Philippe von Borries & Justin Stefano, Co-founders, Refinery29
How four founders turned a sketch on a cocktail napkin into an iconic digital media brand.
One night in 2004, in a bar in New York City, three ambitious entrepreneurs huddled around a cocktail napkin and sketched out a vision.
They essentially wanted to translate the concept of the mall for the internet, only instead of catering to big name brands and retailers, it would connect visitors to all of the amazing independent brands and makers that were flourishing at the time.
That initial sketch—it started as a picture of a virtual mall—has evolved a lot since that night, and the team solidified around four dedicated co-founders. But 15 years later, the dream of Justin Stefano, Philippe von Borries, Christene Barberich, and Piera Gelardi has become a reality, and so much more, in the form of now-iconic digital media company Refinery29.
“One of my biggest regrets to date is that we didn’t save the napkin,” Stefano says.
Since they set out on that journey, the team has created an online space where media targeted toward women is distilled, removing the impurities of stereotypes, taboos, and shame. Initially focused on fashion and style, Refinery29 has since expanded to a staggering breadth of content.
Covering almost every topic imaginable—from skin care to the latest in immigration legislation—Refinery29 is a comprehensive digital media company dedicated to elevating women’s voices. It’s built an international audience of more than 550 million across all its platforms, which include all major social media, a YouTube channel with nearly 2 million subscribers, an award-winning podcast in its fourth season, a short film series, an app, and more.
But Stefano and von Borries, the two who initially had the idea for Refinery29, didn’t come from a background in publishing or fashion. In fact, as you may have noticed, they aren’t even women. But they saw a need, set out to meet it, and connected with the right partners to realize their vision and help it evolve.
In the early 2000s, Stefano and von Borries were just a couple of friends from high school, who had recently graduated from NYU and Columbia, respectively, and were embarking on their first post-grad endeavors.
Von Borries headed off to Washington, D.C., to work for a political startup called The Globalist, and Stefano took a position with the Civilian Complaint Review Board in New York City, where he investigated complaints against the NYPD.
Despite the distance, the duo stayed close, and maintained a group of friends who were mostly in the creative space. They began to notice a frequently recurring topic of conversation among the group: dissatisfaction with media coverage, especially when it came to fashion.
“Most of the media companies that existed, most of the magazine businesses, were fairly mainstream,” Stefano says. “They would write about big designers that bought pages in their magazines. That’s how the model worked.”
Stefano and von Borries found that many of their friends still read these magazines, but not because they felt particularly connected to the content.
“They didn’t think it was good. They didn’t think it was interesting,” Stefano says. “It was just what they were forced to read, because that’s what you could buy at a newsstand.”
Their friends hungered for something with a more independent edge and authenticity, but couldn’t find it anywhere.
So the pair had the spark of an idea: What if they created something that appealed to young New Yorkers by focusing on serving their audience rather than on serving big companies and brands. But with no experience in publishing or fashion, they knew they needed to call in reinforcements.
At the time, Piera Gelardi was dating von Borries (they went on to get married), who worked as the photo director at CITY Magazine. When von Borries shared their idea and asked for her advice, she encouraged him to reach out to her former boss and mentor at CITY, Christene Barberich. Her knowledge of fashion and brands, as well as the world of publishing, would prove invaluable to the pair.
Barberich says that she was already paying close attention to the transformation happening in the media landscape. She noticed that with the rise of the internet, the one-way nature of traditional publications, with outlets talking at their audiences instead of with them, was slowly being set aside in favor of platforms offering more conversational approaches.
So when von Borries and Stefano shared their idea, she had a gut feeling that they were on to something big.
She immediately reached out to Gelardi and told her that she didn’t just want to consult. She wanted to become a partner in the endeavor. Barberich’s infectious excitement for the project then made Gelardi reevaluate her own position as a consultant.
“Because she wanted to sign up, it showed me that bigger vision and also reminded me to think about my own value in the equation,” Gelardi says. “Now we have four co-founders.”
Building the Brand
With the team assembled, the quartet was anxious to get their vision off the ground as quickly as possible.
But all four of them still had day jobs, so much to learn, and very little money to put toward the project. They met in a coffee shop every night after work and on every weekend as they powered toward their goal.
“It just became an obsession until we got it live,” Stefano says.
They called in all kinds of favors with friends who were programmers, engineers, and graphic designers, and built the first iteration of Refinery29 over a period of six months.
“It felt like forever,” Stefano says. “That six-month period, I think it felt years of work went into that.”
But in June 2005, the wait was finally over, and the team celebrated the launch of Refinery29 at a bar called Union Pool over pizza and beers. Looking back at nearly a decade and a half and several waves of changes since, the founders are still proud of the original website they launched that day.
“When you look back at the first iteration of Refinery29, it just really, deeply warms my heart, because I think it’s still beautiful,” Barberich says.
While the website received some fanfare on launch day, growth was a slow, gradual process, and they struggled to be taken seriously, especially by traditional media outlets.
“Most of the traditional publishers saw digital as a phase,” Gelardi says. “It’s so laughable now, but truly we would go talk to people, and they would act like we were trying to sell them a carpet or something. They thought it was a scam.”
Challenges aside, the untested nature of their business model was also a blessing in disguise.
“I think we were able to really pioneer this new space because it was, you know, an open road,” Gelardi says.
Barberich agrees. “When you start out and you really are at the beginning of something, you have so much freedom to just test things,” she says. “I do credit that period—the first two years when we were essentially flying under the radar—as this really important testing ground for us.”
They gradually tried out new content, such as a segment called “Neighborhood Watch,” in which local creatives shared fun activities and events they loved, and “Spotlight,” a section featuring products by homegrown, independent makers.
“The products that we would feature would sell out overnight,” von Borries says. “That was the first time that something we had created had really been validated. So we started to look into commerce.”
In early 2006, they decided to raise capital for the first time to fund a marketplace on their website, and in 2006, it launched, taking Refinery29 into its next phase.
“We didn’t engineer this thing at all to be what it is today,” von Borries says. “In fact, I think the journey for us has been sort of going down the river and hitting different moments of momentum in the business and seeing the world shift.”
And as the world shifted, so did they.
Experiments and Expansions
Before long, von Borries had quit his D.C. job and returned to New York City to work full time for Refinery29, and not long afterward the other three joined the work full time, too.
Stefano says that, over the first five years, they sold ads, hosted live events, held sample sales (retail events that involve selling extra prototypes, often from big names in fashion or design) and did everything they could to drive slow-but-consistent growth that took them to $1.7 million by their fifth year.
They then decided to raise capital to grow their branded content and native advertising. This resulted in a single-year leap to $8.9 million in revenue.
“It was not a fast journey,” Stefano says. “I think that a lot of people have this belief that you’ll launch a business and within, you know, 18 months, you’re going to be on fire, but it often takes far longer. And I would say it took us probably 10 years before we felt like we had a business that was here to stay.”
As von Borries and Stefano toiled away on the technical and management side, Barberich and Gelardi dove into the content and creative aspects of the business.
“Our desire has always been to elevate underrepresented voices, to really bring these new ideas to the surface and challenge sort of what is in the mainstream, and how the media speaks to and about women,” Gelardi says.
While the focus was initially centered on fashion and style, the pair slowly experimented with content expansions that appealed to the women who visited the site. Barberich was interested in topics surrounding health and wellness, so she tested the waters and found the audience receptive. Gelardi noticed that most mainstream editorial content on sex for women was “not focused on women’s pleasure or bodily autonomy,” so she looked to offer something better.
As they grew, they found an almost endless hunger for content on just about every topic imaginable, and with each new addition, a new wave of readers joined the ranks. Soon, stories on politics, finances, and entertainment appeared on the website, continuing to meet the interests of modern women.
They were also able to quickly learn from mistakes and make changes, thanks to the instant feedback provided by comments, shares, and analytics.
“We really were focused on experimentation,” Gelardi says. “We were so invigorated by having access to the knowledge of our audience in real time.”
With the kinds of data that traditional media outlets simply didn’t have at their fingertips yet, they were able to make informed decisions and pursue avenues that seemed utterly foolproof. But, Barberich says, information in this space can be both a blessing and a curse.
“I think in some ways you lose that spontaneity,” she says. “Just having an idea to do something and being able to pursue it and not worry so much about what the outcome was going to be or worry that it was going to hit a certain traffic benchmark.”
So while they take advantage of the analytics available to them, Gelardi says she always wants to leave room for risks.
“I think influence also comes down to risk-taking,” she says. “It’s the art and the science; it’s not just about volume. Quality can be subjective, as well, but I think it is about risk-taking and knowing that core of who you are and staying true to it.”
Barberich and Gelardi say that they see their roles as a balancing act between the numbers and creative spontaneity.
“I think that that’s really what motivates people,” Barberich says. “When they feel like they’re making content that they deeply love, but that’s also touching a person’s life. The greatest success is to know that something struck a chord that is universally felt.”
Scaling With Heart
As the company continued to grow, all four founders felt an overwhelming pressure to keep the train on the tracks.
“I think that a lot of people lose sleep in this company because they care so much,” Barberich says. “In laying that foundation, we want to make sure that people feel really fulfilled by it and it doesn’t lose its path.”
They knew they had to stay true to the heart of their mission and remain in sync with their audience, all while rapidly expanding far beyond what they had imagined possible.
“The audience has been the single most important focus—and staying committed to that audience—and clearly everything that’s happened in the world at large has sort of snowballed our commitment to serving women amazing content,” von Borries says. “Our belief is that, in this moment, to really build a long term, sustainable brand in this space, you really have to mean something to your audience.”
And Barberich believes the key to scaling while staying true to the heart of the business lies in a single, but incredibly vital, part of the business.
“Honestly, if I’ve learned anything in the near-14 years that we’ve been doing this it’s that it all comes down to the people that you hire,” she says, “because scale is all about the people that you’re trusting to handle the scale.”
And she says they have been fortunate at Refinery29 to find and hire people who care deeply about the mission of their brand.
“When you bring people on board that really, automatically love the brand, when things get hard, and they will inevitably get hard, it actually helps those people to deal with the issues that arise and recover quickly.”
Gelardi also believes that hiring new staff members who have that entrepreneurial spark inside them helps the brand thrive.
“The industry that we’re in is ever shifting. The work that we do is ever shifting,” Gelardi says. “I think it requires that level of entrepreneurial creativity in order to really be able to roll with things and to find the solutions.”
Establishing a Legacy
Much has changed in the 15 years since the four founders first tossed around the idea for Refinery29. Especially on the internet.
What once felt like a wide open space, now feels more like an overstuffed room pumped full of noise. Because of this, von Borries believes people have begun seeking more intimate, offline experiences, something Refinery29 is working to supply.
“We were always doing events,” he says. “Back 15 years ago when we launched Refinery, we would host local events at stores and boutiques and would bring people together. We’ve always been thinking about the real world, and when you do something in digital, the real world is very validating.”
One such example of Refinery29 IRL is 29Rooms, an art exhibition that features 29 collaborative spaces touching on topics meaningful to readers, such as virtual reality, body positivity and music.
At the end of the day, all four founders are focused on building a legacy they can be proud of.
“You can’t have a media company, I don’t think, without having a really true understanding of what it is you want to leave behind someday,” Barberich says.
And she believes that today’s world, with its renewed focus on social justice, women’s rights, and political activism, is the perfect place for a platform like Refinery29 to thrive. Now more than ever, people are seeing unmet needs, especially in areas of representation and diversity, and feeling driven to meet those needs.
“I think the motivation to start a business is fairly universal,” Barberich says. “You feel that there is something missing. You feel that there is something missing and usually, you’re not the only person.”
She encourages those who feel that tug not to ignore it, but to step out boldly.
“When that happens, you have to really face the facts that this is going to be scary. It’s going to be a ton of work. You’re going to make mistakes. You’re going to need the help of a lot of people, and a lot of times you’re going to need their help for free, and you have to be able to ask for that help, so great relationships really make a difference.”
When looking at Refinery29, that was certainly the case. If one thing made Refinery29 what it is today, it’s relationships.
The relationship built between two high school friends. The relationship between a mentor and her intern. The relationship between a couple that brought them all together. And the relationship between a business and its audience—a two-way exchange of encouragement and authenticity that has amplified the voices of women for 15 years and will continue to do so into the future.
Interview by Nathan Chan, feature article reprinted from Foundr Magazine, by Erica Comitalo.
- Details on the night Philippe and Justin sketched the rough idea for Refinery29 on the back of a bar napkin
- One of Justin’s biggest regrets
- How long it took them to launch the first iteration of Refinery29 and how much it cost
- What the first version looked like and how the launch was received
- At what point they left their jobs and started monetizing the site
- The stats—audience size, subscribers, event sales—that show how their business is doing now
- The new media model and what to consider if you plan to start a media company
- When a bootstrapped company should start monetizing
- Monetization models for media companies
- Exciting moves coming up for Refinery29
Full Transcript of Podcast with Philippe von Borries & Justin Stefano
Nathan: So the first question I ask everyone that comes on is how’d you guys get your job? I might start with you, Philippe.
Philippe: Desk job? I guess on choosing. So we started the company in 2005, and Justin and I have actually known each other for the better part of our lives now. We met in high school and both went our separate path and went to university in New York. I studied at Columbia, Justin at NYU. And after we graduated in our respective fields we were sort of embarking on our professional path for the first couple of years. We realized that we had a tonne of friends who are in different creative fields. I had moved down to DC and realized that I was sort of missing the creative pull of New York, and one night as good things happen at a bar we started to sketch out the idea for Refinery 29. And lo and behold, six months later with one foot still in a job at the time and the other in Refinery 29 the journey set sail.
Nathan: Amazing. I’d love to hear your take, Justin.
Justin: Yeah. I mean, it’s similar story but I think one of my biggest regrets to date is that we didn’t save the napkin that actually had the sketch because that existed. It was a real thing. We actually sketched it on a napkin. But I was working for the city at the time for an organisation called the Civilian Complaint Review Board that was investigating complaints against the NYPD. So it was a completely different industry.
Philippe: Did you get that?
Justin: Completely different industry that had nothing to do… I mean, before the cameras started rolling you were mentioning that you started your business and you came from a very different industry. And I think often that’s what happens because you come into a sector with fresh eyes and you come into a business not exactly knowing what you’re doing. But that’s okay. And that’s actually what gives you strength and kind of over time can make you successful because you’re willing to do things differently. And so, yeah, so Philip and I both kind of came into this world from the outside. And like he said, we kind of just invented our own jobs.
Nathan: Yeah. Did you guys think on that napkin you were going to build a female millennial website that haves 400 million plus users?
Nathan: Was that on the napkin?
Philippe: 100%. All the stats were written right underneath the nap. Really good liar. That’s what we’re going to be in 2015. No.
Nathan: What was on there?
Philippe: Not at all. What was on there was actually a… we decided that the analogy of the mall, which obviously is a very iconic thing in America hadn’t really been translated to the digital environment yet and it hadn’t been conceived off through the lens of great independent makers versus just big brands retailers. And a lot of friends of ours had started their own brands and had come out of different creative fields and become designers so strong or some artists. And we basically wanted to create a digital mall made up of the greatest independent brands and makers, and the mall with different floors was on the sketch of the napkin.
And so no, we didn’t engineer this thing at all to be what it is today. In fact, I think the journey for us has definitely been sort of going down the river and hitting different moments of momentum in the business and seeing the world shift. I’m sure we’ll talk more about different business models that we’ve been in and seeing the world distribution change and all of that. But it was a very organic path for us.
Nathan: Yeah. So talk me through how long did it take to get the site up and running? What are the first pieces of content look like?
Philippe: That’s a great question.
Nathan: We’re you guys embarrassed? Were you proud of it? Did you just have to ship it or what will happen?
Justin: Okay. So the napkin conversation at the bar was I believe in like October or November of 2014.
Philippe: No. Four.
Justin: I’m sorry, 2004. It was 2004. The site actually went live in-
Philippe: June 2005.
Justin: June 2005. So it was call it like six to seven months from moment of inspiration to having a kind of MVP or having something launched for consumers to interact with. And it felt like forever. I mean, that six month period I think it felt like years of work went into that. And we both had day jobs at the time too.
Nathan: So you guys didn’t leave your jobs?
Justin: Not until after the website launched. But every night we would meet after work at a coffee shop not far from where we both were living at the time and we would work on this. And every weekend we would work on this, and it just became just an obsession until we got it live. But I think in that six month period we crammed in five years of just self education about the industry, self education about tech and product and about building a website and how it all worked. I mean, we really came into this not knowing much of anything. So we learned it all in real time while at the same time trying to also kind of figure out what the business plan was going to be and what the content was going to be. So there was just a lot compressed into a really short period of time.
Nathan: And what were the initial costs early days you guys. Because back then, we’re talking 15 years ago, it would have been expensive to create a website . You guys learned html and… how did that-
Justin: We were just so thrifty about everything. I think we launched the initial website for $5000, is what it costs us to get it live. We called in a lot of favors. Luckily we had friends that were… they’re graphic designers, were interactive designers, were programmers and engineers. We’re able to kind of call in favors and people helped out. But we didn’t raise any money to launch the business. We did it ourselves. And we’d only been working for two years post college. So we didn’t have a lot saved. So we were forced to do it on a very, very real budget.
Philippe: We were also only 23 and 24, which makes it a lot easier.
Justin: Yeah, exactly. Because you’re happy eating Mama noodles, hot dogs, buttons full of ketchup at night.
Nathan: Yeah, don’t have much to lose, right?
Justin: Yeah, exactly.
Nathan: Awesome. So take us back to the night before you launched and what happened next. Did you guys launch to crickets or was it just, hey, some people are pouring in or did you all this PR and-
Philippe: It was actually… well, first of all, that’s an amazing journey back in time. I haven’t thought about the night before we launched in a really long time. So thank you. I think there was definitely a lot of anticipation. It’d been six or seven months of putting our hearts and souls into it. We were super proud with the product that we launched. And in fact the day we launched the recognition that we got clearly indicated that there was something cool here, both about the concept, this sort of mall directory translated into like a digital experience and the content and highlighting sort of people who are a little bit on the periphery, on the fringes, right? This wasn’t your mass appeal type of story.
And it was also something super local about the story, about loving New York City and people who are making it here and creating something interesting. And that day we got an article in Women’s Wear Daily. I remember still actually the journalist who wrote it. It’s from Rosemary who just wrote another article about what happened like 15 years later. And it said Independence Day at Refinery 29. That was the headline. We thought we’ve made it. And in terms of crickets we actually got a lot of recognition that day. It crashed the next day.
So the first day a lot of people tuned in, Piera, who you’re going to interview, she’s our other co-founder, also I’m married to her, and she had been working at a magazine called City Magazine. And it was decided that we’re going to send 2000 emails that City Magazine also had as their subscriber base a note about Refinery 29. So we got our first small spike. And these were also the days where… and this is before social media. These were the days where good old solid outreach to a lot of different blogs yielded a lot of return. People clearly saw that we put a lot of effort into it, decided it looked cool. It had a point of view. The design was really next level. And so a lot of people wrote it up.
And that became actually sort of our first lesson in marketing and getting the word out there. The product looked good. People are always interested in writing and covering something that is differentiated and sort of unique. And yet we were often running. And we celebrated that night at a bar called the Union Pool with pizza and beers.
Justin: It’s really funny about that time too. Because the question that you asked is really funny because today you know with a fair degree of accuracy how many people come to your site on any given day. Or any given hour or minute. But back then also the reporting, the actual data reporting products were so-
Justin: Yeah. Primitive.
Nathan Chan: There was no GA.
Justin: So a lot of it came down to like did you feel it did well. Did you get emails from people saying they saw it because the actual first party data was, again, it was so primitive. I didn’t even think they… they wouldn’t even break out audience or people. You would get a report that told you hits. When was the last time anyone spoke like hit?
Philippe: Hits or impressions? I think it was totally misleading because we thought we had like 50000 visitors or something like that. But it was like-
Nathan: Google trolling hits.
Justin: Yeah. It was Google trolling your site and it kind of did the hits. We saw the first report. We were like, “30000 hits.” And then after the fact learned that 30000 hits meant like five visits.
Nathan: Yeah. Well there you go. So what happened next? You had a celebration. At what point did you guys leave your jobs? At what point did you start putting banners on the side and kind of work out that monetization piece? Because there’s four of you guys. That’s for people that you need to take a salary.
Philippe: So I was actually the first to quit my job. I’d lived in DC and I was working for a political startup called the Globalist, and then Justin quit his job and Christene and Piera afterwards. Look, we were so young and in some respects naive, but it was also the beauty of it because it was sort of let’s just go do this. The monetization model was definitely not fully explored by the time we launched. By the time we did get Refinery up and running we’d started to meet with people who both understood the ad world, and then because we’re dealing with products we’d also started to educate ourselves about sort of commerce and marketplace.
And both of those worlds were pretty new. And so we were basically a balancing back and forth, what was the more interesting business model. And the ad model at first barely yielded anything. These were days where you could grab like affiliate banners or other performance marketing banners from third party websites and run them on your site. And it yielded like cents. And the revenue that we saw…
Actually the first thing that we saw, probably the most important thing that established us on our trajectory, was that we would have content and from the first day we were proud of our content with these very cool features like the section about products called Spotlight. We had a section called Neighborhood Watch that was all about cool things to do in different parts of town as told by really cool creative people. And the products that would feature would sell out like overnight.
Nathan: So yeah. When did you guys add the marketplace to the site? Was that early days?
Justin: Late 2016. So I think we launched November-
Philippe: Six. You’re getting your decades wrong.
Justin: Gosh. Sorry. This is how long we’ve been doing this. 2006-
Nathan: Okay. Wow! So only like-
Justin: … we launched the marketplace. And that was actually we first raised capital too. So we raised a very small amount of seed financing at the beginning of 2016 specifically to launch the marketplace because that was a more expensive product to build because we had a shopping cart and have customer service and it required just a lot of manual work to get it up and running.
Nathan: Before I get to that, let’s look on the fast forward to now and give people like a picture of where you guys are at. You’re consistently the Inc. 500, always growing super fast, and a lot of media startups are really, really struggling. So can you just kind of give us a snapshot around the users, team, traction just for clarity for everyone listening?
Philippe: Sure. So fast forward 15 years from those early beginnings and the marketplace we have a very large audience that we’ve nurtured over 15 years that comes to us directly, close to 30 million of them, mostly women. We exist on all the various platforms from YouTube where we’ve really broken out over the last few years, to Instagram with millions of followers, to our email newsletter that close to 2.5 million people get every month. And the audience has been the single most important focus and staying committed to that audience. And clearly everything that’s happened in the world at large has sort of snowballed our commitment to serving women amazing content over the last five or six years.
We have our studio business, which is sort of the upper echelon of video content where we create content that we produced in partnership with networks and streaming services. And we have our life events business, which is 29Rooms which we have to talk about. It started actually as a seedling of an idea at our 10th anniversary party where last year we had close to 100000 tickets sold to four events and which we’d just announced a big partnership for. So our belief is that in this moment to really build a long-term sustainable brand in this space you have to really mean something to your audience. You have to have scale. You need to be global. You need to be able to service your partners in a multitude of ways, and you need to have a direct connection to your consumers, which to us has been the events business.
Nathan: Yeah. Interesting. So talk to me around the new media model. You guys have a more kind of new style media business model. As mentioned previously, a lot of media companies are struggling. How do you think… if somebody wants to start a media company today what are the things that they should be thinking about? Yes, you can create a site. You can spin it up in WordPress. It won’t cost you that much money. Yes, you can write the content. You can put it out yourself. But what are the things that people need to be thinking about from not just a content generation perspective but then also making a viable, sustainable business model out of it?
Philippe: Can you get that?
Justin: Yeah. Well, look, I mean, the first thing that you have to start with is you have to believe that there’s a need in the market or in the world for your voice, right? Or for whatever the vertical is or the category that you want to develop. And I think if you go back to when we started one of the things that really, really, really helped us early on and allowed us to really kind of build a brand in a market that was pretty crowded at the time… I mean, in 2004, 2005, there was a lot of media companies that existed, not as many digital media companies, but still a lot of media companies.
But there was a very, very specific need or there was a gap in the market around what Philip was describing earlier, which was kind of independent voices, independent fashion, independent style. Most of the media companies that existed, most of the magazine businesses we’re fairly mainstream. And they would write about big designers that bought pages in their magazines. That’s how the market was. That’s how the model worked. And what we knew is when we read these magazines and when our friends read these magazines they felt totally disconnected from the content that was actually being covered. They didn’t think it was good. They didn’t think it was interesting. It was just what they were forced to read because that’s what you could buy at a newsstand. And there wasn’t a lot of choice outside of that.
So we were really focused on how is the brand different? What does it mean in the world? What kind of value are we creating for our readers and our audience that they’re not able to get in other places? So there was a real purpose for it existing in the first place. So I think anyone trying to start a media company you should always start with answering that question. Because if you can’t answer that question then what you’re building isn’t going to have legs long term. You’re going to be just focused on getting eyeballs but not building a real relationship and not solving a real problem. So I think that’s always where you need to start.
And then once you identify what that is then you have to then back into, “Okay. So then what are the best ways for me to get this information and get this content to my target audience?” Maybe I want to start my media company as a live events business and then start building content out around that because connecting to people in the real world is more effective based on the value that I want to create again, for the audience, or maybe it’s best to start it on YouTube or on Snapchat. So it really depends on I think or will come out of that answering that first question, which is what is the problem that you’re trying to solve.
Nathan: And when it comes… So people should choose one channel, podcasts, video, written, they should just use one modality first do you think?
Justin: Well, at the beginning you have to be focused. Unless you have raised a whole lot of money and you’re able to go and fund 10 different things at once you have to be focused. I would argue even if you have done that you still need to be focused. And so I don’t think that we would ever recommend to anyone that if they were going to launch a media company that they should try and launch on 10 different platforms at once. I think you would say figure out what’s the platform that’s going to be the most important to you and to the brand that you’re trying to build, and then after you developed a really strong foothold there then you can think about expanding from there into other channels.
Nathan: I think a lot of people get quite obsessed with what the model should be, how do they make money very, very quickly. If you are bootstrapping at what time should you even consider kind of turning on that dial, that monetization dial, and how do you work out what it should be?
Justin: Well, our approach was that we wanted to get to break even as quickly as possible as a business when we launched because we didn’t raise… again, we didn’t raise capital and we had to eat. And so we were very scrappy at the beginning about how we made money to do that. We sold ads. We did live events. We would do sample sales. We would do lots of different activities that allowed us to, I don’t want to say kick the can on the bigger, more scalable revenue model but things that allowed us to take time to really be more thoughtful about what that could be longer term. And so for the first five years that we were running the business, four to five years, the revenue growth was pretty slow but it was very consistent and predictable.
Justin: And then what happened is when you look at it, the first five years of the business we went from zero dollars of revenue to about $1.7 million of revenue. And then in year five we hit on the fact that we believe that there was a big opportunity to grow the branded content native advertising business for us. And that was the moment when we decided we would going to go out and raise capital. And we did that. And in that single year the business went from 1.7 million of revenue to 8.9. So it just entered hypergrowth scale or its hypergrowth cut a period. But it took us five years to get there. I mean, it was not a fast journey.
And I think that a lot of people have this belief that you launch your business and within 18 months you’re going to be on fire. But often it takes far longer, years. And I would say it took us probably 10 years before we really felt like we had a business that was here to stay.
Nathan: Traction. Yeah. Interesting. Yeah. Something that one of my mentors shares with me is he says like, “Nathan, it takes 7 to 10 years to build anything of true worth and significance.” And if you’re not prepared to go on that journey then you shouldn’t be-
Justin: So true.
Nathan: Yeah. You shouldn’t be doing what you’re doing.
Justin: So true.
Nathan: Let’s come back to that business model side. What do you guys think is the model that traditional media companies that are transitioning to digital or want to get into the digital space or they might be struggling or new media companies, what is the ultimate model you guys guys believe? Is it a combination of paywall? Is it native advertising, advertorial mixed in? Is it banners? Is it live events? Is it a combination? Is it commerce? What do you think people should be thinking about?
Justin: First of all, it comes down to your ambition, right? It’s very easy to create a great content destination. It comes down to like what you want to do with it. Do you want to create the next huge media company or is it your ambition to something this smaller. But obviously if it is to really build a big business then the important thing to remind yourself of is that through history successful media has had multiple revenue streams, right? So for the TV businesses it has been advertising and collecting affiliate fees for every subscriber, and the same for the magazine industry who obviously had a big subscriber base and then advertising business.
And the challenge in this current environment is that advertising has become the primary revenue channel for most businesses in this space. And then on top of that advertising has been a really challenged space as is evidenced by people talking about Google and Facebook. Now Amazon is swallowing up most of the ad dollars that flow into media. So those are the dynamics. So that goes back to what Justin was saying with regards to, hey, the first important thing is are you actually serving someone and is there a distinct need that you’re addressing, right? Without that all bets are off, which is why there’s actually a really interesting moment to focus on sort of niches, specific things that really appeal to a segment of the population. Like World Surfing League is an example, something that is just so clearly defined.
So that’s at the heart of it. And then can you build scale? Can you build an audience around that? Do they come back to you? Clearly advertisers will want to be there because they feel like they’ll be able to cut through the noise. Then its down to what you think is the sort of the best mode of monetizing for the business that you’re getting in. In our case subscription and pay wall, which has become sort of like a big thing, is not quite right because all content is more in the lifestyle category and doesn’t lend itself to that type of business model. But we have 100000 people who are buying tickets from us for life events and are there opportunities to give people access to more special things and products, it’s something that we’re thinking about.
So there’s sort of a range of things, and it comes down to what you’re really after, what you’re really tried to build. But more so than ever the sort of the rallying cry is out to figure out how you can diversify your business. And if advertising is one strong revenue stream what is something that is going to be of a similar size and proportion?
Nathan: We have to work towards wrapping up. Two more questions. One, what are you guys really excited about for the future at the moment, and I guess where’s the best place people can find out more about both of you guys and your work?
Justin: For the future?
Nathan: I want to know where I can find out everything about you.
Justin: No, I’m not going to answer that part of the question because you talked about the future. I mean, there’s a couple of areas in our business specifically that we’re really excited about over the last couple of years. One is the studios and the originals business. It’s a real passion, I think, of everyone in the building, and we’re making some really, really, really amazing and important work that’s coming out of that shop. So that scenario that were super enthusiastic about, the international business, is amazing right now from a growth perspective.
But more so even forgetting about the growth from a brand perspective, the work and the content that we’re now able to produce globally is just so inspiring to everyone here, everyone in North America, and it’s just creating a bigger platform for us to make bigger impact globally. So that’s another area that we are super, super enthusiastic about. Live events, that would be another area.
Nathan: Awesome. Well, look, thank you so much for taking the time to speak with me. It was an absolute pleasure. I think people have got a ton of value from this conversation.
Justin: Thank you.
Philippe: Thank you for having us.