Craig Fuller on Building The Bloomberg for Trucking

Craig Fuller, Founder & CEO of FreightWaves, didn't have a clear path to media. His background was in the trucking business. But when he identified an opportunity to launch a futures market around trucking, he recognized that there were major gaps in the news & data around trucking. So, he launched FreightWaves.In this episode, we discussed a variety of topics, but a few things jumped out.On pivoting post CovidEvents were a big part of the business, accounting for half of the revenue in 2019. It was expected that it'd be another major component in 2020, but due to Covid-19, it was forced to pivot.The company had already started introducing TV-quality content from its studio in Tennessee. It shifted its event to fit within the TV experience. The majority of the sponsorship dollars were absorbed into commercials on the show. On the attendee front, FreightWaves was able to keep the majority of its revenue by shifting them all to research subscriptions.Ultimately, FreightWaves was able to give sponsors exposure to nearly 100,000 viewers rather than the 2,500 that they expected to have at the physical event.On being valued as a data companyMore than half of the revenue at FreightWaves comes from traditional media sources: advertising on the site and video and subscriptions. However, the company has been able to raise tens of millions of dollars because FreightWaves is also in the data business.When investors look at the business, they see the entire community across media, data and events and were willing to value the business much higher than if the company had just been a traditional media company. Data multiples are higher than media.That has then allowed FreightWaves to play a bit of an arbitrage game where it can acquire smaller pure-play media companies at lower multiples compared to the multiples it raises.On media creating negative net CACs for dataCustomer acquisition costs (CACs) is effectively the amount of money that a company spends to acquire a new customer. For traditional SaaS companies, these can be incredibly high, but it's worth it because the retention is high enough that returns accrue over time.However, FreightWaves has a new metric it tracks called net CACs. Because users are being monetized with the media business before they get a subscription to the SaaS data platform, FreightWaves actually generates strong cash flow while also earning free advertising for its data products.This is the unique opportunity that a media/data blended company can offer that a true SaaS company can't. The media brings the audience in, FreightWaves monetizes with traditional advertising and then it also promotes the data business to those same users.