How Medium Became Profitable After Losing $2.6 Million a Month
When people search for “how Medium became profitable” or “Medium CEO turnaround strategy,” they’re often looking for an honest breakdown of how a tech platform with massive early hype pulled off a near-impossible turnaround. Medium was once burning $2.6 million monthly, losing subscribers, and close to running out of investor goodwill. But since August 2024, the platform has remained profitable — a feat CEO Tony Stubblebine says came only after a series of radical and uncomfortable decisions. In this blog, we’ll explore what went wrong, the crucial pivots made, and how the team restructured both product and finances to get back on track. Whether you’re a startup founder, writer, or just curious about startup survival, this breakdown of Medium’s business turnaround delivers valuable insights.
Image Credits:Medium
The Financial Hole: Why Medium Faced a $2.6M Monthly Loss
When Tony Stubblebine stepped in as CEO in 2022, Medium was far from a healthy company. It had a bloated cost structure, a confusing business model, and investor complications that made decision-making slow and fragmented. Medium was shedding subscribers and had no acquisition interest. Worse, it was $37 million in debt and burdened with $225 million in liquidation preferences. These financial and structural obstacles meant that unless the platform became profitable quickly, it would shut down entirely. The company’s governance model was also a nightmare, requiring consent from five separate investor tranches before major decisions could be made — an unsustainable situation in a fast-moving market.
Stubblebine’s immediate goal was stark: make Medium profitable or close it down. That meant cutting costs, simplifying investor structures, and rethinking the product’s value proposition. It also meant being brutally honest about what was and wasn’t working in their core model — especially the bundled subscription system that rewarded everyone equally, regardless of content quality.
Product Overhaul: From Editorial Bloat to Writer-Focused Tools
Medium’s business model initially aimed to democratize publishing, but over time, its editorial ambitions began to backfire. The introduction of high-quality, professional editorial content — often written by hired journalists — started to overshadow the user-generated stories from independent thinkers, professionals, and academics. This shift alienated the core community that gave Medium its identity.
Stubblebine decided to refocus on the people who brought Medium to life in the first place — everyday experts and passionate storytellers. Key product changes followed. The Boost feature introduced human-powered recommendations. The Partner Program was revamped to reward thoughtful writing rather than pure clicks. Medium also rolled out a Featuring tool, allowing publications to curate and promote content within the platform — helping users discover high-quality work more easily.
These product shifts sent a clear message: Medium was once again prioritizing authenticity and individual expression over polished editorial. And critically, they began to build an incentive system that aligned with that mission.
The Toughest Fix: Restructuring Medium’s Investors and Cap Table
While product changes addressed user value, the core of Medium’s crisis was financial. Beyond the operational burn, the investor structure was a minefield. Complex governance rules and multiple layers of liquidation preference made it nearly impossible to execute long-term strategy.
To survive, Medium had to clean its cap table — fast. Stubblebine initiated a complete investor restructuring. He convinced loan holders to convert debt into equity and approached other investors with terms for a recapitalization. It was risky: only six out of 113 investors agreed. But that was enough to dilute existing stakes, remove liquidation preferences, and reduce governance friction.
This bold move effectively handed the company back to its operators. It also eliminated the pressure of a looming liquidation cliff and gave Medium room to make more agile, founder-led decisions. Simplifying the investor pool was not just about equity — it was about survival.
How Medium Stayed Profitable and What Founders Can Learn
Since August 2024, Medium has not only stopped losing money — it’s been profitable. That success wasn’t driven by a single growth hack or viral product update. It came from hard choices: laying off staff, selling office space, shutting down acquisitions, cutting editorial bloat, and rebuilding investor trust.
There’s a lesson here for any startup facing its own reckoning: profitability isn’t just about raising more money. It’s about prioritizing clarity, cleaning up decision-making structures, and realigning product with user needs. For Medium, that meant betting on real writers, not newsroom expansion. It meant renegotiating debt with a walkaway threat. And it meant simplifying an investor mess no founder wants to inherit.
Stubblebine’s playbook isn’t glamorous — but it’s honest, tactical, and deeply rooted in financial and operational discipline. If Medium can go from losing $2.6 million a month to building a sustainable business, there’s hope for any founder willing to have the hard conversations — and back it up with action.
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