Managing Business Model Changes

What do you do when the business model of your chosen career changes radically? How can you adapt to changing conditions? Sam Ro is a veteran markets journalist and CFA. After decades of working for Forbes, Yahoo Finance, Business Insider, and Axios, he launched his own Substack, TKER. Each week, “At the Money” discusses an important topic in money management. From portfolio construction to taxes and cutting down on fees, join Barry Ritholtz to learn the best ways to put your money to work. See omnystudio.com/listener https://omnystudio.com/listener for privacy information.

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

• 0:00Speaker 00

  At KKR, we've spent 50 years understanding what matters to our clients and companies. From pioneering private equity to investing across credit, real assets, insurance and sports, KKR has built the experience to navigate complexity, the judgment to recognize opportunity, and the conviction to create lasting value. Because when people and institutions are counting on us, understanding what matters isn't just important, it's everything. KKR, understanding what matters. Visit kkr.com/whatmatters.

• 0:31Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 1:13Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates, quote, "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute brought to you by ChatGPT. Get started at ChatGPT.com.

• 1:54Speaker 02

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• 2:29Speaker 03

  Bloomberg Audio Studios. Podcasts, radio, news.

• 2:45Barry Ritholtz?

  What happens when the best business decision you can make is to change businesses? What's the best way to redeploy your skill sets in the modern age of artificial intelligence and changing business models? I'm Barry Ritholtz, and on today's edition of At the Money, we're going to discuss how to manage your way through the challenges of technology-driven change. To help us unpack all of this and what it means for your career, let's bring in veteran markets journalist and CFA, Sam Rowe. Sam is known for his clear, data-driven insights into markets and the economy. He spent two decades working in the trenches

• 3:29Barry Ritholtz?

  for shops such as Forbes, Yahoo Finance, Business Insider, and Axios. He launched his own Substack three years ago, Ticker, T-K-E-R, which earned him the Society of Business and Editor and Writers Award for Best in Business in 2022. So, let's start with your background. You earn a Certified Financial Analyst.

• 3:54Barry Ritholtz?

  But you became a financial journalist. Explain that initial career choice.

• 3:59Speaker 05

  Yeah, well, the initial plan actually was to figure out a way to get into Wall Street. You know, if we go even further back, I was working as a contractor for a law firm that, for whatever reason, got me exposure to equity research for the first time. And this is the first time I started to realize that how asset valuation worked. And it's not just math and spreadsheets and, you know, a hard science, you know, theoretical exercise. There's a lot of soft sciences involved in here because you're dealing with human behavior. So I was interested in getting into equity research.

• 4:39Speaker 05

  And my first job, being able to write about stocks or markets, was at Forbes in their investment newsletters division.

• 4:48Barry Ritholtz?

  So a traditional media outlet, but a sort of non-traditional position. That's kind of been your career history. So you go from Forbes newsletters, Yahoo Finance, Business Insider, Axios. These are all post 20th century sort of technology-based news organizations.

• 5:10Speaker 05

  Sure. Yeah, yeah. I mean, even Forbes, when I was there, I was there from 2006 to 2010, was by far number one in terms of news websites. They had tons and tons and tons of traffic going through their website because they were one of the first news outlets to really establish themselves in the late 90s and early 2000s. And then, of course, the financial crisis comes and, you know, business media did not do very well during that time. I eventually get laid off in 2010. And I'm in between jobs a little bit. And then I end up at Business Insider where the business model is just completely different.

• 5:50Speaker 05

  You know, my last day at Forbes, I actually had a talk with my boss's boss in my office. That's what the state of things were back then, right? That I could actually have an office at a print magazine in a building in Greenwich Village.

• 6:06Barry Ritholtz?

  Seems super inefficient.

• 6:08Speaker 05

  Well, I didn't realize how inefficient that was until I ended up at Business Insider, where on my first day, I'm on a desk that's probably about three feet wide in a newsroom, where we're basically just sitting there shoulder to shoulder with every other editor and journalist, including, you know, the editor in chief and the CEO of the company. And the productivity was insane. So, yeah, like, in the snap of a finger, I realized, you know, there's a reason why we had layoffs at my previous employer.

• 6:41Barry Ritholtz?

  So that took place in 2010, but really, we've seen technology really hurting traditional media's business model since the 1990s. So Craigslist really did a job on the classified advertising business, which was a big driver. eBay was another thing that took sales away from the traditional ad model. Now it's things like Facebook Marketplace, Zillow for real estate, Bring a Trailer for Automobiles. Technology has been taking big chunks of the revenue streams from traditional media. It's now three-plus decades of this.

• 7:25Barry Ritholtz?

  When did you first start to realize, hey, this entire underlying business model is under assault?

• 7:33Speaker 05

  I think it was probably late in my Business Insider days and early in my Yahoo Finance days, where we started to really begin to understand how much digital news sites were beholden to the traffic coming from places like Google Search and social media platforms like Facebook. But then, in terms of like the revenue perspective with advertising and all of this stuff... Um, the you quickly saw that the economics of this was was falling apart. And I think that the advertisers were largely realizing that the ROI of of having ads on on some of these sites, you know, weren't as competitive as what they're doing now,

• 8:14Speaker 05

  which is having an influencer on TikTok, you know, hocking products.

• 8:19Barry Ritholtz?

  So so we're going to work our way up to social media. I want to track your career. So you you start Business Insider in the 2011. Yahoo Finance is when?

• 8:31Speaker 05

  2016.

• 8:32Barry Ritholtz?

  So five years later, and then Axios?

• 8:36Speaker 05

  2021 for a very brief period.

• 8:38Barry Ritholtz?

  And then you launch your Substack back in 2022. When Substack was still kind of young, we hadn't quite hit, you know, peak Substack yet.

• 8:49Speaker 05

  Sure.

• 8:49Barry Ritholtz?

  What what was the motivation to say, you know what, I have to take control of this and do it on my own?

• 8:56Speaker 05

  I think, you know, being in management at Yahoo Finance and getting a little bit of exposure to it at Business Insider, for me, I think it was as simple as it was two. There was two parts to this. One, if you can keep your costs low, then I think you can have a media operation. And related to costs, if you can be, if you have an audience and if you are sort of very deliberate about how who your audience is and how big that audience can get, then you can have the revenue to cover that cost and you can have a nice, small business like like what I'm doing now.

• 9:33Barry Ritholtz?

  So Substack really inverted the traditional media model back in when you have an office and a salary. They're the ones who are who are building subscriptions, running ads, doing the business side of it. Your job in a traditional media business is to just create content. The inversion is writers now earn money based on their subscriptions, which are driven in part by their content, but also their marketing savvy, their branding, their reputations. Is this? New content model, a modern meritocracy?

• 10:12Speaker 05

  I think increasingly, I'm not sure if I would characterize it that way. You know, I think about, you know, I spend a lot of time on TikTok and Twitch and watch, you know, all the various streamers that have found career success. And there are some people who get massive and there are some people who have very medium sized, you know, moderate sized audiences.

• 10:36Speaker 05

  The analogy that I've been using lately, when it comes to how people or how media has been working, is the difference between publicly traded fast food companies and your favorite restaurant that's run by mom and pop around the corner, right? It's possible to have a really great restaurant with just one outlet, right? I think if you ask most people, if you ask them what their favorite restaurant is, it's a privately owned family business somewhere because the red sauce will never be replicated by Olive Garden or whatever. That doesn't mean, you know, Olive Garden and McDonald's and any of this stuff is bad, but it's just the business strategy, the reach, the audience that they're going for is going to be very different.

• 11:18Speaker 05

  And so I think that there's probably a world where, you know, these big mainstream media outlets and the independent journalists can coexist. I think it only works because the frictions and the costs and the barriers to entry to becoming an independent writer has come down significantly.

• 11:40Barry Ritholtz?

  So let me ask you a sort of abstract question about, about Google search as a source for new readers or new blog followers or whatever. Cory Doctorow uses the phrase platform crapification. And we've certainly seen that with Google. I find myself using Google far much less. The whole genius of PageRank seems to have gone away. I don't want their AI answer. I have perplexity on my phone. I don't need them. If I want an AI answer, I know exactly how to get it. What I want is show me the

• 12:19Barry Ritholtz?

  Top 30, 50, 100 sites that have this phrase or this topic. And I, I just don't get that anymore. Just festooned with so much garbage. So the question I want to ask you is, has the slow, I guess it's too early to call the death of Google, but has the crapification of Google harmed writers who are looking for an audience? Or are people no longer relying on it and word of mouth is helping people looking for?

• 12:50Speaker 05

  Yeah, I would actually say it's probably helped.

• 12:52Barry Ritholtz?

  Really?

• 12:53Speaker 05

  Um, I think it's made, it's, it's hurt the large media companies significantly. I think the Wall Street Journal had an article, fabulous article about this in terms of how much search traffic, um, digital media sites were getting from, from Google. And it's all shrink, it has been shrinking.

• 13:08Barry Ritholtz?

  It's collapsed, right?

• 13:09Speaker 05

  It's collapsed. Yeah. It's a nightmare. Um, but that also means if people are spending less time being drawn to these, um, mega properties, well, where are they going for their news and their information? And maybe they're, you know, gravitating toward, you know, something like a newsletter that they signed up because, you know, one of their friends shared something and they saw something good here.

• 13:29Barry Ritholtz?

  So, so Google SEO is not a job anyone should be thinking about that. That was a real job, certainly since the nineties and 2000s.

• 13:40Speaker 05

  Yeah.

• 13:41Barry Ritholtz?

  Hey, if you can optimize for Google search, here's a fire hose of traffic. Just hope they never change their algorithm.

• 13:48Speaker 05

  Yeah. I mean, I think, I think passively I try to be conscious of things that help improve the SEO of anything I publish, but I'm not going to lose sleep over it because, you know, I might get a couple more clicks.

• 14:00Barry Ritholtz?

  It's so diminished today from, from what it once was. So what's been the most surprising part of this transition to, you know, hanging out your own newsletter? What, what's been the most difficult part?

• 14:12Speaker 05

  The most difficult part, you know, is very easy. All of the other resources you get from working at a large company, you realize you took all that stuff for granted. Having access to really great healthcare for a very cheap price. That's number one. Two, when you have tech issues, you're not on the phone. You know, when you're employed by someone, you're not the one on the phone with Verizon.

• 14:38Barry Ritholtz?

  Someone else.

• 14:39Speaker 05

  Someone else is taking care of that.

• 14:40Barry Ritholtz?

  And you're here today because you're Verizon modem.

• 14:42Speaker 05

  Yeah, that's a whole other nightmare. But, but yeah, all that stuff like, you know, the AC doesn't work in my apartment. You know, who's paying for the snacks and all this kind of stuff? And then, you know, there are other things that are, you know, intangible value that I really do miss about working at larger media companies, which is being surrounded by people who are passionate about what they're doing. They're curious. You can bounce ideas off and have something, you know, crushed or really developed, you know, in a room with people. So I think, you know, it's a trade off though. The other thing being that as an independent writer, I'm not in nearly as many meetings as I used to.

• 15:24Barry Ritholtz?

  You're not wasting as much time. So, so final question, someone thinking about a career change, thinking about hanging their own chingle, what's the most important lesson you can impart to those people?

• 15:35Speaker 05

  You just have to go out and give it a shot. It doesn't cost anything to start a website or a blog on any of these newsletters, especially if you start off free. And, you know, if you might actually find you have a passion for writing. Some people think that they want to be a writer. They gave it a shot. They find out that they don't want to be a writer.

• 15:54Barry Ritholtz?

  It's a lonely grind. It can be at times.

• 15:56Speaker 05

  It can be very lonely. And then some people find that it's therapeutic or it's a way to keep themselves organized. You know, I've actually talked to a couple of financial advisors who have started newsletters for no other reason than to help them keep themselves organized and have found an audience for this because what they're doing for themselves is actually benefiting someone else.

• 16:14Barry Ritholtz?

  Fascinating stuff.

• 16:15Speaker 05

  I think it's just worth giving it a shot.

• 16:17Barry Ritholtz?

  So to wrap up, if you're thinking about changing careers, you should be paying attention to technology, what it's doing to your field's revenue and profit models. Understand how technology is changing the way business is being done. It's usually better to jump than to be pushed. I'm Barry Ritholtz. This is Bloomberg's At the Money.

• 16:48Speaker 00

  At KKR, we've spent 50 years understanding what matters to our clients and companies. From pioneering private equity to investing across credit, real assets, insurance and sports, KKR has built the experience to navigate complexity, the judgment to recognize opportunity, and the conviction to create lasting value. Because when people and institutions are counting on us, understanding what matters isn't just important, it's everything. KKR, understanding what matters. Visit kkr.com/whatmatters.

• 17:20Speaker 01

  This is the Bloomberg Tech Minute brought to you by ChatGPT. I'm Carol Muster. Getting hired at SpaceX requires exceptional ability and may include having Elon Musk review a candidate's resume. So writes Bloomberg Business Week's Lauren Grush. She reports that the company culture is defined by Musk, and job candidates must understand that a commitment to SpaceX means adhering to this culture and exhibiting loyalty to Elon Musk. To get hired, candidates must demonstrate their achievements from past jobs, and hands-on experience matters more to recruiters than advanced degrees, with the company looking for people with raw, innate intelligence. A spokesperson for SpaceX didn't respond to a request for comment on its recruiting

• 18:02Speaker 01

  and hiring practices, but according to recruiters, advisors and those who've interviewed for jobs there, it's the space exploration dream that draws people to the company, and Musk invokes that dream regularly to remind workers why they're there. Prospective hires are told that the job will require stamina, including in job ads that candidates "must be willing to work extended hours and weekends as needed." One major perk for all that hard work? Employees' access to equity, either the right to buy shares or payment in the form of restricted stock units that vest over time. That's the Bloomberg Tech Minute, brought to you by ChatGPT. Get started at chatgpt.com.

• 18:43Speaker 06

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• 19:48Speaker 07

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