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Circa is dead: A valuable experiment in mobile news that never became a business

June 24, 2015, 10:08 PM UTC
Photograph by Hachephotography/Getty Images/Flickr RF

Startups die all the time—a lot more often than we think, in fact, because we only ever hear about the famous (or the infamous) ones. And news-related startups in particular seem to be especially prone to failure, in part because the economics of the news business have changed to the point where even some traditional media giants like the Washington Post and Boston Globe are having a tough time of it.

So it didn’t come as a huge surprise to many when Circa, a startup focused on mobile news delivery, said on Wednesday that it has run out of money—especially since Fortune‘s Dan Primack reported a few weeks ago that the company had been having trouble raising a new round of financing and was looking to be acquired.

In a post on Medium, co-founder and CEO Matt Galligan seemed to hold out some hope that Circa might live on, saying the service was “on hiatus,” and that he was still in talks about a potential deal. Sources close to the company said it has been talking with The Daily Dot, another media startup that just closed a new funding round. But any agreement would likely involve a fairly small amount of money and only a few of Circa’s technical staff, if any.

The Circa app, which was initially funded by Cheezburger CEO Ben Huh and Tumblr founder David Karp, used a team of editors to deliver short updates on breaking news stories, and pioneered the idea of “following” a story, as a way of indicating interest. For me, one of the most innovative things about the service was that Circa knew how much of a story each of its users had seen—which updates were clicked on and which weren’t—and so it could send new information only to those who hadn’t already seen it.

From a purely technical point of view, this was a huge improvement over the way that many mainstream media outlets go about their business: In most cases, when there is a breaking news story, they pump out a huge amount of old information that many readers have already seen, because they have no idea who has seen it and who hasn’t. It’s a massive duplication of effort, and a waste of resources.

Unfortunately, those aspects of Circa always seemed more like useful features of some other, larger service than a standalone business. And there never was a concrete monetization model, other than some experimenting with native ads and some discussion of licensing the software as a content-management system. But the company didn’t really have proprietary technology that would command a high price, and while Circa never talked about how many users it had, sources say the number was fairly low.

What I think surprised some media-industry observers, including me, is that Circa seemed to be a very worthwhile experiment in smart, mobile-first news aggregation—something that the traditional media industry could certainly use more of. And yet none of the major media companies appeared to have any interest in acquiring it, even as a way of getting some of that expertise into their newsrooms.

It’s possible that—in a classic kind of Catch 22 common to venture-capital backed companies—some media entities wanted to acquire Circa, but couldn’t justify the amount of money that the company would have needed to compensate its VC backers for their $6-million in investment. Gigaom, another news startup that failed earlier this year (my former employer) arguably suffered from that problem as well.

A few media companies also seemed to learn from Circa without actually having to acquire or license it: The New York Times launched NYT Now, an app that did some smart aggregation of external sources, and a number of other traditional media players—including a newspaper chain in Canada—borrowed the idea of “following” a news story as a way of indicating their interest in it.

In a sense, despite the hard work of all those involved (many of whom I consider friends), Circa always had the feel of an experiment, a lab project or hack-weekend demo that was pursuing some valuable insights into the potential future of mobile news, but never really managed to turn into a business. There’s no shame in that, of course. We could use a lot more experimentation in media. And in some cases, through no fault of their own, those experiments will fail.

Follow Mathew Ingram on Twitter at @mathewi. You can read his coverage of the media industry by going here, or you can subscribe via his RSS feed.