Wondery: Hernan Lopez

When Hernan Lopez founded Wondery in 2016, podcasts were just starting to go mainstream. Five years later, his team had scored a number of hit shows and sold to Amazon for a reported $300 million. Not bad for an immigrant from Argentina who moved to the U. S. in his late 20s with “terrible” English skills. Before launching Wondery, Hernan worked his way up in television, eventually becoming CEO of Fox International Channels. But despite his experience and connections, he struggled to attract investors and break through in an emerging industry. After the success of shows like Dirty John, Wondery began to take off, and today it’s one of the largest podcast networks in the world, with hundreds of shows in comedy, crime, sports, history and business—including this one! This episode was produced by Chris Maccini with music by Ramtin Arablouei. Edited by Neva Grant, with research from Alex Cheng. Our engineers were Gilly Moon and Maggie Luthar. You can follow HIBT on Twitter https://twitter.com/HowIBuiltThis & Instagram https://www.instagram.com/howibuiltthis, and email us at [email protected] mailto:[email protected]. See Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Guy Raz?

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• 1:32Guy Raz?

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• 2:16Guy Raz?

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• 3:00Guy Raz?

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• 3:45Guy Raz?

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• 4:27Guy Raz?

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• 5:11Guy Raz?

  Hey, before we start the show, a quick thought about imposter syndrome, which is something that comes up often in how I built this interview. I recently interviewed Keri Brownstein, who worked with Fred Armisen to create Portlandia, which is one of the funniest TV shows of the 2010s. And Keri talked about feeling nervous and unprepared in the writers' room, and eventually, how she found her place there. If you want to hear more about it, check out my conversation with Keri over on my other podcast. It's called The Great Creators. Just search for The Great Creators with Guy Raz wherever you listen to podcasts or go to thegreatcreators.com. And now, on to today's show.

• 5:56Speaker 01

  I remember looking at the P and L statement by the end of that month, and we had maybe $10,000 in revenue.

• 6:06Guy Raz?

  And you had a staff of six?

• 6:07Speaker 01

  We had a staff of six.

• 6:09Guy Raz?

  And $10,000 ain't gonna cover those costs.

• 6:12Speaker 01

  Nope, no, they wasn't. Like, even if we get to 10 times this, 100 times this, it's not going to be a big business of the scale that I thought that it would. And I remember thinking, oh, my God, what did I do?

• 6:38Guy Raz?

  Welcome to How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they built.

• 6:50Guy Raz?

  I'm Guy Raz, and on the show today, how Hernán López saw the early promise of podcasts and left a corporate job to start Wondery, a podcast platform that eventually sold to Amazon for hundreds of millions of dollars.

• 7:07Guy Raz?

  Back in 2012, I left the world of broadcast radio and went into the world of podcasting. And at the time, it was like going into exile. Up to that point, I'd only ever been a print, radio, and TV reporter. So when I started in podcasting, many of the people I knew in traditional media took pity on me. "Who listens to podcasts?" a very famous colleague asked me at the time. "And why would you listen to one subject for a whole hour?" And to be honest, I asked myself the same questions. I had no idea if anyone would ever listen. But just two years into my own journey,

• 7:50Guy Raz?

  another podcast managed to turn the whole industry mainstream. That show was season one of Serial, and it would help usher in a podcast boom that inspired thousands of people to get into the space. One of them was a TV executive named Hernán López. At the time, he was the CEO of Fox International Channels. And when Hernán heard Serial, he realized the audio industry might be at an inflection point similar to what he'd seen happen to television in the early 2000s. Back then, a new technology called TiVo allowed viewers to record their favorite shows and watch them anytime.

• 8:31Guy Raz?

  And this allowed TV writers and producers to create an entirely different kind of program. TV shows that told long, complicated stories over the course of a season. It was the dawn of the prestige era in television. And Hernán believed that audio was primed to go through the same revolution. So in 2016, he left his job at Fox to launch a podcast network called Wondery. After struggling to pitch the idea to early investors and coming close to running out of cash, Hernán and a small team managed to score a hit with a true crime podcast called Dirty John. And soon enough, Wondery became the target of acquisition offers from bigger players,

• 9:14Guy Raz?

  including Amazon, which did acquire Wondery in 2021, reportedly for around $300 million. Hernán left the company shortly thereafter, in part to fight an indictment he faced related to his time at Fox. He was found not guilty, but the ordeal lasted nearly three years, which we'll hear about. Also, to address the elephant in the room, yes, How I Built This is distributed by Wondery. And no, they didn't ask us to make this episode. In fact, they didn't even know about it until just a few days ago. The thing is, I wanted to interview Hernán because he's one of the most successful podcast entrepreneurs in the business, and his story is somewhat unlikely.

• 9:58Guy Raz?

  In fact, he barely spoke English until his early 20s, when he emigrated to the US from Argentina. He grew up in Buenos Aires. His dad ran an auto parts store, and his mom was an accountant. And Hernán came of age in the 1970s and 80s, a time of massive social change in South America.

• 10:19Speaker 01

  We grew up, for as long as I remember, in this military dictatorship. And when I was 13, I remember we transitioned to democracy and the whole country celebrated as if it was 10 times Christmas. There was joy in the air and there was this enthusiasm with a newfound freedom of press. And I remember at the time going to the city to celebrate the new democratic government and also at the same time, this is in 1983, I was 13, something else was happening in my life. I was coming to the realization that I was gay and, of course, a Catholic country, not something that was easy to accept.

• 11:03Speaker 01

  And this also happened to be at the same time of the AIDS crisis. I got to see the awful headlines that were being written about gay people in this context and reading headlines that were just not true and feeling if people knew what the truth is, they just would not be printing what they're printing. And I think that's probably when I got the bug that I wanted to work in media and I went to write for the school newspaper and then becoming the editor of the newspaper.

• 11:36Guy Raz?

  And so when you were a teenager and your parents or, you know, because Argentina's a sort of, and certainly then, very machismo culture, right?

• 11:44Speaker 01

  That's right.

• 11:45Guy Raz?

  And so as a teenager growing up, were there other young men that, I don't know, that you could, that, I mean, was there a community that you found? Was there like an underground?

• 11:55Speaker 01

  No, not when I was a teenage, well, I guess when I went to college to study advertising and communications, that was the first time that I talked to somebody and I told them what I was feeling and they were open and welcoming. It was a straight guy, he was a musician. And then after that, as would happen, I met a guy and fell in love and any plan of being in the closet just went out the window.

• 12:24Guy Raz?

  How did your parents react when you told them?

• 12:28Speaker 01

  Not great. I think they were coming from the point of love, right? They were concerned about me and they were having the same concerns that any parent would have at that time or any time at that age. So they wanted me to get therapy and really believe whether it was a temporary phase or not. But they came around and they, you know, they became loving and accepting and that's what did my siblings. I have an amazing relationship with them. I talk to them every weekend. They're still in Argentina.

• 13:01Guy Raz?

  And so, growing up, do you remember feeling like having big aspirations to do big things? Were you, do you remember feeling ambitious even as a teenager?

• 13:12Speaker 01

  I had a little bit of an entrepreneurial streak. I remember when I was 18 with four friends of mine, we bought airtime on a neighborhood radio station. This was late at night on Thursday at 11:00 PM and we had a radio show and we financed it by selling advertising. And that show was the equivalent of what a podcast today would be. And one with 10 listeners and that's assuming that every one of us got both of our parents to listen. But it was short-lived because then I got a real full-time job at a radio and cable company.

• 13:49Guy Raz?

  He did so well selling ads that eventually Hernan got an offer to move to the US to work for Fox International Channels. And we're fast-forwarding a bit here, but while he was in the US, Hernan got an MBA at the University of Miami and then rose through the ranks at Fox with almost unbelievable speed. By age 30, he became the Senior Vice President for Fox Latin America, a job that partly involved adapting US shows for a Spanish-speaking audience.

• 14:21Speaker 01

  I was in charge of programming and marketing. And I, with my team, was in charge of deciding the programming schedule and how we would market them and how we would launch them.

• 14:32Guy Raz?

  So what kind of shows? 2000, I'm thinking like, what does Fox have? Simpsons X-Files, I think, right?

• 14:37Speaker 01

  Simpsons X-Files, Ally McBeal, Buffy, The Vampire Slayer, Angel.

• 14:43Guy Raz?

  Oh, huge shows, wow.

• 14:44Speaker 01

  It was really the beginning of a renaissance for the 20th century Fox studio.

• 14:49Guy Raz?

  Totally.

• 14:49Speaker 01

  And I didn't know this at the time, but that was the dawn of what's today considered the golden age of television.

• 14:56Guy Raz?

  Yeah.

• 14:57Speaker 01

  If you think about it, that was the time when The Sopranos and Six Feet Under were launching and our sister channel FX in the US, what was about to start that revolution with The Shield, which was their way of going after the character-driven, very greedy, incredibly well-produced drama. And I was just very fortunate to be there to witness it all.

• 15:23Guy Raz?

  All right. So while you were sort of rising up the ranks at Fox Latin America, I read about this really, something that you wrote about a couple of years ago, and it was about your accent. Because, you know, having learned English only a few years earlier, you had a pretty heavy accent when you spoke English. And I guess you got advice from like a mentor. Tell me about what happened.

• 15:52Speaker 01

  What happened was that in 2001, I started to report to a new boss, David Hasselnden, and I learned so much from him. He was an amazing mentor and coach, the person that took time to develop the skills from each of the executives that he took interest in. And my career was making progress, but I had this hunch that there was something that was keeping me from going further. And His boss had sent word or had sent a suggestion that I should take accent reduction classes.

• 16:31Guy Raz?

  Accent reduction classes. I didn't even know they exist. Of course they exist, but.

• 16:35Speaker 01

  Of course.

• 16:36Guy Raz?

  But who knew? So was your accent hard to understand? Were you hard? Was it hard for people to understand you when you spoke English?

• 16:42Speaker 01

  In hindsight, yes. And I remember being at meetings and seeing faces of people frowning. And I remember that being the cue that, oh, I said something that people are not understanding. And that got in the way of my ability to communicate and to inspire people and to get my points across. And I remember hearing that advice and saying, oh, my God, what a gift. How did I not see this before? And how did I not know that they're accent reduction coaches? So I remember finding one in L.A. As far as time spent versus impact on my career, one of the best decisions I ever made.

• 17:27Speaker 01

  And I recommended this to so many people over the years.

• 17:30Guy Raz?

  It's so interesting because, you know, I've lived all over the world as a reporter in my past life. And in countries like Germany and France, accent is really appreciated and valued. And I think in the United States today, no boss would ever give somebody this advice. They would not give this advice because it would be considered to be toxic. Right? To say, hey, you might want to take a class to work on your accent. So you're, you know, but you know what I mean? Like, nobody would have told you that in 2023 at all.

• 18:04Speaker 01

  1,000%. And I remember this same executive gave that advice to somebody else who did get offended and didn't work on it. And you still probably can see that I still have an accent. It's not that I completely went away. But think about it, if you are at a meeting with your peers and you come up with a great idea, but you're not communicating it well in a way that comes across. And then another colleague, who has a perfect accent and is a great communicator, picks up on your idea, but then communicates it in a way that inspires people, that gets people to say, oh, wow, that's a great idea. Who do you think gets traded for the idea?

• 18:47Guy Raz?

  Yeah, yeah.

• 18:49Guy Raz?

  I read an interview you gave a few years ago. You said, "I don't think I would have made it to the C-suite level at Fox if I hadn't taken those accent classes."

• 18:57Speaker 01

  A thousand percent. I don't think I would have.

• 18:59Guy Raz?

  It's just so interesting how little tweaks. And it's not like you did this for years and years. It was a couple of months of taking classes and then practicing on yours like physical therapy. You go, you get the physical therapy, but then you gotta do the work on your own.

• 19:13Speaker 01

  That's right. And now there are apps that allow you to do it and it give you instant feedback. So it's a lot easier now than it was before.

• 19:22Guy Raz?

  All right. So you are now, this is, you know, early 2000s. 2003, you became president of Latin America and the GM for the UK for Fox International Channel. So you were really, clearly you had people there who were, who really liked you or impressed at the work you were doing. Did you, were you good at finding mentors?

• 19:44Speaker 01

  I think most importantly, David, my direct boss was the best mentor and he gave me chances and opportunities to learn. But I was always somebody who was reaching out to other people and trying to learn. I heard this amazing expression that if you work in international, you have the ability to quote unquote, "read tomorrow's newspaper." Because you're in a country and you're seeing a trend and that trend probably happened in some other country five years before, two years before, three years before. And so you're much more able to predict trends that are going to happen from one place to the next.

• 20:28Speaker 01

  So for example, my boss, David, gave me the chance to launch a television channel in the UK and that would become the FX channel in the UK. And remember flying in, we only had six months to get from zero to launch and noticing that the television market was hyper fragmented because every household had digital penetration. So, and they had multiplex channels, a number of things that weren't even available in the US. And I remember thinking, this is the way that multi-channel television will go everywhere, not just the UK. So in the future, we're going to go through a world of hyper fragmentation of audiences. So that's when I started to.

• 21:13Speaker 01

  Realized that we need a new set of skills to create shows and market them in a way that would break through.

• 21:20Guy Raz?

  All right, and meanwhile, you're continuing to move up the ladder at Fox. And we're fast forwarding again here a little bit, but I guess around 2011, you're promoted to president and CEO of all of Fox international channels, which again is a pretty incredible rise. I mean, you've reached sort of the top of the food chain overseeing TV channels, production houses, digital assets all over the world. And you probably were thinking, I imagine, that maybe one day you'll be the head of Fox. I don't know, or maybe the head of another studio. Was that the trajectory you felt you were on?

• 22:00Speaker 01

  Part of me felt that I wanted to see whether I could go and lead another company. And at the time, I also was curious about entrepreneurship. And I remember part of my job was in business development, talking to founders, talking to entrepreneurs, and seeing how they went from zero to 100. And actually, there's a moment I remember in 2015. There's this bank that generated or published valuation of the whole company of Fox.

• 22:40Speaker 01

  It's called a sum of the parts valuation, where they go and value each part of the business. And there's FIC, which at the time had grown into one of the biggest parts of the Fox organizations, was valued at $10 billion.

• 22:55Guy Raz?

  Wow.

• 22:56Speaker 01

  And part of me wondered if I could create even a small version of that, starting from scratch, without the benefit of a large organization, with amazing brands, of amazing colleagues. And so I had that nagging. Sense. And at the time, I felt that at Fox, I probably had risen as far as I would.

• 23:21Guy Raz?

  And we're going to talk a little more about where your head was at in a second. But I also want to pause and ask about your personal life because by this point, you'd also gotten married and had kids, right?

• 23:34Speaker 01

  Yeah, so I got married to my now ex-husband in 2008. We had met while on vacation and very quickly, the very first day that we talked about having kids. And we were trying through IVF initially, that just didn't work out. And then we got on the adoption list. And in 2010, we were blessed with our son. And then within nine months, we were blessed with our daughter. So that was a busy, busy time at our household.

• 24:09Guy Raz?

  Meantime, in the background, you, like many people, started to listen to podcasts. I got into podcasting in 2012, so I'm like a dinosaur in this industry. And I remember very distinctly, because I had started with this show, The TED Radio Hour, that it really, everything changed for everybody with Serial. Serial, it really kind of floated all boats. It was such a phenomenon that people were like, wait, what's this podcasting thing? And then they discovered other shows. You also had that experience, just as a consumer, a listener of podcasts, I think, right?

• 24:48Speaker 01

  That's right. I had a number of friends, not a lot, but they came to me and they all used the same language. You have to listen to Serial. And I remember listening to it and saying, whoa, now I understand. This is just something that I had never experienced before in audio.

• 25:07Guy Raz?

  It was so good. That first season was unbelievable.

• 25:11Speaker 01

  Unbelievable. I remember I listened to maybe the first four episodes over a month and then the final four, and binge listened to them on a flight back from Europe. And I remember crying and feeling that just, it was an incredible story, so emotional and so well told. And so I said, OK, Zero is great. What's next? And then somebody recommended Startup, the show that Alex Blumberg.

• 25:36Guy Raz?

  Because he started his company around then, Gimlet, around 2014, I think.

• 25:40Speaker 01

  That's right. That's right.

• 25:41Guy Raz?

  Yep.

• 25:41Speaker 01

  And I remember listening to it and liking it every bit as much because not only was an amazing narrative, serialized story, but it also happened to be about the creation of a company. And again, loved it. And I look for other shows like those and zilch.

• 26:01Guy Raz?

  You were listening to Ted Radio Hour, my show at the time?

• 26:04Speaker 01

  I was listening to Ted Radio Hour, yes, sir.

• 26:07Guy Raz?

  It was not a serialized show. It was not a serialized story.

• 26:09Speaker 01

  Exactly. I was looking for serialized stories. Because remember, one of the things that I learned at Fox was, and this was true of any entertainment company, there was a lot of value to be created out of having a library of evergreen IP.

• 26:25Guy Raz?

  Yeah.

• 26:25Speaker 01

  So I thought that Zero, one of the reasons why you could spend the time in making a show like that was that people could listen it two years, three years, four years later, it would still be current.

• 26:35Guy Raz?

  Yeah.

• 26:36Speaker 01

  And that's something I aspired to do.

• 26:38Guy Raz?

  And you knew that there was something about this evergreen idea, right? Which is, you make content that has a lifespan beyond its that week or beyond that month, that it could live. I mean, this is how I think about this show. Like, if you go back 70 years on this show, the stories, they don't change. I mean, the elements change, but they stand. They're evergreen. You can hear them in 10 or 20 years and still valuable.

• 27:01Speaker 01

  That's right. And when you talk to anybody who has run a movie studio or a television studio, they will tell you that library funds new production, right? That the profits and the cash flow that comes from library typically is what funds new production because new production is expensive and risky and more new production doesn't work, whereas library, you only monetize what actually has worked.

• 27:21Guy Raz?

  So essentially, when people watch Halloween horror movies around Halloween or

• 27:27Guy Raz?

  Or Christmas movies, Home Alone around Christmas, that actually, that's what you're talking about.

• 27:31Speaker 01

  That's right.

• 27:32Guy Raz?

  Those libraries are just, they live forever and they can generate, they generate enough money to fund new projects.

• 27:37Speaker 01

  That's right, and that happens in music as well. So it's a, it's a dynamic that has been well-known and one of the reasons why libraries are valued as much as they are. And that, again, true of many, many years of IP.

• 27:51Guy Raz?

  So, all right, you're listening to these podcasts, but you're a listener to them. I mean, you've got this job at Fox, very successful executive, but I have to imagine it wasn't right away where you're thinking, that's it, that's what I can do.

• 28:05Speaker 01

  It was, it didn't take a long time, to be honest, because I always felt that timing is important and it's, you can be right on time, too late or too early. Too late, you cannot go back from. Too early is also bad, but if you have to choose, you better be too early than too late. It's always better to be just a tad little early before everybody else goes into one trend.

• 28:33Guy Raz?

  Yeah.

• 28:34Speaker 01

  And I went and studied the history of what happened in public radio in other countries and noticed that there were audio dramas being produced in the UK and Canada.

• 28:44Guy Raz?

  Yeah, I mean, the BBC had, and still does, The Archers or, and, you know, but the whole, that was what the BBC, the golden age of the BBC was, it was radio dramas. Even in the US, they existed.

• 28:55Speaker 01

  That's right, that's right, back in the post-war, right? And they were replaced by television. And if you remember in the 90s, the most popular television shows were episodic.

• 29:05Guy Raz?

  Yeah.

• 29:06Speaker 01

  Were procedurals and sitcoms. You can watch one episode, skip the next.

• 29:09Guy Raz?

  Yep.

• 29:10Speaker 01

  And in the turn of the century, TiVo gets invented and with it, on-demand television. So people are able to watch television on their own time. Surprisingly or not, The Sopranos, Six Feet Under, and that new golden age of television, of character-driven drama, starts at that time. That's when showrunners know that they're going to be able to tell stories over an arc of a season. So, character development becomes more or as important as plot.

• 29:41Guy Raz?

  So the minute TiVo happens, that enables what we now call sort of the golden age of television, because you could record them and watch them on your own time.

• 29:51Speaker 01

  That's exactly right. So my analogy was that if Episodic was a pass and TiVo happened. And that led to the golden age of television, which led to the new age of not only HBO, but FX and AMC and eventually Netflix. Then podcasts were the TiVo moment. Maybe Serial was HBO, but there was an opportunity to create FX, Showtime, AMC, all of that amazing IP that followed. And I just happened to be witnessing a potential inflection point in what then became the golden age of audio.

• 30:34Guy Raz?

  And everybody had a smartphone, which was like a TiVo in their pocket for audio.

• 30:39Speaker 01

  That's right. And there was, the shows were funded by advertising, so there was very little friction. And you can promote shows through the Apple Podcast chart and the app. And there were so many things like NIN-NINE UP that I felt that this was an amazing opportunity. I'd be crazy not to take it.

• 31:02Guy Raz?

  Let me come back in just a moment. Erenan takes the leap to start his own podcast company and learns that despite his skills and connections, a leap can feel more like a plunge. Stay with us. I'm Guy Raz and you're listening to How I Built This. This episode is brought to you by Eight Sleep. Sleep science shows that in order to sleep our best, our body temperature needs to drop in the early and middle part of sleep and rise in the morning. I used to be a terrible sleeper, but I can tell you that I've been sleeping on the Pod cover by Eight Sleep for a few months now. And it is a total game changer.

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• 33:33Guy Raz?

  We can connect our turntable, CD players, a projector, and tons of other devices directly to the 5. And with Sonos, we started with one speaker and then expanded over time. Sonos makes pairing super easy since Sonos speakers connect over Wi-Fi. That means you can group speakers in different rooms and play music throughout your entire house. Visit sonos.com to learn more and find gifts for every listener on your list.

• 34:02Speaker 02

  Hi, guys. My name is Kayla. I'm from Cleveland, Ohio. And my favorite episode was with Sarah Blakely from Spanx. And she had talked about how when she brought her idea for a footless pantyhose to the manufacturer, they thought that she was crazy and that nobody would want it. And when I first submitted my product idea to a manufacturer, they thought the same thing. And it was kind of an aha moment for me of, OK, maybe I'm on to something. So I'm grateful for that inspiration and all of the episodes and wealth of knowledge that you share with us.

• 34:34Guy Raz?

  If you want to share your favorite episode of How I Built This, record a short voice memo on your phone telling us your name, where you're from, what your favorite episode is, and why. A lot like the voice memo you just heard. And email it to us at [email protected]. And we'll share your favorites right here in the ad breaks in future episodes. And thanks so much. We love you, guys. You're the best. And now, back to the show.

• 35:09Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2016, and Hernán López has a top job in television. But after becoming a fan of podcasts like Serial, he starts to think about launching his own podcast company.

• 35:25Speaker 01

  When I talked to my boss at the time, Peter Rice, and I told him, well, I want to start this podcast company. And this is what I like to do. And he said, oh, my God, that sounds like such a fun idea. I don't know that it will be commercially successful, but I believe in you, and we'll make the first investment as Fox. And so they put a $250,000 check.

• 35:49Guy Raz?

  So my question, I mean, here you are now. You are, you know, at this point, you know, you're going to start a business, and you have a lot of connections, obviously, and a lot of experience, but still risky because it's 2016. Podcasting is...

• 36:05Guy Raz?

  You know, it's blowing up, but it's still not clear. Did a part of you think, well, I'll try this, and if it doesn't work, I'm sure I can go back and work as an executive at a media company?

• 36:18Speaker 01

  A part of me thought that that was a fallback, and I talked to a lot of people in my internal circle. And to be frank, a lot of people thought I was crazy about going into this new space because the whole industry was thought to be worth $125 million.

• 36:38Guy Raz?

  Yeah, which is nothing. I mean, if a bunch of people are competing for market share, they're competing for $3, $5 million, $10 million.

• 36:44Speaker 01

  That's right. And I'm saying "thought to be" because the industry itself didn't even have an official estimate.

• 36:50Guy Raz?

  So at the time, this is 2016, you leave Fox, and you decide you're going to start your own podcast network. And let's talk a little bit about what that was going to be, because obviously, you were inspired by Gimlet and what Alex Blumberg and Matt Lieber were doing there. We did an episode on them a couple of years ago on this show, which is a really interesting story and worth listening to. But let's start with the reaction. I mean, I'm sure most people around you were like, you know, this is great, Hernan, go for it. Did you feel any sort of, I don't know, underneath the surface that there was, people were like, this is a weird idea, like, what is he doing?

• 37:29Speaker 01

  Oh, no, they did. It wasn't very much under the surface. I remember talking to colleagues that were wondering, like, what the heck is Hernan doing? And it was just very, 2016 was tough. It was in a number of ways. Because we had that $250,000 check from Fox, and then a few friends and former colleagues also offered to invest, and we raised another 200 grand. And I thought, OK, this is easy.

• 37:57Guy Raz?

  Yeah.

• 37:58Speaker 01

  But then, this is where it gets interesting. I tried to go and raise money from venture capital the way that Gimlet had raised money, and the phones stopped ringing.

• 38:10Guy Raz?

  You couldn't, even with all of your industry experience and your background, you couldn't raise any venture capital money in 2016?

• 38:17Speaker 01

  I could not. Guy, I talked to I stopped counting the no's after I hit 50 on venture capitals. And they all had different versions and different reasons, and they were legitimate, by the way. So the industry was super small. I was a solo founder in my 40s with no experience in starting a business from the point of view of they were looking at it and had spent too much time at what they thought was a cushy corporate job.

• 38:47Guy Raz?

  Yeah.

• 38:48Speaker 01

  And so, yeah, we just hit a wall.

• 38:49Guy Raz?

  Well, tell me a little bit more about this. I mean, you're going from a guy who flies to Buenos Aires, or Berlin, or Singapore, wherever, and you're being chauffeured into these boardrooms, and you're the boss from Fox, and you're meeting all these people. All of a sudden now, you're like, being brought in for meetings and sitting in a conference room where everyone's like, okay, why are you wasting our time? What is this about?

• 39:17Speaker 01

  Pretty much, and setting up my own printer, and trying to find out how to do payroll, and it gets worse, actually. So on top of that, my husband at the time was in the hospital for a couple of months and then was unable to work for the rest. So I was, yeah, taking care of him, dipping into my own savings every month because we were unable to fund the company. And there were many points in 2016 that I said, what am I doing? And I was ready to give up.

• 39:50Guy Raz?

  How many people were you able to hire from that initial seed funding?

• 39:56Speaker 01

  We hired six people very early on. We had somebody in sales, and a head of the operating office, a chief content officer who had been with Fox for 20 years.

• 40:10Guy Raz?

  And this is a major figure, so he probably got some equity because you couldn't possibly pay him what he was getting paid at Fox.

• 40:19Speaker 01

  That's right, that's right. Yeah, so, yes, he did. And we had somebody in charge of recruiting shows. This, one of the things I learned at Fox was that it's almost impossible to create a media brand with just your own content. You have to combine content that you produce with content that you license from others. And that was the model for Wondery as well.

• 40:43Guy Raz?

  So, Anand, when you started this out, right, I mean, you've got to raise the money and start a business. But at the same time, you had to make great shows, right? And you wanted to do something different than what was being done in public radio at the time, or at a company like Gimlet. So what was it that you wanted to do?

• 41:03Speaker 01

  So I wanted to bring everything that I had learned in 25 years in television to the area of podcasting, from storytelling style to marketing to business model. But the first product that we wanted to launch were audio dramas. It hadn't been done much, it was only maybe one or two audio dramas. And I essentially wanted to create those Hollywood soundscapes with characters and sound design, and essentially turn it into scripted audio. And we did. We launched this great show, I thought, or we all thought at the time, called Secrets, Crimes and Audio Tape.

• 41:47Speaker 01

  It was an ongoing audio drama. And it hit only number two on Apple Podcasts. And we couldn't get to number one because there was this one other show that launched at the same time called How I Built This. Have you heard of it?

• 42:02Guy Raz?

  Wow. Didn't I know that? Yeah, sorry about that.

• 42:05Speaker 01

  That's when I became a listener of How I Built This. And again, I think what we learned in Secrets Crimes was that there were so many people that the audience for an audio drama was limited. But podcast listeners loved true stories. That's how I fell in love with podcasts. So the insight was that we could actually tell true stories, but following the Hollywood playbook of character development, cliffhangers, high stakes, and sound design.

• 42:41Guy Raz?

  Right.

• 42:42Speaker 01

  And also, I should say that at Fox, we paid a lot of attention to sound. We were often fond of saying that sound is where the emotion comes from.

• 42:50Guy Raz?

  Yeah.

• 42:51Speaker 01

  I'm sure you heard the story that you watch a horror movie with the sound turned off and it's not scary.

• 42:55Guy Raz?

  Nothing, does nothing, yep.

• 42:56Speaker 01

  And then the marketing playbook of trailer And super trailers and podcasts about the podcast and how to build momentum. One of the most difficult things is how to create urgency for something that is evergreen. That's something that my colleagues in the movie studio used to talk about a lot.

• 43:16Guy Raz?

  It's interesting because what you were doing was sort of reviving old style radio drama, but updating it and modernizing it. And I guess the difference, the big difference was that what you, public radio, right? Or even Gimlet, which is rooted in public radio, was still about journalism. And that's not what you wanted to do. You could actually tell stories in a different way that were more focused on entertainment.

• 43:39Speaker 01

  That's right. And by the way, the reason why I didn't follow what Alex and Matt and other people in that space were doing it was that they were so good at it that I did not think that I could do a better job at doing what they were doing. So there was a space to do something completely different.

• 43:56Guy Raz?

  I mean, when you listen to a show like Radiolab or This American Life that are so beautifully produced, they're very, very hard to make. I mean, most, most people

• 44:05Speaker 01

  Oh, my God.

• 44:05Guy Raz?

  don't understand the amount of work. And so that was not what you, you did not, I mean, you were not trying to recreate that. You couldn't compete with that.

• 44:15Speaker 01

  I could not compete with that. And quite honestly, felt that there was a bigger opportunity in the one space that Wondery was creating in which we were alone.

• 44:25Guy Raz?

  And by the way, that first year, did you even attract any advertising?

• 44:29Speaker 01

  I did, but just didn't make enough money to pay for the cost. So the first year, we lost a ton of money. And I remember looking at the P and L statement by the end of that month, and we had maybe $10,000 in revenue.

• 44:47Guy Raz?

  And you had a staff of six?

• 44:49Speaker 01

  We had a staff of six.

• 44:50Guy Raz?

  And $10,000 ain't going to cover those costs.

• 44:53Speaker 01

  Nope, no, they wasn't. And I remember thinking, oh, my God, what did I do? Like, even if we get to 10 times this, this is still not going to cover the cost. Even if we get to 100 times this, it's not going to be a big business of the scale that I thought that it would. But Look, I mean, there are times in which you have to overcome every no that you get and you have to be able to distinguish between the helpful no's and the unhelpful no's. And I got some of both.

• 45:32Speaker 01

  Every time that I went to a venture capital meeting and they told me, no, we cannot fund you because the TAM is just not there. That was one thing and it was hard to respond to that. But there were times where they were saying, look, we cannot find you now because we don't want to fund a business that relies primarily on third-party content because we think that at the end of your agreement that those margins can be competed away. We can fund you if you bring a significant amount of your revenue coming from your own content that is-

• 46:14Guy Raz?

  If you own a property.

• 46:15Speaker 01

  Right. And I said, but that's precisely what I'm doing. That's our plan, believe me.

• 46:21Guy Raz?

  Yeah.

• 46:21Speaker 01

  And they said, yeah, come when you've done it.

• 46:24Guy Raz?

  So you get to 2016 and you get to 2017 to launch Hollywood Crimes.

• 46:30Speaker 01

  Yeah, Hollywood and crime.

• 46:31Guy Raz?

  Hollywood and crime. And that show was a hit, but what was it about that show that like, because I think that show really changed how you thought about what Wondery should be doing.

• 46:44Speaker 01

  That was the first show in which we realized that if we tell a true story with the Hollywood playbook, with character development and with stakes and with sound design, then people were going to listen. And it was also the show in which we tried the marketing playbook of having a launch campaign that allowed people to get excited about the show. It wasn't an accident that we launched in the first week of January. We knew that nobody else was going to launch a show at the same time. So our chances of getting to the top of the Apple Podcast chart, which at the time was-

• 47:23Guy Raz?

  Really important, yeah.

• 47:25Speaker 01

  It was a way of really getting more people to see you and see your show and see your brand and see what the Wondery logo was. Just we put a lot of attention into all those details and that sometimes are overlooked.

• 47:40Guy Raz?

  Let me ask you about how you sourced producers at the time, even 2016, 2017. I mean, now, there's lots of people who know how to make audio because podcasting has exploded. But then, it was pretty much the only people who knew how to make really high-quality audio programs were in public radio.

• 47:59Speaker 01

  That is true. And we really were paying attention to who was out in the market. We're going to podcast meetups. And I think it helped that we were the only ones in LA. Everybody else in the East Coast was competing with the same pool of talent, and we're the only ones in LA. And people who were in our world sometimes were really working for Hollywood projects that essentially allowed them to pay the bills, and they were doing audio as a passion project on the side.

• 48:29Guy Raz?

  How did you, you'd gone from, let's be honest, having people kiss your butt when you're running Fox, OK, being this guy like, oh, Aaron Hanna's coming to the building, guys, you know? Or I've seen this play. I've been in places where people talk about the boss like they're a god, which I think is unhealthy, but it happens, especially in Hollywood, to going to the guy who's like, going to podcast meetups at dive bars in Los Angeles with like 12 people showing up, and you're telling them about this new thing you're starting.

• 49:00Speaker 01

  But I think that has always been one of my skills, that I've been always adaptable. I remember growing up in Argentina and just seeing how realities can change from one moment to the next. I think that gives anybody who comes from a similar environmental background the ability to just adapt. And at the same time, there was this sense of community in the podcast industry that everybody was excited every time they met somebody who understood what they understood. And we all felt that, over time, everybody else will get it, too. But we just are excited to be at the early stage of what we now realize was a new golden

• 49:45Speaker 01

  age of audio.

• 49:46Guy Raz?

  All right. So by 2017, you've made your first few shows, right? And you're starting to bring in some advertising revenue, but you're still struggling to attract investors, right? Because you haven't really had a hit show yet. But then, of course, something happens. I guess the story I understand is that the LA Times basically approaches Wondery because they want to launch their own podcast. I mean, at this point, other media outlets like the New York Times were jumping into podcasting, right? So understandably, the LA Times wants to get in on the action. And so what? Did they just call a meeting to bat around ideas with you?

• 50:24Speaker 01

  That's right. And they went around the room and they pitched different stories that they had been working on. And at the third one, I said, that's the one.

• 50:33Guy Raz?

  What was the story they told you?

• 50:35Speaker 01

  It was Dirty John.

• 50:36Guy Raz?

  And what was the actual story?

• 50:39Speaker 01

  It was a story about a woman in Orange County who had been tricked by this grifter who obviously pretended to be who he was not. And she fell in love with him.

• 50:55Guy Raz?

  His name was John Meehan.

• 50:56Speaker 01

  John Meehan, exactly. And her daughters really did not like him. And there was a really high stakes family drama of two generations of people who are not seeing eye to eye. And it was this incredibly rich psychological thriller with a completely unexpected ending.

• 51:19Guy Raz?

  Yeah.

• 51:20Speaker 01

  And then finally, we went to the Apple Podcast team and actually shared with them the first episode of the show. They loved it so much that they agreed to give us what at the time was called the Beyonce Treatment, you know, the takeover of the top carousel of the Apple Podcast app. And this put us on the map.

• 51:39Guy Raz?

  Could prove the concept of even if you didn't own this IP, you could show that what you were able to do with it. And that presumably would convince people that there was a huge potential here.

• 51:53Speaker 01

  That's right, and we could go to any meeting and say, "We are the company that made Dirty John."

• 51:57Guy Raz?

  Yeah.

• 51:58Speaker 01

  In the middle of that happening, we got approached. Finally, it looked like we were going to raise money. And one major company agreed to essentially fund our CSA at $5 million at a $25 million valuation.

• 52:15Guy Raz?

  They'd give you $5 million at a $25 million valuation. This is a major, I know who it is, but you can't, you don't want to talk about specifically who it was, is a major LA player.

• 52:26Speaker 01

  That's right. Yeah, we'll even call it a global player.

• 52:29Guy Raz?

  Global player, okay. And they made an offer. It's not an investment firm. This is a player in the industry.

• 52:36Speaker 01

  Corporate, right.

• 52:37Guy Raz?

  And they made an offer to make a 20% investment in Wondery. So that was exciting. That was good news.

• 52:44Speaker 01

  That was very exciting. I felt, okay, now we are finally going to be able to take this to the next level. We shook hands, and then I don't hear anything for a couple of weeks, and the corporate team comes back and says, "Actually, we've been looking at the deal, and we decided that instead of investing, we want to buy your company outright for the same valuation."

• 53:09Guy Raz?

  For $25 million.

• 53:11Speaker 01

  That's right. And tempting, yes, but...

• 53:15Guy Raz?

  You probably could have walked away with $15 million bucks.

• 53:17Speaker 01

  Maybe even more than that at the time. But essentially, what I really wanted to do is what you guys promised, and we shook hands on, which is do an investment run so that we can make this company a lot bigger and have big plans. And there's this Dirty John thing that you guys don't know how big it's going to be, and believe me, it's going to be great. And they said, "Well, either we buy the company or nothing. There's no investment." And I was tough. But I ultimately decided to just not take the offer because I just was confident that we were about to hit something big.

• 53:59Guy Raz?

  When we come back in just a moment, why Erenan says no to a new offer to buy Wondery before saying yes to Amazon, and how his life turns upside down when he's embroiled in a federal bribery case. Stay with us. You're listening to How I Built This.

• 54:24Guy Raz?

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• 55:06Guy Raz?

  The agents bring speed and scale, and people bring taste, judgment, and control. Learn how you can get more out of your site from a Framer specialist or get started building for free today at framer.com/built for 30% off a Framer Pro annual plan. That's framer.com/built. Rules and restrictions may apply. AI isn't just opening new business opportunities, it's changing the way businesses get work done. The questions they ask, the decisions they make, the routine tasks they can hand off. That's the idea behind NetSuite Next, the next generation of NetSuite with AI woven into the tools your business already relies on.

• 55:51Guy Raz?

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• 56:36Guy Raz?

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• 58:02Guy Raz?

  Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2017, and Erenan has just turned down a $25 million offer to buy Wondery, the company he started less than two years earlier. And instead, he's betting on the success of the new podcast that he's about to launch with the LA Times. So you were taking a risk. I mean, even if Dirty John was a success, it wasn't necessarily going to make tons of money.

• 58:30Speaker 01

  Not only that, but also, I'm sure you heard this before, that it's very often that happens that a company that makes you an offer, you turn it down.

• 58:38Guy Raz?

  That's it.

• 58:39Speaker 01

  You're done with that company. It's not that they're going to come next year. Sometimes they do. I mean, there are cases where a company keeps chasing the valuation up.

• 58:47Guy Raz?

  Right.

• 58:48Speaker 01

  But more often than not, you're done with that company because they're going to feel bad that you turned them down.

• 58:52Guy Raz?

  And it kind of poisons the relationship.

• 58:54Speaker 01

  In some respects.

• 58:56Guy Raz?

  And this was a company that you needed a relationship with?

• 58:59Speaker 01

  I did. And then, look, we're all good. We still remain in a relationship. But yes, I was very mindful, okay, that's not going to be ultimately the buyer of my company. But I, so, you know, we went and launched Dirty John in October of 2017, and it really hit the psyche. It was number one on Apple Podcasts for 30 days straight. It made something like 2 million listeners within the first month per episode, way more than we had predicted, and so ads on. But you know, Guy, the one thing that made me proudest of was that we kept hearing all

• 59:41Speaker 01

  these stories about mothers talking to daughters and vice versa about listening to Dirty John and saying, you should listen to Dirty John to find out about toxic relationships and red flags. And that's where we finally hit what Wondery was meant to be. We came up with a name for it, what we called emotionally immersive storytelling. True stories with a perspective that allowed listeners to immerse themselves in the shoes of all the people in the story and to understand what was happening to them. And I think that was, from that moment on, the defining trait of every Wondery show.

• 1:00:24Guy Raz?

  So, once that show really kind of hit.

• 1:00:30Guy Raz?

  I have to imagine you're coming back now when you're going to investors. Because you're still, at this point, working on the initial seed money and the money you're putting in. And do you, just ballpark, do you know how much you were in, like, from your own cash?

• 1:00:47Speaker 01

  Seven figures. I can't tell you exactly how much, but it was seven figures.

• 1:00:50Guy Raz?

  And that was, I mean, you clearly were, you know, had made good money as an executive at Fox. Was that scary to you? Or were you like, you know what, I can put in seven figures, I've got it in the bank?

• 1:01:01Speaker 01

  Oh, God, it was scary, yes. Because I was, you know, I had two kids, and my husband, ex at the time, had gone back to work, but he was still building his medical practice, so...

• 1:01:12Guy Raz?

  This is your retirement money.

• 1:01:13Speaker 01

  That's right, yes. And again, there was a non-zero chance that this could go nowhere, that there would be no buyer, or there will be no wonder in the future, that nobody would see the value in it.

• 1:01:25Guy Raz?

  So you, in 2018, with the momentum of Dirty John, go back to the, go back to investors. Did you go back to any of the investors that you talked to previously?

• 1:01:38Speaker 01

  Well, actually, one of them called me back. In October of 17, I got a call from Alan Patrick of...

• 1:01:46Guy Raz?

  Of Greycroft.

• 1:01:47Speaker 01

  Of Greycroft. And many people consider him the father of modern venture capital. He called me up for a meeting in New York. And he eventually became the lead investor alongside with Larry Hippo and Advancing, Sherry Redstone's company. But that took several months.

• 1:02:06Guy Raz?

  Was it, but it was easier to attract the money at that point?

• 1:02:10Speaker 01

  It was easier, because at the same time, he had listened to Dirty John every episode, so he understood emotionally. And also, we felt that we couldn't rely on only mini-series.

• 1:02:21Guy Raz?

  Right.

• 1:02:22Speaker 01

  So at the time, we came up with this concept of the always-on shows that also came from the emotionally immersive storytelling. The first one was American History Tellers. It was a show that allowed people to put themselves in historical moments, and so that was the first show. And then we had also lined up Business Wars, what's the second show that we created in that. And that allowed us to essentially have wholly on wonder shows that, in the future, would allow us to have a library that... That made Wondery Plus possible.

• 1:02:55Guy Raz?

  And Wondery Plus is your paid subscription service.

• 1:02:59Speaker 01

  That's right.

• 1:03:00Guy Raz?

  So in that year, 2018, really, it's this is the because you start in January 2016, tough year. 2017, start to get some momentum and then Dirty John and then 2018. Now you're working on, you know, other programs, you have Dr. Death, which is going to be another huge success and Gladiator. But I guess in that year, 2018, you actually started to talk to a serious acquirer, just two years in, about buying you out.

• 1:03:34Speaker 01

  This, they called us and again, this was a call that I wasn't expecting. It was maybe nine months after, or maybe eight months after we had, we closed our CSA run, which had valued the company at $22 million, so less than.

• 1:03:49Guy Raz?

  Is the Greycroft investment.

• 1:03:51Speaker 01

  That's right.

• 1:03:51Guy Raz?

  That they led, that valued the company at 22 million.

• 1:03:55Speaker 01

  $22 million, so less than than what I expected a year before. And this company says, Hernan, we've been following, and they hadn't bought any companies in the podcast space.

• 1:04:04Guy Raz?

  Can you tell us which company it was?

• 1:04:06Speaker 01

  I'd rather not, but.

• 1:04:08Guy Raz?

  Can you give us a hint, like was it, what kind of company?

• 1:04:10Speaker 01

  It's a tech company that a lot of people use every day.

• 1:04:14Guy Raz?

  And it's a, what kind of tech?

• 1:04:17Speaker 01

  Content tech, it's essentially, or media, yes, it's both media and tech.

• 1:04:21Guy Raz?

  And at that point, they had not purchased any podcast companies.

• 1:04:24Speaker 01

  No.

• 1:04:25Guy Raz?

  So they contacted you.

• 1:04:25Speaker 01

  They contacted me and said, Hernan, we actually were fans of what you've been doing and we've been following and we would like to make an offer for your company. And so first I told them, look, thank you, I'm very flattered, but quite honestly, we just literally raised money, as you know, from VCs and VCs are not in the business of investing so that somebody will buy the company in nine months. It's just, so in order to make this work for their perspective, you would have to value the company at something that just would make sense for you.

• 1:05:01Guy Raz?

  Yeah.

• 1:05:02Speaker 01

  And they said, well, can we try? So we exchanged an NDA, some basic information. We, they came with an offer that was.

• 1:05:14Speaker 01

  Four times when we had raised that.

• 1:05:16Guy Raz?

  It's over 80 million bucks.

• 1:05:18Speaker 01

  Again, hard to say no from the perspective of, okay, if this was my business, maybe it would have been tempting. But it wasn't my business anymore. I had great investors and a great team. And they were just scratching the surface of what we could do. And we knew that, again, Dr. Death had come out, Gladiaro had come out, and we knew that the following year we would do that times two or maybe more. But we, yeah, we turned them down.

• 1:05:50Guy Raz?

  I mean, this was a, I mean, 80 million. You would have probably walked away with maybe half of that, maybe a little bit more. Your investors would have been happy. They would have gotten a pretty decent return. That would have been an amazing outcome. But at this point, you felt like the momentum was on your side, that you could confidently say no.

• 1:06:09Speaker 01

  I had. So for that, for all those reasons, it was a scary thing to do. But I was having a lot of fun. And I always thought that there was a chance that we could even take the company public one day. So there were a number of options. But regardless, I felt that I had taken investment from some of the best and brightest investors in the venture capital world. And it would have been disappointing to them to essentially sell that quickly, and even if it was four times what they invested at.

• 1:06:44Guy Raz?

  How were you, what about your pipeline of like content creators? How did you develop a pipeline, especially as there was more money coming into the industry with other content companies who were now starting to write checks, significant checks? How were you able to compete when, you know, you didn't have an endless pool of money to do that?

• 1:07:04Speaker 01

  I think it really helped us that we were in L.A. and we're kind of alone in L.A. And a lot of people had listened to Dirty John. And the other thing that helped us was The fact that Dirty John, even though it was owned by the LA Times, very quickly got optioned to television. It was turned into a very successful television show for Bravo. And it's, um, it really put us in a position where, because we were in Hollywood, we could give creators the potential of having their show be turned into a television show because we were starting to show that there was a track record. But every time that a pitch came to us,

• 1:07:47Speaker 01

  we thought, could this be turned into a high stakes, character-driven, interesting, human story that would resonate with showrunners? Because it would resonate with viewers. For example, if somebody came to us and said, um, I have this open case and nobody has been to solve it. And I want to create a show of me trying to solve it. We would always say, no, thank you. Because one of the most tried and true things in Hollywood is that you need to have a satisfying ending to a story. And when you don't have a clear ending, people will not recommend the show to other people.

• 1:08:31Speaker 01

  It's just as simple as that.

• 1:08:34Guy Raz?

  In 2019, Gimlet gets acquired by Spotify. It was really one of the first major acquisitions of a podcast company. It was big, it was over $200 million. That must have, you must have thought that was a good sign for Wondery.

• 1:08:51Speaker 01

  I thought so, yes.

• 1:08:52Guy Raz?

  I mean, you knew that this thing that you were starting, I mean, and I think you were clear about it. You want it, your goal was to eventually get it, have it be acquired by a larger player in the industry or in media.

• 1:09:04Speaker 01

  When, when you take an investment from venture capital, that's something that you have to accept, that venture capital will want an exit. And the only two ways of exiting a company are either selling to another company or going public. And I thought the more likely outcome was to be acquired. But there was a chance, if the company had gotten a lot bigger, to go public as well.

• 1:09:29Guy Raz?

  Aaron, were you ever concerned already in 2019? You know, Gimlet gets acquired and now the advertising is starting to really grow. And it was clear that podcast advertising was going to grow. At the same time, more podcasts were coming online, so the competition was going to also grow. But in the back of your mind, did you ever think, you know, we cannot depend on advertising revenue alone because look what happened to newspapers? And, you know, ads, not just print ads, but online ads were declining. And you could see that that could happen in podcasting. There was going to be a race to the bottom to charge the least amount of money. Were you thinking about that?

• 1:10:10Guy Raz?

  Were you like, we got to figure something out here to develop new revenue streams?

• 1:10:16Speaker 01

  Yes. And remember, that's what attracted me to cable television at the very beginning, the fact that they had dual revenue streams. And so when we raised our series A, I presented to our investors a five-year plan, not year by year, but essentially told them, look, in 2022, I want to be here and I want us to have so many listeners and so much revenue. And of that revenue, so much needs to come from our own original content and so much needs to come from international, so much needs to come from sources other than advertising. We were putting all in a bucket. And yes, revenue diversification was a key goal of ours from early on.

• 1:11:01Guy Raz?

  All right. 2020, Gimlet had sold the year before. It's looking very good for the future of Wondery. And you find out that you have been indicted by the federal government alleging that when you were at Fox, your previous career, that you were involved in a bribery scheme to acquire the rights to soccer, TV soccer games for Fox Networks.

• 1:11:32Guy Raz?

  First of all, were you aware that you were being investigated?

• 1:11:35Speaker 01

  I was shocked, 1,000% shocked, as was my lawyer. This actually happened in April of 2020. So we had just gone to work from home, everybody in the team. I had two third graders doing school from home and we were being hit with advertiser cancellations and listener dropping and we felt all this great thing that we had built now was

• 1:11:59Guy Raz?

  was crumbling.

• 1:12:00Speaker 01

  was under question. But I first, let me take you back to what happened.

• 1:12:06Guy Raz?

  Yeah.

• 1:12:07Speaker 01

  I remember when I was at Fox, this is 10 years before. We, our business had hundreds of entities all over the world. Some of them were wholly owned, some were joint ventures. One of them, a joint venture in South America, was being run by a partner who unbeknownst to us had been bribing soccer officials in South America and taking tens of millions of dollars for himself for years before we bought into the joint venture. And when he got caught in 2015, he decided to become a witness for the government and he falsely implicated a number of people, including my colleague and myself, as being

• 1:12:52Speaker 01

  aware of what he was doing and not stopping him, which for US law is the same as doing something.

• 1:13:00Guy Raz?

  But your point was that, yes, I hear you, that there was clearly, the evidence shows that bribery happened, but me as a Fox executive, I was not aware of it.

• 1:13:12Speaker 01

  That's right. So this guy said that I knew what he was doing and I did not stop him, and that's a lie.

• 1:13:19Guy Raz?

  You pleaded not guilty and you had to post bail because you faced prison time, which I'm sure was very stressful. The thing is, you decided that you would not leave, stepped down from Wondery, that you would continue to run it in light of this indictment.

• 1:13:39Guy Raz?

  Did you have investors who were like, hey, maybe you should step aside for a while and just deal with this?

• 1:13:44Speaker 01

  Not a single one said that. We had, if anything, the one thing that got me through, Guy, was an amazing group of friends and my family, my now husband at the time we were just starting dating, my employees, every single person supporting me because they knew my character. They knew that what this guy was saying was a lie and they were just determined to help me get through.

• 1:14:13Guy Raz?

  So how are you, I mean, obviously, the case was not going to go to trial for a while, but you are now in the process of dealing with just the psychological effects of having to prepare for trial and lawyers. And from what I gather, I think Fox, now at this point owned by Disney, covered your legal costs. But you still had to sit for, you were going to have to sit for depositions, you were going to have to talk to lawyers, you were going to have to, a considerable amount of your day-to-day time, which already was probably full, spending it on trying to make Wondery bigger, you'd have to carve out maybe up to a quarter of your time, maybe a third of your time, and devote it to this trial and this lawsuit.

• 1:14:52Speaker 01

  It wasn't as much ever because the process works in slow ways and there are times, obviously, preparing for trial, but that was not for two years later, that, yes, I was spending a lot more time. I eventually had to wait three years to get my case heard before a jury.

• 1:15:10Guy Raz?

  Meantime, you were also, you know, you were the face of Wondery, but everybody around you, you say, said, don't, you know, stay, do this. You were committed to doing this. You were committed to growing the company. But I wonder at that time whether you started to think that maybe this would be the year to sell Wondery.

• 1:15:31Speaker 01

  So around that time in the summer, we were approached by an investment bank that had been working with the same that was renewed interest in Wondery. Stitcher had just been bought by Sirius XM and Serial Productions by the New York Times.

• 1:15:48Guy Raz?

  The Ringer was bought by Spotify.

• 1:15:51Speaker 01

  There were a number of acquisitions and, you know, but there were multiple people that were still interested in the space. And we had hundreds of shareholders, including every single employee in Wondery was a stakeholder.

• 1:16:06Guy Raz?

  Yeah.

• 1:16:06Speaker 01

  And we had, you know, at the time was the minority owner with my family of Wondery. I had sniffing a steak, but more people than me on the majority of the company. And there were lots of conversations in the board and some people wanted us to continue to build. But ultimately, we came to the conclusion that taking the deal with Amazon was in the best interest of the company.

• 1:16:32Guy Raz?

  So you got offered, it's not reported the exact amount, but anywhere from between $200 million to $400 million by Amazon to acquire Wondery. And pretty great, pretty great result for, you know, for you and for the shareholders and stakeholders.

• 1:16:53Speaker 01

  Yes, yes. And most importantly for me as a founder would allow me to see Wondery become the best possible version of what it could become. I knew that Amazon had the resources and the where we live and the motivation just to turn it into something a lot bigger than I could probably do on my own. And so I'm very happy that we ended up doing that deal.

• 1:17:20Guy Raz?

  So, okay, so you're, and you leave Wondery in 2021 after the acquisition goes through. But it was bittersweet because you now had to deal with this lawsuit, this indictment. And in March of 2023, you were found guilty of these allegations by the federal government that you were involved in this scandal. The case relied very heavily on testimony from this one man who had already pleaded guilty in 2015, Alejandro Borzaco.

• 1:17:58Guy Raz?

  You knew that you were going to appeal. You appealed immediately, but still it's like, OK, here we go again. And in that time between the appeal and then what eventually happened, which we'll talk about in a moment, how did you just get through the day? I mean, you faced 20 years in prison at that point. I mean, how did you react to that possibility?

• 1:18:20Speaker 01

  It's really something that you just, you need to find in yourself. And I talked to a lot of people who went through adversity that they did not expect. I read this book called Ikigai. It's essentially a Japanese philosophy about how to live a longer and more fruitful life. And that's the other thing that helped me get through, reading lots of meditation, trying to stay with my routine as much as I could, trying to spend a lot of time with the kids, spend more time virtually with my parents who came to visit me. Yeah, all of that.

• 1:19:01Guy Raz?

  So September of 2023, a federal judge threw throughout the conviction, basically determining there was not enough evidence to convict you of wire fraud and bribery. That must have been an unbelievable relief.

• 1:19:19Speaker 01

  I can't describe it. I mean, getting that call on that Friday night, on Friday before going into a long weekend from my lawyers, they themselves could not find the words because we were always confident that this was going to be the outcome ultimately. We just didn't think that it was going to happen at this particular stage necessarily. But we were all confident that this was going to ultimately be the outcome. But yes, I was, I was obviously very happy.

• 1:19:46Guy Raz?

  I mean, there could still be the possibility of an appeal from, from federal prosecutors, right? I mean, there's still a possibility.

• 1:19:55Speaker 01

  There is a possibility, yes. But I am living my life as if this chapter is over because I know that the truth is in my side and I'm, having seen the strength. And the weaknesses of our legal system. And actually, there's research. Even despite the presumption of innocence that we all taught in school, people that go to serve on a jury believe that indicted equals guilty. And deep down, I was one of them. And I'm embarrassed to admit it, but I was one of them. And it took me to go through this grueling experience to realize that not only indicted doesn't equal guilty, but sometimes guilty doesn't equal guilty. You work in podcasts, I worked in podcasts.

• 1:20:40Speaker 01

  I'm sure you listen to many stories of wrongful convictions. And you just, you don't think that it could happen to you until it does.

• 1:20:48Guy Raz?

  And I'm curious to get your take on podcasting, the industry in general. Because, you know, there's still money that's being made in podcasting, no question about it, but it's changed a lot since 2016, since 2012 when I started. There are millions and millions of podcasts now in English alone. And it's harder for new shows to scale. Advertising is more competitive. There have been all kinds of articles about, and there have been budgets cut and layoffs at places like Spotify. I mean, they basically shut down Gimlet. There have been layoffs at NPR and Vox Media and Sony.

• 1:21:27Guy Raz?

  I mean, it's, I wonder if you think this is just part of the cycle of any business? Or do you think this bodes badly for the future of podcasting?

• 1:21:39Speaker 01

  I think, look, I don't know much about specifics because I don't get the data that I used to get when I was in the industry. But yes, there might be pockets that are less financially viable than they were before. But as a whole, the industry continues to grow. And in fact, there are lots of companies that are pushing to add more video to podcasts. And there's, I think we're still in the early innings of podcasts in different languages. So I think the industry has lots of room for growth, absolutely.

• 1:22:14Guy Raz?

  Do you feel like your timing was fortuitous?

• 1:22:17Speaker 01

  I definitely remember at the beginning I talked about being too early or too late. And maybe I was a year too early. But yes, my timing was really, really fortuitous in that if I tried to launch Wondery, the exact same version of Wondery in 2018, I don't know that it would have gotten to where it did.

• 1:22:41Guy Raz?

  Because by that point, it was already too competitive?

• 1:22:44Speaker 01

  It was already a lot more competitive.

• 1:22:47Guy Raz?

  So, I mean, here you are, this guy who came from Argentina with Broken English to the US when he was 27 to try and make a life, you know, and rose up the ranks at Fox. And here you are, you know, 25 years later, wealthy and having created a pretty significant business that has had a cultural impact on American media. And so when you kind of reflect on, on your story, Ernan, on where you got to, where you are now, how much of, of where you are do you think has to do with your, your skill and your work ethic? And how much do you think has to do with getting lucky?

• 1:23:29Speaker 01

  I think that over my, my life, I've probably been at the 0.1% of lucky and at the 0.1% of unlucky at different points in my life. And sometimes you don't know when bad luck can become good luck later on, but you can control that, no matter how much luck you have or don't have in your life. Hard work is essential. Yes, there's always some degree of luck in every success story. But people often don't tell you about the degrees of bad luck that happen in, in success story.

• 1:24:12Speaker 01

  And again, you can only control what you do and how you respond to events around you.

• 1:24:20Guy Raz?

  That's Hernan Lopez, founder of Wondery. Since leaving the company in 2021, he's co-founded another business called Danvis, which makes digital displays for showcasing NFTs and other kinds of digital art. Hernan has also launched a nonprofit that helps young professionals from marginalized communities get ahead in their careers, which, by the way, often includes accent coaching. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. This episode was produced by Chris Messini with music composed by Ramtin Arablouei. It was edited by Neva Grant with research help from Alex Cheng.

• 1:25:05Guy Raz?

  Our audio engineers were Gilly Moon and Maggie Luthar. Our production staff also includes Casey Herman, Carla Estevez, J.C. Howard, John Isabella, Catherine Seifer, Kerry Thompson, Malia Agudelo, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.