Henry Blodget's Money Talks: New Cash, Same Strategy
Yesterday, The Business Insider's chief Henry Blodget announced a new round of funding to the world in a blog post explaining that the company just scored a cool $3M in the form of backing from a venture capital firm, RRE Ventures. That's more than the company's had since they started. TBI and Blodget get the news on a wave of decent publicity stemming from a Bloomberg BusinessWeek profile of Blodget, after having had their fair share of staffing changes and loud public criticism and crazies literally screaming at them on the internet -- along with my relentless bullshit -- but the often unspoken truth is that TBI's bloggers are some of the hardest working in New York City, and maybe the country.
For example, TBI deputy editor Joe Weisenthal has filed something like 24 blog posts since 4:46 AM today. Ask any working blogger: It doesn't matter if he's typing gibberish into his computer, 24 is a lot. 4:46 AM is an hour the majority of bloggers are still sussing out their Freudian issues or desk-monkey escapist fantasies in deep R.E.M. And yet, there Joe is, hustling hard. Forget about demanding that kind of work ethic. If Blodget's operation can even remotely inspire that kind of hustle, the money shouldn't really come as a surprise to anyone. They've also popped off some much-read in-depth reporting, which was a concern after TBI editor John Carney's ouster in March. If one thing about Business Insider is indisputable, it's that this startup editorial operation founded by a disgraced Wall Street analyst has come from nowhere to emerge as (to say the very least) quite the interesting, scrappy, and upwardly-mobile product.
I sent Blodget a few questions over email for him to wax poetic on his new cash, which he shot back shortly after.
How long has the new money been in the works?
Did the Bloomberg BusinessWeek profile help matters?
No. The term sheet was signed a month before the BW article.
What was your general reaction to the [Bloomberg BusinessWeek] profile? Did Andrew Goldman get the story right?
I haven't read it. Nothing against Andrew -- I just can't stand reading about myself.
I heard you guys were looking to staff another media reporter next to [The Wire writer] Joe Pompeo. This still the case? Making any other hires?
Yes to all.
Do you think the new money is going to change your editorial strategy (less in terms of scale, more in terms of direction)? Where I'm inevitably going with this: You've gotten a lot of heat for the slideshows and "scraping" and excitable headlines. Is the new money going to free you from that?
We're happy with the editorial strategy, which combines original reporting and analysis with contributors, syndication, aggregation, and direct links to great work elsewhere. The new capital will allow us to expand all of that, including our newsroom. As an aside, in a world where thousands of excellent sources are a link away, having a "not invented here" mentality with respect to information no longer makes any sense. The concept of a single massive news organization bringing the whole world to you is as antiquated as a single car company producing all of your automotive needs--from tires to windows to gas.
Any other plans with the new money? [Tech pundit and Google cultist] Jeff Jarvis suggested an ad network. Don't give me the "we wouldn't rule it out" line.
Lots of plans! As for an ad network, we wouldn't rule it out.*
Does the revelation that the Huffington Post - which was supposed to be a leader in digital news - lack the profitability it was once forecasted to have change things for you as the chief of an editorial product?
I missed that revelation--last I heard, they were going to be profitable this year. (And if it doesn't happen this year, it will likely happen next year or whenever it makes sense to happen. They have $20 million in the bank, so there's no rush. Traditional media businesses like magazines and cable networks lose money for years before reaching profitability, so if Huffpo takes another few years, they'll be right on schedule). Gawker Media has illustrated that it's possible to build a dynamic, profitable, and rapidly growing digital media business, and I think we're on the way to doing the same. With this financing, we'll go from break-even to investment mode for a while again, but I'm a big believer in the business long term.
Are there any miscalculations or missteps you've seen others in your position make with an influx of cash (like yours) that you're going to be overly cautious in avoiding?
There are a thousand ways to become roadkill, with or without money. We'll keep trying to avoid them.
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