Digital Media: What *Really* Went Wrong in 2018

Rafat Ali
4 min readFeb 2, 2019


Seven years into running Skift as a fiercely independent business media company, I have become a fan of this financial term called “optionality” which by the way is also Mohamed El-Erian’s favorite word. What it means in Buzzfeed’s context is it lost a number of options when it took so much venture capital, one of which would have been slower growth, another of which would have been not artificially looking for an exit within a fixed time frame or too early. Or, that the $1 billion deal they were getting from Disney would have been enough money for everyone, but investors likely balked because they thought they could get more returns than that.

All of them — Buzzfeed, Vox, Vice — raised this money based on the fallacy of infinite scale and even more problematic, that one-hit wonder type of business line (advertising or specific type of advertising) would scale infinitely. This isn’t software, certainly doesn’t have the ARR or margins of software subscription business, and somehow they — including investors — all forgot that. Vice is in slightly different bucket because it predates this era of Web, but then mismanagement really did it in.

Another big hurdle: the potential buyers have whittled down as well: AOL and Yahoo used to buy such companies are now done with and in lots of troubles of their own. Comcast, Disney, AT&T and other large conglomerates are focused on much larger TV/video deals, dealing with a much bigger enemy such as Netflix. Time Inc and Conde Nast are, well, you know their story, completely out of the picture and Hearst is buying big companies in B2B media. Axel Springer is not an option, it has its hands full with Business Insider and if that goes south for them they will sit out the market. Facebook, Google and Apple are not coming to anyone’s rescue, particularly not in media. Unless Vision Fund buys everything, which you never know with Son, the buyers are gone.

They got seduced by the idea that this is easy, digital media is easy to build in a platform era. It should be really hard to raise millions and millions in funding. It should be hard and maybe impossible to have a valuation in hundreds of millions. It better be freakin’ hard to have millions in revenues and reach sustainability as a media company. That is what every other previous era of media taught us.

The democratization of publishing has had lots of good effects for the growth of media around the world, the biggest being the proliferation of previously under-represented groups to have a voice. But amongst the worst effects of it has been the perception that it is easy to be in media, raise money in media, build a company in media — driven in large part by availability of venture money.

As soon as you take money in any big way, you are not in control. This is a digital media fallacy: That big venture money backed digital media startups are independent. They’re not, boxed in to do whatever it takes to get to desired outcome promised. If anything has a timed outcome in a 3–7 year horizon, which most venture backed companies have, that dictates *everything*. Truly independent companies are meant to last forever. That is the box these digital media companies are in: these are artificial constructs meant to exit in a decent timeframe, with no exits in sight.

For us at Skift, we raised peanuts compared to everyone else, total of $3 million in seven years we have been in existence and we haven’t officially raised since 2014. We have always been very intentional in our growth and know that we can be innovative within the constraints we have. Being a small company has meant always being short on resources. Less is better, less is deep, less is slow and deliberate, less is human, and humane. In many ways that has defined the ethos at Skift, and has kept the primacy of action over intent. Constraints — having less — has also means less panic about every new thing every other media company is chasing. We know what we’re good at and what we aren’t. Now having crossed our early phase and now in our Young Adult phase, we have lots of options ahead and we are in control of which option we take.

Lots of people are knocking on our doors, and I have relished saying no again and again.


Rafat Ali is the CEO and founder of Skift, the global travel intelligence company: News, Analysis, Research and conferences on online travel, airlines, hotels, tourism, cruises, startups, tech and more. Subscribe to the daily newsletter and you will be a lot smarter about the future of travel, we guarantee it!

Previously, he was the founder of paidContent, which he sold to Guardian Media Group in 2008.



Rafat Ali

CEO/Founder, Skift, travel intelligence startup. Founder, paidContent. New Yorker, Global Soul. My travel pics: