Q&A: Rafat Ali, Founder & CEO @ Skift
This week, The Idea caught up with Rafat Ali. Rafat co-founded Skift, a B2B publication that focuses on the “leisure” industry. Having started with just the travel industry, Skift has moved to both dining and wellness.
Tell us about yourself and your company.
My career has always been in B2B media, which is unique in many ways because I know many people don’t dream of starting in B2B media when they come out of college. But I did, because I like going deep into a subject and being an expert, rather than a generalist.
I started writing about Internet advertising in ’97 back in India. I started a blog called Paid Content, which launched in summer of 2002, which turned into a larger media company. That went from a blogger in a bedroom type story to hiring more people as the site grew. At our peak we were about 20-something people, 4 different sites, covering the business of digital media. We raised a tiny bit of venture capital, and then sold to Guardian in 2008 before the crash.
Guardian bought us with the idea of expanding to the U.S. and different verticals, with us as one of the flagships, because they’re very strong in media coverage. That plan went out the window as the financial crisis hit; they were busy laying off hundreds of people back home. We got sacrificed as the U.S. plan going away. I was there for a year and a half, so I left and traveled for two years.
I started Skift in the summer of 2012. My co-founder, Jason Clampet came from the editorial side. I came from editorial and business. In my previous company, I was the journalist, the editor, publisher and CEO. At Skift I chose not to be editorial talent; I write on and off, and early on I did write more. Once in a while I will write some bigger thinkpiece type stuff, but I’m focused on the business side.
Six and a half years into Skift, we’re about 60 people as a company, growing fast. We’ve raised a little bit of venture capital, $3 million. We haven’t raised in many years now; we don’t need to, and growing beyond the business of travel into the business of dining and now business of wellness very recently.
Skift Table is our business of dining brand and Skift Wellness is our business of wellness media brand. These are all industry focused coverage of these sectors: travel, dining and wellness, all falling under the larger umbrella of the business of leisure.
Can you tell me about the business model of Skift?
Media is a simple business: You pick a sector, cover the shit out of it, get an audience, you either sell them, which is advertising, or you sell to them, which is subscriptions or paid services, that’s it. There’s no other way to do media.
Our model is essentially a mix of things. Our advertising is all branded content, we don’t sell traditional advertising at all like banners or boxes. We sell only branded, native campaigns that we publish through our platform: the site, the email newsletter, promotion through social, etc.
Then there’s the conferences that we do: The Skift Global Forum, our flagship conference in New York. We now do one in Europe we’re starting one in Asia next year (Singapore). We started a tech conference on the West Coast. In the business of dining, we started a Restaurants Forum this year.
We sell subscriptions to Skift Research, which is our division that does industry research on the business of travel. That’s a high-priced thousands of dollars a year subscription for the travel industry.
We aim for one-third from advertising, one-third from conferences, and one-third from subscriptions. Today, we’re around 40/40/20: 40-branded, 40-conferences and 20-subscriptions, which is fine. I would like it to become one-third, one-third, one-third, but if subscriptions become the largest part, even better, because that’s the most stable part of the business in general.
Who is your audience for each of those products?
Not everybody in the travel industry is our focus. Our focus is what we call MST: marketers, strategists, and technologists. We cover marketing, strategy and tech in the travel industry. CEO’s, CMO’s, their organs, and tech people. If there’s one ideal persona for us as a reader, it would be the CMO. That’s our audience in travel. Travel is a very global industry, so globally we’re very strong.
Dining is a very different industry. There’s a long tail; there’s a lot of small players in the industry and it’s more regional. Our focus today is primarily U.S. We’re only a year into it. We bought a small weekly newsletter that we rebranded Skift Table and made it a daily early last year.
It’s only been a year that we’ve been doing a daily. The audience there is the chain people, restaurateurs, some chefs, restaurant tech people, and restaurant marketing people at chains and independents.
Wellness is only a few months old. It’s a weekly newsletter for now, the business of wellness today is whatever the hell you want it to be, because everything is wellness today. We’re trying to figure it out, can we try to create the right definitions around what is the business of wellness, what isn’t. We intend to demystify much of it, not from a consumer perspective, but more from an industry perspective.
How did you come up with these different verticals and the different products for each of them?
There is a lot of overlap. Food and beverage (F&B) is a huge part of the travel industry, because travelers eat and drink. 25% of the hospitality industry’s revenue comes from F&B. So, that was an organic decision for us.
Wellness travel is one of the largest parts of wellness, so there’s a lot of commonalities, and a lot of people move between these sectors, in terms of marketing people who move from one sector to the other to the other. We see them as organic — yes these are different sectors from the economics of how they work — but we see a lot of commonalities, which is why we think it’s an organic expansion from one to the other.
Can you walk me through the process of how you develop products?
If you’re going to cover any industry, the decision has to be that there has to be daily content, because you cannot be part of the fabric of an industry without being a daily. Daily for us means a daily email newsletter.
Email newsletters in industry media matter a lot because that’s where most busy industry executives will be consuming information. It’s also the most intimate, personal relationship you can have with any reader, which is the promise of being in their inbox every morning at the same time, hopefully for you to read the news of the day before you start your work.
If you can create that habit in the users, that’s probably the most powerful relationship you can have in media. And that’s what we did with my previous company, a blog that many people knew as an email newsletter, because everyday we used to copy paste all the blog posts in a newsletter.
I took the same lessons from that daily relationship with email. All of our growth targets on all three sectors are on email newsletter growth. We have zero goals on traffic, which for anyone in the media industry would be mind-blowing. We have not had goals for traffic for years now.
Obviously, traffic shouldn’t be declining. If the number of subscribers to the newsletter is increasing, the traffic should increase because people are going to click through and read, which has happened. We are not a consumer site so our traffic isn’t huge, but it’s the largest in the travel industry. Dining, we’re still too new, and wellness we’re just starting.
The product in many ways is email. That then leads to other things. It leads us to be able to build conferences, because how do you market conferences? Through email marketing. How do you market subscriptions? On-site, but then you market through email. Email has become the main product for us in many ways. That’s where a lot of effort goes.
For us, social matters little in the scheme of things. We do the basics: Twitter, Facebook, and LinkedIn. Facebook doesn’t do much at all for us. In a professional sense, we’re actually quite big on LinkedIn for being an industry brand, I think we have about 500k followers, which is very large for a B2B brand. We do the basics there, it’s not like we have a strategy for how we leverage LinkedIn beyond a certain point.
Flipboard has consistently done well for us over the years, primarily because some of our audience is a general audience that maybe is business travelers or travel enthusiasts who read the site. Apple News has emerged as a big source for us in the last year in travel.
What’s the most interesting thing you’ve seen from a media company other than your own?
I just met this company called Sports Innovation Lab. The founder, Angela Ruggiero is a famous former Olympic ice hockey player. I like what they’re building, sports tech is a fascinating space, and not many people cover it.
I’m a fan of a company called Fatherly, which is focused on creating a media company around fathers. There’s a company based out of DC called Industry Dive, which is a very industry-focused network of B2B newsletters, that has grown like gangbusters without any funding. I’m a fan of companies that have grown without too much funding.