My Big Break: How Ken Lerer helped Buzzfeed's Jonah Peretti turn viral prankery into an $850M business
Before cofounding Huffington Post and later Buzzfeed, Jonah Peretti was basically a guy who liked fucking around on the Internet.
Sure, he was far earlier than most to experiment on the web, and he's probably funnier and knows a lot more about network effects than you. Yet as he told Sarah Lacy at a 2012 PandoMonthly event in New York, his early viral projects, including the Nike sweatshop emails, the New York Rejection Line, and Black People Love Us, had nothing to do with making money.
"We used to get made fun of by the press mostly because we weren't trying to make money," Peretti said. "We just think it's kind of interesting. My sister's [Chelsea Peretti] a stand-up comic and a comedian and wants to make fun, funny things. And I'm trying to understand how networks work and how media works."
At the time, Peretti worked at the New York-based non-profit called I-Beam which Peretti describes as a sort of a playground for artists and hackers. Here, surrounded by laser-cutters and 3D printers, Peretti not only had a steady income but also a professional creative outlet. Why bother wasting time trying to make bank on all those fun little side-projects, particularly when, as Peretti puts it, "[Rejection] doesn't monetize well."
That all changed when Peretti met media exec Kenneth Lerer. Lerer had invited Peretti and other Internet savants to help develop web strategies for the Brady Campaign to Prevent Gun Violence. After that work ended, the "unhappily retired" Lerer had another proposal for Peretti: "I know business, you know the Internet, let's do something together," Peretti recalls Lerer telling him.
"He was experienced in business, and he knew a lot of things I knew absolutely nothing about and had lots of connections," Peretti says. "We weren't sure what we were going to do. Then he went out to LA and met with Arianna [Huffington] at this event where a bunch of people were at Arianna's house thinking about what to do for the next election. And he came back, saying, 'Wow, she knows everyone in the universe. What if those people were online?'"
And thus, the Huffington Post was born which, in addition to helping introduce words like "aggregation," "SEO," and "Sideboob" into the modern Internet lexicon, went on to sell to AOL for $315 million.
Peretti's biggest success, however, was yet to come -- over the past eight years, Peretti has built Buzzfeed from a silly listicle-heavy "viral lab" into a silly listicle-heavy "viral lab" that also publishes serious journalism, is worth $850 million, and is expected to turn a profit on $100 million in revenue this year. As I wrote yesterday, with its latest $50 million investment from Andreessen Horowitz*, Buzzfeed may look to break out of the HuffPost model of fast clicks and diminishing ad returns in favor of deeper, richer VICE-like experiences that rely heavily on video and attract even bigger ad dollars.
And none of it might have happened if Lerer hadn't shown Peretti there's real money to be made in fucking around on the Internet -- "rejection lines" notwithstanding.
[Note: The My Big Break series is being sponsored by Braintree's Ignition program, so you'll only see their ads around "My Big Break" pieces. But the series was conceived, commissioned and edited entirely by Pando. Braintree had no input whatsoever in the editorial. For more on our policy towards single sponsor series like this one, see here.]
- Andreessen Horowitz partners Marc Andreessen, Chris Dixon, and Jeff Jordan are personal investors in Pando
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