Tag: sequoia

The OpenAI saga was, in many ways, a perfect story for The Information. Reporters at the influential tech site spent the week of Thanksgiving obsessively chronicling the chaos inside the company behind ChatGPT, after its board of directors abruptly ousted its CEO Sam Altman. Five days later, Altman, the generative AI poster boy, was reinstated. By then, The Information had published 17 exclusive news articles on the company that had been picked up hundreds of times by other news outlets. “His firing was announced, and then everyone on my team was sending me all these tweets, where people were saying, ‘Oh, if The Information gets the scoop on this, I’ll subscribe,’ or ‘I really hope my Information subscription’s worth the money,’” editor in chief Jessica Lessin recalls. “And so it really felt like game on.” Lessin—who has followed Altman from the start, writing the first extensive profile on him back in 2005—supported her team throughout the week by, among other things, “reporting in bathrooms while serving my friendsgiving” and at the ENT doctor with her four-year-old.

The small-but-mighty Silicon Valley publication, which turns 10 this week, has spent the past decade rolling out ad-free scoops and analysis to a targeted audience willing to cough up $399 a year for total access. Back in 2013, when Lessin left The Wall Street Journal to start her company, it was generally accepted that “legacy media was where serious journalism was. And then there were a couple of upstarts trying to do new things, but trying to fuel it with venture capital and ad dollars,” she says, adding, “Those businesses have evaporated.” But The Information, fueled by subscriptions, has survived and seemingly paved the way for a new cohort of outlets offering niche industry reporting at a premium price, from Puck to Punchbowl News. Today, more outlets, like Axios and Politico, are also offering B2B subscription products along with their free content.

“There were a number of media start-ups around that moment, and she was very unconventional—that she was doing paid subscriptions and was not that interested in social,” says Ben Smith, a former editor in chief of BuzzFeed News, who last year founded Semafor, one of the start-ups in which Lessin has invested. “It kind of pains me to say it, but obviously, she’s been totally vindicated, and most of her competitors are no longer around.” Those former competitors include BuzzFeed News, the Pulitzer Prize–winning online news site that shut down in April. There was also Recode, a brand Vox retired in March; Quartz, which is still around but has changed hands multiple times over the years, most recently to G/O Media; and Vice, which, the Times, while reporting that the company had filed for bankruptcy in May, referred to as a “decayed digital colossus.” Lessin was ahead of her time with the business model she adopted and the story she wanted to own. “She’d come out of The Wall Street Journal, and there was a sense that The Information was applying the kind of East Coast financial reporting rigor to an ecosystem that the East Coast publications didn’t really seem to understand very well,” says Smith. Longtime subscriber Roelof Botha, the head of Sequoia Capital and former CFO of PayPal, agrees, noting that when Lessin started The Information, “The conventional wisdom at the time was, Oh, you’re not going to build a successful subscription-only business at that price point. Who knows if the market is big enough for people who are deeply passionate about technology news of the sorts that they would cover?” He adds, “She was on the right side of history.”

“There is no CEO of any company of significance that was not paying attention to OpenAI over the past week,” Lessin tells me. “I think that was a fundamental bet we took 10 years ago—that you cannot be ahead or even keep up in business without immersing yourself in what’s happening in these companies and technologies.”

Today, per Lessin, The Information has 475,000 active readers (i.e., paid subscribers and unpaid newsletter subscribers). According to Lessin, they expect to be profitable this year. The company will grow its overall revenue by 30% year over year in 2023. They’ve been disciplined when it comes to growth, with only 65 full-time employees working across offices in San Francisco, New York, and Hong Kong, as well as remotely. Lessin is focused on growing The Information’s presence in Asia; they currently have three people assigned to the Hong Kong bureau and two hires in the works. Lessin, meanwhile, traveled with US commerce secretary Gina Raimondo to China in August—a trip she later recapped during a special event for subscribers.

She’s also focused on building out The Information’s finance coverage, especially following their coverage of the Silicon Valley Bank crisis earlier this year. That was a “real eye-opener for me,” says Lessin, both in terms of how they were serving their audience—“a lot of subscribers said we saved them a lot of money,” she notes—and that they could compete on the finance beat, which she says has “led to a host of coverage around the banking sector overall.” Legacy media outlets like the Times, the Journal, and Bloomberg, says Lessin, are “going to be around forever,” but “they’re not as relevant” in “my world, and I think in business,” because of the size of the audience they aim to serve. “That model really limits how indispensable you can be, especially to a certain class of reader,” says Lessin.

Among that targeted class is Jeff Bezos. “I read it all the time and have been a subscriber for years,” the Amazon founder told me in an email. “Jessica has done a terrific job. Always insightful on tech.” Another longtime subscriber is Netflix cofounder Reed Hastings. “Check it every day,” he tells me, noting that he’s “thrilled from a business-model standpoint that she’s succeeded”—he is, after all, “a subscriber guy”—but “as a reader, what I care about is the thoughtfulness. She curates amazing reporters, and the pieces, from my perspective, are written in-depth, as opposed to clickbaity. Probably subscription is the key to that because then they don’t get paid on clicks,” says Hastings. “People care enough about the stories to continue to renew.”

Lessin maintains full ownership of the company and says she has no plans to sell. “I’m in this for the long term,” she says, a view that she says has been key to the site’s success. “You need the talent, you need the right business model, and kind of that alignment that we’re not going to go chase the latest fancy revenue thing,” she says. “Over the course of the 10 years, I’ve seen every legacy publication build a Snapchat team, and then a TikTok team, and then a video team. We built none of those teams and instead hired journalists or paid our journalists what they were worth. It’s a different formula, and it takes a lot of patience.”

It’s worth noting that Lessin used her own money—“less than $1 million,” she previously said—to start The Information. Her father is a partner at the private equity giant TPG, and her husband, the tech entrepreneur Sam Lessin, won big on Facebook stock he received when Harvard pal Mark Zuckerberg bought his start-up in 2010. And there’s a perception that Lessin has worked to distance herself from—that she’s too close to the people she covers. Her personal relationship with Zuckerberg, for one, has come under scrutiny. “You learn to have dinner with people one night and then edit a tough but true piece about them the next day,” Lessin says, when I asked about the dynamic. “That’s what we do time and time again.”

“Finding the truth and telling people why it matters is a fabulous business. It’s just really hard.” That’s why, she suggests, others haven’t been able to figure it out in the same way. “They don’t want to sit in a closet during Thanksgiving taking source calls,” she tells me.