Politico & Axios: Jim VandeHei - Transcripts
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That's usertesting.com slash hibt. We started to go through the stories one by one, and they were awful. And we were literally sick to our stomach. We're like, how in the hell are we going to put out a publication tomorrow, much less how are we going to do this on a regular basis? And by the way, a lot of people wanted you to fail. It was a big deal. I was pretty cocky in public about what we were going to deliver, but it was that bad.
It was a dark, dark moment. Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built. I'm Guy Roz, and on the show today, how Jim Vande Heil walked away from a dream job to help reimagine journalism with Politico, and then 10 years later, did it again with Axios. The business of news is, well, how do I say it clearly? It's a bad business. It's one of the hardest businesses to make sustainable or even profitable. Do you remember Inside.com? Back in 1999, three big-time journalists managed to raise $35 million for a site that went bust by 2001. Or how about Talk Magazine? Tina Brown hosted a launch party on Liberty Island with some of the most famous people in America. And within two years, Talk Magazine was no more. Even media brands we've had on this show in the past, like BuzzFeed and Vice Media, aren't looking too healthy these days.
Now, I'm not pointing out these failures to pile on. All the people who worked on these things were smart and talented and committed. The problem with most news startups is that not enough people are willing to pay for the news. Which brings us to today's story, because it happens to be a story of a successful news startup. Axios. And Axios didn't reinvent news or somehow get millions of people to pay to read it. What founder Jim Vande Heil and his partners did was figure out how to target small but powerful communities of readers who also had money to spend. Lawyers, lobbyists, tech executives, Hollywood insiders. You get those people to pay a high subscription price for premium insider reporting. And you use the money to finance a bigger operation that covers a bunch of other stuff for the general public. That's the model Jim learned as a young reporter in Washington, D.C., in the early 1990s. Back then, he was working for a trade publication that only covered alternative fuels.
But it was those small niche publications that seemed to thrive, and by the way, still do. They only had to convince a small number of subscribers that they were indispensable, and they could charge thousands of dollars a year. At the time, Jim Vande Heil wasn't looking to become an entrepreneur or a media mogul. He simply wanted to reach the top of the greasy pole as a political reporter. And in fact, he did. He became a star political reporter for The Washington Post. But by 2006, Jim saw that the future of political reporting, and breaking news in general, was moving online. Why read yesterday's news in tomorrow's print newspaper? So a year later, in 2007, Jim and another Washington Post journalist, John Harris, and a wealthy media mogul, Robert Alberton, launched Politico. And Politico became a must-read publication for the movers and shakers in Washington. But the problem was that despite having the idea and launching it, Jim Vande Heil did not own Politico. It was financed by Robert Alberton, and over time, tension between Jim and his benefactor grew.
So in 2016, Jim left Politico to start Axios. And if Politico was mainly about politics, Axios was meant to focus mainly on media, tech, and business, except the articles were written to be read and digested very quickly, a concept Jim calls smart brevity. Through a combination of premium products for big spenders, brand partnerships, events, and advertising, Axios managed to figure out how to become a profitable news business. And just five years after it was launched, Axios was acquired by the media conglomerate Cox for over $500 million. Jim Vande Heil grew up in Oshkosh, Wisconsin, where his mom looked after the family and his dad was an accountant. He wasn't really into politics until he got to college. And when it came to schoolwork, Jim really wasn't into that either.
And Axiomogal, he did. No, I was a terrible student, graduated in the bottom third of my class, was, you know, teachers would probably describe me as a troublemaker. Troublemaker. A troublemaker, for sure. Not well behaved. I just didn't, I didn't, it's funny, I didn't, until college, I just, I put so little thought into school or even like what I was going to do with my life. Like I was a fun loving guy. I think I got along with people, you know, because I was interested like myself by the time high school. I was interested in events and news, but I didn't like do homework or stuff, things like that, that normal kids did. Yeah. You know, even the first couple of years, like I was, I got good enough grades to get into the University of Wisconsin, Oshkosh. And then I turned in my 1.49, one grade point average and had myself on the verge of not being in college much longer.
What were you doing? Two things, two things, partying, drinking, and I worked a lot. I always had really good work ethic. I was, probably even in high school, I worked 40 hours a week at a delivery. What did you do? I delivered pizzas for the most part in high school. I did it at Little Caesars and then there was a local restaurant called Red's Pizza. And so I'd work, you know, 40, 50 hours a week, occasionally, you know, going to class
and getting lousy grades. So clearly you had a work ethic, but it was focused on things that you were interested
in like delivering pizza, making money, but not a work ethic on like your schoolwork, your studies. Nothing.
Not until I found journalism. How did that happen?
How did you get even like interested in journalism? Well it's funny because even when I wasn't interested in school, I did start to really get interested in politics and I really became almost addicted to C-SPAN. So like at night I would come home smashed from a party and I would sit and watch Agriculture Committee hearings, which seems pretty loser-ish, right? But I was just interested in the process and it was all new to me and something about it like I intuitively got. And I was also trying to figure out, okay, what am I going to do with my life? I'm a good writer and at that time I also liked sports a lot. And so I went to the, we had a daily newspaper. I was either cocky enough or dumb enough or lucky enough that I, you know, was starting to think about journalism classes and the guy that ran the department said, I should go talk to the Oshkosh Northwestern and see if they have any jobs. I went in and talked to this editor, Joe Dill. I said, listen, I know a lot about sports. I think I'm a good writer. I don't know how this works, but can you give me some kind of test?
And maybe if I pass it, can I have a job? And this is the, but this is the university, this is a student newspaper at the university. No, no, this was the local newspaper. It's a daily, Oshkosh Northwestern. And so he gave me a writing test and I did well enough that he hired me to basically work full-time as a, mostly covering high school sports, but a little bit of college sports. And then I was hooked.
Oh, in Oshkosh. Oshkosh Northwestern.
I was like this, I'm going to do this.
And how did you, you know, I mean, how did you know how to write? I don't know. I mean, I read, read newspapers and that was really lucky because Gene Hintz, who, who passed away several years ago, was the professor of the journalism department. He took a real shine to me and was like, listen, just keep working. Like, if you can work 50, 60 hours a week, I can't teach you that. Like learn to work sources, learn to write a story, learn to be creative.
And so I really took his advice. I guess while you were in college, there was a, another small town paper, maybe nearby in a place called Brilliant in Wisconsin, they had a daily paper and you, you somehow got a job like kind of running this paper, which I think meant literally you were the only employee.
You were the editor and the reporter and the photographer in Wisconsin, is that right? Yeah. It's like, I mean, I, I had decided, okay, I really like journalism, but I had this kind of suspicion that I'm going to think sports is going to get old. And so I called around every newspaper and brilliant news is one of the top of the list because it, you know, obviously starting with a B and, uh, Zane Zander answers the phone and I explained, Hey, I want to come. I'm looking to do anything. I'll do it for free. Uh, do you have any jobs this summer? And it was one of those moments of serendipity. I said, you know, I don't have a ton of academic experience in this and I've, I've done this one sports gig and he's like, yeah, yeah, yeah. Can you run my paper? And I'm like, well, again, like I don't really have done one job at covering high school sports. I don't know that that qualifies me to run a newspaper.
He said, yeah, whatever. He goes, my editor just, uh, just informed me that if he can't go to Finland for the next three months, he had some opportunity there, uh, that he was going to leave forever. And I need someone to run my paper for, for three months. And if you will do it, I'm going to teach you in the next week how to run a newspaper I'm gonna teach you how to lay it out. I'm gonna teach you how to edit it, how to do photography, how to think about agriculture and the farm country that you're sitting in, and I'm gonna set you loose."
And he did that. What were you covering? How did you generate stories? Would you go to like, was it like a town hall that you would go to?
What do you remember? I do everything from, you know, it's a small town, so I got to know the people in politics there. Again, it was, I don't know if it was cocky, naive, lucky, I just never, I was never insecure about it. Even though my first, I'll never forget, my first, it's probably the only time I've ever cried at work. My very first edition, this is back when you would lay out a newspaper, you would do it on cardboard, right? And you would- Cut them out. Cut out the columns. Cut out the columns using a razor blade. And I, this is my first issue, I'm working at 80, 100 hours, whatever it was, it was Elon Musk hours to get this paper out. And I had accidentally put column three in four, and four in three. So the only way you could read it and it would make sense is if you went column one, two, four, three. And I remember sitting in my car and exhausted in reading this and realizing that I had screwed it up.
And I, from-
Because they already printed the paper when you gave them the boards.
It was gone. The boards. It was gone. It was printed. So that was humiliating, humbling, but even that, you bounce back and I just, Zane was gracious and the people around him were generous in teaching me and having patience. And I loved it because it's one of the cool things about journalism, everybody has an interesting story. I don't care what it is and you become a rock star, you are the paper.
And it was just an amazing master's class in running something. Was that experience, when you finished that experience, right? Because I know you graduated from college in 94 and when you finished that job, was
it clear to you that you were going to become a reporter, that's what you want to pursue? Absolutely. I was going to be a-
After that, I was going to be a political reporter in Washington. In Washington DC? Yeah. Yeah. And you'd been there before? Never.
Never been there.
Again, again, cockiness or being naive, probably more of the naive. I think during your senior year, you applied to an internship in Washington DC with Herb Cole, who was a senator at the time, a senator from Wisconsin, of course, and I think this may have been your first time in Washington, right, in your first introduction to national politics.
Yeah. It was awesome. I learned everything you could about, you know, how to deal with the press, but I also did all the grunt errands, so I learned all the tunnels and ways to get around Capitol Hill and where the offices and where the hideaways, and I just, I loved Washington, like just
loved it. All right. So you get to DC, I think, in 1994. Is that right?
Yeah. The internship was in the spring, and then I went to Martha's Vineyard and Mowed Lawns and did landscaping with friends that I met through there, and then I moved out in, it would have been February of 95 is when I moved out for good to DC, and I didn't have a job, and I sent out 100 and some resumes and crickets for the most part. I wasn't, it was months, and so I ended up being working for a bricklayer, and I, you
know, begged everybody from C-SPAN to, you name it, for a job, and just, you know, just mailing your resume in a manila envelope and waiting to hear back.
Yeah, it's funny, thinking back about that, the one interview I got was with C-SPAN, and I was really into C-SPAN, like I said earlier. In my cover letter, had explained to them, like, changes I would make to C-SPAN. And I've never thought, even when I became an entrepreneur, I never thought of myself as an entrepreneur, but I look back and I'm like, well, here I am, this young, dumb kid trying to get a job is a bricklayer, and I'm giving C-SPAN ideas on how they might prepare their viewers by creating content in advance, so they're ready for the debates that they're about to watch that unfold in these congressional hearings and such. And so when I'm finally interviewed with whoever I interviewed at C-SPAN, they're like, yeah, I think you're a little too ambitious for us. And I'm like, ambitious? Like, I'm carrying bricks, I have no job, like, I'll take anything. But anyways, they didn't hire me, but a company called Inside Washington Publishers did. And Inside Washington Publishers is a collection of, kind of, hyper-niche publications. Newsletters. Yeah, like pamphlets, the pre-newsletter, like paper newsletters, right? And New Fuel's report was the one that hired me, and it was covering the alternative fuels industry.
And that was an awesome job. This is an interesting niche that some people may not know about, which is that in Washington D.C., certainly at the time, even now, there are these publications, and later on, you would kind of replicate this model with PoliticalPro, but the publications that were designed for very specific audiences, like lobbyists interested in oil, or lobbyists interested in the transportation industry, or lawyers, or people who were interested in a particular area, and they were expensive, and a lot of, like, inexperienced reporters were brought into these places, and they were basically churning out the content for them, and you were one of them.
I was one of them. I mean, it's one of the little, like you said, it's one of the little known training grounds for many of the reporters that you see around town today. And you learn, because you have to learn how to do a beat. You have to learn, you are covering a sophisticated topic for a sophisticated audience. So you can't just be, you just can't be young and dumb. Like you have to pretty quickly become a decent reporter. And every industry, every city, every person has a story and has, there's drama, there's power, there's people, there's politics. And if you dig into it, the people that are living it, breathing it, doing it for a living, they have real passion around it.
And by the way, this, I mean, this was all happening around 1995, which was a historic time in Washington because both houses of Congress had just shifted to Republican control, which was a huge story. It was like after 40 years or something. And so I guess that same publisher that was doing the Alternative Fuels Journal launched a new one to cover Congress. And you like, you started working on that.
Is that right? Yeah, they started a publication called Inside the New Congress, which was created to cover the Republican Congress. And it was me, Charlie Mitchell, and then John Brezhnehan, who I worked with later at Roll Call, later at Politico, and now is one of the co-founders of Punchbowl. We were covering Congress. So the three of us were off and running covering this new Congress run by Republicans at a time where most reporters only had Democratic sources. So while we were tiny and unknown and new, we were on equal footing with everyone else because they didn't know anybody in the Republican Party. And we got sourced up pretty quickly. And we did some good stories. How did you get sourced up? You know, you start calling people. You start figuring out who has power. And at the time, I'm in my young 20s, and I'm single.
And guess what? Most staffers are in their young 20s. And guess what they do at night? They go out. They play cards. They drink. And you get to go out. And I just met everyone I could and tried to create relationships and try to understand power dynamics, try to get to know the members, read a lot, understand the issues. And I've always had a natural, once I got into journalism, a fascination with just how people get, use, and abuse power. I'm very interested in power.
Like, I just understood power.
They do it in ethics. So all right, so you're working for this publication. And I think not too long, maybe within a year, I think you're hired by Roll Call, which for people don't know, that was at the time the gold standard in Washington DC for covering Congress. That was like, I think, Monday and Thursday. I don't know, Tuesday and Wednesday. And it was every Congress person gets it. Every lobbyist and lawyer, they all read it religiously. They still might. I don't know.
But you were there, I think, within a year of moving to DC. Yeah, I get there. I cover Republican leadership. It just happens to be one of the few moments in history that Republican congressional leaders are the national story. I happen to be extremely well sourced in that space. And I start breaking a lot of stories, and stories that really echoed nationally. And especially around, I was the first person back then to report that Republicans were meeting secretly in the basement of the Capitol and trying to move money from a slush fund to lay the groundwork to impeach Clinton. And it was a monster, monster story back then. And I'll never forget, someday I'll find the tape. It was big enough that they got called to be on The Today Show. And here I am, I don't own dress clothes. I had this supper club sports coat, that plaid thing that was my dad's that didn't fit.
And I looked at the time. I was young, but I probably looked like I was 17. And I'm sitting here talking to Katie Couric and Matt Lauer. And I couldn't be more scared over my head. But it just captured the enormity of that story and of that moment. And it was just, it was fun. It was just, it was interesting. It was intoxicating.
And I was getting good at it. I mean, it seems, I would imagine that your kind of ambition probably would eventually maybe be like an editor in a newspaper, right? Because you were obviously really successful. You were, because when I think about my early career, I was like, that's what I want to be. I want to be a foreign correspondent. And then I want to be a host of all things considered. And then that would be it. I'd be done. That'd be great.
Yeah. I achieved my objective at Roll Call. I never had ambition to be an editor. I never had ambition to run anything. I never aspired anything beyond that. My dream coming out to Washington is if I could cover leadership in Congress for Roll Call, that would be it.
I would have made it. Yeah. But I mean, of course, you would eventually move well beyond Roll Call. Because I think while you were still in your 20s, you got a job covering politics for the journal, the Wall Street Journal. And then after doing that for a few years, you got hired by the top of the heap, by the Washington Post, as a political reporter. It's a, for people who don't, aren't interested or don't know much about this world, it is high stress, right? The competition was absolutely fierce. So what did that mean, that were you just constantly just working the phones, like shouting at people if somebody else got a scoop and you didn't get it first? What was your life? Because I think you are a competitive reporter, right? I mean, you are.
I know you are. Very, very competitive reporter, like all reporters, like competitive and then insecure about my standing. Like I would be in this, I would have a great story and I would live off that high for a day. And then I'd be like, oh my god, do I have imposter syndrome? Do I ever going to get another scoop? And a lot of the stuff I didn't realize until later in reflecting on it, what I was good at, and probably what I was uniquely good at, I had learned at the journal, which is I was really good at fact pattern recognition. Like I could see three things that were happening in society or business and politics, and I could put them into a portrait that would give people some clarity of what and why things are happening. And then I was very good at figuring out what moves will somebody else make next based on what I've seen them do in the past, which would then allow me to pick up the phone and call a member of Congress and say, I know you're meeting on this, even if I didn't know they're meeting on it because I know that naturally that's what they would meet on. So why don't you tell me why you're doing that? And it would, it's amazing how often that trick would get them to tell me stuff they otherwise wouldn't tell me because they think I already knew it. And that little bag of tricks and an ability to write fast
allowed me to be good. You know, I mean, here you are working at the best possible place to be for a political junkie and a political reporter. And clearly, you loved it, and you still love it. You still live there in the DC area. But what started to happen in 2006, you would leave. But what was going on?
Why were you getting restless? If you had asked me in May of 2006,
are you ever going to start a company, I would have looked at you like you're on LSD. Like, what are you talking about? Like, no.
Like, I'm working at the Washington Post. But like later that month or early, I can't remember the exact timing, but somewhere after that point, Google bought YouTube. And it was like this aha moment for reasons I can't fully explain of. I remember going up to John Harris, who's my editor, and looking around the newsroom and thinking about what was happening with cable TV and the internet. And I said, could you imagine if Eric Schmidt came to us right now and said, I want to take on the Washington Post. How much money would that cost me? And I answered my rhetorical question to John saying, not that much. If you think about what's happening before us, if we hired, at the time I said, if we hired six of the best reporters we know and six rising stars and we hooked ourselves up to the internet and we took advantage of the fact that cable TV likes to have us on, I bet you we could compete with the Post instantaneously. And it was like a light bulb went off. It literally went from never thought of it to holy crap, I'm going to start this company. We jokingly called it Project X and started to really sketch out what would later become Politico. And it led us very quickly, and it probably only happened because it went quickly, to a series of conversations.
John and I, or John had been at the Post for 20 years. We knew a lot of people around town. We called people who had money. We said, hey, this is what I'm thinking. Here's an idea. And because I worked at Roll Call, I understood the business. I understood that, ah, if you get really influential people that read content, you can sell ads to companies who care about their image in front of that audience of DC elites. And basically pitched this. And every person that we talked to said, ah, not only do I like that, can I invest?
And so we're like, wow, OK, now this is real. And I guess at this point, you've got this idea called Project X. And it's going to be like, I think I read that you describe it like the Yankees of political journalism. Or if you get the Yankees together, right? So it would be political journalists, but it would be a publication for a very specific but influential audience that a certain kind of advertiser
wanted to reach. The idea was to reach, our thing was, listen, if we can get the president and Nancy Pelosi to have to read what we're writing, we're going to have a very profitable publication. And by the way, because of cable and the internet, we're probably going to have a pretty large audience for this. Back then, the Washington Post and WashingtonPost.com were separate companies in separate buildings on two different sides of the Potomac. And I remember walking over to.com and they're looking at me like, oh my god, the paper people never come here. And I'm like, what are you guys up to over here? And oh, what's this? Oh, this is the traffic to the stories that you're writing. And I'm like, well, wait a second. According to your leaderboard, my story got more readers online than it got in print. They're like, yeah, yeah, that happens every day. And I'm like, then why the hell am I spending all my time looking at the newspaper if I can get a much bigger audience online?
And they're like, yeah, we've been trying to tell you all, but no one cares about the internet, at least people at newspapers. And so, yeah, we thought if we could do those two things,
we were going to have a really successful publication. Yeah. And I guess that at this point, we've kind of reached a major turning point in the story, because this is where you would begin a partnership with a local media mogul named Robert Albritton. He was, I guess, basically the son of a very wealthy media mogul himself who owned a bunch of local TV stations. And at the time, I guess Albritton was trying to launch his own political publication, but it wasn't coming together. Yep. And from what I understand, he heard that you and John Harris were trying to do something similar. So then what, did Robert approach you and say, hey, why don't you do your publication,
your political thing with me, and I'll fund it? Yeah. So this is the serendipity part. And I remember telling Harris, if this is meant to be, someone's going to come along and hear about it. And there's probably gossip around town that we're thinking of doing something, and that's what those guys picked up on. And by this time, remember, we had been pitching this to venture capitalists and pitching it to people in town. We had a very compelling case. So by the time we meet with them, we've really thought it through. We never run a business. We've never done a budget or anything like that. But we had a back of the envelope formula for how this could be a very successful company. And the post initially, I think, looked at us like we were on drugs or we were aliens.
They didn't think it was going to be out.
They would just say, I mean, I remember Don Graham saying, what are you talking about, Jim? You've never managed anything. You're not very often in the newsroom. You've never raised your hand to be a leader. And now you're telling me you're going to start a competitor to the post. I think they thought it was a joke or a fanciful dream. It was their initial reaction until they realized that we were serious.
And then they got serious. And by the way, did you ever consider going to the post and saying, hey, let's spin off a company and I'll run it?
Well, they came back with that idea. They said, well, once things got real serious, they said, fine. What if we created a company inside the company and called it Post Politics? Don't do it there. Do it here.
If you think the future is digital, build it out here. And they only came to you with that proposal once they realized that somebody else might actually
finance this thing. Correct, yeah. And what we said to them was it just it wouldn't work. You have this massive legacy operation with leaders who have a lot of power and big egos. There's no way that they're going to make good music with us being an upstart internally at the same time. And by the way, by this point, we want to go do it. We want to do it on our own. And they're bringing it, though. At this point, they're bringing it. They do both the charm and then they do the intimidation. I remember Don Graham and his leadership team calls us in and explains to us why it's a dumb idea for us to leave. And Don, who couldn't be a sweeter guy and a smart guy, turned to us and just said, I've never said this to anybody.
You are making a catastrophic mistake. When we come back in just a moment, what happens after Jim decides not to heed that very dire warning? Stay with us. I'm Guy Roz, and you're listening to How I Built This. Remember those New Year's goals you promised yourself you'd stick to? HelloFresh is here to help you eat better by delivering fresh ingredients and easy recipes right to your door, taking the hassle out of dinnertime. No matter your lifestyle or meal preferences, HelloFresh has recipes sure to please everyone at your table. From fit and wholesome to veggie or family friendly, you'll always find something even the pickiest eaters will enjoy. I do a lot of cooking in my house, and I always love trying out all the fun recipes HelloFresh has to offer, like falafel power bowls, seared steak and potatoes with bernet sauce, and Southwest pork and bean burritos. Go to HelloFresh.com slash Built 65 and use code Built 65 for 65% off, plus free shipping. That's HelloFresh.com slash Built 65. Promo code Built 65 for 65% off, plus free shipping.
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for just $14.95. Hey, welcome back to How I Built This. I'm Guy Roz. So it's 2006 and Jim is thinking of leaving the Washington Post to start a new publication. And he's gonna partner with Post Editor John Harris and get financial backing from media mogul Robert Albritton. And still, Jim's been told that if he does this, he'll be making a catastrophic mistake.
So he's feeling the pressure. For sure. I mean, again, I got a wife at home, I've got kids and, you know, it's not a cheap market living in Washington, D.C., and so the risk was very high. I always calculated that, okay, but even if I fail, I'm a pretty good reporter, somebody's gonna hire me. And so I didn't worry that much about the failure dimension. I worried a little bit about the public humiliation, but even that, I don't spend a whole lot of time caring what other people think about me. So that part didn't weigh that heavily, but it weighed very heavily on Harris. I mean, he very much wanted to back out and there was a moment that we now refer to as the famous coffee walk, where he basically had convinced himself that we can't do this, that he was gonna pull the plug. And we had always said, like, we're doing it together. We're not, one of us not doing it alone. And so he wanted to pull the plug and he comes over, we go for a walk, and as I leave, my wife looks at me and she says, under no circumstances, Harris talking you out of this. My wife was a huge believer in it.
And I said, no way, no way will he talk me out of it. So we go get coffee, and of course he talks me out of it. But I get home and my wife looks at me and she could tell instantly that I buckled and she jumped on her keyboard and, you know, wrote up this note to Harris, to me and to Harris's wife, Anne O'Hanlon, and she was quoting Churchill and Roosevelt and about seizing the moment, and like moments like this only happened once, getting the arena, and she saved us from ourselves.
It was arguably a bigger risk for your partner, John Harris, because he was older than you. You were in your early, mid-30s. So that's a normal time for a lot of people to kind of jump ship and try their own, you know, their own thing, and you can recover. You can recover and go back.
I think that's right. Yeah, for him it was a bigger risk. Bigger risk and he had more of an emotional attachment to the post. Like I'd been there three years, he'd been there 20. Like it was his only job. It was definitely an easier move for me
than it was for him. All right, so you connect with Robert Alberton. He is gonna be the guy that will back this thing. And the reason that you do this is because it's stability. You're gonna get a, he's gonna guarantee a salary, and he's guaranteeing to put in $10 million in this thing, right, at the time. Yep.
And there was no, it mitigated the risk. Yeah, it was all about risk mitigation. But the most important thing is we had a building and we had money. And so when I went to recruit people from the journal, I could say, look, like here's a computer, here's an office, like this is real. It's not some, I'm not doing it in my garage.
This isn't a garage band activity. You and John basically were handed the reins to run the editorial side of Politico, to kind of create it. And I think your wife gave it the name, right? She named it. She gave the name. My wife named it correct. My wife named it correct. And Alberton and Fred Ryan, the CEO, his sort of media company,
they would handle the business side, more or less, right? That was the arrangement originally, yes. They would, they had business acumen. They had, you know, they had TV stations. They had set up sales organizations before. And so in the beginning, it was very much a, it was a group effort, right? And Robert, who, you know, if it weren't for his money and his courage in taking a chance on us, Politico doesn't exist. And I look back at like, it was a miracle,
a miracle that Politico worked. Yeah. I mean, with his money, obviously, there were resources, right? The paper launches in January of 2007. Yeah. So he, because he owns these television stations, he had a building, I think, just across DC in Arlington. And that was where Politico would be located. And I remember those early papers when I, you know, read them online. And, but it was a newspaper and it was online. I mean, it was going to be a print newspaper and an online paper. Yeah. And from, from like one account that I read, you know, the night or the cutting in the nights before that first edition was launched, a lot of the copy was just crap.
It was terrible.
Like you, you and John basically had to rewrite the paper. We had a pact going into this. We said, never will either of us ask the following question. If you could do it over again, would you still do it? And we had stuck to it until the night that we're about to launch. And we look at all the stories. We were so busy getting everything put together. We never had time to deal with a copy. We knew what the lead story would be. But you had an entire newspaper to fill and a website to load up. And we started to go through the stories one by one and they were awful. And we were literally sick to our stomach.
We're like, how in the hell are we going to put out a publication tomorrow,
much less how are we going to do this on a regular basis? And by the way, a lot of people wanted you to fail.
It was a big deal. I was pretty cocky in public about what we were going to deliver.
What were you promising, by the way?
What were you saying? I was just saying that we're going to take on the post and the people from... Why were you saying that? Why would you say that? I don't know. I think John and others were asking me that at the time as well. I am at this point in my mind, we are going to will this into existence. And part of willing something into existence is having a little PT Barnum in you. Understanding that you need people talking about you, even if it's not always in flattering ways. You need to be part of the conversation. So the bet I was making was, I'm going to be provocative and definitely it came off, I think, to a lot of people as abrasive or cocky. And so we had tons of people cheering against us.
And so against that backdrop, we're looking at these stories. And I remember looking at Harris and saying, if you could do it over again, would you do it? And even though we've promised not to ask that, and he said, no way. But it was that bad. It was a dark, dark moment.
But you know...
Why would you say that? You don't... Failure is not an option. Like anybody who started a company, failure is not an option. I don't have time for pessimism. All I have time for is activation and solutions. And we had enough fresh ideas and enough savvy reporters like Ben Smith and Jay Mar, Jonathan Martin, who are breaking stories and other people were having to follow, that we built up this momentum. And a few things became very clear to us early on. One, talent matters profoundly. One good person, one awesome person is better than 10 good people. And we had a lot of them. We had a lot of these killer talents.
And I wanted to find those people and you wanted to keep those people. But that took time. Took time. And when you're going out there saying, we're gonna beat the Washington Post, that means there's a lot of people really secretly hoping you're going to fail, there's pressure there
because you can't fail because that would be humiliating. There's no entrepreneur who's done your show who won't tell you that there's an insane amount of pressure. It takes a certain amount of lunacy to believe you can take something that doesn't exist and will it into existence. And so you by nature have some level of very high tolerance for stress and you don't sleep. I remember my brother coming and visiting and my brother knows nothing about politics at the time, doesn't pay attention to media, just came to hang out and go to bars for a couple days. And I remember him looking at me, going to bed at 12 and getting up at 3 o'clock and firing off 100 emails saying, whatever you're doing is not healthy. What are you doing? It wasn't healthy, but it was exhilarating. It's intoxicating. You either collapse from it or you thrive. And because of it being new and maybe a little bit because of the bravado, everyone was covering us. So there were stories on CNN and there were stories in the journal and others.
So we were getting all of this earned media. So the P.T. Barnum part of it was paying off.
And so there was enough public success that it was clear we could be successful. I wonder, I mean, one of the things I wonder about is you get there and you're John Harris who you worked with. He had some managerial experience because he was an editor. You had none. I mean, you were a reporter. Most reporters are, you know, they're one-person bands, right? They're lone wolves, right, or if they work in teams. But still, they're, you know, they're their own boss usually. And now you are a manager plus you were the kind of the star reporter. So you also had to report and oversee a team of young reporters and push them hard. How did you learn to do that without being an asshole?
I don't think I was ever an asshole. I think I pushed people hard and did I push people to the limit? There's no doubt. There's no doubt. Like our level of burnout in that first year was exceptionally high. I never pushed people harder than I pushed myself. And I hired a lot of people who I knew were similar, right? We ended up hiring Jake Sherman or Ben Smith. Like if you get the right reporter who's motivated, you don't need to push them. Like they're pushing themselves and they're on fire for breaking news and getting scoops and the adrenaline that flows from it. But yeah, like I only, I didn't lead. Like John had been a manager.
John was certainly the adult in the room and I was more Vince Lombardi. Like I'm going to like pound power. I'm going to work to you. I'm going to work hard. I'm going to, you know, I'm going to try to inspire, I'm going to try to, like, run around the room. Like, what do you got for me now? Like, let's get a scoop. Like why did that person beat us? Like it became a joke, uh, to a point because I would do so, so much of it. But instinctively, I felt that's we have to somehow do the impossible. And that's the story of, of every startup. trying to do something no one's ever done before with a group of people who haven't done it together before and in this environment we did it with the
added layer of we're under intense public scrutiny. You know I'm curious when you would tell reporters like when new reporters came in and you would say this is what a Politico story is. This is what makes us different. How would you
describe it? What was it? What was a Politico story? A Politico story we would say is, listen, is this an idea, an analysis, a scoop that the Speaker of the House or the White House Chief of Staff would consider new, revelatory, essential, illuminating? Like that was the marker. Like we were writing, we called it the bull's-eye of the audience. If we can get something that is so interesting to the most powerful people it's going to be interesting to anybody who cares about
politics. So here's what I'm wondering, like Politico became you know a sort of a sensation in Washington DC quickly and let's let's be honest for a moment here. Washington DC can be very provincial, right? People can really be naval-gazy and and so you know it's also a great place to get attention because it is a small town in that sense. So people were talking about Politico but it was it was not making money. I mean here here you've got Politico, you're writing your own stuff. It's really expensive to have all those staffers writing original pieces and Huffington Post was at that time kind of kicking your butt, you know, and they were just aggregating articles. They weren't even writing them. I mean was was there ever like did anybody internally just say what are we doing? Why are we paying people to write
stuff? Why don't we just do what they do? Not really because we were starting to bring in revenue. The whole idea was if you can write things that members of Congress have to read, then these companies would want to advertise to reach those and that happened instantly. So we started to get a lot of ad buyers, defense companies, and financial service companies. But that was in the newspaper. That was in the newspaper. But back then, that was enough. I don't remember the numbers that first year, but let's say we spent 10 million. I think we brought in 3 or 4 million in year 1 if my memory serves me correct. So it wasn't there was money coming in and I think by year 3 we broke even or might even have made money that third or fourth year. But back then like I wasn't even that worried about the business.
We wanted it to work. We were like about brand building, about hiring the right journalists, about getting people to take us seriously, and on that score pretty
early on it was mission accomplished. It was in the newspaper. But back then, I don't remember the numbers. Obviously, Albritton, he knew going in that he was not gonna make money for at least a year, probably two, but there must have been pressure coming
down to bring in money. Yeah, I don't remember in those early years there being a whole lot of tension about revenue. There definitely started to have tension between John and I and kind of the suits, Robert and Fred, just about how to run the company and how often do we need to meet. When did that start? When did that start? I wish I had a better memory on specific, but I would say it started low-grade around year 3 and got progressively more worse. It's not set up the way you would want to set up a company. Our CEO, Fred, is also
running a massive local television MPV. TV. Right, because all
Britain owned a bunch of TV channels. So a lot of our leadership, a lot of our technology was coming from TV, which I didn't realize at the time, but very antiquated and a very throwback industry. It started to become clear that that was the source of the tension. I was like, there's no way that we could be a successful company at a national or international scale if we're running like a mom-and-pop shop or certainly running like a mom-and-pop shop back by a local TV station. We need a full-time leader. We need a full-time technologist. We need to continue to grow and find new revenue streams. And that would be where we started to hit our first period of real turbulence. But up until then, it was like we're having a blast. For the most part, people are getting along and we're all trying to kind of figure out who does what. And then John and I are becoming, we start to become leaders ourselves. We start to do a lot of self-appraisal.
We start to figure out what are the weaknesses and how do we create something that's more sustainable. We're not dumb. Once you have turnover as high as we had and you have people writing stories about us being a sweatshop, we're not dopes. We know that that's not sustainable. It may have gotten us to where we were, but we were gonna have to create a culture and a company that could rely on something other than the maniacal energy of a few
people. I mean, it's interesting because the the culture, right? I mean, you talk about the culture and you mentioned this kind of the sweatshop stories that were coming out about Politico. And it's almost as if you anticipated that that churn would happen. That it was just gonna be, you know, sort of par for the course to when you had to operate that way. Or maybe not. I mean, if you were to do it again, would you have baked in a different culture
from the beginning? I can't express this enough. Everything that we did was based on intuition and instinct. And so I think at the crassest level, yes, like what is what is the instinct that motivates people in trauma or turmoil? It is, it's I'm not, failure's not an option. I'm gonna get out of this hole. And so all you're doing is like, I'm gonna fight today to win today. And I'm not thinking about casualties. And it was made messier because we were in the media and the media loves to cover media. And so any misstep would be amplified in a way it might not be amplified if I was trying to start a shoe company, right? People
wouldn't care. Yeah. How was your, before things started to get a little bit tense, right? I think they started around 2010. But from everything I've read, I mean, you and Robert Alberton were quite close. You guys went out to dinner with your wives and you guys went on vacation together. I mean, you became pretty close.
Yeah, there's definitely long periods of time where, you know, you listen here, like any startup is like a family, you're trapped in a house together. And, you know, Harris used to have this expression that we've been in the car too long together. Like that, that certainly is true at times. But Robert and I were close at different times. We were friends. But, you know, we started to clash. I mean, it's pretty well documented that I just, we had different values. We had different business styles. And, you know, at that point when you start to have success, egos emerge, right? And people want credit or people want more input. Yeah. You know, our first big clash, I basically, at some point, it was clear to me the company needed a CEO.
And to be blunt, I thought it needed me to be the CEO because I had, it sounds so arrogant, but I was like, I was learning how to lead. I was really interested in the business. I had it, I had started to gravitate away from the coverage and much more towards how do you turn these things into scalable businesses. I had started to think about culture. You know,
I started to bring in our team. So what happened? I mean, you would obviously eventually become the CEO, which we will, I will ask you about in a moment. But when you were still in that first year, right, and you guys were trying to figure out ways to grow your revenue, I guess you brought someone
on to help you figure that out, right? Yeah. So I had went out on a limb and hired a guy, Roy Schwartz, who was at Gallup and had been a consultant, but was just smart as hell. And I'm like, you need to come and run our revenue. There's no way that there can't be a better way than this good old boy network. I need someone who's smart and savvy, who could talk to CEOs, who can help companies think smartly about how to utilize our platform. And once I hired him, then, you know, we really had an alliance and became quite close. And he was just smarter than anybody on the business side at that company by 10x. And we had decided we wanted to start a subscription business called Politico Pro.
Yeah. This was, I mean, this really was going to become a significant generator of revenue. And this, for people that don't know what it is, it's similar to what you did as an early reporter. I mean, it's like it was designed for industry people, lobbyists, lawyers, you know, who had a specific interest in a specific topic and in Politico Pro delivers, well, delivered and delivers this intensive, specialized information to them. And the subscriptions were like that $10,000 a year, something like that. Correct. And so you didn't need, you
didn't, you don't need that many subscribers. Nope. You need lobbyists, companies, lawmakers, they pay $10,000 a slot. Some big company who has 50 lobbyists might pay $100,000. And it's an expensive business up front because you got to hire a lot of reporters, you got to hire like, yeah, a real sales team because you're asking companies to pay, you know, tens of thousands of dollars for a subscription. And there was a real clash between, you know, Roy and I and really got Robert on the other side who just thought it was, we were wasting money and that John wasn't that enamored with it because he thought it was too wonky in terms of the coverage focus. But we believe that you couldn't be solely dependent on advertising and to be a really big durable company. Roy and I were super confident that you needed this subscription leg of the business. And eventually Roy and I prevailed and eventually Robert agreed to it. So to his credit, like while resistant in the beginning, he did fund it. And yeah, for us, like Politico was us. It was an extension of us.
So its success, its durability was, was everything. And I do, we just felt in our bones that if we didn't have another, if we didn't have another revenue stream, and God forbid we hit economic turbulence and the ad market locks up, that we could be in real
trouble. Jim, you finally get to actually become the CEO in 2014. And there are different accounts, or I guess 2013, when Fred Ryan stepped down, there are different accounts of, of that. And, you know, I've read different interpretations from, you know, Robert Auburn's not here. And again, this is not a critique of him at all. I think, I think he's very successful and has done some amazing things and made his mark, certainly with Politico and, but, you know, from there, there, there are some accounts that said that I've seen that suggested that he kind of really didn't really want you doing that job, that he, he sort of felt pressured to give you that job and didn't really think you, I don't know, did you
get that sense at all, at all? For sure. Yeah. And there's no doubt. And again, like, I think Robert would say it here, and then at the time he might've been right. I think he felt like, number one, like I had essentially demanded that I be CEO. I felt like... Well, you started the thing. I started the thing. I felt like I understood it. And I felt like I can run this thing. And he felt like I couldn't.
I think he thought, you know, I need someone more seasoned, I want someone with more experience in media. And so we had a mighty clash over it. But again, and to his credit, he was right that I had not again like I'd be the first to say I was a reporter I hadn't run anything like until before I started to run Politico the only thing I had run was the night shift at Little Caesars in high school in Oshkosh and so there was a big piece of it that you're learning on the fly and I learned a lot in that
period. I actually think that being a reporter is is good training for becoming a formal entrepreneur because there are entrepreneurial things you have to do I talked about this with Don Katz who started audible he was a Rolling Stone reporter you know for most of his career he was a writer and what a lot of people don't realize is reporters you really have to you know do things
very quickly with limited resources. Everything I know is a CEO I learned from being a reporter everything I knew as a reporter I learned from playing poker huh right so take it back to playing poker in high school and college like poker is so much about fact pattern recognition it's about knowing when to take a risk it's knowing about how to modulate emotion in complex and often tense situations and knowing that there's a decent probability that you're gonna lose and like somewhere in that journey from poker table to journalist to CEO I think those skill sets helped immensely but by the time I became CEO I was very clear that I'm not in this for the long haul like at some point I was always up front with Robert like at some point when I feel like the company can grow at 20% and we're not here I'm probably gonna go that at some point I'm probably gonna I want to do my own thing like I have and by this point I'm you know Roy and Kim and Danielle Jones and you know Mikey like we're we have our kind of owned view of like what a company should look like and and what
its soul should be and what its value should be what its morality and you
could not make that happen because it was not your shop no way no way it wasn't my shop it was Robert's like Robert listen again like the his credit he's the one who bank rolled it when no one else would and he took the risk had political dawn down the tubes, it's his money that would have been lost. And so he owned it, and therefore he had every right to control it. And, you know, it's hard after 10 years. You could have the best of intentions. It's very hard for that to end in a pretty way.
And obviously it didn't end in a pretty way, but that's life. So what happened? I mean, clearly you're starting to think, okay, eventually I want to run my own shop. And, you know, you're alluding to regretfully how it ended. How did it end?
What happened? I mean, it ended that we couldn't get on the same page about, like, how you would set up the company. Like, for instance, it's very important to us that everybody should be able
to share in the success, not just us, but the entire company. You wanted shares distributed and... To other people.
Right. You wanted more ownership distributed. Not just because we thought it was the right thing to do, but also it was getting harder and harder to keep talent. And so you wanted to bring everybody together, have everyone
have upside in the company. Because people were getting equity in BuzzFeed. They were getting equity in other startups.
Yeah, yeah. And it was like, it would have been a competitive advantage if we could have done that. But it was more just like, it's a philosophy. Like, we had a philosophy about what we wanted out of life and what we wanted out of a company that was incompatible at Politico. And it just wasn't gonna happen. We wanted a very transparent culture. We wanted to be very clear lines of authority. And so in many ways it was more the power of that, of, hey, you know what? I think we could do that. I think we could go off on our own. I think we could raise money and we could build a utopian company. And it was that, you're almost, again, like that naive or that cocky, whatever, somewhere in the middle of that, that we could build a utopian company and that lure of that was powerful and by the time Mike tells me yes if we do that we're in and Roy says yes come on let's go do that you know that it's gonna be successful there's no company that Mike Allen is a part of and that Roy Schwartz is a part of and that wasn't gonna be a success and that that
more than anything else is what led us to believe okay we can do this. When we come back in just a moment how Jim and his partners design a new publication to stand out from the others and in the process stumble across an unexpected stream of revenue. Stay with us I'm Guy Ross and you're listening to How I Built This. TurboTax has experts who can help relieve you from the stresses of taxes and file for you so you can do not taxes. With TurboTax an expert will do your taxes from start to finish ensuring your taxes are done right guaranteed so you can relax. Feels good to be done with your taxes doesn't it? Come to TurboTax and don't do your taxes. Visit TurboTax.com to learn more. Intuit TurboTax. Full-service products only. Video meeting while an expert does your taxes required.
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locations. See additional terms at onepeloton.com slash home-trial. Hey welcome back to How I Built This. So it's early 2016 and Jim is about to take another risk and this time he's gonna leave the business he helped build Politico to start a new online publication. And he's partnering with two colleagues, the finance guy Roy Schwartz and the journalist Mike Allen. And they want to cover topics other than politics and do it in digestible chunks, ready-made
for the internet. And this time data was unambiguous that most people were skimming and scanning and they weren't reading most of the words that any of us in the media were writing. And so it meant that people were just consuming content in smaller chunks. And that's the light bulb. That becomes Axios. We're like if we could solve for that how can we help people, especially busy smart people, get smarter faster across more topics? Wow if we could solve that that would be a big company. Well the solution to us became very clear that what we come to over that period is this concept of smart brevity. We've got to find people who have subject matter expertise in media, in business, in technology, in politics. And we have to figure out the most efficient way to deliver that. Smart brevity. So we come up with this architecture of okay what is the smartest way to deliver two or four hundred words?
And if we could do that
we're gonna do something different. All right so you have this concept you leave Politico in January of 2016 and was there any threats or any sort of like you can't do this or you can't go off and start your own thing or any concern that there might have been like litigation or anything or were you
pretty comfortable that wasn't gonna happen? Oh no we thought for sure we'd be going to court. I mean there was tension right and Robert and others it sort of threatened if you take any information from here or if you replicate any of our ideas. I think by the time I left I had three lawyers you know like looking at my contract, looking at potential litigation, probably an overreaction because we never actually had any litigation. But when you leave a company especially when you leave with some bit of tension you have a cooling off period. You have six months where you can't really do anything. You can't start a new company, can't recruit, can't raise money for it. And you know we were lucky we had enough money and to be able to rest for six months and go figure out what we're gonna do. Not a pleasant place to be. I'm not a big sit-around type of person like that. Like some people would love it. I wish that I loved
it. I didn't love it. Right. Here's the thing. I mean in 2016 right when you left you were not financially set for life. Like you still had to work if it didn't work out. Correct. But you had a playbook. You knew right you had done this already. You had started a media company. But now really was different because you weren't just gonna be doing the editorial side. You were
gonna be running a company, the business side, everything. Yes like it could have flopped. You know we went out and we raised money and I mean I've in some ways was the worst person to raise money because I would tell every venture capitalist that I think media is the hardest space in America today. I think that most media companies are gonna go under and yes if you want to get a 10x return I would get into health care or tech or energy stocks. I would think you have a higher degree of probability to make money there. But if anyone's gonna get you a 10x return in the media space based on their previous record I think
we're the group of people who can do that. Here's the thing though Jim even even somebody with your experience talent platform building a new brand is really hard. You're leaving at Politico which was a massive brand by the time you left and even with all the experience right I mean look at look at Jeffrey Katzenberg and what was it called? Quibble. Quibble. Right? Quibble. Yeah right I mean even super highly successful talented people have a hard time building a brand. So what was what was the way that you were gonna put this out there? Because to be successful you had to have an audience because without
an audience you can't command high prices for advertising. Yeah but we listen we have Mike Allen so like we haven't talked enough about Mike. So Mike is one of the co-founders of Politico and he's a co-founder of Axios. He's maybe the most generous gracious person in the history of American journalism and he also has a work ethic that has never been seen before and never will be seen
again. He's written. Right and kind of a legendary reporter he wrote the this playbook that was became a central reading for people in Washington DC and
beyond. New York Times magazine did a cover story called The Man the White House Wakes Up To. He's written a daily newsletter every day but 10 days for 15 years straight. It's insane I've never seen anything like it gets up at 230 in the morning bangs that thing out and it is read by the most influential people in the world and so we knew that we had Mike and we knew that when we launched all the important people in Washington would read Mike. So that was like as long as Mike is breathing and healthy and feeling good we were gonna be successful and then in that early day in walks his kid Jonathan Swan who no one knew about and he had been doing some good reporting on Donald Trump and within like half hour of meeting him I remember sitting in the room with Mike and looking at Swan who had I think three other offers at the time and looking at him and saying dude you were born to work for us like we are gonna pour whatever we have into you and I think we could be helpful you're you have a gift that few people have and he turned down everyone else and took a job with us and you know took upside instead of salary and at that point then I'm okay we're we're good we're gonna be a really interesting fun company and that was the cool thing like one of the things that your entrepreneurial listeners would enjoy is like I don't know how people do it alone remember I had two co-founders for Axios I have Roy and Mike and we have this beautiful professional relationship and I can't stress like anybody who's thinking about starting a company really try to find a partner who you believe in who shares your values who complements whatever skill set you have because there will be dark days and you're gonna want someone you trust in those dark days and if you can find people who can handle themselves with class and character in
the darkest of moments you found yourself a gem what was the tell me about this approach you took you call it smart brevity basically I mean to kind of distill it down to it's a short articles very short articles but it had very specific principles what what what made made an article adhere to us to the
smart brevity model basically one of the genetic flaws in journalists is that they're not great writers and they often bury what matters and they often hide it in a vomit of words and so we tried to create a structure that could make even mediocre writers at least clear writers and so we tried to do is mimic the conversation I would have with you if I went to a bar and if I did what I would do is I would tell you something in clear language that I'm excited about that's new that's interesting that's illuminating then I would give you the context the why it matters that's our second graph the Y portent and then you would give me some kind of visual cue about whether to go deeper which we call go deeper into the conversation and if you go deeper into the conversation you would like it to be hierarchical because you don't know when the conversation is going to end, so make sure the most important information is distilled in the proper hierarchy. And we had seen from the data that if you take multiple ideas and break it into bullets, you're much like clear to get people to keep reading and to retain. And so we broke it into bullets. And having those founding principles made it much easier to run the company because those founding principles really haven't changed to this day, we're much bigger, we've created new business lines. But fundamentally, all of those things were set in place five years ago and haven't changed that much.
How important was the Trump era to the success of Axios? I mean, that was a boom time for news. Yeah, we know that for
CNN, everybody. I have mixed feelings. I have a mixed analysis. Like on the one hand, it was really good for us because Jonathan Swan and Mike Allen and others were extremely wired into the Trump White House Trump campaign. And we were able to break a lot of news and people were captivated by Trump. So we were able to elevate our brand for free at scale quickly. That's on the plus side. The minus side was one of the things we'd set out to do is we didn't want to be defined by politics alone. We wanted to be seen as a source of truth for politics, business, media, technology, other topics. It made it really hard because Trump sucked up all the oxygen sucked up all of the traffic, people started to massively consume politics to a level that's not healthy for a normal human beings diet. And so those two things were in conflict, but it certainly helped us it certainly helped put us on the map.
Yeah, how did you I mean, I you know, obviously, it's a private company. So you may not talk too specifically about financials. But I mean, as you said yourself, media companies are inherently risky. They're very hard to make profitable. We're gonna see what happens over the next couple of years with, you know, a lot of different media companies. But, you know, diversification seemed to be the the answer for a while, you know, let's do events and let's do partnerships and licensing deals and podcasts and TV and, you know, well, you guys won't even be on that you you created a piece of software for businesses this based on the smart brevity model, like to help businesses write shorter emails and stuff. How did you but that took some time. But out of the gate, how did you just drum up cash to, you know, to to bring in revenue? What was what
was the biggest driver of that? Yeah, I mean, two things. One, we raised money. So we launched with $10 million in cash. And then, because we had done Politico, when we left, I probably had four or five companies call me and say, I don't care what you're starting, like, we've allocated x amount to advertise with you guys, but whatever you're gonna start, we have we're successful, you're gonna, you're gonna be successful. And that's where most of the money came from in those early years. And then a great, like your entrepreneurial audience, I love the story, like we're a media company, we're doing well, we're 18 months into our creation, and I start to get phone calls. The NBA, the Basketball Association, JP Morgan Chase, United Health Group, their executives start calling us and say, almost identical things, like they were in the same room. And they said, Listen, our executives all read Axios, but they won't read anything that we write internally. Will you teach us to write? And our initial reaction was no, we're a media company, go learn how to write somewhere else. But the more we heard that from people, I remember Roy and I turning to each other saying, man, like, usually a market whispers like this market is screaming, it is screaming at us.
And so we created a sister company inside the company called Axios HQ. And the idea was to both teach smart brevity to companies. But then little by little, we built a technology, AI power technology that took all the learnings from the newsroom about how to write an engaging headline, how to pick the right visual to get people to pay attention to content that matters. And we created a software that now, you know, hundreds of companies and the mayor of Austin and the school system in Austin, Texas, like tons of people, big companies, small companies, medium companies, now use it HQ and smart brevity to communicate internally.
So, all right. I mean, I think that sometimes this comes across this can come across as an obvious question, because, you know, why wouldn't you but here, you've got this thing that you launched in 2017. And it's doing pretty well. You know, it's, it's I think, how long until you reached sustainability or
profitability? How many years in? I think by year two, or by year two, we're profitable, not by design, by the way, we were trying to be an investment mode. The business was doing better than we thought. Hiring is tough in media, but we were we were breaking even like we were doing five, we're, we broke even I think year 234, or made a
little bit of money, like, but not right, or made a lot of right. So, so you are, and you know, you've got all these revenue streams going. And then in 2022, you sold to to Cox Enterprises that they bought, bought out Axios, I think for a little more than $500 million. Again, it can come across as an obvious question, just why, why would you sell because it's $500 million? Why not? But, but why? I mean, I mean, you know, you wanted, you want independence, you want to run your own shop, you're just four and a half years in. Why was it the right time?
Yeah, it's a great question. Especially given that, you know, five years earlier, we wanted to control our own destiny, right? And we were very clear with people that were a hard company to buy, because yes, we're willing to sell a substantial percentage of the company. But we want to run the company, we want to run the business, and we want 100% editorial control so that we told people along the way, listen, if you are fine, you know, buying out the shareholders, and you're, you're paying a premium price, and you believe in us, and you believe in this culture, you got to let us run the show for a long time. This is like, there's nothing else that we want to do. Well, along comes Cox Communications, they were they led our series D. So we've done a couple of rounds in between.
How much did you raise in total?
I think we're probably 35 to 40 million all in. But we're sitting there, we have a nice cash runway, we have a good company that's generating a lot of growth. Cox becomes a series D investor. And they are just like, it's almost too good to be true. Like, they're the nicest people, they're a fourth generation company, they, you know, Alex who runs the company is just a great guy, he used to be in journalism himself. They make very clear that, you know, the terms you guys are talking about, that's something we could see ourselves doing, like, we have no desire to operate the company, we want you guys to operate it. And so it made the transaction, which is you can imagine, you're selling your baby, it made what could have
been very painful and torturous, quite easy. What's your commitment? How long?
I mean, I could leave whenever, I guess, but our commitment to them is, you know, a minimum of six years and probably a lot longer. I think if you talked to the leadership of Cox, they would say, we hope these these guys are here for 20 years running the company. And you know, I don't, you know, I'm 51, I guess at some point, I'll get tired, I don't, I probably work harder today than I did. I don't know if I worked as hard as I did the first year at Politico, but I work a lot, like, because I love it, I get a lot of energy off of it. And so it's, you know, again, I'm a blessed guy, like, I've had a hell of a fun ride. I have a big ride in front of us. But like, it just it's, I talked to college kids a lot now. And I'm just like, man, if you could figure out a way, like, to do a job that you would do for free, that you love it so much. Like, that's nirvana. That's winning the lottery.
Um, you know, which question is coming next? Because you I know you've heard this show before, but it's still a question that worth asking after talking with you for several hours, which is in you've alluded to this, and in various points during the interview, you've talked about luck. How much how much do you think luck got you to this point versus the grind? I mean, I'm tired, exhausted, just just imagining the 18 hour days that you put in for two decades. So what do you what do you what do you I don't know, how much how much is it about one and and how much is about the other?
I just feel like people don't credit luck enough. That's why I hate the great man stories, these one person visionaries who will something into existence. That's bullshit. Like nobody will something into existence alone. You have a lot of people who are helping you who've helped you in the past were helping you in real time to do the impossible. And I don't think people appreciate luck of just being in the right place at the right time of having an idea that works now that might not work tomorrow or might not have worked yesterday of running into the right co founder. Like if I don't ask Jen Hurley, who's was working in our finance department about where she's going, and she had not told me I'm going skiing with this guy Roy Schwartz, who's really interesting, and you should talk to him about business. He's just a smart guy. Like, that's pure luck. Like, how did I have that conversation with her? And she pointed me to Roy, if we didn't have Roy Schwartz, Axios wouldn't have existed. Or how do I end up on the Lido deck in Genoa, Italy during the trade protests when I'm working at the Wall Street Journal, and I turned to the person next to me at 4am who looks at me and says, with his beer in his hand for speed.
And it's Mike Allen wanting to see who can slam a beer faster, and starts a lifelong friendship. How do we have a spark of an idea to start Politico? And it just happens to be at that very moment, the internet's taking off and cable has an insatiable appetite, and we happen to run into the right mix of reporters that can bring it into existence. Like so much of that is luck. And it's perishable. And I just don't feel like
people appreciate that enough. That's Jim VandeHei, co founder of Politico, and co founder and CEO of Axios. By the way, in 2021, Robert Albritton, Jim's co founder and the man who financed and owned Politico, sold it to the German media giant, Axel Springer, reportedly for a billion dollars. And according to the New York Times, it was one of the most expensive media mergers in recent memory. Hey, thanks so much for listening to the show this week. If you want to contact the team, our email address is hibt at id.wundery.com. If you want to follow us on Twitter, our account is at how I built this and mine is at Guy Roz. On Instagram, we're at how I built this and I'm at guy dot ros. And don't forget to follow this show wherever or however you're listening to it so you don't miss any new episodes. This episode was produced by Kerry Thompson with music composed by Ramtin era Bluey. It was edited by Niba Grant with research help from Sam Paulson. Our production staff also includes JC Howard, Casey Herman, Alex Chung, Elaine Coates, John Isabella, Chris Messini, and Carla Esteban.
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