Less is more for the media startup
In the hype-infested world of startups, big, splashy numbers are king. Derek Flanzraich, the CEO of Greatist, considered this fact recently when he was raising a new round of funding for his startup. Founded four years ago, Greatist is a New York-based media startup focused on healthy living. It has 10 million monthly unique visitors, 25 employees, and a profitable advertising business.
Given the recent investor excitement around media startups, Flanzraich probably could have raised $30 million in Greatist’s next round of funding.
Comparable media startups, from Mic and Refinery29 to Bustle and Brit + Co., have all raised significant sums of venture funding. One tier up, BuzzFeed, Vice Media, and Vox Media are all worth more than $1 billion.
But Flanzraich raised just $4.5 million from Floodgate with participation from prior investors and angel investors. (The company previously raised $3.5 million in seed funding.) The modest raise lines up with Greatist’s ethos of doing things the right way for its business, even if that also means doing things more slowly. “We didn’t raise $30 million so we wouldn’t have pressure to grow and sell,” Flanzraich says. We’re not setting out to build and flip something.”
Greatist approaches content with a painstaking focus on quality. The site is designed to cut through the Internet’s confusing, contradictory, and often manipulative content about health, weight loss, and fitness. So rather than chasing pageviews with a high volume of articles, it only publishes two to three posts a day. Each article is evergreen and each claim is backed up by scientific research and vetted by at least two experts. “We’re not taking shortcuts and compromising to generate pageviews,” Flanzraich says.
Greatist measures success not by pageviews, but by return rates and engagement. As a result, the site has a strong social media presence. A story about poop health, has over 12,000 social media shares. A list of healthy high protein snacks racked up 2.3 million shares. Readers average as much as six to seven minutes on many of Greatist’s articles, which is an unheard of metric for the clickbait era.
“The millennial audience has been aching for a trustworthy brand in this space,” Flanzraich says. “It’s easy to be successful in this space in the easy way. But this audience is smart, and tired of ‘miracle fix.’” Greatist doesn’t have to vet its articles with experts or rely so heavily on scientific evidence, but Flanzraich insists the content be “unreasonably good” to build true loyalty and trust with readers.
Flanzraich notes that the reigning narrative around body image is often hurtful and offensive, but it works. “Bad manipulation still works, but there’s an opportunity for brands like ours,” he says.
Speaking of brands, Greatist began making money from custom ad campaigns last year, with sponsors like Kind Snacks and Fitbit FIT . The site also appears to be running regular banner ads. Greatist plans to use half of its new funding to invest in sales, support, and video content. The rest will be for research into ways to “go deeper” with its audience. “We’re very ambitious, but this is just the right way to build this business,” Flanzraich says.