On Monday, Gigaom, a widely respected blog dedicated to tech coverage, suddenly shut down. By all external appearances, the site was successful: It claimed well over 6 million monthly readers, was staffed by more than 70 employees, and had its own research platform. Just last year, founder Om Malik announced that Gigaom was taking $8 million in venture capital money to fund the growing business, which used smart, clickbait-free editorial content to attract an audience willing to pay for exclusive research and events. Yet, while the details of Gigaom’s downfall remain unknown, some have speculated that it was this dependence on venture capital and a corresponding urge to expand beyond viability that precipitated the blog’s demise.
This morning, I asked senior writer Mathew Ingram, who joined Gigaom in 2010, about the collapse, what it says about digital media, and what it means to him. As Ingram covered media there, he is in the interesting position of being an analyst of the very forces that have put him temporarily out of work.
Were there any indications that this was going to happen before Monday?
You were just totally blindsided?
Yeah. And I think the majority of staff were as well. We were writing right up until the announcement. We did get a new CEO [Michael Rolnick] recently, so I think people thought maybe there needed to be some changes—maybe some strategic changes—but there was literally no talk of even layoffs.There was no talk of having to cut back. There were no austerity measures. We just got a phone call Monday afternoon saying “Be on the phone in an hour.” And the CEO said they were shutting it down and we were all out of work.
It’s just hard for me to wrap my head around that nobody saw this on the horizon.
Me too. I think we knew that Gigaom was under some financial pressure, but we’ve been under pressure forever, in a way. So that wasn’t anything new. And our new CEO—when he joined, he talked about all the plans he had to grow the business. He talked about some challenges, but he certainly never gave anyone the impression that we were on the brink of shutting down completely and turning off the lights.
One reason this is so strange is that Gigaom seemed like it was doing so well. What should the takeaway be for other media outlets?
Everyone has their own favorite lesson. Danny Sullivan at Search Engine Land talked about what this says about taking [venture capital] money when you’re a media company. And that’s part of the story. Gigaom has been VC-financed from the beginning. Other media startups were not. And when you take venture capital money they’re golden handcuffs, in a way. It’s a Faustian bargain. You make certain promises about your growth, and if that growth doesn’t materialize then VCs lose interest and your company fails.
I wanted to ask you about that Danny Sullivan piece arguing that this was a product of taking venture money, which as you say forces you to try to reach a mass audience faster than a niche outlet, and sometimes too fast.
The model that Danny and others have chosen is to grow slowly and to be funded only by your cash flow. And that’s a much safer model—there’s no question about it. The only problem is it takes a lot longer. And you frequently don’t build as big a business.
So you could say: Why doesn’t everyone just run on their cash flow and grow slowly and build a small, kind of lifestyle business where it supports them and maybe a dozen other people and that’s that? Well, some people don’t want to do that. Some people want to build something big. And in order to build something big you have to basically borrow against the future. You have to paint a picture of where you’re going to go and convince people to give you money to get there. And you could say that’s hubris or whatever, but it is the way the world works.
I do think Gigaom was in a strange place in the sense that we were not a niche player, but we had sort of niche aspects. I think Will Oremus mentioned this in his post at Slate—we focused on less sexy areas like clean tech and the Internet of Things or hardware in the cloud and so on. And we built a substantial expertise in those areas. But those are not the areas that are going to get you a mass readership. So to some extent we were too small to be huge and mass and successful in scale like a BuzzFeed or a Vox or Vice, but too big to be the kind of business that Danny Sullivan is describing. We were sort of caught in the middle.
That’s interesting because you’ve been writing about how one potential drawback of digital media is that tons of places on the internet are kind of the same and they try to be huge and cover everything. But it’s not like Gigaom did that. You guys had a clearly defined beat.
There’s a sort of barbell effect: If you are super small and super focused and super niche you can succeed, arguably. And if you’re super huge and mass and gigantic and growing quickly, you can succeed. But in the middle, is death. The valley of death. So arguably we got caught in that valley of death.
Like even three or four years ago, our traffic—6, 7 million uniques a month—would’ve been fantastic. We would’ve been one of the leaders in the market. But now, you see sites with 20, 30, 40, 50 million. That’s the kind of game we’re in now, it seems like. We were just never gonna get there arguably.
In a lot of ways the bet was that editorial, research, and events would create this kind of virtuous circle, in which they all supported each other and research and events were kind of the monetization model for the audience that we developed through editorial. And I would argue that the editorial side itself was not actually the problem. The problem was that research and events did not support as big a business as they were intended to. Research just didn’t produce the kind of returns that were required in order to support a business the size of Gigaom.
I still believe that model can work. It may not work well enough to justify the amount of money we raised, but I still think it can work.
Is there any innovation you can see that might have changed the outcome?
Not that I can think of.
Let’s shift to a more happy subject. Generally speaking, how do you think that some of the issues that have been at the forefront of the media’s transition to the Web have evolved since you went to Gigaom in 2010?
It almost feels like 10 years ago since I started at Gigaom. When I left the Globe in Toronto, blogs like Gigaom were—not underappreciated, but there was still a lot of uncertainty about purely digital online publishing. There was no BuzzFeed, there was no Vox, and there was no Verge so it was kind of uncharted territory at the time. And the biggest change since then is that except for some pockets of backwater thinking at large media companies, everyone is kind of on board with the idea that online is the future of content and has to be in that being digital first—even The New York Times is talking about being digital first. Five years ago, that would’ve been unthinkable.
What work did you do at Gigaom that you’re particularly proud of?
I’m most proud of helping to build the team that became Gigaom. When I started there were 12 people in the whole company and there was just a small handful of writers. And when the doors closed I think we had 22 editorial staff. And I think helping to build that and shape that and grow that is the thing I’m most proud of. Even though it ultimately failed, I still think we built something good and worthwhile for a brief, shining moment.
I think the one thing we did and I did that stood apart and was the best was that, even before Vox came along, we did explainers, where you take all the sound and fury of a story like the NSA surveillance leaks and you try to break it down, sum things up, put things in context, and and figure out what’s important and what’s not. You know, the “Everything You Need to Know About X” story. Ultimately that’s a big part of what journalism is and needs to be, from my point of view.
What are you thinking about doing now?
Since the news broke, I’ve had a number of people reach out with potential opportunities. And I did have a couple of people I was talking to about things before the end came—just coincidentally, not because I knew things were falling apart. I would say broadly, I’m trying to decide whether to return to a more traditional form of media or to continue my quixotic quest to be digital only.
Are you leaning one way or the other? It must interest you to work somewhere where you’re an expert on the same phenomena that affect the company you’re working for.
You could argue that if I was such an expert, I should’ve seen it coming. But yeah, I’m still fascinated by media and the evolution that it’s going through. We’re in like the second inning. We’re not anywhere near the end.