How BuzzFeed CEO Jonah Peretti took an instant messaging bot and turned it into a $1.5 billion media empire
Lara O'Reilly/Business Insider
Jonah Peretti is the CEO and founder of BuzzFeed, a digital media company that reaches hundreds of millions of readers around the world with its fun quizzes and videos, as well as with hard-hitting news coverage.Before starting BuzzFeed, Peretti launched The Huffington Post along with Ariana Huffington, Ken Lerer and the late conservative firebrand, Andrew Breitbart.
In this episode, we cover:
- Jonah's first experience with viral fame, after an email thread between him and Nike exploded.
- How he first met Arianna Huffington, who invited him to her home and cooked him breakfast.
- What Andrew Breitbart - another Huffington Post founder - was like, and what he might think of his namesake website today.
- Buzzfeed's early days as an instant messaging bot.
- The reason he resisted the urge to sell BuzzFeed after receiving a huge buyout offer from Disney.
- Why company executives who seem intregral might not be as essential as you think.
- That famous lewd Ivanka Trump tweet, and why he published it.
- Why Buzzfeed decided to publish the Trump-Russia dossier.
- How to build a successful startup, and turn it into something massive.
Alyson Shontell: Jonah Peretti is here with us today. He's the founder and CEO of Buzzfeed which has been valued at more than a billion dollars. There are rumors it might go public in 2018, and he previously cofounded the Huffington Post, so the guy clearly knows what he's doing. We're really happy to have you here with us today, Jonah. Thanks for coming.Jonah Peretti: Thanks for having me. Shontell: Awesome. First off, we were just talking about how you're in California now, but Buzzfeed was founded in New York, so how many people are here? How many people are there? How big is Buzzfeed these days?
Peretti: We have about 700 people in New York and 600 in LA with more video production in LA and more news people in New York and about 1500 globally, so we have offices in a lot of other cities around the world.
Shontell: I wanted to talk about how you grew it to the size that it is, but first can we go back to growing up in California? You have a sister who's a comedian. You've always had this knack for making things go viral. The first thing I remember reading about you is this famous Nike letter that you wrote that went viral when you were in college I think?Peretti: In grad school.
Shontell: So what was the story behind that?
How Jonah went viral before social media existed: The rejection hotline,"Black People Love Us," and trolling Nike
I looked at this email correspondence. This was before YouTube, before Facebook, before people thought of things going viral, but there were these things called email forwards. I pasted this correspondence into an email, sent it to a few friends, then they sent it to their friends, and it became an early email forward that reached millions of people. Even though I didn't know anything about sweatshops or labor issues, I ended up on the Today Show debating the issue with Nike's head of global PR and Katie Couric moderating.It opened up my eyes to the possibility of the fact that media was shifting so that if people thought something was worth passing on or sharing, you could reach millions of people even if you don't own a printing press or a broadcast pipe or the normal ways that you reach mass audiences.
Shontell: That was your first viral taste, but then you also did other gimmicks and pranks that went viral. What else did you do?Peretti: With my sister, I did something called the New York City rejection line which was a phone number where if someone was hitting on you and wouldn't take no for an answer, you could give them your number and when they called, they get an automated rejection message that would say, "The person who gave you this number didn't actually want to see you again. Press one ..." Shontell: We should bring that back. I feel like that would be useful still.
Peretti: Then we did a project called "Black People Love Us," which looked like the personal website of two super-white people who were so proud of having black friends that they created a whole website about it. A lot of various types of projects, then after that did some political projects and did some projects with Ken Lerer who I later started Huffington Post with along with Arianna Huffington and Andrew Breitbart.
Shontell: Talk about the gang getting together for the founding of the Huffington Post because you have Andrew Breitbart in there and then you have Kenny Lerer and then you have Arianna Huffington and you. How did you all come together to form what ultimately became a huge company?Peretti: It was a lot of serendipity. Kenny heard about some of the viral projects I had done.
Shontell: Was he one of the recipients of the prank phone call?
Starting the Huffington Post with Andrew Breitbart, Arianna Huffington and Ken Lerer, and what it was like to work with Breitbart
Getty Images/Brendan Smialowski
Getty Images/Brendan Smialowski
Peretti: I don't think so. I think he had seen the Nike email and heard about some of the work we were doing, so he stopped by and wanted to do some work on gun control which was his issue and he was trying to understand how to use the internet to do that. We did a few projects together there. Then at the end of working together on a few things he said, "I know business. You know the internet. Let's start a company together." We shook hands, but we didn't know what we were going to do.Then subsequently he went to LA and met Arianna Huffington and was amazed at how many people she knew and how connected she was to people in the world of businesses and entertainment and politics, and so many different worlds who came together in Arianna's own personal network. He came back from his trip to LA and said, "Our company with Arianna..."
So I flew out to LA, and I stayed at her house in Brentwood and woke up at seven in the morning. She already had a 6 AM meeting and had breakfast, and she was incredibly charming. Then I flew back thinking this was an adventure. We're going to build something. Then Andrew Breitbart had previously worked for Arianna, and at the time that we started Huffington Post, he was working for the Drudge Report and was really this savant of internet news.Kenny got very excited about the idea that the guy from the Drudge Report who spent - half the day, Andrew would write headlines and half the day Matt Drudge would write headlines. Kenny got very exciting about luring him to Huffington Post. He joined us before we launched the site and was one of the partners in the business. Then it just didn't last very long once the site launched, because the site was too liberal for him. He thought the site was going to be much more bipartisan and had trouble writing these liberal headlines and stuff.
Shontell: He's unfortunately since passed away, but you did have the chance to know him. He's of course the founder of Breitbart, which seems to be one of the Trump administration's favorite publications. What do you think he would make of what's become of his publication, and what was he like?Peretti: He was just bouncing off the walls at a million miles an hour, tons of ideas, lived on the internet kind of guy. It was challenging to work with him but also a lot of fun. He was at some level a real internet troll. He told me a story about how he was writing a headline on the Drudge Report about Chris Rock, and how he loves Chris Rock and thinks he's hilarious, but the headline was like "Shock and Outrage: How could he host the Oscars when he makes all these inappropriate jokes?" He knew that he could write it exactly in a way that would cause socially-liberal conservatives to think it was funny and actual more family-values conservatives to be outraged. He knew how to find the line that would cause all the different cultural cracks to explode and have people bang into each other. He loved it. He loved that kind of thing.
I think the continued trolling of massive parts of the population by Breitbart and the Trump administration would be something that Andrew would love. I think he would have a more complex and nuanced view on Trump himself, and on policies and things like that. It's hard to say have since he passed away several years ago now what his views on that would be, but the trolling part he would absolutely love.
Spotting an opportunity to build a giant media startup
Peretti: I think when you look at media, you always have to look at what do new media technologies enable that was not possible before. If you look at something like cable, CNN could do 24 hour news, which was not possible before, and the reason you couldn't do 24 hour news on broadcast is you had prime-time programming and other shows and soap operas and game shows and all these other things. You had to cut into that programming to show news. If there's a big news event like the Iraq war, they couldn't cut into all their programming because it would destroy their business.
With cable, you could go 24 hours into a big story, so CNN took advantage of the fact that you could do things on cable you couldn't do on traditional TV. When you look at internet media businesses, one of the big things you get from the internet that you don't get in print and broadcast is feedback from the audiences and this massive amount of data that comes in and shows you what are people sharing. What are people clicking? How are people engaging? When are they dropping off if you're watching a video? When did they stop scrolling? What kind of comments are they writing?It's a massive difference from a newspaper or broadcast TV. That difference is the key thing that you need to tap into if you're trying to build something in an industry. If you're trying to be a new entrant in an industry and you want to have some prayer of competing against these giant companies that are already in the industry, like giant multi-billion dollar companies, The Disney's and NBC's and all these big companies that already exist in media, how do you compete with that? You can't, unless you figure out how to tap into something that is special and new about the new medium that you're in.
Peretti: Yeah, I was doing Huffington Post and BuzzFeed at the same time.Shontell: How did that work?
Peretti: Not very well. I wouldn't recommend it. I was going between our office in Chinatown at BuzzFeed and SoHo, and I'd pick up Vietnamese sandwiches on the way and feed them to the Huff Post editors. BuzzFeed was more of a lab, and we were experimenting. It started to be hard. I was spending most of my time at BuzzFeed and going Monday mornings to Huff Post for the management meeting but then spending lots of time thinking about it, emailing a lot with Paul Barry who was the CTO about product and tech and growth. It wasn't until Huff Post sold to AOL that I made a complete break and focused entirely on BuzzFeed. It made a huge difference in the ability to grow BuzzFeed once I was not also doing Huff Post.Shontell: You described early BuzzFeed as this lab of sorts. What was the first version? Wasn't it something like an IM product almost?
Buzzfeed's early days as an Instant Messenger bot
Peretti: Before we launched anything, we had something called Buzz Bot that used IM, and we had this thing that we called a trend detector. Our design advisor was this guy Jason who was an early pioneer blogger, and he linked to lots of things. We actually built a crawler that crawled out from his blog and found a network of 1,000 other blogs, something like that. Maybe it was 10,000. I can't remember. Then it would look for acceleration of links among that pool of influential bloggers.
It was inspired by my friend Cameron Marlow, who created something called Blogdex, which was a popular service in the early days of blogging that would track acceleration of links on blogs. This wasn't public facing. It was just for our editor Peggy. Peggy Wang was our founding editor. She still works at the company, and she would look at this trend detector and see half of it was junk or spam or whatever, and some of it was interesting.She would write up little summaries of that, but before we had a site and before she wrote the summaries, we had this thing called Buzz Bot and it would just IM you a link that made it to the top of the trend. The problem was IM only allowed something like 10 people to be connected. It was a pretty fun product that only 10 people could use, so not the best business strategy.
Shontell: Was it ever hard? It seems like it was almost viral from the start. Was traction ever difficult, or did you have any tough times in the early days of BuzzFeed?
Peretti: It's always hard. It's hard now. It was hard then. Everything is hard. I think of it as almost like a video game or exercise. If it wasn't hard, it wouldn't be fun and what's the point? It was always fun and it's still fun, but you're always trying to solve problems and new challenges. At BuzzFeed, we've done a good job in the early years of doubling every year, but it was from very small numbers.We'd have 300,000 uniques. Then one year later, 600,000. None of that was really material, and none of it could support an ad business. It wasn't until we got enough scale that that growth put us in a position where people even noticed, but we were pretty under the radar for a long time.
Peretti: That's what small companies say. That's what we said when we were small. There was a write up about how smart it was that Buzzfeed, in a world of information overload where tons of things are being published, only does five or six things a day. That focus is so key and is a new trend in media. I remember reading it and thinking, "Yeah, but we have one editor." Now we publish hundreds of things a day - video and lists and quizzes and news and micro-short content and longer shows and podcasts.Shontell: The things that people like to read online they claim they don't actually like to read and they want to read lots of other more serious stuff. I would say the brand has transitioned quite a bit, but how did you do that?
Peretti: The way we did it was an obsession with social, and social to us wasn't a category or a buzzword. It was, how do you interact with another person in the world? What I noticed with the Nike email and those early projects is that people were using content as a way to connect to other people in their lives, and they were using content to express their identity or their political beliefs or their cultural beliefs. They were using content to feel less alone. In a way, content and communication had converged where you weren't just consuming content.You were taking that content and sharing it with a friend as a way of connecting with another person in the world. That was really the key for us from the beginning. When we first started, the way that people were connecting with each other online was internet memes and humor and cute animals. Cute animals were an easy way to feel the same emotion as someone and to say, "Aww," together and you feel closer to the person. Just the same way when everyone pets the family dog they feel closer to each other. Not just the dog, but it's a way of connecting with other people.Humor is the same thing. When you laugh with someone, it doesn't really matter what you laugh about. You just have shared that laughter, and you feel closer to someone when you've laughed with them. That was what initially was on Facebook and social platforms and even email forwards.
Then what we saw was that social became much bigger, and people started to do that with news. They started to do it with all kinds of other forms of entertainment, with video and new formats and new platforms, with Snapchat and Instagram.
That same human connection, that same idea of how do people connect with each other, drove all of our expansion. When people started to share news we said, "Wow, we'd love to be in the news industry. We'd love to make news." We didn't think we could because people weren't sharing news. All of a sudden, we started to see news on Facebook and Twitter, and it made us realize we could go into that business. We've evolved along with the way consumers have evolved and the way social interactions have evolved online.Shontell: It seemed like you guys were the first to capitalize on Facebook in a really meaningful way and there was this idea that maybe people don't want to come to your website to read stuff. Maybe they want to read it on Facebook and that's okay. What was your thought process around seeing the trend of everything going to distributed?
Peretti: I think we figured this out through Ze Frank. We acquired his company when it was a four person company. He was doing video in LA and everyone else was in New York. He tried initially to put video on BuzzFeed's site, and it didn't do nearly as well as when he put it on YouTube. We started to see our video business really grow.It wasn't growing on our site, but because we were focused on branded content and native advertising, we could take all of our learnings and still make money. That was another piece of it. Then looking around at the industry, we started to realize all these publishers [generated revenue] based on banner advertisements.
We went from having billions of impressions of our links on these social platforms to having billions of content views on the social platforms because you could just consume it right there.Shontell: One thing that happened as a result of all this success is that you had outside parties interested in Buzzfeed and potentially acquiring Buzzfeed. One tough decision that you have to make as a CEO is, do you stay the course or do you exit? It's been well reported now that Disney was very interested in buying BuzzFeed a couple years ago. In the final hour, you decided not to sell. What was that process like as CEO? How do you walk away from all of that money that's right there, dangling like a carrot?
Peretti: Some of these things come down to almost an emotional feeling, but I think that the gut feeling and emotional feeling actually is informed by a lot of data and looking at things in a rational way. The biggest thing for me is that I felt we had many more things to do as a company, that we valued our independence a lot.It felt that we would be able to do a lot more as an independent company. If you think about the time when we had some conversations with Disney, we were just hiring Mark Schoofs to lead our investigate journalism team. That was just starting. Video we had been doing for a little bit but it was growing and we knew that it was going to be huge.Now it's more than half our revenue. We knew it was going to be huge, but at the time people thought BuzzFeed was just a website. It felt like there were a lot of shifts coming, and there would be a lot of opportunity. There were a lot of things we wanted to do, and remaining an independent company just in my gut and my bones felt like the right path.
Shontell: Since then, the media industry has changed a lot. Do you ever think, "If I had just sold to Disney, I wouldn't have to figure out this video thing. I wouldn't have to do all these things in the industry that are changing so much"?
Don't even think about joining a startup if you don't like things that are hard
Peretti: I think you shouldn't be a CEO or even a startup executive or employee if you don't like things that are hard or challenging, and you don't like trying to do things that are difficult where you have to figure out new things that don't exist yet. That has to be part of why you do it. It has to be part of the fun. They say when there's a bubble or lots of money flows into startups, you have a lot of people who come in because they want to make a lot of money.The whole get rich quick thing. "I want to do something where it doesn't take that much work, and I'll make a lot of money." I'm reading stories about startups and all the money in startups. It's just a lot harder than it looks. Harder meaning the day to day is trying to create something new and trying to be a small little guy in a giant industry.
Even now, we're 1,500 employees and growing quickly and things are going incredibly well. But when you compare that to the size of Disney or Time Warner, we're small. When you want to work in a startup and build something, it's going to be really hard.
If you love that, if you love the struggle and that's part of why you do it, it also makes selling a company a lot less appealing. Because if the idea is you're doing it so you can relax, you wouldn't be building the company in the first place.Shontell: You've grown tremendously since then. It seems like it was the right choice. Jon Steinberg was with you for the first half of your company. He left shortly after [you decided not to sell to Disney]. How do you go from having someone who's an integral player in keeping the company afloat, to keeping it going after they leave?
People think that the key to everything is the founder, and the founder is the one on the cover of the magazine, the one who is the source of all the success. The truth is, particularly once a company gets a little bit bigger and there are more people involved with all different experiences who come together, it really becomes a team thing. You start to see that when there's a gap, a million other people pick up the slack.People step up. People who you didn't think could do it step up and take on a role. People want the company to succeed, and they want the company to thrive. When somebody leaves and it's tough, you see a lot of people step up and fill the void. It's really actually pretty inspiring that there's a resiliency to a company and that the team is a real thing. It can be hard, but I think also companies are systems and they're people and they're operations and they're business models and all those things are bigger than any one person. And they're even bigger than a founder or a senior executive.
The real story behind that lewd Ivanka Trump tweet, and why BuzzFeed published the Trump-Russia dossier
Shontell: That's great advice. I have a couple questions that are more about recent times. One is, you all made some splashes during the campaign and also post election. You know I have to ask you: what was up with that Ivanka Trump tweet?If you are listening and don't know this story, I have to ask. You tweeted [just before the presidential election] seemingly out of the blue about Ivanka Trump. You tweeted, and I quote: "I met her once and she casually said, "I've never seen a mulatto cock. But I'd like to!" Sean Gallup/Getty Images
Sean Gallup/Getty Images
What was the thought process behind sending that tweet? Were you drunk? Were you okay? What happened?
Peretti: You know how if you meet a celebrity, you have a story of, "The time I met this person ..." and you remember it? Not everyone's met a celebrity, but a lot of people have this experience if you live in New York or LA. The person came into the restaurant you're in and they did something funny or whatever and you remember it.For me, what I remember about Ivanka...We had a mutual friend. She came out for drinks. We were doing sake bombs at a dive bar in Chinatown on the lower east side. It was just a shock that she said that. It was like, "What?"
I got off a flight and I was in the Burbank airport, and I was reading Twitter. There was a Buzzfeed news story that had quoted her saying she was shocked at her father's language, something like that. I saw it and I was like, "What? She's shocked? She uses that kind of language! How could she be saying she's shocked by her dad's language like she's some choir boy?"
Anyway, I saw that and then without really thinking much - obviously because you wouldn't tweet that if you were thinking a lot - I just retweeted that tweet with a comment of, "Funny she's shocked by it because this is what she said the one time I met her.Shontell: I remember Ben Smith, your head of news, saying, "Are there medics on this flight?" You of all people should know to not tweet before flying, but I guess you were off the plane.
Shontell: Right. If I remember correctly, Buzzfeed wrote an article interviewing you about what your tweet was.Peretti: Shawnee calls me, and I can't not take the call when it's Shawnee calling me - she's a very key, important and powerful person in our news room. She calls me and is like, "I have a reporter here who wants to talk to you." I was like, I never would've taken a call from any other news sources but I have to when it's ...
Shontell: It's your employee.Peretti: I have to answer the phone. Then I did some awkward interview about why ...Shontell: Did you talk to Ivanka after?
Jonah: I haven't talked to her.
Shontell: One other more serious thing that you all published was the [Trump-Russia] dossier. This is the Donald Trump pee tape origins, allegedly. You all find this document that's been circulating around all of Washington. Obama's read it. Donald Trump has apparently been briefed on it.It's got a lot of different allegations in it, and you publish. You say, "We haven't verified everything in it. We tried. We spent weeks sitting on this thing, but we feel like you, the public, deserve to see it because, frankly, all of Washington already has."
It created this storm within media of, "Should they have published it? Should they not have?" We debated it in our news room. What was it like for you all, and what was it like for you as a CEO of the company deciding to publish this?
Peretti: I would say in retrospect we feel like we made the right decision. When you have a documents circulating in the highest level of the government and people are taking action based on the document... We have Harry Reid referencing it but not saying what's in it, and you have CNN referencing it but not saying what's in it. How's the public supposed to understand what's happening at the highest level of government in something that's incredibly important to the country and to democracy if they can't see the thing that everyone in power is looking at?We don't see ourselves as being a news outlet that's trying to tell people how to think and tell people what matters. We try to inform people, let people know what's going on, be transparent with our readers, assume that our readers are intelligent and can understand context that we provide. It fit BuzzFeed New's values, to make the decision to publish.
Building a company for the way the world works today, not 20 years ago
Getty Images/Michael Kovac
Shontell: A few wrap up questions. What is Buzzfeed, and what is its future? Are you the next Disney? Are you the next NBC? What are you building here?Peretti: I think every time there's been a massive shift in technology of media, there's been a few companies that have emerged that are large sustainable hundred year companies. When you look at ... There was a period of tons of new people starting newspapers that coincided with roads and be able to deliver newspapers, and a few of them became really huge, enduring companies.
When you look at magazines, it was really the postal service that enabled magazines. You could deliver magazines to people's houses and also raise their literacy. There were lots of magazines, and then consolidation, and a few that became really, really big. The same thing happened in the '80s with cable. You could actually talk to people who experienced that. There were lots of cable channels that then ended up becoming a few big companies.I think with internet and media, you're going to see something similar. We want to be one of the ones to emerge from the era, redefining how news and entertainment should work for the era of digital, the internet, mobile and social. It feels like there's a possibility to build a media company that's much more connected with people's lives, that has a much more intimate relationship with readers, that serves readers whether it's news or entertainment or things like Tasty and lifestyle content. I think we're also very well positioned as a company with all the advances that are happening in machine learning and deep learning and technology that's going to really advance what's possible in media. We're building a global news and entertainment company for the way the world works today, instead of the way the world worked 20, 80 or 120 years ago.
Shontell: Do you ever regret raising so much money? There's an argument to be made that ... I think TechCrunch sold for $30 million. Huffington Post sold for $300 million. Arianna and Mike Harrington, the co-founders, made about the same. One was much smaller, didn't raise really much money, and one raised a ton. You've raised how many millions? Hundreds of millions. Do you ever think, "I should've just gone a little smaller."
Peretti: No, I don't. I think it has to do with what you want to do and what you want to build. My advice is there's not one path. There's not one way to skin a cat. You see arguments online sometimes where people are like, "You should raise a lot of money. You shouldn't raise money. You should raise a little." It totally depends on what you're doing and also what you're good at and what kind of life you want to live.If you are excited about building something that grows really fast and has a lower chance of success but could be giant, you should try to raise venture capital and you should try to raise a lot of it as soon as you have signal that you're onto something and that you can deploy that capital to do something useful.
If you're someone who has a special skill or wants to be an artist or wants to do something that you can do with a small, core group of people, then you shouldn't raise venture capital and you shouldn't feel badly if you don't do the venture capital route. You should feel badly if you're doing something that isn't the right fit for you and isn't the thing that you're passionate about and doesn't fit your strengths and the things you're interested in doing.
I know people who what they want to do is think and write, and that's great. You can be really successful, and there are multimillionaires who are writers. You can be Malcolm Gladwell, who I think probably is richer than Arianna Huffington or Michael Arrington. That doesn't mean that you should not raise venture capital. You should just try to be like Malcolm Gladwell. You should do what's right for you and what fits your temperament and your passion.Shontell: Anything else to add for someone who wants to build an empire like you're doing.
What to do if you want to build a business empirePeretti: If you want to build an empire - I accidentally/reluctantly found my way into building something that was much bigger than I expected. But I think, start small and focus on the customer or the audience, solving problems for them and focusing on that small thing. Then figure out how to scale that into something much bigger.
Then if you are trying to build something really big, then you just need to figure out how do you find really great people that you trust who can join your team and be part of it with you because, really, the key to everything is you can't do it all on your own. You need to have really great, smart people, people like Ze Frank and Ben Smith with doing the product lab, and all these people who have a unique perspective and are way better at their jobs than I am. I would never be able to do what they do. That's what you need.I think that's the other thing. If you want to build something really big, you have to be okay with the fact that you're not going to be able to be in the weeds on everything, and you shouldn't be micromanaging everything. You need people who can do things way better than you can in the areas where they have the ... What's the right way to end the sentence? Sometimes I start sentences and ...
Shontell: We can just let it trail off and just play some music?Peretti: Just end with, "Errr ..."Shontell: That sounds great.
Peretti: You need to find people who are better at speaking than you also.
Shontell: Perfect. Thank you so much, Jonah. It's been a real pleasure.Peretti: Thank you so much.
Surprised Ivanka would be shocked by lewd language. I met her once & she casually said: "I've never seen a mulatto cock, but I'd like to!" https://t.co/WrgCoM0MGK- Jonah Peretti (@peretti) October 19, 2016
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