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Medium’s pivot and the inherent instability of new businesses

posted by Jason Kottke   Jan 05, 2017

From this piece by Evan Williams, it sounds like Medium is still trying to figure out what it wants to be when it grows up.

So, we are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people. And toward building a transformational product for curious humans who want to get smarter about the world every day.

It is too soon to say exactly what this will look like. This strategy is more focused but also less proven. It will require time to get it right, as well as some different skills. Which is why we are taking these steps today and saying goodbye to many talented people.

I like Medium and read thoughtful & engaging stuff on there daily, including articles by the many publications that moved their entire publishing operations to Medium and who were caught off-guard by Williams’ announcement:

As part of the strategic pivot, Medium will lay off 50 staffers and close its satellite offices in New York and Washington. It will also stop selling “Promoted Stories,” its native ad unit, and distributing revenue from those sales to publishers.

Medium’s exit from the online ad business was news to some of its publishing partners, many of whom have come to depend on the publishing platform as a key source of revenue. More than two dozen publications are members of Medium’s revenue beta program, which allows them to sell paid subscriptions to readers and to receive a cut of Medium’s native advertising revenue.

Five members of the revenue beta program told POLITICO that they did not receive any advance notice of Medium’s change in strategy before Williams’ public announcement. One publishing partner only learned about the pivot after reading an article about it on the tech news site Recode.

Over the past year, when I was thinking about how best to steward kottke.org into a financially stable future, moving to Medium was definitely an option. But never, in my mind, a very serious option. It was just too many eggs in one basket for a small publisher like me, especially when Medium is still obviously trying to figure out if they’re even in the egg-carrying business. New businesses are unstable…that’s just the way it is.1 In Silicon Valley (and in other startup-rich areas), these unstable businesses have lots of someone else’s money to throw around — which makes them appear more stable in the short term — but they cannot escape the reality of the extreme risk involved in building a new business, particularly a business that needs to grow quickly (as almost all VC-backed startups are required to do). All of which can make it difficult to enter into a business arrangement with a startup…just ask publishers working with Facebook or businesses dependent on Twitter’s API or Vine or Tumblr, not to mention the thousands of startups that have ceased to exist over the years.

With kottke.org, even though it hasn’t been easy, I’ve opted for independence and control over a potential rocketship ride. Instead of moving the site to Medium or Tumblr or focusing my activities on one social network or another, I use third-party services like The Deck, Amazon Associates, Stripe, and Memberful that plug in to the site. Small pieces loosely joined, not a monolithic solution. If necessary, I can switch any of them out for a comparable service and am therefore not as subject to any potential change in business goals by these companies. Given the news out of Medium, I’m increasingly happy that I’ve decided to do it this way (with your very kind assistance).

Update: It’s tough to hear about the small companies that put their faith in Medium and then got blindsided by their umpteenth pivot.

“Right now, we’re very concerned about the future of our site’s partnership with Medium,” said Neil Miller, the founder of pop culture site Film School Rejects. “What we were sold when we joined their platform is very different from what they’re offering as a way forward.”

“It’s almost as if Ev Williams wasn’t concerned that he was pulling out the rug from underneath publishers who had placed their trust in his vision for the future of journalism,” he said.

  1. I will add that new services by large companies are unstable as well. They need to reach scale just as quickly as VC-backed startups or they don’t stick around that long or pivot to something else.

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