Hustle CEO Sam Parr & SmartNews co-founder Rich Jaroslavsky on the future of media

Welcome to this edition of The Operators, a recurring Extra Crunch column, podcast and YouTube show that brings you insights and information from inside the top tech companies. Our guests are execs with operational experience at both fast-rising startups, like Brex, Calm, DocSend, and Zeus Living, and more established companies, like AirBnB, Facebook, Google, and Uber. Here they share strategies and tactics for building your first a company and charting your career in tech.

Our two guests for this episode have very different backgrounds, one an experienced exec serving at a large digital media unicorn and the other a younger co-founder CEO of an upstart media business. But both are at rapidly growing companies who are at the forefront of what it means to be a media company today. Both experts from the online media industry have built successful careers and businesses in this age of social media and ready-to-go, instant news.

Rich Jarislowsky began his media career as a journalist for the Wall Street Journal before becoming the national political editor as a White House correspondent. He was instrumental in bringing The Wall Street Journal online years ago. For the past 25 years, Rich has been involved in digital news at wsj.com and Bloomberg, and is currently at Smart News, where he is Chief Journalist and the VP of Content.

Sam Parr is the co-founder and CEO of The Hustle, a beloved and rapidly growing newsletter, conference convener, and broadening digital media business.

Our discussion touched on some of the most important questions in digital media:

  • What opportunities are there for new media entrants;
  • How it is impossible to start a successful media company today without having a strong grasp of how technology can be leveraged;
  • How the hardest problems in media today center around distribution and monetization;
  • Why content creation is actually one of the easier problems to address;
  • How increasingly the medium is the message: the iPhone changed media consumption and increasingly it looks like how we consume audio is changing the delivery of media, consumption, and monetization; and
  • An analysis on the current state of media and their predictions on where media is headed.

How to get a start in today’s media industry

Starting a successful business is the dream and life-goal of many inspired entrepreneurs, but many startups have been created, only to crash and burn or to find a mediocre amount of success. Sam suggests that the route to creating profitable companies is to find a niche market, and make and market a product to that specific market.

“I think what is going to happen in the next five years is you’re going to see dozens and dozens of pretty large companies being built on very niche audiences and they’re going to be able to charge a lot of money for their service.” A joke Sam also often tells to his team is that “Niches make riches.”

Sam also cited concern for many mid-sized brands, which he believes will soon begin to fade as the years roll by. He believes that for any hobby, there are enough people to have a product specifically designed for them and make money. He did warn, however, that not every niche will become huge, but that it is a good starting point which will definitely pay the bills. “It turns out there are loads of people who enjoy the same stuff I enjoyed. So that makes life way easier when you can appeal to these small things.”

Many entrepreneurs to-be fear not having a big business but should probably focus more on having any kind of business at all. Even a niche business has risk, and having appetite for that risk is vitally important. Rich shared that taking risks, although required, is something that many people, including himself, tend to avoid. Despite that, those very risks are sometimes the key to success. With such a rich, and vibrant resume behind him, Rich has noted that many opportunities were gambles that he did not need to take, but that taking those risks brought him to where he is today. His stated methodology is to always ask yourself the pros and cons, the benefits and potential losses, of any major decisions, and to trust your instincts in starting new ventures.

The current state of media

Social media and the internet have been game-changers to the news industry, and both Sam and Rich have been a part of shaping the new face of on-demand, instant online news. Rich’s career serves as a microcosm of this, going from being a writer for the Wall Street Journal when pages were freshly printed and delivered to launching the paper’s online presence and now working at a company that only exists online.

Having seen first hand the transition of the Wall Street Journal from a business based on physical papers to a digital media company, and now leading content at “digitally native” news media business, Rich believes effective media companies are finally fully embracing being technology companies and must continue to do so: “You can’t not be both in this environment. If you just think of yourself as a media company without considering the technology, you have no brain. And if you just consider yourself a technology company without considering the importance of media, you have no soul. So you’ve gotta be both.”

Technology is at the core of every process in media, including managing content creation, hosting, distribution, marketing, and managing the workflows internal to and between each of those. Technology has also closed the gap between the time an incident occurs and the moment people locally and globally hear about it. Technology and its impact on consumer behavior has also blurred the lines of categories of media, as aggregators and platforms that dominate news also begin to dominate humor, drama, and everything in between, not to mention making it all available anywhere, any time, across all devices.

Rich spoke intently on the subject of how technology has evolved the state of media:

“You know, the iPhone really revolutionized not just telephony and personal communication, but it revolutionized media as well… you may be consuming news as I do in the morning while I’m making the bed via Alexa or Google home. You may be consuming content on your phone, certainly, but you will be consuming content pretty much everywhere around you.”

The future of media

As the times have changed, so have the ways we receive media — and that changing dynamic of information transfer will never stop. Every day, new devices, new websites, new innovations continue to change, little by little, the way we receive and deliver news, meaning that ten years from now, who knows how we’ll be absorbing our media.

When asked about the changing face of media, Rich put out the idea that people will be the next platform, as they are the ones receiving and re-delivering information more than any website can. When the technology of today is gone tomorrow, people will still continue to make, tell, and receive the news.

From a business perspective, Sam stated that “what I see is the future is I think these individual folks are just gonna continue getting bigger and bigger and bigger and the big media companies are just going to shrink.” He came to this revelation after watching who he thought to be an amateur YouTube reporter, but then found himself learning more from impromptu interviews on the streets of Baltimore than he did from major news reports from CNN or Fox. Though he dislikes the term “social media influencer,” Sam does have a positive outlook on the powers of individual people making big names for themselves as the times change, compared to major news outlets and broadcasting teams continuing to dominate the media market.

Rich also added into the idea of major news outlets and individual news sources, offering, “well, to me at least, that’s a goal or a shimmering vision that companies have been pursuing for quite a long time… And so the question in my mind is who is well enough placed to be able to pull that off to marry the technology with the content in an intelligent way? That’s one of the things that attracted me to Smart News. We’re not a big company, but we have state of the art machine learning technology and we’re trying to marry that with high-quality content in a way that works for users and helps broaden people’s perspectives rather than narrow them.”

Media’s biggest challenges

The world of media is bigger than most people thought it could ever be, and it’s come a long way from the old days of paper and ink. Competition, it stands to reason, is now also greater than ever, with more and more companies and personalities competing for the same eyeballs across a finite set of time. Looking back to a time when print media was still around, Rich told an insightful story about how getting insider scoops used to give some outlets an edge on consumer-growth, but now personalization is perhaps a larger driver:

“Print is basically a two-dimensional medium… I had a lot of friends working out here for the San Francisco Chronicle, SFGate.com. And every day in my inbox I would get an email from The Chronicle that had basically all their San Francisco Giants coverage. And I used to tell my friends, if you tried to charge me for SFGate, I wouldn’t pay. But if you gave me a little bit more in that newsletter, a little bit of stuff that I couldn’t get anyplace else, I am so passionate, God help me about the Giants, that I pay you for that because it would appeal to that third dimension of my information needs and desires, which is the intensity with which I want that information.”

Now, with the introduction of the internet, the intensity for wanting certain information has diminished greatly. If one site is paywalled, then another will likely contain very similar, if not the exact same information. This has proven difficult for certain publications, which hide or used to hide behind paywalls. Curation is a very powerful tool, but it must be done properly in order for many media sites and companies to find profits and continue to maintain audiences. Some companies never reach the point where a paywall can be initiated, while others found their roots in paywalled news – it’s a balancing act that most smaller and up-and-coming companies cannot afford.

Often broken into the three categories of creation, distribution, and monetization, both Sam and Rich agreed that creation was not difficult. Rather, distribution and monetization remain key problems in the equation of success. Sam would advise that anyone looking to enter the media industry keep in mind his rule of “niches make riches.” Rich agrees with the idea but added that “the single most important skill for somebody coming into media is the ability to absorb new skills because you cannot possibly imagine what skills are going to be needed in the future. And the most important skill is to be adaptable.” Though many news outlets and social media exist currently, there is still a lot of room for the industry to grow and transform.