How I Built This with Guy Raz - Politico & Axios: Jim VandeHei

Episode Date: February 27, 2023

Before Jim VandeHei co-founded the media company Politico, the only thing he’d managed was the night shift at Little Caesar’s pizza in Oshkosh, Wisconsin. An early passion for politics and journalism led him to Washington, D.C., where he became a political reporter for Roll Call, The Wall Street Journal, and The Washington Post. But by 2006, he could see how the internet was transforming journalism, so he walked away from the Post to co-found a digital publication—Politico—with the goal of setting the daily agenda for Washington’s power elite. With the financial backing of a local media mogul, Politico took off, but Jim eventually grew frustrated managing a company he didn’t own. So in 2017, he took another leap and co-founded Axios, a news website that gained a following for its bullet-point brevity, ready-made for the internet. Both companies have landed well: last year Axios was acquired by Cox Enterprises for over $500 million, and in 2021, Politico was purchased by Axel Springer for a reported $1 billion.See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

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It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city, made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb. your place with all of its personal touches and its amazing location could make someone else's vacation even better your home might be worth more than you think find out how much at arbb.ca slash host 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 Raz, and on the show today, how Jim Vandaai 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 the 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 new 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 new startup, Axios. And Axios didn't reinvent news or somehow get millions of people to pay to read it. What founder Jim Vandehi 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 Van Dehye wasn't looking to become an entrepreneur or a media mogul. He simply wanted to reach the top of the greasy poll as a political reporter.

And in fact, he did. He became a star political reporter. 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 Vandehy did not own Politico. It was financed by Robert

Allbron. 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. In just five years after it was launched, Axios was acquired by the media conglomerate Cox for over $500 million. Jim Van de High 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. 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. Trouble maker? A troublemaker. A troublemaker. for sure not well-behaved I just didn't I didn't that'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 normal kids did yeah you know even the first couple of years like I was my I got good enough grades to get get into the University of Wisconsin-Oshkosh, and then I turned in my 1.491 grade point average

and had myself on the verge of not being in college much longer. Wow. What were you doing? Two things, three 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. Where 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. a restaurant called Reds 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 loserish, right? But I was just interested in the process, and it was all new to me, and I 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 like 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 Ashkoshosh North Western and see if they have any jobs. I went in, 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 university, this is a student newspaper at the university. No, no. This was this was the local newspaper. This is a daily. Oh, in Oshashash, Northwestern.

Yeah. 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. I was like, 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 newspapers. And that was really lucky because Gene Hince, 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. He learned to be creative. And so I really took his advice. I guess while you were in college, there was another small town paper maybe nearby in a place called Brilliant in Wisconsin.

They had a daily paper. And 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. Is that right? Yeah. It's like, I mean, I had decided, okay, I really like journalism. but I had this kind of suspicion that how many sports is going to get old.

And so I called around to every newspaper and Brilliant News is one of the top of the list because obviously starting with a B. And Zane Zander answers the phone. And I explain, hey, I want to come. I'm looking to do anything. I'll do it for free. 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 done this one sports gig. And he's like, yeah, yeah, yeah, can you run my paper? I'm like, well, again, like, I don't really, I've done one job covering high school of sports. I don't know that that qualifies me to run a newspaper. He's like, yeah, whatever.

He goes, my editor just informed me that if he can't go to Finland for the next three months, he had some opportunity there, that he was going to leave forever. And I need someone to run my paper for three months. And if you will do it, I'm going to teach you in the next week. how to run a newspaper. Wow. I'm going to teach you how to lay it out. I'm going to 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 going to 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'd do everything from, you know, it's a small town, so I got to know the people in politics there. then it wasn't, 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. I, my very first edition, this is back when you would lay out a newspaper, you would do it on cardboard, right, and you would use a cut them out, cut them out, cut out the columns, you'd cut out the columns using a razor blade. And I, this is my first issue, I'm working 80, 100 hours, whatever it was, was an episode, or 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, I, I was, they already printed the paper when you gave them the boards. It was done. It was printed. This is the printed version.

And so that was humiliating, humbling. But even that, you bounce back and I just, you know, 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. Like, everybody has an interesting story. I don't care what it is. And, you know, you become a rock star. Like, you are the paper. And yeah, it was just an amazing master's class in running something.

Was that experience? When you finish 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 this profession. After that, I was going to be a political reporter in Washington. In Washington, D.C. Yeah, yeah.

And you'd been there before? Never. No. Never. Never been there. Again, cockiness are being naive, probably more of the naive. I think during your senior year, you applied to do an internship in Washington, D.C., with Herb Cole, who was a senator at the time, senator from Wisconsin, of course. And I think this may have been your first time in Washington, right, and 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 are the offices and where are the hideaways. And I just, I loved Washington, like just loved it. All right. So you get to D.C., 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 D.C. And I didn't have a job. And I sent out, hundred and some resumes and crickets for the most part. I wasn't, it was months. And so I ended up

working for a bricklayer and I, you know, begged everybody from C-SPAN to you name it for a job. And just nothing. Just mailing your app, mailing your resume and a manila envelope and waiting to hear back. Yeah, it's funny. I thinking back about that, I had sent the, 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 like 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 as 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 finally interviewed with whoever I interviewed at C-SPAN, they're like, hey, 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-nitch publications. Newsletters. Well, yeah, like pamphlets. Yeah, like the pre-newsletters, like paper newsletters, right? Yeah.

And New Fuels 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 political pro, but the publications that were designed for very specific audiences, like lobbyists interested in oil or lobbyists interested in the transatlanticians. transportation industry or lawyers or people who were interested in a particular area and they could and they're they were expensive but a lot of like inexperienced reporters were brought into these places and they 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 it's one 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 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 Fuel's 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 just, who I worked with later at Roll Call, later at Politico, and now is one of the co-founders of Punch Bowl. We were covering Congress. There was the three of us were often 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 like who has power. And, you know, at the time I'm in my, you know, 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 try 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, like, how people get, use and abuse power. I'm very interested in power.

Like, I just, I understood politics. So, all right. So you're working for this publication. And pretty, I think not too long, maybe within a year, I think you're hired by roll call, which is, which for people don't know, that's the, that was at the time, like the gold standard in Washington, D.C. for covering Congress, that was like, came out of Monday and Thursday. I don't know, Tuesday and Wednesday. And it was every congressperson gets it. Every lobbyist and lawyer, like they all read it religiously. They still might.

I don't know. But that, right, you were there with, I think, within a year of moving to D.C. 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, you know, especially around, like, 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, I mean, 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, like, dress clothes. I had, like, 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 in 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.

It your, I mean, it seems, I would imagine that your, your kind of ambition probably would eventually maybe to be like an editor at a newspaper, right? Because you were obviously really successful. You were, because when I think about my early career, it 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. Like, I'd be done. That'd be great.

I achieved my objective at roll call. I never had ambition to be an editor. I never had ambition to run anything. Like, I never aspired anything beyond that. My dream coming out to Washington is if I could cover leadership in Congress for roll call, like that would be it. Like, I would have made it. Yeah. But, I mean, of course, you would eventually move well beyond a roll call because I think while you were still in your 20 years.

you get 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, like, the top of the heap by the Washington Post as a political reporter. Yeah. It's a, for people who don't, you know, aren't interested or don't know much about this world,

like, it is high stress, right? Like, the competition was absolutely fierce. So what do that mean? Were you just constantly just working the phones, like, you know, shouting at people if somebody else got a scoop and you didn't get it first. What was your like? Because I think you are, I think you are a competitive reporter, right? I mean, you are. I know you are. Very, very competitive reporter, you know, both 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, am I, do I have important? imposter syndrome, do I, like, am I ever going to get another scoop? And a lot of this stuff I didn't realize until later in reflecting on it. I was, 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. 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 like that little bag of tricks and an ability to write fast allowed me to be good. You know, I mean, here you are. You're 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 D.C. area. But, you know, what started happening 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 like, 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. Yeah. And it led us very quickly, and it probably only happened because it went quickly, to a series of conversations.

Like we, John and I are, 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 to read content, you can sell ads to companies who care about their image in front of that audience of DC elites.

Yeah. And basically pitched this. And every person that we talked to said, ah, not only do I like that, like, can I invest? And so we're like, wow, okay, now this is real. Yeah. 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 described it like the Yankees of political journalism. We're looking at 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. So that was... 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 Washington Post.com were separate companies in separate buildings on two different sides of the Potomac. And I remember walking over to dot 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? Like,

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. 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 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 Allbritten. He was basically the son of a very wealthy media mogul himself who owned a bunch of local TV stations. And at the time, I guess All Britain was trying to launch his own political publication, but it wasn't coming together. 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, like, if this is meant to be someone's going to come along and hear about it. And, you know, 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 capitalist and pitching a 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 like 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. Right. They didn't think it was going to be. 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 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's 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. Like you have this massive legacy operation with leaders who have, you know, 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 and we want to do it on our own. Right. And, you know, they're bringing it, though. At this point, they're bringing it. They do both the charm and then they do the intimidation, right? Like I remember, you know, Don Graham and his leadership team calls us in and, 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 Raz, and you're listening to How I Built This. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2006, and Jim is thinking of... of leaving The Washington Post to start a new publication. And he's going to partner with Post editor John Harris and get financial backing from media mogul Robert Allbron. 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, we're, 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 going to 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 going to 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, Anna O'Hantlin. And she was quoting Churchill and Roosevelt and about seizing the moment and like moments like this only happened once, get in the arena. And she saved us from ourselves. I mean, 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. But 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. Yeah. It was definitely an easier move for me than it was for him. All right. So you connect with Robert Allbert and he is going to be the guy that will back this.

thing. And the reason that you do this is because it's stability. You're going to get a, he's going to guarantee a salary. And he's guaranteeing to put in $10 million in this thing, right, at the time. 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. My wife named it, correct. And All Britain and Fred Ryan, 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 and 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. I think the paper launches in January of 2007. Yeah. So he's, because he owns these television stations, he had a building, I think, just across it, just outside of D.C. in Arlington. And that was where Politico would be located.

And I remember those early papers when I would, you know, read them online. 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 like one account that I read, you know, the night or the cut in the nights before that first edition was launched, a lot of the copy was just crap. It was terrible. Like 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're 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 like the people from big. Why were you saying that? You know, I think John and others were asking me that at the time as well.

Yeah. Like 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 P.T. 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. It definitely 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 don't, failure's not an option. Like anybody who started a company, failure's 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 J-Mar, Jonathan Martin, who were breaking stories and that 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 going to beat the Washington Post. And that means there's a lot of people really, you know, 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. I just came to, you know, to hang out and go to bars for a couple days. And I remember him looking at me, getting, you know, 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. Like, what are you doing? Yeah. And it wasn't healthy, but it was, it was exhilarating. It's intoxicating. Like, 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? How did you learn to do? And, you know,

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. I'm 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, power. I'm going to work 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, I'd 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. to a point because I would do so much of it. But instinctively, I felt that's what we have to somehow do the impossible. And that's the story of every startup. You're 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 political story? A political 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 a sense?

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. I'm like Politico became, you know, sort of a sensation in Washington, D.C. quickly. And let's let's be honest for a moment here. Washington, D.C. can be very provincial, right? People can really be navel-gazy. 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 political, but it was it was not making money. I mean, 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 teaking your butt, you know, and they were just aggregating articles. They weren't even writing them. Yeah. I mean, 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

print newspaper. But back then, like, that was enough. I don't remember numbers at first year, but let's say we spent 10 million. I think we brought in three or four million in year one, if my memory serves me correct. So there was money coming in. And I think by year three, 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. Did you, I mean, obviously, All Britain, he knew going in that he was not going to 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. They're 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? I wish I had a better memory on specifics, but I would say it started low grade around year three and got progressively more, worse, progressively worse. It's not set up the way you would want to set up a company, right? Our CEO, Fred, is also running a massive local television empire, right? Right, because All Britain owned a bunch of TV channels. A bunch of TV channels. And 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.

And 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. or certainly running like a mom and pop shop back by a local TV station. Like we need like a full-time leader. We need a full-time technologist. We need to continue to grow and find new revenue streams. And like we were, that would be where we started to hit our sort of 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 like who does what. And, you know, then John and I are becoming. are, you know, 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, like, how do we create something that's more sustainable? Like, we're not dumb.

Like, once you have turnover as high as we had and you have people writing stories about us being a sweatshop, we're not dope. Yeah. We know that that's not sustainable. It may have gotten us to where we were, but we were going to have to create a culture and a company that could really, rely on something other than the maniacal energy of a few people. It's interesting because 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 going to be, you know, sort of par for the course. To win 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 the instinct that motivates people in trauma or turmoil? It is, I'm not, failure's not an option. I'm going to get out of this hole. And so all you're doing is like, I'm going to 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. 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 Albert and 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, listen, you're 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 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 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 by 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.

You need to, 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 where 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 political pro delivers, what delivered and delivers this intensive specialized information to them.

And the subscriptions were like at that $10,000 a year, something like that. Correct. And so you didn't need, 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've got to hire a lot of reporters.

You've got to hire like 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 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, while resistant in the beginning, he did fund it. And for us, like, Politico was us. It was an extension of us. So its success, its durability was everything. And we just felt in our bones that 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, I guess, 2013, when Fred Ryan stepped down, there are different accounts of that.

And, you know, I've read different interpretations from, you know, Robert Alburn's not here to time. And again, this is not a critique of him at all. I think he's very successful and has done some amazing things and made his mark, certainly with Politico. And, but, you know, 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 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? For sure, yeah. And there's no doubt. And again, like, I think Robert would say it here.

And at the time, he might have been right. I think he felt like, number one, like I had essentially demanded that I be CEO. I felt like I... 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, 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 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 as 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 going to 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 percent and we're not here, I'm probably going to go. At some point, I'm probably going to, I want to do my own thing. Like I have, by this point, I'm, you know, Roy and Kim and Danielle Jones and, you know, Mikey, like, we have our kind of own view of like what a company should look like and what its soul should be and what its value should be, what its morality should be. And you could not make that happen because it was not your shop. No way.

It wasn't my shop. It was Robert. It was Robert, listen, again, like his credit, he's the one who bankrolled it when no one else would. And he took the risk. Had political 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, I mean, clearly you're starting to think, okay, eventually I want to run my own shop. And, you know, you're alluding to, you know, regret, sort of kind of regretfully how it ended. Well, 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. To other people, right. You wanted more ownership distributed. Yeah, both 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. They were, 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 going to 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. 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 going to 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 going to be a success. And 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 Raz, and you're listening to How I Built This.

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 going to 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. The 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. 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.

Ha, smart brevity. So we come up with this architecture of, okay, what is the smartest way to deliver two or 400 words? And if we could do that, we're going to 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 going to happen? Oh, no. We thought for sure we'd be going to court. I mean, there was tension, right? And, and Ross. 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. Yeah.

But when you leave a company, especially when you leave with some mid 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 going to do. Not a pleasant place to be. I'm not a big sit-around type of person. Like, some people would love it.

I wish that I loved it. I didn't love it. Right. Here's a 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 going to be dealing the editorial side. You were going to 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, 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 going to 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 going to 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 a thing, though, Jim. Even somebody with your experienced talent platform, building a new brand is really hard. You're leaving Politico, which was a massive brand by the time you left. And even with all the experience, right? I mean, look at Jeffrey Katzenberg and what was it called, quibble, quibby, right? Quibble.

You know, right? I mean, even super highly successful, talented people have a hard time building a brand. So what was the way that you were going to 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 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. And kind of a legendary report. He wrote this playbook that became a central reading for people in Washington, D.C. and beyond for years. 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 2.30 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 going to 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 going to pour whatever we have into you. And I think we could be helpful.

You have a gift that few people have. 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 good. We're going to be a really interesting, fun company. And that was a 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 going to 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 as short articles, very short articles, but it had very specific principles. What made an article adhere 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 why important. 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's 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 likelier 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 the stay. 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. 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. Yeah. 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. And we're going to 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 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, we'll, we'll, you guys wouldn't even be on that. 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 bring in revenue? 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 Politica, 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. Like, whatever you're going to start. We're successful. You're going to be successful. And that's where most of the money came from in those early years. And then a great, like your entrepreneurial audience will love the story. Like we're a media company. We're doing well. We're, you're. 18 months into our creation and I start to get phone calls. The NBA, the basketball association, J.P. 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 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, I think, how long until you reached sustainability or profitability?

How many years in? I think by year two, 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 breaking even. Like we were doing, we broke even, I think year two, three, four. Or made a little bit of money, like, but not.

Right. So, so you are, and you know, you've got all these revenue streams going. And then in 2022, you sold to, you sold to. to Cox Enterprises that they bought out Axios, I think for a little more than $500 million. Again, it can come across as an obvious question, which is why would you sell it? Because it's $500 million. Why not? But why? I mean, you know, you wanted independence, you wanted 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 five years earlier.

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 paying a premium price, and you believe in us and you believe in this culture, you've got to let us run the show for a long time. There's nothing else that we want to do.

Well, along comes Cox communications. They led our series D. So we had done a couple of rounds in between. How much did you raise in total? I think we were 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 are the nicest people. They're a fourth generation company. They, you know, Alex, who runs the company as 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 you could 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 talk to the leadership of Cox, they would say we hope 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 that 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, 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's just, it's, again, I talk to college

kids a lot now, and I'm just like, man, if you could figure out a way, like, or to do a job that you would do for free, You love it so much. Like, that's Nirvana. That's winning the lottery. You know which question is coming next because I know you've heard this show before, but it's still a question worth asking after talking with you for several hours, which is, and you've alluded to this in various points during the interview.

You've talked about luck. How much do you think luck got you to this point versus the grind? I mean, I'm tired, exhausted, just imagining the 18-hour days that you put in for two decades. So what do you, what do you, I don't know, how much, how much is it about one 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 willed 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, who are 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, oh, I'm going skiing with this. Sky 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, Axiess wouldn't have existed. Or how do I end up on the Lido deck in Genoa, Italy, during the trade protest when I'm working at the Wall Street Journal, and I turned the person next to me at 4 a.m. 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 Bandaai, co-founder of Politico and co-founder and CEO of Axios.

By the way, in 2021, Robert Albreton, 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.1.13.com. If you want to follow us on Twitter, our account is at How I Built This, and mine is at Guy Raz. On Instagram, we're at How I Built This, and I'm at guy.orgas. 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 Carrie Thompson with music composed by Rumtina Arablewe. It was edited by Neva Grant with research help from Sam Paulson. Our production staff also includes J.C. Howard, Casey Herman, Alex Chung, Elaine Coates, John Isabella, Chris Messini, and Carla Estevez. I'm Guy Raz, and you've been listening to How I Built This.