TheSkimm Shows How a Little Attitude and Audience Can Draw Big Backing in New Media
Editor’s note: This feature is the first of an occasional series of profiles of the emerging standouts in the new media landscape.
UPDATED on 2/28 to reflect theSkimm co-founder Danielle Weisberg's response to comments about the company's business model made by media-business analyst Ken Doctor.
It happened in November 2012, about five months after they quit their day jobs as associate producers at NBC, the network that broadcasts Today. "Being back in the building in such a different way with anchors we knew and worked with meant a lot to us," Zakin says.
TheSkimm is one of a new crop of media startups that have emerged as the industry continues to remake itself, drawing attention for both its audience traction and deep-pocketed financial backers.
Several other of these companies repackage news stories in various ways, which makes attracting a critical mass of readers and advertisers a formidable challenge. But what helps theSkimm stand out is its ability to simplify and contextualize the headlines so its female millennial audience feels informed and a part of what the founders call "the conversation."
To date, the company has raised $1.1 million in seed financing led by Homebrew, the venture capital firm founded by early Googlers Hunter Walk and Satya Patel, and supported by RRE Ventures, Troy Carter of Atom Factory, and Clear Channel CEO Bob Pittman.
The venture was born of the frustration of savvy young people seeking a voice in a struggling media landscape desperately in need of disruption. "We saw a lot of people we know get laid off and struggle to keep jobs," says Zakin, who, like Weisberg, is 27. "We knew that the industry was changing."
Before taking the leap into entrepreneurship, the two considered careers in public relations, enrolling in law school, or pursuing an MBA. Their love of news, though, made all of those paths appear unsatisfying.
"We started talking about the role that we played in our friends' lives by briefing them on current events," Weisberg says. "[Our friends] would say, 'What's going on in Syria? I see the latest news, but I don't really have context.' We really saw that there was a void in the marketplace for news delivered by email."
In July 2012, the pair left their jobs to commit to theSkimm. With scant funding from angel investors and almost no blueprint for their product, the outlook didn't seem bright. But Zakin and Weisberg weren't afraid to ask for help. Little by little, with advice from their friends and others in the tech industry, theSkimm--whose name, Zakin says, "conveys information on-the-go"--came together as a early-morning roundup of news bites that read as though they were written by your best friend.
The catchy subject lines--"This is the warmest you will be today"--ensured the daily open rate (the frequency with which recipients open the company's emails) remained higher than the 16.4 percent average in media and publishing. In fact, Zakin put theSkimm's daily open rate around 50 percent in November 2012.
Zakin and Weisberg, who are roommates as well as business partners, worked out of their Manhattan apartment to keep overhead low. "We were so nervous to spend that we had a half [of our budget] left over," jokes Zakin. "We're the definition of a lean startup. We saved as much as we could to bootstrap this."
By November 2012, theSkimm had 100,000 subscribers and an invitation to appear on the Today Show. The taping went well, but there was one problem: As soon as they finished, their website went down. "We were on Cloud Nine, walked into the green room, talked to our parents, and our server had crashed," says Weisberg. "Then we spent the next few hours on the floor, watching people go by and yelling at our host provider. We switched immediately after that."
Still, she calls the taping "the second-most special day for us." The only day that surpassed it came in November 2013, when the two landed their funding from Homebrew.
"Although we knew that raising funding was a new experience for Carly and Danielle, their talent, vision, and passion came through clearly," Walk writes in an email. "Three qualities stood out: unique founders matched to the product, wild organic growth and an engaged community, and a target demographic that drives large amounts of spending, online and off. The combination of these suggested there was a substantial business to be built."
Although theSkimm's logo features a woman in pearls and high heels reading her tablet, Zakin and Weisberg envision theSkimm as a lifestyle empire for both sexes. It's a model followed by Esquire, Martha Stewart, and a host of other media brands that have expanded into multiple platforms in recent years.
The venture has a long way to go before reaching its lofty goals, however, says Ken Doctor, who runs Newsonomics, an Aptos, California-based media-analysis website. "I think it's got a hell of a tough road," he says. "You have two immediate needs for something like this: circulation and advertising. There's not much original content and there's not much of a model of people paying for a subscription to a news aggregator, even if it's well done. If they keep it small and can build a big audience, they'll bring in some advertising. But it will probably take two to three years to break even."
Weisberg declined to comment on criticism of theSkimm's business model, whether the company has broken even yet, or when it expects to, saying only that the company is "entirely focused on growth right now." The founders say they hope to grow their subscriber base 10 to 100 times in the next few years.
Expanding the team also will take time. Currently theSkimm has only five employees, including Zakin and Weisberg. The company is now beginning to tackle that challenge, advertising openings for editors, a business development director, and a growth strategist.
"This year will be the first, foundational step," Walk says.
JILL KRASNY | Staff Writer
Jill Krasny is a staff writer for Inc. magazine, where she covers the intersection of entertainment and startups. Prior to Inc., she was a writer for MTV and Esquire and an editor at TheStreet. She is a graduate of the University of Southern California with a degree in communication. She lives in New York City.