The digital magazine startup, which just closed a $100 million funding round and passed the 100-million-user milestone, is consumed with solving the problem of curating online content.
Everyone has a few of those vague memories of typing a search query into Ask Jeeves or another antiquated search engine. Along with improved search technology though, there comes a different problem--the daunting amount of information out there to sift through.
This is the issue Flipboard is trying to fix. Founded in 2010, the Palo Alto-based digital magazine publishing platform aggregates news and links through users' social circles to deliver personalized content. With more than 800,000 publishing partners and partnerships with Facebook, Twitter, and Google+, Flipboard hopes to bridge the gap between publishers and readers.
Earlier this month the company hit three major milestones related to to the number 100--it struck the 100-million-user milestone, reached a total of 100 employees, and closed a $100 million Series C funding round. The round, which was led by Rizvi Traverse Management and Goldman Sachs, increases the company's total funding to a reported $160 million.
Flipboard CTO Eric Feng spoke with Inc. about how his company plans to use this lastest captial infusion, the company's unique advertising model, and the greatest challenges the startup faces.
Inc.: This has been a pretty exciting few months for Flipboard. What are the company’s plans now that the round is closed and these other milestones are out of the way?
Eric Feng: It has been a fortuitous, very fun quarter for us centered on the number 100. Our plans are to use the capital that we just raised to continue to enable our mission of building the world’s best personal magazine out there. We are going to be using much of the new capital to grow the team. In 2014 we are hoping to roughly double the size its size, and most of those hires will come in two key areas--engineering and advertising. We are very much a technology company and in order to be a great technology company we need world-class product and engineering folks at Flipboard. But at the end of the day we work in the media industry and are also in the business of helping publishers monetize and distribute content.
Inc.: You have a unique advertising model behind Flipboard. Can you tell me a bit more about it and how it might change with this most recent funding round?
EF: Our advertising model is actually very, very flexible. It starts with a critical first principle--we believe great content moves the world forward. But great content is expensive to create. You need ways to monetize and distribute it. So to enable great content, we have to make sure that publishers are getting a fair return on their content.
With our model, if publishers are comfortable and have the resources to sell ads we are absolutely fine with them selling the ads on our platform. So that’s one way. Then the second way is publishers who create great content but might not have the expertise or resources to sell can use our own ad sales team that can help them monetize content as well.
Inc.: How has the Flipboard business model changed over time?
EF: I think that the biggest change that we have undergone happened on March 26th when we launched Flipboard 2.0. What we did for the first time ever was open up our curation platform beyond our publishing partners and allowed users to program back into Flipboard. They can now create magazines on Flipboard and start curating their own content on any topic that they were excited about. That has really changed the game. When Flipboard first launched if you were really, really passionate about, say, wooden sailboats, Flipboard might not have been the best place for you to go. But now that we have opened up that curation platform it can be a great place for people no matter what their interests.
Inc.: How did this move change Flipboard’s revenue model, if at all?
EF: By opening up the curation platform, what we have done is increase the distribution of publishers’ content. They now can have far greater distribution of content because users can take it, remix it and distribute it to new audiences that the publishers may never have reached. And with our technology we can track the content and most importantly we can still run ads off that content.
Inc.: What is the greatest obstacle facing companies such as Flipboard right now?
EF: What we are doing is solving a very important problem that a lot of people are trying to think about--curating the Web. If you think about the evolution of the Web, it has gone from a situation where content was very difficult to find, to where you are overwhelmed with content now and it is actually really hard to get the stuff that you care about and want. It’s really a big problem but if you solve it you can build a lot of value for the user.
Inc.: With this funding round, Flipboard became the most heavily funded digital content publishing platform. How has the company stayed ahead of the competition?
EF: We are not a company that has just one type of person or one type of mindset. We are a group of triple majors. It’s about being more than single-focused that has worked really well. When we do product meetings we not only invite the design team but also the engineers, the marketing team, and the business team to help us make the right product decisions. We really want all of that expertise and different areas of skills to be represented in our decision-making. Also, a lot of companies might just be focused on the customers and the users. For us our end users are important, but so are our publishing partners and our advertisers. We try to make sure that we are serving all three equally well.
Inc.: What is the hardest lesson Flipboard had to learn?
EF: That is a very interesting question. Certainly as we have continued to grow, there have been a of things that we wish we could have done differently or that we would have loved to come back and change, but I would say that the biggest lesson has been how fast the industry is changing and how aggressively we have to be moving in order to stay ahead.