I just want to support Michael’s post — great reading, btw — with some thoughts on what was happening at Gigaom Research, some of which I explored in What was working at Gigaom Research. Note the proviso that I was always a freelancer and never an employee of Gigaom, so I knew next to nothing about the company’s finances, except by the indirect metric of delays in payment of my invoices.

As Gigaom Research’s influence started to grow in recent years, we began to gain traction in advisory-style services with larger vendors. I agree with Michael, and other commentators (like Matthew Ingram and Peter Kafka), that the level of overhead involved was too high. In particular, the level of sales and client services people in Gigaom Research was too high, because the company was trying to grow very fast.

But the real disconnect was that researchers like me were all freelancers: most were being paid for piece work — like writing reports, or conducting webinars and the like. I was a research lead, so I was also being paid to write quarterly reports and blog on the web site, as well as conducting sponsored research and writing reports based on that work. But we were not focused solely on Gigaom Research, but had to pursue many parallel lines of work to cobble together a living.

What Gigaom Research might have done was to drop the ‘disruptive’ model of low-cost subscription research, and instead build a true research and advisory analyst firm. They could have dropped half the sales and client services team, or more, and brought in a small group — to begin with — of research directors who would manage relationships with the clients, and they would work closely with the network of freelancer analysts, too, and grow staff in line with revenues. Yes, such research directors would have to be compensated, but that is a proven model that has worked at firms like Gartner, Forrester, and many others for decades. And those research directors would be able to concentrate their efforts on Gigaom Research, exclusively.

As Michael pointed out, Gigaom Research grew from nothing to 60% of the company’s revenues in a few years, while the editorial side had flattened out on page views — but continuing to add editorial staff — in an era when ad revenues are falling.

I, in fact, proposed that change of business model for Gigaom Research early in 2014, and we were experimenting with that starting in the fall of 2014, and with some success with major tech companies (although I was still operating as a freelancer). I believe that if we had taken that path years ago, Gigaom Research would have grown much faster that it was. It may not have been enough to counter the overhang caused by VC and debt financing, but Research might have been producing 90% or more of the company’s revenue by 2015, if they had gone that way from the outset. And maybe last year’s debt and VC raise might have been avoided, if so.

In the end, Gigaom was brought down by three factors: too much overhead, too much VC and debt, and a failed bet on a low-cost research model.

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Work ecologist. Founder, Work Futures. The ecology of work and the anthropology of the future.

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