Some said it was too expensive. Others said it would never scale. But Jessica Lessin ignored the naysayers and stuck to her convictions. Almost three years ago, the former Wall Street Journal tech reporter founded The Information, an in-depth, online-only publication that combines rigorous investigative journalism with technology and business reporting. It publishes two pieces of original content a day, charges $399 for an annual subscription to read them, and is ad-free.
From the outset, Lessin was convinced that her target audience — decision-makers in tech, media, and finance — would be willing to pay for access to exclusive, high-quality content, such as stories about Uber’s latest hire, and the future of Google Fiber. And she’s been proven right. The Information’s subscriber base has more than doubled in the past year (they won’t reveal the exact number). They have 19 employees, have never taken VC funding, and are cashflow positive (with the caveat that they’re in the middle of a hiring spree).
Lessin recently joined Matter’s Managing Partner, Corey Ford, for a fireside chat at our San Francisco office to talk about why the news business model is broken, and why sometimes starting from scratch is the only solution.
“I didn’t have to pick one career.”
In June 2013, Lessin had a job many journalists would kill for. As a technology correspondent at The Wall Street Journal, she was covering one of the most coveted tech beats in the world: Apple, Inc. She’d come to Silicon Valley from New York City five years previously to cover Google, Yahoo (which Microsoft was trying to acquire at the time), and two “tiny startups” called Facebook and Twitter. “I used to have to defend that they would have business models to my editors,” she says.
Lessin’s love affair with journalism started with helping her teacher write the high school newsletter. Then, studying for her Bachelor’s degree in History at Harvard, she became deeply involved with The Harvard Crimson newspaper, and embarked on a series of internships that ended with a first job at The Journal. “I think what drew me to journalism was I didn’t have to pick one career,” she says. “I could constantly learn across many, and that just seemed to be pretty awesome.”
But, 8 years later, she had seen the media shift away from meticulous, in-depth reporting. Journalists were being spread way too thin: “The whole media industry became so obsessed with traffic, page views, comprehensiveness. Everyone had to have every story. My job as a reporter had really changed. And it was not only not what I wanted to do — I think it missed that bigger opportunity for a type of story that was really valuable to people.” She felt the Journal was not immune to sacrificing quality for clicks and traffic. Lessin had to churn out the same “commodity news” stories as all the other journalists on the Apple beat, “instead of going to work on that profile of Phil Schiller that really told you something about him no one already knew.”
“Sometimes you just have to start from scratch.”
Frustrated by the mismatch between the incumbents’ business models and their value proposition, Lessin saw her opportunity. She knew that it wasn’t by seeking to reform an established media outlet that she was going to seize it — she had to start something new. “I felt that if you were doing it from scratch, you could do better,” she says. “More than anything I believed that there were other journalists who would love to work at a place like The Information where they could still do stories that got people to be like, OK we’ve got to read this.” Self-funded, and with her new startup’s business model — a subscription service which she planned to price at $400-$500 per year — established, she went about hiring like-minded journalists: “I honestly believed that the way we’d get to a world where we would have the best journalists who wanted to be at The Information [was by being a] subscription business and that’s what I remain so excited about today.”
Lessin recognizes she’s been fortunate to have personal resources to draw on to fund The Information independent of external investment. “I truly believe that particularly in media the vast majority of VCs would not have been aligned with what we wanted to do,” she says (although perhaps Matter would have been the exception). “This was not a get-big-fast-and-sell-to-AOL kind of model.” In a recent column for The Information, she cautioned that news-related startups should steer clear of VC funding altogether. She also suggests seeking alternative routes to funding, such as loans.
“There were six specific people I had in mind.”
The Information launched in December 2013, with a vision to produce a low volume of content that would be deeply valuable to the leading lights of Silicon Valley, and a plan to later hook in the leaders of other tech hubs and “ripe-for-disruption” industries ranging from automotives to retail.
From the outset, Lessin wanted to empathically immerse herself in the interests of her readers. In fact, using a design thinking-esque approach, she had six real people in tech and business in her mind’s eye when evaluating whether the stories The Information was covering were relevant to their intended audience. They ranged from the early stage entrepreneur bootstrapping a company, to a hedge fund investor in New York City, to the head of digital at Ford. “I would ask myself, would this story be valuable to these people? Sometimes I would ask the people,” she says. “I was really just going back to those types as a gut check. Not every story would be in the sweet spot for each.” Her role in the editorial process is a human-centered one, often tweaking the angle of a story to make sure it’s of significance to as many readers as possible.
Being a subscription business, The Information has great insights into user behavior (they know who’s reading and for how long, unlike many content producers), and a strong feedback loop that helps them meet user needs. “Because people are paying, invested in it, they tell you what they think,” says Lessin. “We get a lot of feedback and some of it’s explicit. ‘I want more of this I want less of this.’ Otherwise you can just sort of see what’s bubbling up.” The networking events they hold for subscribers are an opportunity for The Information journalists to get to know their audience better, and take the temperature of what topics currently matter to them. They also convene their community on Slack, where subscribers can chat with reporters, and each other, and hold (admittedly “old school”) conference calls, which are a chance for subscribers to go beyond a written article and plug into the expertise of a particular reporter.
“Think of what you think of as focus. Then triple it.”
One of Lessin’s greatest challenges going forward is to ensure The Information keeps “winning at what it’s winning at”, while increasing its scale and impact. She encourages the team to stay laser-focused on where they excel, and not to get distracted by the latest fad: “For some reason it’s kind of a ‘bad thing’ to just write kick ass articles. Turns out doing that is a great business.”
At the same time, she is keeping an eye on conversion. There are more than 100,000 people on The Information’s mailing list — and email has been a key component of building brand awareness from the get-go — but not all of them are subscribers. They receive a weekly email summary of The Information’s stories, so they know what they’re missing, and maybe one day they’ll get a daily email as well. Not for now. “We know how to write really great articles,” says Lessin, “and that’s not coming up with a clever aggregator”, so she’s dropped a daily email down the priority list because “it’s not going to amplify our key strength.” It’s all about focus.
“It’s the Valley, and China.”
Something that will amplify their key strength is hiring more talented journalists to cover different geographical locations. The latest is China. Lessin says that The Information has a lot of subscribers based in the region, and strong engagement around China tech stories, so they decided to set up a bureau there. Pulitzer Prize-winning former Wall Street Journal reporter Shai Oster will staff it. Again, Lessin says she’s homing in on a missed opportunity: “No one’s writing about, “is Xiaomi actually building a business?”, or “we know WeChat exists but let’s look at its economics and how it’s monetizing.” So that’s the opportunity I’m really excited about. There are only two places in the world that consistently build billion dollar companies: the Valley, and China.”
While she may not be building a business empire on quite that scale, Lessin has nonetheless carved out a lucrative niche covering the firms that are. And, she believes, she’s found her raison d’être at the helm of The Information: “this is the last job I’ll ever have.”
To hear more of Jessica Lessin’s insights into building a cashflow-positive media startup in less than 3 years, check out the video of her full conversation with Matter Managing Partner, Corey Ford. You can also sign up for a trial subscription to The Information here.
The Drunken Walk is a series of live fireside chats, blog posts, and podcasts (coming soon!) from Matter Ventures, the world’s only independent startup accelerator for media entrepreneurs. We dive into the personal stories of founders, experts, and innovators in media to uncover the moments in their careers that changed everything. Our goal is to inspire and empower the next generation of media entrepreneurs to get from A to B without a map.