April 29, 2024

Jim VandeHei Talks About Everything Axios, Past and Future


Jacob Donnelly: I recognize that you’re likely doing many of these podcasts in the lead-up to your new book launching, Just the Good Stuff. Walk us through the steps of your career that led you to becoming the CEO and founder of Axios today in 2024.

Jim VandeHei: Thanks for having me. First of all, I love your work of the podcast. Man, that’s a long one to answer here. Listen, most of my career and what I thought I was going to do with my life was as a journalist, for the first, until I was about 35, I was covering politics, came to DC to cover politics. I was obsessed with power and how people get it, use it, and abuse it. I was really obsessed with Congress.

I came here hoping to be a congressional reporter, eventually made it to roll call where that’s what I did. I covered congressional leadership and happened to do it at a time where the public was really interested in congressional leadership. Newt Gingrich was the speaker. There was all kinds of intrigue. There was just a lot of national attention on Congress, which back then was rare. I was good at it, I think. There’s things that from growing up from playing poker or being a small town, being a troublemaker, I was good at getting people on the Hill to tell me things that they probably didn’t tell other people.

Did that, rose, and pretty quickly went to The Wall Street Journal in my late 20s to cover the presidency and Congress. Did that for about three, four years then did the same thing at The Washington Post. I thought that’s what I was going to do was just covering the White House politics, whatever I wanted to, with the Post, love The Washington Post, but I could tell the industry was changing. This is that 2006 period. You could tell the internet surging, newspaper, readerships declining, people are anxious.

We had an idea and came out of nowhere of, “Hey, I was at the Post.” I remember talking to John Harris saying, “I don’t think the Post is as good as we think it is.” This is right when Google was buying YouTube. I said, “What if Eric Schmidt came to us,” and said, “What would it take to take on the Post?” The answer was like, not that much. If we could hire six of the best people we know and hire six up-and-comers and hook ourselves up to the internet and hook ourselves up to cable TV, we could really make a big difference almost overnight.

We essentially called our own bluff and started Politico. Six months from that conversation, we’re live with Politico. That’s when I shifted from being, “Okay, I’m a reporter,” an introverted reporter, on my own to suddenly you’re running a company, you’re an entrepreneur. Eventually became a self-taught CEO and did that for a decade, really fell in love with the starting of things and the running of things, the operating of things, and left Politico and did the same thing with Axios.

We did Axios. It was very much trying to solve the problem of you could tell people needed to get smarter across more topics. It didn’t have much time, came up with this idea of smart brevity, and went out and recruited the smartest people on the most important topics. I had a lot of success right off the bat. That’s grown into what it is today, which is a much bigger company with– we have verticals, we have a presence in local communities, which I’m sure we’ll get into. That’s my story. It’s fun. I love this industry. It’s a hard industry, almost impossible industry, but it’s a fun industry.

Jacob: You have to really like pain, I think, to work in media in 2024.

Jim: I don’t think people realize how much pain you got to like. It is hard. Very few success stories in the digital era. Man, if your technology’s off or your editorial’s off or your sale’s off, or your marketing’s off, if everything’s not working in synchronicity, your margin for error is so slim because all the big tech companies gobbled up all our money, it’s almost impossible, but it’s a blast. I work as hard today as I did 30, 40 years ago. I love it and I love trying to solve the problem.

I think information and news matter. I think having durable brands that people trust matters. I always tell people I used to try to do something that you get paid for that you would do for free and I would do this for free. I just love it. I love the space.

Jacob: If we look at Axios today, there are a number of divisions or products depending on how you might think about it internally and I want to talk about each and every one of them. To do that, I actually think it helps to take a step back and look at the org chart of Axios. You’ve got so many different departments. As the CEO of the business, talk to me about how each of these business units rolls up to you.

Jim: It’s an interesting question. We have just gone through a process where we’re trying to diversify the company. If you think about us as a business, we have your traditional ad business that’s newsletter and website-heavy. We’ve got this very fast-growing events business and that’s a fast-growing business for a lot of companies. We’ve got high-end subscriptions. We have a local business. We have a tiny but growing entertainment business.

The way that I’ve tried to structure the company is that each one of those is set up as a business inside the business, almost like a little startup. I have an editorial lead and a business lead on each one of those. There’s very specific direction about the culture and about what we’re selling and how we’re selling it and what we’re building and how we deliver it. As long as you stick to that, you have a lot of leeway to just go run that business within your P&L.

My COO, Allison Murphy, who’s a big fan of yours, she operates the company, but she has ownership specifically over Local and specifically over the ad business. As long as they’re doing what they need to do, she has a lot of autonomy to do that. Kristin Burkhalter runs events and she’s partnered now with Sara Goo, who was our editor in chief who we moved over to be executive editor of events because it’s such a fast-growing business and they have a lot of freedom. As long as you’re delivering first-class events and it’s a high-quality editorial product and you’re hitting a certain margin, you could go months without getting any direct feedback from me.

That’s how we work across each of the– Erica Winograd, who’s out in LA, who runs the entertainment business. I could go months without talking to her because she knows the type of shows that she’s pitching and the type of economics that it would take to land it. That just takes a long time. When you think of operating any company, we’re now seven years in, so we have a nice structure and a nice culture. That’s after seven years of getting to this point and figuring out what are the type of people that you need.

The operating level, it’s the whole game. Yes, we have a great vision. I think if we’re really good at one thing, it’s like figuring out with total clarity, what it is that we want to be and do and then finding really high-quality people to do it. If you don’t have those high-quality people, you can’t grow for sure. You couldn’t grow. I couldn’t be in 30 cities with a high-quality product if I was micromanaging that or if I was even really involved in it other than setting things directionally.

That operating level, my leadership team matters profoundly, and then that layer under them matters profoundly, and the layer over them. We’re about 530 people now total at the media company. It’s a lot of people to make sure they know exactly what they need to do each and every day to drive as much value as humanly possible.

Jacob: You talk about how each product has its own business lead and editorial lead. Is the rest of the company then shared services? Is it a general account management team, a creative team, or does each pod still have their own bespoke teams?

Jim: No. The technology serves all the platforms. The HR talent function serves all of the platforms. The finance office serves all of the platforms. We even have a centralized operating team just to make sure you’re keeping tabs that all these things intersect at different places, making sure you’re not slowing things down. There’s a lot of shared services that these companies that sit on top of, which you have to do.

Marketing for us is a centralized function that, yes, you might have embedded people, but you can’t afford to have– It’s like a margin of error thing. The margin of error and even the margin of profit is so small in so many areas of media, you can’t replicate it like you might replicate it at Facebook or something like that where you have endless amount of money to spend. You have to get that shared platform, that shared culture, shared talent operation really down pat.

I think there’s a lot of reasons media companies haven’t worked, but one of them is it’s just they’re a very complicated business to run, really complicated because all those things, your technology, your sales, your marketing, your editorial, have to work in synchronicity. All have to be working at a pretty optimal level because if you have janky technology and your distribution’s not working, or your SEO isn’t set up right, you could really hurt and cripple the company. If you have bad editorial content, means you have bad product, you’re going to die, and if you have a good product but don’t have people who could sell it, you’re not going to have money. You’ve got to get all of those things working as a symphony.

Jacob: Let’s start with core Axios. Back in 2016, you spoke at the Information’s New York Subscriber Summit, and you said that your dream was to create a company that doesn’t require any advertising. Obviously, now, Axios is still predominantly an ad-based business. When you started, what did you realize as you started building Axios that made you go, “Wait a second, I’ve actually got to run ads.”?

Jim: We always planned to run ads. My point at that forum was in a dream world, you have so much revenue reoccurring through subscriptions that you don’t need advertising, which is a very up-and-down business. You needed advertising early on, and you need to stay free in advertising as long as you can, as long as you have growth, because that essentially is how you do your marketing. That’s how you do your brand awareness, that’s how you do your audience acquisition.

We were lucky in that the ad side of the business, which to this day is the vast majority of our revenue, was bigger than we thought it would be, which then allowed us to grow the brand a little bit bigger and faster than we would’ve thought, and to be able to have capital to build the company a little quicker than we thought. We did not launch on day one with a high-end subscription model. Remember, we didn’t either at Politico. I remember Politico for the first five years, I think my math is right, it’s either four or five years, it was a all-advertising business. We didn’t introduce POLITICO Pro until year four or five.

By the time we left, it was a 50/50 business almost. 50% subscription, 50% advertising. Really, we only started to introduce the high-end subscription side here in year four. Those are still baby businesses, nice trajectory, but baby businesses. We’ve benefited a lot from that. Our advertising market, which your listeners probably know, but I’ll just go a little bit deeper so people realize it, we’re basically selling to people who care about what really important people think of their brand or their ideas. It’s not somebody trying to sell a product.

You would almost never advertise with Axios to sell a product because we don’t have the scale and we don’t have the precision matchup tools that you would get on social platforms. What we do have is a super elite audience of decision-makers at companies, at technology companies, in politics, in policy, leaders in the media who are reading us religiously. If you care what those people think about your brand or your idea, there aren’t that many places that are clean, well-lit, and safe to advertise, and that’s our sweet spot. That’s where we make to this day, the vast majority of our money.

Jacob: A former colleague of mine likes to talk about what he refers to as the trap of generality, where everything on the internet ultimately just becomes general news. You chase politics, you chase sports. It could be argued that when you launched Axios, you intentionally went into this potential trap, and yet, it worked. Why has it worked so well for Axios being a more general interest news publication versus so many others who have failed at this?

Jim: Now, that’s interesting. I would never describe ourselves as a general interest publication, I would describe ourselves as a broad base of interests that we care about, but with almost a niche mentality to each of those. We wanted somebody who had true domain expertise on a topic that matters. Sarah Fisher in media, Dan Primack in technology, Alex Thompson on Biden, you go down the list. The idea is here are the topics that a smart professional would care about, here is the person who we think is the best in the business at doing it.

If we can aggregate all of those audiences together, you start to have not the scale of The New York Times, but a pretty big scale of people. Yes, you’re hitting across healthcare, and you’re hitting across politics, and you’re hitting across AI, but you’re doing it through the lens of expertise. We’ve doubled down on that, but that hasn’t changed. I wholly agree that anything that is general interest, anything that’s commodity, and I’ve felt this for 15 years, you’re doomed to be dead.

There’s no market for it, it is a commodity, it doesn’t have intrinsic value, it isn’t something that you can only get in one place. You have to have something that is distinctive. For us, the distinctiveness, if you reverse engineer the company, the thing we did that turned out to be right was smart brevity, and it was both parts of it. It was smart, really smart journalists offering distinctive coverage, but the brevity part, I would argue was as if not more important. This idea of bringing efficiency to high-end information creation and consumption. The marriage of those two met the consumer need.

Again, reverse engineering the company, I’d go back one layer further and I would say the thing we got most right was the first two words of that manifesto, and they haven’t changed to this day, reader-first. We basically sat down and said, “Screw what we want. I don’t care what The New York Times is doing or what we did at Politico. What do we know that the smart professional needs? How do they want it delivered, and how do we produce that? How do we make that the only thing we care about?” In those early days, we would sit there.

Basically, when we decided to start Axios, I shut my laptop and I’ve looked at a computer screen, I’ve worked on a computer fewer than six times in seven years. Everything I’ve ever done, I do on the phone, and the reason was I had to become the consumer and they were going to get 80% of their content on the phone. We would stress about every pixel on the phone or every pixel in the layout of a newsletter to make it as user-friendly and delightful as possible.

Almost like you were building a shoe for somebody who’s a shoe enthusiast. You’d care about the comfort, and you care about the style, the shoe laces, and the material. Ultimately, that person is going to wear that shoe because there’s something delightful, unique, and distinctive about it. We felt that same way about the content experience. I think that is a huge mistake that media companies make. They do things that they think are cool that they want to do without first asking themselves, “What does the reader, the listener, the watcher, what do they want? What do they need? How do you make them happy?”

Jacob: As time goes on, do you see the core part of Axios continuing to be a growth area or do you view it more now as a top-of-funnel to all the other business units that you’ve launched?

Jim: Hopefully, a growth area. It was a explosive growth area until last year. That was a really hard year for everyone. We still grew, but it wasn’t 30%, 40% in the core business. You’re talking single-digit growth. I hope it continues to grow. Again, we are a new enough brand that there’s tons of people who’ve never read us. There’s still a lot of acquisition to do out there.

I think the core of the brand can grow, but we’re diversifying now because I think we’re on the edge. Maybe we’re 6 months or 18 months away, but we’re on the edge of a profound shift in the relationship between human and information. The way that we think about businesses is we think about, “Okay. Mike and I went out to Silicon Valley and spent an inordinate amount of time with people at Apple, Amazon, Philanthropic, OpenAI, Character.AI, all these companies.” Not saying,” How can we get money from them?”

We would take money if they want to pay for the content, but it’s more like, “What is the world going to look like in 18 months or 2 years? How do we engineer Axios now to be ready for that disruption?” Almost like what would’ve happened if you knew the internet was coming before the internet came? We know there’s going to be this huge platform shift. How do we get ourselves ready for that?

Our belief is, “Okay, there’s a couple of fundamental things about humans and information that we don’t think will change.” People are going to always need, especially smart professionals who are looking to news to probably get ahead at work really fundamentally, they’re going to always need expertise. The nuance of breaking news, of getting people to tell you things they shouldn’t tell you, the historical context that they have that a machine’s not going to replicate. They’re going to need human conductivity with like-minded people around passion topics.

That’s why we’re investing heavily in events. That fraternity of content consumption, we’re launching a membership program, just did it around communicators where we charge a decent amount of money, but you get to go to events, you get access to proprietary data or information, those things alongside of trust like, “Oh, the world’s on fire. I don’t trust anything, but if it’s written by Axios, I know them. I trust them. It’s in this secure package that they’re delivering me,” those things will have a tremendous amount of value.

It’s a long way of getting to your thing of like, will the national business grow? I hope so. I hope it continues to, but we’re diversifying knowing that it’s not going to grow 30, 40% a year probably ever again. It’s just off of being too big of a base.

Jacob: You launched your first subscription product in 2022, five years after launching Axios, the national brand.

Jim: Yes.

Jacob: Can you talk about this offering and why you decided to take the approach of niche newsletters versus, say, gating the entire site like so many other media companies have done?

Jim: Yes. Let me take the last part first. The decision is do you charge– do you have a paywall? The upside of a paywall is that if you could be one of the chosen few and you get a big enough subscription base, even consumer-based subscribers tend to renew in the 80% plus range. It’s a nice business.

The flip side of that is it limits the amount of exposure to your brand and the amount of engagement with content, which therefore limits the amount of advertising. For us, because the advertising business was and is so attractive, I don’t want to reduce the amount of content that I’m producing because we’re going to make more money off of advertising than we would off of that paywall. Then what we said is, “Okay, yes, but we want gated content,” so we basically did what we did at Politico, which is create additive content above and beyond the base of your content that is more micro-focused around niches.

The two niches that we picked were the Dan Primack universe of deals, like people in venture, private equity banks who are transacting in deals, and buying and selling companies or stocks, and then our version of what we did at POLITICO Pro, which is Axios Pro around policy, and we did it around newsletters because even to this day, it is the best vehicle for getting high-end content from me, us to the end user.

The stupidest thing, the dumbest thing, I always get a kick out of people who are– the groupthink that takes on– remember a year ago, wherever it was like, “Oh, it’s peak newsletter,” and I remember looking at the– I’m like, “What are these people seeing?” I’m looking at the engagement of newsletters, subscribers are going up, and open rates going up. Advertisers have no idea how to even get smart people to engage in content other than through a newsletter. Maybe people are doing a lot of newsletters and maybe the consumer’s getting a little overwhelmed, but if anything, now newsletters are more valuable than ever.

You’re losing your audience that you had on Facebook. You’re losing the audience that you had on Twitter, and most of us are still very strong on Google search, but make no mistake, it’s a flop. Google is a flop if you are still searching for information two years from now. If you don’t have some kind of chip in your brain that’s just answering those questions that is brought to you by Google, they failed, so they’re not going to fail. Search is going to be replaced by generative AI and personal assistants.

What’s left standing? People who come to your app, people who come to your site, people who subscribe to newsletters, something else will come along, but those are pretty powerful things to have. What was the other– That was a long answer. I missed your first part.

Jacob: Oh, well, just ultimately why did you pick these niches in newsletter form, which you did answer, but then as a follow-up, how did you pinpoint the price that you wanted to charge for them?

Jim: I’ll tell you a funny story, and we’ll get to it. When we were starting POLITICO Pro, oh, God, that was 12 years ago, I’m getting old, whatever it was, 12 years ago, is me and Roy that were pushing it, and Bloomberg was starting BGOV, and they had hired all these McKinsey guys, and they wanted to do a meeting, and I think we were talking about do we merge? Could one of us buy the other?

We had this discussion about pricing, and we had come up with, I think, five grand was our price back then, and they had seven grand or something like that, and they were– Oh, we hired focus groups and data people, and this algorithm and that, and we found out that 6,999 is the perfect number and they’re like, “How did you guys come to 5,000?” Roy and I look at each other. I’m like, “I don’t know. 4,000 seemed low, 6,000 seemed high, and 5,000 feels right.”

There’s no magical formula. You want to get in high enough. It’s easier to reduce a price than it is to increase a price. You want to get in high enough where, if it works, you’re going to be able to bring in enough revenue, but low enough to get enough people to test the product. People were accustomed to paying 400-plus for the information, and we were getting in the venture space, so 5.99 felt like that’s close enough that you’re not going to scare people off.

The policy product was priced right around 5,000, which is lower than BGOV and lower than Politico mainly because we want to get customers and get people used to consuming content our way, but we’re not big focus group data overthinking people. We feel like we know the market, we’ll take chances, we’ll adjust if we need to, but all the time people waste with all these stupid things where they think that they give you a magical answer that they don’t. You’re better off kind of trusting your gut and then fixing it if you’re wrong.

Jacob: I mean, I was going to charge $100 a year because that’s what Substack said, and then I decided to slide my finger over one number to 200 and said, “That feels better,” and it was still wrong. Most of my audience says they’d be willing to pay 50% more than that, so I’ll be fixing that soon.

Jim: The reason, which is smart on your end, but the reason is, at the end of the day, we’re dealing with customers once you get into the $200, $300 plus range that either it’s a business expense or it’s business related enough that they’re willing to pay for it. All that matters is do you deliver the goods. If you deliver the goods, they’re going to pay 600. They might pay 6,000 if you’re really good. It’s all about can you deliver the goods. I think that is the thing we’ve always tried to focus on. If we’re not smart, if we’re not efficient, if we’re not delivering value, the price doesn’t matter. The price will work itself out.

Jacob: Axios Entertainment is a new initiative for the business, but it’s not your first foray into, you could argue, TV content because you had Axios on HBO. Can you talk about, A, Axios Entertainment, and B, what is the strategic rationale behind doing these sorts of multimedia projects?

Jim: Axios Entertainment is a relatively small group headed by Erica Winograd who’s out in LA who has a background in conceiving of original documentary programming. She has a small team that helps her think and bring these ideas to life. Then the idea is to partner with production companies and pitch platforms like Amazon, Netflix, Apple, HBO, and Showtime to buy your programming.

We just sold a show called Money Game to Amazon that we’re doing in partnership with a production company called Campfire out in Hollywood. It’s a many million dollar deal where we have the exclusive rights to all of the players at LSU as they go from being a gymnast, basketball player, or football player to being able to make money through name, image, likeness, called Money Game, and what happens, just their life, the economics of it, so a cool idea. We’ve sold that show and now it’ll air on Amazon this fall.

The idea is the way we look at Axios is not through where we are today. 10 years from now, there’s going to be a couple of media companies that are kind of known national or international brands, and what are the attributes of those companies? I think one of the attributes can be and probably will be that you’re able to engage people who care about serious content in a bunch of different ways.

Maybe it’s in person at an event, but also through documentary films or through shows that are based on the IP that we create through the journalism that we do. It’s an experiment, it’s a small thing, the early signs are good. It’s not going to make or break the company, but I do think if we can nail it, it’s just another way to expose people to the Axios brand, to be blunt, and also strengthen our relationship with people in the production world.

Shaquille O’Neal, for instance, is a partner on the Amazon deal, and if that works, maybe do something else with him or we’re pitching a show right now in the market with Tom Brady’s production company and on leadership. Maybe something happens there, and you will have better relationships with these platforms. You hear more about what they’re interested in and find more stuff adjacent to what Axios cares about; AI, healthcare, the energy revolution, or politics, and that’s the play there. Then we’ll see.

Over time, for it to be a real business, you have to own the production of the films, which we don’t. We’re the idea creator, we’re the connector, but if we really wanted to do this long term we would either buy a studio, or we buy a production company, or build it ourselves.

Jacob: Is the way to minimize the downside of this to focus on the ideas right now until you prove that you have that, and then–

Jim: Bingo, yes, there’s no cost. It’s just a couple of people conceiving of ideas. You sell it, you sell a couple of shows, you’ve more than paid for that, get started to strengthen your reputation, and then you start to bring in some of the production.

I don’t know how they’re doing now with it, but they had a really good business around production. They made it one of the things that they were focused on. It became a many tens of millions of dollar business for them with a decent margin and they ended up becoming a production company themselves. I don’t know where that stands now. I haven’t talked to them in a while, but I assume that’s still


All right. We talked national Axios, we’ve talked subscriptions, we’ve talked entertainment. For most operators that would be enough. For you, it’s not. Now we move to Local. You decided to acquire was it Axios Charlotte a few years ago, and then roll out a ton of different local pubs. Talk a little bit about the strategy here and the advertising business specifically. How does it make money?

Jim: Like you said, we like pain. Rewind a couple of years. Basically, one of the things that we do and it’s served us well, is if everyone in the media thinks something’s true, go the opposite direction. It’s a very safe bet to make. People are like– they’re hopeless about Local and I get why they’re hopeless about Local, but what we realize is, well, wait a second, people are still in these cities, they still care about what’s happening, and if you can reach them, there’s still advertisers who want to reach them.

The advantage of today is, particularly after COVID, but even pre-COVID, people don’t need to work in a building, so you don’t need to buy or lease a building and you don’t need a newspaper or paper boys and girls to deliver it. You just took away your two biggest cost drivers. Then the question is what is the lowest cost way to create a daily habit with a serious group of readers that you could then monetize?

We came up with this idea of Axios Local, let’s take the Mike Allen formula, let’s find one or two– Two is the number we settled on and now it’s more than that, but two people who are the most wired reporters in a city like Minneapolis, and create a morning habit of a newsletter which if you do it right, if the layout is right, if you have the right people, the right voice, you can do– Let’s lock those people down. Let’s start to see if we can sell against it, and as we grow the revenue, we will grow the size of the staff, so we don’t collapse ourselves on day one because we took on too much cost.

In the middle of this, there’s this guy Ted Williams, he is running this company called Charlotte Agenda. I remember being at National Airport, he calls me, he’s like, “Yes, you don’t know me. I have the Charlotte Agenda. I got eight people. I saw what you guys are doing in Local. You should buy me and then I’m going to show you how to do these other places.” He is a really straight shooter. He is like, “This is how much money we make. This is how much it costs.” It’s like, “Holy shit, you’re making money off of Local?” I can’t remember, the number at the time was maybe they were doing about 2.5 in revenue, so 2.5 million, but 1.5 in cost.

I was like, “Wow, that’s not bad. If I could do that in 100 cities, we’re off to the races.” He is like, “Not only will I tell you the revenue and the cost,” he goes, “If you give me X amount, I’ll sell you the company, and we don’t really have to negotiate.” It wasn’t that big of a number. He goes, “But I want to help build this out.” Our only due diligence was he had eight or nine employees, I wanted to make sure we met them to make sure they would fit culturally. We have a pretty unique culture here.

We loved all of them, so we bought them. That has been very much a template for going into these other cities, which is this mix of what’s happening in politics, or business, or technology, but an equal mix of what’s the city like, what’s cool? What are the new restaurants? What are the new bars? Who are the cool people that live here? It’s like a mix of that in each of these.

We ended up now we’re in 30 cities, but we started– I think that first batch was Des Moines, Denver, Minneapolis, Tampa, I think that’s right, Twin Cities, Tampa. We were able to do what we thought we could do. Oh, my God, suddenly we’re able to get to– our first marker was 50,000 readers with a 50% open rate. Now I think there’s at least 10 or 11 cities that are 100,000 readers. Getting the 100,000 subscribers to the newsletter in that city by that city for that city with a roughly 50% open rate. Now the big test– eventually, we’re in 30 cities now.

Now the test is I’m very confident we have product-market fit. I think the fact that we get to that scale with that kind of consistent open rate and then look at the anecdotal feedback, we have product-market fit. The next test and the one we’re trying to validate as quickly as possible, is can we change local buying habits to make this a regular part of their buying cycle so that we can get each one of these cities to profitability in a three to five-year time period.

Break down a city. A city, if you have two or three reporters even with the allocation of other costs, your cost is less than a million per city. You need to be able to get to, let’s say, 1.2 million in revenue. Ideally, most of that is local. Early on we had a lot of success selling, but it was not a false indicator, but maybe it was a little bit of a false indicator. National buyers wanted to reach smart professionals in those, would pay a premium, so they would buy out a lot of the newsletter, so we couldn’t actually sell to local. Really only in the last year, we hired a guy who had been next door. He’s now running Local sales. He has a Local sales team. We’re now starting this last quarter.

We had our– by far and away, I think Uber came in for the biggest buy we’ve ever had local, biggest event sale ever, most clients spending 100,000 or more. The signs are good. I’m not at 100% to declare victory. I have to be able to see something other than Charlotte which has continued to grow and sustain its profitability number. I have to be able to see that in the other cities before we move on from 30. That’s what we’re in the middle of, which is just a really cool experiment.

What I tell our team is, if we get Local right it will be a bigger achievement than starting Axios or Politico. It’s that hard because everyone says it can’t be done, no one’s been able to do it, it doesn’t seem doable. If we pull it off, not only will it be important, I think it’ll be the thing that I will look back on that I’m most proud of, just understanding the level of difficulty.

We’ll see. I really hope by the end of this year we’ll have validated it. If not, we’ll validate it early next year. The trajectory I would say is good to very good. It’s not I want to get to about 92% certainty before I would say now we’re off to the races. Once we get off to the races, the hope is now we’re really off. Once we have it and having Cox as a partner, that thinks generationally, the minute that we know we have it, then we’re going to go into 50, 100. Maybe I could lay out a scenario where we could be in every town no matter how big, especially when AI really starts to pick up. That would be the exciting exciting thing to do. We’ll see, it’s still in the early stages.

Jacob: Last year, Digiday reported that your event revenue was greater in 2023 than you had originally budgeted. What is the overall event strategy for Axios, considering you have so many of these different business units?

Jim: The overall, like I think last year, the events business, off a pretty good base, grew 60%. This year, it’s on track to probably do 30% or better. The event strategy is just to put on the best possible live journalism show that is truly newsy with truly interesting people, and is respectful of your time.

To make it worthwhile for that audience and make it sensationally worthwhile for the advertiser, the sponsor who’s there and excited to convene people around a topic. Most of that is national. The biggest growth has been around these bigger events. We did a lot of events around Davos, around COP.

We’re doing a lot around AI now. We have a couple of different AI summits. We have BFD, which are these investment summits built around Dan Primack and his audience. Those are much bigger. You’re getting into the close to a million dollars often plus in sponsorship for big events like that.

We do a lot of a hundred thousand dollars events, or in local communities, $10,000 or $20,000 events. The idea is to keep growing that. There’s no reason that that couldn’t be a huge, huge company because just think about yourself and the world. The more artificial and virtual the world comes, the more valuable live events are, right?

People are just, they’re hungry for connection. Not just connection. They’re hungry for smart connection around a shared passion topic, almost always related to work. If you can do that, there’s a really interesting business to be had. Kristen runs the business side. Sarah now who ran our entire newsroom is running that.

That’s how bullish we are on that space. The idea is just to keep being really smart. There’s a lot of people who are competitive in that space with us, but if we can keep being a blue chip or seen as the best in that space, I feel very confident it’ll keep growing at this percentage rate.

Jacob: Why did you ultimately decide to divest Axios HQ?

Jim: People don’t understand. Axios HQ was a business we created within Axios. We had a bunch of companies come to us, who their executive teams loved Axios newsletters. They loved Smart Brevity, and they said, “Will you teach us to write?”

Our first response was, “No, not my job.” Then the more people who said it were like, “Wow, something’s going on that these big companies,” including UnitedHealth Group or BP, JP Morgan Chase, the NBA. They all called us and used almost the same language. We’re like, “Oh man, something’s going on here.”

Myself, Roy, others, we dug in, and it turned out that internal communications in every company, big or small, was a hot mess. They didn’t know how to bring smarts and efficiency to it. We created, at first, a training program and then software.

Now we have very sophisticated AI software that helps communicators or helps managers or leaders communicate more efficiently, be able to measure it, and be able to track that communication so you can start to bring real value to it. That’s the context.

Then when we did the deal with Cox, we see a huge, huge upside in that SaaS-type business. It needed to get capitalized differently because a SaaS company gets valued differently than a media company. When we did the deal with Cox, who ended up buying a majority stake of the media company, we were insistent.

We had been insistent when we had talked to Axel Springer and others about buying the company that we wanted, at transaction point, to split off HQ into its own entity. We would help capitalize the company. We would get other investors to capitalize it.

Then Roy Schwartz, who was one of the three co-founders, who was born to be a CEO, but I was a CEO, you’re only going to probably have one. He’s a better businessman than I am. He wanted to go run that company, so we did that. When we did the transaction, we split it off.

Roy is now the CEO of HQ. It’s a sister company, but it’s completely separate of the media company. It’s doing exceptionally well. It’s definitely on the cutting edge of using AI and creating an AI copilot for communicators. It’s a great product.

We, being more than you probably need to know, me, Mike, and Roy, are the biggest shareholders in that company. Cox is also a minority shareholder. Then on the media company, Cox is the majority shareholder where we continue to be shareholders, but they own the vast majority of the company.

Jacob: I think we’ve talked about every single core product that Axios has. If you had to break revenue down for the entire corporate structure across those various divisions, what would be the percentages?

Jim: Man, I wish I had that in front of me. Subscription is still– Even subscription with membership high, is still 5% of the revenue. Let’s say 95% of it is in advertising. Probably– God, I’m going to probably get these wrong. Let’s say 10% is local and then the rest is national. Of the national– Let me just do the math in my head. 25% of national would be events and the rest would be advertising.

Jacob: Where do you expect to finish 2024 from a revenue perspective?

Jim: Obviously, we hope to be up. I think we project to be up overall as a company in the 15% range. It’s a really hard time. I find this period, the last 18 months, the hardest period in 15 years to budget in. I really only budget confidently quarter to quarter.

The world’s just changing too fast. Q1 was good, and signs is that the rest of the year could be good, strong good. Definitely different than last year. It’s not four years ago, where there’s just a lot of money out there. It’s still really a hard environment. It’s a better environment than last year.

I’m reasonably confident that the economy’s not going to tank to the point that it would reverse what we’re seeing right now, but it’s still a difficult environment. I tell our people all the time. It’s still a fight every single day for every single dollar.

My hope is we end up with solid double-digit growth this year. That would make me feel good. What would make me feel even better is that these emerging lines of business are doing the things behaviorally that we want them to do.

That’s why Cox has been just a godsend. They’re just a great company with a similar culture. They’re so big that they think in 20-year increments. They really want Axios to be, a decade from now, the way we would’ve seen CNN in its heyday, just a dominant publication that reaches people in a variety of ways and stands for truth.

I think there’s no guarantee we’ll get there or anywhere close to that, but I feel like we’ve set the foundation to do that. Shame on us if we don’t execute on it, but that’s a lot of work. It’s a lot of things that have to go right.

Jacob: In a recent Times article, you talked about the $1,000 per year membership product that you’re building and said, “I’m trying to align the company with the people who have a ton of talent. They thrive, we thrive.”

When I wrote about this in AMO, I said that, as media companies, we need to better incentivize our star talent. When you think about this membership product specifically, how do you think about incentivizing that talent? How do you think about incentivizing Sarah or Dan or–

Jim: It’s hard, right? What you want to do is you want to, in an ideal world, you would incentivize them wholly based on the growth of their product. I don’t love that model for them, or for us, because they don’t really control the sales of the product. They don’t control the advertising buy. They don’t even control the outward selling of the individual product.

They could be punished if they might be producing an A+ product, but maybe the selling wasn’t right. The way that we try to align it is we do try to put together an aggressive package of bonuses, salary, incentives, where they’re being paid as stars, right?

We have to be confident that there’s just going to be some reporters who make a lot more than other reporters because they drive a hell of a lot of business and they drive value that a generalist or somebody who’s not a franchise player drives.

My hope is, with the membership program, and the subscriptions, and getting people on stage, my hope is, over time, people like yourself– Let’s say you build out this business and you’re the media operator. You get a decent following and you could derive subscription dollars off of that, maybe events and maybe advertising, but you’re lonely.

You’re like, “You know what? This is hard, man. I don’t have anyone to talk to. No one to bounce ideas off of. Man, it’d be nice to collaborate with somebody who is on the technology beat. Man, I’d love to do a conference, but I don’t have a team.” My hope is that people like you then see us as that’s the place to go.

If I’m the best of the best, I want to go there because I’m going to get the best of both worlds. I’m going to be able to make more money than I thought I could make. I’m going to be able to become an even bigger presence or a bigger star, but I’m also going to have the trappings of a company that cares about me and can give these other pieces of support.

That’s the flaw of Substack. Substack is, and they’re trying to remedy that a little bit, but it’s a little lonely. Most people aren’t wired that way. Very few are, actually. Some have done it exceptionally well, but I think most people in the end are going to want people in support. I hope that we are seen as a place to go if you are at the top of your game and have some dominance in a niche beat.

Jacob: Industry Dive sold for a few hundred million dollars, and I guess more depending on incentives. POLITICO sold for $1 billion. You sold for $525 million. What are they putting into the DC water that makes all these media companies sell for so much down there?

Jim: Listen, in some ways, if we’re being blunt, media companies are a little bit like NFL franchises. They’re a prestige asset for a lot of people. If done right, they carry a multiple you’re just not going to get for most businesses. Or to be blunt, you might not get it based on the business that you’re looking at on a spreadsheet.

You just love the space. You love the, “Hey man, the guy owned POLITICO.” There is something about that. I think the reason that they’re DC-based, and all of the ones that you just mentioned, is they are businesses. They’re businesses that, let’s be blunt, they feed off of the city, which is people want influence. People want to influence political insiders through advertising. There’s not that many ways to do it.

Or in Industry Dive’s case, they were DC-based, but they realized that if they could go through these micro niches and get the most powerful readers and things like wastewater treatment, that there’s real value there. Very smart people who ran that, very smart exit for all of them. There is an advantage, if you understand the economics of DC, to doing it in DC.

Jacob: You’ve got a new book coming out, Just the Good Stuff. I want to run through a couple of what-ifs with you.

Jim: Yes.

Jacob: First one– I read this last night. Axel Springer almost bought you guys.

Jim: Yes.

Jacob: As time went on, and I won’t put words in your mouth, people should read the book. You found that the opportunity of merging with POLITICO to be just not that interesting. Let’s assume that, using your words, that revenge feeling that you had won out and you actually decided to go forward with that deal. When you became the CEO of Axios and POLITICO and that combined entity, what would you have done to make that combined entity a success?

Jim: Listen, there was a point in time where we thought about it. They came to us. They wanted to buy us and POLITICO and put us in charge of it. I put thought into that. It didn’t excite me in a way that I think that they thought it would excite me.

What I would’ve done is done what we’ve done here. I feel very strongly. There’s a certain type of culture that you have to create. I think you have to find people who can have true beat dominance, B-E-A-T dominance, on every single thing that POLITICO touches or that we touch. You’d probably want to get rid of the overlap between the two companies.

You would want to be the most important publication for people in power across every single sector. That would’ve been the playbook if we had done that. There’s a lot of problems with that deal. One, I don’t think Axel would’ve been the right partner for us.

I like Mathias Döpfner. I like that he cares about journalism. He’s got really strong political views I think he probably wants to impose on his publications that would’ve made me deeply uncomfortable. We both have strong feelings.

Now watching him in action and knowing myself, I think we would’ve collided a lot. I think we both have strong personalities and strong views that probably would not have been a great marriage over time. I write in the book about peacetime leaders and wartime leaders. I don’t know that I’m the best peacetime guy.

I think I’m a good wartime guy. I’m good when it’s hard and you’re trying to do a bunch of things that people say you can’t do, and you’re willing to take some risks and you’re willing to hire other people who are wired like you.

You get into a big company. POLITICO is a big company now. It’s 1200 people. There’s like a peacetime dimension to it of like, “Do you have the right processes? Are you operating inefficiently?” That’s just not Jim’s gig. I have other people who could do it, but I don’t know.

I thought about this a lot even when we left POLITICO. Would we go run a different publication? Ugh. Cleaning up other people’s stuff or trying to impose a culture on people who are resistant to it. You only would understand what I’m saying once you’ve run something that’s 500 people. It’s so hard, man.

People are so difficult. Once you figure out what you want to be around. Axios is like 525 people who are just high-achieving, they’re ass-kickers, but they’re good people. The idea of going back in, and most of people that were at POLITICO were hired after I left, that just does not sound fun. I like fun.

Jacob: Around the same time that the POLITICO-Axios stuff is going on, there are reports that you’re also exploring a merger with The Athletic. Was that true?

Jim: True that we talked. True that we admired them, and I think they admired us. We went to LA wherever they were. Spent the day whiteboarding, “What could this look like?” It wasn’t an obvious marriage. There’s just not that much here’s Axios and here’s The Athletic. There are not a lot of overlap.

It’s not really clear what we would’ve brought to them or they would’ve brought to us. Yes, we talked but we never got so close as to talk specific numbers or let’s really engage in this. Back then, there’s a lot of talk, because there’s a lot of people circling around that wanted to buy up all these publications and put them together.

There’s different people who are like, “Oh, we’ll put together Axios and The Athletic, and maybe we could buy the information.” There’s all these weird people who thought they could put together these composts. They typically don’t work.

By the way, I remember walking away thinking the company that should buy The Athletic is The New York Times because The New York Times needed subscription growth and they did have subscribers. The New York Times is really good at getting more subscribers.

Athletic needed help boosting their subscription base. I don’t know how The New York Times feels about that today, but it struck me as a smart purchase. I’m a big fan of The Athletic. I read it a lot. Read The Times a lot. It wouldn’t have been a good fit with us.

Jacob: Do you watch Hot Ones?

Jim: No. What is it?

Jacob: It’s a YouTube show where two people eat chicken wings that get progressively hotter and then at the end, everyone’s crying because it’s too hot. I won’t go too much deeper into that. Before we end with the same two questions that I ask every operator that comes on the show, I want to give you a minute to tell us about your book that’s coming out.

Jim: The book is, Just the Good Stuff. It comes out tomorrow. Basically, I was in this rare position where I started two companies. I ran two companies and I’m a journalist. I kept very close notes about management, leadership, difficult people, difficult bosses. All the weird things that you confront in work and life and turned it into a book.

Essentially using my story of like, here’s 60 lessons, and very applicable lessons, with takeaways that you can apply to your specific life, almost all based on me screwing it up the first time and hopefully having enough humility and self-awareness to fix it.

I write a column called Finish Line. I’ve just noticed that people are hungry for that type of content. I have a very blunt direct delivery style. I hope that that will resonate with readers. To me, it’s a book written for leaders, managers, college grads.

Anyone who’s trying to get ahead in life and at work in particular and wants to know a couple of secrets that have worked for us and for a lot of other people. I think if you apply them, you’ll probably have a lot of success.

Jacob: That’s Just the Good Stuff that comes on sale tomorrow.

Jim: Just the Good Stuff is the name. I appreciate you pushing it. All the money from it goes to a foundation we created for kids who need help, who don’t have the money to get vocational training or go to school. I don’t profit from the book. It really is a passion project.

For me, I believe a lot and I try to help other founders. I try to help managers. I feel very blessed to be in a position of leadership. I love helping other people think through complicated things. I just have this weird– I’m not wired like other people.

I don’t really get affected by bad situations. I could just look at it intellectually or look at it calmly and say, “Okay, this is a weird situation. How do you fix it and what did I learn from it?” Then I’m able to distill that and pass it on to other people that might help them in otherwise very tough decision points.

Jacob: All right. My last two brief questions. First, what is a mistake that you have made in your career and what did you learn from it?

Jim: Probably my biggest mistake, and the one that changed my thinking the most was, it’s no secret that the ending of POLITICO was not a happy ending. I just allowed myself to sit in a situation where too much of my day was eaten up by negativity and conflict.

What I learned from it is, every one of us, if you can, should try to spend 90, 95% of your time doing things you like doing, that you’re good at doing, with people you enjoy, and who are life-enhancing. If you find yourself in a situation where that’s not the case, and particularly when more than 50% of your time is soul-sucking, get the hell out if you can.

Life is too short. Even if you make a lot of money, or you love the gig that you have, or you love the people around you, you owe it to yourself to be in perpetual pursuit of being happier.

Jacob: Second, what is some advice that you would give operators looking to grow their media businesses?

Jim: Reader first. Sit down and just study, study, study who it is that is reading you or that you want reading you or listening to you and you want listening to you. How do you serve them? Get on the phone with them. Ask them.

Don’t survey them because that’s not helpful. The success comes from the nuance of the conversation. People don’t actually know what they want, but they can’t articulate what they want. If you listen enough, and you look closely enough at the data, you could start to see the future. I think too often we think about what we want and not what the consumer needs.