20VC: The Information's Jessica Lessin on The Future For Online Journalism & The Benefits Of A Subscription Based Business Model

Jessica Lessin founder and Editor in Chief of The Information. Prior to The Information, she covered Silicon the technology industry for eight years at the Wall Street Journal where she wrote nearly 1,000 articles for the paper, consistently breaking news about major products, management changes and strategy shifts. Jessica was also part of a team that was a finalist for the Pulitzer Prize. Now you can follow both Jessica and me on Snapchat on @jlessk and @hstebbings In Today’s Episode You Will Learn: 1.) How did Jessica come to found The Information following The Wall Street Journal? 2.) Marc Andreesen: 'print journalism is converging in quality and technique with blogs and Wikipedia'. Does Jessica agree with this? Has revisability has led to a lower quality initial publication? 3.) How does Jessica view the competitive landscape for journalism today? Who are competitors and what would Jessica say is complimentary to The Information?? 4.) We have seen the decentralization away from the central forms of authority in journalism. What effect has this decentralization had on distribution? Competition? Market size? 5.) What is the monetisation strategy for The Information? Why choose that strategy over the more prevalent others such as advertising? Items Mentioned In Today’s Episode: Jessica’s Fave Book: Ben Bradlee: A Good Life Jessica’s Fave Blog: Doug Young As always you can follow The Twenty Minute VC, Harry and Jessica on Twitter here! If you would like to see a more colourful side to Harry with many a mojito session, you can follow him on Instagram here! The Twenty Minute VC is brought to you by Leesa, the Warby Parker or TOMS shoes of the mattress industry. Lees have done away with the terrible mattress showroom buying experience by creating a luxury premium foam mattress that is order completely online and ships for free to your doorstep. The 10 inch mattress comes in all sizes and is engineered with 3 unique foam layers for a universal, adaptive feel, including 2 inches of memory foam and 2 inches of a really cool latex foam called Avena, design to keep you cool. All Leesa mattresses are 100% US or UK made and for every 10 mattresses they sell, they donate one to a shelter. Go to Leesa.com/VC and enter the promo code VC75 to get $75 off!

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

• 0:00Harry Stebbings?

  Welcome back to part two of Romance Week on the 20 Minute VC with your host Harry Stebbings. Now, on Wednesday, we heard the journey of Sam Lessin, so now it's time to hear the journey of his other half, Jessica Lessin, founder and editor-in-chief of The Information. Now, prior to founding The Information, Jessica covered Silicon Valley and the technology industry for eight years at The Wall Street Journal, where she wrote nearly 1,000 articles for the paper, consistently breaking news about major products, management changes, and strategy shifts. She was also part of a team that was a finalist for the Pulitzer Prize in 2011. Now, you can also follow both Jessica and I on Snapchat. For me, it's at H Stebbings, and for Jessica, it's at J less K, that's J L E S S K.

• 0:42Harry Stebbings?

  I also want to give a personal recommendation of The Information. That and Mattermark Daily are all I need to stay on top of everything in the world of tech and VC, so if you've not already signed up for The Information, it really is absolutely fantastic. But before we dive into all things The Information, if today's dual romance episodes with Sam and Jessica Lessin have got you feeling romantic, then you can head over to leesa.com/VC and surprise your other half with a Lisa mattress. Nothing says I love you like three unique layers, one of memory foam, one of latex light foam designed to keep you cool at night. That's if your other half really loves a mattress. And if that fails to win them over, tell them that you saved money, as Lisa has no retail stores, so they pass on the cost savings to you, the consumer, seen in the pricing.

• 1:26Harry Stebbings?

  And if that fails, tell them they do not even have to do anything, as it's delivered to your door in a matter of days. And if that fails, hey, there's always Tinder. So don't resort to Tinder. Head over to leesa.com/VC and enter the promo code VC75 for a whopping $75 off at checkout. Now it's time to meet the fantastic Jessica Lessin, founder and editor-in-chief at The Information.

• 1:52Harry Stebbings?

  Jessica, it's so awesome to have you on the show. I've been a big fan of The Information for a while now and really love the podcast. So first of all, thank you so much for joining me today.

• 2:02Speaker 01

  Thanks for having me, Harry.

• 2:03Harry Stebbings?

  Now, I'd love to start today with a little background on you and how you came to found The Information.

• 2:09Speaker 01

  Sure. So I started The Information about two and a half years ago, after eight years as a tech reporter at The Wall Street Journal. And we did it because we believe there's a huge opportunity to build a business publication that is deeply focused on the business of technology. And as technology literally transforms every industry out there, we think there's a huge market for, not necessarily just more information, but more good information about tech and business. Also, to do it with a subscription business model, which is something that has kind of gotten a bad rap in the digital world, but we think is the model that's really aligned with delivering a quality product and something

• 2:52Speaker 01

  that can ultimately thrive in the digital world as well. So we started out two and a half years ago and it's been a fun ride since.

• 3:00Harry Stebbings?

  And I have to ask then, slightly going back to the Wall Street Journal days, what were the takeaways from working at such a kind of journalistic behemoth as The Wall Street Journal that you've taken with you and adapted to The Information and sometimes left behind?

• 3:15Speaker 01

  So The Journal obviously has some fabulous reporters and editors who I think were instrumental in training me as a journalist. And I think we learned a lot from about what constitutes great reporting. In particular, when I started at The Journal in 2005, the emphasis was on reporting no one else was doing. So we didn't just write the same news of the day, we didn't write the press release, we looked for the stories no one was doing. And I think The Journal and other publications have broadened their focus away from that kind of journalism. But it's something that I've certainly taken from The Journal and half our reporting team, you know, spent decades collectively at The Journal as well

• 3:57Speaker 01

  at The Information. So I think that's one of the things that we still think of to this day.

• 4:03Harry Stebbings?

  And speaking of kind of transitory change and movement within the industry, we've seen a huge amount of change in traditional journalistic press over the last several years in particular. So how have you seen the industry alter as an insider?

• 4:17Speaker 01

  Uh, in so many ways. I think most of it comes down to the fact the industry is getting very broad and shallow. And what I mean by that is there are more publications by the day, but they're all essentially covering the same kind of news for mass audiences. And and that's simply a business model function, right? If you're trying to drive traffic for advertising, you're gonna think of a broad group of readers, you're gonna try and hook that reader into clicking on your story with a sexy headline, and you're gonna write about Donald Trump, the iPhone, the the proven traffic drivers. And and so I think we've seen broadening of the number of publications, but those publications, they're shallower and they're looking more similar.

• 5:02Speaker 01

  I think that leaves a huge opportunity for other types of businesses that aren't doing that, that wanna go deeper and focus on things that aren't being written about. But to answer your question, my my main observation is is one of sameness, one of things looking, you know, more like each other and kind of converging to an average, if you will.

• 5:22Harry Stebbings?

  And talking of the quality of content purely being produced, and I I have to ask, Marc Andreessen made an assertion that print journalism is converging in quality and technique with blogs and Wikipedia. Uh, do you agree with that statement, do you think?

• 5:35Speaker 01

  I think, you know, I've always separated, so yes, because I think you have to separate the the medium from the content. So just because something's digital, it doesn't mean that it's inherently better or worse than something that's dead trees, right? So I I think what's behind Mark's observation and point is that, again, there's sort of this idea of sameness, that and and also that you can have an experience that you used to have reading The Economist by reading a webpage, right? It it depends what the content is. And so I think we've certainly seen that. I think that behind his comment too is When I hear a statement like that, it exposes, no one's thinking about who the

• 6:18Speaker 01

  audience is. So for me, any statement about the quality of something converging towards the quality of something else ignores the way I think about it, which is, who's this supposed to reach, right? Quality isn't something that is abstract. It's based on the value of that information to a particular audience. So the way I look at the world is less, here's one type of publication, here's one type of medium. It's what is this information or who is this information trying to reach in terms of an audience? Is it business professionals? Is it techies? Is it politics walks? And then what are the relative values of information to those audiences? And that can be print, that can be digital, you know, it's sort of a different way of looking at things. But anytime someone

• 7:00Speaker 01

  talks about quality, it raises the question for me, to whom and in what way, right? And I think that's an important thing for news organizations to start thinking about more deeply, who their audience is and how they're serving them.

• 7:13Harry Stebbings?

  And I'd love to hear then, moving then specifically to the information, if we were to address that same strategic approach to the information and kind of profile the avatar of your average reader, and then the relative values for them, how would you approach that? Is it a kind of 20 to 35 male San Franciscan?

• 7:32Speaker 01

  Absolutely. So it's a decision maker in tech, media, or finance. Our subscribers range from entrepreneurs who are just starting out on their first white combinator company, to executives in the management teams at the most highly valued public tech companies, to 10 out of 10 of the founders of the most highly valued US private tech companies. It really does range in terms of the demographics and even the roles. But I think the thing our subscribers have in common is that they're making decisions, running a team, they're running a company, making investments. So they're looking for

• 8:14Speaker 01

  Information that helps them answer the questions they have about these companies and their competitors. And they're they're very actively involved in shaping the future of their industry.

• 8:25Harry Stebbings?

  And we mentioned earlier the the kind of sameness of the industry and and I completely agree with you in terms of kind of audience and who it's reaching and who they're aiming for. But how do you then view the competitive landscape for for journalism and publishing today? You know, there are quality out there in terms of, you know, Ben Thompson's strategy, maybe. Um, Ben Evans is always brilliant at writing. So how do you view that competitive landscape?

• 8:48Speaker 01

  So anything that takes our subscribers time that they find valuable from Instagram to The Economist is in some ways competitive, right? I mean, I think that is actually the bar for anyone in the media business. There's a lot of things you can do with your time and anything that saps that is going to, you know, something we're gonna be thinking of as we're trying to write our stories that are that are worth reading. I think when you get into the news industry, yes, we've got you have analysts like Ben Thompson and Ben Evans, who were wonderful, who give you their take on on some news that's already happened. You've got major publications, you have the research arms inside banks and companies,

• 9:30Speaker 01

  venture capital firms that are publishing their own newsletters and um, I think ramping up the amount of content they're producing, often analyzing other content that's been written. I think the thing about being where we want to sit is if you're writing stories that have new information about business and technology, it's not like our audience will only read one of those. They literally have a thirst for as much that's valuable to them as humanly possible. It's not like there are only X hours someone's only gonna read a business publication about technology. I think it's more that people are craving stories that are different, relevant to them. And and that it's not as much of a zero sum among the kinds of publications that are doing that work.

• 10:14Speaker 01

  So on one hand, we feel the intense competition trying to capture consumer attention in a digital age. On the other hand, I think we actually feel quite a big opportunity and open field if we can consistently do the the stories that that we want to do because I I think if you just look at the thirst for knowledge about how tech is transforming business and the need to get a competitive edge, you know, that trumps pretty much everything else. It's sort of, it's both very competitive but very open, I think.

• 10:49Harry Stebbings?

  And talking of that uniqueness there, how do you approach that uniqueness with regards to your content creation? Is there different kind of investigative strategies you can use to seek out the stories that others aren't? What's your approach to that and to not writing the press releases that we often see in more major publications?

• 11:07Speaker 01

  It starts with excellent reporters who are deeply sourced and knowledgeable about what they're writing about. And, you know, our team has been covering companies like Google, Facebook and others for, for pretty much longer than most other tech reporters out there, period. You know, more than a decade, which in tech land is a short period of time. You know, we have networks and relationships and, and just reporting that I think is a huge advantage in terms of experience. At the same time, we hire, you know, excellent reporters who maybe have less experience in technology, but can sort of work collaboratively with our team that does have more experience in technology to help them come up the sourcing

• 11:49Speaker 01

  learning curve faster. And, and that's what it starts with. And it's surprising because you may say, well, that can't be that much of an advantage. Lots of places have great reporters. But one just abnormality about where we are right now is that so many other publications are having their great reporters spend their time on less than great stories. Again, on these stories that are no time, regurgitation, written because, you know, they're trending on Twitter and God forbid a publication doesn't have a story to go with it. So even if we had the same quality of reporters, and, and I think we have, you know, much better reporters, but even if we did, and we were letting those reporters spend a hundred percent of their time on stories that were going to have a real original

• 12:33Speaker 01

  angle, we'd have a higher hit rate of those stories. And so I think that is where it starts. It starts with the great reporting, the ability to really get trustworthy, accurate, inside information about these companies. The second thing, it goes back to the audience point. It gets back to knowing who we're writing for. As a subscription business, we get a ton of information about our subscribers, but also their habits, how they're using the product, what they like. And our job is to make them happy. Our job is to be valuable to that group. And it's a broad group. It's not any one person. But that customer subscriber focused approach to journalism, I think, does help in making our stories pack a punch and be valuable

• 13:18Speaker 01

  because we know who we're writing for. We know the questions that story has to answer. And I think that's another key aspect of quality journalism that stands out that a lot of other publications don't think about.

• 13:30Harry Stebbings?

  And you mentioned that great reporting and great reporters themselves. I have to ask then, what do you think truly makes a great reporter? Is it kind of an innate curiosity for all things? Is it an ability to weave narrative into a particular circumstance? What is it for you in particular that sees the eye of the tiger in a potential journalist?

• 13:50Speaker 01

  I love that question because I think it's a couple of things. So myself, I am a news hound. I love breaking news, getting stories before other people have them. My personal style of reporting is less long form narrative and more staying on top of and working a beat. And we have other reporters at The Information who are similarly sort of cut, who love that. And so what makes them great is grit, competitiveness, really deep curiosity about the beat they're covering, and they just want to be all over it. But then we have reporters like Reid Albergotti, who is a colleague of mine at The Journal, who just published a 4,000 word piece on Nest that took a very long time. It was a

• 14:34Speaker 01

  narrative of all the troubles at that company with interviews with all the key players, including Tony Fadell. A much more narrative story that took longer, that is obviously excellent journalism as well. And then a third bucket, the great columns, the great analyzers, the people who maybe aren't focused always on getting the facts first, but they piece them together and connect the dots. And at The Information, we do all three. And I think They're all incredibly valuable and there are commonalities. I think there's a lot of curiosity, a lot of keenness to ask questions, but the styles of reporting are very different.

• 15:15Speaker 01

  I think it's been really fun as we've grown our reporting team to now eight journalists, you know, to get more variety as well.

• 15:23Harry Stebbings?

  And I'd love to discuss now one of the main problems that probably online journalism houses have faced in the past couple of years, which is the monetization, which we've just discussed. Obviously, the information doesn't have with your subscription-based model. But I want to ask then, why did you choose this model first off? Why was that the inherently correct model for you?

• 15:44Speaker 01

  To me, it was the only model because it's the only model that is going to align doing stories that people have to read that have value to them with the business. And if you're not writing stories that people feel like they have to read, you know, you may get blips in traffic here and there. You may even grow your audience for a couple of years, but you're not going to be around years and years and years from now. The subscription business to me is very core in the history of news and journalism. It's worked very well for a very long time. And it's the business aligned with the kind of stories and publications we want to build. And I think if you're in a world where you're dependent on advertising, you're going to serve multiple masters.

• 16:28Speaker 01

  You're going to serve the traffic master, the advertising master. You know, if you're dependent on events, you're going to serve the sponsorship master. And the subscription business is, it's pure. It's serving your end reader and your customer. It's also insanely scalable, right? It doesn't tap out at how, you know, many business development deals you can cut or how many ad packages you can sell, right? It taps out based on... The inherent value of the product. And so our excitement for that business model that that caused us to start the information. And so it's never been a sort of thing we arrived at through process of elimination. It's very core in our identity.

• 17:08Harry Stebbings?

  And were you concerned though by the by the slight barrier to entry on consumers with the subscription fee? Obviously with, you know, your mediums, which I know are very different in terms of publications, but that users would be faced with a payment and it would cause the onboarding to turn off. Did that concern you?

• 17:25Speaker 01

  Look, I think it's a good thing that we're not writing for every person. You're right that there's some barrier to entry. Now, now, obviously, as we've been rapidly growing our business, I mean, I certainly want to and we see the information as a publication that, you know, can reach massive audiences over time. We're not, we don't want to write for all people. We want there to be a sense that we're writing for a community that has a certain set of interests where we can have a certain value proposition. And and that's a big difference. I think if you're writing a publication or building a tech product for a billion people, you know, that's going to look a certain way. And and we don't want to build that product. I think that's a first important conceptual thing to to understand.

• 18:07Speaker 01

  Absolutely. You know, from a product perspective, you want the subscription to be as seamless as humanly possible. Obviously, I these days, and that's totally possible with technology. There are great many products that you can use. We have an awesome engineering team. And I think we can continue to do a lot to even make that easier than it is today. And so we certainly put a lot of thought into the product. So once someone decides they want to subscribe, that becomes very easy. But we don't lose sleep over the fact that some people don't want to subscribe to the information. We think, you know, we'll focus on the ones that do and and then take it from there.

• 18:47Harry Stebbings?

  And and you mentioned there your growth. And I have to ask, because the information now is is such a substantial organization and such a brilliant organization and publishing house. So I have to ask, what were the transitory moments in your growth where you really hit a stride and increased substantially? What were those moments?

• 19:05Speaker 01

  So it's so early for us, too. It's hard to say. I mean, our business has been one of steady, organic growth, which and by organic, I mean, we've grown through word of mouth and through our stories, reaching new people, being picked up by other news outlets, you know, in a given week. Uh, maybe a given month, most of our other publications will, will pick up information stories. So actually to date, our, it, our growth has been the organic word of mouth side and incredibly linear, sort of eerily linear. Actually, one of the things we're focusing on now is how we can turbocharge that with, you know, smart email marketing and other kinds of business led initiatives.

• 19:48Speaker 01

  But honestly, those are in the very early stages for us. And so more than an inflection point, I think it, it's been this very consistent predictable pattern, stories breeding growth. That's incredibly exciting to me because again, it gets to the, the sort of scalability of the model. Uh, and I think we also have the opportunity now to, you know, change the slope of the curve, you know, even more through other initiatives, but I'd be hard pressed to find one moment.

• 20:16Harry Stebbings?

  And, and then I do have to ask, before we dive into a quick fire round, which business led initiative, a obviously very early stages, we're throwing ideas at a wall here, but which one are you most, uh, maybe excited for, would most like to try even out of curiosity? Is there one, may, may it be kind of innovative form of email newsletters or free content in some way to entice users in, whatever it is, what, what are you most excited by?

• 20:40Speaker 01

  I'm very excited about email. I think, you know, we have orders of magnitude more than emails than we have subscribers right now, maybe one order magnitude more, just from people who have expressed interest in the information. These are people who want to learn more about the information. They've literally given us their email to, to help us, you know, to express interest. And I think the opportunity to let them know more about us, bring them into our community is awesome. And these days from a technology perspective, the sky's the limit with email. Uh, there are a lot of challenges with email too, and you know, it's amazing to me how hard our engineering team works on things like the right margins for the right phone and the, you know, it's a tricky platform in a lot of ways, but I think there's a ton

• 21:24Speaker 01

  of potential to communicate with potential subscribers over it. So I'm incredibly excited about that.

• 21:29Harry Stebbings?

  And then I want to dive into a quick fire round now. So I say a short statement and then you give me your immediate thoughts. How does that sound?

• 21:36Speaker 01

  Sounds great.

• 21:37Harry Stebbings?

  Okay, so your favorite book and why?

• 21:39Speaker 01

  Any biography, but one of my favorite is Ben Bradley's autobiography um from the Washington Post. Highly recommend it.

• 21:46Harry Stebbings?

  Okay, and then if you could start the information process again and change one thing, what would you change?

• 21:51Speaker 01

  I'd make this early decisions faster, swatted a lot of decisions like what payroll provider to use that turned out not to be that important. I would have made those a lot faster.

• 22:02Harry Stebbings?

  Other than the information, of course, which modern journalism house is also doing it very right? Who do you respect and admire amongst your counterparts?

• 22:10Speaker 01

  There are a lot. It's very hard to pick one. I think any place that is hiring and training journalists is is doing a great job. Um, I I tend to be most interested in in some of the individuals who are writing these days too and and kind of respect the businesses and brands they're building as well.

• 22:28Harry Stebbings?

  Is there anyone we should be following?

• 22:29Speaker 01

  My new um one I've been following a lot is actually uh someone based in Beijing called Doug Young, who writes about uh China and business and I find his stuff awesome and would highly recommend it to anyone who wants to follow tech trends globally.

• 22:46Harry Stebbings?

  Fantastic. That's a good one. I've never had that before, so that's one for the reading list. And then subjectivity versus objectivity, how do you balance the two of the information?

• 22:54Speaker 01

  I think it comes down to the the trust of the reader. So obviously, as a journalist, you want facts, you want to stick to facts, you want to defend with facts, but I think you also, where appropriate, want to have a perspective. I mean, if you're the expert in this, our subscribers want to hear from us. And I think ultimately they converge together in having the trust of the reader. If you can have the experience and track record to deliver um valuable opinion, I think that's very important. But I think anything subjective is always strengthened by as much objective as possible baked into that argument. So that's, I think, how I think about my column and and how we try to think about things as well.

• 23:36Harry Stebbings?

  Penultimate question, Snapchat marketing, what do you think of it? We're seeing a massive rise in recent months, even weeks.

• 23:42Speaker 01

  I'm into Snapchat. I think um find the sort of story experience really compelling. Don't use it for a lot of marketing of the information, but as a Consumer, I really enjoy the product and my usage has gone up significantly. So definitely interested in the company. Whether brands can use it to fundamentally change their trajectories or acquire customers. I think it's early, but you know, we, we know that Snapchat is committed to building the tools to help them. So definitely a place people should be experimenting.

• 24:16Harry Stebbings?

  And then finally, the next five years for you and for the information, what's in the pipelines?

• 24:22Speaker 01

  I think it's just growth. I mean, we, our product is simple. It's information you can't get elsewhere that's valuable. It's a community of subscribers that you can talk to about that information online. And I do not see that changing in five, 10, 15, 20, 25 years. But I think our, our community, the readership and, and also the areas where we can cover will grow. Not in the sense that like we want to start a sports page tomorrow, but in the sense that I think if we're covering technology, we'll inherently be covering all sorts of industries and areas. And, and our coverage will broaden from that as well. So that's kind of what I see when I look on the horizon.

• 25:04Harry Stebbings?

  So growth, full steam ahead.

• 25:06Speaker 01

  Absolutely.

• 25:07Harry Stebbings?

  Well, Jessica, thank you so much for joining me today. It really has been a pleasure hearing more about the information.

• 25:11Speaker 01

  Thanks for having me.

• 25:15Harry Stebbings?

  Incredible to hear Jessica's take on the evolution of the media industry and such a pleasure to have her on the show today. If you want to stay in the loop with the 20 minute VC, then you can add me on Snapchat at H Stebbings or Jessica Lessin on J L E S S K. That's J L E S S K. And also you can sign up for the newsletter on the 20minutevc.com so you never have to miss an episode or an update from us. Now, before we leave you and go into the weekend, in the theme of romance, do not forget to surprise your other half with the Lisa mattress this weekend. That is guaranteed to make the weekend a whole lot better. Who does not get excited by the three unique layers of memory foam and latex light foam, which will come in handy if the weekend goes really well, as the latex light foam keeps you cool at night.

• 25:56Harry Stebbings?

  Hashtag winning. Even more awesome and even better, no one likes heading to a mattress showroom on the weekend. That is why Lisa. To have designed the perfect online mattress buying experience, which allows you to buy and have a mattress delivered to your door in just a couple of days if you live in the US, the UK and Canada. So take advantage and do something nice for your loved one this weekend. Buy them a Lisa mattress on leesa.com/vc and enter the promo code VC75 for a whopping seventy-five dollars off. That's L E E S A dot com forward slash V C. I really can't emphasise enough how much I appreciate all your support. Please do send me emails with feedback and comments. I always love to hear from you. Harry at the twenty minute V C dot com and I'm very forward to seeing you next week.