Moment of triumph, seed of the demise? (image via medium.com)
The technology publishing company GigaOm closed its doors last Tuesday. As a consultant working in the technology space for many years, this news really struck me.
Back in the day I’d occasionally pitch GigaOm for my technology clients. You really had to know the space to have any chance, which I always respected. And way back in 2008, when I had just started blogging, my avatar appeared next to Om’s on a WordPress page showing popular posts by category. One of my Wheels posts was popular that day, and of course his category was technology. A geeky thrill, and I wish I could find the screen shot I took that day.
With little context available the day the closure news broke, I’ve waited a few days for reports on the “why?” to come out. Here are three good ones:
Mathew Ingram, senior GigaOm writer and respected authority on digital media, gives an “exit interview” to Columbia Journalism Review.
Danny Sullivan, aka Mr. Search, gives his take on the dangers of VC money via his LinkedIn profile.
Former VP of GigaOM Pro Michael Wolf gives his insider take on GigaOm’s rise and fall.
The emerging conventional wisdom is that venture and debt financing doomed GigaOm, coupled with the inability of selling inexpensive ($79 per year) premium content and research to a decent percentage of readers. Sullivan is particularly strong on this point, contrasting GigaOm’s financing with the boot strapped, cash fueled operations of his Third Door Media company, producer of publications like Search Engine Land and conferences such as SMX.
Danny goes one to say he’s not gloating in any way, just frustrated that running a company this way never gets any notice:
“I say these things not as a brag or a humblebrag but because, I suppose, it can be frustrating running a successful vertical and knowing what your company is doing — and other companies like it— simply isn’t recognized. That’s not inspiring for newcomers. It also doesn’t reflect the overall publishing world.”
I understand personally what Sullivan is saying about a lack of respect. Earlier in my career I worked for tech companies like Advertising.com and VeriSign. The trade media covered what we did closely, and in their respective markets the companies were doing innovative things. I had a somewhat patronizing view of lifestyle businesses at the time, as small and certainly not as significant as the companies I worked for.
That attitude has come full circle now that I’ve founded my own content marketing firm. There is nothing more engaging and fulfilling as building your own business. It demands a broad range of skills — creativity, continual education, market knowledge and good old attention to detail. It’s up to you succeed and there is no safety net, which is simultaneously sobering and thrilling.
The crib notes version of the GigaOm story is that producing quality content doesn’t pay, because it simply can’t scale. That may be true — certainly the problems of getting online consumers to pay for content and the travails of traditional media companies are well documented. But based on the information to date, I do think it’s fair to wonder what GigaOm could have been without debt financing and the imperative for explosive growth hanging over it.
I’ll miss GigaOm. The final chapter has not yet been written. It could come back in some form — the site is still up and the company has not filed for bankruptcy. But one major cause of its demise seems indisputable. As soon as you take investment funds, your destiny is not your own.