Storyful accounts reveal losses of €3m prior to News Corp sale
Published 12/01/2014 | 02:30
It was the Irish entrepreneurial success story of the year when Storyful, "the world's first social news agency", was sold to Rupert Murdoch's News Corp for €18m. But the most recent accounts filed with the Companies Registration Office (CRO) in Dublin reveal how it experienced a 10-fold increase in losses in three years.
Balance sheet figures for Storyful show that losses increased from just under €364,000 in 2010 to more than €3m in 2012. Now former RTE man Mark Little has opened up about how it was "touch and go" for his start-up and how he was forced to make the agonising decision to let staff go last year.
Speaking in depth for the first time since the high-profile sale last month, Mr Little spoke of the roller-coaster ride involved in turning a bright idea into a successful business. The CEO was quick to point out that the accounts were over 18 months old when filed and that the company had turned a profit in the months leading to the landmark sale.
"One of the main problems with launching a start-up is raising money. The other problem is, you get enthusiastic about an idea and try to scale the idea too quickly," Mr Little, told the Sunday Independent from Las Vegas where he is meeting the world's biggest media organisations.
"Losses for a start-up are par for the course. Very few businesses scale like Facebook," he added. "We had to lay off a few people last year.
"When you have to sit down with someone who is your friend and tell them they don't have a job, it's one of the most saddening responsibilities you could have," he added. Mr Little was thankful for the involvement of entrepreneur Ray Nolan, who invested heavily in the company and helped it to stay afloat.
"He was willing to invest in me as a person," Mr Little explained. "My family's future was on the line. I remortgaged my house and invested every penny I had."
Despite the difficulties, he never thought of returning to his old job after leaving in 2009. "Once I closed the door, I was never going back to RTE," he said.
Losses resulted from staff costs, while Mr Little tried to generate revenue by convincing newsrooms to buy into the idea of a social news agency. His idea came after he became "terrified" that social media was allowing the general public to do what previously only reporters could do -- break stories.
"I could see that social media was more than just something that 20-year-old kids were doing on their phones. Sometimes a 17-year-old had a better vantage point than any journalist," he said.
But he also found the idea liberating and saw the potential in a company that could curate news from across the world's social media.
"A few of my friends, they had no idea what I was doing, they thought I was crazy," Mr Little said. Some people even laughed at him.
"We were going around the newsrooms and no one took it seriously, until the Arab Spring happened," he said.
As Storyful began distributing verified video and picture content from the revolution and events such as the Boston Marathon bombing, media companies quickly singed up.
What followed was major interest from big venture capitalist firms, which eventually culminated in last month's News Corp deal.
Mr Little remains on as CEO of the company following the sale, which also paid him a reported €6m sum personally.
And he praised the hard work of his staff and attributed the success of Storyful to the efforts of a great many people, and revealed how his old RTE colleagues have expressed their admiration.
"After the deal, I got a text from Miriam [O'Callaghan], and all my friends in the newsroom have been very supportive," he said.