Axios is entering into the software licensing business with a new tool to help companies communicate

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This coming February, Axios’s first software-as-a-service product, AxiosHQ, will hit the market.

The newsletter publisher hopes its strategy to target companies looking to more effectively communicate will differentiate it from other publishers that have built businesses around licensing their proprietary technology to strictly media companies.

The Washington Post’s Arc content management system, Vox Media’s suite of software-as-a-service products and Minute Media’s CMS — which the publisher makes half of its annual revenue from — are all created for publishers and companies with content operations. But Axios’ software is meant to give companies an easier and more succinct way of communicating internally. Any number of companies could license and use AxiosHQ, according to Axios president Roy Schwartz.

AxiosHQ is a software that was built by the company — the second piece of proprietary software it created after its content management system — that gives users a space to write their company-wide memos, with real-time feedback on their writing. For example, the software will provide a template for users to fill in and give a “Smart Brevity” score to how smart, brief and clear the information is.

Soon enough, company memos could end up looking like Axios newsletters, with the same subheads — one big thing, what’s next, go deeper and why it matters — outlining the changes in an organization.

Once the memo is written, it can be emailed to a listserv of employees and the sender is able to receive engagement analytics like open rates. The pricing model for the licensing agreements have not yet been set, according to the company.

The idea to build this inter-communications business came shortly after Axios itself came to life in 2017. Co-created by Roy Schwartz, Jim VandeHei and Mike Allen, the idea of Axios was to publish the important information in an easily digestible format, rather than in the form of an 800-word article.

After that approach to news proved to be working, Schwartz said dozens of companies approached Axios for a way to “create an Axios-style newsletter” for their own businesses.

So far, about 100 customers, including AT&T, Delta and GetUpside, have beta tested the software for the past year, earning Axios approximately $1 million in revenue.

The Axios business team started testing the idea two years ago by providing editing services and training in “smart brevity” to company clients that wanted to learn how to better communicate with their employees.

The company hired trainers and editors outside of the editorial team specifically tasked with leading this initiative. The process paid off and brought in close to 7-figures in revenue, but the team realized there was the possibility to scale with a software that would do the work for them, Schwartz said.

“The problem within a corporation or an organization is even bigger than the problem that people are having with news consumption because the stakes are so much higher. If there is a miscommunication, then you can’t implement your strategy and it hurts revenue,” said Schwartz. 

There are big plans for what AxiosHQ will end up contributing to the company’s overall revenue, but the company is projecting it won’t be profitable for a few years, Schwartz said, accounting for the service’s build-up costs.

AxiosHQ has a team of 25 people, including the new vp of sales for AxiosHQ Lindsey Sullivan. Sullivan started with the company last week and is tasked with growing the sales and marketing teams by at least six more hires over the next several months in order to scale AxiosHQ as quickly as possible.

“The reason [SaaS] businesses are so lucrative in the market is because after a year or two, you understand the lifetime value of a customer, so yes you’re investing a lot of money, but you know there will be a return at the other end,” said Schwartz.

Tammy Bjelland, CEO of remote working consulting group Workplaceless, said her team, which provides its clients with suggestions on which tools might be helpful in streamlining their businesses’ operations, has seen an increase in clients asking for recommendations on the software and communications tools they should be using during the pandemic. But at the same time, there has been an increase in tools that are coming on the market to solve the issues that newly remote workforces are dealing with. 

Because of that, any company that is looking to launch an internal communications tool needs to have a unique value proposition to hook prospective customers. For Axios, Bjelland said it could mean being a curation tool that benefits lower level employees.

“The amount of information that needs to get exchanged or shared is overwhelming and when you’re on the receiving end, it can be hard to parse through what is important,” Bjelland said.

By giving companies the ability to surface the most important information in eye-catching bullet points, it will likely make it easier for employees to get the information without overwhelming their attention or inboxes.

“If a company sends something out to 10,000 people and it is two minutes longer than it should be in terms of it being inefficient, you just wasted 20,000 minutes of a company’s time,” said Schwartz.

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