“It’s been a very challenging year for the

[media] industry,” to say the least.

On a recent episode of Recode Media with Peter Kafka, Henry Blodget stopped by to chat about his role at Business Insider now that it’s owned by German publisher Axel Springer. Peter and Henry also delved into their shared history in the origins of BI, Henry’s rise and fall as a Wall Street analyst and the media’s role in Trump’s America.

You can read some of the highlights from the interview at that link, or listen to it in the audio player above. Below, we’ve posted a lightly edited complete transcript of their conversation.

If you like this, be sure to subscribe to Recode Media on iTunes, Google Play Music, TuneIn, Stitcher and SoundCloud.


Peter Kafka: This is Recode Media with Peter Kafka. I am here with my old boss, Henry Blodget. Henry, welcome.

Henry Blodget: Thank you, it’s great to be here.

Thanks for coming. I’ve been trying to get you forever. Finally squeezed in a few moments between you and your … Your iPhone now, right?

Yes.

Are you recording this?

Yeah, should I not be?

No, go ahead.

Okay.

What the purpose of doing a recording?

I don’t know, I instinctively record things …

I love it.

… whether I’m interviewing or whether you’re interviewing, but I’m happy to turn it off. I didn’t even think about it.

Did you get burned once?

No, I thought you were going to be tweeting through it this whole time.

That’s more of a Kara Swisher move.

No, I haven’t been burned, but it’s always helpful.

It’s not an email.

What do you mean?

I have it seared my memory. I once talked to you early on, and you said you were emailing a lot. You said, “I know I should not like email, but I still really love email.”

Ah, yes.

As a form of communication.

Exactly. It’s a wonderful form, and dangerous, as we all know.

I will catch people up who don’t know who you are. You are the CEO of Business Insider. Is that the correct title for you?

That’s correct.

When I started working with you, you were the CEO of Silicon Alley Insider, which became Business Insider. You were the editor in chief. You had a long career on Wall Street, prior to that; then you were removed from Wall Street.

I was.

Forced to become a journalist. I started working for you in 2007. I left a year later, and then last year, once you’d been freed of my burden, you sold the company for a ton of money to Axel Springer.

Yes.

Am I correct? You’re smiling at me so I wasn’t sure.

It didn’t have anything to do with your …

No, no, no. Once I was gone, it was easier to sell. How’s it going? You’re about a year and a half post-sale. You’re still working for Axel Springer. Working hard, I believe.

Yes. The last year’s been great. It’s been a very challenging year for the industry. There are lots of trends taking place that are changing everybody’s businesses, so we worked through that and I would say, given the circumstances that we were working with, one of the best years we’ve ever had as a company. You can only control what you can control, and we really navigated it very well, I think, and it turned out to be a good, strong year of growth. Audience and revenue continues to grow, so everything’s going great.

We can talk about some of those challenges. Want to dive into that a little bit. What is it like to build a company, 10 years, sell it, and then continue working at that company, but now you’re working for someone as opposed to being the boss?

One of the reasons we sold to Axel Springer is that they wanted to keep us as a standalone entity. We were their entry into the United States, and we’d had a lot of conversations about …

It’s a big German publisher.

That’s right. Leading German publisher and one of the leading digital publishers in Europe. We’d had a lot over conversations over the years with other companies and often, early on in that conversation, the question would be synergy. “What can we do to smush you into our organization?” Usually that is code for, “How many of your people can we fire?”

Yep.

Didn’t want to have anything to do with that. If we were going to be partnered with an organization, I wanted it to be that we continued to grow. Really, this was a change out of our board and shareholders. Axel Springer’s a media investor. They know the media growth trajectory and they’ve been incredibly supportive. It’s been a first year of marriage. You obviously learn a lot about each other through the first year, but it’s been great.

Before you had a board and before you had investors, you were working for your investors long term, right? They weren’t coming in and [getting] on you quarter after quarter, I assume. They let you run the business. I assume that’s very different, and I’ve heard it’s different with Axel, and much more hands-on. Like you say, they know the business, so it’s not like you can say, “Trust me, this is how publishing works. Just leave me alone here.”

Actually, the board we had before was incredibly active. Updates all the time, very focused on growth. Obviously, we had a lot of professional venture capitalists, and others. Jeff Bezos was involved, they want the best of the business, and it was very much a dialogue where we were focusing and asking questions all the time [about] what we could to better.

It’s been a little bit different with Axel Springer. They are a public company, quarters matter, the bottom line matters more. As a venture-capital-funded company, you’ve got more flexibility on the bottom line. There’s a lot of focus on the top line. Again, given some of the transitions that the industry was going through last year, there was a big learning process, because the U.S. is a different market than Germany. We’re about two years ahead of Germany, I think, in digital media evolutions. There was a lot of their learning about what was going on.

It actually hasn’t changed that much in the last couple of quarters. Things have been going incredibly well, so they’re focused on other opportunities.

You’re alluding to this, but what I heard is that after you had sold the company, about a year and a half ago, you guys then missed a few quarters in terms of projections. Is that true?

We had a slower year, especially early on, on the top line, than we had thought. What was going on was this big shift to programmatic, which we had set up for a couple of years in advance.

If you’re listening to this podcast, you probably know what programmatic is, but it’s robots buying and selling ads.

Very well done. Yes. Exactly. It’s the old, premium, direct business. The reason Yahoo has struggled, for example, is that the business has been converting from that business to an automated business that is a lot more efficient for clients and actually a lot more efficient for publishers, but it’s not a dollar-for-dollar exchange. Basically, you’re taking a dollar of what would have been revenue and suddenly it’s 25 cents. The programmatic is great for clients and it’s good for us, ultimately, so we had set up to take advantage of that.

What you’re saying is that as it shifted over, it cut your top line faster than you’d expected.

That’s right. Exactly. What it did was actually increase the number of clients that we’re working with and it’s enabled our salesforce to actually focus on much higher-end custom work, which is a business line that’s growing incredibly rapidly.

If you step back with what’s happened with advertising revenue over the last two years, for us and the rest of the industry, what was almost 100 percent direct premium revenue …

Sales. Men and women selling something to buyers over steak, or red wine, or however one sells these things.

Exactly. It’s shifting into programmatic for most of the banners and buttons that folks see, to really high-end custom. The market is bifurcating into what we call the barbell, and we’ve reorganized the team and refocused to really emphasize both of those. Now that we’re through that transition, things are going great, but it definitely slowed things down for a while.

Axel Springer buys you for $344 million+ cash, so it works out to value you guys north of $400 million in the fall of 2015. Then, immediately afterwards, you guys say, “Listen, new owners, I know we’re in our honeymoon period, but I gotta tell you something about the ad market. It turns out programmatic …” You start explaining why revenue is not where you thought it was going to be. You go though this explanation you’re going through with me. How does that go over?

Again, there was a learning process for Axel Springer about what’s going on in the U.S. market and understanding programmatic and we were … Fortunately, we’re in a business where it’s not like you have to go out and build a $10 billion factory and if things develop more slowly than you expect, suddenly you’re really over your skis. We are very much able to control the growth rate of investment in editorial, so we just slowed our investment out in front of that and ultimately, by the end of the year, everything was re-accelerating again. That’s continued into this year.

Culturally, what’s it like to work with owners who are German, owners who are European? They have other investments in the U.S., but you are the one major investment.

The key for Axel Springer — which is again one of the reasons we were so excited to work with them — is their company’s built on journalism. They were founded as a newspaper. They built huge numbers of newspapers in Germany. They really care about it. As you well know, there are better businesses than journalism. If you just care about Ebitda, for example, there are lots of other businesses that we can all go into and do much better [in] and have a less competitive environment and so forth.

One of the things that’s great about them is they really care about journalism, so they care about what we’re doing. Our mission journalistically is to delight our audience and get better every day. They have been 100 percent behind that. That is the most important cultural element of what’s going on. Right from the CEO on down; Mathias [Döpfner] is a former journalist, it’s what he really cares about. We’re in great hands there.

Other than that, the next big cultural thing is A) it’s a public company, so different things, as we’ve already talked about, go on with that. Then B) it’s just getting used to a new market. Again, it works very differently here. It’s a much more fragmented and competitive digital media market than it is in Germany.

I can’t remember the timing of this, but around the time that they purchased you, either right before or right after, you were saying, “I think we’re going to have some kind of pay wall. We’re a free site, there’s a research product you can buy as an add-on, but we’re going to eventually start asking our readers to pay for this in some way.” I haven’t really seen it … On Twitter a couple of weeks ago someone showed me a screenshot of something that looked like you were testing a pay wall. Are you going to ask a regular reader to pay for Business Insider?

First of all, we really believe in subscriptions. I think the lesson from Netflix and Hulu and others, and the lesson from the New York Times, the Wall Street Journal and many publications, is that lots of people prefer to pay directly, have a different kind of experience than you have when it’s ad-supported, and it really enables you to develop a different kind of journalism. You can go much deeper into niches than you can when you’re building an ad business. What we want to do is build a fully dual revenue stream business: Advertising and subscriptions.

Which is what everyone says they want to do.

Absolutely.

Especially in the media business now.

We’re well on our way to that. The research business that you mentioned is growing very rapidly, much faster than the ad side. It’s now quite significant in terms of its size. We feel like there’s a huge opportunity for that to continue to grow. Over the last three months, as you mentioned, we’ve started to test a more consumer-focused subscription that is on Business Insider proper. We’re testing a bunch of things. One is the meter that some folks have seen. There are other models that we’re looking at, too.

Meters: You can get 10 free articles. Then, at some point, we’re going to ask you to pay.

That’s right, which is one of the models that has worked well for folks. Another thing that we’re doing is we’re offering an ad-light version. The reason ad blocking is growing is people don’t like advertising. Totally respect that, want to serve them, and so we’ve created a service that has no advertising. It’s incredibly fast …

I can buy that now?

You can buy that now.

What do you charge me to read Business Insider without ads?

$9.99 a month.

Wow.

Yeah.

Are people buying?

Yeah, they are! It’s nice. A lot of ad-block folks who show up and you have an option … By the way, we completely respect everybody’s right to use an ad blocker. That’s fine. We do want to point out, though, you can’t have the content without the ads. If that’s the product that we’re serving, we obviously need to pay our journalists and our engineers, so we’re offering now two things. One is you can whitelist the site — and we care a great deal about our experience, we’re not going to shove through all sorts of crap ads — or you can buy an ad lite experience. A lot of the ad-block folks are signing up for that. It’s great.

10 bucks … I think the Times is maybe 15 bucks. Around that. I should know, since it’s my beat. I think one of the things …

Yes, the Times is more expensive.

But not a lot more, right? Ten bucks a month, that’s Netflix money, it’s more than, I think, a Spotify subscription costs, maybe right around there. That’s what a Spotify subscription costs.

We can talk about the history of the site and where it came from, but I think one of the things a lot of people … When you said, “We’re going to start asking people to pay for this,” they said “Business Insider is a site that consists of other people’s product that you guys have aggregated and created, and done a smart job with, but it’s not something you would pay for.” Are you going to create a different kind of product that you think people would pay for? Do you think, “Nope, this product by itself is good enough that we think people can pay for it”?

I would say … First of all, that description is extremely out of date based on what we are doing today. We do, obviously, build on stories that others report, especially in an environment now where you’ve got a new president of the United States who breaks a massive news story every five minutes, practically. Obviously, media is building on each other. We also do a huge amount of original reporting and in many different varieties, in text and video and photos and so forth. Everything we produce is original, except for the stuff that we license from our partners, which is great for our readers and viewers as well.

You do raise the question … For us, it’s more of a generational question. I am used to paying for a newspaper, it’s what I was brought up doing. My parents did. Younger generation? Are they used to that? Millennials, less so. As we are testing this, one of the questions we’ve been trying to answer is, “Is the meter the right model or is it just a premium service like Amazon Prime?”, which is very attractive. Where they give you something you want. What we’re starting with for a lot of people is ad light, they don’t have the ads, it’s much faster and lighter on mobile, and adding onto that. We’re very much at the testing phase at this point.

So interesting. We make our money for this modest podcast, but excellent podcast, from our fine sponsors, so we’re going to hear from them, and then come right back.

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I’m back here with Business Insider’s Henry Blodget, we’re talking about ad models and payment models. I want to go back a little bit in time, 10 years ago or so, when you started this site, and talk about why you ended up starting a website to begin with. As you said, journalism can be a fun business, but there are easier businesses, there are more lucrative businesses to be in. You’d been on Wall Street. For people who don’t know that part of your life, just explain why you became a famous Wall Street person.

I can’t so much explain why I became a famous Wall Street person, but yes, when I got out of school, I was a journalist for a little while.

Tiny while, right?

Yeah, yeah, yeah. Tiny while. Few years. Then I went to work on Wall Street, and my journalism was the local newspaper and TV. I worked at CNN Business News 150 years ago, then ultimately went to Wall Street though a training program. Became an analyst during the internet boom. Rode the internet boom all the way out.

You were one of the faces of the internet.

I was indeed.

When people wanted to talk about the boom in stocks, they often talked about you, or to you.

That’s right. Early with Amazon and Yahoo and AOL, then a big incredibly powerful company …

You famously called Amazon at 400.

Yes. Then, when the internet boom imploded, I imploded along with it. We talked about email earlier: New York Attorney General Elliot Spitzer found some emails that he didn’t like of mine and said, “This reveals a huge scandal,” which I disagreed with, but the emails were certainly very colorful and, as you said, that led to my leaving the industry.

Fined, and basically barred from Wall Street.

Exactly. Although I’m still horrified by that, and it was a searing experience, both from a learning perspective and I also just felt like, “My goodness, I feel like I’ve let so many people down,” and I felt basically like it was a dishonorable discharge and so forth. I felt like I wanted to do something that enables me to regain some of the trust that I’ve lost and use the skills that I have, and fortunately, the journalism was something that I knew how to do and had an editor who welcomed me back, which was great.

Was that something you wanted? Did you think, “All right, I’m on Wall Street, I’m going to do journalism”? Was there a middle period, [when] you thought there might be something else you could do? I assume there was a way for you to work with money but not be on Wall Street that probably would have worked out well, or could have worked out well for you.

Yeah, I consulted for a couple of years, I wrote a book. I started freelancing around and doing some TV here and there. Then, ultimately, where I really decided to go back into it full-time was covering the Martha Stewart trial for Slate. Slate was the one that really welcomed me back, which was wonderful.

Then, in 2007, a CEO that I knew from the internet era, Kevin Ryan from DoubleClick, called, and he said, “Look, I’m thinking about starting a tech site focused on New York, like a TechCrunch for New York. What do you think?” I said, “Ah, that sounds great! I’ve always been interested in companies, after watching all the boom during the 1990s and love journalism, this is a new medium, hopefully it will create the opportunity for new companies to be built. It’s sounds really exciting,” and we went. Then we immediately hired …

Me.

Peter Kafka from Forbes and Dan Frommer from Forbes.

Dan Frommer, who’s now my boss.

We brought over the Forbes team, which was great. The three of us were banging away in the loading dock of another startup. Panicked that if one of us went on vacation traffic would drop, which it did, but we figured out, over the course of that year, what we could do that was different and valuable, and ultimately, it’s built from there.

You said the premise originally was, “We’re going to do local business news in New York and then we’ll do Boston, then we’ll spread out. We’ll do everywhere but Silicon Valley because we figure that was covered.”

I think a couple months into it, the light bulb went off for you, and you said, “There’s no such thing as local internet news. Maybe there is, but that’s not where we’re going to go. Let’s make this a national publication. Do you remember what changed your mind?

I think the three of us saw it quickly, which was we would write about many New York startups, and then we’d write one story about Apple, and suddenly readers are coming in from California. With my Wall Street background and your years in technology, both you and Dan, it felt like we could really add a lot to the overall technology conversation, so we jumped into that and gradually the New York focus faded away. Then, after about a year, we realized, “Hey, we should do this in other areas of business too,” and Wall Street was natural for me, obviously having that background. We began to expand, and then one more year in, so second year in, we basically said, “Look, we need to have a Wall Street Journal for the digital generation, let’s become that.” That became the mission.

You were pretty frank with us, you just mentioned it in passing here. You had two goals here, it seems to me, when you started this business. One of which is, “I need a job, I want to build something, I want to make money.” Two, “I want to reclaim my name. I want to be known as something other than a disgraced former Wall Street analyst.”

Can you blame me?

I don’t think many people figured out that was an important thing for you, that this was Henry’s business, and this is Henry’s next business. For you it was very much, you had a public name and you felt like you wanted to clear it, or at least write a new chapter for yourself. I don’t think a lot of people get that chance, which is pretty cool, because you’ve done it.

Look, I had really young kids, I didn’t want to disappear and quit. What happened to me was, I think, it was a product of the period. Obviously, I look back and just say, “You moron,” for calling a stock a piece of junk in email, taken out of context. It does look horrible, and so forth.

The secondary conversation about that, that stocks go up even when Wall Street deems them low-quality, or what have you, it’s very subtle, so as you’re not going to see it in the ratings. It was an incredibly public humiliation and I definitely wanted to … I didn’t want to quit, I was young, had a young family, I wanted to try to do something else.

You could have packed up and gone somewhere else and gone into an industry where you wouldn’t have had a public name, and you could have just been Henry Blodget, smart guy.

I guess. Yes, but I really loved what I did as an analyst, in terms of the core skills of interviewing and analyzing. In that case, it had a lot to do with spreadsheets and so forth and communicating; that’s why I was in journalism first, and I didn’t want to have a life where I disappeared. I wanted to come back and use what I had in the public realm.

It seems to me that there’s a through line between the journalism you started with, the name you made for yourself as an analyst, by being someone who was willing to go make a big splash and say, “I think Amazon is going to go to $400,” when it was, I don’t know, 98 bucks? Something like that.

Something like that.

Something like that. Then what I saw you do, when I worked for you for that year, and subsequently, which your saying, “There’s no point in going, ‘it could be one or the other, or this or that, let’s go out and say, This thing is going to happen. This thing is terrible. This thing is horrible. This thing is great.’ Let’s go to the edge, one way or the other.”

It seems like there’s a connection between someone who was able to make that Amazon call and someone who’s been able to figure out, “Let’s get someone’s attention on a screen. Is that fair?

It was interesting, I was at a breakfast with Thomas Friedman from the New York Times the other day, and he was talking about the different roles in journalism, and he said, “Look, basically we’re in the lighting business or we’re in the heating business, and sometimes we’re in both. Light news, you’re reporting things, educating people. Heat, if you’re a columnist, your job is to provoke and make people think about something.”

Adding to that, what I learned on Wall Street is, the job of an analyst is to take a big complex set of facts and reduce it to “buy” or “sell.” That’s it. You have to do that. That is your job, and so over time, I became trained in that, which is okay: Here’s the situation, analyze it, make a decision. And it turns out that that is a very valuable skill for a columnist.

It’s been very interesting to watch the evolution of Business Insider because I think in the early days, we had that mix, we did some reporting and we also did some provoking with the columns. That’s exactly the way it has evolved. I would say actually Business Insider, over the last few years, has moved much more into reporting; we do very little of the column writing that we did, and the sort of take writing that grew out of the blogosphere. Although that is something that I think there is a big opportunity for, and we do have folks like Josh Barrow and others who are exceptionally good at it.

It also seems like that was an idea at the time that you were doing it, and you were very clear about your modeling yourself in some ways after Huffington Post and Gawker, which were sort of pushing those takes and provocative stuff, that that’s all been baked in to the internet now. It’s no longer a crazy idea to imagine that someone has a provocative take and they’re going to publish it on the internet. As many people pointed out, the New York Times now has an aggregation desk where they say, “Here’s what’s happening on social media.” All this stuff has sort of … The landscape looks more homogenous in some ways.

I think that’s right. I think that what you’re describing is a modern newsroom. That is what we have tried to build. We didn’t set out to rebuild a newspaper and try to figure out how to make it work. We didn’t want to build a TV network. We wanted to figure out what was endemic to digital and how the model worked there. There are profound differences, and I would say digital is as different from print and TV as they are from each other. We have figured out over time, through lots of experiments — many of which didn’t work at all — what works in digital and how to build a newsroom that is self-sustaining and ultimately can grow from where we are now, which is about 200 journalists to, hopefully over time, thousands of journalists around the world, when we get there in terms of being able to afford it.

It’s very different and we wanted that. Now that we have that, I think we’re also seeing a lot of other newsrooms modernize effectively and it’s a different organization, it’s a different approach to storytelling and distribution, and folks like the Times are doing a good job of that.

I want to talk about models and types of content in a minute, but I do want to go back to memory lane a couple more times. There’s something that always stuck with me working for you for that year. I don’t know, three or four months into it, Elliot Spitzer, who you said had been the guy taking you down, the former New York Attorney General, was ensnared in a prostitution scandal.

He was.

Splashed all over the New York Post, splashed all over the internet. I remember you going, “Oh, look at this.” Then all of a sudden just this slew of calls started coming in to you because everyone wanted to know what Henry Blodget, who had been taken down by Elliot Spitzer, thought about Elliot Spitzer being taken down.

Not only did you not respond to those calls, or get on the phone and gloat, I don’t even remember you giving yourself like a flicker of a smile — which would be, I think, a normal human reaction, would be “Ah, it’s a comeuppance for Elliot Spitzer.” I don’t know if it’s gentlemanliness or a scary lack of emotion, but I was really taken by [your] calm. You didn’t allow yourself any kind of victory dance. Were you consciously restraining yourself, or is that just your personality?

Well, by that time, I had already moved on to what I would describe as the next phase of an interesting relationship with Elliot Spitzer over time, which is that by that time he was governor of New York, he had come and talked to Slate, where I was working at the time.

Right, you’d had a meeting with him.

I met him for the first time in the food line at the buffet at Slate when he came to talk, when he was running for governor. I said, “Hi, you wrecked my life,” and he’s like, “Well, that’s my job,” and I said, “Okay, but you know, you wrecked my life and I didn’t think …” Well, anyway, we sort of got there.

Wait, wait, wait. This is not like people who fight on cable TV for a living being pally in the green room. He did wreck your life. He cost you millions of dollars and got you barred from Wall Street.

Yes, absolutely. What he has always said is, “Look, it wasn’t personal,” and I agree with that, although I did feel like I was quite singled out by him. Then, it went to where, after the whole thing collapsed for him, he came back by writing at Slate. He invited me on his TV show at CNN and ultimately, obviously, he has his big fall from grace as well. I feel like we’ve actually had some experiences in life that we could relate to each other.

One of the things somebody said to me, a very wise person, when I was in the middle of what happened to me in 2002, or whenever it was, he said, “Look, I know it seems like your life is over. Take a long view. Focus on the long term. Focus all of your energies on that and ultimately you’re going to forget about this. It’s part of you now, but it will seem like a long time ago.”

This was like the advice that’s really easy to give; to receive it seems like, “That’s not really going to help me.

Hard at the time, but that has proven absolutely true. Life is long, and I would say … I haven’t spoken to Elliot in a while, but we had lunch last year together, and look, we’ve both been through a lot and it is another example of, “Wow, life is long.”

Who paid for lunch?

I think he did, as a matter of fact. I owe him lunch, because I was like …

Good for you.

The other bit of history I’m interested in, because it affects me, I made money when you sold this company a few years ago.

You did indeed.

Thank you for that. I’m a journalist who had an exit. It’s a very rare group. The history of how you got to that point is interesting to me, because from the outside it looked like you had the same trajectory as any successful startup and granted, there are very few of those where you raised ever-increasing amounts of money, and then eventually you sold and had a great outcome. I’ve seen you allude to this: At one point it looked like you were going to run out of money. When was that?

The mission of the company was to figure out what works in digital. It’s a new medium, it’s going to involve a new model, new approach and distribution, we got to figure that out, and we’ve got a very limited time [in] which to do it because the sand is running through the hourglass in terms of cash. Every year, we set our budget to get to break-even by the end of next year, knowing that we would have an opportunity to maybe raise additional cash and maybe go more aggressively, as we wanted.

To behave in a lot of ways like a regular startup, which is grow as fast as you can and raise money when you need more money.

Exactly, but what we didn’t want to do was ever set a budget that required us to raise capital down the road, just because I’ve just seen too many companies go through these horrible …

So not like a standard venture-backed company, which is to actually achieve some sort of sustainability at some point.

We wanted to have that every time. Every year. Every time we went out and raised money, we set a model to get to break-even with the resources that we had. What happened is that every year, we were doing well enough that we felt like if we invested more, we can do even better next time, so we went out and raised more money.

The first year we self-funded, the three partners, the three of us, and then we raised our first institutional round, and then it was a much bigger round, then Jeff Bezos came in. Over eight years, we ended up raising $56 million dollars, I think. Each time we did it, we would set the budgets for the next year or two, to get us back to break-even.

But the whole model, again, it was designed on figuring out a sustainable model for digital journalism. One of the strengths that we had is we didn’t come into it with a lot of fixed ideas of what that was going to look like. As I said before, hundreds and hundreds of experiments, of which a handful have worked, and have now propelled us toward …

Wasn’t there a year where you nearly went to zero?

In the middle of the financial crisis, we had grown nicely, year over year, but it was a year in which suddenly fundraising got incredibly difficult, and fortunately we had a nice investor come in, and we’d raised money at about the same valuation as we had the prior round, which a lot of companies are doing now. We didn’t get to where we were within minutes of it, but in another few months we would have been struggling.

You sold in 2015. This was the same year that, all of a sudden, it seemed like, all the venture capitalists that said, “Why would you invest in media companies? That makes no sense,” were suddenly throwing money at media companies. Vox, where I work, had raised a bunch of money. BuzzFeed was raising a bunch of money. Everyone was raising money. You guys sold. Did you think about, “All right, what does the market look like? Maybe we should get out at the top.” Because that seems to be, in some ways, what happened. Since then, things have gotten a little bit more wobbly for media companies.

No. Basically, again, we had flexible approach, which is in, I think, a year before we ended up selling the company, we raised a big round (for us — now it sounds like chicken feed, but in those, days $25 million was a lot of money). We did it because we wanted to invest very aggressively, in the U.K., in launching a property beyond a business, which is Insider, which is off to an incredible start; investing more in Business Insider; and more in subscriptions.

We wanted to go more aggressively than we had, and we knew that if we did that, if we then would make a decision like, “Are we going to raise another bigger round behind it?” What happened instead was, as we started to think about that, Axel Springer decided they wanted to increase their investment, because they had actually invested in the $25 million round, by buying us.

Again, had it not been a good match of their culture, journalistic DNA, wanting to keep the company together, and so forth, I don’t think we would have done it.

You would have kept going and raised a round?

Absolutely, because I really believe that we are still in the midst of an incredible opportunity for digital media. I think all the tectonic plates are now smashing together; the last 20 years have been about print getting disrupted by digital. Next 20 years are going to be about TV getting disrupted by digital. You’ve seen companies like Vice and others …

That’s the thesis, but it’s one thing to have a thesis, it’s another thing for you to have built a company for 10 years and decide, “All right. I’m going to keep building it, versus selling it.” By the way, you’re going to be working there for years to come, I believe, right?

Long-term incentive in place.

Long term. And you’re working. It’s not like you’re some … Some founders sell the company, and the expectation is in a couple years you leave, but you’re going to Las Vegas at CES and doing ad meetings and people know you. The idea of Henry going to Las Vegas, that’s not something you do for fun. That’s not your kind of town.

It’s funny. I’ve actually liked CES …

Oh, you’ve come around? All right.

… the last couple of years, but you’re right. I had not been there for a long time.

You’re not a flesh presser.

Yes. We’re still working …

They’re working you, specifically.

Well, I’m working myself. We are working as a team. The last year, as I talked about some of the challenges last year, that’s when the team really comes together. Everybody looks like a hero when the wind’s behind you, and when the wind starts to turn in your face, that’s when the team really comes together, and so I’m just tremendously proud of what we’ve done in the last year.

The Axel deal, they wanted to buy the Financial Times instead of buying you guys.

That’s what I read in the paper.

They were going to spend a billion dollars, and they thought they had bought it. Their own reporters were reporting that they’d been sold to Axel, and then the Japanese bought it instead. If that deal hadn’t gone through, would they not have purchased you? Were those things tethered?

I don’t know the answer. I actually think that there are interesting opportunities for how Business Insider could work with the Financial Times or even another publisher. We’re reaching a different … We’re reaching the digital generation. They’re reaching a much older demographic, so there would have been interesting opportunities there. I don’t know what they would have done, but yes, as I said, we’re happy that we ended up together.

You mentioned Insider. This is something Nick Carlson, who has been one of your star writers for years, is doing for you. My understanding is it’s your attempt to do distributed media, right? You create content that will live many, many places, Facebook primarily, Twitter, other places, and secondarily there’s an Insider.com site. The idea is to find viewers where they are, find readers where they are, basically on Facebook. How’s that working?

That’s right. In addition to the programmatic shift, the other things that are happening are a big shift to mobile, obviously. There’s a big shift to video. There’s a big shift to distributed, which is exactly what you’re describing. We made a decision internally, where we can either fight that, and we can continue to play the old game, which is try to get people back to the site, or we can embrace it, and basically view dot-com — businessinsider.com and thisisinsider.com — as one distribution channel of many.

When Insider started, we did two things. One, they were outside of business. They’re focused on lifestyle, food, travel. It’s an even younger demographic than Business Insider. Then second, they started with video, and they started, as you say, with distributed. Facebook, Instagram, other platforms, were the prime, and for about the first six months, that’s what they did. Then ultimately we added a website, which is growing incredibly rapidly, as well. It was very interesting to learn by building something that was just distributed in the beginning. We learned a ton from that, that we then brought back to Business Insider.

A lot of people who’ve done this distributed strategy in the last couple years, and for various reasons, but the main one is, “Look, all the eyeballs are over on Facebook, and secondarily Snapchat and Twitter, so let’s go there, and then hope we figure out a model where we make money from those eyeballs. Either we bring them back, or we figure out some way to show an ad to them.” But a lot of people have been frustrated with that, I think primarily because Facebook has not been generating either the ad dollars they think, or it’s not bringing referral traffic. What’s your experience like with them?

We are thrilled with the way distributed is developing. I’ll give you some backup on that. We’ve grown from zero views on Insider and overall to now 2.5 billion views a month, distributed across everything. That included Business Insider, as well. The vast majority of our views across our properties are now off-site. We’re doing about 3.5 billion overall views, of which almost three-quarters are off the site, so there’s still a very vibrant community coming in, but then there’s also huge readership and viewership off-site. Our revenue from distributed has been growing incredibly rapidly.

How are you making money from those views that are happening off site?

Many different ways. Often a revenue share. Facebook is a revenue share, for example, and we have revenue shares in place with our other platform partners. Some of it is licensing, but most of them are revenue share. Just growing incredibly rapidly.

If you step back and you think about, “What do we know the world is going to need?” People are always going to want great stories. They’re always going to want to be informed about what’s happening. We are great at telling those stories, figuring out what’s happening, and then distributing them in this environment, where people want them, when people want them, wherever they happen to be. You have to embrace distributed to do that.

For us, because we are building the business based on the economics that we can get from all forms of distribution — and that includes our website, but it really includes Facebook, it includes our other distribution partners as well — we are building the business based on those economics, and with those economics, it works very well. It does not work, again, to support traditional print or television economics. I think a lot of the frustration is traditional companies looking at Facebook and saying, “Hey, we’ve got thousands of journalists over here, and what you’re paying us won’t support them, and therefore we need more from you. This is not working for us.” When, in fact, it really is working.

If you build the model … You’re saying, if you produce it cheaply enough.

Yes, but it’s not just about cheap. It’s also about producing the kinds of stories that people want in the medium. As you remember from our loading-dock days, people bring to digital this idea that what we all want, as digital users, is a clone of a newspaper, or the clone of a 24-hour cable network.

Right, which is a natural thing to think, because that’s how media always works.

Of course.

You make the thing you knew how to do the last time.

That’s right, but it turns out it’s just very, very different, the way we consume news. We want different news coming in different ways. It’s a very visual medium. It is a medium that has broken down the walls between publishers and producers, to where we’re getting a stream from lots of different publishers and producers, and that is great. It’s a very diverse world that we’re seeing. You’re not relying on one …

It also changes based on, in large part, what Facebook’s telling you it wants, right? Facebook is now saying, “We would like longer videos,” and you guys will have to adapt to that and make videos that keep people’s attention for a longer amount of time.

I think what will happen with that is Facebook will observe that sometimes you want a long video, just the same way that sometimes you want a long, in-depth narrative or investigation of something, and sometimes you want short: “I wasn’t expecting this, but that was an awesome way to spend six seconds, or 30 seconds.”

Right. By the way, in Facebook’s world, 90 seconds is their minimum, is what they consider long. At least the minimum for long.

That’s right. In watching myself and all of our team and people out in the world, including my family, the way they consume media, my daughters will sit there and go through short videos, long videos, all mixed, whatever they like. It can be excellent.

I think it’s very smart for Facebook to diversify into longer, and they are building a special section to do that, but I think what we’ve discovered is, in fact, short-form video is great. It is a huge opportunity. You can tell stories in an incredibly fast way. We’re thrilled about that opportunity. The world is not just interested in hour-long documentaries.

Last question. This ties in, actually. We’re on week two, amazingly, of the Trump administration. It seems like it’s been years already. In my mind, you guys … Early on, earlier than most people, jumped right on Trump. He announced, and you said, “We are going to cover everything that Donald Trump says and does.” The TV networks, notably CNN, also did that, but with a little more trepidation, and they sort of treated him like a goof. You jumped in with both feet. You got some criticism for that. Some people said, “Why is Henry Blodget promoting Donald Trump?” Eventually you did make a … How long was the movie? Was it an hour-long movie?

30 minutes.

A 30-minute movie.

“Trump Nation.” Available on Amazon.

High-end video. Do you have any second thoughts about the way you treated Donald Trump as a news story, during that cycle?

No, because Donald Trump was immediately compelling, and to ignore that and blame the media, it’s just crazy. We sit there and we look at what folks are interested in, and he, for better and worse, is an incredibly compelling media personality. He came in and smashed into the political scene. I think the best magazine cover that I saw was when he was doing the belly flop in the pool with the 17 other republican challengers. He’s just destroying everybody. That was his impact on the race. Based on traveling with him, and going to one of his rallies, it was obvious that a lot of Americans were relating to what he had to say. So no, I think I’m incredibly glad that we covered him seriously from the beginning.

What do your German owners make of Donald Trump? I imagine they have some perspective they may have shared with you.

I think that, along with lots of the rest of the world, people are startled by what is going on in this country.

That’s a value-neutral term, right?

From a business perspective, some of what President Trump has been saying and is saying is actually great for us all to hear. One of the things that has gone wrong in American business over the last 30 years is that we have gone from a business environment that embraced all of the different constituencies that good companies serve — and those include customers and employees in addition to shareholders — we have gone from that, to an environment where it’s just all about shareholders, screw employees, customers are secondary, it’s just all about ROI and cash flow.

This is not revisionist from you, because you’ve been writing this for years, that people need to pay their workers more, and you would get all this feedback from people saying, “Henry, what kind of leftist are you?”

Yeah. Exactly. We’ve gotten into this crazy environment where it’s like there’s somehow a law out there, you’re supposed to pay people as little as you can. Come on. It’s always a choice. One of the things that Trump identified relatively early was, we’ve got to take better care of people who are actually working for a living in this country. It would be nice if it’s just business saying, “That’s part of what we do,” rather than it being legislated or rather than unions having to demand better pay, and that is what Trump has tapped into. That overall idea that we should think about employees as business people is great. That is a better form of capitalism. Something that Business Insider stood behind, like constituency, taking care of all the different constituencies.

Almost socialist, in a way.

It isn’t. At all. It’s more like an ecosystem. You look at … People are like, “Oh, well, the only people who add value are the shareholders and the entrepreneurs. Without them, everybody else is irrelevant.” It’s just crap. We are all benefiting from this incredible society we live in. The legal framework that we have. Incredibly deep capital markets. Yes, entrepreneurs and investors are very important, but an incredibly educated, smart, ambitious workforce, this perpetual improvement, we’re all in this together.

Right, and legislating that you pay your employees a decent wage, that’s …

It’s too …

Some people strike you as, “Well, that’s government,” and by the way, Trump is going to be conflicted on this, because he’s got a labor secretary who wants to pay people as little as possible, so there’s going to be some conflicts.

There are plenty of conflicted things. My only point has been, it would be great if we didn’t have to legislate any of it, and we didn’t need unions, because everybody who ran a business, it was much more of a holistic thing, saying, “We’re all a team. It’s a privilege to be here. Sure, the business has to make money, but hey, we also need to create great lives for our folks, and our customers,” and so forth.

So they can buy things.

Exactly. The Henry Ford motto. That is what I would say about Donald Trump, is that fundamental premise, and the fact that we should take care of ourselves too, our workforce, globally, not just in the United States, is good. Then, obviously, there are many things that conflict with a strong business environment, like the threat of tariffs and trade wars, and all that is kind of scary.

Yeah. One of the things I saw from you in the run-up to the election was, “This will be what Donald Trump’s first hundred days will be like.”

“Waking up to President Trump.”

Yes.

Exactly.

Did you write that after the election or before?

No. That was before the election.

Before the election. Have you gone back to revisit that?

No, because I remember it pretty clearly.

How did you do?

So far it’s pretty spot on. Yes. In terms of the storytelling, and the behavior, and he’s very quick to make decisions, and so forth. So far it’s pretty close.

Do you feel good? Do you feel like, “All right. I saw what this is going to look like, and then it’s going to end well.” Or, “Boy, we should start running for the hills.”

No. Look, I respect American and U.S. democracy. The election was stunning to a lot of people, but Americans spoke. They elected him. It’s perfectly legitimate. Obviously we still have a lot of investigating to do about whether there were foreign interventions in the election and so forth, but there’s no question about that.

Now the question is, what of these policies are actually going to move us toward the better future that we all want, and what’s distracting and ultimately what is fundamentally American? I think that one of the reasons there has been so much focus on what President Trump has done thus far is, in addition to making quick decisions and action, which a lot of people support, he is also advocating some things that are not just un-American, but I would say are anti-American.

We have from the beginning in this country celebrated and encouraged a free press, and the First Amendment, and to have an administration building an attack on the vast majority of the media is frightening. And then tariffs and trade wars and the travel ban that we got over the weekend, these are anti-American ideas. I think that the administration will continue to see huge pushback on those.

We’re going to read about it in Business Insider.

You certainly will.

Henry, thank you for your time. I think I tried to do this for a year, to get you out here.

Thank you for being persistent.

It was well worth it. Thank you for coming. I appreciate it.

All right. Thanks, Peter.


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