AN ALTERNATIVE TO THE PESKY NEWS PAYWALL?
With Harvey’s background in newspaper and journal publishing, one idea in particular piqued his curiosity. Pkhovelishvili and his four teammates proposed NewsCoin, essentially a pay-as-you-read way to monetize online journalism and blogging. At its most basic form, NewsCoin is a patented technology allowing news sites and blogs to charge micro-transactions for users in a per-article payment system. As international graduate students, Pkhovelishvili and co-founder and fellow Duke Fuqua MBA Alex Castro knew well the frustrations of pesky paywalls. Through NewsCoin, users would be able to navigate individual articles of participating content generators, and instead of a flat rate of $19.99 a month, for example, for one news source, they could surf as many articles as they want from participating sources — then be billed according to activity level.
“You start with a NewsCoin wallet and we’ll cross-authenticate you through all the content providers that are working with us,” Pkhovelishvili explains.
“The traditional approach of putting a paywall around your site has failed for almost everybody except the Wall Street Journal and The New York Times and places like that,” adds Harvey, who serves on the startup’s advisory board. He sees the idea having multiple advantages. First, and obviously, it’s another stab at monetizing news in a digital era. Moreover, if notable news sources buy in, it could provide an advantage for consumers of the news — foremost among the, convenience. Of course, the clunky switch by media companies to digital has often come with a depletion of newsroom resources, and Harvey points to the loss of quality journalism as something that could, in time, be reversed.
Harvey says the evolution of ad blocking technology could force media companies to consider alternative forms of monetization, and monetization is the key to dam the massive amounts hemorrhaging from many major media outlets. He says processing tiny amounts of payment has been a potential issue for the new type of monetization — but blockchain technology, and specifically the technology Castro has helped develop alongside the Brazilian-based development company, Aevotech, may be the answer. “How do you process one penny of payment? The answer is no longer theoretical, it’s real technology,” Harvey explains.
A COVETED SPOT IN MASS CHALLEGE
After the final presentation of Harvey’s course, Castro and Pkhovelishvili decided to pursue NewsCoin, and supportive and intrigued classmates came in droves. “Every person in our group had the same experience,” Pkhovelishvili says of the original five teammates. “People kept coming up to us wanting to know more.” So the two snagged Castro’s brother, Felipe, a 2015 graduate of Harvard Business School, and began developing the actual site and product.
“We had time during the summer after we graduated,” Pkhovelishvili says. “We knew it wasn’t hard to bring to life, so we thought, ‘Why not do this startup?'”
The team applied for Boston-based accelerator, Mass Challenge, and were one of 125 teams to be selected out of more than 2,800 applicants. They officially launched the platform on Aug. 1. Of course, they face some immediate hurdles. For one, they must convince news outlets to give it a try. Pkhovelishvili and the Castros, who are originally from Brazil, are testing the product with the upcoming launch of a Brazil-focused business blog founded by popular business journalist Geraldo Samor. If things go well, the team plans to move the platform to small community newspapers in the U.S.
So far, Felipe Castro will be the only one moving forward with the venture on a full-time basis. Pkhovelishvili says while they have been bootstrapping so far, the team plans to do a seed investment round this fall. Potential funding connections have been established through Mass Challenge, he says, which gives them immediate entrepreneurship legitimacy. In addition to a team of mentors and office space, Mass Challenge has provided legal connections, which has been particularly helpful amid the uncertainty of global blockchain regulation.
AN EVOLUTION IN BUSINESS EDUCATION?
As for similar courses popping up on other B-school campuses, Harvey says it’s coming, albeit at a slow rate. “There is a lot of inertia,” Harvey says. “And I guess I’ve taken the risk. And maybe other schools will follow.” He says several other elite schools have asked for his course slide decks, with UC-Berkeley’s Haas School of Business being particularly interested.
For Harvey, cryptocurrency’s ability to process micro-transactions — exemplified by NewsCoin — is why he sees blockchain as an important addition to B-school curriculum. “Micro-transactions are why this technology has a lot of promise in emerging markets, where the transactions could be very small but people are un-banked,” he explains. “They might have mobile phones, but many of them don’t have banking accounts.”
Harvey believes his particular entrepreneurial focus is also essential.
“This is not writing an essay or doing some calculations on an exam,” he says. “We are forcing students to produce the same pitch deck that they would pitch to a venture capitalist. There is no difference. In a way, this might be an evolution in business education, too.”