VICE: Suroosh Alvi (2017)

We're hard at work planning our upcoming live show, so we bring you this favorite from the last year: VICE. Suroosh Alvi was a recovering addict when he started a scrappy underground magazine in Montreal. It grew into a multi-billion dollar company that has shaken up the world of journalism. PLUS in our postscript "How You Built That," we check back with Kent Sheridan of Voila Coffee, a company aiming to make instant coffee with the quality of a four-dollar pour over. 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?

  Hey, it's Guy here. So we're still working hard prepping for a live episode coming up in a couple of weeks. In fact, we are looking forward to seeing some of you there in Seattle on September 14th for my conversation with Howard Schultz of Starbucks. But for now, we've got this one from our archives, one of our favorites. It's the story of Vice. Enjoy.

• 0:24Speaker 01

  I remember walking down the street completely freaked out with a friend of mine who also went to meetings. And I was scared because I didn't know what I was doing. And he said, what have you got to lose? He said, maybe it'll be like one magazine that you make. And you can go around and say, hey, I made this magazine. And then you can apply for a job and get a job somewhere. Or maybe it'll be huge.

• 0:50Guy Raz?

  From NPR, it's How I Built This, a show about innovators, entrepreneurs, idealists, and the stories behind the movements they've built.

• 1:04Guy Raz?

  I'm Guy Raz. And on today's show, how Sarouche Alvi took a small, alternative magazine in Montreal and built it into Vice Media, which is, and this is totally mind blowing, now valued at over $4 billion.

• 1:21Guy Raz?

  So I'm sitting here in the studio, and I'm looking at the website for Vice. And I'm clicking through, you know, it's kind of typical mashup of hard hitting news. And then you've got the sort of oddball feature. Like this one, this is, the story is, a psychologist analyzes the fights couples have in IKEA, which I think many of us can identify with. And then you just scroll down a little bit. There's this one, how majority Muslim countries are handling HIV infections. And of course, you can, you know, you can click on plenty of slick videos that take you all over the world, like this one. Cockfighting in the Canary Islands.

• 1:57Speaker 02

  Anna Belinda Dominguez is a SARA activist, an organization who fights for animal rights in the Canary Islands. I am meeting her because she has arranged to meet Jose Luis Martín, the president of the Canary Islands Cockfighting Federation.

• 2:10Guy Raz?

  Anyway, we know that flashy news websites can die almost as fast as they launch, but for some reason, Vice has stuck around. Its YouTube channel has over a billion views, and it's even won a couple of Peabody Awards, which is super prestigious. But the thing is, Vice's co-founder, Sarush Alvi, he didn't set out to create any of this. In fact, he barely made it out of his 20s alive.

• 2:36Speaker 01

  I was born in Toronto. My parents emigrated from Pakistan a couple of years before I was born.

• 2:43Guy Raz?

  Right.

• 2:44Speaker 01

  They are retired academics. My mom taught at McGill and my father at the University of Toronto, although my mom also taught at the University of Minnesota for a while. And so I ended up going to high school in the States. So I heard a lot of, you have to work twice as hard as white people to get anywhere in this world growing up.

• 3:02Guy Raz?

  And did that turn out to be true?

• 3:07Speaker 01

  Yeah.

• 3:07Guy Raz?

  Yeah.

• 3:08Speaker 01

  Yeah.

• 3:09Guy Raz?

  What did they want you to be?

• 3:13Speaker 01

  Well, the two fields that are most respected in Pakistan, at least when I was growing up, was medicine or engineering. So I think that, you know, in an ideal world, I would have been a doctor. With a BA, I'm the black sheep of the family. Everyone has multiple degrees.

• 3:32Guy Raz?

  So you went to college in Montreal, right?

• 3:33Speaker 01

  Yes.

• 3:34Guy Raz?

  Were you a good student?

• 3:35Speaker 01

  I was not a good student. I originally went into psychology. I got kicked out of that program. Ended up getting a degree in philosophy. It was a tough slog. I'd come from, you know, a small, private school in Minneapolis where I went to high school, and going to McGill was just a different vibe. There's a lot of distractions in Montreal.

• 3:56Guy Raz?

  And that's, I guess that's the place where you kind of hit a low point, right?

• 4:01Speaker 01

  Yeah, that's where I bottomed out.

• 4:06Speaker 01

  When I, you know, finished McGill, it was also with a full-blown heroin habit. And so I spent a couple of years afterwards, kind of looking for a geographic cure, bouncing around, jumping, you know, from city to city. Oh, the problem's not with me, it's here, the city, this environment. It's just too decadent and blah, blah, blah. So I ran around and no matter where I went, I kind of took it with me. Ended up in Eastern Europe and even there, in a remote part of Slovakia, was able to stay strung out for upwards of five years and ended up back in grad school at Toronto, studying psychology and dropped out. And that's when I really was like, you know, descending in the tailspin, hitting bottom. And when I ended up back in Montreal, it was to go to rehab.

• 4:51Guy Raz?

  How did you know it was time to go to rehab?

• 4:54Speaker 01

  I couldn't, I couldn't sustain it anymore. I couldn't keep the, the web of lies going.

• 5:01Guy Raz?

  Yeah.

• 5:02Speaker 01

  It was this kind of double life I'd been leading. You know, no one really knew that I was, you know, heroin addict.

• 5:10Guy Raz?

  So how did your, your friends and family react?

• 5:13Speaker 01

  Again, my parents are conservative Muslim immigrants, but progressive as well, you know, as far as Pakistani immigrants go. But they thought I had the occasional drink. They didn't know the extent of what was going on with me. And when they found out, I think my mom went into a bit of a depression. My brother wanted to kill me. My dad had a heart attack. I don't know if the, the heart attack was directly related, but I don't think it helped. It was bad. It was a really bad time. And so my mental state at the time was, was not good. I, I did go into a bit of a depression at that point. I went, I had to go to rehab twice. You know, the first time it didn't stick and, you know, like they found out that I was using again. And it's the only time in my life that my mom's ever hit me.

• 5:58Speaker 01

  And at that point, I remember that was my bottom. So it's like early 94, on a waiting list to get into a treatment center. No friends, no, I wasn't speaking much. I was kind of, you know, kicking dope in my parents' house on a waiting list to get into a treatment center. Like, life was not great at that point.

• 6:16Guy Raz?

  How long did it take you before you, you started to sort of feel like you were regaining control over your life?

• 6:23Speaker 01

  Well, after I came out of the treatment center, you know, I was so scared that I was gonna relapse. And it was just like, I was going to meetings, just going to, you know, NA meetings at the time. You know, they say you should go to 90 meetings in 90 days when you first stop drinking or doing drugs. And I was going like two meetings a day. I got my own little apartment in Montreal and was on welfare. And I just rode on my bike from meeting to meeting all day, every day. And it was during that time that I actually started thinking about what I wanted to do with the rest of my life. And I'd had this idea that I wanted to work for a magazine.

• 6:57Guy Raz?

  Hmm, and you wanted to write about like what, like music or pop culture or like what?

• 7:02Speaker 01

  I didn't even get that far. Something, I felt like I wanted to talk about those things, yes, music, culture. I felt like there was just a lot happening that wasn't being talked about when I picked up magazines.

• 7:16Guy Raz?

  Yeah.

• 7:17Speaker 01

  The depraved underground culture that I was obsessed with was not being covered properly in the alt weeklies.

• 7:23Guy Raz?

  So was it like a realistic possibility? Could you just go and work for a magazine or newspaper?

• 7:28Speaker 01

  No, I don't think so. I had no experience doing it. My only writing that I'd ever done was academic, you know, writing in university. And when I was going to these meetings in Montreal, someone came up to me and out of the blue, they started a conversation with me and they said, "Do you have a sponsor?" I said, "No." And they said, "Well, I'll be your sponsor."

• 7:47Guy Raz?

  This is some random dude who was...

• 7:49Speaker 01

  A random dude walked up to me.

• 7:51Guy Raz?

  After the Narcotics Anonymous meeting?

• 7:53Speaker 01

  He was in the meeting with me, the meeting ended, and he came up to me. He said, "What are you, what are you doing? Like, are you working?" I said, "No, I'm not working. I can't even get a job volunteering anywhere. I tried to volunteer at this place and they wouldn't, wouldn't let me." And out of the blue, he said, "Have you ever thought about writing?" He didn't know me. I was like, "Actually, yeah." And he's like, "Well, I know a place. I'll take you there tomorrow." So he took me to this place, these Haitians in Montreal who had a bilingual magazine going called Imager Culturelle, and it was becoming French-only, and they wanted to start an English magazine. And he vouched on my behalf.

• 8:30Guy Raz?

  He just basically like, "Oh, this is the guy you want. He's really good."

• 8:33Speaker 01

  Yeah.

• 8:34Guy Raz?

  And he barely knew you.

• 8:35Speaker 01

  He barely knew me. He'd worked there before. But he was like this heaven-sent angel who just was like put in my path. And it opens up a whole conversation about like, "Do I believe in God? Do I believe in a higher power? Do I believe in Allah?" All this kind of stuff.

• 8:51Guy Raz?

  Yeah.

• 8:51Speaker 01

  And for me, that whole story is like this proof-of-existence moment for me in my life. Something greater than me put me there in this place where this guy just walked up to me and chose me to talk to me and happened to know a place that was looking for a guy.

• 9:10Guy Raz?

  To start an English-language magazine in Montreal.

• 9:13Speaker 01

  Exactly.

• 9:19Guy Raz?

  So what was the magazine called and how did it start?

• 9:22Speaker 01

  So I went in for this meeting, and he vouched for me and said that he'd known me a long time, that I was going to work really hard. I didn't have a lot of experience, but that he thought I could do this thing. And they said, "Okay." And they gave me a desk, a fax machine, a phone, and a computer. And I started this process of, you know, making a magazine. And, all right, Voice of Montreal is the name that I came up with at the time.

• 9:46Guy Raz?

  Yeah.

• 9:46Speaker 01

  And I had no idea what I was doing. I just-- but I knew a few people around town and started this kind of recruitment process of finding writers to write in the magazine. And I remember walking down the street, completely freaked out, with a friend of mine, and I was scared because I didn't know what I was doing. And he said, "What have you got to lose?" He said, "Maybe it'll be, you know, like, one magazine that you make, and you can go around and say, 'Hey, I made this magazine,' and then you can apply for a job and get a job somewhere. Or maybe it'll be huge." And like, that conversation on the street, that was a huge moment for me because that gave me the kind of strength to continue on when I was like overwhelmed and could barely tie my shoes straight coming

• 10:30Speaker 01

  out of a treatment center. Like, that was a mess. And I owe him a lot because he didn't realize what he was doing at the time, but he gave me this kind of strength to keep marching forward.

• 10:42Guy Raz?

  So you get to the magazine. What kind of-- Publication was it?

• 10:46Speaker 01

  It was a 16-page newsprint magazine.

• 10:49Guy Raz?

  But you were like the, kind of the, really like, the poor, poor stepchild of the two big alt-weeklies in Montreal. Like, you guys were totally like a joke compared to those.

• 10:56Speaker 01

  We were the laughing stock.

• 10:57Guy Raz?

  Yeah.

• 10:58Speaker 01

  Because it was a shrinking English market.

• 11:00Guy Raz?

  Okay.

• 11:01Speaker 01

  So it's, you know, it's a bilingual city. So there were four alt-weeklies already, two French ones and two English ones. And then we came on the scene, and the English market is actually shrinking. There wasn't enough advertising to sustain those two, let alone the third one. It didn't make any economic sense. But I really believe that there was an audience there for what we were talking about.

• 11:25Guy Raz?

  So, so you guys were covering like, what, like, the sort of the alternative scene in Montreal, like, skaters and?

• 11:32Speaker 01

  Punk shows and hip-hop and, like, underground music.

• 11:36Guy Raz?

  Yeah.

• 11:37Speaker 01

  And I wrote this terrible editorial about the search for authenticity and the need for like, creating real content. But I stand by that editorial. Like, I hope to God nobody ever finds that and publishes it again because it, it was awful. But the spirit of what we do today is, was, was there.

• 11:56Guy Raz?

  So you are, so like, you are basically the editor-in-chief of this magazine, and you're in your early twenties, the voice of Montreal. And like, who did you, who are some of the people you brought in to help you start it and create it?

• 12:09Speaker 01

  You know, one of my friends from college, he connected me to a bunch of different artists, and also to different writers. And one of these writers was a guy named Gavin McInnes, and he was funny and had a comic book called Pervert. And so I asked him to become my assistant editor. And I think I asked him to be my comics editor, whatever that means. And so it was his job to find the different comic artists around town and put together a comics page.

• 12:34Guy Raz?

  And what about Shane Smith, who's now kind of like the public face of Vice, I guess? How did he, how did he get involved?

• 12:40Speaker 01

  So Shane and Gavin grew up together in Ottawa. And the first night we met, he was just like, he literally said, "You're my new best friend."

• 12:49Guy Raz?

  What happened?

• 12:50Speaker 01

  He was drunk and on acid as well. I should, I should qualify this.

• 12:54Guy Raz?

  Yes, right.

• 12:55Speaker 01

  He was in a bar called The Bif Tech. Gavin and I had been driving around the city all day, distributing the magazine that had just come out. And we'd finished our rounds and went to the bar to meet Shane, and he was in there. He'd been waiting for a couple hours for us. And by himself, somehow managed to procure some psychedelics and was drunk. And I was, of course, you know, sober and tired. And I walk in, there's a drunk man on psychedelics, who was like, "Oh, you're from Pakistan. You must love cricket." And then was like, pretending to like bowl, like balls at me and...

• 13:26Guy Raz?

  And you're like, "This guy wants to be our ad sales dude?"

• 13:29Speaker 01

  Yeah, exactly. But he had worked for Greenpeace before, and he could actually sell. You know, with Greenpeace, he raised a lot of money for them. And in Eastern Europe, he was involved with some activities where he was making lots of money.

• 13:43Guy Raz?

  Ah, I see.

• 13:44Speaker 01

  And so he knew how to make money.

• 13:45Guy Raz?

  Okay, some activities.

• 13:47Speaker 01

  Some activities. I'm gonna leave it at that. He was good at making money. And he could, you know, sell rattlesnake boots to a rattlesnake.

• 13:57Speaker 01

  And so then it was me, Gavin, and Shane, working in this office with the Haitians. And we were there for like, three, four months. And, but it wasn't working out, because we weren't getting paid the commissions on the ads that we were selling.

• 14:11Guy Raz?

  Yeah, like, how were you being paid at all?

• 14:13Speaker 01

  Well, we were on welfare.

• 14:14Guy Raz?

  Okay, I got you, fine.

• 14:16Speaker 01

  And so we talked to the Haitians and said, you know, "It's time for us to leave." And we came up with this thing where we said, "The Village Voice has a trademark on the word 'voice,' and they're suing us and forcing us to change our name."

• 14:30Guy Raz?

  Because you guys were the Voice of Montreal.

• 14:31Speaker 01

  Yes. We told the world that we were being sued by The Village Voice, and that's why we had to change the name to Vice.

• 14:37Guy Raz?

  So you basically made this thing up about The Village Voice to generate publicity?

• 14:42Speaker 01

  Yeah.

• 14:43Guy Raz?

  And it was a complete lie?

• 14:44Speaker 01

  It was a total lie.

• 14:45Guy Raz?

  Ah, I got you.

• 14:46Speaker 01

  And that's why we dropped the O in how we started Vice.

• 14:49Guy Raz?

  So you basically created a new magazine?

• 14:51Speaker 01

  We created a new magazine.

• 14:52Guy Raz?

  Because you didn't own The Voice of Montreal.

• 14:54Speaker 01

  Exactly.

• 14:55Guy Raz?

  So what'd you do at that point? Did you like, go to find a new office, or did you start working under your apartment, or...

• 15:00Speaker 01

  That's a good question. We got a new loft. Like not too far from the original office. I borrowed five grand from my parents. Gavin borrowed five grand from his parents and Shane got $5,000 worth of computers from his dad. His dad worked in IT or something. And so it was with that $10,000 Canadian that we started Vice.

• 15:24Guy Raz?

  Okay, so this is now like, I guess, the mid 90s and you guys have become Vice. What was a magazine like at that point? What did you cover?

• 15:34Speaker 01

  We really wanted to, again, it's such an overused word, Guy, but it's a good one. Authenticity, like, how do you create real content? And we hadn't been to journalism school.

• 15:48Guy Raz?

  Yeah.

• 15:49Speaker 01

  So the way to do that is to get as close to the source as possible. And if we were going to write an article about the prostitution community in Montreal, let's get the prostitutes to write that story. And let's go out with pimps as they drive around and interview them. And so we created this really raw magazine. There were a lot of typos, but it was alive. I think the words kind of jumped off the page and it was kind of shocking stuff.

• 16:14Guy Raz?

  Yeah.

• 16:15Speaker 01

  And we were so, you know, freedom of the press was such a big deal. We're so anti-censorship that even if you, you know, our view towards advertising, if you buy that page of advertising, you own that page. You can do whatever you want with it. And so we had these skateboard companies from Southern California that had porn stars in their ads, nude porn stars in the ads. So the magazine all of a sudden has these crazy articles with lots of nudity advertising, skateboard companies called Serial Killer Skateboards or whatever. So it was this whole weird little take on American culture that was coming from Montreal. So we were sending this magazine to San Francisco, Chicago, LA, New York, and the Americans were eating it up.

• 16:59Guy Raz?

  So were you guys making money, like, pretty soon after you launched? Or were you still, like, bootstrapping it and barely?

• 17:06Speaker 01

  We were bootstrapping it because we couldn't afford to have debt. We didn't, we couldn't get a loan. So we just printed copies based on how much we were selling and advertising. And it's what we call this kind of punk rock capitalism, just be really aggressive, be really ambitious, and you can't have debt. Those are the rules that we lived by until we... Took our investment for the first time.

• 17:28Guy Raz?

  And that was when?

• 17:29Speaker 01

  That was in 98, when we sold 25% of the company to a guy named Richard Solwinski.

• 17:36Guy Raz?

  So he was like a rich guy who just wanted to invest in the magazine? Because it seems like kind of a crazy investment at the time.

• 17:44Speaker 01

  So Shane and I had realized at that point that we needed some help if we wanted to grow the magazine. And we're like, who would invest in us? Like, maybe Larry Flynt would. But there was a guy in Montreal named Richard Solwinski, who had a software company called Discrete Logic that he'd sold to Autodesk for several hundred billion dollars. And he was starting to buy media properties. And we had been interviewed by the French Daily in Montreal called La Presse. And so we said in that interview in La Presse that he was interested in buying us. And he then read it.

• 18:19Speaker 01

  And then had his office contact us a few days later and said, he wants to meet you guys. Who are you guys? He has no idea who you are, but apparently he's interested in buying you guys. So we met him and did a deal very quickly to sell 25% of the company to him.

• 18:35Guy Raz?

  That must have been like a crazy amount of money for you guys at the time.

• 18:40Speaker 01

  Crazy.

• 18:41Guy Raz?

  Yeah.

• 18:42Speaker 01

  This could have only happened in Montreal. There was no due diligence that took place. It was literally one meeting with him at a restaurant that he loved. And so he bought it and moved it into the basement of his office. And he brought out a bottle of Jack Daniels and kind of forced Shane to drink a bunch of it. And then at the end of the meeting said, I want to buy a piece of your magazine. Come back to me in a week and tell me how much. And don't try and gouge me. And so we left his office and spent a week going like, how much do we value our company for?

• 19:13Guy Raz?

  How did you even figure that out?

• 19:15Speaker 01

  It was kind of arbitrary.

• 19:16Guy Raz?

  You just pulled it from the air?

• 19:17Speaker 01

  Yeah, we pulled it from the air and came up with this number. Somehow justified that it was a million bucks. And he read it. It was all on one piece of paper. It said the price of ice. He read it. He said, That's a lot of money. And then he signed it and they whisked us upstairs and they wrote us checks. And I think his advisers were like, this is such a bad idea. This shouldn't be happening. But again, no due diligence, no like accounting, nothing. And his office was actually walking distance from our office. And we went out, it was springtime in Montreal, and we literally did somersaults in the grass when we left.

• 19:50Guy Raz?

  You had $250,000 now.

• 19:52Speaker 01

  Yeah.

• 19:52Guy Raz?

  So with that money, you were able to scale the magazine?

• 19:57Speaker 01

  We were able to move to New York.

• 20:04Guy Raz?

  When we come back, the story of Vice's move to New York and its almost complete collapse. It's How I Built This from NPR. I'm Guy Raz. Stay with us.

• 20:39Guy Raz?

  It's How I Built This from NPR. I'm Guy Raz. So it's 1999. Gavin, Shane, and Sarush have a $250,000 check and a dream to become much, much bigger.

• 20:53Speaker 01

  We always had aspirations to talk about the world and other things as well. And we had started building up a stable of writers that was international. But we hit a ceiling. Becoming national in Canada wasn't good enough for us. We aspired for more. And we thought, OK, we have to go, if we want to become bigger, we need to go to either New York or London or LA.

• 21:16Guy Raz?

  And so what did your investor, Richard Zawinski, want you guys to do with the money?

• 21:21Speaker 01

  He had this vision. So he had Vice, and then he had a magazine called Shift, which was like a Spin Meets Wired kind of magazine for a slightly older crowd. And then he had another company called Halo 46, which was kind of a luxury goods, high-end brand. And he wanted all three of these brands to diversify and become multi-channel brands that was going to be tied into a big e-commerce platform. And he was going to take it all public.

• 21:47Speaker 01

  And so that's what we did with the money. We built a fashion division, a film division, a TV division, a music division. And you should have a brick and mortar presence for your fashion division.

• 22:00Guy Raz?

  So he had like this huge vision that you guys weren't even thinking about. Like you were thinking we're just a zine.

• 22:06Speaker 01

  Yeah, and he was kind of ahead of the curve. It was kind of like an Amazon kind of thing. And like, we came in and we actually executed his business plan.

• 22:15Guy Raz?

  Like you actually started a fashion label?

• 22:17Speaker 01

  Yeah, and we had four clothing stores.

• 22:20Guy Raz?

  Like you got designers to make like Vice kind of fashion?

• 22:24Speaker 01

  Yeah, but we also sold a lot of other lines. All the lines that we were advertising in the magazine, we sold their clothes. We realized by doing it that we don't want to sell pants for a living.

• 22:34Guy Raz?

  Yeah.

• 22:35Speaker 01

  That we're better at making content. That's really what we want to do. But it served its purpose at the time.

• 22:40Guy Raz?

  So at that point, were things like really starting to move?

• 22:43Speaker 01

  No, very quickly. Zawinski kind of ran out of money and retreated to Nantucket.

• 22:51Guy Raz?

  And this is when the dot com bubble bursts?

• 22:53Speaker 01

  Exactly.

• 22:54Guy Raz?

  So what did that leave you guys?

• 22:56Speaker 01

  It left us, you know, high and dry.

• 22:59Guy Raz?

  You had stores in New York, you had an office space in Manhattan, and you had employees, and you had no money coming in.

• 23:08Speaker 01

  100%. It was bad. It was a bad time.

• 23:12Guy Raz?

  So what happened to Zawinski?

• 23:14Speaker 01

  We found out that Richard was in Nantucket at his house. And so we rented a car and drove up there. We took the ferry over and called him from a payphone. And he picked us up and was very surprised that we were there. We hadn't had any contact with him for, you know, like a month or something like that.

• 23:31Guy Raz?

  What was going on? Was he running out of money?

• 23:34Speaker 01

  Yeah, so we went to his house and we're like, what's going on? And he said, it's over, the money's gone. I'm done. I can't put any more money into this. So all of a sudden, we're like, what do we do? And so then we came back and we, that's when we moved to Brooklyn. We left his office. I unscrewed the mirrors out of the bathroom and took the plants and the desks and filing cabinets that we still have. I'm still using the same filing cabinet that I stole from that office on 27th Street. It all happened so quickly. We, and we sold more equity to Solwinski. So he ended up taking over control of the whole company at that point.

• 24:11Guy Raz?

  Okay, so wait, before the company basically fell apart, he, he bought the entire company from you?

• 24:17Speaker 01

  Yeah, and, and like we did a stock trade. You know, our shares for his company, which was called Normal Net. And they're like, you're worth $44 million now. So we went from being on welfare to theoretically being worth 40 million bucks in a very short amount of time to it just all collapsing and being broke again. And all of a sudden, we have these stores and we have debt for the first time.

• 24:41Guy Raz?

  And Solwinski still owned, completely owned the brand at that point?

• 24:45Speaker 01

  Yeah, and then we bought it back from him.

• 24:47Guy Raz?

  How did you do that?

• 24:49Speaker 01

  For pennies on the dollar, Shane did a deal. And, you know, he, he was nice to us in a way, like even though he put us out of business. But he was, he, he agreed to sell the company back to us and we did a deal with him. I can't remember for exactly how much, but for, for, we got a deal to buy the company back. So we got our equity back.

• 25:16Guy Raz?

  How, how were you able to raise the money to buy him out?

• 25:18Speaker 01

  We took, I borrowed money from my brother.

• 25:20Guy Raz?

  Wow.

• 25:21Speaker 01

  We all kind of borrowed the money.

• 25:23Guy Raz?

  So you guys buy the, buy back the company. It's yours again. Essentially, you've got to completely rebuild it. So what did you do? Did you like, I mean, you've got these, these shops. You've got the film division and this division and the e-commerce. Like, what do you do?

• 25:37Speaker 01

  We went back to doing things how we had originally done them, which is we can't have debt. You know, we owed all this money to these Italian like fashion companies who were manufacturing our clothes and Shane went and took meetings with all of them and figured out how to reduce the debt. So he's like, well, I know you want 200,000. I've got 20. Take it or leave it. Sue me or take the 20 grand. And that's how we worked our way out of

• 26:01Guy Raz?

  Yeah.

• 26:02Speaker 01

  that debt in that time. And we just went back to eating beans and rebuilding and, and doing things how we'd always done them before we took investment. And so that was, you know, like a really valuable lesson and being able to buy the company back and have a second chance was, was huge.

• 26:31Guy Raz?

  All right. So in, in the midst of all this, you, you were still putting out the magazine, right?

• 26:35Speaker 01

  Yeah, the magazine was hot. It was still doing well, like from a cultural level, maybe not making a lot of money. It was profitable because it had to be. We weren't paying people much money and we weren't distributing millions and millions of copies, but it was getting out there and it was making an impact and getting some recognition.

• 26:56Guy Raz?

  And you're still mainly covering like counterculture and stuff like that?

• 26:59Speaker 01

  Yeah. But when occasionally we would have photojournalists that would come in who had been in Afghanistan or Jamaica and done something with like, you know, gangsters in Jamaica and we would run their photos. Like we tried, but we didn't have the resources. We didn't have a network. We weren't doing reporting in the traditional sense at all. It was a culture magazine that occasionally did some kind of newsy photojournalism if it was gritty and raw. But in 2006, that was when everything changed for us, when we picked up cameras.

• 27:37Guy Raz?

  Video cameras?

• 27:38Speaker 01

  Yeah. We took a meeting with MTV and they said, if we gave you money to make a DVD, what would you do? And we said it would be like Jackass meets 60 Minutes.

• 27:50Speaker 01

  And that worked. We were speaking their language, you know. And so they gave us money to make a DVD. And so we said, OK, let's go make the travel, the Vice Guide to Travel DVD.

• 27:59Guy Raz?

  And so where did you go?

• 28:00Speaker 01

  I went to Pakistan. We traveled in this area three years ago when we wanted to visit a massive illegal arms market, believed to be a source of weapons for the Taliban. We just kind of recreated what we'd done in the magazine. Is this loaded?

• 28:12Guy Raz?

  Yes, this is loaded, but they locked.

• 28:14Speaker 01

  They locked it. Where's the lock? But it was the first time we were telling stories in a different medium. And it was like an eight-minute segment. We stuck it on this DVD. That segment eventually ended up on the homepage of CNN. And they treated it as news.

• 28:33Speaker 03

  Sarush Alvi, the co-founder of Vice, took a trip to the country's most volatile city, Karachi.

• 28:41Guy Raz?

  I mean, it's crazy to think about it, right? Because if you go back to the early 2000s and the late 90s, there were a lot of really cool magazines. I mean, there were a lot of really cool, like, zines and people doing cool stuff. But for some reason, you guys made it. Like, why do you think that is? I mean, how was it that Vice became Vice and those other magazines didn't?

• 29:07Speaker 01

  We refused to die. Again, we're survivors, right? And we always found a way to do a deal, even when times were dark and it was hard. You know, we found a way. And we diversified at the right time. So we would have some other deal that would keep the lights on while the magazine is going through a downturn and we're having a hard time selling ads. Go out and do a big deal with Viacom that will keep us going for another eight months, you know, and then do a deal with, you know, a private equity firm and get some money from there. And so, but it is crazy that all those magazines are gone for the most part. And they were all so big.

• 29:52Speaker 01

  And we were like the stepchildren, and they disappeared.

• 30:02Guy Raz?

  How do you feel when people say that bias is self-indulgent? And it's all about the reporter and it's not really news? Because you have heard that, right? You hear that from mainstream news organizations.

• 30:15Speaker 01

  Sure.

• 30:16Guy Raz?

  So how do you feel about it? Do you get defensive? Do you just ignore it? Or do you think maybe they're right?

• 30:23Speaker 01

  We ignore it for the most part. I think they're often wrong. Or they're basing it on one thing that we did way back in the day, whatever. But I do believe strongly in how we create our content and the importance of having a point of view and subjectivity. Yes, we didn't go to journalism school, but I think that there's a place for the type of content that we're making. We're winning Peabody Awards for all the people that are taking shots at us. I also think those accusations are coming from a place of where people are feeling threatened as well, while Al Jazeera America is shutting down and that kind of thing.

• 31:08Speaker 01

  But of course, we have made content that isn't great, that isn't perfect. There are mistakes, but we're learning. We're going to school in public. And I do think there's a lot that they teach in journalism school that we've tried to incorporate into the content we make to be accountable.

• 31:27Guy Raz?

  Yeah. Have there ever been stories that you guys have done that you wish you didn't do?

• 31:33Speaker 01

  Hmm.

• 31:37Speaker 01

  Yeah.

• 31:40Guy Raz?

  Can you talk about any of them without fear of being sued?

• 31:43Speaker 01

  No, I mean, there's the one, the McAfee story. I don't know if you remember that one? The guy who did the...

• 31:50Guy Raz?

  He was the guy who did the antivirus software? He was on the run from the police a couple of years ago?

• 31:55Speaker 01

  Exactly. Where we kind of embedded with him and released a photo where we didn't scrub the geo tag from it. So people, we basically exposed exactly where he was when he was on the run, which we obviously weren't trying to do. And everybody celebrated that mistake. Everybody being all of the competition and the other news organizations that...

• 32:22Speaker 01

  You know, Vice, oh, they're trying to do this reporting and they're making rookie mistakes. So that was, you know, learning a lesson in public the hard way. But for the most part, you know, I don't have a lot of regrets about the content that we make and have made because it's got us to this point today.

• 32:41Guy Raz?

  Yeah, I mean, over time, you guys have attracted a lot of investment. And today, Vice is valued at over $4 billion. You started this, like, English-language version of a Haitian French magazine in 1994. Like, how crazy is that?

• 33:02Speaker 01

  I mean, it takes me back to that time on the street where my buddy said to me, he said, "Maybe you'll make one copy of the magazine, or maybe it'll be huge one day." And in my gut at that time, I felt like, oh, maybe this could be huge. I couldn't define it. I didn't know that this is how it was going to manifest itself and that we would employ, you know, 2,000 people and be valued at over $4 billion. But yeah, it's pretty amazing.

• 33:32Guy Raz?

  Sarush Alvi, co-founder of Vice. By the way, since this episode first ran last year, Vice's valuation has gone up to over $5 billion. And as for Sarush, he's no longer editing Vice on a daily basis. These days, he spends most of his time traveling around the world and picking the stories he wants to tell.

• 33:59Guy Raz?

  Are you the only one at Vice without sleeve tattoos?

• 34:01Speaker 01

  I, you know, it's true. I have no tattoos. I'm a minority.

• 34:04Guy Raz?

  Okay.

• 34:30Guy Raz?

  And stick around because in just a moment, we're going to hear from you about the things you're building.

• 34:39Guy Raz?

  Hey, thanks for sticking around because it's time now for how you built that. And we're going to check in with someone who we first interviewed back in the fall. He's from Bend, Oregon.

• 34:48Speaker 04

  I'm Kent Sheridan, the owner of Voila.

• 34:52Guy Raz?

  Voila, it's a company that makes very delicious coffee, Kent says, even though that coffee is instant and it comes in a little packet.

• 35:01Speaker 04

  So being able to just add water wherever you are is pretty special, in my opinion, without compromising the quality for even the highest coffee snob.

• 35:11Guy Raz?

  Kent says that he's actually going for a flavor that tastes as good as a $4 pour-over.

• 35:17Speaker 04

  Coffees that have a caramel sweetness, nutty, like hazelnut.

• 35:22Guy Raz?

  Leather, wet wool, hyacinth, pine needles.

• 35:26Speaker 04

  Blueberry, mango, tropical fruit notes, watermelon.

• 35:30Guy Raz?

  Kent is getting these coffee beans from specialty roasters all across the US and he wants to sell his coffee online. But he's obviously not the first person to try and make a really good, high-end, instant coffee, right? Like Starbucks has done this. So there is competition out there. Oh, and one other problem?

• 35:47Speaker 04

  As soon as we tried to ramp up, everything went crazy, it seemed like. You know, when you bump it up in size and you have all of these variables with temperature and pressure, it's not so clear-cut.

• 36:01Guy Raz?

  When we spoke with Kent last November, he had just finished a Kickstarter campaign and he owed his backers 1,339 cups of coffee.

• 36:11Speaker 04

  I mean, I remember talking to you back in November and just being like, well, I hope, I hope this next batch is it. I was pretty determined that I would find a way how to make it work and give those people their coffee.

• 36:24Guy Raz?

  And at the time, Kent was kind of freaking out because the company in Missouri that was helping him freeze-dry the coffee just kept sending him batches that tasted burnt and metallic.

• 36:35Speaker 04

  And that batch that we were waiting on, it turned out completely ruined again. And we just decided, it's not going to work.

• 36:43Guy Raz?

  But Kent and his partner would not give up. So instead,

• 36:47Speaker 04

  we just doubled down. And instead of sending our coffee out to contractors to try to process it for us, we just purchased our own freeze drying equipment and went back to doing it just ourselves. And it just got so much better.

• 37:04Guy Raz?

  And in May, they finally sent their first batch to their Kickstarter followers.

• 37:08Speaker 04

  That was such a relief. I mean, we were just waiting for it to be exactly what we promised and nothing less.

• 37:14Guy Raz?

  That's Kent Sheridan of Voila Coffee, which plans to launch for real in October. By the way, they just caught another really big break, a major investment of $200,000 from a former VP at Stumptown Coffee.

• 37:29Speaker 04

  You know, it's, of course, been so many ups and downs, but through every down, there's just this even greater upside. So that's, that's kind of what I love about this whole thing.

• 37:41Guy Raz?

  To find out more about Voila Coffee, check out our Facebook page. And of course, if you want to tell us your story, go to build.npr.org. We love hearing what you're up to. And thanks for listening to the show this week. If you want to find out more, you can go to howibuiltthis.npr.org. Better yet, subscribe to us on Apple Podcasts or however you get your podcasts. You can also write to us. Our email address is h i b t at npr.org. You can follow us on Twitter. It's at howibuiltthis. Our show was produced this week by Ramtin Arablouei, who also composed the music. Thanks also to Neva Grant, Sanaz Meshkhanpour, Claire Breen, and Jeff Rogers. Our intern is Lawrence Wu.

• 38:26Guy Raz?

  I'm Guy Raz, and you've been listening to How I Built This from NPR.