Before Adam Angelo started quora, he had a job that most engineers would consider to be a dream position: he was the Chief Technology Officer at Facebook.
In a 2010 interview with Business Insider, almost a year after he had started working on quora in June 2009, Adam shared what made him take the decision to leave Facebook and start on his own, “I could make a bigger impact on the world by starting something new rather than just continuing to optimize Facebook.”
But it wasn’t like there weren’t any Q/A answer sites when he started Quora in 2009. There was Reddit, Yahoo Answers, Ask me Helpdesk, Answers.Com, Experts Exchange, and many others. Was there a need for another Q/A platform then?
Adam and his co-founder Charlie Cheever thought there was.
“There’s a lot of information that has been in peoples’ heads and hasn’t gotten onto the Internet. Even as the Web has gotten really big, there’s just been this gap. So we made Quora as a general place for people to share knowledge of all kinds,” Adam told Business Insider in Sep 2010.
Explaining his decision to launch a Q/A site despite the existence of so many of them at the time, Adam told Wired, “Before Google, there were all these search engines, and even though they were just OK, there were still a lot of people using them, and it showed that there was demand. We hope that we can be that for the knowledge-sharing space. There are all these people sharing knowledge on the internet, but it’s kind of a mess.”
Thanks to the two founders’ previously established credibility in the tech industry and Silicon Valley connections, Quora was able to raise $11 million from Benchmark Capital in March 2010, even when it was still in Beta.
When Quora did launch in June 2010, the user base largely consisted of Adam & Cheever’s college and high-school friends.
Using Quora’s invite feature, their friends from Facebook also started inviting people from other startups, and these Silicon Valley folks played a huge role in getting quora its initial traction.
Some famous examples of tech biggies writing answers on Quora in its first year include Netflix CEO Reed Hastings. Facebook co-founder Dustin Moskovitz, Medium founder Evan Williams, etc.
In May 2012, Techcrunch reported that Quora had raised $50 Million at a $400 million pre-money valuation from, $20 Million of which was co-founder Adam D’Angelo’s own money.
By April 2014, Quora has raised another $80 Million at a valuation of $900 Million from Tiger Global.
Quora wasn’t even seeking money at the time, but when Tiger Global Management approached Quora, Adam D’Angelo said their visions aligned.
“They’ve invested in a lot of similar companies. They understood all our metrics really well. They’re also very long-term-oriented. We won’t have near-term pressure to sell or make money. Tiger said they were willing to hold on to our stock for 10 years, which is a perfect alignment with our strategy.”
Quora Business Model
It wasn’t until six years after the launch of Quora, a long time considering Quora always knew that they would make money through digital advertising, that the company started to monetize the 100 million monthly eyeballs it had aggregated back then.
When Quora first started testing ads on the platform, product manager Ryan Browne wrote,
“At this stage we’ll only be showing ads from a handful of advertisers, and our main aim is to learn what kind of advertising works best for readers, writers, and advertisers. We know that, when done carelessly, ads can often be negative for user experience.
Nobody likes banner ads, ads from shady companies, or ads that are irrelevant to their needs. However, we are optimistic that we will be able to introduce ads on Quora in a way that will fit in well and ideally make the product better.”
Even after the announcement that Quora would show ads on its platform, Quora was slow in terms of increasing the number of advertisers on the platform.
Quora ads only existed in a closed beta for a little more than a year, with access being granted only to select pre-approved advertisers.
In April 2017, a year after Quora first launched ads, the company raised an $85 million Series D round co-led by Collaborative Fund and Y Combinator’s Continuity Fund, making the company a Unicorn valued at $1.8 billion, even though it was still in the nascent stages of monetizing the product. During the same time, Quora revealed it has 190 million monthly unique visitors, up from 100 million a year earlier.
A month after raising the Series D, Quora launched its self-serve ad platform, which would enable advertisers to buy ads on their own, eliminating the manual process of media buying facilitated by an ad sales representative. Using Quora’s self-serve ad platform, any advertiser — big or small would be able to buy ads on the platform.
By September 2018, Quora’s monthly unique visitor count had grown to 300 million. Despite Quora pulling in a massive number of visitors, Quora only brought in a nominal revenue of $20 million in 2018.
Since Quora is a private company, it is not obliged to reveal financial numbers, which is why there is no publicly available information of Quora’s revenue post-2018.
Four years after it started monetizing its platform through advertising, Quora launched a new revenue stream: two different types of content subscriptions called Quora+ & Space subscriptions. The purpose of these content subscriptions is to give creators the option to generate revenue from the writing they publish on Quora, and also to keep up with the relatively new trend of more & more people willing to pay creators.
In a blog announcing the subscription offering, Adam Angelo, Quora CEO explained how the subscriptions will work,
” As a creator, you will have two options for subscriptions.
The first is to select content you’ve written for inclusion into a subscription bundle called Quora+. Quora+ subscribers will pay us monthly, they’ll get access to all Quora+ content, and we’ll distribute this revenue to creators in proportion to the amount each subscriber is consuming their content, with more of a subscriber’s contribution going to writers and spaces the subscriber follows. Most Quora+ content will remain freely available to the public, and we’ll explain more how this works below.
The second option is to set up a Space for people to subscribe specifically to your content. A Space can serve as a forum for expert advice, a platform for sharing specialized knowledge, or a place to engage communities of any size with a mix of original and shared content. Creators today are using Spaces to build audiences of millions for their unique insights or audiences of thousands for niche knowledge that can’t be found anywhere else. When you enable subscriptions for a Space, you can choose whatever price you want, and we’ll take a 5% fee. We’re able to sustainably commit to taking only a minimal fee without needing to increase it in the future because we make enough revenue from ads to fund most of the platform’s development and operations. With Space subscriptions, you will be able to choose which content to show to everyone and which to make exclusive to subscribers.”
To reiterate, Quora makes money through two different mediums: advertising and subscriptions products. Under the revenue sharing program, Quora also shares a portion of advertising revenue with owners of spaces on which ad revenue is generated. Quora also earns from Quora+ subscriptions and the 5% fee it takes from individual space subscriptions.
While Quora immediate competitors are platforms operating in the Q/A space, the online advertising business model it is pursuing makes all online channels including the digital advertising behemoths like Google, Facebook & Amazon its competitors, the three of whom combined make for more than 70% percent of digital ad spending.
The silver lining for Quora in a competitive digital ads space is the fact that traditional offline media spends like print, direct mail, television and radio are shifting to digital media buying.
But even then, Quora’s success largely depends on its ability to attract advertisers and ensure advertisers get a high ROI through Quora ads, given that digital advertisers have way too many platforms trying to capture their media spends.
A key thing to note is that Quora was cashflow positive from just ads before it launched the content subscriptions. With its newly launched content subscriptions, the site will also compete with players like Medium, Substack, etc.
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