Carly Zakin and Danielle Weisberg, founders of theSkimm, explain why they chose to forgo advertising at first and bet on customer loyalty instead.
At 6 a.m. every weekday, over 5 million people open their email to find a message from theSkimm, a subscription newsletter that chooses the most important news stories of the day and presents them in casual, bite-sized points.
TheSkimm's founders, Carly Zakin and Danielle Weisberg, sat down with Business Insider US Editor-in-Chief Alyson Shontell for an episode of Business Insider's podcast, "Success! How I Did It," to talk about their battle stories, how they eventually got investors on board, and how theSkimm took off.
When they started the company in 2012, they told Shontell, investors were turning them down left and right. However, someone was willing to help them generate revenue: advertisers.
"From truly Day One — maybe let's not be hyperbolic, let's just say Day Four — we had brands reaching out to us, like our wish-list brands," Zakin told Shontell.
But they "knew nothing about how to work with an advertiser," she said. "So instead, we said, 'We're actually not working with brands right now.' By doing that, I think we created a little bit of mystery. Our list kept growing. There kept being more press about how big our list was and who the audience was. And we weren't letting brands in."
From early on, she explained, they placed "a long bet on loyalty."
"What can you do with loyalty?" Zakin said. "How do you develop a community, get people engaged? And from there, you can activate them and, in many ways, directly monetize that."
As their subscribers ballooned to 150,000 in less than 18 months, some investors started changing their tune.
"Once we got that first big check — we raised just over $1 million — it was life-changing," Zakin said. "We took a picture of it in our bank account."
Then they started considering working with sponsors.
"We have a media business," Zakin said. "We work with sponsors in a really needed capacity, and we're really great storytellers with that."
While the founders declined to provide exact numbers, Zakin says they're "proud to say that we do very well." Today, theSkimm:
- Has raised more than $15 million from venture capitalists.
- Launched a subscription news product, Skimm Ahead ($2.99 a month), which the founders told Shontell was No. 1 for news apps in its first month and "continually beats" The New York Times and The Wall Street Journal in highest-grossing news apps every month.
- Recommends a book and a bottle of wine every Friday for which they receive affiliate revenue. Publishers have told the company's founders that a recommendation from theSkimm is the top driver of sales.
Beyond revenue, theSkimm says it was also responsible for spurring 120,000 people to register to vote in the last election, becoming one of the biggest partners the nonpartisan group Rock the Vote has ever had.
It all comes back to reader loyalty, where the founders placed their bets early on.
"We would much rather say, 'We have 5 million people we activate and get to pay for a subscription product,' or, 'We can get them to turn out in the hundreds of thousands to vote,' than say, 'We've got 20 million of them, but only 2 million of them open us every day,'" Weisberg said. "That's not interesting to us."Carly Zakin and Danielle Weisberg, founders of theSkimm, explain why they chose to forgo advertising at first and bet on customer loyalty instead. Read Full Story