What this summer’s 4 hottest media startups learned from last year’s newcomers

A song to read by: "It's My House," by Diana Ross

What I’m reading: "Forget the Alamo," by Bryan Burrough, Chris Tomlinson and Jason Stanford

Deja vu

Last summer, a mix of factors led to an explosion of new, subscription-funded digital startups, including Defector, Discourse Blog, Study Hall and The Dispatch, among others.

I wrote about their rise almost exactly a year ago, pegging much of their momentum to a new train of thought that I largely attributed to Substack. The newsletter platform had empowered writers by revealing the true market value of their craft, demonstrating that, if a writer had a sizable enough following, they and a few others could bankroll a nimble media upstart on subscriptions alone.

That realization, combined with a harrowing wave of lay-offs that left a lot of talented journalists unemployed and with ample time on their hands, led to an upswell of independent media publications. Many started with next-to-no money; their websites, many of which were built by Alley, Lede or Pico on a layaway payment plan, were spartan and paywalled.

In a year that saw something like 36,000 journalists lose their jobs, the new startups were hailed as a way forward. The digital advertising market had cratered, but if 15 journalists could convince 3,000 people to pay $10 a month, they could start a company.

Fast-forward a year, and you can still feel the reverberations of last summer. All four publications are still kicking, albeit some more strongly than others.

More to the point: The model they pioneered has stuck around, but it has grown up. A number of new publications have announced their launch in the last few months, and they share key similarities — and a few differences — with their forebears from a year prior.

The similarities

These publishers, Puck, Off the Record, Confidential and Charter, cover wildly different subject matter, but they share DNA with the media startups that emerged during the pandemic.

(For reference, Puck covers "the nexus of power" between Hollywood, Wall Street, Washington and Silicon Valley; Off the Record will cover the media industry, first in New York; Confidential will cover policy, geopolitics, technology and science; and Charter will cover "the future of work.")

For one, they are all small staffs, populated mostly by premiere journalists with sizable personal followings. Puck, Off the Record and Charter all have head counts ranging somewhere between eight and 20. Confidential, which is operating under its mysterious nom de fundraise until it officially launches, seems to be amassing a larger team than the others based on its job openings. Axios reports they are aiming for 60 by year’s end, but still: None of these publishers could fill an office floor.

The Substack revolution has imparted the lesson that, if the journalists you hire bring sizable enough followings with them, the fewer you need to launch the better. Start small, then hire up as your budget increases.

Speaking of Substack, the second thing these publishers share in common is their vocal emphasis on subscriptions. Puck and Off the Record have both begun encouraging readers to subscribe — before either has officially launched — and Charter cofounder Kevin Delaney told me for an Adweek piece that he hopes subscriptions will constitute about a third of total revenue.

I am less sure how emphatically Confidential will embrace subscriptions. One of its principal cofounders, Laura McGann, is a student of the Vox Media school, which generally considers paywalls anathema.

The final thing they share in common: an affinity for newsletters. Several of the Puck writers have launched independent newsletters while the publication gets off the ground, where they have already started reporting on their areas of coverage and banging the Puck drum.

Charter was built out of a newsletter, originally called Reset Work, that had 20,000 free subscribers a few months ago. Delaney et al. must have been reading Medialyte, because they used the newsletter as the minimum viable product for their larger idea.

Off the Record and Confidential have not launched any newsletters yet, to my knowledge, but I imagine Off the Record is tinkering with one as I type, given its subscription-based structure. While Confidential has yet to launch any email products, I am sure they are soon to come as well.

The differences

If Defector, Discourse Blog, Study Hall and The Dispatch were Laika, the stray dog the Soviets launched into space in 1957 to see what happened, Puck, Off the Record, Confidential and Charter are the Apollo program.

While they share a similar structure, the media startups of 2021 are far better funded, financially diversified and better connected. Last year’s cohort proved the model worked; this year’s cohort hopes to make it work comfortably.

Their first primary difference is financing. Whereas last year’s newcomers were largely bootstrapped affairs, Puck and Confidential have both raised capital, $7 million and $10 million, respectively.

Charter is self-funded, but it has already sold a number of sponsorships and is certainly benefiting from the cachet (and deep pockets) of its media-famous founders, Kevin Delaney, Jay Lauf and Erin Grau. Off the Record alone seems to be roughing it.

The 2021 cohort also differs in its business model, a key difference and what I predict will become more common among media startups.

Puck plans to make most of its money from subscriptions, but it brought aboard Condé Nast's Liz Gough as co-founder and chief operating officer to manage its business operations, b2b marketing and advertising. If the subject of its coverage — Hollywood, Wall Street, Washington and Silicon Valley — is any indication, I imagine there will be no shortage of money thrown around.

Charter reigns supreme in this arena, as it plans to monetize not only through subscriptions and sponsorships (read: advertising), but also consulting. Because it covers “the future of work,” and because its trio of cofounders command respect in the industry, it will no doubt enjoy a steady stream of floundering businesses willing to pay for advice.

From Charter

Again, in this regard I have little insight as to the deeper financial strategies of Confidential and Off the Record, the latter of which will probably resemble its 2020 ancestors in its focus on subscriptions.

Given what we know about Confidential, it is not a stretch to imagine that it will rely primarily on advertising, perhaps with reader donations, b2b partnerships and other Vox Media-esque tricks up its sleeve. While it might not employ subscriptions, everything else under the sun is probably fair game.

The final departure between the two classes of summer startups is the pedigree of their founders. I love everyone involved in Defector, Discourse and Study Hall, in large part because of who they are: scrappy, talented outsiders trying to improve a broken system and write amazing things in the process.

They proved an unproven system — not a task that typically falls to people with a lot to lose. This year, though, with the viability of a subscriptions-based, small-staffed, niche publisher proven, the established players want in.

The figures involved in all four 2021 startups come from powerful places and have close connections to money, power and favor. Puck, Confidential and Charter, especially, have recruited many of the top editors and writers from top publishers across the country. In many cases, their staff left jobs to join these upstarts, whereas many of the 2020 cohort were motivated by the job losses of last year.

These factors are all intertwined, of course: Puck and Confidential were able to raise money, in part, because of the vaunted places they sprang from and the moneyed subjects they cover. Teddy Schleifer, a Puck reporter whose newsletter I have been following, writes about billionaires’ plans for world domination with the kind of dismissiveness I would bring to a grocery list.

In summation

Make no mistake about it: the work of last year’s media upstarts paved the way for a new class of nimble publishers. This time around though, the newcomers are better-resourced and have a clearer picture of what it will take to survive. They also have the good fortune of launching in a climate that is far more hospitable to focused publications with clear visions.

I would like to see the revolutionary spirit that typified the 2020 entrants continued to some degree, and in some ways it is. Puck is worker-owned, and Off the Record has a brawling tone set for its coverage. Confidential, too, plans to focus on policy, geopolitics and technology, three areas where we can use all the truth-to-powering we can get.

But many of the same characteristics that made the path to longevity a long shot for the 2020 cohort — no outside funding, mission-oriented, fiercely writer-centric — have been blurred a bit this time around. Hopefully Puck, Confidential, Charter and Off the Record will strike the right balance between calculation and experimentation.

Maybe next year, we’ll check in again.

Some good readin'

— I wrote about how publishers, many of whom began planning for a return to in-person events this fall, have responded to the delta variant. (Adweek)

— I spoke with the fine people from Newsletter Crew about the process and thinking behind my newsletter! (Newsletter Crew)

— This Olivia Nuzzi profile of New York Post tabloid icon Cindy Adams is so, so well written. I laughed out loud like seven times. (The Cut)

— If you have 30 minutes, love good writing and have ever wanted a definitive chronicle of the history of Asian-American female musicians, here you go! It also has a great Spotify soundtrack attached to it. (The New York Times)

— I was just put on to Michelle Lhooq, and she appears to be a genius! Don't be surprised if a lot of people reevaluate their relationships to drugs, alcohol, sobriety and revolution after the pandemic. (Rave New World)

— Why do tech leaders disdain fashion? One of my favorite technologists offers a hypothesis. (Real Life Mag)

Cover image: "Squares with Concentric Circles," by Wassily Kandinski