Business Insider, turned a profit in just 3 years, sold at a whopping $442 million valuation, and is often cited as one of the successful digital media startups that have ever existed. The journey to success wasn’t easy though.
We’ve previously studied how Bleacher Report, a sports publisher started in the same year sold for $175 million to TBS. Both have some common grounds, see for yourself.
Business Insider had ~1000 readers a day when they started in 2007 and competed against the likes of Bloomberg and Reuters as it targets business people and investors, rather than a general audience. Besides, the 2008 financial crisis exacerbated the situation for small/mid-market media companies.
Don’t you think it’ll be interesting to see how they have turned around to hit a $450 million valuation? That’s what we thought and it is, indeed, pretty interesting.
Discretion: Insider Inc., originally called Business Insider Inc., is an American online media company known for publishing the financial news website ‘Business Insider’ and other news and media websites. As you know, Business Insider is the largest property in terms of both readership and revenue. So, we’ll be focusing on Business Insider in this study. That being said, we’ve to cite the group revenue in some cases, as the parent didn’t breakdown revenue of each of its properties (after all, it’s a private company).
How it all started?
The publisher is new to digital and didn’t have any print legacy. So, you wouldn’t see bigger numbers as you saw in The Guardian, The New York Times, etc. They attracted approximately 1000 readers per day and by the end of 2008, they had 2 million monthly visitors to their site. The annual revenue, mainly from advertising was around $700k, but the expenses were more than $1.3 million.
A crew of just 6 ran the business.
Where are they today?
According to Alexa, Business Insider is among the top 100 most popular sites in the US, and according to Similar Web that is the most popular business news site in the US.
Business Insider has raised a total of $55.6M in funding over 7 rounds. Let’s talk about the actual business.
Pete Spande, Publisher and CRO of Insider told Digiday that the parent crossed $100 million in revenue, a major milestone and is profitable (Src). As predicted, the majority of the revenue comes from advertising, however, BI Prime, BI Intelligence plays an important role in propelling the revenue.
The company has grown its audience substantially, reaching 91.3 million unique visitors in the U.S alone, according to Comscore. This puts Business Insider on top of other news outlets such as The New York Times, The Washington Post and BuzzFeed:
Let’s learn how this business website evolved into one of the top publishers in the world and reached 350 million users worldwide(Src).
Becoming the Insider
Silicon Alley to Business Insider
2007 – 2009
Tech Blog for New York
There’s a real advantage when you start with the right team. You can do the job better and most importantly, you can see the trend and pivot to scale the business. Henry Blodget, a former Wall Street analyst (banned from the market on fraudulent charges) joined hands with Dwight Merriman, and Kevin Ryan, DoubleClick founders to start a Typepad blog, then called ‘Silicon Alley Insider’.
They had a simple, straightforward mission – “Tech Blog for New York”. The publisher wanted to run a tech blog for New York business people. Having a precise and specific goal is extremely important for a media business. It helps in content, distribution, advertising, and several other aspects of a business.
They started with a basic website and direct campaigns were their primary source of income. It is way easier to approach and convince a business to invest in you when you write what matters to the customers of the business. As the site primarily offered aggregated content and commentary on the financial news and events, the publisher was able to onboard advertisers early.
Back in the day, you can’t make much from AdSense or any other ad networks. Programmatic didn’t exist at all. Direct deals are the best and reliable way to run a digital media company.
A $900k Seed
To be frank, the founders have the stellar track record of building unicorns, except for Henry Blodget. It was quite obvious that they’ll be backed by investors. That being said, no one wanted to invest in a digital-only media business. Especially, Silicon Alley Insider wouldn’t be as big as other publishers as they wrote for New York.
The competence of the team and initial market traction helped them bag $900k in a seed round, the very next year. That’s the huge feat and it allowed them to hire more editors and push 20 posts per day.
Getting to the Top 1%
Just 2 years into internet publishing, ‘Clusterstock’ section of the Silicon Alley Insider got featured in Time’s “Best 25 Financial Blogs”. and Silicon Alley Insider section was listed in PC Magazine’s “Our Favorite Blogs 2009.”
2009 also saw Business Insider’s selection as an official Webby honoree for Best Business Blog. Recognitions aside, Silicon Alley Insider has to grow much faster as they’re fueled by investors’ money.
At the end of 2009, the publisher collectively has 2.6 million monthly visitors, which is roughly 30 percent higher than that of the previous year. They still aren’t profitable and lost $375k. Though the publisher decreased its loss, increased its gross revenue to $2 million, it couldn’t figure out a way to scale.
If you cover a particular niche and only target a specific city, then there’s no way you can grow as fast as other news sites. At least for a long time, because of the saturation.
“He [Henry Blodget] realized having a bunch of small sites was not the way to do it.”
– Owen Thomas, a BI vet (Src).
It’s clear that, at this point, the publisher decided to expand its horizons and break even. That led to “The Business Insider”. They dropped “The” later (remember, Facebook?).
It is true indeed. Digital media properties can thrive/sustain only when they scale or become niche publishers (with considerable niche audience). The publisher realized it sooner.