Amid the turbulence in the industry, Skift isn't the only example of a digital media company doing something different and finding success.
Take Axios, the digital news site launched by former Politico co-founder Jim VandeHei and former Politico chief political writer Mike Allen in 2017. Axios Media has taken on $30 million in outside investment according to The Wall Street Journal, but it has a staff of just 150 and it more than doubled its revenue in 2018, to $25 million. (An Axios spokesperson declined to comment.)
And Business Insider became profitable in 2018, according to parent company Axel Springer, which bought control for $343 million in 2015, in a deal that valued the company at roughly $450 million.
Nicholas Carlson, global editor in chief of Business Insider and Insider Inc., tells CNBC Make It that BI co-founder and CEO Henry Blodget "[executed] towards an ambitious goal carefully" by taking a disciplined approach to growth, and found a buyer that plans to "own us for a very long time, hopefully forever. That changes the calculus for what a board or the owners of a company expect."
Indeed, Ali notes Skift also faces little or no pressure to prioritize short-term growth thanks to its choices. "We don't have a formal board," Ali says. "So, our pressures are ours and ours alone. … That said, of course at some stage we will have an exit and hope to give our investors who bet on us a rational good return, but we have no time horizons for it."
The revenue of companies like Axios and Skift is still much less than BuzzFeed's (which was more than $300 million in 2018). And Skift also isn't necessarily competing with those larger, high-profile sites; its biggest competitors for online traffic are typically travel industry publications that have around a million monthly visitors, as well as Northstar Travel Media, which sold to a private equity firm in 2016, at which point it was expected to hit $80 million in annual revenue.
The truth is business leaders have to pick the strategy that works for their business, not just do what the rest of the industry is doing.
"A publisher that aspires to be really high quality and small can also have a great business, maybe with lower risk in the long run," Brian Wieser, a senior media analyst at Pivotal Research, tells CNBC Make It. Small publishers may be better equipped to deal with the ups and downs of an advertising-driven business model, he says.
But if a digital media company is too small to compete with larger sites for dwindling advertising dollars that increasingly go to Google and Facebook, it's that much more reliant on a strong economy. In an economic downturn, subscription numbers will shrink, says Wieser. And revenue streams like conferences tend to be costly and can have a poor return on investment, especially if the economy suddenly turns sour and sponsors and attendees stay away.
Of course, the endgame for founders is almost always an exit via a sale, says Rick Edmonds, media business analyst at the Poynter Institute. So it's potential buyers that will ultimately determine if a company's business model is viable.
"The payout will reflect whether you have built a solid business," Edmonds says.
As for Ali, he says, "My media companies have been a philosophy of growing lean, and I'm sticking to it, raising as little money as possible."
The results, so far: Skift is surviving on its own revenue and has been able to make moderate moves aimed at expansion, including buying newsletter Airline Weekly in September for an undisclosed amount. Skift also announced in September that it is launching a nonprofit foundation, expanding into Asia with a slate of new hires in Singapore, and it also recently began covering the business of wellness (which might seem to go against his philosophy of narrow focus, but Ali believes it is adjacent to the business of travel, falling under the umbrella of "leisure").
Ali says those moves represent the sort of manageable growth that will allow Skift to continue making money without digging into a financial hole from which it might never escape. Skift's size, and the fact that Ali isn't courting outside money will save it from making the mistakes other have.
"The fact that we don't have tons of extra money lying around just gives us that discipline."
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