The new Pando: "Speaking truth to the new power"
Two years and one month ago, I officially founded PandoDaily. I had $2.5 million of investor money, an incorporated company, and a business card showing my job title: CEO. But it wasn’t until the last six months of 2013 that I felt I'd earned the title, with all the emotional scars to prove it.
Elon Musk wasn’t kidding when he said you should only become an entrepreneur if the idea of “eating glass and staring into the abyss of death” sounds appealing. By year's end, my mouth was scarred and full of blood.
When I started PandoDaily, friends, investors, and readers who had followed me from BusinessWeek or TechCrunch or from reading my books seemed confident I could put together a good editorial team and product. But there was no reason to believe I could actually build a company. In the media business, editorial is necessarily shielded from the business side, so it wasn’t just that I lacked experience. I’d been actively protected from anything that might possibly prepare me for this role. In fact, if I hadn't had people as varied as Kevin Rose and Dick Costolo insist that I could do it, or at least learn to do it, I would have probably hired an experienced CEO -- my own personal Heather Harde -- out of sheer terror.
Although I've said many times I would never want to go through the hell of building another company from scratch, year one was comparatively painless. We raised a good amount of seed funding and all we had to do was put together something people would read. By the end of our first year, we were well on the way.
It wasn’t until year two -- last year-- that I had to step outside my editorial comfort zone and learn what it means to be a real CEO. With $2.5 seed investment evaporating by the day, and a series A crunch looming, the clock was ticking.
What followed was a frantic 12 months of hiring and firing and experiments -- both editorial and commercial -- and at least six months of negotiation hell, all while I was pregnant and giving birth to my second child. It was brutal. I made a ton of mistakes, some dumb, some (hopefully) understandable.
When all was said and done, 2013 was the year we laid most of the important foundational pillars that we will build on in the coming months, years, and decades. Along with the scars and the unforgettable taste of blood and glass, we began 2014 with a company that's in great shape, commercially and editorially, and is poised to have a breakout year.
As Paul wrote in his post last week, I’m not a big fan of bragging about what we’ve achieved or publicly wailing about our failures. I’d rather just focus on the work. That said, Pando wouldn't be in business without the growing army of readers who take time out of their day to visit Pando.com, attend our events, watch our videos or -- as of this week -- read our new print magazine.
Most likely aren't interested in the behind-the-scenes specifics of what we're doing here, but I know many of you are -- and I figured you're well overdue a post details on how Pando is doing and what’s coming next. Paul’s post gave some hints at the product side of things, but I wanted to lay out the whole picture.
The glass was worth it
Let’s start with those strong pillars. Here are the headlines:
-- We have just finished raising our Series A round of funding. We have raised $1.2 million from a range of new and existing investors. It was lead by an unconventional group of investors in Tennessee organized by Nashville-based Jumpstart Foundry. I got to know and respect many of these investors through our work on Southland and, as we expand beyond the Valley's echo chamber in coverage and events, I felt our investor base should reflect that. Also new are Base Ventures and Vegas Tech Fund, which were also two of the largest investors in NSFWCORP. It's a testament to what Paul built that they wanted to continue backing our two combined companies. Returning investors were Accel Partners, Founders Fund, and angel investor Zach Nelson.
$1.2 million is more than we initially set out to raise, and we are still wrapping up a few last conversations, so the final total may tick up to $1.5 million before it's all done (I'll update this post and our disclosure page if that happens). We were lucky to raise that money at a healthy valuation, which I won't disclose, because no entrepreneur ever does if she can help it. The new investment brings our total raised to date to $4.2 million.
That's a lot of money, but it’s a drop in the ocean compared to the mega-rounds raised by content companies this past fall. For all of the attention that Pando gets as a VC-backed company, we've raised far less than most all of our rivals and have strategically raised it from a wide variety of sources. None of our venture capitalist backers sits on our board, and none owns close to 10 percent of the company. This structure has made it monumentally harder to raise capital. Most series A investors require 20 percent and a board seat, or the deal isn't worth their time. But we think it's important that no investor is ever in a position to influence how we do things.
The other reason we haven't raised more money is that I believe it's vitally important that a content company with a long-term strategy gain control of its own destiny as quickly as possible. It will take five to ten years to build the brand and audience we envision, and I worry that investors' excitement around content could wane over that period. Many startups running off of venture cash bloat their staffs to a dangerous level. They'll need more venture cash to keep going. I'm not convinced that cash for content companies will be there over the long term.
Pando is too important to me to put us in the position of falling victim to investing fads. Maybe that means we'll grow slower. That's okay. I've got time, and so has the entire senior team who are equally committed to the long-term. I want to be running Pando for the rest of my career. We only get one shot to do this right.
-- Our traffic continues to increase, and our editorial team is stronger than ever. Having breezed past our previous one-day traffic record last week, February is on pace to be our best month ever, following an already near-record setting January. We're read by more people and in more places and have the resources to make more pivotal hires, many of which are already in negotiation. (If you'd like to join the team here at Pando, email Sarah(at)PandoDaily.com for specifics on who we're looking for.)
How we've grown is equally important. My goal early on was to make Pando's editorial as little about me as possible, and I've mostly handed over the keys of day-to-day newsroom management to Adam Penenberg. In fact, I haven't run the newsroom day-to-day since last April when I went into labor. Adam and the team deserve the lion’s share of the credit for Pando's traffic growth since then.
Frankly, at this point, editorial is the part of the company that needs me the least. Reporters we hired as fresh blood two years ago, like David Holmes and Michael Carney, have become leaders in the newsroom and newer hires like Cale Weissman and Carmel DeAmicis are already rising stars. Newcomer James Robinson has hit the ground sprinting. The arrival of the former NSFWCORP team has bolstered everything immeasurably. (More on this in a minute.) And of course the art department Hallie Bateman and Brad Jonas have kept developing that signature Pando look -- now in print as well as online.
-- Our revenue is growing substantially year-over-year. Over the last six weeks we have booked almost as much ad and sponsorship revenue as we did in the whole of 2013. We have finally reached the point when it's easier for us to get $100,000 in revenue than $100,000 in venture capital. As a CEO that's a huge milestone and a huge relief. We understand what works and how to sell, and are thrilled that many of our early advertisers and sponsors who ran test campaigns over the last two years, have re-upped for significant six-figure campaigns this year. It won't be easy, but we are confident that this latest investment will get us profitable in the next 18 months.
So how did we get here? A lot of it was the same unsexy, heads-down hard work our team has been doing since the beginning. But there were a few crucial opportunistic moves last year that helped. None was a no-brainer at the time and they involved risk, upping our burn rate, and months of negotiation. Each could be its own story.
The big ones:
-- Acquiring NSFWCORP. Great assets here: Amazing investigative reporting unit, Paul Carr, product team, and a fiercely loyal base of subscribers.
-- Our joint venture to co-produce Southland, an annual tech conference. An astoundingly mutually beneficial partnership with LaunchTN that allows us to build a distinct national event franchise, profitably. We are already sold out of major sponsorships and ahead of plan on Southland revenues.
-- Buying the Pando.com domain. We needed a brand that could extend beyond a daily blog. We finally got the domain we needed to achieve that.
-- That series A to help fund all this. Companies fail for one of two reasons: They run out of cash or the founder gives up. The series A guarantees that neither will happen to Pando.
The story of our time and a new tagline
So given these moves, where is Pando going and how is it a different company than it was a year ago?
It starts with our mission. When Pando launched we described ourselves as "the site-of-record for Silicon Valley." We realized early on, though, that wasn't a great tagline. Yes, the blog, combined with the PandoTicker, does a great job to telling you everything you need to know about Valley-style entrepreneurship while respecting your time and intelligence. But we quickly understood that wasn't the real reason readers come to Pando. Yes, you come to us for scoops, but also for context. For the story behind the headlines and for answers to the hard questions that other tech and business publications aren’t asking.
At our last editorial retreat, in Las Vegas, we scheduled a brainstorming session to come up with a more fitting tagline, one that explained what we were, but also what we were aiming to be. I blocked out two hours for the conversation on our last morning and loaded the team up with McDonalds breakfast, coffee and mimosas. The previous 48 hours of the retreat had been a series of fierce debates about almost every aspect of the company, and I expected another long, drawn-out process. In the end it took just twenty minutes to agree on a tagline that encapsulates everything we aim to do here at Pando:
"Speaking truth to the new power."
The technology industry has long ceased to be a niche. In fact, it is taking over the world, in good ways and bad. Startups are taking on old-world industries like transportation, logistics, and manufacturing. Every old world company is rapidly becoming a software company. Netflix is nominated for Emmys and Golden Globes alongside HBO. Tech money is aquiring legacy news organizations or buying up state secrets to kickstart new ones. And technology and the billionaires behind it are playing greater roles in public policy than ever before.
Power in America is shifting from New York and DC to the tech billionaires of Silicon Valley. And that shift of power from old to new is being reflected across the globe, creating both opportunity and threats, excitement and anger. Dig into any controversial issue from government spying to income inequality and you’ll find the tech industry lurking in the shadows. Tech is without a doubt the economic, social, and political story of our generation.
To tell this story well, you need a reporting team that understands the four major centers of power: Technology, finance, media, and politics (loosely concentrated, in the US, in Silicon Valley, New York, LA, and Washington DC). We already were strong, and getting stronger, in those first three areas -- but, before the NSFWCORP acquisition, we lacked any real authority or expertise in the fourth. This despite Quantcast numbers that showed our audience was more likely to be interested in politics than almost anything else -- even technology. That's why it was so important for us to acquire a strong a political team including heavyweights like Mark Ames, Yasha Levine, and David Sirota.
I should say, in general, we believe the power shift from old to new is a positive development. The more fluid power is, the less abuse there is for it. As we pointed out with our Tectopus story, wage collusion has its limits in the Valley because here tech titans don't stay on top for forever. And the fascinating thing about tech billionaires is that they look at a world without gravity. They aren't beholden to the way things have been done. They are frequently idealistic. That's not all bad.
But it's also not all good.
That same Techtopus story is a reminder of why just having a slogan that you won't be evil isn't sufficient. In a Twitter exchange with Pando editors, Pierre Omidyar complained that asking whether he'd hold companies like eBay accountable for corporate spying as he did with the NSA was an "idiotic question." We disagree. When someone has just bought access to one of the most valuable troves of state secrets ever leaked, few questions on how they plan to wield that power are "idiotic."
While other tech blogs have taken for granted that transportation companies like Uber do background checks on their drivers, we investigated and found that the company had been misrepresenting how drivers are vetted, potentially putting customers’ lives at risk.
In one of our earliest stories, Pando asked why venture firms with "scout" programs -- yes, including some of our own investors -- felt the need to keep those programs a secret. Around the same time, we challenged Google for flagrantly betraying the “Ten things” it claimed to believe. We have criticized the many failures and broken promises of Facebook’s so-called platform that is both the most powerful distribution system of the international Web and the most dangerous one to build a company on. And when a collection of the Valley's biggest heavyweights (including, again, many of our investors) took on Washington by making costly political compromises, we investigated and called them out.
We’re happy to keep asking "idiotic questions" of billionaires and the world's most powerful companies until they give our readers, and the rest of the world, the answers they deserve. Not because we think all "rich people" are evil or all tech billionaires are hiding something, but because we don't take for granted that they’re all good, or that none is hiding anything. Silicon Valley already has enough publications that blindly republish press releases. That’s not what we do here.
Another reason for us dropping “Silicon Valley” from our strapline is that it gave the false impression that we only cared about what was happening on the West Coast of the United States. In fact, we always considered the Valley to be a convenient shorthand for a style of entrepreneurship particular to the tech industry.
The rise of the “new power,” driven by the tech industry, is increasingly a global story. This is a big reason we are producing our first annual conference outside the Valley. In the future, I hope to expand our international presence as well. Reporting my book on emerging markets was a life changing experience, and producing TechCrunch Disrupt in China was one of my proudest professional achievements. There is a lot more we can, and will, do to bring Pando to those outside the US and even the English speaking world.
But, as I said about Google, just having a slogan isn't sufficient. This year, you can expect three concrete things from us: Continual improvement of our editorial team, the launch of a phenomenally better product, and a profitable business to make sure we can keep doing this for years and years to come.
We -- I and the entire Pando team -- truly appreciate everything you have done to support us this far. We are only now getting to the fun part.
[Disclosure: A full list of Pando's investors can be found here.]
[Image credit: Brad Jonas (from a photo by Paula Borowska) for Pando]