Full transcript: The Information founder Jessica Lessin on Recode Media

On this episode of Recode Media with Peter Kafka, fellow journalist Jessica Lessin stopped by to talk about her news site The Information. Lessin began covering the business of technology at the Wall Street Journal and now runs her own subscription-based publication.

You can read some of the highlights from the interview at the link above, or listen to it in the audio player below. We’ve also provided a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Media on Apple Podcasts, Google Play Music, TuneIn, Stitcher or SoundCloud.

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Peter Kafka: Today’s show is sponsored by Mack Weldon. They make the most comfortable hoodies, sweatpants, underwear and socks you’ll ever wear. I’m wearing the socks right now because I paid for them with my own money. That is the best endorsement I can ever give you. What else can I tell you about them? They look good, they smell good. Jessica, I’m not going to ask you to smell them. What do you think of the hue though?

Jessica Lessin: Love the blue.

It’s color coordinated.

It’s a deep blue.

Deep, is it turquoise? I don’t know, I defer to your color judgment here. They’re easy to buy. You go to MackWeldon.com, you get 20 percent off your order with the promo code “recode.” If for some reason you don’t like them — and you will, you will like them — you get to hang onto them, Mack Weldon will send your money back. That’s how venture capital works, apparently. Go to MackWeldon.com, use the promo code “recode,” you get 20 percent off.

Jessica Lessin, you are not in the advertising business so you do not have to read ads. How do you feel about that?

I feel pretty great about it, although you did an excellent job.

Thank you.

I’d buy them.

I appreciate it. This is Recode Media with Peter Kafka, that’s me. I’m speaking with Jessica Lessin from The Information. Normally when I have a guest on ... Not normally. Oftentimes when I have a guess on I say, “What do you do? Explain what your business is.” There’s this uncomfortable back and forth, they try to explain that they’re not really a newsletter company, they’re a something else. You guys are really simple to explain. Can I take a crack at it?

Go for it!

You guys are a tech business publication, subscription-only business. The main business is a $400-a-year-subscription, and you’ve recently said you got to 10,000 subscribers.

More than 10,000.

More than 10,000 subscribers. What did I miss?

I think that’s it.

That’s the end of the interview. We’re done.

We’re done!

We solved the riddle.

We’re three years in, I think publishing some really great in-depth journalism about the tech industry.

I concur. You guys are doing great.

The kind of things I’m really excited about right now, we actually have the second-largest tech reporting team in Silicon Valley, which people don’t realize. If you look at the number of unique reporters we have covering technology —

Unique reporters?

Number of reporters.

I like unique reporters.

Unique reporters. I’m so techie.

People who publish once each month.

I know. If you think that I ... That’s obviously a unique visitor slipover from my days as a tech reporter. On the ground, second only to Bloomberg, we have ...

You’ve got a couple dozen people I think, all in?

Yeah, a couple dozen all in, 13 full-time reporters. Why that’s important is because we are doing original journalism, and that’s what we’re excited about, what’s driven our business, and what we think is an awesome business for the future.

You’re three years into this, prior to that you had a long impressive run at the Wall Street Journal, and prior to that you were in college.

That’s correct.

You shot right out of school and said, “I know what I want to do, I want to do technology journalism,” and then you said, “I want to start my own technology journalism company.” Boom. Successful twice in a row.

That was it. I was lucky, I joined the Journal at a time when technology was this new fancy shiny object, that a publication like the Wall Street Journal was still figuring out how to cover, so there was a lot of opportunity to be the first to important things like online video. I remember interviewing Ze Frank when he was a vlogger, that was the term we used. I really enjoyed the chance to cover the industry at a place that wasn’t paying a ton of attention, but was paying more over time, and then actually began to cover the ways that these tech companies I was writing about were changing my industry, and so came up with the idea for The Information.

So you’ve got more than 10,000 subscribers paying $400 a year. You introduced a student rate, and then there’s a super-high premium rate for 10 grand, but I assume most of them are paying $400 a year.

Yeah, that’s our focus.

What do your readers want to read about, besides awesome technology journalism? What drives, flips the ... What’s the metaphor?

Tips the scale.

Tips the scale, something with a needle ... It’s Monday morning.

Sure, all of the above.

What are people most interested in reading?

It’s many different kinds of stories, which I think is important, because there’s a sense that people will only pay for scoops, or people will only pay for something they can trade off of, and it’s not true. We find in terms of, whether it’s an in-depth look at how Magic Leap has been showing investors prototypes that aren’t really what they’re saying, or what’s happening to Tony Fadell at Nest, or it’s a thoughtful analysis that is pure commentary, or anything in between, if it isn’t already out there, it drives a lot of business.

We were just talking before you came up about what podcast episodes are doing well for us. Anything with Apple in the title, obviously, and then Uber, Amazon, Trump, all things that make sense if you’ve ever looked at web traffic. Because you guys aren’t interested in web traffic. I’m sure you are, but you’re not dependent on it for your revenue. Do you think your readers are fundamentally interested in different kinds of stories than they would be if they were going to a free site?

I don’t, but I think there’s a breadth of interest out there that the free sites aren’t serving, that we’re serving. Here’s an example. Yes, Uber, Apple, big news about big tech companies is important, and we do that, but we’re also interested in how technology is changing other industries. I think that the industry has become too ... Our coverage is too tech obsessed, and not enough what I like to think of as tech centric, as in seeing the world of business through technology. Writing about even some auto suppliers who might be for sale in the self-driving car movement, or key players like Velodyne in that industry with LiDAR, those are stories that are very big stories for us, that may not see a surge in certain types of traffic, but our subscribers recognize they’re at that intersection of where tech is interrupting their business.

Because you still fundamentally have an audience to please, just like HBO is a subscription business but they still want to make sure that people are watching their shows, and if no one’s watching a show with Jack Black in it, which I can’t remember, they will not renew that show. Netflix is the same way. They’re still a metric-driven thing.

Engagement, right. I think that’s why ... and it’s great you mention HBO, to me they’re a model branding this new media zone that we’re in. Because they are a brand. They are something that people want to identify with, that you don’t just wait and see what shows up in Twitter, you actually go to the programming actively. I think all publishers need to start thinking more like brands, and so as a subscription business that is very natural for what we have to do, because we have to be engaging enough that people want to keep paying us.

You’re three years into this. What has surprised you about running your own business for the first time, and running this kind of business?

I think what surprised me is how much time I spend on recruiting and growing our team. As a reporter, when I asked entrepreneurs what surprised them, or what they spent the most time on, they said that and I thought they were dodging my questions about their big scoop, they didn’t want to tell me about it or something. But it’s true.

Because bringing people in, getting them to come in, getting them to stay, replacing them when they leave, it’s a giant chunk of time.

Yeah, absolutely. I think that no matter what you do, when you’re building a business it’s about the people. Even more so for our business, where our product is our journalism, which is totally driven by our reporters. I think we’ve been really, really fortunate and hired some amazing reporters, and I think because of what’s happening in the rest of the industry there’s a lot of opportunity. We’re getting a lot more inbound lately, but it’s time consuming.

I think a lot of the work that I do, and other reporters do, and the work that you used to do as a reporter, is, sometimes it’s collaborative, and often you’re working with an editor, but really you’re off working on your own quite a lot. Now you’re running a company, you’re managing people, you’ve got a couple dozen people; everyone who runs something for the first time has to feel their way through it, but they also go out and look for help. Have you gone to people in the industry and said, “Can you help me out, can I get advice from you”?

Absolutely.

Who do you rely on?

As a reporter it’s my second nature to ask questions. That’s the only thing I ... How I run a business. Across the board, entrepreneurs are a huge source of wisdom. Also many of them are subscribers, and so we get double-edged feedback there. We have an advisory group at The Information, just informal group of advisers, like Paul Steiger, former editor of the Wall Street Journal, Jim VandeHei, now founder of Axios, John Doerr at Kleiner Perkins. Those people are great when I have some targeted issue I really want to put a lot of brains against.

Are there other management aphorisms like that, like “recruiting is really my No. 1 time suck,” that you would have brushed off as a reporter and now find newly relevant?

That’s the one that comes back again and again. Oh, culture. Culture is another thing with the reporters. As a reporter my eyes would sort of glaze over ...

They would roll in the back of your head?

When an entrepreneur would talk about that, but it actually ties into the recruiting point. Not culture as in what kind of snacks do you have, but someone once told me, I forget who it was, that the culture is really why everyone at your company is doing what they’re doing. That, I think, can be critical, both in recruiting and also bringing clarity to prioritizing what the business is going to do and go after. This one I’m a little less skeptical of these days.

I see you out there proselytizing, you do op-eds, you do speaking engagements, you’ve come to our events, you’re doing this. Oftentimes when I see someone who’s running a business out there I say, assuming that it’s not just ego, that they’re doing it because they want to generate ad business, they’re looking for investment. You’re self-funded, right?

Yep.

Just no advertising business?

No advertising.

Why is it important for you to go out there and bang the drum on behalf of your business? More than that, you’re often talking about the ad model, and why the ad model is screwed, and why the pay business is the way to go.

Are you calling me outspoken, Mr. Kafka?

Yes. What’s the point of saying that? Obviously you’re outspoken. That’s why you’re here. What’s the point of having a public persona?

I think we’re at a really important moment in the news business. The news has become the news. This is not an original idea, everyone is talking about this, but we have a dearth of original reporting, and it’s going to affect our society and is affecting our society. There’s this belief that news is a bad business, and I don’t believe that, and I think it’s really critical that others feel the same way, and invest in building new businesses, old businesses, that can continue to serve this mission of being great journalistic enterprises. Being great businesses because of their journalism, not having to tack on a multi-million dollar events business, or get into consulting.

Not that there’s anything wrong with that.

Your words, not mine. I think the point is, we’ve seen an era where the assumption is news is a bad business, it’s all going the way of a race to the bottom, talent is fleeing the industry. My perspective is totally different. I think it’s never been a better time to be in the news business.

My question is why ...

So why do I do it?

Why do you ... We’ll go back to the theory in a bit, but why is it important for you to be out there writing op-eds? There’s people who make a living doing the chin-stroking, and I guess this is a version of that on this podcast, talking about the future of news, but you’ve got a business to run, you’ve got people to recruit. What’s the point of going out and banging the drum for your message?

I just personally think it’s important, and it’s part of what excites me about this opportunity. I think I want to reach the kind of people who want to work at The Information, because I think it’s important to get that message out that we commit ...

So it’s a recruiting tool?

Absolutely. On a relative basis, I don’t feel like I spend that much time doing it. Most of my days are in the office and in the news room. It’s also a chance — I still write and report — and it is a chance to meet other interesting people and develop story ideas as well.

On the paid model, the death of news, I don’t think there’s any debate that you can sell certain kinds of news to a certain kind of audience. Clearly the Wall Street Journal, where you worked before this, has been able to do that for a long time. Clearly there’s an audience for investors and other people in technology to pay for a premium for a certain kind of news, and that model has existed for a long time for other newsletters, other trades. It seems like where the question is, is how does this work for general news, local news, lots of stuff that has either been traditionally fully ad-supported or had some other sort of subsidy that has now been erased by the internet? Doesn’t seem like this model will work in local news, for instance. Nothing works in local news right now.

The way I see it is, people will pay for things that are valuable to them. We pay to go to the movies. We don’t expect to go to the movies for free. We pay for items of clothing we like. News is information, and I think if it’s valuable to an audience, there’s a price that people should be willing to pay. As an industry, that should be our default assumption, whether we’re in local news or business news, that we want to create something that will have some value to someone. That hasn’t been how people approach the industry. We treat news as some separate thing that’s sort of free until otherwise proven it should be paid. I just think that we have been approaching it backwards.

What is the right approach if I’m in Towanda, Pennsylvania, or Stillwater, Minnesota, or other small towns that I could think of off the top of my head? What should I pay as a consumer, or how should I get my news, if i want to get news about my community?

I look at it from the point of view that people covering those markets should be asking themselves, what can we do that is so valuable that someone maybe will pay $5 a month, or maybe less? I don’t think we’re talking about $400 a year, but in the same way that people obviously in those markets do pay for some sources of information, I think if outlets approached it from that mentality they would be raising the bar in what they publish. Some of them may still end up in a place where they’re primarily ad-supported, and that was probably true. Again, someone’s willingness to pay is just saying, “This is important to me.” There are people in those markets who are paying for Netflix, they’re paying for Spotify, and for a lot of other stuff.

What you may end up with, right, is you may end up with — and we’re headed there — you end up with a very small community of people who are informed because it’s important to them, and/or they can afford to pay for that, and a lot of other people who probably should know what’s going on and don’t. We just had Lydia Polgreen in here talking about the difference between the Huffington Post and the New York Times. The New York Times has a big audience and an affluent audience, and they can pay 15, 20 bucks a month, and she thinks that’s great, but she thinks there’s a bigger, broader audience that should be served by a free publication. Again, I think nationally that solves ... I think it’s really broken in mid-size markets and smaller markets.

I think in those markets it would make sense to experiment with blended models. There are metered paywalls, there are all sorts of things, and just because as a publisher you say, “I want to charge something for my content,” it doesn’t mean you’re attacking society, or against the freedom of information. Quite the contrary. It says, “I’m going to support myself by doing good work that has value,” and it does spread and reach other people and inform people in other ways.

I just think it’s a giant gap between the number of people who would pay a lot of money for that Magic Leap story that you wrote — it was a very important story for a small number of people but with deep pockets — and someone who needs to know what’s going on with the city council or zoning board or wherever.

Yeah, and there’s a long gap between $400 a year and other kinds of paid models. As an industry, I just hope we see more experimentation in paid models throughout the chain.

We make money, some money, through advertising here, so we’re going to hear from our fond sponsors. We’ll be right back.

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We’re back here at Recode Media. I’m Peter Kafka. This is Jessica Lessin. We’re talking theory and fact and argument and idioms about news. Let’s have some real talk now. How did you get into the business?

I had wanted to be a journalist since I can remember, in grade school. Thought it was the career where you didn’t have to pick your career, you just keep learning.

What was their model? What was the thing you wanted ... Who were you emulating?

I’m not sure I thought that far ahead, honestly. I just loved ...

You saw someone, right? You saw someone do that job, or you saw someone on TV, or you read someone in the newspaper, and said, “That sounds fun”?

It’s probably Lois Lane, if we’re being totally honest. I think it was as much that as all the great ... Woodward and Bernstein, too ...

You gotta start somewhere.

I loved all aspects of reporting, and just had awesome tutors who were the editors of the newspapers at school and all of that. At Harvard I was on the Crimson, which was really my first experience of being at a newspaper, and I got to cover the faculty beat, which is sort of like covering Congress, because it’s that political. Larry Summers was on his way out for some controversial remarks, and the faculty was actually voting him out, and I got to sort of cover that moment.

I have a vague memory of this. There was gender stuff involved, right?

Yes. A comment that implied women weren’t very good at science. He was out, and the faculty uproared, and it was just an important story, and it was one that was interesting beyond Harvard, which was sort of exciting to me. I had secured an internship at the Journal that summer, and actually started corresponding with the Journal on a freelance basis to help them cover that story since there was so much interest.

How do you secure an internship at the Journal? That’s pretty hard to get, as I recall. Then how do you go about telling the Journal, “I’m going to do some freelancing for you in between junior and senior year”?

The Journal’s Boston bureau chief at the time reached out and said, “I hear you’re going to be an intern for us.” My college newspaper duties had ended, the new guard had taken over, so I was for hire.

There’s a pipeline. If you’re working at the Crimson it’s easier to get to the Journal? Or you got yourself there?

Sure. I was pretty methodical in terms of my internship, so every summer I had kind of pursued an internship that I thought would help me get another internship. I was at the AP during college, which was awesome, covering the UN, which was a very neat time. Then I went to work for the Boston Globe in Washington, D.C., and actually was interviewed by Marty Baron, now of Washington Post fame, who was at the Globe at the time. That was when I first met Marty, when I was trying to get an internship at the Globe.

So these all are and were then the best papers in the country. Does it occur to you while you’re getting internships at the best paper in the country, and then the next one and the next one, that this is an extraordinary trajectory you’re on, or did you just think it was normal, and of course what you want to do?

No, I felt incredibly lucky, incredibly lucky. I think it was also a time when intern programs were much larger. It was obviously challenging, but these were ... The Globe in particular had an incredible program, a ton of training, you had a writing coach who read all your clips ...

Writing coaches.

It was an amazing, amazing time. Sadly a lot of these programs have pulled back. It’s one reason why I think we’re going to have four summer interns at The Information this summer, had four last year, one of which we’ve hired. I’ve become a sort of intern junky.

Do you pay them?

Of course, absolutely.

Good for you.

Absolutely.

You’re on this high-power trajectory from Day One, basically, in college, and then you go straight from college to the Journal?

Yep.

I recall reading your stuff at the Journal right away, and we got a drink because you were kicking so much ass, and you were getting right out of college. Again, did it strike you that, “Boy, I’m really moving fast,” or you just thought, “This is the natural order of things”?

I think I just felt excited, and lucky. I will never forget actually getting hired at the Journal. Because it’s one thing to get an intern program, but then there are very few slots, and newsrooms aren’t the best run, let’s say, in terms of hiring, and keeping in touch with people about their prospects. I actually just didn’t leave the building after my internship. I kept pitching editors on different stories they’d want, made sure my keycard would continue to work, and then finally they just ...

Gave up.

Saw me and said, “Okay, something has finally opened up, so we’ll give it to you.” I was just incredibly excited, in part because I did feel like I was riding this interest in technology, too.

You had the media beat when you started off, which was even then morphing into tech, or back and forth.

Yeah. My very first beat was sort of consumer tech for personal journal, which was, the Journal had a San Francisco bureau that covered all the big tech companies. In New York, New York wanted their tech reporters too, it was a little bit turfy, but Google had just bought YouTube, and the Journal had kind of missed the story, so there was this sense, “What’s the next YouTube? Let’s hire someone young who won’t miss the next YouTube.” That was just incredibly exciting to me.

You said, “I’ve heard of this thing called Facebook.”

Yeah, then it was Myspace, and then it was Facebook. I remember talking to editors, or getting edits back on stories about Facebook. “How will this business ever make money? Should we really be writing about it?”

Tease out your connection to Facebook for the listeners who don’t know.

Sure. My first connection was that I covered it for the Wall Street Journal for a while, and then my husband joined it, at which point I stopped covering it.

But prior to that you knew Mark Zuckerberg in college.

We were overlapped. I think I met him a few times. We weren’t friends in college.

Your husband Sam, wasn’t he Mark’s roommate at one point?

No.

No, friends. Pals?

They knew each other.

Knew each other, okay. You were not hanging out, wherever one hangs out in Harvard.

We were not hanging out. We were working.

So this is not, you didn’t go back years with him.

Nope.

I remember seeing you, it was when Mark had the sweat incident at D ...

Oh, the sweat ...

And you’re sort of, “That’s just how Mark is.”

I had covered them, and I think at the Journal I was one of the first reporters, certainly one of the first business reporters, who took them seriously as a business and something that we should be writing about. I think it has been very cool to watch so many businesses grow when you’ve covered them from the very early days, as you have too. They’re certainly in a different place than they were, but I think as a business story they’re probably as exciting as ever.

What’s the thing you think people misunderstand the most about Mark Zuckerberg? Because you know him pretty well at this point.

No one’s ever asked me that question, Peter. That’s a good question.

I win!

You win. This is one where I think people understand it, but maybe not to the degree they should, is just how incredibly far into the future and big picture he and the company are thinking. You get glimpses of that when they do their 10-year roadmap at F8 and all that, but I think some people start ... I currently don’t have a hundred-year vision for The Information. Maybe I should.

You’re allowed to do that, right, when you have a business that’s throwing off billions of dollars in profit. Not on autopilot, but it really is just a colossus. It allows you to go, “All right, we’ve got next year licked. What’s coming out?” What do you make of ... They just threw F8, and there’s a lot of talk about mind reading and alternative reality, and stuff that ranges from crazy shit we won’t see for a few years to maybe we’ll never see. What do you think the point is of them spending that time talking about what the future might look like?

This is with my business journalist hat back on. Facebook now reminds me of where Google was for a long time when I was covering it at the Journal. The easy stuff is over; now what? Yes, you have this cash machine that is minting money, and you’re throwing it in a lot of different directions, and you’ve got to do something with your capital, and you’ve got to do something to keep your employees and team looking far, far into the future.

And occupied ...

And occupied.

And keeping them engaged on campus.

Absolutely. Google, again, when I was trying to understand, that was a playbook they used, and Facebook is using it now. I think it’s fascinating to watch, because it’s very unclear which of these things is going to bear fruit, and many of them won’t. If you even look at — and our reporter at the Information Quarry has done some great work on this in Facebook, Messenger perform. Two years ago, one year ago, it was the cat’s meow, it was the future, it was everything, and it still exists, but it hasn’t really gone anywhere.

That was my big question mark over my last week of coverage. Again, this is the stuff, it’s designed to sort of occupy everyone’s, the front of their brain for a second. It’s, literally we’re going to be able to read your brain, we’ll do all this amazing shit, and there’s a lot of deep thinking about it. Very few people are saying, “What happened to last year’s big shiny thing, and why should we trust them to have any better sense of what the future’s going to look like than anybody else?”

They’re placing a lot of bets, and it’s absolutely obvious that many of those won’t work out. I think the great companies and the great CEOs kind of manage through that, and we’ll see, but it’s absolutely the role of people like us to continue to understand what’s going on internally, what kind of traction are these things seeing? You do have to wonder over time what employees and people working there think and choose to work on, and eventually something’s going to have to really gain some traction and start taking off.

You’re at the Journal how many years?

Eight.

Eight years, really successful there, media beat, technology beat. Were you thinking, “I’m just going to work my way up the masthead and one day I’m going to run the Wall Street Journal”? Did you think, “At some point when I grow up I’m going to run my own business”? How did that come about?

I thought I was going to stay at the Journal forever. I really thought that it was a place where I could grow and play a bigger leadership role in how the news industry would write its next chapter. I didn’t sort of contemplate start The Information for more than a couple months, and the switch for me was that I felt the Journal and other places were just making a bunch of mistakes, and that there was a big opportunity.

But that means something, then you’re dissatisfied for a long period then, right? You don’t just decide to get up one day and start a new business? Theoretically you can ...

Sure, but as a reporter I ... There were a couple of frustrations. One, as a reporter, was, who am I writing for? I was writing, I was covering Apple at the time, and you can write Apple stories ... There’s such great interest in Apple stories ...

Less so now than there was.

A little bit actually, that is fair. It will swing back. What was happening is, I was getting a lot of encouragement from my editors for liveblogging Apple press conferences, and stories that I just didn’t care, it wasn’t why I got up in the morning. I got up in the morning to write stories other people weren’t writing, that would help business leaders make decisions. That struck me as, on one hand, frustrating. On the other hand it was like, there was this hole in the market for this other kind of journalism, which was the writing that would really focus on the new information for a certain audience. I felt like I didn’t know who our reader was, and that did frustrate me. It just also felt like a big opportunity. I believed that there were others like me. My colleagues, when I looked around, felt similarly, that they were being asked to spend their time writing the 19th version of a story just because it would generate a lot of traffic.

You didn’t think, “I’m on a management track, I’m going to be able to influence decisions, I’m going to have a voice in saying, ‘Let’s stop this’”?

No. I felt that I saw an opportunity, and it would be exciting for me to kind of go after it now as opposed to waiting.

How much of this is being in Silicon Valley, being in San Francisco, in that period where you could literally write a napkin pitch and get funded if you were a certain kind of white male? Being around people for many years who’d started their own companies, run their own companies, your husband Sam had done that ...

Yeah, my husband.

Just saying, “I want to try this too, it doesn’t look that hard.” Or, “Let me see how hard it is.”

It was because I felt I knew how hard it was, and I was still excited by it, that I felt like I could give it a go. I was absolutely influenced by knowing a bunch of entrepreneurs. Because it is a crazy idea to say, “Here’s an opportunity, I’m just going to go do it,” but the great thing about journalism is, it doesn’t take a lot of capital to get going. Thanks to the internet you can instantly reach an audience, and you can grow faster. I felt like the situation was ripe to try it, and that I would learn a lot, and I just knew that if you were writing stories that had original reporting about important technology companies, there was a market for that.

And the plan was always that you were going to fund it yourself, and fund it through the business, or did you think at one point, “I’m going to go out and do the standard angel/VC seed round”?

The plan was always for me to just kind of get us going, and then to be supported through our business and cash flow and our subscribers. The reason I wanted that to be how we operated is, I felt like it was the true sign we were onto something. If we could sustain our growth, with some help so we had a cushion of investment, but based on our growth it meant we were going in the right direction, and if we got to a place when that isn’t happening that should be a warning sign that we need to adapt.

How much money did you need to start the business from scratch?

Not much.

Not much?

I’m not going to get into the numbers, but ...

Six figures, seven figures?

Definitely not ... Well, I’m not going to get into the numbers. You don’t need seven figures.

But you were in a position where you could pay yourself a salary. Amir Efrati was, I think, your main hire, right? A couple other people?

Yeah. I don’t pay myself, which is also a situation I’m fortunate to be able to be in. We started with ... I remember we hired our first reporter, and hired our second, but we always scaled as our business was scaling.

So you have this many more subs, we can hire another reporter.

Sure. I think we were fortunate enough, and the business grew fast enough, that we didn’t make those ... We have always been in the mode of just hiring as many reporters as we think would be a good fit, and work out well with what we’re trying to do. We’re in that mode now.

Do you give people equity or not? There’s a debate now, at least in journalism startups, about whether or not you should be giving away equity, or incenting people with equity.

Sure. Because I own the company it’s a little bit different for us, because our equity would be worthless because I want to own this business forever. We just compensate people competitively, and if they stay with us we do upside through other bonuses and that kind of thing.

Does that culture exist for journalists, where they say, “I’m worth this percent of the company,” or is that specific to engineers and other folks in the business world?

I think the culture of saying, “I’m helping build something and I want to accrue some of the value” definitely exists, and we love that. We want people who think that way. The problem with the culture of equity is, it’s often worthless. More often than not it is, and that’s what gets missed. I think sadly a lot of employees in Silicon Valley are getting duped by just thinking that equity is fancy and good comp.

Yeah, people are more sophisticated about it now than they were a decade ago.

I hope so. We’ve done some coverage on how unsophisticated people are and we’ve interviewed people and asked them about their offer letters and the like. Something I wish people paid more attention to.

That would always irk me when someone said, “You own this company, so you should ...” Yes I do, but I can’t get paid based on my equity, which has not been liquid. I can’t really complain. We’re going to take another quick break for a word from our sponsor. Here’s my friend Lauren Goode with a word from Viacom.

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We’re back here at Recode Media. What’s your partnership with Jim VandeHei and Axios?

Jim is one of the informal group of advisers that we have, so he’s been incredibly helpful on actually giving me some wonderful advice on growing a team and retaining talent. When he started Axios he asked if I would sort of reciprocate and informally advise them.

Because he’s a big paid subscription guy.

He is a big paid subscription guy.

He had a $10,000-a-year business.

The Politico Pro model.

Right.

I think he’s got similar ideas they want to eventually implement at Axios.

It was weird, we had him onstage and we got him to talk about that eventually, and eventually got him to talk about the price, and they don’t ever want to talk about that again. For now they are behaving as if they are a free publication, but that’s not the plan.

That’s what they say. I don’t know more here. I would agree with you completely.

They’re a hybrid model, or will be one day a hybrid model. Do you ever think, “All right, there’s a way I could incorporate advertising that would make this business more successful”?

Maybe. I’m not anti advertising, and I think that successful media companies, if you look, have multiple revenue streams. We want to be on the scale of an FT or Wall Street Journal someday. I think we’ll definitely have multiple revenue streams, and advertising could be one of them. It’s not something we think about at all today, because I think it’s important ... If you could have a large base of people willing to pay you, that to me is the biggest position of strength you can start from and grow from.

We were talking about events briefly. You’re not in the events business but you’re holding events. When people hear this you will have held a New York event, which is not open to the public.

Yeah. It’s subscriber only.

And you don’t sell this, right? It’s a bonus ...

Correct. We have a small fee to make sure you actually show up if you reserve, but it’s part of being a subscriber, part of the community. We will have talked, in hindsight. We have Jeff Zucker, Marty Baron, Nate Silver, Katie Couric.

Good one.

So we’re digging into the topic of news. We also unveiled a new product that we’re actually very excited about. It’s probably our biggest launch since we started, which is called Briefing, and it’s our reporters’ commentary on the tech news of the day.

Do I call it a newsletter?

The site is more the focus, so Briefing.TheInformation.com. You can get it as an email if you want, but our goal is to have something that subscribers can check continuously throughout the day to kind of see what our reporters think of the news of the day.

Because you guys deliberately do low-volume publishing, right? Story a day, couple stories a day max?

Yep. That’s because what we publish is original to us. It’s more important to us to be the first to say something, or having gone more in depth about something.

But the idea there’s still some value, meaning we’ll say, “That Mike Isaac story about Uber, there was some really interesting stuff in there, and by the way think about this,” or, “I think Mike got this wrong.” Is that the idea?

Absolutely. Here’s, if you’ve been following this, here’s what struck us as the most interesting. Exactly, that’s a perfect example. That story came out during our beta test, and that was one Amir did during the test, that worked really well I thought.

It’s funny the spotlight you get if you’re writing about ... I think this exists outside of technology reporting as well, but certainly in technology reporting, where there’s an informed and engaged audience who have their own platforms, who will tell you what they think of your story, and not just leave a note in the comments but write their own blog post about it. Right now, this will be at least a week old, but there is this back and forth with Mike and Ben Thompson and other folks talking about the lead of the story, and whether or not it was really tracking users or just tracking the iPhone. It’s the kind of scrutiny I think you really don’t get in other ... Well, I’m going back and forth. I guess this probably does exist now in politics and sports.

Yeah.

Anywhere where there’s an audience, where the people you’re writing about have a degree of power and autonomy, and can say what they want.

I think it’s also fueled by the fact, there’s a whole cohort of writers who exist only to engage with other people. It’s actually easier to react than to go out and do the work yourself. If you’re in the business of just reacting to other people’s news, and that’s your whole business. That’s why there’s been a lot of it.

There is that, but there’s also just a lot of folks, again, who are technically savvy, who are doing the work, who figured out years ago, “My opinion is as valuable as anybody else’s, and I can express it on a blog, or a Medium post, or a tweet.” There’s a whole chattering class, but that’s always existed, and that exists everywhere.

Yeah. One question that interests me a lot is, who’s that in service to, and how does it not get so navel-gazing? This is something we’re trying to do with Briefing, and another reason why having a subscription business is valuable. When you have a subscription business you know your audience. You know a lot about them, you can study their behavior and readership more closely, and it’s easier to sort of home in on what aspect of this story is going to be really interesting to that audience? That’s a tricky thing to do. It’s particularly tricky in tech journalism, where the potential interest is vast, but sometimes when you’re in the bubble of Silicon Valley it’s easy to get lost in the fine points of something.

Right. The current of this is called the take, but the two guys, two people of either gender, or whatever gender you want, in a bar talking about the events of the day, or the game, or whatever. That’s an old model for, one, engaging with people, and two, creating media. There’s an old model for that, there’s nothing wrong with that.

No, and I think it can be valuable. I think when you’re building a business around it, the question is, who’s the audience, and how differentiated is that perspective?

I think this is a big problem for ESPN now, is this is all they can do now. They used to have a lock on sports information, and that lock has been unlocked. Everyone can see the score, and everyone can see highlights. Now they’re doing talk radio, on and on, but anyone can do talk radio.

Yeah, and I think you do have to worry. I sort of have this image, it is not a great metaphor, but of the financial crisis and mortgages, where you repackage and regurgitate the product so often, you lose sort of what was the original value to it. I just think it’s so much more important to be in the business of creating the new stuff that then people talk about. It’s much harder, but it’s what skilled journalists do.

Does this remain a technology-centered business for a long time, or do you branch out and do verticals, and you’re going to do bio ... ?

I think tech is the vertical. The parallel I think about is, over the last several decades, the Journal and the FT grew to prominence because they saw the work through a lens of finance. They hired reporters to cover all sorts of subjects who understood finance. I had to take a course on cashflow, reading cashflow statements, as part of my training with the Wall Street Journal, and we want to do that for tech. I think that instead of treating tech as this vertical, it’s really the way to understand what’s going to be new and changing across industries, and that’s really exciting to me.

Do you need, we were talking about this at the beginning, do you need the Apples and Ubers and Amazons, and sort of these glitzy, big companies, people know who the company is, they know what the product is, it’s a product they can touch or buy, they know who the CEO is; are those important to keeping this going for you? If tech becomes sort of diffuse and in everything, and everything is technology, does that make what you’re covering less interesting?

The big companies aren’t going away. There’s just now the question, they’re just getting bigger, and they’re going to touch more of our lives. Covering and sort of owning, as much as we can, different parts of that, I think is critical, but we’re not going to lose those companies. I think then being ahead of the curve on all the other stuff is incredibly important as well, and that’s a big playing field. One of the things we’ve focused on over the past couple years are those later-stage, almost-public companies, like Dropbox, like Airbnb, like Uber, and covering them, not just when they raise a round of financing, but really covering their business, covering the executives no one else can name. Some of our most popular features at The Information are our org charts, where we’ll actually report out who reports to whom — 40 or 50 people at Snap, for instance. That becomes important, because then as these companies get bigger, the interest gets bigger.

It’s also just a great tool for lots of different people who need to know what that org chart looks like. I remember Roger McNamee wanted us to create a free one at Forbes.com when he bought that for a couple years. And went nowhere, because it turns out that people who know what the org chart of Microsoft looks like don’t want to share it.

I was going to say, it’s incredibly challenging reporting, but it’s something our team thinks is worthwhile, because the value is important as well.

It turns out you cannot crowdsource that kind of information.

You cannot crowdsource it.

Well you can, it’s just not good.

You can crowdsource maybe 60 percent of it, or something, but to really get to the level ... Which isn’t even that in the weeds. Our subscribers are interacting with these companies, they need to not just know Evan Spiegel, but know the people who report to him, and the people who report to them.

What’s the toughest story for you? What’s the story you guys haven’t cracked that you’re spending a lot of time on? What’s opaque to you that shouldn’t be?

Right now I’m thinking a lot about issues around gender and sexual harassment in Silicon Valley, as are many publications, many of which are doing great work. It is a very challenging topic, and I think it’s challenging not just because getting people to talk is challenging, but figuring out the right questions to sort of ask, and where the line is between ...

There’s still too much of this, “Everyone does it so how bad is it?” That just doesn’t fly, obviously, but you encounter that so much in your reporting, just figuring out how to go after that story. Another challenge of it is stories where there’s been a behavior that’s been around for a long time, just doesn’t seem new and newsworthy to people.

This happened with the Uber, the Travis story, where he’s taking out the employees to the strip club in South Korea.

Exactly.

They were in a part of a news cycle where every story then got a ton of scrutiny, but there was pushback even from my boss, Kara Swisher, who said, “It’s a strip club. It happens.”

Absolutely. That was disturbing to me, that we could publish a story about how Uber executives went to, it wasn’t just a strip club, it was an escort bar, in South Korea. We thought this was significant because it was a company event, and there had been an HR complaint about it, and then another HR executive had subsequently reached out to one of the attendees, and the attendee asked her to lie about that situation when it came up in the ongoing sexual harassment situation about Uber. From our perspective that was it. There were some, including Kara, who said, “This happens all the time.” My reaction to that is, all the more reason to write about it.

Why do you think the Susan Fowler story tipped things? At least in my mind it tipped things.

Yeah, it did.

Why do you think ... This is if you’re not following this very closely, this was a former Uber engineer who had terrible things to say about the way she was treated at Uber, astonishing. I remember seeing that thing break on a Sunday on Twitter and going, “This is another example of Uber behaving badly.” It didn’t resonate with me, and it wasn’t until a day of coverage that I thought, “Oh, this is a thing.”

Yeah. I wondered that too, and it did shoot up in attention very, very quickly. I think Uber is a company in a moment where it has a lot of enemies, and it’s also a company that, increasingly, everyone’s using. Even people who aren’t in the bubble have heard about it, and therefore have some level of interest in it. I think the company reacted as they ... We’ll see how this investigation goes on. They were quick on that. That was another thing that surprised me. You saw their reaction right away. I think it was just a moment when ...

This is a company that previously had leaned in to criticism, leaned in in the un-Sheryl Sandberg way, so basically, “Fuck you. We’re doing this with a reason, and we celebrate various kinds of transgressive behavior. It’s baked into our company.”

Right, that was proud of being aggressive, and has realized that doesn’t fly. The Susan Fowler thing did shoot up, and then it was just thing after thing. The video of Travis in the back of a car yelling at an Uber driver ultimately, and more complaints. New York Times’ great investigations of their behaviors around driving tactics ...

Do you think they are genuinely vulnerable, or do you think this is a company with such speed and such reach and, again, everyone uses it, and short of Donald Trump-style shooting someone on 5th Avenue, he’s basically impervious at this point?

I guess it depends, impervious to what? Do I think Uber will be a very valuable company someday, or a public company? Yes, I do. I think that its business will continue to grow, and I think that’s because it has a good product. It’s a very competitive product, and I think it ends up looking a lot more like Amazon, with really low margins and a lot of scale, than maybe other businesses. I think Travis will survive. I think that he will power through. There’s a lot of interest, obviously, in who his COO is going to be, and I think that’s a very tough role to fill. I think, barring something else coming out about him in particular, I think he’ll stay on top of that company, but it’s going to be a slog, and rebuilding his management team right now is what he’s got to do.

It seems a little bit resonant of that Amazon New York Times story. Amazon is a company that generally has a much bigger halo, but when that story broke, again it was a summer story, August I think, and everyone said, “How will this affect Amazon’s business?” I knew immediately it won’t affect it at all, because people like getting stuff from Amazon, and if people who work at Amazon are treated poorly, you can debate whether they are or not, as long as you don’t have to see it ... By the way, it’s not a Sea World situation, it’s not images of dogs and whales being kicked and beaten. It’s fine. I think Uber kind of exists that way. It’s more intimate because there’s still a driver you’re talking to, or not talking to. This has been Uber talk with Peter and Jessica.

Yeah, always. No, we’ll see. I agree with all that, and it’s also been this fascinating case study in public relations, and how these private tech companies that grow up too fast deal with the fallout.

Let’s give you one more plug. If someone wants to sample what you’re doing, they don’t have $400 dollars they want to spend immediately, or they want to debate how they want to spend their $400, how do they get to your stuff? Because you have a pretty tight paywall.

We do have a monthly option, so if people do want to get the whole experience for $39 bucks, they can always do that, and lots of folks do.

By the way, not to be flip, but a lot of your stuff just gets reblogged by various folks anyway, so I can get it for free without ever paying you.

You can get what the blogger thinks is interesting and a fact or two. I don’t think you actually get the meat of the story, but sure, when we break a big story others will absolutely follow it. Then subscribers can share stories with anyone through share links they have too, so if you know someone who’s a subscriber they can send you some stuff, and that’s a great way to see if it’s for you as well.

Excellent. Thanks for letting me ramble at you for ... 52 minutes? That was longer than I thought we’d go. You’re busy, you’ve got a kid to raise, conference to run. I’m going to let you go. Thanks for coming.

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This article originally appeared on Recode.net.