David Skok, a former newspaper and broadcast journalist, founded subscription news startup The Logic in 2018 with CA$300,000 (£186,000) of investment and three employees. Four years on, The Logic will soon have a staff of 23 and is growing fast.
With a “wonkish” approach to journalism, The Logic has established itself as a widely-respected tech and business news entity in Canada.
Skok, The Logic’s chief executive and editor-in-chief, says subscription numbers have approximately doubled each year since launch.
The Logic’s startup story
What made him decide to launch The Logic?
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“I felt like there was an opening for a subscription-based news site in Canada,” says Skok.
Before becoming an entrepreneur, Skok worked as a news executive at Global News in Canada, the Toronto Star, and the Boston Globe. He also studied the business of news and disruption while on a fellowship at the Nieman Foundation for Journalism at Harvard University.
“I’d watched The Information, which Jessica Lessin had built, with great admiration. I’d watched The Athletic at that time, which was starting to really gain traction.
“And I thought, okay, there’s a window here where people will be willing to pay for in-depth, deep reporting. So that’s how The Logic came about.”
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Skok was involved in news product launches at the Boston Globe and Global News in Canada previously. “I was kind of an intrapreneur, I guess is what you’d call it. So I knew how to launch something. It didn’t feel foreign to me.
“The thing I think that was a shock was I had grand ambitions of raising millions of dollars to get The Logic off the ground. I realised very quickly when I was fundraising that this was going to be a lot harder than I thought. And so all of my forecasting and operating models had to be revised dramatically downwards. We ended up raising CA$300,000… It wasn’t a lot, and we had to stretch that.”
The Logic was able to raise a further CA$1.8m in 2019 – from newspaper publisher Postmedia, Relay Ventures and angel investors – but the company was under pressure to sell subscriptions fast after launch. An annual subscription to The Logic costs CA$300, placing it at the pricier end of the news market.
“We only did annual subscriptions, because we needed the cashflow,” says Skok. “Monthly was not something that would give us the cashflow we needed. That turned out to be a really smart decision because obviously churn is lower with annual subscribers. So that gave us the runway we needed to keep going.
“The other smart decision we made is we charged CA$300, and we didn’t really discount it at that time. Our point was we’re going to prove our value to you and we aren’t going to give it away.”
Keeping reporters off the ‘hamster wheel’
The Logic will soon employ 23 staff, including 18 journalists who cover areas including electric and autonomous vehicles, cryptocurrency, policy, politics, the innovation economy, ethical investment and fintech.
Broadly, says Skok, “we cover the future of Canada – and Canada’s transformation from a resource economy to the knowledge-based economy.
“If you look at Canadian productivity and growth, if you remove the resource sector and you remove housing, our growth as a country GDP-wise is negligible. And that’s where we need to improve.”
Skok says The Logic had three goals when it launched. Firstly, it wanted to use journalism “to make Canada a better place to live and work”. Secondly, “to light a path to show others wanting to start their own publications, or believe again in journalism.
“And the third thing was to create a space where journalists themselves could have a career and have stability and have a sense of financial independence hopefully – where they are treated not as the first thing to get cut… but treated as the core engine of any success that any publication can have.”
The Logic aims to publish one or two stories a day in total. “That really reduces the requirement on the reporters to feel like they’re on a hamster wheel always having to churn out copy for scale’s sake,” says Skok.
“The reporters and editors are our products. And for so long in a lot of organisations, that just hasn’t been the case.”
He adds that reporters are not set targets or quotas for work – “we don’t rely on analytics to determine what they do. If anything they want more than we give them. We really try to keep them separate.
“Our view is, we’ve told our readers one to two really strong, original pieces of journalism a day, plus a daily briefing that comes out every afternoon that rounds up with some smart analysis of what’s been happening in the world.”
The Logic’s stories aim for high impact and depth. “We’re not afraid of wonkish work,” says Skok. “Obviously it’s really important that all our work is enjoyable and readable and easy to read.”
‘I would love to have foreign bureaus’
The Logic appears to be thriving. It is not yet profitable, because it is investing in growth, but its reputation is growing in Canada and beyond. Skok says that around 15% of its readership comes from outside Canada, mainly the United States.
“We’ve basically doubled every year since we launched in subscriber growth,” says Skok. “And that continues. We are not seeing the slowdowns that others are.
“And the other interesting thing is we’ve seen an increase in advertising. Two years ago, advertising was not at all a part of our business. But in fact what we’ve discovered, as others have as well, is that when you have a really strong, loyal readership, it brings in advertisers who want to be aligned with that readership or get in front of it.”
What is Skok’s vision for the future now? How large can The Logic be?
“As long as can keep investing in the newsroom and the operations in a way that is financially responsible, I don’t think there’s a limit to that,” he says. “It’s wherever we feel like the best areas to cover are.
“The way I view it more is just making sure that, unlike other outlets that have launched – not just in Canada but around the world – over the last 10, 15 years, that we aren’t tipping over our skis. That we aren’t getting too far ahead of our revenues. So we’re being really diligent and disciplined about spending within our means.”
And longer term? Could The Logic expand beyond Canada?
“I think there’s a lot about Canada, and a lot about what the Canadian lens can bring to the world, that hasn’t really been tapped into in a real way. I would love to have foreign bureaus and places we can go where the Canadian lens brings real value, both back to Canadians but also to the world.”
Photo credit: Nick Iwanyshyn
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