A digital-only launch focused on content, ad sales and data subs.
In mid-2012, Rafat Ali, the founder of PaidContent.org, launched an online-only media and data company called Skift that targets the business travel market.
By its July launch, Skift had raised $500,000 in angel funding, which was used to scale the operation going forward. Ali had self-funded the project to that point. There are a dozen investors including Chris Ahern, Gordon Crovitz, Alan Meckler, Luke Beatty, Tom Glocer and Vishal Gondal.
Ali says the travel vertical is ripe for disruption. â€śWhen I started looking at doing something in this industry I discovered the sources are very old-school. They are also very siloed in their sub-sectors. No one is bringing it all together in a Web-native, social-friendly fashion of the kind that exists in the media, tech or finance markets.â€ť
Phase one, he told FOLIO: when he launched, was to create â€śa homepage for the industry,â€ť which was largely fed by aggregation software PublishThis.
Since then, Ali has shifted Skift to a combination of curated content and original content. The approach strikes a balance between cheaper content development and the still-critical original reporting. Too much aggregated content and the site gets flagged and penalized by Googleâ€™s search algorithm, but all-original reporting requires an up-front investment thatâ€™s tough for a brand-new digital operation.
The plan is to create a b-to-b destination site for the business travel market, with the content supported by advertisingâ€”endemic trade advertisers as well as consumer-oriented advertisers looking for an audience of business travelers. But the site will not solely rely on ad revenueâ€”or content.
Skift will also have a data services operation supported by a variety of subscription models. The data will initially be pulled in from publicly available sources, such as tourism, airport and arrival-departure data at the global and local levels.
As the company grows, proprietary data will be added to the mix. This, says Ali, will be Skiftâ€™s core value proposition. Advertising, he says, will continue to be aÂ major revenue contributor, but as of now, Skiftâ€™s scale prevents rapid growth via an ad-only modelâ€”size matters. Data sales and subscriptions, no matter how large the site scales, will continue to be the primary brand-builder.
â€śThe better way to build a media company is not through content, but services. The best way to scale is to figure out the data services that the industry and people will pay for.â€ť
PROGRESS SO FAR...
Launched last year on a $500,000 initial funding round, Skift has since expanded its content development from an aggregation model to more original reporting. Data services are at the core of its business.