The rise of Rebecca Derrington and her media tech startup SourceBottle
Rebecca Derrington is one of the most under-recognised entrepreneurs in the Australian technology scene. Given her humble nature, it’s not all that surprising that she’s flown under the radar. But when you do the math, Derrington has achieved phenomenal success over the past five years with her startup SourceBottle.
For those who are unfamiliar with SourceBottle, essentially it’s a two-sided marketplace connecting journalists with sources. Media professionals can post call-outs (anonymously, if desired) on SourceBottle when in need of a source, and relevant sources can pitch to be a part of the story. Replies to the call-outs are delivered straight into the journalist’s email inbox. Sources can discover call-outs on sourcebottle.com.au, follow SourceBottle on social media to stay up to date with the latest call-outs, or subscribe to SourceBottle’s newsletter which also feature call-outs.
What’s particularly fascinating about SourceBottle is the way it’s perceived by many users. Journalists and PR professionals alike treat it as their ‘secret tool’: “Don’t tell anyone, but there’s this thing called SourceBottle that I discovered last week…” Even media teachers at universities whisper about the service as if it’s the secret ingredient to a recipe. Derrington notes that this is good and bad at the same time: good because someone finds it valuable enough to make it their ‘secret’; and bad because they’re not telling other people about it.
Regardless, SourceBottle has experienced significant growth, especially in the past two years. And while it’s easy to envy Derrington’s success, it’s not an overnight success story. Like with all genuine startup stories, the journey had its obstacles – plenty of them. But Derrington’s tenacity got her to where she is today.
Originally from Brisbane, Derrington graduated from law school in 1988. She admits she was a ‘miserable lawyer’, who only studied law to fulfil her parents’ wishes. Her parents didn’t quite appreciate how much she hated law school, so much that she had to practice law for an entire excruciating year to prove it to them. But there was one good thing, and only one good thing, that came out of it: she was able to meet her husband, also a lawyer.
Derrington decided to return to university to pursue studies in business, marketing and public relations. She worked in a number of large and medium sized businesses as a PR and marketing officer – and she felt right at home. After moving to Melbourne with her husband and landing a job in a law firm as a marketing officer, she realised that her lifestyle was unsustainable. At the time, Derrington, who is the mother of three boys, was pregnant with her second child. Her and her husband’s jobs were highly demanding and putting a strain on their family life. This is when Derrington decided to work for herself.
She started a corporate communications consultancy, Wagging Tongues, and worked with a diverse range of clients. It was through operating Wagging Tongues that Derrington recognised a number of problems faced by businesses, PR professionals and journalists. She got much of her grassroots media training in Brisbane, and when she moved to Melbourne, she realised that she didn’t have many media connections. She was working with clients that operate in many different industries, and it was difficult to get them media traction with no established relationships with journalists.
At that time, the crowdsourcing model was beginning to evolve and Derrington recognised an opportunity to implement that model into the media and PR industry.
“I started seeing savvy people embracing new social media like Facebook and Twitter as a way getting access to a much larger community, which wasn’t possible before. Technology is a great enabler,” says Derrington.
“Journalists are being bombarded with irrelevant media pitches from the most well-intentioned PR people; and because the change is so prolific in the media industry, sometimes it’s hard for PR people to keep up to pace. As a result, many people with great stories aren’t being heard. I realised this was a great opportunity to create a condu, a highly customised platform that offers value to businesses, PR people, experts and journalists.”
As a non-technical entrepreneur, Derrington had to partner with a design and development agency in Melbourne, Bliss Media, to bring SourceBottle to life. In July 2009, the service was launched with, what Derrington describes as, a “fundamentally flawed business model”. She says the integrity of the business required SourceBottle to be a free service.
“I started a business without having any real idea of how I was going to turn it into a business and make money out of it,” Derrington adds.
She decided to focus on the value SourceBottle would bring, postponing any consideration of how it will generate revenue. Derrington says she wanted journalists to be able to tap into a huge talent pool that wasn’t going to be managed by public relations consultants; and for journalists to value the service, it needed to have a high level of urgency.
“This is one demand of the service that sometimes people find frustrating. It’s a couple of emails every week day and some people don’t understand why there’s that level of frequency. For it to be an effective service for a journalist with very strict time constraints on stories, it has to be frequent,” Derrington explains.
SourceBottle was also designed so that journalists wouldn’t have to display their name or email address on call-outs. This was to ensure journalists would be comfortable using the service, and know that once a call-out period ends, they won’t continue to receive replies from potential sources for a story.
What Derrington hadn’t foreseen when launching SourceBottle, was the scepticism it would invite. She thought people would instantly understand the value of the service, but some established journalists remained unconvinced, even calling it a ‘tool for lazy journalists’.
“There was resistance from the journalist community – particularly from those who had established careers and probably had a sea of contacts. they were labeling it as a tool for lazy journalists, which I thought was really unfair. There were people mocking it on Twitter, saying ‘I’m going to ask for a pony’,” says Derrington.
“It’s a disruptor to an industry. I should have anticipated that there would be a resistance and pessimism about SourceBottle’s longevity, its credibility, about the kinds of people using it or not using it. But the negativity didn’t last for long.”
Although SourceBottle has been generating consistent six-figure annual revenue and has an email subscriber base that’s 24,000 to 25,000 strong, Derrington admits it’s been ‘a long slog’ and that the early days were grim.
“There were a lot of dark days in the early stages where I was still having to fund the building of the website and its development without having any revenue or traction. I didn’t have the critical mass to sell advertising. It was about being patient and knowing that eventually the community will be very strong and loyal,” says Derrington.
She had to focus on solving the ‘chicken and egg’ problem – finding a balance between two target markets (media and sources). The question she pondered was “What’s worse? Having journalists use it while there were hardly any subscribers, and posting out a call out and hearing crickets? Or having subscribers sign up to it and receive nothing for a week?” The latter option was definitely the lesser of two evils, according to Derrington, so she focused on the second market.
“I built up the subscriber base with a handful of call-outs. There were a couple of journalists who were amazing in terms of their support. They were telling people about it and giving me a call, getting in touch with me, telling me how grateful they are that I’ve created a service like this. Having those first call-outs was important in demonstrating the value of SourceBottle five years ago. If it wasn’t for those handful of journalists, SourceBottle really wouldn’t have gone off the ground, so I’m grateful to them,” says Derrington.
She also says that tenacity, persistence, and even a bit of naivety is important in the early stages of starting up.
“There was something that kept me thinking ‘it’s going to get there’. I still think it’s going to get there. But I’m so happy that it’s made it to this point. It’s makes me think that it was all worth it. It wasn’t easy. I marvel at these overnight success stories, because that wasn’t my experience,” says Derrington.
She knew it would take time to build a community; and that it wasn’t until the user base was sizable enough that she could legitimately charge for advertising.
“If you’re building a community there’s a certain level of patience you need to have where your sole driver can’t be making money. It’s about building trust and providing a really useful service. That was always going to be my primary focus and it still is.“
SourceBottle’s initial revenue streams were on-site and EDM advertising; and these were the startup’s only sources of revenue, which Derrington says was a result of her “ignorance of the digital space”. She realised that “advertising is a ridiculous long-term monetisation model for an online business, because there’s only so much real estate you can sell”.
But then she began noticing user activity. They were using SourceBottle in ways she hadn’t anticipated; and that listening to them helped her redefine the long-term financial model for the business.
“I had various PR professionals contacting me saying they really need a request type service, where they could give away goodie bags. The whole premise of the service is for journalists to get access to great talent, on demand. But on the flip side, it’s for people to get access publicity and profile-raising opportunities – which could be in the form of a promo piece in a gift bag at an event for 300 people, or an editorial piece. What people were suggesting fit into SourceBottle’s overall objective. That’s when I recognised an opportunity to introduce a subscription model,” Derrington explains.
Earlier this year, Derrington recognised another potential subscription arm. Given the number of experts always on the look-out for opportunities to raise their profile and professional credibility, Derrington decided to introduce ‘expert profiles’.
At first, the idea was just to have profiles that would automatically attach to call-out responses. This way, sources wouldn’t have to repeatedly enter their contact details and professional backgrounds. The problem at the time was that people were occasionally not providing their correct email addresses, which meant that responses to call-outs bounced back to SourceBottle and journalists would not be able to contact the source.
“Every day, I was being bombarded with these bounced emails and I thought ‘wow, so many missed opportunities’. The journalists can’t figure out what your right email address is and that’s a bother. At first I thought people should take the time to put in their right email address or add their phone number. But then I realised it was a problem I needed to address,” says Derrington.
But she wanted to make the profile feature better, without necessarily knowing how. Derrington says she was talking to a smart fellow who suggested, ‘wouldn’t it be great if when journalists post call-outs, they could put in a few keywords which will automatically be matched with profiles that contain the same keywords?’ This way, while the journalists wait for responses to their call-outs, SourceBottle can present a number of relevant experts that may be able to help the journalist with her or his story.
“If the matching service works really well, the journalist may be able to find the best source in a sea of experts who have subscribed to the service. It also means if sources don’t have a chance to check the call-outs, they might still be considered by the journalist who will access to their profile. This idea evolved, and I worked with the development team to ensure the matching algorithm works really well. A lot of experts are already finding value in this service,” says Derrington.
SourceBottle’s ‘expert profile’ feature was introduced in the middle of this year, and has since generated around 350 sign-ups from experts, who are required to pay $25 per month to be featured on the site. There is also a subscription-based ‘Find a case study’ feature which allows PR consultants to find the right expert to feature on a press release.
If PR consultants want to put together case studies for their clients, they can get an expert weighing in on the story to make it more compelling for the journalist. For instance, they can post a call-out requesting to interview a medical expert for a media pitch.
These subscription arms allow for recurrent revenue, meaning that even if there’s unsold inventory in the future, the business is still generating revenue. Advertising may become a thing of the past, but for the time being, it’s a great source of revenue for SourceBottle. Derrington says, due to SourceBottle’s strong email subscriber base, the calendar fills up fairly quickly.
Although SourceBottle’s growth curve is steep, with revenue doubling in the past year, and user base increasing 20 percent in the same period, Derrington feels she’s not necessarily a natural fit in business. She says the ‘money side of things’ is too distracting and she just wants it to ‘get out of the way’. But it’s her focus on the product that’s helped make money follow.
“It’s lovely now being able to focus on the business and not look to other revenue streams, being able to drive this business and generate a good income. It’s exactly what I wanted it to be, it’s giving me a lifestyle that I wanted where I can take care of my three boys, I can be the primary carer for kids, I can work flexibly. It’s no longer a slog, it’s a real joy to run a business like this,” says Derrington.
“Because I’m operating in the tech space, it means I have to constantly innovate. That’s a challenge – constantly innovating, trying to improve and refine and deliver on what your audience wants. SourceBottle just can’t sit in a stagnant form. I have to enjoy those moments where everything is working properly, because tomorrow it might all fall apart.”
She does lament, however, the ‘sense of aloneness’ that comes with running an online business as a solo founder. Sometimes, when she’s craving creative input from someone else or wants to bounce ideas off of someone else, there’s no-one to turn to.
“It feels like you’re in a bubble of your own. I might get a nasty email from someone who is upset that I’ve changed something on the EDM. People get outraged about small things, like small changes to the way an advert looks. And it’s really only you who has to deal with it. There’s a sense of isolation I feel when dealing with challenges, because I have to confront them on my own,” says Derrington.
“When you’re on your own, you’re less likely to celebrate your milestones and successes because there’s no-one to celebrate with.”
And because of the way the technology works, she doesn’t necessarily get to hear the success stories that eventuate with the help of SourceBottle.
“I don’t know whether someone has landed their first fantastic television opportunity because of SourceBottle. I don’t know unless they email me or call me,” says Derrington.
That said, SourceBottle has achieved significant success since its inception in 2009, operating in not only Australia, but the UK, North America and New Zealand.
At the moment, Australia is unsurprisingly SourceBottle’s top market, responsible for over 80 percent of the startup’s total revenue. Derrington says one of the main benefits of having an international reach without necessarily having large subscriber numbers in those markets, is that it allows Australian subscribers with a product or those who are looking to get exposure in places like North America have the opportunity to access call-outs posted from North America. Similarly, international journalists can cherry pick which countries they want to receive responses from.
What’s particularly impressive is that SourceBottle has achieved growth with a small team of one full-time founder and two virtual assistants. Derrington has an assistant working in Sydney and another in the UK who manages all the Northern Hemisphere markets. Derrington says the virtual assistance is very conducive to SourceBottle’s business model; and as she looks to grow in international markets, will be continuing to grow her virtual team. SourceBottle has been a lean operation since birth, with consistent overhead costs while profits continue to grow.
The growth of SourceBottle has also been predominantly organic. Derrington says she’s only now content with the product and open to the prospect of marketing SourceBottle more aggressively, which means the company’s growth will multiply in the upcoming years.