The Great Media Arbitrage: How Craig Fuller Built FreightWaves
Feb 1, 2024
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Craig Fuller, Founder and CEO of FreightWaves, discusses the importance of logistics and supply chains, the rise of deglobalization, US manufacturing benefits for Colombia, the changing supply chain function, the US labor availability problem, why AI won't fully replace humans in media, the early days of FreightWaves, predicting recessions, logistics as a barometer of the global economy, surviving COVID, how FreightWaves became a media business, the arbitrage opportunity in media, buying print magazines, and building a flying community.
Real-time data and information are vital for ensuring resilience in supply chains.
Companies are reevaluating their supply chain strategies and considering near-shoring and reshoring options.
Media businesses that focus on niche audiences and provide high-quality content can thrive and offer unique value.
Acquiring media businesses can tap into existing loyal audiences and leverage their value to drive profits.
Deep dives
Logistics as the Backbone of the Global Economy
Logistics plays a crucial role in the global economy, supporting around 40% of industries. However, recent disruptions, such as the COVID-19 pandemic, have highlighted the vulnerability of supply chains. Real-time data and information have become vital for ensuring resilience in supply chains.
The Impact of Disruptions on Global Trade
Global trade is facing new challenges, including attacks on commercial vessels and disruptions in major trade corridors like the Suez Canal. State-sponsored actors and military-grade technologies are causing these disruptions, leading to uncertainty in global trade and the need for alternative supply chain strategies.
The Rise of Near-Shoring and Reshoring
Companies are reevaluating their supply chain strategies and considering near-shoring and reshoring options. The de-globalization trend, accelerated by factors like the Trump tariffs and the COVID-19 pandemic, has created an opportunity for countries like the United States, Mexico, and Colombia to attract manufacturing and investment.
The Power of Data and Media in Supply Chain
The need for real-time, high-quality data and media coverage in the supply chain industry has become increasingly evident. Companies like Freight Waves are taking up this challenge, providing comprehensive information and analysis, allowing businesses to make informed decisions and navigate supply chain disruptions.
Adapting to the Challenges
Despite facing significant challenges in 2020, including layoffs and financial constraints, the company managed to turn things around. They focused on cash preservation and discipline, which ultimately saved them. They also realized the importance of delegating responsibilities and creating a strong management team. By staying focused on high-value activities and avoiding unnecessary costs, they were able to grow their revenue despite the pandemic's impact on their events business.
The Power of Media Businesses
Media businesses have often been undervalued and overlooked by investors, creating an opportunity for those who recognize their potential. By owning the audience and leveraging it for advertising and subscriptions, media businesses can generate profits and drive commerce. The ability to directly engage with customers and use the audience's interests to inform product offerings creates a powerful and profitable business model. Media businesses that focus on niche audiences and provide high-quality content can thrive and offer unique value.
Lessons from Transformation
A bold strategy shift may seem risky at first, but it can lead to remarkable outcomes. The podcast episode highlights the example of Flying Magazine, which transformed its business by focusing on delivering high-quality content and targeting the right audience. Despite initial concerns and challenges, the magazine's new approach attracted loyal subscribers, increased advertising rates, and ultimately led to business success. This experience shows the importance of reevaluating business models, taking calculated risks, and focusing on the needs and interests of the target audience.
The Potential of Media Businesses
Traditional media businesses, such as magazines, can offer attractive investment opportunities due to their undervaluation and the potential for revenue diversification. By acquiring media businesses, entrepreneurs can tap into existing loyal audiences and leverage their value to drive profits. Owning the audience allows for direct customer acquisition and engagement, reducing dependence on external advertising platforms. Successful media businesses understand their audience and deliver content that resonates, creating a strong and profitable brand that can extend beyond traditional advertising and subscriptions.
Craig Fuller is the Founder and CEO of FreightWaves, a media company and data provider for the global supply chain. He’s also the CEO of Flying Media Group, which he founded in 2021 to acquire Flying Magazine, the largest US-based print magazine for the aviation industry. This conversation is split into three parts: a crash course on logistics and supply chains, how to build and run a media company, and finally all things print magazines.
Topics discussed include:
(00:00) Intro
(02:39) Why logistics is the most important industry no one talks about
(04:23) The rise of deglobalization
(11:07) How Colombia benefits from US manufacturing
(14:52) Why Craig’s watching US onshoring and Mexican nearshoring
(18:18) How the supply chain function is changing
(28:59) The US labor availability problem
(32:40) Why AI will never fully replace humans in media
(34:56) The early days of FreightWaves
(41:04) Predicting recessions months before it shows up in data
(48:51) Why logistics is the best barometer of the global economy
(52:44) Taking 12+ months to raise FreightWaves first venture round
(59:24) Surviving COVID with only two months of runway
(01:05:20) How FreightWaves accidentally became a media business
(01:08:15) Why the best startups make low risk, high upside decisions
(01:13:27) Why media business are the arbitrage opportunity this decade
(01:15:55) Getting 200%+ IRR’s buying print magazines, starting with flying
(01:17:50) Building his own airport and flying community
(01:30:16) Almost failing to turnaround his first magazine acquisition
(01:39:06) His non-intuitive lessons from building media businesses
