Raconteur Media: Freddie Ossberg
The young publishing pundit on starting in a recession and bagging Murdoch as a partner
While the autumn of 2008 was a turbulent time for most print companies, it marked the start of a sensational journey for Raconteur Media. The London-based niche publisher rode the recession tide with great gusto during its first few months of trading. While businesses all around were dropping like flies, Raconteur bagged a certain Mr Murdoch for its first partner and the results have been astounding. Recording an impressive turnover of £2.5m last year, the business, whose founders were named young entrepreneurs of the year at the 2010 Startups Awards, is well on its way to publishing supremacy.
Freddie Ossberg and Henrik Kanekrans were both working for independent publisher, Mediaplanet in London when the idea for Raconteur Media was born. They wanted to build a similar business but one that would provide original high-quality content that wasn't dictated by the advertisers. “To be a successful player in the field we realised we needed to publish content of the highest quality – that wasn't written by the clients. We want to be a premium provider of niche content,” explains Freddie. Clearly confident in their offering, the pair caught the esteemed eye of News International, with whom Freddie and Henrik have secured an exclusivity agreement for both The Times and The Sunday Times. The arrangement, which has recently been renewed for another three years, means Raconteur is the only publishing company allowed to produce editorial publications to be distributed inside these papers. Although on the flip side, Raconteur is prohibited from working with any other UK newspapers. With such respected titles on board, it's no wonder business is booming.
The young entrepreneurs launched the company in September 2008 using personal savings of £50,000. “The beauty is that we were a small operation at the start and our overheads were low, so we could keep costs down and then reinvest the revenue back into the business,” recalls Freddie. Through outsourcing the writing to freelancers, the company can maintain relatively low outgoings, as they currently employ 15 full time staff. Strong profits in the firm's first quarter helped to establish a reputable name in the publishing field, while some very favourable credit terms with News International were also key to early success. “This was invaluable for the company because we could always get paid before we paid our creditors,” explains Freddie.
Revenue is generated 100% from advertisers and Raconteur then pays News International to print and distribute the content. Freddie and Henrik went straight to the top when approaching News International and presented their unique selling point to the managing director, with whom they were in contact with at their former firm: “We said we would hire the best journalists and give them complete independence to write fantastic, high-quality articles, which resonated well with them.” Poaching News International from Mediaplanet was a huge breakthrough for the pair, who don't appear to be losing any sleep over the fate of their former employer – but then again, can you blame them?
October 2008, the second month in operation, marked another major breakthrough for the business because it was unrivalled in terms of commercial success. “There we were, the whole economy and advertising market was collapsing around us and the world's capital markets were in turmoil, but we were raising revenue as if it was still 2006 – that was pretty surreal.” Without that lucrative early month, Freddie says they probably wouldn't be where they are today. Compared to other newspaper groups and magazine publishers who suffered massive declines, Raconteur's revenue levels were healthy from the start: “It just goes to show that if the attitude is that it will work, it usually does. Clients haven't stopped doing business, but they've become a lot more picky over who they do business with – which requires you to have a great product and great people to communicate the value of what you do.”
Despite only launching two and a half years ago, Raconteur has successfully carved out a niche on the publishing sphere. With a projected turnover of £3.5m this year, Freddie believes that the next few years will be very transformational for the business: “We want to double in size this year, we want to launch at least two new products and we want to build our customer base.” While their exclusivity agreement with News International prevents the Raconteur team from working with other UK-based newspapers, there are a number of other potential opportunities in the pipeline; magazines are fair game, as well as overseas newspapers.
Of course, there's always the risk of News International pulling the plug, however, there's so much on this ambitious pair's radar that could buffer the possible blow. “We want to build an extensive portfolio of communications solutions – whether it's in events, market research, PR, or online publishing, as long as it fits under the umbrella of providing niche content for a premium audience. This will make the company less dependent on print as the sole medium and News International as the sole distribution partner.”
Freddie says he also wants to expand internationally, ideally to America or Asia. Thinking big is something of a recurring theme with these two young entrepreneurs: “We can't do anything by halves – everything has to be huge and the best.”