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Full Q&A: Axios business editor Dan Primack on newsletters, IPOs, and the economy in 2019

“I want to tell a reader something they don’t know yet ... I want to make them feel smart when they get to work and feel like they’re ready to do their jobs.”

Axios business editor Dan Primack.
Axios Business Editor Dan Primack
Courtesy Axios

On the latest episode of Recode Media, Peter Kafka spoke with Dan Primack — the business editor at Axios who previously worked at Reuters and Fortune, each time creating and authoring a popular email newsletter about his beat.

Primack said his No. 1 focus in his current newsletter, Pro Rata, is mergers and acquisitions, ideally with details that other journalists have not yet reported. He acknowledged that Pro Rata is slightly different from other Axios newsletters such as co-founder Mike Allen’s Axios AM, which typically sums up 10 items while Primack hits on dozens.

“There are news blurbs in it, maybe 30 or 40 depending on the day, and those are really short and those are linked out to other places because I’m not gonna analyze 40 deals in a day and no one wants to read that,” he said. “In general, though, my goal with this newsletter is the same as it has been with any other, and I think it’s true for most of the newsletter writers at Axios, and we’ve got over a dozen of them now. I want to tell a reader something they don’t know yet ... I want to make them feel smart when they get to work and feel like they’re ready to do their jobs.”

You can listen to Recode Media wherever you get your podcasts — including Apple Podcasts, Spotify, Google Podcasts, Pocket Casts and Overcast.

Below, we’ve shared a lightly edited full transcript of Peter’s conversation with Dan.

Peter Kafka: This is Recode Media with Peter Kafka, that is me. I’m part of the Vox Media Podcast Network, talking to you from New York City at our headquarters here. I’m here with Dan Primack?

Dan Primack: Sure!



I think of you as Dan, the guy I read forever.

That’s fine. That works.

Thanks for coming, man.

Thanks for having me.

I do not see you nearly enough, so thank you for coming.

I know. This is a really impressive setup. I was in the Vox offices years ago and they did not look like this.

Yeah, it’s cleaned, vacuumed. That’s a fake plant.


There’s a video feed here for reasons I don’t understand.

I don’t either, but I can see myself. It’s exciting.

Thanks for coming. You are one of my favorite reporters.

Oh, that’s kind of you to say.

That’s the end of the podcast.

And now you’re apparently gonna rip me to shreds. That’s just like buttering me up.

No, we don’t rip anyone to shreds on the podcast. We do it behind their back. I started reading you when you were publishing like a PE newsletter at Reuters.

Yeah. First Thomson Financial, which ended up buying Reuters, but yeah, starting in 2002, I think, was when I started doing the newsletter.

And then Fortune.

Then Fortune for six years.

And now Axios.

And now Axios.

I think of you as one of the guys who would be successful wherever you went because you have built this following of being a really plugged-in guy in business... beyond business, in the investing world, and had built up a personal brand. And back a couple years ago when everyone was very interested in the idea of star journalists creating their own thing, you should have been one of those guys.

Yeah. I thought...

What happened?

Okay. There’s some history. Go back maybe 10 years or so. I was gonna do my own thing. In fact, I was gonna do what became ... so now more maybe 13 years. Gonna do what became VentureBeat, actually, with Matt Marshall who’d been at, I guess, the San Jose Mercury.

That’s way longer than 10 years ago.

Way, way longer than 10 years ago. He and I were gonna do that together and then I was at Reuters and Reuters very clearly informed me they were gonna sue the hell out of me if I did that when they found out.

Sue you because ...

Sue me because ... so, Thomson Financial buys Reuters and shortly after that happened, the company reenlisted in the New York Stock Exchange, and like every employee of a big company you get a new code of conduct or terms of service or whatever, and you sign it because you’re an employee and you don’t read it. It turned out that one of the things in the thing I had signed was if I was an adviser or executive or something like that of a competitor, a potential competitor, I was in violation of my contract, which I didn’t have a contract, but in violation of my employment, I guess, and I most clearly was an executive of something. We were trying to raise money. There was a massive email trail on that. I was told in no uncertain terms that they might lose the case but they would bankrupt me in the process.

Okay, so that’s a reason to don’t do that.

Don’t do that. And then later ...

But you are a guy ... just to be clear, you’ve had a newsletter forever. It moves around every couple years when you go to a different job. You have a following, there’s a core audience that really depends on you for the information you provide. So you certainly could leave one company. Even if you took zero members from that mailing list, you could regenerate it. You’ve done it now multiple times.

That’s what we’ve done, yes. The old companies always own the list.

So you could have Dan’s Fun Email Business Newsletter tomorrow if you wanted.

I could. I could move in with Ben in Singapore and it would be great.

Let’s figure out a better name than Dan’s Fun Email Newsletter.

I could. I think, to be honest, I like having colleagues. That’s a big part of it. I’m a journalist at heart and I like bouncing ideas off people I work with. I like talking to them. I like working with other really smart people. It’s what I enjoyed a lot at Fortune. It’s the reason I joined Axios. I think that’s probably the reason I don’t do it. I work alone a lot. I work out of my house and I’m in Boston, whereas in this case my colleagues are in DC and New York and San Francisco. But I like working with people. I like being part of something bigger, I think.

Economic predictions for 2019

So we’re gonna talk a bunch about the media business, because that’s what this podcast is about, but let’s go macro for a bit. We’re recording this at the very beginning of 2019. Stock market’s up, stock market’s down, there is a debate about what that means for the economy or how tethered the economy is. Prognosticate for us. What is 2019 gonna look like overall for the economy?

That’s a great question that I will admit that I can’t quite answer. I’m glad that I kind of predicted that the market would turn bearish at the end of the last year, which it did. Look, I don’t think it’s going to be a great year for the economy. I just don’t think it is.

Economy measured by people working and people spending money?

At least in terms of stocks and probably GDP. Look, that’s conventional wisdom. Stocks are probably not gonna have a great year. The GDP in 2019 is gonna be lower than whatever it becomes in 2018.

I’m a general believer in cycles. I’m old enough that I’ve been through a couple. I was living here in New York in whatever it was ... I guess ‘99, 2000, when people were talking about the end of cycles and there was the rooftop parties every night and stuff like that. And it was never gonna change!

Those were great.

And when it changed, it changed fast. You don’t usually know why the change is coming except you know it’s gonna come, and I subscribe to that. That said, there have been people who have been predicting the end of this boom for what, six years, seven years?

So retroactively, right...


Dot-com boom you can go back and go, “All right, well that was crazy, what we were doing with the globe dot-com,” and retroactively after 2008 you can go, “Holy shit. Did you know what a derivative swap was?” Now we do. Assuming we reach the end of a cycle, whenever that comes, what is the cause of that? Or is that just the earth turning around on its axis?

I think it’s more the earth turning on its axis. But look, we’re seeing signs of slowdowns and global growth. Whatever you want to say about Apple and is it the fault of the iPhone or the fault of trade tensions, the reality is the Chinese economy is growing really fast, but it is growing slower than it was before. That’s a big deal.

You’re seeing that in other countries. We’ll see what ultimately happens with Brexit. We’ll see what ultimately happens with our trade negotiations, but I think there is a slowing of the global economy and I think therefore that is a slowing, that’s what happens.

People will want to blame Trump, because it’s easy and usually accurate to blame Trump for many things. Is that fair in this case?

It depends what exactly happens. It will be fair if we ultimately end up in an actual trade war. Wilbur Ross was on CNBC today and he said there’s only two things that happen ultimately with the trade conflict with China, which is either they get some sort of deal — and very few people seem to think they’re gonna get one that’s beyond window dressing, and if I’m proven wrong, fantastic. Or we’re just gonna have increased tariffs going both ways for a while. That’s not gonna be good for the global economy, for us or for them, and that will be Trump’s fault if that happens.

And if it’s not Trump’s fault, it’s just this is ... whatever economic problems we have were so six years ago or eight years ago, or it’s just a natural ending.

It is. We don’t have a huge cushion. There’s all this talk about the fed. Historically, when we’ve had major economic problems, the fed has been able to not fix them but has been able to help out by lowering rates. We don’t really have a huge cushion there. Companies have raised huge ... put huge amounts of leverage on their balance sheets and that’s not just a private equity retail story, that’s kind of across the board. That limits flexibility as well.

Also, we are close to full employment, so there is a point, particularly as immigration is not ... we’re not really increasing the amount of legal immigration, that on its own, at some point, slows down.

Is this your No. 1 focus every day when you’re up and typing?

My No. 1 focus is probably deals more than anything else, M&A, venture capital, things like that.

Someone’s buying something.

Someone’s buying something, why did they buy it?

What percentage of what you’re writing about is, “I ferreted out this thing and it’s a scoop. I’m gonna write about it,” versus “This is a $71 billion medical technology deal that got announced this morning. I should say something about it”?

It’s preferably the former. I think most days it’s probably a combination of the two. It’s a $71 million pharma merger and I know something about it nobody’s reported yet, and so I’m gonna write the headline that everybody’s seeing and here’s an item and a piece of it. Whether that’s some backstory, whether that’s a financial detail or something like that that hasn’t been out and that’s to me kind of when it’s working the best.

We can talk a lot about Axios, we will, but a lot of their brand is, some of it is scoops, here’s a hot new thing you haven’t heard, but a lot of it is these 10 things happened and you probably didn’t read about them and we’re just gonna provide links. We’re gonna write a very brief synopsis of it. We’ll provide maybe a line of analysis and we’re gonna save you time. That’s the whole Mike Allen wrap. We’re saving you time.

So how do you balance, “I know this arcane detail,” or, “I know this one really interesting detail about a deal that frankly probably only a minority of you care about,” versus, “There’s a lot of you who don’t know very much about a lot of things. I’m gonna tell you a little bit about all of it”?

So my newsletter, which is Pro Rata, which is my daily, is structured a little differently than most of the Axios newsletters, and that’s kind of just historical just because ...

It’s what you’ve done.

It’s what I’ve done. It’s different than the past ones. There’s different pieces to it, but a bunch of it’s the same, which is there are news blurbs in it, maybe 30 or 40 depending on the day, and those are really short and those are linked out to other places because I’m not gonna analyze 40 deals in a day and no one wants to read that.

In general, though, my goal with this newsletter is the same as it has been with any other, and I think it’s true for most of the newsletter writers at Axios, and we’ve got over a dozen of them now. I want to tell a reader something they don’t know yet. I want to give them ... I want to make them feel smart when they get to work and feel like they’re ready to do their jobs and when they get to ...

They don’t know most things, and we’re getting a little nerdy on newsletter theory, but there’s four or five or six or seven media newsletters that come in my ... and I read half of them. A lot of them are just like, “Here are the 20 things that happened yesterday.”

I want to be more than that. I want us to be more than that. I want you to ...

There’s a utility to it.

There is.

“Here’s 20 things, because you were watching football so you don’t know about this.”

So I want you to be able to do two things. When you get to the water cooler in the morning, I don’t want someone to tell you something that’s happened that you’re surprised by, like, “Wow. I had not heard that!” I want that taken care of. Then I want you to be able, the reader, to introduce something to that person at the water cooler that they haven’t heard before.

And you do all this solo, by the way?

The newsletter, yeah.

Yeah. There’s the whole list of deal stuff that comes in to you? You’re not going out and ferreting...

It’s both. Some of it comes in to me. I think anyone who’s done this long enough, I’ve got kind of a system, and I visit Recode, I visit the Times and the Journal and stuff like that.

“What do I have to hoover up for this thing?”

I go through the wires and I go through FCC filings. There’s a pattern. A lot of people ... certain things publish at certain times. There’s certain things I check at 8:00 am and then at 9:00 am but not in between.

How long does it take you to physically construct this, the newsletter?

A couple hours.

That’s it?

A couple hours, yeah.

What a lazy job you have.

It’s awful.

What a great gig.

I’m up at 5:45 and probably at my desk by 6:05 or something like that, but in the middle of this I’m making my kid breakfast and getting her to school. Not when I’m in New York. In New York, it got out a little earlier today and that’s because I’m not doing those other things. I’d say three hours beginning to end.

Predictions for the media industry

I want to go back to the business of Axios in a bit, but let’s go from macro to minor, the media business. What is different about the media economy versus the general global economy? Are they the exact same thing?

It’s worse, right? Somebody ... and I’m gonna screw this up. I think somebody said that in December if you looked at the job numbers, you had this blow-out jobs number, this macro job number. Information technology or kind of the information sector was the one area that shrunk. You probably know this better than me, but in terms of humans, it shrunk in December. It’s just not as strong. It’s partially because we don’t have necessarily the same sort of innovations. We come up with new companies and we might have innovations around model and business model, but we don’t have the ... we don’t have the next type of car or the next type of smartphone or chip that goes in. It’s just an industry we don’t have that.

Netflix created a new thing.

A new category, yeah.

But a lot of it ... Fox and Disney combining is gonna be a shrinking business.

It is.

They’re not gonna be a bigger business.


They might tell you otherwise, but it’s gonna be a smaller business.

I don’t know. I was just in Disney World. They seem to be doing very well on that side of the thing.

They took a lot of your money.

They took a lot of my money. Yeah. So really, the online media money is apparently going to the theme parks.

I do feel ... because journalists are consumed with themselves.


Natural. They also tend to not understand business very well, which is kind of good for me because I don’t understand it very well, but I understand it marginally better than some of them. They’ll write about the “media apocalypse” of 2018 and we stand back ...

It wasn’t bad.

It’s a couple venture-backed businesses that were high profile.

Mic failed.

It’s not much money.


If you were a person who was employed at Mic, it’s terrible, and if you’re a person who maybe gave them some of the $60 million, it’s not great, although you probably have deployed a lot more than that in the last...

But it’s beyond that. All the story, BuzzFeed and Vice, which are the two that get talked about so much in addition to Mic. BuzzFeed missed its own revenue target. Let me tell you ... I can’t speak to Recode. I know for us, if we had had ... Now, granted we don’t have the same number of employees and we didn’t have that target, they made a lot of money last year, at least in revenue, top-line money last year. Vice, it’s got valuation problems. It’s still a really highly valued company for an online/streaming whatever you want to call Vice.

This is all the time when I read the litany of terrible things that happened in media and it’s like BuzzFeed missed their own ... It’s like, they made a lot of money.

Made a lot of money. Again, granted, they wish they made more. Obviously that indicates that they misjudged certain things. But as online VC-backed media companies go, you wouldn’t mind being BuzzFeed.

So let’s focus a little more on that, because I think a lot of ... basically anyone who was getting funding over the last couple ... well, most of them who were getting funding over the last couple years now looks back and goes, “Our peak valuation was 2015 and we’re no longer worth what we thought we were worth and what our investors were worth back then.”

In a couple cases that’s now public; Disney wrote down its valuation in Vice. What does that mean practically for the realities in business? You know this very well. What happens when a VC-backed company is no longer worth as much as the VCs thought?

It freaks out employees, I think. I think ... and I don’t think that media ... VC-backed media company employees are necessarily different than a lot of VC-backed software employees, etc.

They just don’t write about themselves.

They don’t write about themselves, and maybe being the exception, a lot of those engineers in the Valley who have been through three or four of these, so they’re surprised with how this works six years ago as opposed to today. I think that, look, Axios is a VC-backed company. We’ve raised money. I think people don’t necessarily realize that the value of their stock can necessarily be worth less, particularly someone who joined six months ago or a year ago.

It’s like any other company, though, right? It’s a morale thing. You always ... people have asked me what’s the biggest difference in joining Axios and leaving Fortune? The answer is it feels just morale-wise, a lot different to be part of something growing as opposed to something shrinking, and I think when your valuation goes down, I think that just kind of permeates through everybody. And the big question I think in media is if you’re at software you can always find a software company that’s growing or that’s getting an increased valuation if that’s what’s important to you.

If you’re at Startup X and it turns out your equity is worth not very much or your company folds or gets sold, you can find somewhere else to work.

Leave. You can find one of a thousand companies. In media, it’s much harder. It’s harder to do.

As someone who is frequently writing about other people’s business journalism, what is the thing that journalists misunderstand about business most often?

That’s an interesting question. I think journal ... that’s a good question I don’t have a great answer to, Peter.

Do you want to think about it?

Let me think about it.

We’ll be right back.


What journalists get wrong about business and what businesses like Facebook get wrong about journalists

We left on a cliffhanger, I was going to ask Dan to criticize other journalists.

I think journalists, at least when it comes not necessarily to business but media business, I don’t think they understand the business of media necessarily all that well.

I 100 percent agree.

I think a lot of journalists, there’s all the talk about the Chinese wall between the business side and the editorial side. And I think that the majority — and maybe I’m overstating this — but that the majority of journalists therefore intentionally don’t pay attention to what’s happening on the other side of the wall.

They used to be proud of not knowing how business worked.

Absolutely. But then when something goes badly, they’re absolutely shocked by it. Absolutely shocked. And there’s a lot of blame to go around. I don’t think the average reporter should be out there, hitting the street and selling the ads and being in those meetings. But man, I do think that you, particularly at newer companies and younger companies, you need to know, both sides need to know what’s happening on the other side.

I do think in the digital era, there are people, in part because metrics that used to be either nonexistent or were kept from the editorial side are now very often very public. Very often you’re being told to hit metrics. I think people are at least aware of some sort of mechanism, that they might misunderstand it.

I don’t know when this is going to air, but there’s this back and forth about how Facebook feels about the New York Times, how the Times feels about Facebook. I do think that something is particular to the Facebook/media relationship, is you did have reporters who had some knowledge or understanding of what Facebook was doing to their business, then reporting on Facebook, the Facebook folks being aware of that.

Can I say, I think also business, and I say this generally, not media business, I think business has an awful understanding of how media works. Or let me rephrase, how reporters and how editorial works. Take the Facebook thing. This idea that there’s this ...

This is a story that Dylan Byers popped up. Really, a two-line story, about the New York Times ...

Without any sourcing.

Well, without on-the-record sourcing, saying that Facebook people are steamed with the New York Times. They feel that the New York Times is going after them and are doing so unfairly.

Doing so unfairly, and doing so for nefarious purposes. I think the two things, mainly that it was click driven. The reporters at the Times are worried about their numbers, personal numbers, and therefore writing Facebook stories because they know that will move their needles. It’s just not how most reporters do things. I’m sure there are some that do. To my knowledge, at least from working with reporters, reporters like finding a good story and telling the story.

There’s a little bit more nuance. There literally have been — and I think are less so in the past just because the business model doesn’t work — people who were getting paid based on clicks.

But there’s also people at the Times now who are dedicated Facebook reporters, which isn’t something there once was.

I think the thing that is actually more truthful and I think the Facebook people don’t really get is that you don’t get paid based on clicks at the New York Times. They are very interested in how their stories perform.


Socially, maybe less so in how they convert, but they’re certainly aware of it. It’s that institutionally, you do get rewarded for big, juicy stories that make something happen. Now, usually if you’ve written a big juicy story that makes something happen, it means it was also an accurate story.

Yep. And probably… it’s probably a negative piece, too, because the ...

It wasn’t, “What a great company Facebook is.” You don’t win a Pulitzer for that. But for a long time the Times was very interested in the Murdoch business. Which again is a very important business to be covering. There’s no shame in that. But institutionally, they were very consumed with Murdoch and it wouldn’t be unfair for someone at Facebook to go, “Hey, you’re suddenly focusing on us with a lot of intensity that wasn’t there before.”

Look, with great power comes great scrutiny. Facebook’s, pick the day, is the No. 2 or No. 3 most valuable company in the world. And as for media, they’re not just a media company. They’re the thing that a reporter goes home and they look at their feed to see the pictures of their kids and their friends. It’s part of everybody’s life. So for Facebook to be surprised by this ...

And look, it’s been an awful year for them. An objectively awful year for them. Everything from politics that ... some of the stuff that’s come out ... I think some of it’s been a little overstated. I thought the Definers stuff was way overblown, but in general it’s been a bad year. And you know what? Facebook’s had a decade-plus run of generally positive coverage. This is bound to happen to you.

And if you’re in tech, I think one difference in tech versus another industry where you don’t really understand how media works is that, at least in startup tech and Silicon Valley tech, is that you’re used to primarily adulatory coverage. Getting positive stories written about you because you raised money, which is a weird idea, but was very commonplace for a long time.

And it’s also a world in which you — again, this is true in most businesses — you know more about the story than the person writing about it. But not only that, in the tech world, there’s a whole slew of people who are not “journalists” — I’m putting air quotes around it — but are writing and are public and have a lot of influence. And I think it’s a really interesting ecosystem, but you don’t need to depend on the New York Times to learn about Facebook because you might have an interesting VC blogging about it or some random guy tweeting about it and all of that stuff comes to you.

And that random guy tweeting might have a, not maybe the New York Times’ audience, but will have a very substantial audience.

And so you go, well, the idea that we have to pay attention, it’s a different world where, I don’t know, if you’re doing plastic extrusions in New Jersey, that probably doesn’t happen.

Nope. No, look, it’s true. It’s one of the reasons a lot of these companies didn’t — and Facebook is a pretty good example of this — years ago, didn’t want to go public. And the private-public thing isn’t perfect. Uber is still private and they’ve certainly gotten their share of scrutiny, but this is a part of it. The bigger you are and the more out there you are, the more ripe for criticism you are.

And it’s a reason a lot of companies and CEOs ... I said for years that when Facebook decided to go public, that was going to push a bunch of other companies public as well, if Zuckerberg is willing to do it. Man, I think what’s happened to Facebook recently will cause some to reconsider.

2019 in IPOs

Let’s talk about that again, not strictly media but important to a bunch of us. The conventional wisdom is, this is the year that Slack and Uber and Lyft and who else?

Airbnb, maybe. Peloton will go this year.

Airbnb. We’re all going to go out. One, recording this early January, do you think that is still the case?

Yeah, it should be. There’s a huge variable. Again, depending on when we’re recording this, if the government shutdown ends right now ... Lyft and Uber, for example, have put in confidential filings with the SEC. There is no one to review them right now.

Just sitting on a desk.

Those people are home, not working. So those documents are sitting on a desk somewhere. So assuming that we get our government back in the next couple of weeks, yeah, I think this should still be the year. And I think because ... You might not see huge volume numbers in terms of number of companies at the end, but those big ones, like Uber particularly ...

Big brands you’ve heard of.

Big brands you’ve heard of, those can go public in almost any market. October, if you’re right in the middle of the Great Recession or the beginning of it, no, there’s no reason to put yourself up for that volatility. But you look at some companies that have gone public in not-great years. I don’t think Facebook went public in a great year. Google didn’t go public in a great year.

But just tease that out. Why does it matter if you’re Uber or Lyft or whomever, whether the market is good or bad when you decided to go out, because you’re a company, you’re not the market, and if people like your business they’re going to value it.

Well, because if overall valuations are down, you’re gonna get a comp. And it’s weird because Uber and Lyft don’t really have a comp out there except for each other, but the Wall Street analysts are going to find a basket of companies and say, “Hey, Uber, you’re in this basket,” and if that basket is down 20 percent from where it was a year ago, Uber’s going to have to either overcome that or its value is going to be 20 percent less of where it was a year ago. Or if the market’s up, it gets to ride that. And you don’t necessarily care about the stock price on day one per se, except that that’s less dilution for you and your employees and your current shareholders.

Pursue this a little more. because you and I are old. So we have seen waves of IPOs. I always like talking about how we used to go to sports bars and CNBC would be on the sports bar.

It’s true.

Which again is bananas to think about now. What is the thing that most people don’t understand about how IPOs work and what they’re supposed to do? Because we’re going to see a bunch of it this year, most likely.

I think most people think that this comes to the first day stock pop. There’s always so much attention, did the stock go up 10 percent or 20 percent or did it go up 100 percent? And that matters to a certain extent, because if a company, if the stock price went up 200 percent, it left a lot of money on the table.

In general, though, what the IPO was for is to give you more access to the capital markets later in life. It’s easier to raise debts, easier to raise other equity. It also rewards — particularly if you were a startup — it rewards employees who might have been waiting, in case of some of these companies, eight years for money.

But we’ve been living in a world for quite some time now where these companies could raise money without going public or there’s been liquidity for employees.

Some liquidity for employees, depending on the company.

But there’s a lot of Uber gazillionaires out there.

There are, based on the deal that SoftBank did with them at the end of last year. But for years, Uber employees couldn’t get out except at very onerous terms. Uber, the only way to get out was — and this is really in the weeds now — but it was a tender through Uber, and I’m going to make these numbers up because I don’t remember them, but if Uber, if its last round was, say, $20 a share, Uber was saying to employees, “Yeah, we’ll buy your stock at $15 a share. And by the way, if you’ve left, you’re going to have to pay a tax bill on that stock. So you either take our deal, you give up the stock, or you probably go bankrupt.”

But broadly, if you were working for a successful Airbnb, Peloton, a real company with real prospects, it wasn’t just a theoretical thing that they were hoping to float and flip. Does your life change very much? And similarly as an investor, you’ve been able to sell those shares for some time.

Your life doesn’t necessarily change. I think there’s less ... you now know. That IPO is a weird thing. And so think of a company like Dropbox. I would bet that Dropbox, which has now been public maybe a little under a year, I think we write about it less. And that’s true for a lot of these companies. They get, for some reason, less attention once they become public. It’s like they’ve matured, they’ve graduated college and now ...

They’re less sexy for reporters.

They’re less sexy for reporters.

The flip side is that CNBC could not report on them until they go public, essentially.

That’s true, but fewer people are watching CNBC than are reading all the massive amount of tech media press out there.

Your life doesn’t change much. Look, it is a financing event. It is a liquidity event. It gives you a capital markets ... and there’s some maturity to it. I think particularly if you’re an enterprise company, it tells potential customers, “Oh, they’re real, they’re sticking around for awhile.” There’s always a fear. Even with a highly valued VC-backed company that’s still private, you don’t necessarily want to convert your entire system X over to them because what if they’re gone tomorrow or in a year?

Spotify’s direct listing versus normal IPOs

One more set of nerdy IPO questions. Spotify went public in this unique direct-listing way. Why they did it is interesting. It seems like it has worked.

Did work, absolutely. Yep.

And then again, the conventional wisdom was, this could work for a handful of other companies with widespread consumer ...

Brand recognition.

Brand recognition. So this could work for an Airbnb, basically, maybe.

Airbnb, Uber, yeah.

[editor’s note: This interview was recorded before the Wall Street Journal reported that Slack was planning a Spotify-style direct listing]

Do you think ...

Pinterest has talked about it, but I think that’s a hard sell.

My colleague Teddy has said, they’re all looking at that.

They are.

Do you think that’s likely to happen?

I think you’ll probably see one. At least one. Someone else will try it. Yeah, if only because … Teddy’s right. Spotify, they’ve been on the phone with every company you mentioned and more, they’ve been on the phone with them, at least been taking inquiries. I think somebody else will try because ... Spotify, the big question about Spotify was, was there going to be massive stock volatility after they — because they didn’t really even price it — after they went public? It’s weird. So an IPO without an IPO.

Again, the idea is, one of the things the banker is supposed to do is, supposed to smooth all this out. They’re saying, “We’re going to go out at $12 a share. It’s going to go up. It’s not going to go down. You’re paying us a bunch of money to make that happen.”

And it worked. And you guess ...

Spotify didn’t do that. They just said, “Here’s what it is.”

They didn’t do that. And the two big differences — there’s a lot, as you said. One of the big differences is, if you’re an employee in that company, normally you have to wait. You have to wait maybe three months to be able to sell your stock, and that’s true for existing investors, too, the VCs. In the way Spotify did it, for the most part, everybody could have sold on day one or day two or day three. So there was huge fear of that volatility.

And two, you don’t have to pay the banker fees. But there are some companies that will make the argument that while they hate the banker fees, because no one likes paying a banker, that relationship is really valuable going forward. And so they’re paying that fee now, but that proves to them the banker knows what they’re doing. The banker’s really invested in them, really understands their story.

And that banker’s important to you why? Once you’ve run over ...

Because you’re going to do mergers with them or you’re going to do acquisitions with them or they’re going to do another equity raise or debt raise with them sometime in the future.

It’s hard for me to imagine ...

By the way, that’s why some banks will take discounts, or won’t even take a huge amount on the IPO, because they want that relationship.

Traditionally, it’s a 7 percent fee, but if you’re an Uber or even Spotify ...


... you’re paying much less than that. But again, it seems like it’s funny, we have a ton of financial people who show up at our Code Conference and the thing we hear from a lot of folks — and we love them all — and the thing we hear from a lot of the people who are operating companies is, those guys are great. But when I need to raise money or sell something, I can call them. I don’t need to hang out with them. I don’t need to have relationships with them. There’s some mild derision directed toward them.

I don’t know, I think relationships matter.

They still matter.

I think so. If you’re not ... Look, you’re right. I’m not saying you’re not, if you’re Uber, Goldman Sachs is always going to take your call.

When I need my dishwasher fixed I’m going to call a dishwasher guy. If I know I’m great, but honestly I just need my dishwasher fixed.

You do okay. But if you ... Okay, I’m going to give you the example. Not my dishwasher guy. My electrician happens to live down the street from me. I don’t have a plumber per se, so I do have ... when I have an electrical problem, I know Matt down the street is going to come, because I know him. I’ve used him before. I know generally how long it takes him to respond. The plumber, I look on Google and I don’t know, that’s going to take a while. I’m sure I’ll get somebody competent in the end. It’s a pain in the ass.

Shout out to B&D Plumbing in Brooklyn.

There you go, see, I don’t have B&D Plumbing. That’s way too far for them to travel for me.

Yeah. I like B&D. Those are good guys. Should we take another break, Golda? You’re smiling. Yeah. Let’s take one more break. We’ll hear from an advertiser and we’ll keep rambling.


This is Peter Kafka, here to endorse B&D Plumbing. I paid for them with my own money. I’m here with Dan, still hanging out.

Let’s talk about your current job, which we’ve been talking about on and off. You were at Fortune. I can think of a lot of good reasons to leave a Time, Inc. publication, especially when you left. Why did you end up at Axios and how did that happen?

So, Axios, also because Mike Allen called and he was in Boston and he wanted to get together and have lunch, and to be honest, I missed his initial email. It went into spam.

Did you know who Mike was?

I did know who Mike was, I was a reader. I was a longtime fan. We didn’t know each other.

At Politico?

At Politico. And so we got together and had lunch. I knew that he had left and Jim Vandehei had left Politico and were launching, at the time, just something. I think the only media report was they were going to do something.

And so Mike and I started talking a little bit about what they were thinking about. We kept talking. I covered both the RNC and the DNC conventions. That was summer of ‘16 for Fortune, and they were obviously all there at those. So I talked with them a bit more.

Honestly, I left, I want to ... I liked the idea of two things. One, I said earlier, working with smart people. I thought Jim and Mike and some of the other people they were putting together were just a smart group of folks who didn’t really have a great idea of what they were planning to do at the time, but it was kind of like, “Let’s figure this out together.”

And two, as a reporter, and you know this, you get a bunch of chances, if you want to join younger companies or more established companies. This was one of the first opportunities I had really had to join something that truly didn’t exist, was a true white space, and was being asked to help figure out what the hell they were going to do next.

And the pitch to you was, to do what you’re doing but something else also?

The pitch to me was, “We’re going to put together a bunch of smart people who kind of have niche expertise to cover, at the time, the idea was to cover politics and health care and business, and let’s figure out how we’re going to make this thing work.” That was the pitch.

My perception of it was, these guys who’d created this thing with Politico, they had a problem with the founder, which may have just simply come down to something like comp and that kind of thing.

I think, you know, you read about it, and honestly, I haven’t really had this conversation with Jim and Mike. I think it came down to the fact that he never wants to sell. They were kind of founders of a startup that was never going to sell.

So they were never going to realize the value they had created and basically they didn’t want to say that because it was less sexy, but we want to build the thing we built again, maybe better and bigger but we want to be owners, and we want to create value and realize the value.

That’s the reason why every single employee has got equity and that’s a big deal, right? We want everybody to be an owner of this thing.

There is a counter, Jessica Lessin does this as The information, says I’m not paying people in equity, I’m paying them real money because by the way I don’t want to ...

Yeah I know, I think she’s wrong.

… sell it. Yeah.

Well look, obviously we pay people salaries. I make money, I’ve got a mortgage and I pay it and that’s important. If I wasn’t being paid a salary, I wouldn’t take the job. What I think equity brings, look, this is a startup thing, right? I think everybody, it helps people not necessarily row in the same direction, you can disagree about things, and obviously certain people leave, but I think everybody realizes that what’s good for you and what’s good for the person with the desk next to me is ultimately good for me.

I think there’s a value to that. And I think, we talked earlier about editorial folks not either knowing what’s happening on the business side or maybe not caring what’s happening on the business side. I think it makes everybody care a little bit more. We’re internally a pretty transparent organization in terms of revenue and where we are in terms of sales goals and what we are in terms of product roadmap and why this product and not that product, etc. And I think most people, whether they’re on advertising or editorial or engineering, care about those things and there’s a conversation.

Yeah. I like that part of the argument. I mean, I have found being ... I’ve been a very early startup employee in Vox’s, I guess, theoretical startup.

Vox’s startup, yeah.

There is a real asymmetry, one in terms of how that equity is distributed, which kind of makes sense. And then a giant information asymmetry. Whereas if you are part of a very small group you actually know how the company is performing and what the share prices looks like and what a merger would look like. And everyone else has literally no idea and will find out sort of when the deal is done. And I think, I’ve been told ...

But that’s a bad way to ... Can I ask ...

But that’s standard.

Do you not think most people at Vox know what the current, what the most recent round price per share and how that compares to their options?

I guarantee you they do not.

That’s a shame. They should.

One, it’s very difficult to get it, you’d have to know the person to go ask. You’d have to then demand it. You’d have to know what a 409-A is and say, “I know there’s a valuation, please tell me.”

Yeah, I can’t speak ... All I can’t speak to is Axios. Everybody, if they don’t know the 409-A, it’s only because they forgot. They can find it in their email.

Yeah. You guys put it in the email. I think that’s part of it.

Well, I don’t know if it’s an email, but it’s publicly available, we talk about it at our kind of all-hands, that’s part of the conversation. And you know, if you were a new employee or you wanted to know it, you would simply ask the person and they would tell you.

Because one argument for not getting into the weeds there is one, we wanna keep this relatively tight.


Two: We want you to do your job and not be focusing on the share price, etc.

But it’s not a big piece of information.


It’s a piece of, this is the 409-A price, this is what it means. If you have more questions, ask ‘em the questions.

Yeah. I think that’s fair. And then the third is slightly cynical, but I think also accurate, which is that information asymmetry is built in to the VC model, right? They expect that when you leave, you don’t really understand what your options are or aren’t available. Or aren’t considering purchasing them because they want those to return to the pool.

Well, again, I’ve only been part of one startup. And I know I cover them and I hear these stories. Maybe we’re the exception to that. Maybe other people at Axios think I’m wrong about this, but I know I had, we had a conversation at our last all-staff which was, I think, over the summer. And we were talking about taxes, taxes related to options.

And I sat up there and did a Q and A with whatever we had, you know, 100 employees. And they were asking me questions, we were talking about the 409-A price, what does that mean compared to the price you see headlined on the share price? If I was to leave the company, what would that mean? If the company was to be sold, what would that mean for ...? We had that conversation. We encourage that conversation.

We are in the weeds. I like it.


We’ll pull back a little bit. When you guys did launch, part of the pitch to the investors had been, “We’re gonna do this high-end subscription product.”

I don’t know if that was a pitch to the investors. That was said onstage.

No, no. It was absolutely said to the investors because I talked to them. And then we asked about it onstage. And by the way, it made sense, you’d have a free product that lots of people could use and then you could eventually have a high-end pro thing, which by the way is the Politico model.

It is.

It didn’t seem controversial at all. I think because we got Jim to say it was gonna be 10,000 bucks a year.

Which I think he was just throwing out there to see what the reaction would be to $10,000.

[previously: Politico co-founder’s new media startup is eyeing $10,000 subscriptions — eventually]

It would still be a high-priced product. You guys are a couple years into this now, there is no high-priced product.


There’s no product at all.


What is the plan?

Well there’s products, there’s no high-end products.

What is the plan for a subscription product?

There isn’t one right now, honestly.

Why not?

Well, I think because we’re continuing, we’re building differently, I think, than we initially anticipated. I am gonna screw up this number and I should’ve known it when I came in. We launched two new newsletters today — again depending on when we broadcast this — which was one daily on the markets and also daily on sports. I can tell you, when we launched we weren’t planning to do a sports newsletter, we weren’t planning a cybersecurity newsletter, which we have, and a bunch of other things.

We’re just growing a little bit differently than I think we initially anticipated. I think eventually, Jim’s talked about how you do need to have subscription as part of kind of revenue school for any media company like us. But there’s no real rush to do it. We doubled revenue last year, we think the plan is to double revenue again this year. We’ve been talking about that.

So it’s primarily from newsletters? That’s the core product.

Primarily from newsletters. We make money off of events, we’ve obviously got advertising in ... I mean, it’s interesting, the newsletters are a huge piece of what we do but we’ve got a website that, you know, has lots of ads on it. We make money off of that.

I have noticed. And maybe this is one off, you’ll know that I read your newsletter...

I appreciate that. Everybody should.

And you write about a deal that’s interesting to me and then at some point, you then publish elements of the newsletter on your website.

Usually. Some of the elements in the newsletter, yeah.

And there was at least one case, I can’t remember the deal, where you wrote about something, it moved the market but only once the thing had published. Do you find that happens periodically?

Sometimes. The newsletter’s weird. Everybody’s newsletter’s a little bit different in terms of when they publish. I publish at 10 ... Yeah, I think honestly, because once it goes on a website it shows up in certain search engines, I think.


Which maybe I’m being totally cynical here. I think the algorithms aren’t reading, you know, the bots that are trading at these shops are not getting an email newsletter. They’re just not getting any of them. Once it shows up on the web and Google’s crawled it, suddenly they see the ticker symbol or whatever they see and they react.

Have you ever thought about, “Well, since I can move the market, maybe I should figure out how to make sure the bots are reading ...”

I don’t care.

You don’t care?

Well, no. Move the markets, whenever the markets move ... Again, I’m not trading any of these things so it doesn’t affect me.

Axios’ HBO show, Donald Trump and birthright

God bless. We had Maggie Haberman talking to Jon Swan a bit about this, but I wanna ask you, more broadly ...

I know they were in my studio, they made my podcast late that day.

Sorry, dude. But thanks for doing that. Both you guys. You are both a high-profile thing lots of people talk about. When I’m out talking to investors and meeting people, they’re a company they wanna hear about. You’re a company they wanna hear about. And with that means you are also a punching bag occasionally.


I don’t think anyone’s gone after you.

No. Not here, actually.

It’s all the political stuff, right?

Yeah, of course it is, Trump, Trump, Trump.

Sure, it’s Trump stuff. How much of that criticism is about Trump specifically? And he’s a lightning rod and deserves a lot of the enmity that he’s created versus you guys are a hot shit startup.

I think it’s both. To be honest, I’ve been surprised by how long it took. I mean, honestly, we launched two days before Trump’s inauguration. So whatever, almost two years ago now. I think it took way longer for us to become a punching bag. The day we launched, or maybe the day after we launched, we had a all-hands meeting in DC, but there was only about 30 of us or so. And Vandehei pulled out an article that had been written, I can’t remember who had written it, criticism of Politico the day after Politico launched. Just ripping the living hell out of it. And he said, “Expect this, soon.”

And we waited and we waited and we waited and it didn’t show up. And eventually it did. I think there’s certain things we obviously bring on ourselves. There’s certain people in journalism who I think actively don’t like what we do just because of the format of what we do and it’s antithetical to what they think the format of journalism should be.

With the Trump thing, look, if you go through Twitter and you could figure out how to search it with us, there are people who are convinced we are in Trump’s pocket. There are people who are equally convinced that we are as anti-Trump as you can be. We are either the most capitalistic fascists or we are communists. I mean, that stuff’s all there. But I think ...

There’s another real criticism which is this, this deliberate both-sides thing that Jim in particular advocates for. Mike does as well. That’s a crazy stance to have in 2018, 2019, when one side is the devil, right?

I think if you ... It’s interesting. I think if you read AM, which is Mike’s newsletter, which is the most political of our daily newsletters, obviously. And to be honest, it’s probably led with Trump 80 percent of the time this year, at least during the week. I don’t think it is as both sider-y as people think. And I say this as someone who actively reads it each day and sees the test to make sure there’s no, you know, to see if there’s typos and things. I think he’s been fairly critical in certain cases, but I think where ...

Yes, but often it’ll be like, “Boy, if Trump just hadn’t done these terrible tweets then look at all the accomplishments he could point to.” And that’s the thing ...

And so maybe I’m just being defensive and I don’t read them that way as often.


I honestly think he’s been pretty clear-headed about this. I will say this, we are intentionally not reflexively anti-Trump or reflexively pro-Trump. We don’t look at a story and think, “Oh look, something bad happened for the White House so let’s make sure we write ...” It’s more, “Something bad happened to the White House, how important is this?” You know, if Trump tweeted this crazy thing, well, does it matter? He’s gonna tweet eight times a day. What are we gonna focus on? Let’s focus on something that we think has some substance to it, positive, negative, or because it’s gonna impact people in a real way. Or some of it’s just not.

You guys publicly apologized for the way you handled the HBO thing when Jon and like it’s so ... the Trump shit, it’s just so hard to track.

Yeah, I know.

But it was ...

Which is affected by...

It was, “Can you invade Canada?” Right? No, it wasn’t invade. It was ...

No, it was on rescinding birthright citizenship.


We screwed that up.

You screwed that up. But then there was a subsequent story, I think it was HuffPost where someone got ahold of your Slack logs and basically there was a, “They’re all just haters, so ignore them.” Is that a fair reflection of sort of the way you guys think internally?

No. It wasn’t. Nick, that was our editor in chief, Nick Johnson who was, honestly, was joking. It was a much longer ... It was like a whatever, an hour-long editorial meeting and that was a brief point. And I get it. No, I think internally we take criticism to heart.

You know, Swan — and this also got leaked — had a much longer internal Slack message to the group and I can’t remember how much of it got published or didn’t. But look, I think we’re fairly self-reflective. There’s certain things we think are wrong, we thought that some of the criticism, there was some criticism of that interview, which again appeared on our debut HBO show. Which was this was, I think the word was “bootlicker” and that we were just genuflecting Trump.

There was a lot of hard questions in there for him. There was, to me, there was a lot of response to certain things he said. That one thing about birthright citizenship, we screwed it up. Absolutely. So I think there was reflection on that, but I think some of kind of the ... I think that opened us up to a lot of stuff which came on top of it, which I didn’t think was legitimate.

This is one of the things where being a media startup is way different than being a tech startup. Because a tech startup, if things are going well, you’re a hot company, it goes for quite some time and you’re generally not getting any kind of real scrutiny for a long time.

Right. Well, as you said, reporters care about other reporters.


Or care about other media organizations.

So do you think this is now a permanent feature of your life? Is that ... What’s the thing that is no longer Gawker? Splinter, is going to be railing about you day in and day out? Or do you think they eventually move on and move on to something else?

I don’t think it’ll be day in and day out. It’ll be when they’ve decided we’ve done something awful. I mean, the interesting thing that Swan has said, this too is these organizations like Splinter, when we have a scoop they they think is newsworthy, they run the scoop and then they analyze, not the journalism of it, but the thing, whatever the event is, positive or negative.

So we’re a reliable source when they need us and then we’re a punching bag when we’ve done something wrong. So be it. Criticism’s gonna come with this, that is part, as you said, it’s part of being a startup, certainly part of being a media startup. And particularly a media startup that regularly covers Trump in this environment.

You’re up at 5:30 every day, you turn your phone on, what’s the first thing you read?

Probably Mike’s newsletter. Probably the test of Mike’s newsletter.


And I’m gonna probably read that, yeah.

What’s the first non-Axios product you’re reading?

First non-Axios product I’m reading, it’s not an email. It’s the Reuters Deals page in the morning. It used to be the Bloomberg one but it now crashes my browser, so I’ve stopped that.

You should fix that, Bloomberg.

I know it. It’s killing me.

Dan, I wanted to do this for a long time. Thanks for doing it.

Thank you, Peter.

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