
Mode Media shuts down, leaves bloggers unpaid - danso
http://www.sfchronicle.com/business/article/Bay-Area-unicorn-Mode-Media-shuts-down-leaves-9228272.php
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danso
As someone who is currently in the Bay Area and whose personal and
professional network on Twitter/FB/real-life revolves around the tiny, sad
shrinking universe that is the media industry, I'll have to admit that the
name "Mode Media" did not register a single clue with me. I've heard vaguely
of "Glam Media" and I knew of Ning, which Marc Andreessen co-founded, and
which was bought by Glam/Mode for a reported $120M-$150M [0]. This is not to
say that Mode and its blog/social network was not _good_ (as plenty of good
media companies have gone out of business), but it wasn't talked about much in
the editorial sphere -- in contrast to even content-aggregators/farms such as
Demand Media, ViralNova, etc. Which is weird, because traditional media is
desperate for billion-dollar media success stories.

[0] [https://techcrunch.com/2011/09/20/glam-buys-ning-
andreessen-...](https://techcrunch.com/2011/09/20/glam-buys-ning-andreessen-
joins-board/)

~~~
look_lookatme
Glam did traffic roll ups with and packaging for publishers -- amongst a bunch
of other things. If you were on the revenue or ad-ops side you would know
Glam.

Edit, here is some more info: [http://digiday.com/publishers/rise-fall-mode-
media/](http://digiday.com/publishers/rise-fall-mode-media/)

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GoRudy
I fully expect to see more announcements like this in the media industry over
the next couple of years specifically for these digital media "startups".

They are raising money to grow their unprofitable digital business with cost
structures that will never make sense... it costs them more to create each
piece of content then the revenue each one brings in.

IE... the per unit economics don't make sense and they still won't when they
scale.

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jdavis703
Not debating your point, but how come in the old days media outlets were able
to become profitable when they had (have) both union costs, and costs related
to actually printing and distributing a physical good?

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symkat
Probably because people actually paid for media at the time?

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loudandskittish
But people paying for a newspaper barely covered the cost of printing it, and
even then, plenty were taking losses on the cover price.

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superuser2
The newspaper was the primary way to get ads into the home. Each city paper
had a Google-like position in that city's ad market.

Quality could be higher because ad reach was based in part on subscriber
count, not just the attention-grabby-ness of particular headlines.

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wpietri
It's disappointing to see a company with such big-name investors, including
having Andreessen recently on the board, closing down in a way that screws the
employees.

~~~
jdavis703
And that's why you keep savings, especially if you work at a startup. In
California you're only 1 day away from being jobless and only 30 days away
from being homeless.

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randycupertino
Fwiw most leases are a 60-day notice to terminate residency in CA, at least
the ones for my tenants- I think that is pretty standard in the California
Apartment Association. Also many counties in CA have renter protections in
place so only just cause evictions.

But still, it's always good to have 6 months of backup emergency funds!

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Animats
They need to either pay their debts or go bankrupt. Just shutting down with
bills unpaid is not an option.

~~~
prodigal_erik
If they can't reorg and continue operating, what would a bankruptcy filing
accomplish? They're going to default on all their debts either way.

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Animats
There may be some assets to auction off, and creditors are entitled to a piece
of that.

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nla
All of the debt holders will get paid first, which means everyone else will
get zero.

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eli
Don't unpaid wages get paid first?

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toomuchtodo
As long as they're bonafide employees and not just independent contractors.

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throwawayReply
I understand there is a difference between cashflow and assets on a balance
sheet but how can a company worth $1bn go bankrupt?

Does bankruptcy means something other than insolvent? Is liquidation or
receivership a more accurate term?

Otherwise you would think a bank would lend enough cash to keep the lights on.

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bane
Step 1) Start a company that makes flurbles.

Step 2) I invest in a billionth of your company for $1.

Step 3) Your company is now valued at a billion dollars.

Step 4) Hire an employee

Step 5) Try to make payroll with that $1

Congratulations, your company is now an insolvent unicorn.

The reality is only _slightly_ more complex, but not much.

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jmspring
next gen underpants gnome logic

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cmdrfred
It might make sense to force employer's to retain insurance that guarantees
compensation to its employees/contractors. Executive compensation should be
doled out last but is too often doled out first.

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karma_vaccum123
Anyone can call themselves a unicorn

~~~
verandaguy
I thought it was specifically a word for new-ish companies with a $1B+ market
cap that hadn't been bought by a larger, older company.

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ceejayoz
$1B is easy.

[https://signalvnoise.com/posts/1941-press-
release-37signals-...](https://signalvnoise.com/posts/1941-press-
release-37signals-valuation-tops-100-billion-after-bold-vc-investment)

