Rafat Ali on how b-to-b startups can “punch above their weight”

Rafat ali
                      Rafat Ali

Jan. 15, 2013 -- During a session at Folio:’s MediaNext Conference last week, paidContent founder Rafat Ali (who sold his first startup to Guardian Media in 2008 for a reported $30 million), shared how he’s growing his new b-to-b startup, Skift, with a combination of technology, partnerships and “hustle.”

The key for Skift, said Ali, is balancing multiple revenue streams (advertising, paid content and data) and multiple sources of content (enterprise reporting and aggregation) while leveraging technology to drive scale.

Ali, who will be a featured speaker at ABM’s upcoming Annual Conference, April 28-30 in Amelia Island, Fla., says that many b-to-b verticals are poised for disruption. “The media industry is in the third wave of disruption,” said Ali. “In the travel industry, we really haven’t experienced that yet.”

Content and design: Enterprise, aggregation and mobile

In addition to Co-Founder and Head of Content Jason Clampet, Skift employs two content producers and a “head of data.” About 30 percent of its content comes from aggregation services such as NewsCred, which pulls content from sources such as Associated Press and Bloomberg.  

However, striking the balance between aggregation and enterprise reporting is critical to building the brand. “If it’s just licensed or aggregate, you’ll get killed by Google,” said Ali. “And you can’t go with all original reporting because that requires too many people.”

The Skift site offers multiple entry points including the “Skift Take”—a short summary at the top of each article as well as Twitter feeds that enable readers to follow specific topics and themes as they evolve.   

Understanding how audiences are accessing your site is key. While just 33.3 percent of b-to-b websites are mobile-optimized, according to an ABM/Outsell report on the state of mobile in b-to-b, “Having good design helps you punch above your weight,” said Ali, adding that mobile accounts for is 20 to 25 percent of Skift’s traffic. “Our site is not responsive design, but it is mobile-friendly.”

Advertising and data: One supports, the other sells

While Skift is ad-supported (and targeting a much broader advertising base in travel than Ali did in media with paidContent), data and information services will be the real core. “Data services are where we see the future, media is the way to build the brand,” said Ali. “I don’t think the banner will completely go away, sponsorship on vertical sites is strong and we’re looking at subscriptions as well. We’re not at a scale where we can be completely ad-driven.”

While many b-to-b media companies are adding data and information services via acquisition (the b-to-b media industry saw a flurry of data deals in 2012 and 2013 kicked off in similar fashion, with Hanley Wood buying Metrostudy, a provider of market information to the housing industry, and PennWell buying the data and subscription services of Energy Central), cash-strapped startups don’t have to be left out in the cold. In addition to in-house efforts, Skift is taking raw data, often compiled and made freely available by the government, and turning it into business intelligence.

Data, developers drive investment today

Skift attracted more than $400,000 in angel investment, including from media notables such as Alan Meckler and Gordon Crovitz. However, being a dotcom is no longer enough to get investors to open their wallets. “If you can figure out the data product, it’s easier to get funding,” said Ali.

And don’t scrimp on your technical personnel. “Investors today require you to have a lead developer,” he added.

By Matt Kinsman