Danny Rimer of Index Ventures and Flipboard founder Mike McCue go back a long way. Their paths crossed when McCue founded his first company, Paper Software, which made learning about computers as easy as using a piece of paper. “He was the one who discovered me and referred me to Marc Andreessen at Netscape,” says McCue. Paper Software was eventually bought over by Netscape in 1996. When McCue informed Rimer of his decision to leave Netscape in 1999 to start another venture, Rimer wrote him a cheque of $25,000 without even asking him what his plan was all about. In 2000, McCue launched Tellme Networks, which allowed users to find information on the internet using a telephone with simple voice commands.
Eventually, Microsoft bought over the company for $800 million. But McCue left Microsoft two years later as his entrepreneurial zeal got the better of him. This time, Rimer wrote a $2.5 million cheque, again, no questions asked. “From the first time I met Mike in Woodstock, NY, in 1995, I knew I wanted to be in business with him because he’s a combination of a visionary and a do-er. He is laser-focused on building something transformational and his passion and ability to execute are second to none,” opines Danny Rimer, partner, Index Ventures. Rimer’s confidence wasn’t misplaced, as McCue’s third venture, Flipboard, promises to change the future of publishing by bringing print-level economies to the digital platform.
The seeds for Flipboard were sown in the summer of 2009, when McCue was reading a National Geographic article. He had seen the article online earlier and recalls it as being “much more beautiful in print”. Passionate about building products and teams, McCue was toying with ideas and protoyping some products. He asked his friend Pam Heart to find him an iOS engineer who could develop his products further. She helped him hook up with Evan Doll, who was already taking iOS developer classes at Stanford University and enjoyed a huge fan following, with over 2 million people downloading his classes.
Soon, Mike realised that Doll was not just a guy he could develop products with but also someone with whom he could start a business. Doll introduced him to Twitter and brought a lot of thinking around how social media was creating a web of its own. As they began to see social and print media beginning to converge, Doll and McCue worked on some ideas. “We would brainstorm on how we would rebuild the web from scratch if we had to do it all over again today. Knowing that things are moving to mobile devices, we brainstormed about what the new web would look like and the culmination of those ideas was Flipboard.”
They had originally planned to build it as a website, as the iPad hadn’t been launched back then, in October 2009. “Our focus is to make great content thrive in a digital environment. It is harder to subsidise great content with advertising as ad banners don’t fetch good money. Besides, they eat into the content space and create a messy environment,” points out McCue. He was worried that Flipboard would become yet another website. “A lot of the ideas were based on new UI experience and I was worried people would not get it,” he adds.
By then, the buzz around iPad had reached a frenzy. The team decided to wait till the first iPad was shipped out and then build the product for the tablet. By the time Steve Jobs shipped the tablet in January 2010, both Doll and McCue were incredibly excited. They instantly downloaded the software development kit and started working on their application.
The intention was to build the world’s ultimate personal magazine by putting together a person’s social network, people that he or she was following and his or her friends. “Flipboard goes beyond just reading. It’s a platform for curation and sharing. People don’t just read, they collect and save content they find on Flipboard and share it in a way that expresses who they are,” says Rimer. It’s like getting a magazine delivered to you everyday with only the articles that you want to read. “The only guy who gets that is President Obama. He gets the presidential daily brief and it would be great if we could get that to work for everybody,” quips McCue.
While the duo came up with the basic idea, they hadn’t come up with a name. Doll said it had to be flip-something to mimic the way people flip through a magazine. The next day, McCue came up with the second part of the name and they decided to call the company Flipboard, just like the name boards that flip down at a train station. They loved the name because there was something real-time and tangible about it.
Once the name was in place, they debated on the mechanics of how people would go to from page to page, whether the pages should slide or curl. They wanted it to be an iconic animation. During the search for the right gesture, an engineer on the team mocked up train station flip-boards, but instead of flipping them down he put them together side-by-side and made the swipe gesture the page turner. It was difficult to implement and there was a lot of coding that went into making it happen, but once complete, they knew they had a winner on their hands.
Flipboard made its debut in July 2010 and the company has grown in strength, clocking almost 90 million users. You can download the app across mobile operating platforms iOS, Android, Blackberry10 and, more recently, Windows 8. Flipboard is now also available on conventional desktops as well. There are 19 localised editions for the UK, the US, India, Italy, Japan, West Asia, Latin America, Hong Kong and France, with more than half the users coming from international markets.
While there are more 4.5 million magazines globally, several large publishers such as the Financial Times, The New York Times, BBC, Condé Nast titles Vanity Fair, Glamour, Bon Appétit and Details and Time Inc with Fortune, Time, People and Instyle are some marquee names that work with Flipboard. In March, Flipboard not only allowed its users to browse through magazines but also curate their own by collecting articles they found interesting. You can get news across categories such as politics, travel, sports, food, technology and business to source articles from. Besides creating your own magazine, Flipboard now also allows users and brands to create catalogues of products to promote e-commerce. Brands such as Levi’s have their own magazine, where not only can readers browse through content but also shop and buy the latest collections if they want to.
Flipboard’s revenue model is pretty simple: it gets a percentage of ad revenues on its platform. This is how it works: publishers can sell full-page ads on Flipboard to big brands like they do in print and for every ad that they sell, Flipboard gets a share of the revenues. While McCue declined to discuss specific revenue numbers, he says ad revenues are in tens of millions of dollars already. “Until Flipboard came around, there was no great display or awareness advertising capability related to the internet. With Flipboard, brand advertisers can have as — or even more — compelling advertisements online as what you see in glossy magazines,” says Rimer.
“Our business model will only be successful if publishers are successful. We want to make it a win-win for everyone. The publishers will generate more revenues for articles and mobile devices,” says McCue. But not everyone is buying the argument. Several small publishers are still unable to monetise their inventory because they are too niche. In fact, three publications — New Yorker, Wired and TPM — have pulled out of Flipboard, saying they don’t want their content routed through an intermediary.
Top 10 publishers
While their content is still available on Flipboard through links, readers need to go their website to read the full-length articles. McCue says Flipboard is working on enabling smaller publications with smaller audiences to be able to sell ads and they should be able monetise their inventory from next year, now that they have a paywall capability and a sales team to help them.
Even as revenues are scaling up, Flipboard has always been a favourite with investors, given the pedigree of its founders. The company has raised $110.5 million in funding from marquee investors such as Kleiner Perkins Caufield Byers, Rizvi Traverse Management, Goldman Sachs, Insight Venture Partners, Index Ventures, Twitter co-founder Jack Dorsey and Hollywood star Ashton Kutcher, fetching it a valuation of $800 million.
McCue, however, feels that Flipboard still has a long way to go. “We are crafting an amazing product but on a scale of one to 10, we are still at one-and-a-half,” he says. The company’s future plans include making layouts more personalised and structured and enabling users to buy music and videos, besides improving the discovery of magazines that are already present on Flipboard. “I am hopeful that Flipboard will help make great journalism thrive in the digital world,” he says. Quoting Victor Hugo, who said there is nothing as powerful than an idea whose time has come, McCue believes that while his earlier two companies may have been ahead of their time, Flipboard couldn’t have come at a more opportune moment in the digital world.