 Good afternoon everyone calling in from sunny Miami and welcome to Inform and Engage. In today's episode we'll be discussing the business of journalism and why this might be the right time to invest in local news. I'm your host today Paul Chung, Director of Journalism and Technology Innovation at the Knight Foundation and joining me is the co-founder and CEO of Axios, Jim Hey Paul, how are you doing? Good, and Jim where are you calling from? I am in Lovely Clarendon, which is in Arlington, Virginia. I can see the US capital outside our window here. I'm actually back in the office, which I love. And so for those who doesn't know, Jim actually, before he's the CEO of Axios, he has a long career covering politics from inside Washington publishers through road call to a brief stint at the Wall Street Journal before founding Politico in 2006. And I'm sure a lot of people ask you questions about Politico, but for today's conversation we're going to focus on Axios. But one thing I want to ask you is what is the one thing you learn that shape how you run Axios? And what is one thing that you would never do again from your Politico days in Axios? Oh my god, it's hard to narrow it to one. First off, thanks for doing this, thanks for having me. Remember when we started Politico, I had gone from being a political reporter who was kind of a lone wolf just doing campaigns, covering the White House, covering Congress to suddenly co-founding a company and having to run it. So the thing I learned is that almost every instinct I had was wrong. I thought you could just kind of work people to death and work really hard and that will magically start a company. And so what I guess the big thing I learned was the importance of culture, of like really understanding what type of people you want to surround yourself with, how to give them real clarity of focus about the mission, and how if you get the right group of people, like, you know, we refer to them as 10 or 50 Xers, like people who are just so much better than most people you meet at what they do. If you can put them in one place and they're good people and you have a clear mission, you can do almost anything. I think it's why Axios has had a lot of success early on. The one thing I would never do again, and it's a lesson I learned the hard way many times over, I'll never again for the rest of my life tolerate somebody working with me who might be a genius in an area but is not a good person. I think it's very tempting sometimes to overlook the flaws or kind of the meanness or the edge to some people because they're brilliant in a different topic. In our company I try to make clear like if that happens you're out and there's really no redemption. You have to be fundamentally a good person who cares about your colleagues and cares about what we're trying to do at Axios more than you care about your own selfish ambitions. Now when you left Politico in 2016 and launched Axios in 2017, do you ever thought of making Axios a non-profit? Was that ever an option for you? Never, not once. Why not? Well, I have nothing against not-for-profits. I help out with a lot of different not-for-profits. I just think that there's something about capitalism. There's something about a for-profit business that just brings out I think the edge in people. It creates almost like I just feel like there tends to be a little bit more velocity to it, often a little bit more sort of ambition to grow it when it's in a for-profit setting and I wanted to build a business that is profitable. Like I want to run a profitable business. I want to do some I want to do really important things which is what motivates me but if I do it really well I want to benefit from it and not only me I want everyone who works with us to benefit from it. Every person who works at Axios has and will forever be a shareholder. I think if you come here and do big things you should share in the success of the company and so I like that for-profit dimension and that there's a lot of great not-for-profits out there. You guys doing like great great work. I think we just have sort of a different approach and a different passion. And so right now Axios is a serious C company. You have raised 57 million so far maybe between 2016 and 2019. And during that time the media landscape have really changed a lot. So that's a little bit after those big investment round of BuzzFeed and Mike.com. How do you pitch to your investors for Axios? How do you get them on board to fund news? Good question. I think it's changing a little bit but there certainly was a period of time where media was seen as a dog investment. They're all these other companies that had all this promise never fulfilled that promise. To be honest it wasn't hard for us to raise money largely because we could say listen we did Politico. We founded it. We created it. We grew it to what now I think is about 140 million plus revenue company that is making a lot of money, has diversified its revenue streams, it is sitting in Europe. So by the time we do Axios, listen there aren't that many people who've had success in media. And here we have a very compelling theory of the case about how really smart people are going to consume content over the next decade. And we have a very compelling business case of how you make money off of that. And so to be honest it wasn't hard to raise money and in this environment it's really easy to raise money. Raising money is not a problem. There's never been more capital out there from different sources for almost any good idea. It's much more about how do you responsibly raise capital and invest it to build something that is truly durable and scalable. And that's what we obsess about. This is my life's work. I am a journalist at heart. For some reason I was no longer the CEO or the founder of Axios. I would do something else in journalism. I believe that information that is truthful and high quality is maybe the most precious asset on earth other than human life. And so I want to be part of that. I want to be thinking about how do we protect that? How do we grow that? How do we get it to more people? How do we restore trust if people don't have faith in journalism? And those are big hard difficult questions but to me they're fun. And I think if you in life can align something you would do for free with something you can actually get paid to do that's the holy grail that's nirvana and I think I've been able to do that. I love this space. But how do you sort of convince your I mean is your investor investing at you you know maybe they believe in you know democracy the health of democracy but what is it about your plan that make them yes this can be profitable when so many other sort of like traditional news company are struggling to be profitable. Right to be clear I love my investors I don't think any of them are investing because they care about the health of democracy I mean their their job is to invest and make money so the only way they would put money into us is that they looked at us and said we think we can make five or 10x return. I don't begrudge them for that that's what they do that's the that's the line of business they're in and I'm thankful that they support us. I think the reason that they did is they said listen if you can get smart professionals to consume content on a daily basis we know how to make money off of that we know how to sell high-end ads against that we know how to produce really good events and convene really important people we know how to build B2B businesses we know how to help people communicate better and so we have several different businesses that sit under Axios but from the investor standpoint they look at it they're like yeah like look what they're doing like we've had we had 40 percent growth during the coronavirus well 40 growth again this year and I don't say that to pound my chest I just say it if like if an investor's looking at it they want to see results and they want to then see oh not only have you done it once you've done it twice and there's not that many people in this space that have so I think it gives investors a lot of a lot of reinsurance but there's no doubt that and I do think this is changing I think media is now suddenly becoming a more attractive investment mainly because a lot of the companies that I never thought were that good to begin with they've gone away or they're shrinking like basically the people who are just kind of producing content at mass for like with no real mission to it other than just to have content and drive programmatic advertising that stuff's all dead or it's going to die it's not much interest to me like what's interest me is really high quality content that people are willing to either pay for or advertisers are willing to pay a premium to be in front of that audience in a safe well-lit space and so you're now seeing I think a lot more interest in the media space because I think media has gotten better at it you look around look at how much better than New York Times is today than four years ago at driving subscriptions well then you have a company like the athletic who just does sports maybe copy a couple of things that the New York Times does hires high quality sports reporters and they have a million subs or whatever they have now real successful company that's a great template you see something like the information that says okay Politico was successful can I create a Politico for the technology world and they have and they put up a consumer paywall and best I can tell Jessica lesson has a wonderful business and so people are realizing how to do this I think the entrepreneurs were getting into it or smarter and what I love to see is that I do think one of the comparative advantages that we've had and in the success of this company is a bunch of people but in terms of like me and Mike specifically we're journalists and so I think we understand the journalism piece and we don't just look at it as a business though it is a business and when you see that happening you see a lot of entrepreneurial journalists whether they're moving to substack or you know Jessica lesson was you know was an editor was a reporter now she's a founder you saw this with Kara Swisher you know she's now an entrepreneur Ben Smith is back at the New York Times but I would be shocked that Ben Smith doesn't go off and start a company in the next a couple of years because I know Benny's a very entrepreneurial smart guy and so you're seeing that blend of entrepreneurial fire in the belly with journalistic passion when you get those two things together I just think you have a better chance of creating something that's real and you'll hear these words from me a lot durable and scalable like stuff that just rides a trend doesn't interest me it's gonna burn away you want stuff that's real and turn to stuff that's happening today yeah so there's a lot to unpack there so I will circle back with you about athletic and substack but in terms of journalists being entrepreneurs you know do you think journalists could be really good you and Kara Swisher do you think you guys are the exception or you guys are sort of the norm or definitely the exception but there's just more exceptions than there were before remember when we did political initially back in 2006 2007 people thought we were on drugs just like what the hell are you talking about you have one of the coolest jobs at the Washington Post and you're gonna go start some little publication like so back then it was exotic whereas now you look at all look at you know Ben made the leap and helped create Buzzfeed you know Kara helped create Ricoh Jessica Lesson created the information lots of that happening I don't I'm I don't want to leave you at the impression that I think most journalists are good entrepreneurs actually I think most journalists are terrible entrepreneurs and I think most journalists don't understand business at all I think they understand journalism and that's fine but you are seeing at least more people who have both and when it flows from both I just think you have a better chance of having success so how do you get to understand business is that something that you you know I mean just find a political and you learn along the way or or you think is more instinctual it's hard to unpack because when I go back and I think of Jim 2006 covering the presidency I wasn't sitting there dreaming up new business ideas and I wasn't reading business books and so it was only once we started political and I and I loved it even more than I loved journalism then I'm like okay like there's something inside of me that that is entrepreneurial I definitely have always felt like I probably have a higher tolerance for risk than most people and and I think I have you know hopefully a healthy way more more self-confidence than most people so I could do it and then I was like I'm not lying I'm not it's not false humility when I say I was terrible at it I was not a good business leader early on and what I did was I took one I think I had the humility hopefully to recognize that but then I went out and did what a reporter would do I went out and really studied what are good companies doing what is a good culture I started to read some of those business books I'd pick up the phone and I would call people and then I would just watch and watch what people respond to and what they don't respond to and then you just that's kind of the cool part of this job is that I'm constantly learning right you're learning about I never would have thought about raising money and how do you figure out your your dilution and stuff like it's all it's all kind of the same thing that stimulated me as a reporter like oh I'm learning something new and I'm taking a critical eye to it and hopefully with time I'm accruing more knowledge and I'm applying that knowledge in a in a humble way knowing that like there's a lot that I don't know and so it is mainly like self-taught and then being around really really smart people like one of our co-founders Roy Schwartz is just who wasn't in the media space because it midway through political I realized the key to starting and running a really good media company is never hire anyone from the media other than reporters because there's just more talent in other spaces and he came from Gallup and he opened my eyes to like a whole new world of how you run a company and you just hire people who are super talented and you get them fired up about the mission and you unleash them and it doesn't matter if they had been selling ads before or if they even cared about media like it there was such a difference maker and to this day that's pretty much our mentality and in terms of you know Axio sort of being manifesto smart brevity you know Axio get you smarter faster and what matters was that the original concept that you saw your investor on or was that sort of like an evolution I mean obviously it's evolved now but the fundamental problem that we're trying to solve is not change we basically the the observation we had that turned out to be correct was that people's minds were clogged they're getting so much information from so many spaces that they're almost paralyzed in the way that you could liberate the human mind especially for the smart professional is you have to help them get smarter faster across more topics it's not good enough for me just to know a lot about politics I need to understand technology business China automation like all these different topics so you had to figure out a way to make that process way more efficient and that's what smart brevity is it's both the smarts we're gonna hire the smartest people to help navigate these complex areas for you but the brevity part might be even more important which is we are going to look at the science the data the design to give you the most efficient hopefully pleasing edifying reader or viewer or listener experience humanly possible and it was the marriage of those two investors I think saw what we saw they felt what we felt and so they thought okay these guys will will will probably be successful and so we I don't we spent a couple months raising money but that selling people on the thesis was not hard you know when you're the true display all you're trying to do when you're raising that first round of money is you're trying to jack up evaluation as high as you possibly can on something that doesn't exist so you can get as much money as low with dilution as possible that's what you that's the game so you're trying to say this idea this thing on paper it's worth 33 million dollars I think that's what we ended up getting valued post money on our first raise well how did you do no algorithm that spit set out there's no it's behind it it's it's a it's a horse trade and it's it's like people applying a different logic from different angles to come up with a with a price and it's worked out we've got great investors and we've been able to have a lot of success as a company ever since and how do you operationalize that sort of concept right around smart brevity like you know how do you choose whether it is sort of a newsletter product or a mobile product like like how do you choose sort of your your your product distribution terminal fit well one you try to figure out like one of the temptations when you're starting a company is to try to do a lot of things and it's very hard to do a lot of things well and so we said listen we're going to do one thing we're going to do it exceptionally well we know that almost every smart person is consuming most of their information on this and so we literally I have like the drawings and I spent hours I for a year and a half and almost this day I never do I've never looked at a computer I'm on a computer right now it's gonna be the first time in weeks I spent all of my time for two years just staring at the screen trying to figure out how can I make this the greatest utility possible and down to like studying like how can we get rid of any distraction how we utilize the the the pixels how can we make sure the background makes it is pleasing in terms of the science and how it interacts with your eyes and so we said let's master text and mobile and newsletters just tend to look identical and so almost all of our emphasis in the early days is we're gonna own we're gonna we're gonna try to be essential to the most powerful people in media business and politics and we're gonna do that through a newsletter and we're gonna do it through the app or do it through the the website at the time but it's gonna be screen by screen and it's gonna be based on a iPhone or an Android and that focus allowed us to do that you know we hire designers you know it becomes clarifying right when you say our design principle is I want simplicity there's nothing that how we organize the company how we design things elegance and simplicity anytime someone brings something to me I'm like make it more simple than bring it back to me well that's clarifying for a designer because most designers are like artists artists want to draw when you say no I want you to like draw less it's a it creates this filter and so that filter got us designers that believed in our theories got us reporters that believed in our theories got us business leaders who believe in our theories and so we have this culture of people who they really buy into smart brevity they really buy into the mission and they're fun they're smart like I you're from the right gene pool and you just happen to be smarter than the average cat at something like I want you I want you working for us but they also have to be really good people collaborative people this is the happiest company I'll ever work at there's like not that there's not the only friction is sort of in the ambition the ideas very little personal friction no backbiting it's just and that just makes it easier to recruit and retain talent and to be honest like I'm 50 like I don't want to work around people that are drag I want to work on really exciting ideas with people who make me feel better about life if you if you are if you're sucking the life out of me I don't want to be around you what journalist being a drag never leave it our new room Paul I'm telling you you should be some of our folks like it like our newsroom is actually happy like we're laughing because like journalists in general are male contents but the for something like our even newsrooms happy like people are nice they bring treats for each other like there's just it like that stuff is contagious and that goes to your first like that's one of the things I've learned pretty quickly um when in the early days at politico is that it's it just like all habits trickle down quick right so like if I'm if I'm at the time like the critique the very fair critique of me early on would be ah Jim's a smart ambitious guy but he works 20 hours a day and he's maniacal and he expects everyone else to be nuts and that is a fair critique and is that terrible leadership model but what I learned was okay but what are the good parts of that people see that I care as much as anyone else that I'm gonna work I'm not gonna ask you to do something that I wouldn't do myself so you start to you start to adjust and you start to create like what are the values you want the company to live you have to live them I can't say we're the most transparent company and be secretive I can't say that we're gonna be a super candid company and be like foggy in my communications and that's a cool because it's not like journalism and it's not necessarily you're not gonna read it in a business but it is it's just an interesting dimension to humanity of how much the actions of yourself and others how contagious it is and how quickly contagious it is and for us it's positive but that's why I don't want to be around negative people or people who are self-focused because that is like a cancer and it just spreads and oozes and once it spreads you can't get it out and and that is hard it's not a single hardest thing one of the hardest things I have to do as a leader is to to see that ah man so-and-so is so smart they're so brilliant you're not a good person and I have to like suck it up and fire them like that is like literally the hardest because you don't want to you want to find anyone I don't really see that but like you see it and by the way if I if I don't act everyone else sees it I don't act I'm not living the values so people know if you're doing the right thing and that's why many newsroom is sort of facing their own sort of cultural reckoning right now you know also you talk a little bit about sort of the your audience that you want to focus on like how do you think about that initial to audience base like what what what do you actually do to sort of acquire those audience that you came in the product knowing that I'm going to focus on maybe a DC base or you sort of you know because this the professional is like a lot right and and you know your previous background with political is sort of a very different type of audience like how do you went about sort of scaling axios to a new type of audience yeah so what you do is you what we did is we called it our radiate out strategy which is think of like a bullseye and then these little circles around it and we hired people like Sarah Fischer in media or Dan Primack in technology deals or in a freed up in Silicon Valley and tech more broadly who we knew were already read by the most powerful people in those sectors and our theory was we knew we would get politics because of what we had done and kind of what we know and so we said listen let's get people who are who are so wired that the most important people have to read them because then soon everyone around them will read them then everyone around them will read them and it echoes out it's kind of the opposite approach to what other media companies take which is like let's go get as big an audience as possible we were like no let's go get a pretty small audience and know it will become a much bigger audience and that was maybe like a radical way of thinking about it but we kind of knew that it would be successful if we did it that way and that's worked now that's much bigger now right now it's like we're gonna get into this I'm sure but like we've expanded into cities but we're still targeting the same type of person the smart rise established professional basically what I would call information dependent people people who really need information and news to navigate their community or their job or a sector or what it is and that's a pretty big group of people and it's an important group of people and it is a business proposition it's a it's a lucrative group of people so just transition into that in terms of you know finding the smaller group you know you know according to New York Times you know you acquire Charlotte Agenda which is a night funded project for close to five million dollars right what were some of the indicators with Charlotte Agenda that led you to making this acquisition um so that's one and then we could talk a little bit about your broader local strategy in in a bit uh so this guy Ted Williams runs the Charlotte uh agenda at the time I'm about to board a plane and he calls me up it's a true story and he says listen I run the Charlotte Agenda I never heard uh and he explained what it was he's like I read what you want you want to do on local I'm telling you I've done it here and we're doing two plus million dollars in revenue we have a 30 margin I totally agree with the way you've articulated the strategy to go city by city he goes buy my company and I won't even jack you up I'll sell it at a very reasonable price and but put me in charge and let me help you expand literally the next day I said okay uh we're going to go through due diligence we want to look at your thing but if what you're saying is true like we're in like that's what we want to do we looked at the Charlotte Agenda and they really had delivered the goods it was they there was quality journalism they had a real audience they had a real business and it actually the business was performing better than we thought ours would our individual products would perform in the cities that we were going to go into so they kind of opened our mind that this could be even bigger than we thought and so the only due diligence we really did and this is different probably than most companies we did due diligence on all 11 people working there like we talked to every one of them to figure out if they're a cultural fit because people is our asset right that's our you know you give technology to buy peace stuff like that but it's all about people and they it was like you could just tell instantly they just had the same kind of values and in same a spree decor that that we would have here and so it's a very easy deal to do probably the easiest acquisition we'll ever do uh and smart that's been already paid off so should people just start calling you up it's funny because i've had a couple people do it since listen that's how these deals happen like if you have i've heard from a lot of people and i'd like they have heard from probably a half dozen people you need to probably know most of them uh run in different size local projects and if we think that we can help them or that they can help us like we do it usually we end up just doing it ourselves because it's hard to find that cultural fit or the right price point that works for the seller and the buyer but my feeling on this thing is i learned something every time i get on the phone i learned something about how they think about the market i'm i try to be pretty transparent and the stuff that we think i'm happy to share with anybody you might believe it you might not believe it some of it's probably really good some of it might be useless but those conversations i find to be very useful and so once you acquire you know shell agenda you're also launching in you know demine tamper bay denver twin city in northwest arkansas sort of like how do you go about picking these large cities is it more sort of capital driven or is it what are the indicator for you to say here's the bets that i'm going to make but i'm going to make them first in these cities yeah well there's a couple like the the initial one was we just wanted kind of diversity of region and size right so that's why you get a coin which might be like 106 biggest city or something like that then you have bigger ones like denver minneapolis tap kind of in between and so we because we want to really test our theory i really believe in the theory and i believe in it more today than i did six months ago and i believe it is strongly then i really that that what our theory is is that it's not that people don't want local news and it's not that local news does not have a business model it's at the two just because of a bunch of trends didn't match they basically because papers were so cost heavy distribution was so expensive local news started to get a bad rap people put a little bit less investment in it and what we saw was like no we've got like cities are where all the action is going to be look at where all the companies are moving look at apple's announcement in raleigh this week look at tesla moving to austin like the cities are where the action is going to be that is where you're going to see businesses move to it's where you're seeing people move to in this sort of post-coronavirus remote world and by the way that's where the most interesting debates in new technologies and new regulations are going to take place that's where 5g is going to be unleashed that's where you're going to see driverless vehicles that's where you're going to see drones and all these other technological opportunities and challenges that we face and so we believe that if we can get into these cities in a cost-effective way and basically take out all of the cost other than the journalism and go into these cities and basically do morning newsletters to begin with where you hire two or three of the best reporters in each of those cities to help the smart professional navigate business technology and the things to see and things to do sprinkle in a little bit of politics our theory was okay we're going to start to build an audience and from there as we grow that audience will grow the business so you're not killing yourself with costs from the beginning and the early signs are awesome we just passed today we have 100 000 subscribers in charlotte we have 70 000 in denver we just went live a month and a half ago with a you know a 35 percent open rate so the early signs are that we have what they love to call in business books like product market fit i think we have product market fit and so the minute that we see that then we're going to go into more cities and there's different ways that you test it you look at size definitely try to figure out is there a market like the like the northwest arkansas is an interesting one right we had a we basically a group of businesses would come to us and said like i bet you people here would advertise if you guys would come to this region because this region is the 13th largest growing region but nobody pays attention to it and i'm sure they would love people to pay attention to this region and then we can do advertising on other publications and you and wherever else trying to draw more people to the region i was like that's a smart idea let's talk let's see if there's something we can do we're gonna do it and so i think there'll be a bunch of different ways that we come to these but like very very bullish on it my hope is my hope is we're in a hundred cities at some point soon and my hope is after that that we're in a thousand towns and do you imagine again you know do you imagine sort of your business is mostly advertising and you know right now there's this whole sort of tension between advertising versus subscription right especially in a lot of the traditional local outlet you know their big bet is on local subscribers right you know and so you are basically still you know one of the few that's holding on like making the back on advertising why do you think um that's the bigger bet to win in local versus you know the subscriber route there's more money i don't understand what people are looking at i do not see the advertising market being soft at all i see the advertising markets growing and that's all i can look at is i can look at our numbers and i can look at what's happening with our competitors i don't think that there's a there's a limit of of dollars out there yeah facebook and google gobble up a lot of it but they leave a lot on the table and by the way they're not the safest cleanest place to advertise we are um and that's a compelling point that i think businesses are buying into i'm not anti-subs i'm not anti-consumer subs and maybe at some point we'll do some version of it but i see a very profitable future in keeping these things free and giving access to everybody to the products and being able to make money off the advertising side if we can't maybe we would adjust and do subscriptions or maybe we do both at some point but right now our our focus our theory is that we can do this profitably like charlotte has where everybody has access to this information it's not just the domain of the wealthy that would be great like that how awesome would that be paul right if we can help read help slowly rebuild some coverage of these cities in these towns and we can do it profitably and everyone has free access to this information then everybody's a winner so i i think it's a to me it's of all the projects that we have going it's the one i've got most of my heart in mind into like i want to do this i want part of my legacy to be that we helped solve at least a part of the local news crises and there's a crisis out there and i think listen this is small we're starting in only a few places but i really believe that our theory is a sound of a business theory as i've seen in the local space and we'll test it out and we'll work with partners and work with you guys hopefully on some projects along the way where we can then bring even more investigative reporting and more reporting that that makes a big difference in these communities so you know you outline one of your big aspirations is to be in hundreds cities do you imagine yourself being the predominant local media source of that city or do you envision this to actually to always be sort of like that supplement to it will only thrive when there's an anchoring institution or do you ever see yourself replacing that i don't think that's how it works anymore right i think in substack showing that i just think in good and bad ways we don't all turn to one source of information anymore we have endless opportunities and so i think there's always going to be countless players in every market i don't know what is minneapolis going to look like in 10 years i have no idea i assume the star tribune is still thriving i assume we're thriving i assume there's some individuals using their own platform who are thriving there's probably going to be a business or tech publication we're not thinking of that's thriving i don't i don't think of it that way and i've never and i don't use it to deflect like who are your competitors i don't care about competition care about like are we providing something that the consumer is saying i need to have that if we do that it doesn't matter what other people are doing and our job we're not in there we're not like some equity fund coming in and trying to like buy out a newspaper and gut it for profit like and we're not even trying to we i always say we come in peace like if you have good pieces we're going highlight them in our newsletter we're going to we're going to celebrate local journalism because we're not we come confidently and we come in humbly like we want to create a great product that people are hopefully get habituated to if we can do that then we'll be then we'll be fine and i and i believe we will fix all of these problems i really do i think when you put human creativity to things where there are needs and i think people need really good information around their community around their neighborhood around all these topics that we've talked about like they will figure out how to make money around it and i think we've proven that a couple of times over and hopefully we keep doing it and you know um shahla jen is not your first acquisition you actually also acquire sports internet a sports newsletter company in early 2019 and right now you're constantly being courted or you're thinking about other how do you think about growth via mna to be like clear or fair like sports internet was kendall like it's another great story this is like a great great lesson for people who are thinking about pitching a company kendall baker runs this thing called sports internet it is a new it's a really good daily newsletter basically if you are someone like me who cares about sports but has suddenly become too busy with kids and dogs and life that you can't be as obsessive as you were before so it really summarizes like what's going on in sports that you should care about he calls up and says hey like i love i love being a reporter i love what axios is doing and he sends me a picture on a napkin i am creating the axios of sports he said we look at my product i said yes i'll look at it and uh and it was good and i said it's good but here's kind of what i'd want to see if we were ever to do something with you and he is like uh he's like a golden lab like he's just a puppy he was wanted to like i want to do that i want to do that and he kept improving it and we're like this is awesome why don't you we just acquire you you come over here create axios sports we'll get you a bigger audience we'll we'll give you a bigger support system and he did it and now he's got i think a half million readers i don't know what the the latest numbers are and it's great and if you don't get it then you're interested in sports it's axios sports it's awesome and so in terms of your um other future mna um you know do you have any you know what's going on with the conversation of athletic yeah i mean it was reported in the journal that were uh that they had approached us about a potential merger but i i love the athletic i don't like to be honest like that was an interesting point in uh in media where almost every company in the digital era is talking to somebody about buying or selling or emerging and so we're i probably talked to 10 companies in the last couple of months like would you and and to us we're always going to be a buyer like we're like a buyer or a runner like a like one of our things we'll tell anyone is like we love this space and we think we know how to run a company and so like we want to have conversations where we can help other people maybe grow their businesses i don't know if we'll do anything like in the end like you end up it's often easier just to to go grow it yourself and sort of stick to your culture and grow things organically but when the right things come up it's it all then goes down to like the like the cost right is it can i and is this going to bring in more value or bring us into a space that we couldn't get into on our own quicker at a reasonable price and that's always the rub the bigger it gets remember the two things we've done was Kendall a one-person company you know Charlotte you know a 10 or 11 person company they've been small we've not done anything big and so that doesn't mean we wouldn't do anything big we have we have pretty big ambitions but it's uh it really would have to be the test would be you have to do high quality content you have to really buy into like this like we're not a traffic play we're not going to do stupid tricks to just to game the system to get a bigger audience like we're all about high quality content we're all about like transparency or you know we really we have this packed with the audience and if you can buy into that and you agree with it then we can definitely do business together and by the way a lot of most of these serious premium journalism or media companies do buy into that they they share the same principles yeah it's a couple questions coming from the audience actually you know two questions around sort of the the rural area publishers right they pretty much ignore where to use the like you know and the question is like how small of a market is too small for axios i mean it's a question that we debate all the time and so the way that i think about it is could we get to a point like we're building tools we have this company called hq which basically helps companies or cities or communities or leaders communicate the way we communicate with with smart brevity and it helps has a little bit of machine learning and a lot of tricks and tools to be able to to communicate with brevity one of the things we think a lot about is okay if we had that tool and it was so easy that i'm sally smith and i'm in lincoln main and i just jump on my computer and i get vetted by axios could i start axios lincoln main and is there a way to do that either as an employee or as somebody on the outside do we share in the revenue like how do we structure that we're probably years away from doing it but we think about that question a lot like my dream would be that we figure out a system that unleashes that that we can figure it can you the important part is like you can the the thing that would probably make us less attractive to like the googles or facebook's of the world is we don't believe in just unlimited access to everything and that the creator can just create and whatever happens happens we believe very passionately that you've got to be vetted you have to really be like someone who cares about truth and cares about news and you probably need to be edited right like you've got to like you that that trust that you have with the with the reader or the listener the viewer is so precious and so core to what we do so i would love to crack that code if you have ideas like i'd love to hear ideas because i think like to be honest like the cities are where the trouble is the trouble is going to be there's the news deserts there's rural areas there's tons of places that have no coverage no news like right for mischief right for bad things to happen and and and they deserve good content too so i don't know what the answer is being honest i it's something we're going to probably wrestle with to the next year or two but it's something that's on my mind and i hope i hope we're the ones who can help solve it and there's also questions you know actually a thread in the comments really about legacy outlet not able to innovate and people want to start something new but they don't know which direction what would be your advice for what is it that nonprofit newsroom or legacy newsroom could learn from your journey in scaling actually because the way you sort of frame it is look you know you were you bullish on advertising you're you're still bullish on loco and you're willing to to make that bet because you have a very defined audience and very defined product you know but non-profit a lot many non-profits and legacy is struggling with that like what is it they could adopt if there's like a gym vandaheinism like what what is it that they should subscribe to i mean one let go of the past and let go of your habits and deal with the world as it is and it's about to be right so like there's there's so much of what i think holds back companies that get held back is just doing things because that's the way they always did it or doing things because they can still squeeze a little bit of revenue out of it like you have to look at the world as it is and the world as it is is kind of awesome in the in the new space if you can kind of start fresh or if you can mentally start fresh distribution almost free the underlying technology off the shelf word press almost free can be free very cheap exponentially cheaper than it was five years ago and so the the thing that was the most expensive thing for a newspaper these big buildings why do you need a building why do you need a printing press why do you need a piece of paper why do you need the paperboy or girl you don't need any of it i can send it to you for free so you got to look at the world as it is people are going to consume content digitally obviously they're almost all going to consume it on on a phone so it's going to be mobile and they're going to be busy and if you can build it around knowing where people are and where they're going i think you can be successful and i agree with the question to a point i think that a lot of especially city and state based media companies have been very slow to adapt and by the way they'll die if they don't adapt quickly i do think some of the bigger companies i think the new york times is is exceptionally innovative exceptionally innovative i and i say this not not rulefully like they're like the quickest to copy anything that they see is working we they basically hired the entire political staff of political when we were there because they saw that we were we were better than they were at covering politics and i see that they're adapting much more to newsletters and to brevity even on their on their mobile site like they're i think they're very they're building their company around creators probably paying people more there's no sheen in copying i want to do one more question from the audience before a lightning round um what is actually looking for in a pitch and who's pitching to you in a in a story pitch no um in terms of a investment pitch in terms of somebody who wants to invest money or wants us to buy them want you to buy them and you're in the question is what would i look for yeah how would you do that i listen would be looking for somebody who cares about premium content in a space that we care about so national uh or local or certainly uh b2b and that they have sort of thought about our manifesto and thought about our bill of rights for the audience that they buy into it if those two things are are true there's probably a really good conversation to be had we're flexible around that but it's like if you just if you just read the manifesto which is on our website if you just read the bill of rights that we have with our audience it'll tell you everything you need to know about our company and about us and what would work and not work for us okay before we end just quick lightning round of thoughts um on a couple of hot sort of trends and and topics sub-stack mixed feelings um i think uh i don't understand the valuation that they just got because i don't when i look around i don't see thousands and thousands of people who are such good journalists that they could command a big enough audience to command a big enough subscription base that said they seem to be doing really well they're attracting a lot more talent even from established places they've got a tremendous brand halo and i do think they're unleashing the capabilities for people to do journalism in different places so i i'm a fan like i subscribed to some of their writers but i would uh and i hope that their business model is a successful one but i like i don't ever look at these like some people get oh i don't like them or they led too many people on the platform or i don't like this writer that writer like i don't ever get that spooled up about it i like the fact that they have a nice technology that allows reporters to report or opinion writers to a pine as long as it's clear what what they're up to so it'll be interesting to see how that plays out long term uh nft blockchain i don't know if i know enough about it to like say anything uh super smart like obviously i pay attention to it like the whole blockchain nft crypto area a lot of it i still have a hard time getting my mind around but obviously it's it's like white hot uh in the markets and white hot especially with i think younger uh consumers so my assumption is i would like crypto for instance i'd have been i've always been sort of deeply skeptical because it's not backed by the full might and faith of the united states government or some government but it seems to be taking on a life of its own and even skeptics like the big banks are now embracing it so something that might have been based on a hope and dream might become a reality because so many people rallied around it and they'll figure out the infrastructure and the backing of it and how do you deal with the digital currency that's not backed by a government so no axial tokens um in the immediate future i don't think so i don't think that's in our future um artificial intelligence more important maybe than the internet probably bigger cultural effect potentially than the internet and you think about the internet it's by far and away the biggest most profound change maybe in the history of humanity but certainly in the in our history i just think like AI like this capacity for machines to do things better than humans is only going to get bigger and better and you're going to apply it to almost every aspect of life and it's going to displace humans in a lot of spaces including a lot of spaces you don't think they could replace i think machines are we now have seen the power of them and if you i think it's going to be like the internet in that we're going to wake up one day and we're going to realize we allow these technologies to spread and manifest uh for a decade before we put any regulation around it and i think it's why people like Elon Musk quite sincerely say it's like a threat to humanity like uh like not controlled and it's legitimately a threat to humanity the other side of it is it can cure cancer it could it could dramatically expand our life span it could make a lot a big act could solve some of the most the the toughest diseases the toughest handicaps that people have to to deal with so it's like it's like the internet and that it depends like there's so much good that flows from a facebook or a google and then you can have like massive fraud or massive mind manipulation at scale because of some of these technologies and there's something government's not one the government doesn't attract the best and brightest especially on the elected side of the house of representatives and you don't have an institution that's built for speed of change that we're confronting like everything is going to is going to change even quicker than before right there's no nobody thinks it's going to slow and these new technologies and these new challenges pop up well it takes we're just now getting around to regulating facebook and google and if we do regulate them at all 15 years later well you can't do that to be able to avert some of the problems that you have you had to do it 10 years ago and I could find yourself in the same hole with AI and and also on AI and you wanted to fire you wanted me to do this quick fire I'm doing long ones instead not smart brevity you know the other thing I worry about is that it gives China a distinct advantage over the United States because they have more people and looser regulations around what they do with data and the more data you put into the machine in theory the better and more precise the machine becomes and so I worry that it could give China an advantage over us just because of size and also what they're willing to do with people's privacy and data that we're not willing to do and shouldn't be willing to do and so I wish people paid more attention to it this axio is using AI in the business in your business we are a little we you know what the place where we probably use it the most is in this communication software that we're building which we're basically trying to take what we've learned in the newsroom to use some machine learning and AI to help people clarify their own writing right like be able to spot when you have three ideas you should that should be bullets it shouldn't be three sentences squished together change weak words to to better words change terrible headlines to better headlines and so like there that could be great like that's a good example you can take really smart people with machine learning to maybe help you communicate better that's awesome right like that is great that's different than creating robots that could kill at scale right from afar but there are two ends of the spectrum and I'm not worried about ours I am worried about the killer robot um so unfortunately we've run out of time but I do want to sort of get some final thoughts from you what is the the thing you would double down on in local news if you you know if you could if you could uh you know double down on and what is it that you wish local news would stop doing I mean the thing I would double down on is the thing we probably will double down on which is I would get into more cities faster I think that the especially with these uh the top 50 cities where you're seeing population growth because of migration of people I'd want to get there quickly I don't know that there's I don't have get rid of the newspaper I don't know like it doesn't like people don't need it's too expensive to produce and people can get things digitally I go home my parents are in their late 70s they're on their iPad more than I'm on my phone so they can look at it digitally so I think I just think that the newspapers hold people back but in terms of content and coverage I think like people take it seriously and they try to do good coverage I don't think it's not the problem with media wasn't like crappy reporters or bad coverage decisions I think it was a business model that was so fat and happy for so long that people got addicted to and they were very very very very very very slow to adapt to the change well with that Jim I want to thank you for sharing your insights and and we look forward to having you back here again soon I always love your interviews all right thanks bud appreciate it bye