It’s a common criticism of popular Web services that don’t yet make a lot of money: Where’s the business model? That criticism has certainly been lobbed at Tumblr, the short-burst publishing platform all the kids are flocking to these days. Tumblr generates billions of pageviews across its networks and is growing at more than 250 million pageviews per week. “Making money off of Tumblr would be incredibly easy,” CEO David Karp tells Chris Dixon in the Founder Stories video above. A cheap AdSense ad on every member’s dashboard would make Tumblr “wildly profitable.”
So why doesn’t he do that? As he goes onto explain, he’d rather find ways to make money that also “enhance the experience for our users.” Tumblr does charge for things like being featured in its directory or $9 themes users can buy to spruce up their Tumblog. Karp notes that some theme designers are making tens of thousands of dollars month. Still, these seem more like ancillary revenue streams than what will end up being Tumbr’s main revenue source down the line. Fortunately for Karp, he has patient investors and just raised $30 million to keep scaling the service and figure out a more natural business model.
The challenges of scaling and keeping up with growth “has absolutely slowed down the product roadmap,” he admits. But his team is working hard to get back on track with both keeping the service up and rolling out new features.
Karp also talks about building a startup in New York City in the shadow of giant media conglomerates and how that gives him a different perspective than if Tumblr were based in Silicon Valley. (You can also watch Part I of the interview here, in which Karp talks about why traditional blogs aren’t for everyone).
Update: Watch Part I , III, and IV of this interview.
Tumblr is a re-envisioning of tumblelogging, a subset of blogging that uses quick, mixed-media posts. The service hopes to do for the tumblelog what services like LiveJournal and Blogger did for the blog. The difference is that its extreme simplicity will make luring users a far easier task than acquiring users for traditional weblogging. Anytime a user sees something interesting online, they can click a quick “Share on Tumblr” bookmarklet that then tumbles the snippet directly. The result is...
David Karp is a high school dropout and the founder and CEO of Tumblr. Karp grew up on the Upper West Side of Manhattan, the son of Barbara Ackerman and Michael Karp. He attended The Calhoun School from 3rd to 8th grade, where his mother taught science, until high school when he briefly attended Bronx Science before dropping out at the age of 15 and being homeschooled. Karp began interning for animation producer Fred Seibert at 14, and from there...
Chris Dixon is a Partner at and co-founder of Founder’s Collective. He is also a contributing writer for TechCrunch. He previously was the CEO and Co-founder of SiteAdvisor, which was acquired by McAfee, and Hunch, which was acquired by eBay. In addition to his work with Founder’s Collective, Chris is a personal investor in early-stage technology companies, including Skype, TrialPay, DocVerse, Invite Media, Gerson Lehrman Group, ScanScout, OMGPOP, BillShrink, Oddcast, Panjiva, Knewton, and a handful of other startups that...
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