On March 13 2013, Google decided to kill its RSS product, Reader. Millions of users were bummed to see it go. But for Edwin Khodabakchian and his co-founder Cyril Moutran, the announcement was the best thing that could have happened to their startup.
Khodabakchian, a serial entrepreneur, launched Feedly (initially called Feeddo) about four years ago. In November 2012, the content company pivoted into a smart news reader that was competitive with Google’s product. It was used by everyone from brain scientists to teachers who wanted to stay on top of all information in their fields.
Right now, 40 million websites connect their content to Feedly and 2,000 new articles are brought into the reader per second.
The founders had run successful companies before, so they decided not to take outside funding for Feedly. They did a couple of projects on the side to get by.
By March 2013 when Google announced it’d be killing Reader, Feedly had a little more than 1 million users and it spotted an opportunity. Feedly realised millions of loyal Reader users would need a new home, so it quickly launched a promotion that positioned itself as a viable solution. Transferring an account from Google Reader to Feedly became as easy as clicking a button.
As Google Reader users started pouring in, Khodabakchian’s engineering team made sure its servers stayed up. Khodabakchian says 80% of Google Reader’s users transferred over to Feedly and his startup’s userbase grew about 15 times to 15 million users.
“By the time Google announced its decision, we had a head start in building the data cloud,” Khodabakchian told Business Insider. “We were ready to step in and announce that we’d become a new home for these users. We also offered an API for developers to start building on Feedly. [It worked because] we stood up as a solution and people were stressed out to leave Google Reader.”
The 15X increase has pushed Feedly near profitability. Feedly uses an Evernote-like “freemium” model, where users can pay a small amount per month and earn access to Feedly Pro, a more robust product with a few additional features. When Feedly launched its Pro product over the summer, it was shocked by how much demand — and revenue — it drummed up.
Overnight, the Pro product acquired more customers than Feedly anticipated getting in 10 months.
“We launched Feedly Pro priced at $US5 per month or $US45 per year with Lifetime editions of $US99 for the first 5,000 backers. When we put it out there we had no idea how many would sell,” says Khodabakchian. “We turned it on at 11 PM, went back to sleep, woke up at 6 AM for the European wave and by then it raised $US500,000.” Feedly Pro currently has 24,000 paying customers. Lifetime subscriptions now cost $US299.
If all 24,000 customers pay at least $US45 per year, that means Feedly and its 12 employees are generating more than $US1 million per year.
Feedly customers use the product voraciously. Mobile Feedly users spend an average of 20 minutes per session with the product. Desktop users spend even more time per session — 55 minutes. The majority of Feedly users access the app five out of seven days per week.
Khodabakchian says the reason his users are obsessive is because Feedly is a productivity, not leisure, application. He feels his product is less of a news reader, like Flipboard, and more of a professional resource, like LinkedIn’s Pulse. As the Feedly product and team continues to grow, Khodabakchian says raising a round of financing isn’t out of the question.
While Google shutting down Reader was great for Feedly, it poses questions about Feedly’s exit potential.
If Google, which frequently acquires startups, has decided it doesn’t want a reader product, why would another large tech company want one?
Khodabakchian admits it’s a good question, but says he isn’t focused on an acquisition right now.
“This is my third company. I’m not thinking about it as an exit,” he says. “If you think about content today and connecting all these sources of content with the right users, then we think content will only become more and more valuable and we can help with the distribution.”
Here’s what Feedly looks like: