes into the story visible using video. So, the sort of two taglines are trust through transparency and video without the pivot. And I guess the key word in terms of execution is picture in picture video. So, you could call it Twitch for journalists. I think that kind of gives you an idea, might give you the wrong idea. I mean, you've seen the product, you've seen some of our stories by our pioneering user, Scott. How would you describe it to me? Because I've told so many people so many times, I sometimes feel like I'm talking nonsense. You tell me what our product does. You've seen it.
Tim Burrowes: One of the privileges I think when you're chatting to people are very early in the stages of a startup as they're still evolving their pattern. One of the things that's worth emphasising is that although you use video to capture the process, the journalist has gone through in their research, It's not as if this is something for video bloggers. It's for traditional journalists, but it's a way of them showing their workings.
Austin Mackell: Yes, exactly. Our ideal journalist is someone who's writing text content for a WordPress blog or a Medium blog. They're doing straight to norm standard story writing like for a newspaper, but online. And they're curious about video. Maybe. But they're doing research. They're spending time checking their facts and making sure that the information that they're reporting is correct. And we track that process and allow you to market that as a point of difference is sort of the key offering. And that was actually the idea before video. Video was a means to that end. And then we realized, oh, wait a minute. People what? People like video, don't they? People want video in their content. If we can get free video that's a good thing too.
And the two kind of ... So, you've got the high notes and the low notes, as I like to say. There's like we say, video without the pivot. There's this immediate sort of benefit of you get this free video component to your story, which we'll talk louder about how you can tap into that value. But you also get this brand prestige that you build and a personal connection. People are seeing the journalist’S face. They're seeing what's on the journalist screen. It's sort of hard ... It's like brute force empathy. And you're going to see, like if you see Scott's stories there's hundreds of minutes. We're still measuring in minutes. Minutes of research time. And the bit where you turn your webcam on, by the way, the bit where you turn your webcam on and you explaining what's on your screen, which we call the highlights. That doesn't count towards your research time.
It's only the bit where we're sort of capturing the time lapse. That's one screenshot every second. That's what we measure in research duration. So, you know how medium has a read time. You can imagine in the future, once people are sort of accustomed to this system, you can imagine people discussing research depth. And I imagine that would be the time someone spent researching it versus the time to consume the media. If you're going to ask-
Tim Burrowes: And the idea is that as a journalist is researching an article, they use the software to capture, okay, they're looking at this document. Here's what they do. They talk to the camera, explain what they're doing. They've just made some notes or something, or they've just found a report. Here's the bit in the report. So, the video captures the various moments rather than being something they just shoot at the end of the project?
Austin Mackell: Absolutely. Right. It's a ride along. And we want you to show the audience the actual process. Now it's possible that you can record all of your research first, and then we might add a presentation mode or something. But we're very nervous about that because there's a lot of programs for people to just talk at a webcam, right? We're not just a Zoom competitor. We're not a video product. We are a trust platform. And video is a powerful tool to build trust, but it's not the only one we're going to use.
Tim Burrowes: And to talk about in startup parlance, the use case. You've touched on Scott, which is Scott Stegman, founder of Forensic News. So, how is he using it?
Austin Mackell: Well, exactly as described. Now, I actually had, or have, more like had now a network in journalism of people I knew from years. And then I could have went into the bunker and did dev for a long time and then came back up and pitched everybody. And it wasn't any of them that was our first user. I got Scott via cold Twitter DM from a brand spanking new account I set up. I said, "This is the product. This is the idea." And he said, "Holy shit, I love it." And now we're best friends. Well, shouldn't put words in his mouth, but he immediately said, "This is a great idea." And it wasn't about how I pitched it. It wasn't about the network. He immediately understood the core concept, used it exactly the way we'd imagined it, which is what you're not meant to get in startups.
You're not meant to have people use it the way you imagine it. But he already had a philosophy because he'd actually interned with law enforcement before doing journalism. And his philosophy was “I will not write a story unless there is at least one piece of evidence, which I would present to court without being embarrassed”. There's got to be something here that would be admissible in court. And that's got to be the core of what the story is written about. So, he already had that philosophy and he was already doing really well. He was already rocketing, already doing ... He's 25 years old and he's got his own publication and he's going to be testifying before Congress. And he's a rock star, this guy. And he already had that philosophy. So, it plugged right in. And I think what we're betting on is that's what the next generation of journalism will look like. Especially at the high end, at the premium end of the spectrum.
Tim Burrowes: And one of the attractions for Forensic News and Scott is that it's funded through reader donations. So, he would see this as a tool for increasing that reader trust.
Austin Mackell: Yeah, absolutely. Well increased donations to Patreon is both a product of, we get it both ways, by building trust. People go, “Oh wow, I trust this guy. He's making himself accountable to me. He's not telling me he's just shut up and trust me because I'm the expert and you're the player. He's saying, here's why you can trust me. I will make an account of myself and people like that.” And they're also seeing his face.
And we also allow you to record a message like a call to action, which plays along with the research where he says Scott Forensic News depends on readers like you for support, please support us on Patreon. And he has seen Patreon donations per visitor go up by about 45% in three months since he started using the tool. And we would say that is just one manifestation of the increased trust that he's engendering from his readers.
Tim Burrowes: Well, you are the CEO of the organisation. And you are a journalist by background, including several years sort of based in the middle east, but now back here in Australia. What do you think it is that qualifies you to be the person who solves this problem?
Austin Mackell: Well, I'm the person who's doing it, right? I can tell you the story of how I ended up being the person who did it, is probably the best answer I can give. Should I do that?
Tim Burrowes: Yes, please do.
Austin Mackell: Well look, as a journalist, I was never particularly successful or talented or exceptional, but I did do some work that I was proud of. I did work that I was proud of. And the stuff that I was most proud of was during the Egyptian revolution in 2011 and 2012. And I was married to an Egyptian woman and we left to move to Ecuador in 2013. And from Ecuador, from the safety of Ecuador, we watched as the gains of the revolution were reversed in, and all of that we've gone from the most hopeful time in Egypt's modern history to the most depressing and oppressive time in Egypt's modern history. And that's not me. That's can't remember if it was Human Rights Watch or Amnesty International, but that's their summation. It's the most violent and oppressive time in Egypt's modern history.
And that's a hell of a modern history to pick from. We talk about it so casually, but the stuff that happens is unspeakable. The things that are done to people in Egyptian prisons. I'm not going to repeat them on your polite podcast. But it's something. And it seems insane to me how the world sort of moved on from that. And so that reversal of that hopeful moment, and that kind of got me thinking is it's like we've been really optimistic because of the Egyptian revolution about the power of new technology. And then we started to see the problems emerging. And I basically think that the core of the team me, [inaudible 00:10:51], Daniel, who's our CBDO. John who's our COO. All of them, they were all involved in a project we started then.
And all of us basically saw the fake news monster, the distrust monster a little bit ahead of everybody else who saw it in 2016 through the election of Donald Trump and the media warscape that we now inhabit. So, Egypt was a warning about that no one headed, except the people who were quite close to it. And so there was a movement called Rebel Tamarod. Which has basically stopped the steal, except they won. And they convinced us with the army and the US, they put the elected president in jail. I'll stop going on about Egypt. Sorry. But for me we were like, well, at this point, just writing another opinion piece, didn't feel like an adequate response.
We thought, well, what could we do that would make a difference. And a thought that I kept coming back to was the night I spent with a guy from the Wall Street Journal, the Wall Street Journal's Cairo correspondent, who my wife had also worked for as a producer and a translator and so forth. And he was a libertarian and I'm a sort of lefty through and through. And we had exactly the same take on what was going on in Egypt. And this was this strange phenomenon where the people I agreed with were from all over the political spectrum and the people who I didn't agree with were from also from all over the political spectrum. It was kind of splattering. And I realised, wait a minute, the difference is, who knows what the fuck they're talking about and who doesn't.
And that's actually a thing it's not just a matter of, I have to be a good soldier in the information war for my partisan side, which is what I will admit to having, it's a sort of Chomsky counter propagandist role that a lot of leftwing journalists take on for themselves. They're like, well, I know that the system's biased so I've got to leverage myself against that bias and balance on my toes while I ... You get the idea. So, I was like, well, how could we have directed people to better news? And the idea of transparency came forth. And it's like, well, if we set a new bibliographical standard that know what the bad faith actors can't meet, then we will begin to order and automatically exclude them. And we're thinking in terms of cultural change and website design.
So, we were like, for every story there had to be artifacts, we set up an online website. We had volunteers from ... I was very pleased we managed to get volunteers from all over the world and raise a few thousand dollars and give it a shot. But it was amateur hour. But it was a valuable experience because, so first of all, the people were interested. They clicked through, and they clicked through, on these research artefacts that we created. So, about 10% of people wanted to go past the main story and look at the process behind it, to some extent. This is without video, without any sort of polish on it at all, just links to [inaudible] files. But of course, some of the best journalism didn't actually produce this handy documentary trail.
It was people, for example, reading science journals and reporting on science. So, we had a science reporter do some stuff for us about dinosaurs. And I was like, well, how could we possibly show this? We can't republish the article. Copyright hell, right? So, it's data management and copyright hell. And at some point I realized, wait a minute, the tools don't exist to do this. And this is by 2017, then a core dynamic, the most dynamic core group of that volunteer base broke off and founded a company and said, "We've been doing it all nonprofit and so forth." And we're like, "No, we want to build a new software platform. So, we'll just start a software company like everybody else. And the only creative thing we'll do will be the software." And we'd also just before Patreon actually launched. We'd been talking about well, Patreon support. And we've then going to build that for our website.
And then Patriot came along and we were like, oh, great, well, that's half the website that we don't have to build. And then we realised, no, you don't build all of this technology for one website. You build one piece of technology for all the websites. And in 2017 founded the company. So, you say we're an early stage startup. We've been early for a long time. It's a long early, but I think we're now at the end of the beginning.
Tim Burrowes: Well, let's talk about that business model then of the company four years in, because clearly, although you are solving an important problem for democracy, I suppose. In order to thrive and exist, you need to have a business model that brings you in revenue. How are you thinking about what your business model is?
Austin Mackell: Well, look, I'm going to admit to having listened to Peter Thiel, which is something my lefty self would not have imagined…
Tim Burrowes: This is one of the ... Peter Thiel, one of the early investors in Facebook.
Austin Mackell: Yeah. And PayPal and a million other things, and Palantir. So, Palantir is his privately, it's not publicly is that it's a private company, which provides intelligence service to intelligence services with a lot of their tools. I kind of think of what we're doing is Palantir for the public. People describe the press as the intelligence agency of the public. Well we're Palantir for that intelligence agency. We're trying to build software tools for that market. But he says a line. He goes, "You've got to create X amount of value and capture Y. And X must be greater than Y." So, X in this case, the value we're creating is the video content. And when it comes to Y there's a few different ways to tap into that. We being media, we're media so, obviously, we'll be advertising. Just falls out of your mouth before you even finish the thought. Of course, we've got to have all this video, we'll put pre-roll advertising in it.
And then people would say, oh, well, the CPMs are going to go down. And we say, well, that's true, but we are going to make it cheaper than anybody else, because you're just sort of scooping up this content as you're researching. So, you've got this free video. So, whatever the CPM is, it's a win right?
Tim Burrowes: Let's dig into that one for a moment. Because I must have admit I'd probably want to be persuaded a bit more. Let's say your niche journalist gets a thousand views. Now, often that CPM is a $1 CPM. That's one dollar.
Austin Mackell: Well, Scott's making $17 per thousand person who comes to his website by leveraging the video to drive up from 12.
Tim Burrowes: Okay.
Austin Mackell: So, you know what I mean? So, to put a number on it, that's not using advertising. Right. And I think there's for some people, if you've already got a video advertising platform and some publishers we've spoken to have said, this we've already got. We've already integrated with Graycode. So, you've got to plug in with them before this is even worth us talking about, because that's how we'd make money off the video content. So, then we call Graycode and they say, yeah, well, do you have any customers yet? Because we're not going to fucking ... Pardon my language. We're not going to mess out with you. This startup that probably will never amount to anything. Do some deep tech collaboration. And you know, we sort of get locked out. But we still think we could serve them later on as a premium feature
Tim Burrowes: Before we come onto that, before we come onto ... Let's just finish the thought first on the advertising model. Because like-
Austin Mackell: It's changed a bit since you and I last spoke, right? So, like literally two months ago when you and I were talking or whenever it was, I was telling you that pre-roll advertising for a free version is going to be the main strategic focus. Because we want to have a free version. We don't want to be a tool that's only for people who can. We think that's undemocratic. So, we want to have a free version. Advertising's the easy way to do that. But it's occurred to us that there's a better way. And actually advertising, we're now thinking, and don't lock us into anything because we're an early stage company, as you say. Late, early stage. But we've got to have freedom to move. But our plan is actually, look if people want to pursue an advertising strategy, they get the premium model and they plug into Graycode and then Graycode will Google.
Or we don't get into that world. We stay one step removed from the program, world of programmatic advertising. And our free version is focused on merch. And leveraging that video to sell merch for the journalist. Because every journalist I've spoken to has Patreon get a cap. Or a book like yourself, Media Unmade, Media's Most Disruptive Decade. Not if I can help, Tim. Not if I can help it. Next decade's going to be even more disruptive. So, everyone's got a book that they want to sell. So, first highlight plays and you go, "Hey, I'm Tim and I'm going to be looking into claims of unmarked advertorial circulating in major broadsheets."
And then the next clip that plays is you saying, well, of course I rely on readers like you to support this great journalism that I'm doing, buy my book, support me on Patreon. Buy a t-shirt. And then the rest of the research plays. And when they buy a book or a t-shirt we'll handle the sale. That's the new normal model that we've just come up with that allows us to kick off and put the boat in the water, so to speak. And start trying to make money without having some, any relationship at all.
Tim Burrowes: And you would clip the ticket on that sale of whatever the piece of merchandise would be.
Austin Mackell: Yeah. Well, we would be an eCommerce business with a software development appendage sticking out from it. We become a place that sell ... The journalists are Pig Floyd. And we're the guys that follow Pig Floyd around, let the pig out of the cannon, do the light show and sell the t-shirts.
Tim Burrowes: And in this example, are you also the guys that make the t-shirts as well?
Austin Mackell: Well, that's TBD. Yes. That's the plan. The plan would be we'd print them. We'd run the print on demand. And we would function, probably with the books our plan is to partner with local bookstores. And so there, it might be more of a, we take a 20% cut or some ... Not 20%, 20 cent, I should say. Or some minuscule cut on the sale and have the independent bookstore nearest you, that we partner with, mail it out to you. Rather than try and be the new Amazon. We try to be the anti Amazon, because we're a bunch of lefty journalists. We're not the journalists and diplomats and stuff who are really concerned about this problem and trying to make it a difference. And we actually tried for four years nonprofit. So, we're not some Silicon Valley tech bro monster that's coming to eat journalism. We want to be on side with journalism against Silicon Valley more or less.
Tim Burrowes: And in terms of that sort of revenue stream, being able to kind of take a clip of any merchandise that a journalist sells. Have you got a sense of what sort of size of revenue that might be?
Austin Mackell: Well, it depends are you talking about the, for the journalist or for us?
Tim Burrowes: Well, I guess I'm talking about for you. Because I'm thinking obviously there are a number of you.
Austin Mackell: This is all really early days. As I say, we've been early for a long time. Why I think we still count as an early startup is the actual software that's on the market that's available now came out in June of last year. So, it's still fresh software. I'm sorry. Don't know when this is going to be broadcast, but in June 2021. And we got our first users in, first publisher on board in September, and that's helped us narrow in on what we're trying to achieve. And now we're building a monetisation model around his needs and the needs of the people who seem most likely to be early adopters. But if publisher out there has a different idea. They can reach out to me and we will be building this product around the publishers who come on board first as well.
Tim Burrowes: I presume what you've done though, is as you've sort of discussed the evolving model and talked about the merchandising model, you've sat down with a pen and a back of an envelope or a piece of paper and said, it could look like that. I guess what I'm sort of thinking is, okay you employ yourself and a couple of other colleagues as well. Will you write enough revenue just to cover your own costs by doing it that way?
Austin Mackell: Well, we are like most early stage software companies, a loss making entity at the moment. We have relied on a lot of small investments from several small investors to keep us going. And I don't think there's any danger of us as a company really shutting down because the passion around this project, as I've described it elsewhere it's more like a cult than a company. So, I try and be as unlike a cult leader as I can be, but it's not always easy for me. The company's going to keep on trucking until we find a way to monetise this, which is revenue positive for the publications and for us. I don't want to be drawn too much into numbers and stuff like that, because we need to put more people through the machine and see how it works before we start committing to anything in public.
But there's a lot of ways to monetise video. There's a huge number of ways to monetise video. There's all the old ways advertising, using it, putting it behind a pay wall, digital busking, there's all of that that's expanding. We've got experience with the digital busking model and it works. There's no reason it wouldn't work with the other ones. What we are doing that's new is a new way of creating video and a new species of video content.
Tim Burrowes: Digital busking, can you explain what that is?
Austin Mackell: Oh, that where the content's free, but “please support me on Patreon”. The Guardian is a digital busker. Guardian Australia says, donate to us and we'll give the product away to everyone for free. And I think that there's a insight in that model, is that if people don't want to pay for journalism that only they can read. So, they've had to put this thing in where people then can share it with their friends, still thinking in this sort of transactional thing where people want to experience the news and have the experience of sharing with their friends. And they're paying for that experience. Like no, they're paying for the journalism to exist, because they care about society and they want everybody to have access to this information ideally.
So, digital busking is a model that we are quite aligned with. We can work with pay walls, we can work with any revenue model. We're just in a sense, we're just like Adobe software. We're a new way of making video. But we've just combined a lot of the steps. So, rather than researching a video, writing a video, editing a video, uploading a video and posting a video, you do everything except posting it at once. You're researching it, writing it, editing it and uploading it all at once. And then all you've got to do when you finished researching and your story is posted and you've got this tidy little video package.
Tim Burrowes: And you mentioned that your belief in the project and you of your team is such that you can keep going for the foreseeable. How many of you are working full time on this? And what is your current runway based on the money in the bank?
Austin Mackell: Six months. Sorry, six people and six months.
Tim Burrowes: Yeah. So, you've got enough to go on paying six people full time for the next six months.
Austin Mackell: Well, our COO refuses to take any money. So, we're paying five of those six people. He's working for us from Turkey and insisting that the money is ... Because he's a co-owner too. Everyone of these people are founders, in whatever sense, they're founders. And they all have a stake both emotionally and legally in the company. Our goal like Palantir is to remain a private company. And for the same reason, so that we can stick to our core mission and serve the interest of our client without the interference that comes from being a publicly shared traded company. That's the goal for us. Palantir of the people.
Tim Burrowes: And over the next six months, obviously you'll be talking to potential investors. How much are you looking to raise?
Austin Mackell: Well, in about six months time, we'd like to put together around for about $500,000. It's about when it happens that I'd express a lot of trepidation. Because our goal is to keep honing the product, keep talking to journalists until, and well publishers now. You don't realise how dumb you are until after you realise the stupid things you've been doing. And why are we talking to journalists? They don't have any decision making power, we need to talk to the publishers. There's only really [inaudible] is when we spoke to Scott, who's the journalist and the publisher. And so he could just pull the trigger and off we go. So, it's like, wait a minute. Why are we not…
We're talking to the wrong person. And same with the merch, it's like, well, if we do advertising, the whole idea with advertising is, well, someone's going to see an ad click on the link. Eventually click through five other people and order a product that comes through. And we're all trying to guess what they're interested in. It's like, well, we know one thing they're interested in: Scott and Scott's work. We know that they're interested in this. And what I like to say is that in the last century, especially the second half, the last part of the second half, especially everyone was wearing band t-shirts. The Dead Kennedys made a lot more money selling t-shirts than they did selling albums.
And it's because the bands you listened to were part of your identity and part of your cultural set that you were putting yourself in. And I think that journalism is increasingly going to be fulfilling that role for people. And our music doesn't have that same edginess to it anymore. And it doesn't say anything about you that you listen to mega death anymore, but it does say something about you that you watch Sky News after dark, or that you consume Forensic News, or that you consume the Unmade media podcast. That tells me something about you as a person.
Tim Burrowes: And if your investor or investors do come in with that half million dollars, how would you spend it?
Austin Mackell: I just want to say one thing really quickly. Fuck the investors. I don't wake up in the morning and think about investors. I'm not worried about that. What I think about is what my customers need, what journalists need, what the people who consume news need and how we can solve this sort of matching problem of matching people who want quality news with people who are producing quality news. I think of us, quick analogy before I answer your question, I think of us actually were a lot like AirBNB, because the rooms, especially when they started out and people were actually renting spare rooms, not building whole businesses around it. The rooms were just sitting there and people needed a place to stay in, all the AirBNB had to do was connect the value.
The research is happening. Premium, good faith journalists are spending this time doing valuable work. And there are people out there who want to know who those journalists are and identify them and find them. And we are a matchmaking service between those two. That's what I wake up thinking about. And we would spend the money to achieve that goal. Obviously more dev. We don't have a Mac version. So, build a Mac team and put a Mac version out there because of course some of the best journalists, I don't want to name any names, but probably the most prestigious outlets that we've spoken to have said, “well, we're on Mac and we don't run virtual machines. You can't run a PC, a virtual PC on the Mac for security reasons, because the mafia is trying to kill us and so forth. So, we have to be really, really careful about digital security.” And so we are just blocked by not having a Mac version. So, we would expand into Mac. We would be doing more visual effects. We would be enhancing the visual suite so that it becomes more of a, like you make the videos look more beautiful and interesting and colorful and some branded graphics in there for our premium users. That's the kind of stuff we would grow about. But I'm not here hoping that an investor will be listening to this. I'm hoping, as I say, nine different people, none of whom wherever and whatever invested in a tech company have opened up their checkbooks to keep this company going because they believe in journalism and they believe in our approach to solve it. And I'll find attempt if I need to. That won't be the hard part. The hard part is getting media to adopt a new technology. That's the challenge.
Tim Burrowes: Sure. I'd probably want a little bit more persuading that it's not hard to get investment. And I find myself wondering, given that the route you've chosen is as a for-profit business, rather than not-for-profit. If somebody is going to invest in a for-profit, they want to see how that money will deliver them in return at the other end. That's the nature of investments, investors in for-profits. Now I think if I was an investor and I heard the CEO say, well, fuck the investors, I'd be a bit nervous about seeing my money again?
Austin Mackell: No look. So, the first, let me tell you about the investors who got this company off the ground. There are a couple from New Zealand, not people I know. Part of the network of, the extended network of the company. They have some personal money, some family money, blah, blah, blah. Rich, but no super yachts. And they saw the movie Spotlight. You know, the movie Spotlight. And then the next day, our COO Daniel was sleeping on their couch so he could approach newspapers in Wellington where they live. He's from Auckland. He went to Wellington to go and approach some newspapers that have their offices at the capital. And he was just literally sleeping on their couch, because he's old school buddies with the bloke and they said, what are you doing? And then they said, “this is the most incredible thing we've heard in years. And we want to be a part of this anywhere we can. Are you guys looking for investors?” And we're also, we don't need much money because we've gone broke. We've run out of money. That's already happened. We've run out of money. And everybody just kept, stayed at the battle stations and kept working and took other jobs if they needed to and just kept going. Look, investment is, there's a thing you're saying you want the smart money, not the, well, we want the money with heart and we also want the smart money.
And the other thing is that of that couple, the woman was the sort of driver and she'd worked in film. So, she knows that if we can get millions of impressions on video content, because we're putting video on newspapers all over the world, there's going to be a way to make money over that. What's the hard part is not shipping the album, it's writing a hit song. The hard part is getting the impressions and if we find a new path to video impressions for a whole class of publishers on the internet, the value that we're creating is immense. And I mean the X that we're creating to quote Peter Thiel is so huge that our Y that only needs to be a small portion to be a very profitable company.
Tim Burrowes: And then maybe just a final question around the investment side of things before I ask you to look to the future. So, you mentioned that maybe in six months time, you might look for-
Austin Mackell: Can I just, I just want to jump back in, I just want to jump back in on this ‘fuck the investors’ point. I think that's what an investor should want to hear. Because if the person you're investing with is waking up every morning, thinking about investors, then what they're running is a Ponzi scheme, not a business. Because their goal is to raise more money and keep the company going and pay themselves handsomely and attend startup conferences and invest. Meanwhile, on the side they're investing in their investment property, which is their fallback plan for when it all goes to shit. That's not an option for us. Because we've spent too much of our lives. Many people on the team have been in real danger because of their commitment to journalism and democracy and the things like that.
And the stuff that we're trying to address here. When we run out of money, we keep going. When we realize that the not-for-profit's not going to happen, we keep going. This is because we are convinced of the basic intellectual principle behind it. That if people want to be trusted, they have to provide not just an account of the evidence, but the process by which they gathered that evidence. Process first, then evidence. Like police. Police understand it's where Scott got it straight away. Thinking about how journalists present evidence in an article, they strategically sort of pull it out and throw it across the table in mid stride. You know what I mean? Police couldn't do that if they're prosecuting a case in court. They have to account for the whole chain of custody of how they got that. And sometimes you have to redact your name here and there, but that's the exception, not the rule. And police are more trusted than journalists in increasing numbers, which is a terrifying concept, but maybe there's a reason for it.
Tim Burrowes: Let's just come back and close the loop on the investor question. I'll come back on the point you've just made. And then one final one. I totally see what you say about your team being passionate founders and driven by the mission. I suppose I just, I find myself think of uyou, in a few months time, you are going to have to ask some people for some money. And I guess my question is, are you sure you don't want them to feel that you are going to be taking as seriously, not losing their money, as you are the mission?
Austin Mackell: Absolutely. Absolutely. The mission, it has to be profitable or there's no success. That's a false binary. If we don't make any money, if the company is not making revenue and profit at some stage in, I don't want to say how many years, but not an insane number of years. Then we've failed and we're not going to have the impact that we want. But more important, the path for me to making my investors money is making journalist money. So, what keeps me up at night is not the, I spend very little time, a very small percentage of my time pitching investors. Mostly I spend my time pitching journalists who think this is a mad person. This is a crazy person who I need to sort of filter out of my inbox.
We've been introduced. So, you gave me a minute of your time because whenever I get a journalist face to face on a call in a conversation, they can't tell me why this doesn't make sense from a publisher's point of view and from a public interest point of view. And so the only thing that I'm concerned about really is that we're too early and then maybe we can't survive long enough for the market to catch up. And that is the big risk that we face and the fact that we're never going to stop kind of mitigates that risk. And one more thing about the investors, if I'm thinking about customers so that I can deliver for the investors. If I'm thinking about the investors, I'm not thinking about the customers. The investor doesn't want me thinking about them if they're a smart investor, they want me out there doing whatever it takes to make the company work, not trying to figure out how I'm going to impress them in a conference room that we've rented from Fishbones.
Tim Burrowes: And final question on those investors, let's say somebody does come to you and say, yeah, I've got half million dollars. I can see your vision.
Austin Mackell: Well, that's happened. I mean, not the exact number, but people have come to us in similar numbers and said exactly that. So, yeah.
Tim Burrowes: And to ask the Dragon's Den type question, and I'm sure you might not have an exact number, but I'll be just curious to know the kind of quantum you're thinking. What sort of proportion of the company are you willing to hand over as a sort of rough percentage for that half a million dollars?
Austin Mackell: Well, based on previous ... Look, I'm going to say one more thing that's going to sound really grandiose, but we talk about valuations and I always shirk at the word because this is not the value of the company. The value of the company is incredible. The value of the company is incalculable. We're building the library of Alexandria. But the price, I can tell you the price. And based on transactions that have happened, our company was valued over a year ago, a little over 4.1 million. So, it would be a higher number than that now. It would be a bit higher than that now. We're not trying to 10X every couple of years here. We're trying to build sustainable growth with no hype. And we've got software and a user, and we've got an actual concept here that we're trying to develop.
We're not trying to run a startup. See, no one in the company is a startup person. And I think that's the best thing because none of us would've, you see all this stuff in the startup space. Like people sitting around thinking, oh, how can I come up with a good idea to run a startup? And it's like, well, what's a problem I can solve. We had the problem. We were feeling the problem in the bedrock of our souls for years before we realized that a software company was a vehicle for solving that problem. So, that gives us a huge advantage over every other startup in the marketplace and an enduring advantage. And I'm sorry. So, we're talking a good price for an early stage startup, but an early stage startup that has durability.
Tim Burrowes: And the valuation, I think I heard, you said last round, it was 4.1 million.
Austin Mackell: Closer to 4.8, we're rounding to 4.8. That was for the whole company. So, if you came with what's $500,000, it's about 10%.
Tim Burrowes: Yeah. Okay. And I suppose I, again, and this, I guess, would be the final question on valuations, given that I think I'm right in saying you haven't got any revenue yet. Does a 5 million valuation seem a bit high for a company that doesn't have any revenue?
Austin Mackell: I think in the Australian startup space, people think about this differently than they do in the US startup space as well. And our first investor, and sort of the person who led the charge was an American living in New Zealand. In America, people buy into what they see is the value of the company long term, and then less focused on what I would call superficial early metrics. You can make revenue by selling some potpourri pillows on eBay. And that would not make you a more valuable company than people who are building proprietary software that performs something really valuable.
There's a belief in ‘grow it first and we'll worry about tapping the value in later’, if you can create it. Whereas, I mean, in Australia, people mostly want to invest in, oh, well, last year in America, someone sold mattresses by advertising on podcasts, and we're going to do that. So, fine. I don't believe that every investor out there is only ... I mean, if you were just interested in making money, you probably wouldn't even be in the tech space. Unless you're an idiot and you think that, oh, I'm going to win the lottery because I'm going to be the, tech is the best way to get rich. You're seeing tech stocks taking a beating. Sorry, I'm not trying to date at the podcast, but at the moment we're seeing Facebook has just lost 200 billion dollars in it. What was it like, you'd know better than me, how long did that take, a haircut? A day. Two days. That tells you something about the real value and how good the market is at identifying where the value lies.
Tim Burrowes: So, how do you differ to other people who are operating in the trust space?
Austin Mackell: Okay, well, you've got, one's called the rust Project. Another is called news garden, and there's the Truist Ibn J ournalism Initiative and the People's Front of Judea and so forth. And then related to that, you've got these big philanthropic organizations, the Craig Newmark Foundation, and you've got the Judith Neilson Institute or Nielsen Institute rather. Sorry. What was that? A hundred million request. And I don't know what they're really doing with that apart from some of the same old ideas. But the closest these groups have come, we sometimes collectively refer to them as the model UN. They have a lot of conferences and they talk to each other a lot. And you get a lot of people in the room who all voted for Hillary Clinton. And they figure out who should be on their list of safe news outlets and who should not be on their list of safe news outlets.
And they all have one version or another of putting their logo on a website. And they do the whole website all at once. Okay. We've assessed The Economist. It gets the big green news guard tick. We've assessed whoever it is, I can't think of a customer off the top of my head. They get the Trust in Journalism logo. And now you've got this logo, your RSPCA-approved chicken, and everyone can feel safe and happy about eating you. But a new story is not like a chicken breast. It is not mass produced on a production line. Everyone is different. And you need to build trust at the level of the story. And if you're going to have a reputation system for a journalist or a publication, it needs to be built from the ground up on a story by story granular basis.
That's your basic data. And so we're not just giving you a tick and we're not having experts come in and do it. We're engaging with the public. They're engaging with the material. And we're building a sort of a matrix of values around the research. So, the first one is the research duration. How much time did this person spend researching? It's the simplest thing in the world. “Do you actually know what the fuck you're talking about, mate?” I explained this to a journalists with PhDs and they're so confused sometimes about the idea. “I don't understand who would, want, why? Huh?” I explained it to a trucky, and he got it in about 13 seconds.
And he was like, “yeah, well, I have a GPS unit in the cabin of my truck and it tracks my miles”. If you have an Uber ride driver. You go, oh, well this Uber driver he's all right, some experts checked him out. You can trust him. You build that reputation based on accumulative reviews. Now I know what you're thinking, oh, we are going to get brigaded by the trolls. We have a system to fix that. First of all, now we're just doing the duration. We're not even having the rating. We're letting that conversation happen somewhere else. When we start to bring in other matrices, like quality, what we're going to do is we're going to have a reciprocal relationship where they actually have to watch all the content before they get to participate. And that will immediately deflect the vast majority of the trolls.
There was a Norwegian tech website that said before you can comment, you have to answer a simple multiple choice question about the story. And it wasn't hard. It was just like in what country is the story taking place. And that was enough to deflect most of the people who came to rant about lizard people or whatever. So, we have a system built in. But it's all towards this goal of building an anatomy of research around each story, and then building the trust story by story, claim by claim, source by source, as you go. Bottom down, not top up. And we are the only people taking that approach.
Tim Burrowes: So, final question for me asking you to look forward. If we were to come back and have this conversation again in 12 months from now in 2023, where will you be at?
Austin Mackell: We'll have more users and we'll have a Mac version. And I believe we'll have revenue via the merchandise play. And I think that will be the start of this wave of interest in merch, as a revenue source for journalism, which like all these other sort of trends will probably get a little bit too high at one stage. But I think it'll be end up being a major part of the revenue play going forward. In your book, you've got all these, you see this sort of industry running from monetization strategy to monetization strategy. Merch hasn't really had its turn yet, has it?
Tim Burrowes: Yeah. That's a fair point. Certainly not as a major funder of journalism.
Austin Mackell: And in terms of business, there's a philosophy that we have is don't do anything that anyone else is already doing. If someone else is already doing it, don't get in a knife fight with them about service they're already providing. So, we were kind of not being true to that by just saying, we'll just do advertising like everybody else. Merch is a way we've realised that, first of all, we don't have to get involved with these very complicated ad sales ecosystem. We can sort of do it all in house. And we are doing something by leveraging the video to sell the merch. We're doing something that I don't think anyone's done before, even at that level, even at the level of monetizations. So, I feel like the company really just finally took shape just before this podcast. So, it was really good timing.
Tim Burrowes: I'm glad to hear it. Well, Austin, thank you so much for your time and best of luck with your mission.
Austin Mackell: Okay. Thank you very much, Tim.
Tim Burrowes: Thanks for listening to the Unmakers from Unmade. If you are an unmaker, I'd love to talk to you. Email me, email@example.com. Today's episode of the Unmakers was edited by Abe's Audio. I'm Tim Burrowes, before you remake it, you've got to unmake it.
Today's episode of The Unmakers was edited by Abe's audio.