Tumblr's founding CEO shares the vision that made Yahoo! drop a billion.
This feature is a part of Complex's "Tumblr Generation" Week.
Written by Damien Scott (@Thisisdscott)
David Karp is smiling, but not for the reason you think. It's not because he just pocketed an estimated $250 million from Yahoo!'s acquisition of Tumblr for $1.1 billion. When I meet with the co-founder of one of the web’s hottest properties in early May, that headline-grabbing deal is still two weeks away. On this day he’s smiling because he figured out the best way to get dressed.
Lanky and pencil-thin, Karp, 26, wears an ever-present grin that occasionally gives way to a wry smile. It’s the same grin you'll see if you do a Google image search for him. He seems happy, and his affable demeanor gives you the feeling that this is how he always looks. Like most young tech CEOs he has a uniform of sorts. His consists of a fitted hooded sweatshirt, a button-down Oxford shirt, jeans, and white Jack Purcells. And that's exactly what he’s wearing today, with the exception of the kicks—he opted for red Chuck Taylors. Karp says he usually wears the same type of clothing, because it makes his life that much easier.
“A couple years ago, I noticed that it could take me 30 minutes to get dressed in the morning and it really frustrated me,” he says while sitting in a comfortable-looking chair in Tumblr's airy, wood-floored Manhattan headquarters. He keeps one foot on the floor and the other tucked beneath him. “I didn’t want to do the Jobsian one outfit, but I didn’t want to ever worry about how my outfits were configured," he explains, reducing sartorial flair to a programming problem. "So I got rid of all but one style of sneakers—my Jack Purcells—I got a couple pairs of pants that were khakis and blue jeans, and a bunch of collared shirts that I knew would go with blue and khaki.”
To further simplify his wardrobe, Karp bought a gang of the same underwear and socks so he never has to wear that one pair of underwear everyone hates to rock come laundry day. You can tell he’s thought this through, and that having figured it out brings him a lot of joy. The same kind of joy, perhaps, that came from writing and implementing code back in 2007, before Tumblr grew from a company headquartered in his bedroom to one with offices on both coasts.
I noticed that it could take me 30 minutes to get dressed in the morning and it really frustrated me. I didn’t want to do the Jobsian one outfit, but I didn’t want to ever worry about how my outfits were configured.
That same dedication to minimalism and simplicity in his personal life has guided Karp’s hand in creating Tumblr. In much the same way that Facebook made social networking cleaner and easier, so did Tumblr with blogging. Creating a Tumblr page takes under five minutes. Publishing a post takes even less time. Even if you’ve never created anything more complicated than a Microsoft Word doc, you could make your Tumblr page look like something crafted by a professional art department.
Besides streamlining his closet, David Karp has a lot to be happy about. Since founding Tumblr in 2007, the New York native has enjoyed a steady, if challenging, rise to the top. At the age of 20, he created what's become one of the most popular publishing platforms on the Internet. In 2009, BusinessWeek named him the “Best Young Tech Entrepreneur.” The Massachusetts Institute of Technology, the college he probably would have attended had he attended college (or even completed high school), listed him as one of the top 35 innovators in the world under the age of 35. He’s amassed a fortune well north of $200 million, which mostly sits untouched since he claims not to splurge (although he and his girlfriend, chef Rachel Eakley, did purchase a sick $1.6 million loft in Williamsburg, Brooklyn).
Of all the things Karp has to be happy about, the biggest may be that after years of struggling to turn a profit, Tumblr’s financial woes have been all but eradicated. When Yahoo!’s new CEO, Marissa Mayer, began talks with Tumblr last November, Karp had no plans to sell the company. But he could not pass up what he'd later describe as “an unbelievable opportunity to shortcut all the very hard things that we were about to be going through.” Just what kind of “hard things”? The things that most start-ups have difficulty doing, like making money.
Karp’s use of the word “hard” when talking about finances shouldn’t come as a shock to anyone. Long the poster boy for New York City’s nascent start-up tech scene, Karp has long been big on creative vision but seemed less interested in the monetary side of his company. He once remarked that web advertising "really turns our stomachs," and appeared more comfortable poring through lines of code, looking for ways to make the service faster, better, stronger. But like many tech prodigies before him—including Mark Zuckerberg and Google’s Larry Page—the time came when he could no longer spend his days and nights staring at his two-monitor set-up. With a pre-acquisition valuation of $800 million, Tumblr’s CEO had to, well, act like a CEO.
It wasn’t always like this. David Karp’s story reads like most other successful start-up-founders-turned-CEOs. The precocious son of a teacher and a film composer, Karp taught himself HTML at a very young age and began to offer his web design services to local NYC businesses. Despite having dreams of attending MIT, he dropped out of Bronx Science high school to take an internship at Frederator Studios, an animation company partly founded by Fred Seibert, of MTV and Hanna-Barbera fame. He took a paid position working for John Maloney’s UrbanBaby website at the age of 16. After becoming the site’s head of product, Karp was rewarded with equity in the company. When Maloney sold UrbanBaby to CNET in 2006, the financial windfall was more than enough to give young Karp the pocket change he needed to create a consulting firm called Davidville with the goal of helping companies build great products—and perhaps building some great products of his own.
If you look at what tech is empowering today, it’s social interactions. But there aren’t a whole lot of big networks and big companies that are working to empower creators.
One of those products was a service he created in his mother’s apartment that allowed allowed users to create “tumblelogs”—a sort of microblog that enabled people to share short posts with a few sentences accompanied by an image or a video. Along with his first Davidville employee, Marco Arment, Karp decided shutter the consultancy and focus on Tumblr after its February 2007 launch saw over 75,000 users join the service in two weeks.
Six years later, Tumblr has grown into an Internet force, and while the company won’t release precise figures on how many users it has, they claim that over 300 million unique visitors come to the site each month. That may be a paltry sum compared to Facebook’s 1.11 billion uniques, but while Facebook's numbers have been dwindling (a May 2013 study shows that 10 million fewer visitors came to the social networking behemoth since last year), Tumblr’s has been skyrocketing. It tallies over 18 billion pageviews a month thanks to the 86 million (and counting) blogs its hosts.
What has made Tumblr a destination and safe haven for a jaded generation of Internet users? Perhaps it’s the ability to easily express themselves and be part of an insulated community. Thanks to Tumblr, a new generation of aspiring artists and entrepreneurs has been able to convey their messages and ideas more easily and elegantly than ever before. This has proved to be a very powerful creative engine. “Growing up, my favorite technology companies were Apple, Adobe, and Avid, and things that gave creators tools to make things they couldn’t make before,” says Karp. “Mostly because I love the tech of it. If you looked where the tech industry was before, some of the most interesting technological innovations were empowering creators. If you look at what tech is empowering today, it’s social interactions. But there aren’t a whole lot of big networks and big companies that are working to empower creators.”
If a new meme flies across your Twitter timeline or gets sent to you by a friend via email, you can bet your paycheck it originated on a Tumblr blog. Hot rap acts like Odd Future and A$AP Mob built communities here. The site has been a petri dish of Internet culture, a society with its own lingo and rules—or lack thereof. (Tumblr's laissez-faire approach to content has endeared it to users, many of whom reacted in fear when the Yahoo! takeover was announced.) Some of the most popular online slang has originated here. Ever see someone respond to a Tweet with a random assortment of letters (ex: ;asddsfasdfsdhg)? It wasn’t an accident. The expression, used when you are so shocked you’re left speechless, started on Tumblr.
That’s why an increasing number of companies, brands, and artists have flocked to the service. Everything from water, beer, candy, liquor, entertainment, and automotive brands have taken to Tumblr to carve out a presence and get help in spreading their message, especially to young creative types who tend to be the most influential and sought-after customers. Yes, every company is now on everything: you’d be hard-pressed to find a company not on Facebook, Twitter, and Pinterest, but on Tumblr the brands are afforded a bit more freedom. J. Crew’s Tumblr page, which reads like a digital magazine, is vastly different from, say, M&M’s, which looks like an inspiration board. And on Tumblr these corporate types can rub shoulders with uber-cool brands like Virgil Abloh's Pyrex Vision.
Speaking to Digiday, Noah Brier, CEO of Percolate, said, “I think what makes Tumblr unique as a channel is that it’s good at handling both heavyweight beautiful stock content and quick lightweight pieces of flow.” He added: “Because it has permalink pages that are easy to link back to and good integration in Facebook and Twitter, it can be a good content hub.”
Despite the large number of brands and companies using the service, Tumblr hasn’t yet figured out how to get all of them to contribute to its bottom line. That’s where Karp and Co. are hoping its new suitors will come in handy. Yahoo! has its work cut out for it: In 2012 Tumblr brought in only $3 million in revenue—a humble amount considering the company reportedly spent $25 million to keep the lights on last year and is estimated to have to spend close to $40 million in 2013. Thankfully, the $85 million it raised from Greylock Partners, Insight Venture Partners, the Chernin Group, Spark Capital, Union Square Ventures, Sequoia Capital, and Richard Branson in 2011, allowed it operate at a loss. The Yahoo! deal represents a roll of the tumbling dice. They're betting that enough big-ticket advertisers will tumble for Tumblr to earn back their billion-dollar investment many times over.
“The advertisements fit into spots where we already promote content,” he explained, meaning the page where his staff curates the best of Tumblr. "We've got this thesis that you can build a business that not only does not compromise Tumblr, but actually makes Tumblr a better place. If you ripped all the ads out of Vogue it would be half the magazine and you would lose a lot of good content."
There's a community of underserved creative advertisers, some of the most interesting people who got into that industry, people with Mad Men aspirations, people who want to make great ads and win awards, that’s been totally ignored by technology companies.
Karp has been an outspoken critic of the current model of Internet advertising. He’s referred to other company’s efforts as “hyper-hyper-targeting of little blue links” and believes that there are advertisers who want to do more than just "harvest intent" and drive pre-qualified buyers to their merchandise. “There's a community of underserved creative advertisers," he says, "some of the most interesting people who got into that industry, people with Mad Men aspirations, people who want to make great ads and win awards, that’s been totally ignored by technology companies that have been ignoring the creatives who actually make the most compelling content.”
That type of content is part of the reason Karp agreed to the Yahoo! deal, which has been unpopular among some of the Tumblr faithful in much the same way Facebook's acquisition of Instagram was viewed with skepticism. For his part, Karp has called Yahoo! "the original digital media company," explaining that “they approached media as an editorial team that created content and created creative branded advertising on top of that content. That’s a big part of the future of Tumblr’s business,” said Karp. “That’s something they built out technology for, it’s also something they have advertising relationships around. They have a humongous team and a lot resources behind that effort.”
Hearing Karp wax on about empowering creative and creating great editorial makes it hard to reconcile the shuttering of one of Tumblr’s most forward-minded initiatives: Storyboard. Charged with the task of highlighting cool stuff happening on the network, Storyboard had an acclaimed editorial staff and managed to notch a James Beard Award nomination during the year they were in business. But then in April 2013, Karp announced that the Storyboard team would be "closing up shop and moving on."
When pressed, Karp says Storyboard had three goals: “Identifying the stuff going on in the community, telling those stories in a way that elevates them up, spread that out to the world.” In his eyes it was the third step that wasn’t working. And after a year, the company found that it wasn’t “elevating those stories in a way that actually made it a part of an effective marketing effort.” And since that was the ultimate goal, Tumblr decided to nix it.
Will anything replace Storyboard? Karp’s eyes widen at the question but he remains enigmatic, saying only: “We’ve started to see this year some real breakthroughs that actually let you unlock all of the stuff that you’re going to love on Tumblr.”
Tumblr’s users genuinely love Tumblr. The community is an extremely vocal and fierce defender of their digital home. Will they stay now that their little community is owned by one of the biggest and most archaic tech companies in the world? That’s yet to be seen. When the acquisition was announced, despite Marissa Mayer keeping Karp as CEO as part of her promise “not to screw it up,” users still created a petition on ipetition.com to stop the deal that’s gotten over 170,000 signatures. Some, like Matthew Ingram from GigaOM, have pointed out that despite that pledge, Yahoo! has messed up previous acquisitions like the once popular Flickr photo sharing and storage service. David doesn’t think that will happen. He believes in Marissa Mayer and her plan for both Yahoo! and Tumblr. "She’s a visionary in this industry,” he told Rose. "She’s one of the most capable leaders." To his point, Yahoo! also took over Geocities and didn't screw that up at all.
Karp attempted to douse the flames of disapproval by taking to Tumblr and posting a message in which he said the company wasn’t “turning purple” and that the team and mission weren’t changing. He said that he and Mayer “share a vision for Tumblr’s business that doesn’t compromise the community and product we love.” Karp closed his letter with a rousing “Fuck yeah.”
Exactly what that vision is, we’re not sure. Will it involve claiming the right to repurpose user generated content in ads as happened with Instagram? Since Yahoo! now has to chart a clear path to profitability for both itself and Tumblr, there's no doubt it will include advertising. Mayer said the company would be introducing ads to Tumblr’s Dashboard. Will the Tumblr takeover turn out more like Geocities or more like Instagram? It’s too early to tell. But this much is sure: It’s safe to say, either way, that Karp is still smiling. And should remain smiling for a long time to come. Fuck yeah.