Tech media startup 'The Information' sounds like it's run completely inefficiently, but it's actually a pretty good business

Former star Wall Street Journal reporter Jessica Lessin has a tech media startup called The Information. She joined a Digiday podcast to talk about the digital media landscape and revealed a few stats about her 2.5-year-old company.

Lessin's team of reporters prefer to focus on quality over quantity. She tells Digiday that her team publishes just two stories per day in total, despite having eight editorial staffers (and 15 employees in all).

That means most of her staffers write nothing most days.

That sounds really inefficient, like a death wish for a startup. That's because most digital publishers rely on advertisements to make money. They may also have subscription businesses and events businesses, like Business Insider does, but most of the money they make comes from advertising campaigns.

Currently, advertisers determine how much they'll spend with a publisher based on traffic figures, like a publication's number of monthly readers (uniques) and the number of articles they read (pageviews) per month. And if you only write two articles per day for a very niche audience like "The Information" does, with no potential for your stories to go viral, that's not going to keep the office lights on.

But Lessin doesn't care about any of that. Instead, she's focused on creating quality articles that will attract paying subscribers. She has the luxury of running a subscription-only media company because she chose to bootstrap her startup from the get-go, so she has no pressure from outside investors to scale quickly and generate traffic.

"The Information" has a $399 annual subscription plan, which Lessin says "thousands" of people pay for.

When asked for a more specific number, Lessin told Business Insider her number of subscribers is "multiples" higher than 2,000 people.

So if we estimate that Lessin has 4,000 subscribers paying $399 per year (which would be a lower multiple of only 2), that's about $1.6 million in gross annual revenue. Of course, that number could be a lot higher if, say, the multiple is 3 or 4, which would mean The Information is making somewhere between $2.4 and $3.2 million in gross annual revenue. But even the lower estimate of $1.6 million is impressive, and it doesn't cost a ton of money to run a media business.

The Information has been testing ads to acquire subscribers on Facebook and Twitter, and there are server fees and such, so you can assume Lessin spends $10,000 to $15,000 per month on all that, excluding payroll, or about $120,000 per year.

If we go with the lower estimate for gross annual revenue, that leaves about $1.48 million to pay Lessin and her 14 other employees, which comes out to about $100,000 per person. That'd be a high salary for a team of writers in an industry that notoriously doesn't pay very much. Plus Lessin has said that the number in her company's bank account keeps rising, indicating "The Information" is profitable, despite the fact that it's pouring most of its generated revenue back into the business.

So, for a small, entirely-bootstrapped, 2.5-year-old media startup to be generating $1.6 million without selling any ads or hosting any events - that's unusual, and it's also a real business.

Even if eight people only collectively publish two articles per day.