Venture funding and digital news don’t mix

“In 2017, we saw what happens when you affix the venture model atop a journalism business. Enter: the flash sale of Mashable and layoffs at Vocativ.”

A restaurant is not a venture-scale business. A factory is not a venture-scale business.

A digital news platform, as many have hinted of late, is not a venture-scale business. And that’s not a bad thing.

In the past several years, we’ve seen digital news platforms hedge against Facebook and Google by converting niche audiences into paying subscribers. The favorite children of media analysts — The Information, De Correspondent, and yes, Stratechery — have achieved sizeable revenue by building and personalizing their products around fragmented audiences who pay. Indeed, it’s no coincidence that The New York Times announced hitting the 3.5 million subscriber mark only a week after tightening its paywall for the first time since 2012.

Yet these endeavors have succeeded in spite of VC funding, not because of it. Whereas today’s digital news platforms must abandon ad sales for small-scale audiences who read, donate, and subscribe, VCs must bet on businesses with the potential for not just large-scale, but exponential growth. (It’s not just publishers who are competing against Facebook and Google.) In 2017, we saw what happens when you affix the venture model atop a journalism business. Enter: the flash sale of Mashable and layoffs at Vocativ.

In 2018, rather than repeat this mistake, digital journalists should seek out alternative sources of revenue. In anticipation of a saturation point for news subscriptions, journalists should prove they can grow businesses not only through tiered offerings but also through events, exclusive reporting, and audio stories. Just as well, in the coming year VCs must learn to distinguish between investments in digital media and investments in digital journalism. Though the needs around growth in journalism-based businesses are incompatible with venture capital, content-based media companies like The Skimm can take off and look to journalism as a model for audience-centered editorial. In this way, VCs and publishers can learn from one another without relying on one another for financial gain.

No, digital news does not make for a venture-scale opportunity. Neither does the overwhelming majority of mobile apps, marketplaces, AI assistants, AR/VR games, and mattresses. But journalism — unlike most traditional tech products — does not need VC to have impact, cultivate audiences, and make money.

Kyle Ellis   Let’s build our way out of this

Alfred Hermida   Going beyond mobile-first

Tim Carmody   Watch out for Spotify

Mary Walter-Brown   Show a little vulnerability

Zizi Papacharissi   Women come back

Lanre Akinola   Making noise is not a strategy

Francesco Marconi   The year of machine-to-machine journalism

Almar Latour   Conquering calm

Borja Echevarría   TV goes digital, digital goes TV

Will Sommer   The year local media gets conservative

Mariana Moura Santos   Think local, act global

Sarah Marshall   Loyalty as the key performance indicator

S. Mitra Kalita   The arc of news and audience

Vanessa K. DeLuca   Women’s voices take center stage

Ruth Palmer   Risks will grow for news subjects — especially minorities

Trushar Barot   The Jio-fication of India

Mary Meehan   Real lives are at stake in rural areas

Julia B. Chan   Looking for loyalty in all the right places

Ray Soto   VR reaches the next level

Rodney Benson   Better, less read, and less trusted

Jared Newman   Venture funding and digital news don’t mix

Dan Shanoff   You down with OTT? (Yeah, DTC)

Doris Truong   Computer vision vs. the Internet vigilantes

Usha Sahay   Wallets get opened

Craig Newmark   Working together toward sustainable solutions

Mike Caulfield   Refactoring media literacy for the networked age

Niketa Patel   Live journalism comes of age

Alexios Mantzarlis   Moving fake news research out of the lab

Elizabeth Jensen   Show your work

Vivian Schiller   Pivot to tomorrow

Ariana Tobin   Too tired to tap

Joyce Barnathan   It will be harder to bury the news

Kim Fox   Audience teams diversify their approach

Nushin Rashidian   Publishers seek ad dollar alternatives

Jessica Parker Gilbert   Design connects storytelling and strategy

Mi-Ai Parrish   Blockchain and trust

Cristina Wilson   The year of the Instagram Story

Kinsey Wilson   Facebook and Google: Help out or pay up

Andrew Ramsammy   The year ownership mattered

Nikki Usher   The year of The Washington Post

Basile Simon   We need better career paths for news nerds

Taylor Lorenz   Social and media will split

Debra Adams Simmons   And a woman shall lead them

Carrie Brown-Smith   Transparency finally takes off

John Keefe   Scooped by AI

Jacqui Cheng   Retailers move into content

Cindy Royal   Your journalism curriculum is obsolete

Bill Keller   A growing turn to philanthropy

Mira Lowe   The year of the local watchdog

Jennifer Brandel and Mónica Guzmán   The editorial meeting of the future

Jamie Mottram   From pageviews to t-shirts

Andrew Losowsky   The year of resilience

Corey Ford   The empire strikes back

Matt DeRienzo   A recession, then a collapse

Matt Boggie   The intellectual equivalent of the Dead Sea

Juliette De Maeyer   A responsible press criticism

Marcela Donini and Thiago Herdy   Collaboration is the way forward for Brazilian journalism

Imaeyen Ibanga   Longform video leads the way

Cory Haik   Suffering from realness, pivoting to impact

Michelle Ferrier   The year of the great reckoning

Jim Moroney   Newspapers have to be good enough for readers to pay for

Julia Beizer   A longer view on the pivot

David Skok   Finding an information-life balance

Amy Webb   Listen to weak signals

Hannah Cassius   The year of the echo-chamber escapists

Mario García   Storytelling finally adapts to mobile

Andrew Haeg   The year journalists become relationship builders

Molly de Aguiar   Good journalism won’t be enough

Jennifer Coogan   The future is female

Rubina Madan Fillion   Unlocking the potential of AI

Justin Kosslyn   The year journalists become digital security experts

Emily Goligoski   Looking beyond news for inspiration

Raney Aronson-Rath   Transparency is the antidote to fake news

Charo Henríquez   Training is an investment, not an expense

Sam Ford   The year of investing in processes

Adam Thomas   Sharing is caring: The year of the mentor

Jassim Ahmad   Thriving on change

Errin Haines Whack   At the ballot, it’s time to count black women

Helen Havlak   Keywords, not publishers, power the world’s biggest feeds

Michelle Garcia   Navigating journalistic transparency

Claire Wardle   Disinformation gets worse

Mandy Velez   texting is lit rn, fam

Umbreen Bhatti   The trust problem isn’t new

C.W. Anderson   The social media apocalypse

Joanne Lipman   Journalists inventing revenue streams

Nathalie Malinarich   Peak push

Sara M. Watson   Feeds will open up to new user-determined filters

Matt Carlson   Attacks on the press will get worse

Ståle Grut   Reclaiming audience interaction from social networks

Susie Banikarim   R.I.P. Pivot to Video (2017–2017)

Valérie Bélair-Gagnon   Seeking trust in fragmented spaces

Sally Lehrman   Trust comes first

Rick Berke   Value is the watchword

Jarrod Dicker   Honesty in advertising

Tanya Cordrey   Finally, the seeds of radical reinvention

Heather Bryant   Building the ecosystems for collaboration

Michael Kuntz   The only pivot that might work

José Zamora   Revenue-first journalism

Pete Brown   Push alerts, personalized

Dannagal G. Young   Stop covering politics as a game

Monika Bauerlein   The firehose of falsehood

Lucas Graves   From algorithms to institutions

Ernst-Jan Pfauth   Publishing less to give readers more

Dan Newman   A return to trust

Miguel Castro   The arrival of the impact producer

Jim Brady   With the people, not just of the people

P. Kim Bui   The reckoning is only beginning

Amy King   Let’s amplify visual voice

Laura E. Davis   Writing answers before you know the question

Tanzina Vega   It’s time for media companies to #PassTheMic

Rachel Schallom   Better design helps differentiate opinion and news

L. Gordon Crovitz   Serving readers over advertisers

Matt Thompson   Here come the attention managers

Sam Sanders   Shine the light on ourselves

Dheerja Kaur   Fun with subscription products

Kristen Muller   The year of the voter

Tracie Powell   The muting of underserved voices

Manoush Zomorodi   Self-help as a publishing strategy

Sydette Harry   Listen to your corner and watch for the hook

An Xiao Mina   Memes and visuals come to the fore

Corey Johnson   The pro-fact resistance

Damon Krukowski   Reviving the alt-weekly soul

Caitlin Thompson   Podcasting models mature and diversify

Neha Gandhi   Filler killers

Nicholas Quah   Stop talking trash about young people

Joanne McNeil   Gatekeeping the gatekeepers

Eric Ulken   The year local publishers get smart(er) about change

Feli Sánchez   The year for guerrilla user research

Burt Herman   Things get real

Aron Pilhofer   We can’t leave the business to the business side any more

Betsy O'Donovan and Melody Kramer   Skepticism and narcissism

Jake Levine   The return to now

Nicholas Diakopoulos   Fortifying social media from automated inauthenticity

Rachel Davis Mersey   AI, with real smarts

Luke O'Neil   The end is already here

Rasmus Kleis Nielsen   The Snapchat scenario and the risk of more closed platforms

Pia Frey   Address users as individuals

Jennifer Choi   Standing up for us and for each other

Kelsey Proud   No, no, no

Lam Thuy Vo   Breaking free from the tyranny of the loudest

Alastair Coote   The year of self-improvement

Jesse Holcomb   Information disorder, coming to a congressional district near you

Renée Kaplan   The year of quiet adjustments (shhh)

Felix Salmon   Covering bitcoin while owning bitcoin

Tamar Charney   We get serious about algorithms

Eric Nuzum   Beyond the narrative arc

Hossein Derakhshan   Television has won

Marie Gilot   No assholes allowed

Brian Lam   Sketchy ethics around product reviews

Kawandeep Virdee   Zines had it right all along

Alan Soon   The rise of start of psychographic, micro-targeted media

Caitria O'Neill   The new court of public opinion

Emma Carew Grovum   Newsroom culture becomes a priority

Daniel Trielli   The rich get richer, the poor scramble

Pablo Boczkowski   The rise of skeptical reading

Steve Grove   The midterms are an opportunity

Carlos Martínez de la Serna   The new journalism commons

Monique Judge   Letting black women tell their own stories

Christopher Meighan   Passive partnership is in the rearview

Paul Ford   Go global

Raju Narisetti   Mirror, mirror on the wall

Evie Nagy   Pivot to mobile video frustration

Richard J. Tofel   The platforms’ power demands more reporters’ attention

Sue Schardt   Jump the niche

Kathleen McElroy   Building a news video experience native to mobile

Millie Tran and Stine Bauer Dahlberg   (Hint: It’s about your brand)

Edward Roussel   Eyes, ears, and brains

Amie Ferris-Rotman   More female reporters abroad (please)

Yvonne Leow   The rise of video messaging

Frédéric Filloux   External forces

Nancy Watzman   Know thy TV

Alice Antheaume   Are you fluent in AI?

Federica Cherubini   The rise of bridge roles in news organizations

Rodney Gibbs   Tech workers turn to journalism

Juleyka Lantigua-Williams   Women of color will reclaim and monetize our time

Mariano Blejman   News games rule