Medium CEO explains what it takes to stop losing $ 2.6 million per month

Mediterranean CEO Tony Stopbin Declare On Friday, the publishing platform has been profitable since August last year, when This first teacher achieved for the first time. in mailStublebine detailed what it requires to achieve this goal, which included a set of product changes, restructuring the investor, re -negotiating loans, emptying office spaces, laying workers, and other hard costs.

Its publication offers a deep diving as necessary to start operating to make the difficult options to be taken.

According to Stublebine, the company lost $ 2.6 million per month when it joined the year 2022. He was also losing the subscribers, was outside the financing of investors, and lacked one of the two.

He said this left the company with only one option: “Make a profitable or closed average.”

The difficulties of the platform, in part, arose from its business model, which provided one subscription that any writer can share. The company has also tried to bring high -quality professional editorial content, which studblebine said was that he began to draw attention away from his book “From the Book” From Amateurs on the Platform. “

When he joined the CEO, Medium 760,000 membership topped but losing money every month. He said that Stublebine had to get the company out of that hole. At the front of the product, Medium provided a way to add human experience to recommendations with EnhanceI changed Partner program incentives To reward the studied writing, added a Incorporate The tool that allowed publications to promote and promote other interest stories.

Regarding financial resources, the Mediterranean was owed by $ 37 million in loans, and its investors carried $ 225 million of liquidation preferences (which means that investors will restore their money before the employees see returns). Her governance was also very complicated and required obtaining the investor approval from five separate slides before making the main company’s decisions.

To correct these problems and oaths the ship, the average balance restored its loans, destroyed its liquidation preferences, and simplifying its judgment on only one segment of investors. It also sold two acquisitions and closed a third.

Critically, Medium cleans its maximum table by re -negotiating with investors, which Stublebine did not immediately want to do it. But after one year since the idea was raised for the first time, the CEO realized that this is what it takes to save the company.

“The restructuring of the investor has been asked for a little sweet spot. Work had to look good enough to save, but not so good that there were other options,” he pointed out.

“The case that I made to loan holders is to convert their loans into ownership rights or their administration, and then to create enough ownership for them by going to the rest of the investors under the sake of the summary,” explained by Stublebine. Six out of 113 investors participated in the summary, as the investor’s shares were reduced and special rights such as liquidation preferences and governance roles were abandoned. (He also shouted to VCS who was easy to work with as partners, including Ross Foubini in XyzMark Sotter in advanceand Greylockand sparkAnd A16Z))

The average has also had to reduce costs, by layoffs – from 250 people to only 77 people – and through engineering improvement, whose cloud costs reduced $ 1.5 million to $ 900,000. It also finally got out of the lease contract that witnessed $ 145,000 per month for a 120 -disk office in San Francisco. Employees have given new ownership rights since their current ownership rights after the “Insect round” that is likely to be value.

The platform, which is valued at $ 600 million, has not participated in its new evaluation as a result of all these changes, but it is much lower, of course.

“… I do not have the ego about what our current evaluation,” studblebine books. He said: “But I will not tell you also because I do not want to use as a comparison point with other startups. We are profitable and not. This is a comparative point that serves us better.”