On March 26, 2012, a new media startup called Upworthy launched.
Today, it is the fastest growing media company in the world. Upworthy finished October with 7 million monthly uniques, up from 6 million the month prior. In August, it hit four million uniques, up from 2.5 million in July. Its fast growth was rewarded with $4 million from investors.
There are lots of media companies out there, but none have grown that quickly.
Are Upworthy’s growth and business model sustainable? We’re not sure, but either way the stats are impressive. We asked CEO and co-founder Eli Pariser what Upworthy has been doing to smash traffic records every month.
Here’s what he had to say.
Don’t write about politics.
Before he started Upworthy, Pariser worked for a digital, political publication, MoveOn. He and his co-founder, The Onion’s former Managing Editor, Peter Koechley, thought the upcoming election would drive traffic to Upworthy.
But people weren’t sharing much of Upworthy’s political content, so the pair ditched that angle and broadened the site’s coverage.
“We thought, ‘Ok, it’s an election year, people are going to be really interested in politics and the campaign, and we’ll get a leg up that way,'” Pariser says. “The election was our whole argument for starting Upworthy this year. But it turned out to be a total non-driver of growth. Of all our top pieces, only a couple deal with politics or the election.”
It can be tough for startups to let go of initial ideas and pivot to what’s working. But as soon as Pariser let go of! the pol itics angle, traffic soared.
Find story ideas on social media feeds, not other websites.
Upworthy’s curators don’t start their days surfing other websites for news. They surf social media outlets like Twitter and Facebook instead.
Sometimes it’s easier to highlight a conversation than to start a new one.
“We have our team of curators spending all their time looking on the Internet for stuff,” says Pariser. “We go for visible, sharable stories and really stay away from doing more typical, text-driven articles and blogging. We lean into images and videos.”
Focus on Facebook, not Twitter
Upworthy has found that Twitter is small traffic potatoes compared to Facebook. At the end of the day, Facebook is where the most people spend the vast majority of their time online.
“Facebook is a huge piece of the puzzle for us,” says Pariser. “Our Facebook community has grown from zero in March to over 600,000 likes.”
Pariser says Upworthy hasn’t done anything particularly brilliant to juice Facebook for traffic. It just spent a lot of time and energy cracking the social network.
“Honestly, I think part of [our success with it] is we take Facebook much more seriously than many of the other social networks,” he says. “I love Twitter, and Twitter is a fun place to hang out with smart people, but it’s a small fraction of our traffic compared to Facebook. The time and attention most sites spend on [perfecting] their homepages is probably what we spend on Facebook. If you look at our homepage, it’s pretty mediocre.”
In Mark Zuckerberg’s interview at Disrupt yesterday, he said several things that Facebook investors should find encouraging.
Most importantly, he suggested that:
- Facebook’s mobile opportunity is much bigger than people think
- Facebook is going to go into the search business
- Everyone is now “underestimating” Facebook
One of the big concerns about Facebook is that, as its users migrate to mobile, the company’s ability to monetize the users will drop precipitously, thus clobbering Facebook’s revenue. Zuckerberg said explicitly, for the first time, that he thinks Facebook will ultimately make money money per user on mobile than it makes on the desktop. If this proves true–and, importantly, if it happens because mobile revenue per user soars instead of desktop revenue collapsing–Facebook’s revenue growth should soon reaccelerate and then stay strong for years.
Zuckerberg also said that search is a huge opportunity for the company and that Facebook is “uniquely positioned” to go after it. A few weeks ago, we suggested that Facebook could quickly generate an incremental $3 billion of revenue if it jumped into the search business. If Facebook really does aggressively go after the search opportunity, therefore, this could create a major new growth engine.
Lastly, Zuckerberg made several comments about how everyone is now “underestimating” Facebook. Reading between the lines, this is encouraging both for the near-term and the long-term. With respect to the near-term, Zuckerberg knows exactly how Facebook is doing this quarter, and we suspect he would have been very hesitant to use the word “underestimating” i! f Facebo ok were likely to blow the quarter. Longer term, the word choice suggests that Facebook thinks investors are, in fact, underestimating Facebook’s revenue potential.
Now, of course, none of this changes the fact that Facebook’s stock is still expensive (~30X next year’s estimated earnings), which means the market is counting on revenue reaccelerating this quarter and remaining strong for the next several quarters. And none of it changes the concern that, in October and November, employee lock-up releases will likely lead to additional insider selling–possibly a lot of it.
But it does suggest that a new bull story for Facebook could start to emerge.
Here’s what a few smart Wall Street analysts had to say about Zuckerberg’s remarks:
BEN SCHACHTER, MACQUERIE:
- We thought his comments regarding search over the longer-term were the most noteworthy of the presentation and will drive more discussion about a potential search revenue stream for FB while reigniting some concern about increased competition for GOOG
1) FB’s long-term focus: Nothing new here, but FB is clearly focused on the long–term and creating value over next three-fiveyears.
DOUG ANMUTH, BARCLAYS
Positive comments on Mobile. Zuckerberg indicated that ! Facebook and its mobile potential are being underestimated. Mobile users are spending more time per person on Facebook than desktop users and are 2x as likely to use Facebook in 6 of the past 7 days (L6/7). We also believe mobile DAUs are likely higher than web DAUs. In terms of mobile monetization, Zuckerberg indicated that Facebook can make more money from a mobile user per time spent than a desktop user, and that mobile ads in their early days are already performing better than ads on the right rail of the desktop. As published in our recent Facebook report from 9/4/12, we estimate Facebook’s mobile ad revenue could be more than $200M this year and above $900M in 2013 driven by higher CTRs and CPMs. Our analysis also suggests mobile ad revenue/user/month could ultimately be higher than on the web as higher engagement and pricing offset the lower number of impressions per visit. See page 2 for our proprietary model, which segments Facebook’s ad business into Mobile SS, Web SS, and Web Marketplace.
Search on Facebook’s radar. Facebook currently generates ~1B search queries a day—the majority attributed to people search, but also a meaningful portion related to brand pages and apps. In late August Facebook launched Sponsored Results—ads displayed in the search dropdown bar—to capitalize on this opportunity. However, Zuckerberg indicated that Facebook could do more with search in terms of providing users with direct answers to their questions, likely based on information derived from the social graph. This is likely more headline risk for Google than a real, near-term fundamental concern, but the two companies could ultimately overlap more in search down the line.
BOB PECK, CO-RISE
Last week, The Daily reported that Kanye West‘s charity spent more than a half-million dollars in 2010—but none of that money went to actual charitable causes.
After analyzing federal tax filings, the iPad newspaper found that in 2010, the Kanye West Foundation had expenditures totaling $572,383, but the majority of that went to employee salaries and other overhead expenses.
The charity didn’t even donate a single cent to an actual charity that year. And now, West’s foundation is in the process of being dissolved.
Since it’s easy to get bogged down in the numbers, Statista took The Daily’s findings and compiled information from the foundation’s tax filings to create the below infographic explaining where Kanye West’s money went and what happened to his so-called charity foundation. Complete with West’s stunner shades, obviously.
Take a look below.
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Think headliner Madonna was the highlight of Sunday night’s Super Bowl halftime show performance?
According to ClearSpring, the most tweeted about/Facebooked/e-mailed/printed/overall social-media’s most clicked upon celeb of the night was none other than Cee Lo Green.
Cee Lo beat out not only Madonna as the most talked about on the internet during the big game, but also Kelly Clarkson, M.I.A. and Nicki Minaj.
After taking the stage dressed as a band leader and dueting with Madonna on “Express Yourself” and the grand finale, “Like a Prayer,” Cee Lo fans freaked, causing his online presence to surge to over 2,000 percent above normal—and nearly double any other Super Bowl act.
Cee Lo couldn’t be reached for comment but we have a feeling we know what he would say to his competition and haters: “Forget You.”
Check out the chart below that proves Cee Lo’s online popularity:
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OpenSky was founded in 2009 by John Caplan as an e-commerce arm for bloggers. Influential writers could create storefronts alongside their content, but it wasn’t a fruitful business model for OpenSky.
“Last year we were dead in the water,” says Caplan. “We weren’t selling very much. When people are reading they aren’t buying things; they don’t have their credit cards in hand.”
Caplan decided to pivot his startup. OpenSky relaunched in April as a personalized shopping site. Now e-commerce isn’t secondary to content on OpenSky; it’s king.
The new OpenSky operates like Twitter. It works with 80 industry influencers and celebrities, like Martha Stewart, Bobby Flay and Alicia Silverstone, to create lists of their favorite items. Users can follow the influencers and buy the endorsed products. OpenSky holds all the inventory, ships items to users, and splits the profit 50/50 with influencers. Caplan says none of OpenSky’s influencers are investors. They just really like the product.
“It’s like Twitter but our merchandisers [the celebrities who pick the items OpenSky sells] are making tens of thousands of dollars every month from their followers,” says Caplan. Martha Stewart, for example, has 83,549 followers on OpenSky just waiting to buy a recommended rolling pin or mixing bowl.
So far, OpenSky’s pivot has worked wonders. In April, its first relaunch month, OpenSky generated about $66,000 in sales. Last month it generated well over $1.5 million. “Revenue has been increasing 50% month over month,” says Caplan.
In October the 87-person startup raised $30 million. Today, Caplan told us OpenSky crossed the 1 million user mark. About 68% of users are repeat buyers, purchasing new OpenSky items within eight weeks.
We asked Caplan what his margins are like. Despite the 50/50 split, he says they’re pretty good.
“Brands are excited about OpenSky because they want to be endorsed by celebrities,” says Caplan. While brands can’t pay for distribution on OpenSky, they generate a lot of sales when celebrities decide to post their items. Caplan likens OpenSky to Pinterest. The brands’ excitement makes it easy for OpenSky to purchase, store and sell celebrity-endorsed items at reasonable prices and margins.
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Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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