Before running off to work with a high net-worth client, Jeremy Nowak pauses to offer me, his next door neighbor, some free advice. I ask how startups in the Jewish community can achieve financial sustainability. We need to think anew since traditional pay to stay membership rests in a casket, and no-cost internet access to knowledge and experience is thriving. He invites me to sit on his porch. These kinds of changes have affected a wide range of industries, from newspapers to religion, he explains. “Our world shifted quickly and some people haven’t gotten the memo.” This Brookings Institute Senior Fellow, author and policy analyst metaphorically hands me the memo entitled Hot Dudes Reading.
The essence of the memo is a financial model that may serve the Jewish community. Hot Dudes Reading is an Instagram account that posts photos of attractive men reading books and newspapers on the subway. Started by a group of friends as a lark on a snowy day, Hot Dudes Reading has close to a million followers. Relevant to my initial inquiry about financial sustainability, Jeremy explains the Instagram site’s founders are making money now from what continues to be a playful, free site.
Jeremy warns that “Big institutions are hard to change their deeply embedded cultures and systems.” Congregations and non-profits accustomed to a dues model or their reliance on foundations may be averse to new models of sustainability. With compassion for what may seem inevitable, he notes “You can be good at what you do, but it doesn’t mean you are going to last.”
The challenge is “[…] organizations are good at serving the clients they always served. But, now there are new clients with different expectations and needs.” Despite experience with premiere change leaders, like the McArthur Foundation and the William Penn Foundation, Jeremey says “it is really hard to change. But we have no choice. If you don’t change, you may die.”
Hot Dudes Reading is alive and well because it offers free content that is of interest to a wide audience. Within weeks of its launch, an online community was created around what participants identified as compelling content. Followers accessed the photos, posted their own pictures and shared with friends at no cost. The challenge for the startup was: “How to monetize the site without pissing off original members who wanted to feel part of a community, but not be in a commercial relationship?”
The simple answer: Equipped with a product or service with wide appeal, a community can develop with no fees. However, to monetize, you need to expand the product line and charge for those additional products or services. In other words, give the milk away for free, then when folks are gathered round, charge for the cheese.
The Hot Dudes Reading Instagram account is free. Their book deal brought a six-figure advance. The sale of Hot Dudes Reading China brought in another hefty sum. And, keeping the dollars coming—you guessed it—calendar sales are through the roof.
Jeremy shares numerous ways the bucks can keep flowing. Third party ads, subscriptions and additional products are possible once you have people’s attention and are meeting a real need. “Linked-in is a great example,” he says. “I’m on it for free. But if I want prime, I need to pay for it.” He cautions that you have to keep your eye on the original community that formed around the free content or service. Keeping content fresh and engaging is essential. Hot Dudes Reading now offers suggested reading lists.
Startups in the Jewish community, he warns, may not have a large enough audience to enact this financial model. You need enough people to form the original free gathering community so there can be an ample subset who are willing to pay. Leaders of startups in the Jewish community, he suggests, might think about offering content and services with a more global appeal. “If your numbers are too small to monetize, think beyond Jews only.”
I start to imagine a startup focused on racial inclusion in the Jewish community. How would it position itself to appeal beyond Jews only? Or in the face of weekly gun horror and world terror, how might a Jewish peacemakers startup engage Jews and beyond? These examples are not as sexy as Hot Dudes Reading, but they do touch universal and urgent needs. Could their numbers be large enough to include a subset of participants who will pay?
Jeremy’s leaving on a jet plane. I ask one more question. “Best way to work with foundations?” Jeremy who tends to be a serious person, tells a joke. “If you met one foundation, you met one foundation.” I don’t laugh. He explains, “Each foundation is idiosyncratic. They are all different in how they work.” But, one thing they all have in common is valuing relationships. “Use your network,” he says, “every tribe has one. What is critical is to function as a thought leader and problem solver with them. A grantee might get the smaller sum. But a colleague is more apt to the get the bigger bucks.”
In my quest to understand financial sustainability, Jeremy gave me Hot Dudes Reading. It is hard to get it out of my mind for many reasons. He also left me asking three questions:
How might startups in the Jewish community experiment with the fee and free financial model?
How might Jewish communal startups expand their reach beyond members only to establish a community large enough to support a subset who will provide needed revenue?
How might high-powered consultants help their neighbors become colleagues with multi-million dollar foundation staff?