Lessons from 15 months at The Tab a venture capital backed media startup

The Tab Team

The last twelve months have been a very turbulent time in the media industry with profit forecasts and jobs being slashed across both digital and print. Growing a sustainable business in the modern diversified world of media is a hard nut to crack. This is even harder when you have to raise funds every 12 months in order to survive. Now that my tenure at The Tab has come to a close I have reflected on what being involved in this for last fifteen months has taught me.

Consistent revenue growth is more important than fast audience growth

This is the statement which has changed the most in the last fifteen months. When The Tab raised in 2015 it was to drive audience growth via an American expansion. The revenue following that growth was a secondary concern. Having since been involved in a funding round I can say that this attitude has changed. Clear, consistent and diversified revenues are a huge part of owning your destiny or being able to raise additional funds to grow.

The free growth years are over

As most people have noted the free growth years for media are over. Some say Facebook is capping the amount of traffic that it is sending to publishers. They are definitely focused on optimising the type of content displayed to each of their users. Also the more you are locked into their ecosystem the less attractive you are for investment.

However there are still opportunities for growth

As Facebook rolls out new initiatives there are still windows of opportunities for growth. Ripped video content for example has been very effectively growing page likes. However you usually need to skate close to the line to make this happen and quickly backfill with proper content once your knuckles get rapped.

Facebook Instant Articles provide a decent revenue stream

Considering all the alternatives early indications are that Facebook Instant Articles are a decent revenue stream. With programmatic on mobile still 12-18 months away from where it is on desktop and users demanding a fast experience (as well as Facebook using speed as a Newsfeed ranking factor) this is good news. With auto-fill rates above 95% and decent CPM’s so far for The Tab’s audience this does seem like a good play until other mobile units catch up.

Throwing resources at growth does not build a sustainable business

What is the key driver of your business and revenue? Find that and focus on it relentlessly. It is much easier to build new things rather than fix core issues. Especially when flush with venture capital. Doing more does nothing but move you further away from what you actually need to fix.

Focus is hard when you are unsure of what you are being measured on

What matters most? Uniques, revenue, page views, stories published or cost per story? There are so many things you can be measured on at times it can be bewildering. Bottom line is that you need a clear repeatable, scalable and cost effective growth model including a plan for profitability. Everything else should drop out of that.

There is still a large appetite for great original content

So much of the media industry has been focused on the most efficient way to repackage content which means that everyone is fighting over the same eyeballs. However there are still a lot of amazing original stories out there you just have to have an efficient way to find them and deliver to a relevant audience.

Raising money is a full time job

The time and effort that goes into raising funds is a full time job. It can take many months, hundreds of meetings and due diligence to close out a round. It is a non-linear process as well with many people you meet along the way introducing you to more people to talk to.

VCs with aligned portfolios

When selecting a venture capitalist one that has a decent sized aligned portfolio can provide you access to learning and introductions that others can’t. In such a competitive industry these insights can be gold dust and definitely worth considering as you search for investment.

Negative aspects of raising

Not knowing if you are going to have enough money to continue as your runway is short and terms sheets are close but not signed can really dampen momentum. It takes very strong belief to be able to continue to drive forward in the face of such uncertainty. The volume of feedback you get from pitches can be overwhelming at times. It can be easy for this to become a distraction which can really hurt focus and belief.

Positive aspects of raising

Putting your company on the line and distilling everything you down to a slide deck and presenting it hundreds of times can help sharpen your focus. Some of the feedback you receive throughout this process will be valuable, the trick is to figure out which bits. The pressure which comes from this process either makes you or breaks you, at times it can do both in a single day.

More money, more problems

One of the biggest losses with fast growth by VC money can be the loss of creativity that comes from constraint. Getting the balance right between hitting short term targets and long term issues is hard.

I am very proud of what we achieved with The Tab and I have every confidence in the team going on to achieve great things. These lessons should give me a great foundation for my next challenge.

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