Nothing about that article surprises me regarding G/O but there is one point that Zach makes about his transaction that he is wrong about:
"Thanks to G/O's stubborn insistence that it only wanted Quartz's assets and not the corporate entity"...
this is not stubborn it's quite common and is absolutely the right thing to do for many companies interested in another business. If they buy your entity (stock transaction) it comes with all the legal liability.
Zach probably doesn't understand how much more likely his deal was to close as an asset purchase rather than a stock purchase. A stock purchase comes with lots more diligence and legalese. If they are buying your stock they are buying all your baggage and potential legal matters, it requires a lot more work including a laundry list of representations by the seller. G/O did everyone a favor by sticking to an asset purchase and getting the deal done. that's where the positives end it seems.
> If they buy your entity (stock transaction) it comes with all the legal liability
For dying companies, most of the time it's fraudulent and illegal to create a transaction divesting the good assets from the bad debts. Why is that potential problem not an issue for a proposal to sell off everything good and leave behind an insolvent shell?
That's not how these things work. When a company sells an asset the funds go back to the company that sold that asset. So if the "seller" has debts or other obligations those still remain and proceeds from the sale would go towards satisfying those. However, in this case it sounds like the deal was largerly about the employee costs + some cash to the sellers.
I mean, this is literally what an Assignment for the Benefit of Creditors (ABC) acquisition is (or an Article 9) and the specific goal of an ABC is to allow for some semblance of the company's assets to persist unencumbered by an acquirer and without creditors having any further rights to their debts, aside from what they can claim from the proceeds of the ABC.
It's an alternative to bankruptcy that allows for the continued functioning of the business in many cases, and it absolutely leaves behind an insolvent shell. (And acquirers will go through great pains to avoid incurring "successor liability.")
I'm not sure you answered the question here though, why should that sort of transaction be legal? Is there a compelling public interest in allowing this sort of transaction?
It's a pretty common way for companies to go through bankruptcy. If the courts can identify a viable business inside the company, where the main problem is debt that it can't feasibly pay, they will allow it to proceed with business while cancelling the debt. Since the alternative is having the whole thing go under, without much chance of creditors being made whole, there is a benefit to society: some of the people keep their jobs.
He also states the corporate entity was quite valuable for complicated accounting reasons. I take that to mean he was not paid for the quite valuable thing since it wasn't transferred. After the money and assets were transferred, I take it that he eventually realized that a corporate entity has no actual value by itself, the buyout price can be anything and could have included the value of the corporate entity if he wanted, even if it wasn't transferred, and that statement was just a trick to pay him less money.
I took it to mean that the corporate entity had some favourable tax treatment (perhaps from losses in previous years, which could offset against future profits). Which indeed means the corporate entity has no value by itself, but it has some value if you can turn it back into a functioning business.
G/O either had their own tax shelters that meant they wouldn't benefit additionally from the favourable tax treatment, and/or didn't want to take the risk of assuming unknown liabilities (which Zach Seward could have known didn't exist, but would have required more DD from G/O to rule out).
Lack of a viable business model is precisely what Zach points to in the article, which doesn't preclude him from feeling a bit sad about how it was stripped for parts.
Reporting news accurately is a very difficult business model in a world full of oligarch-backed papers that constantly lose money to further their own agenda, plus social media which is increasingly indifferent as to whether the links they circulate have any truth in them or not.
It's tempting to blame oligarchs and social media, but I'll argue that readers' own tastes are the most daunting challenge that mainstream journalism has faced for the past 20 years.
People will spend a lot more time (and money!) reinforcing their existing beliefs/prejudices than learning about something new.
> it. In the subject line of his email announcing the deal, he spelled our name "Quarts," and that set the tone for the level of care in what he had bought.
This little detail seems to sum up so much about this kind of acquisition.
Zach nails it. He is the reason why I was involved briefly at the start and for where I am today.
It was my first time leading a product team. We tried a lot of things that seemed strange at the time; no homepage, no app, native ads (done well imho), a scrolling stream instead of pages. Some of that broke. Some of it worked. A lot of it stuck around.
Yeah, you might be right. I was gone by then so not 100%. Sam Williams was behind that app. I’m not a fan of chat apps but that was done really well and I was surprised by it.
I really loved the Quartz chat app. I loved how carefully curated it was, how it didn't waste my time, how it gave me an outlay of just the things I care about. It felt a little like a friend was texting me about the news rather than just a dump of news itself.
And I was a little sad when my friend stopped texting me.
Ditto on loving Quartz and the chat app around 2015 I think it was. After Quartz was gone, I didn't really find what I was looking for until I discovered Axios.
The "Roshamon Effect" always kicks in when people share their personal perspectives about time working at a turbulent organization, but even so, I was surprised that this piece made no mention of Quartz's founding editor-in-chief and co-CEO, Kevin Delaney.
I'd overlapped with Kevin during a different period, and he was always a fountain of fascinating ideas. At Quartz, I though he showed great skill in championing expertise in niche areas, under the banner "Our Obsessions." He (or his team) were uniquely bold online in the way they let memorable photos carry more of the weight.
Once Kevin left in 2019, at least from my reader's perspective, all the air went out of the balloon
> The Paycheck Protection Program, for small businesses affected by the pandemic, helped keep us afloat.
In the grand scheme of PPP shenanigans it’s nothing, but how was an online-only _news_ website negatively impacted by perhaps the most globally relevant, urgent, and ongoing news story of the internet age?
I remember browsing Quartz back in 2014-15 and being impressed that there was finally a current affairs focused "digital media" startup that wasn't styled like the odiously click-chasing Business Insider. The website design felt fresh, with a widescreen layout as opposed to the amateurish, single-column blog-like designs of Gawker and Buzzfeed.
But things seemed to change not long after. Paywalls appeared everywhere, so while I could "see" the topics they covered, I couldn't read them. Over time I kept coming back to the website, remembering its cool design, and was disappointed to find fewer and fewer new articles.
Just took a look at the site now, and sadly it just resembles any of those dime-a-dozen "content aggregator" sites like Forbes.com.
Does anyone understand the economics of private equity buying a company like Quartz only to dismantle it and sell off its parts? Aside from brand destruction, it seems like a difficult way to actually make money? I mean can an email list be _that_ valuable?
That Uzabase ownership of Quartz never made sense. What a clueless decision. Buy an ad-based media property and change it to subscription- of course you'll make less with a major change in the business model.
Quartz was a great site - definitely felt like a proto-Axios both from a UX and content standpoint. Sad they weren't able to survive the pandemic era news industry implosion.
I used to read Quartz everyday. As a gen z digital native, Quartz was my first foray into reading journalism daily. It's clean interface, direct and high-quality writing style, and lack of clickbait appealed a lot to me.
These days, I read print newspapers everyday. But I still find myself wishing Quartz existed. I have not found any suitable replacement for it, and I am on the lookout for the same.
Hmmmm... there also used to be Wired. But they've moved away from hard journalism and neutral reporting of technology to more sensationalism and opinion articles.
Quartz was a great site, with a really innovative iOS app on multiple fronts. They were always doing something interesting.
It's sad that independent media faces such an uphill battle. At this point, what ambitious entrepreneur would ever entertain the idea of starting a media platform? The economics are simply not there.
Unfortunate. I was a subscriber, though not an avid reader.
But never a paid subscriber. In retrospect, I could and maybe should have been. I was a paid subscriber at one point for both The Economist and The New Yorker. But for those, I got physical copies. Paying for something purely digital is the only aspect of my not paying for Quartz that I remember.
I really don't understand (from Australia) about this fear and hate of globalism.
The capitalist globalists have done what capitalists do, search for the lowest costs and the lowest quality that continues to sell for the highest price. That's economic globalism.
But the social globalism, of having human rights upheld around the world, a common attitude towards personal liberties, freedom of thought, speech, & work, entitlement to shelter, safe food & water, education, health care etc.
I don't understand why people are against that? You don't think everyone deserves to live with the same level of freedom as you do? They don't deserve to choose their government and leadership like you do?
What is it about that side of globalism that people hate so much?
Let's say we aren't talking about "hate" as much as "disagree". Some countries have vastly different labor standards so globalization means subsidizing immoral practices. As we all know it means that local industrial base is vulnerable to a supply shock.
You can always wonder what there is left for people to do for a living if there's always someone willing to do it for less and have fewer kids, working longer hours. (with economics they simply say that there should always be something to do in a service based economy, but obviously service based jobs can be hit as well) So if you take it to the conclusion it looks fairly bleak. It raises a lot of existential questions of what group you belong to and how you can meaningfully contribute.
> I really don't understand (from Australia) about this fear and hate of globalism
The person youre responding to is a victim of the US culture wars. That is clear as day with the mention of a feminist blog Jezebel, that's entirely irrelevant to the story of Quartz, a business focused website. I'm not going to speculate why a word like 'globalism' results in the clutching of pearls but i think there are some historical precedents around certain similar phrases like 'cosmopolitan', that provide a clue.
That's digital media in a nutshell. Either you try to do things the right way with subscribers and in-house advertising, or you chase clicks and Google Ads revenue like Buzzfeed and SPAC your way to riches before the bottom falls out of your valuation.
> He had just bought the business news organization, Quartz, that I had spent the past decade building and, most recently, trying desperately to save from oblivion.
If he believed in the business so much, why did you sell his company?
Seems like you lose all rights to comment, the moment you sell your company.
> But Quartz never made money. We grew, between 2012 and 2018, to nearly 250 employees and $35 million in annual revenue. The dismal economics of digital media meant losing more than $40 million over that stretch just to grow unsustainably large.
Those are laughably terrible numbers. $35M/year ain't much, and, even at a glance, there's no way to support 250 decently-paid employees on it. All things considered, even 50 is pushing it.
But if they thought outside-the-box a little bit, there might have been a way out: They could have gone into academic publishing. Academic publishers make money hand over fist. Elsevier made $3.5B in profit and >$10B in revenue just last year.
Doing social sciences and political science stuff would have been a good fit for Quartz. You don't need any special permits to become an academic publisher. Most of your employees (reviewers) do it for free, like jannies. The industry is ripe for, uh, "disruption." Oh well.
Nothing about that article surprises me regarding G/O but there is one point that Zach makes about his transaction that he is wrong about:
"Thanks to G/O's stubborn insistence that it only wanted Quartz's assets and not the corporate entity"...
this is not stubborn it's quite common and is absolutely the right thing to do for many companies interested in another business. If they buy your entity (stock transaction) it comes with all the legal liability.
Zach probably doesn't understand how much more likely his deal was to close as an asset purchase rather than a stock purchase. A stock purchase comes with lots more diligence and legalese. If they are buying your stock they are buying all your baggage and potential legal matters, it requires a lot more work including a laundry list of representations by the seller. G/O did everyone a favor by sticking to an asset purchase and getting the deal done. that's where the positives end it seems.
> If they buy your entity (stock transaction) it comes with all the legal liability
For dying companies, most of the time it's fraudulent and illegal to create a transaction divesting the good assets from the bad debts. Why is that potential problem not an issue for a proposal to sell off everything good and leave behind an insolvent shell?
That's not how these things work. When a company sells an asset the funds go back to the company that sold that asset. So if the "seller" has debts or other obligations those still remain and proceeds from the sale would go towards satisfying those. However, in this case it sounds like the deal was largerly about the employee costs + some cash to the sellers.
I mean, this is literally what an Assignment for the Benefit of Creditors (ABC) acquisition is (or an Article 9) and the specific goal of an ABC is to allow for some semblance of the company's assets to persist unencumbered by an acquirer and without creditors having any further rights to their debts, aside from what they can claim from the proceeds of the ABC.
It's an alternative to bankruptcy that allows for the continued functioning of the business in many cases, and it absolutely leaves behind an insolvent shell. (And acquirers will go through great pains to avoid incurring "successor liability.")
I'm not sure you answered the question here though, why should that sort of transaction be legal? Is there a compelling public interest in allowing this sort of transaction?
It's a pretty common way for companies to go through bankruptcy. If the courts can identify a viable business inside the company, where the main problem is debt that it can't feasibly pay, they will allow it to proceed with business while cancelling the debt. Since the alternative is having the whole thing go under, without much chance of creditors being made whole, there is a benefit to society: some of the people keep their jobs.
He also states the corporate entity was quite valuable for complicated accounting reasons. I take that to mean he was not paid for the quite valuable thing since it wasn't transferred. After the money and assets were transferred, I take it that he eventually realized that a corporate entity has no actual value by itself, the buyout price can be anything and could have included the value of the corporate entity if he wanted, even if it wasn't transferred, and that statement was just a trick to pay him less money.
I took it to mean that the corporate entity had some favourable tax treatment (perhaps from losses in previous years, which could offset against future profits). Which indeed means the corporate entity has no value by itself, but it has some value if you can turn it back into a functioning business.
G/O either had their own tax shelters that meant they wouldn't benefit additionally from the favourable tax treatment, and/or didn't want to take the risk of assuming unknown liabilities (which Zach Seward could have known didn't exist, but would have required more DD from G/O to rule out).
Quartz wasn't "destroyed" by cynicism; it collapsed due to its own financial unsustainability.
Investors didn’t kill Quartz—they stopped subsidizing losses once it was clear Quartz couldn't become self-sufficient.
The "cynical" narrative obscures Quartz’s fundamental flaw: lack of a viable business model.
Calling Quartz a victim overlooks that it repeatedly failed commercially, despite many chances and significant investment.
Ultimately, Quartz’s fate wasn't about cynicism, but about investors deciding to stop throwing money into a losing bet.
Lack of a viable business model is precisely what Zach points to in the article, which doesn't preclude him from feeling a bit sad about how it was stripped for parts.
> Ultimately, Quartz’s fate wasn't about cynicism, but about investors deciding to stop throwing money into a losing bet.
So would you say that the investors… became cynical?
They say an optimist is just a cynic lacking experience
Skeptical and cynical are not the same thing.
Reporting news accurately is a very difficult business model in a world full of oligarch-backed papers that constantly lose money to further their own agenda, plus social media which is increasingly indifferent as to whether the links they circulate have any truth in them or not.
It's tempting to blame oligarchs and social media, but I'll argue that readers' own tastes are the most daunting challenge that mainstream journalism has faced for the past 20 years.
People will spend a lot more time (and money!) reinforcing their existing beliefs/prejudices than learning about something new.
> it. In the subject line of his email announcing the deal, he spelled our name "Quarts," and that set the tone for the level of care in what he had bought.
This little detail seems to sum up so much about this kind of acquisition.
Zach nails it. He is the reason why I was involved briefly at the start and for where I am today.
It was my first time leading a product team. We tried a lot of things that seemed strange at the time; no homepage, no app, native ads (done well imho), a scrolling stream instead of pages. Some of that broke. Some of it worked. A lot of it stuck around.
RIP Quartz.
I was an avid reader when it first launched; really stood out from the rest at the time. Kudos.
the first publication (that I recall) that offered a chatbot for news too, right?
Yeah, you might be right. I was gone by then so not 100%. Sam Williams was behind that app. I’m not a fan of chat apps but that was done really well and I was surprised by it.
I really loved the Quartz chat app. I loved how carefully curated it was, how it didn't waste my time, how it gave me an outlay of just the things I care about. It felt a little like a friend was texting me about the news rather than just a dump of news itself.
And I was a little sad when my friend stopped texting me.
Ditto on loving Quartz and the chat app around 2015 I think it was. After Quartz was gone, I didn't really find what I was looking for until I discovered Axios.
The "Roshamon Effect" always kicks in when people share their personal perspectives about time working at a turbulent organization, but even so, I was surprised that this piece made no mention of Quartz's founding editor-in-chief and co-CEO, Kevin Delaney.
I'd overlapped with Kevin during a different period, and he was always a fountain of fascinating ideas. At Quartz, I though he showed great skill in championing expertise in niche areas, under the banner "Our Obsessions." He (or his team) were uniquely bold online in the way they let memorable photos carry more of the weight.
Once Kevin left in 2019, at least from my reader's perspective, all the air went out of the balloon
Spanfeller believing "it's impossible to kill a media brand" goes a long way towards explaining everything I've ever heard about him.
> The Paycheck Protection Program, for small businesses affected by the pandemic, helped keep us afloat.
In the grand scheme of PPP shenanigans it’s nothing, but how was an online-only _news_ website negatively impacted by perhaps the most globally relevant, urgent, and ongoing news story of the internet age?
Ad spending got put on hold or canceled during the covid recession. Companies in all sectors moved to conserve cash.
Even Google froze hiring.
It was a good time to have a conservative balance sheet. I bought some good stock on the cheap, and hired my best programmer.
> and hired my best programmer.
And they're still around? Or moved on when hiring defroze again, to get a non covid salary?
I remember browsing Quartz back in 2014-15 and being impressed that there was finally a current affairs focused "digital media" startup that wasn't styled like the odiously click-chasing Business Insider. The website design felt fresh, with a widescreen layout as opposed to the amateurish, single-column blog-like designs of Gawker and Buzzfeed.
But things seemed to change not long after. Paywalls appeared everywhere, so while I could "see" the topics they covered, I couldn't read them. Over time I kept coming back to the website, remembering its cool design, and was disappointed to find fewer and fewer new articles.
Just took a look at the site now, and sadly it just resembles any of those dime-a-dozen "content aggregator" sites like Forbes.com.
Does anyone understand the economics of private equity buying a company like Quartz only to dismantle it and sell off its parts? Aside from brand destruction, it seems like a difficult way to actually make money? I mean can an email list be _that_ valuable?
That Uzabase ownership of Quartz never made sense. What a clueless decision. Buy an ad-based media property and change it to subscription- of course you'll make less with a major change in the business model.
Was hoping this would be a deep dive into the Quartz compositor.
Quartz was a great site - definitely felt like a proto-Axios both from a UX and content standpoint. Sad they weren't able to survive the pandemic era news industry implosion.
Axios?
A similar short form news site primarily aimed at decisionmakers [0]
[0] - https://www.axios.com/
I used to read Quartz everyday. As a gen z digital native, Quartz was my first foray into reading journalism daily. It's clean interface, direct and high-quality writing style, and lack of clickbait appealed a lot to me.
These days, I read print newspapers everyday. But I still find myself wishing Quartz existed. I have not found any suitable replacement for it, and I am on the lookout for the same.
I really miss the Quartz I used to read a decade ago, does anyone know of any similar media orgs out there?
Give 404 Media a try. They do a lot of original investigative tech journalism.
Yep they’re on the list!
Maybe arstechnica
Na, I read that but it really doesn’t have the same kind of business focus that qz did
Hmmmm... there also used to be Wired. But they've moved away from hard journalism and neutral reporting of technology to more sensationalism and opinion articles.
Quartz was a great site, with a really innovative iOS app on multiple fronts. They were always doing something interesting.
It's sad that independent media faces such an uphill battle. At this point, what ambitious entrepreneur would ever entertain the idea of starting a media platform? The economics are simply not there.
How does spanefeller and g/o have enough money to keep buying properties?
All I ever hear about are his decisions that take unprofitable-but-beloved brands and turn them into detestable slop.
Is slop actually that profitable?
It’s almost free to produce, so anything you do make with it is pure margin. Quality media is expensive. Profit is income minus expenses.
Maybe they're riding the AI hype and burning investor money?
they dont they've sold nearly everything. pe group that backed them was the source of funding
Not really sure why this is on Hackernews but let me be first to say: Spanfeller is a herb.
He is a herb, but no sage. Was a deadspin member back when you had to email Will to get an account.
Jim Spanfeller is a herb!
Expected something about MacOS' Quartz.
… and I thought it was about Quartz scheduler. Wrote too much Java back in the days.
I was expecting something about Magma's static timing engine Quartz (EDA world)
Or at least something about the quartz mineral.
Then you dodged a bullet!
Unfortunate. I was a subscriber, though not an avid reader.
But never a paid subscriber. In retrospect, I could and maybe should have been. I was a paid subscriber at one point for both The Economist and The New Yorker. But for those, I got physical copies. Paying for something purely digital is the only aspect of my not paying for Quartz that I remember.
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I really don't understand (from Australia) about this fear and hate of globalism.
The capitalist globalists have done what capitalists do, search for the lowest costs and the lowest quality that continues to sell for the highest price. That's economic globalism.
But the social globalism, of having human rights upheld around the world, a common attitude towards personal liberties, freedom of thought, speech, & work, entitlement to shelter, safe food & water, education, health care etc.
I don't understand why people are against that? You don't think everyone deserves to live with the same level of freedom as you do? They don't deserve to choose their government and leadership like you do?
What is it about that side of globalism that people hate so much?
Let's say we aren't talking about "hate" as much as "disagree". Some countries have vastly different labor standards so globalization means subsidizing immoral practices. As we all know it means that local industrial base is vulnerable to a supply shock.
You can always wonder what there is left for people to do for a living if there's always someone willing to do it for less and have fewer kids, working longer hours. (with economics they simply say that there should always be something to do in a service based economy, but obviously service based jobs can be hit as well) So if you take it to the conclusion it looks fairly bleak. It raises a lot of existential questions of what group you belong to and how you can meaningfully contribute.
> I really don't understand (from Australia) about this fear and hate of globalism
The person youre responding to is a victim of the US culture wars. That is clear as day with the mention of a feminist blog Jezebel, that's entirely irrelevant to the story of Quartz, a business focused website. I'm not going to speculate why a word like 'globalism' results in the clutching of pearls but i think there are some historical precedents around certain similar phrases like 'cosmopolitan', that provide a clue.
All countries should govern themselves, based on their cultural needs.
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"It's impossible to kill a media brand," "Still, we also hoped to endure on the scale of centuries"
2012 to nowt.
I feel very sorry for Quartz and its staff. I'm not a fan of private equity firms or parasites as they are generally known.
That's digital media in a nutshell. Either you try to do things the right way with subscribers and in-house advertising, or you chase clicks and Google Ads revenue like Buzzfeed and SPAC your way to riches before the bottom falls out of your valuation.
> He had just bought the business news organization, Quartz, that I had spent the past decade building and, most recently, trying desperately to save from oblivion.
If he believed in the business so much, why did you sell his company?
Seems like you lose all rights to comment, the moment you sell your company.
sometimes, selling to someone with deep pockets is the only way to save a company.
> But Quartz never made money. We grew, between 2012 and 2018, to nearly 250 employees and $35 million in annual revenue. The dismal economics of digital media meant losing more than $40 million over that stretch just to grow unsustainably large.
Those are laughably terrible numbers. $35M/year ain't much, and, even at a glance, there's no way to support 250 decently-paid employees on it. All things considered, even 50 is pushing it.
But if they thought outside-the-box a little bit, there might have been a way out: They could have gone into academic publishing. Academic publishers make money hand over fist. Elsevier made $3.5B in profit and >$10B in revenue just last year.
Doing social sciences and political science stuff would have been a good fit for Quartz. You don't need any special permits to become an academic publisher. Most of your employees (reviewers) do it for free, like jannies. The industry is ripe for, uh, "disruption." Oh well.