Henry Blodget is infamous for hyping dot-com stocks before the crash. Now he has one of his own Henry Blodget is enjoying an impressive second act. Eleven years ago, his career as a high-profile Wall Street analyst imploded with the collapse of the dot-com bubble, when he was accused of promoting stocks publicly and disparaging them privately. He was banned for life from the investment industry. Covering it is another matter: He has reinvented himself as editor-in-chief of Business Insider, an online publication he co-founded in 2007. Business Insider is loud and brash – a “scrappy upstart,” as Mr. Blodget puts it, aimed at a young audience – with headlines that scream and content that roams well beyond a core business readership. It now claims more U.S. readers than The Wall Street Journal.
There are a lot of struggling media companies in the U.S. Why did you see the need for a new one?
There certainly was no need for another struggling media company–the goal was never to build one of those. The goal was to build a native digital media company, an organization that fully embraced the capabilities and differences of the digital medium, instead of resisting them. Our theory was that digital, like television and radio before it, would eventually evolve its own forms of journalistic storytelling and that embracing digital would allow us to reach a new generation of consumers. So far, that theory has proven correct. And our readers, the new generation of business leaders, are getting most of their news and information from digital.
How difficult was the launch of Business Insider? Was there a low barrier to entry?
If your goal is to publish some text or pictures and make them available to anyone in the world, there is zero barrier to entry. You can use Facebook, Twitter, Instagram or dozens of other digital platforms. If your goal is to create a self-sustaining news organization with a $10-million-plus annual editorial budget, the barrier is much higher. You have to figure out how to build a great brand, culture and team, while consistently producing excellent digital stories and generating enough revenue to fund your growth. That’s hard!
Have you ever thought of launching a print edition, ha ha?
Actually, we’ve often considered it. There are some things that print does very well, and we have many readers who still enjoy reading paper. So far, we have decided to keep our resources focused on digital. But we would never say never.
There are quite a few mainstream-media journalists gravitating toward start-ups, such as FiveThirtyEight and Vox. Is this a new era for journalism–and where is it headed?
We are in a golden age for journalism. The digital medium is by far the richest, most flexible and most powerful medium ever developed, and it is creating amazing opportunities for entrepreneurs and journalists who embrace it. At the same time, most traditional news organizations are still doing okay, at least for now, so there are still options available for those who prefer print or broadcast. Going forward, there is likely to be far more growth and opportunity in digital than in print or broadcast, but both will be with us for decades.
You’ve gotten a lot of attention for attracting well-heeled investors, including Jeff Bezos. What are they after?
Over the past several years, thanks to the success of Huffington Post, Bleacher Report and others, investors have realized that digital media can be a successful business, and that has fuelled a lot of excitement. Digital media organizations have different growth characteristics than, say, social networks and other tech companies. They’re content and technology businesses, as opposed to just technology platforms. But they can still make excellent investments.
Your bio makes it clear that you prefer index funds to stock-picking. But if anyone is well-equipped for stock-picking, it’d be you, given your Wall Street background. Why so shy?
If there were a way for casual investors to consistently pick stocks well enough to beat the pros, I would be all over it. Alas, there isn’t. Stock-picking is so competitive now that even most pros can’t do it well enough to add value after fees, costs and taxes. Stock-picking and other forms of active money management is fun, but unless you do it purely for the intellectual challenge, it’s a bad strategy. Over the long haul, it will almost certainly cost you money relative to index funds.
This is your second career. Is it better than the first one?
For me, yes. I actually started as a journalist [at a small paper in Massachusetts, then several magazines and CNN in New York], so returning to journalism was a sort of homecoming. Starting Business Insider also combined journalism with business, technology and start-ups, which I focused on on Wall Street. So it’s a wonderful mesh of everything I did in the first two decades of my career. And it is a huge privilege to lead a team as talented as ours and serve so many readers and clients. I’m grateful every day for the opportunity.
This interview has been condensed.