How to Lose Money Quickly
Start with a lot of it, and then say you're going to change media forever.
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Well there’s a pervasive idea that rattles through The Industry: that trying to create something new in media is a journey to disappointment and pain.
I was halfway through my decade here when I realised this wasn’t the case. Successful media brands are everywhere. The problem is not in the ideas; the concepts; the people. The problem is that wonderfully American constant: the money.
The truth is that Big Money creates Big Expectations, and anyone driving a media business with enough self awareness will — in their darkest and purest moments — admit that most of the media industry does not exist to make money. At least, not Big Money. Not VC Money. Instead, the potential ownership and investment into a media brand plays at the pure vanity and boredom of the wealthy. The idea that they don’t need the cash and that it doesn’t need to be profitable. Until it does.
Every large investor in a media brand has had a conversation with a veteran who is jaded and honest enough to play it straight with them: the odds aren’t great, the return is sour, and it’ll take years. Years, buddy. In most cases, the response here is a smiling nod of assurance, because the people with money aren’t thinking about profit — they’re thinking about power. The power to influence the conversation, the power to control where its headed, and the power to go to sleep each night with the gentle humming assurance that — in a way that skips over a hundred or so others actively doing the work — all of this is because of them.
Why am I talking about this? Suppose I’m tired of seeing the quarterly story of investment into some new media enterprise, and the following annual announcement that it’s time to make cuts: the model didn’t work; the algorithms were cruel; the stories just didn’t drive audience. But I thought someone told you this would take years? What did you think that meant? Bet you thought you’d be the one to solve all of that — there’s nothing $500million can’t fix.
Let’s face it — most of the people with money know close to nothing… other than the right people. Shake enough hands and you’ll get to where you want to go. I’ve seen it happen plenty. We should all be so lucky. Even in media, anyone who has spent more than six months working actively as an editor will have Horror Stories about published authors and critically-acclaimed writers with Giant Followings who can’t string more than three words together. The editor is doing the work here, and the goal is to Sell More Copies. That part of the machine works well enough, if you’re willing to take on the humility. I have had my own revelations, equal parts religious and psychedelic, when commissioning the work of wildly popular writers, only to realise that, well, they’re not really selling what I thought they were…
Still, when it comes to publishing day, the audience numbers are good. Everyone’s a winner if you play the game.
Where was I? Rambling…
These fools poured almost $2 BILLION into Quibi. Some of you have heard of that already — a fair amount might just have it in the corner of your brain. But that whole mess went down just about as you would’ve called it. 80+ million on Ozy. A decent amount similar on new upstart The Messenger. Yes, there is money to grab at if you’re willing to bet on pissing it away. The solution from outsiders to the problem of making a successful media brand is to Start With A Bang and hire everyone, despite this rarely being the true model to longterm success. Even the brands held up as golden children had true success when they were small and when they were nimble. Morning Brew is the cornerstone of many overpriced, underserving Media Strategy college courses, all based on an impressive origin story and a powerful audience. It was sold to Axel Springer for $75 million, doubled down on growth and opportunity, and two years later fired more than 15% of its new staff.
Oh sure, it’s a growing pain. It’s not Death and Misery just yet. But a symptom of our 2010s tech boom has meant a similar boom in terrible people with terrible ideas on how to spend their easy-earned cash. But who am to judge? It’s your money, kiddo. When I worked at BuzzFeed there was a period where the company was hiring new people, every day, every week, for more than a year. That bubble got real big before it popped (and then popped again). Though Jonah has been right on SEO (Huffington Post) and Social Publishing (BuzzFeed) before, so maybe he’s right that AI could be the answer. Play the betting game and follow the horse who has won before. Of course, it has mostly meant good news for him and his life. You could throw in perhaps 20 people that surround him, too. Once you know the right people, money is much easier to fall into.
All of these failed investments are healthy, and collapse is important, but only if the right people pay attention. Do they even need to? A viable future in our industry relies on small groups doing small things and being content with that. But that’s only if you’re in it for the long haul. That’s the saddest part: media feels romantic because it is a creative pursuit, but the obvious way to be good at it is to Get In Early and Get Out Sooner.
Or you could hold on for dear life knowing your ability to influence people in power is enough. There’s plenty of other ways to make money on the side. I throw away money betting on football - maybe the really wealthy just want something fun to watch collapse while their investment portfolios continue to thrive. Hell, if it comes with a side of democratic manipulation, that sounds good to me.
But do you really want to be Rupert Murdoch?
Don’t answer that.