Free Enterprise Staff  | November 5, 2014

Part II: Q&A With Politico Co-Founder Jim VandeHei

This is the second of a two-part Q&A we conducted with Politico co-founder Jim VandeHei at the U.S. Chamber of Commerce’s Small Business Summit this past summer. You can check out part I of our interview here.

Politico is often cited as an example of a news organization that actually understands the digital media landscape. Was that a goal you set out to accomplish—to create a news outlet that engages its readership in innovative ways?

I would dispute that. I don’t even know if we get digital media. I think there are certainly other digital companies that are more digitally savvy than we are. I think we get powerful people, and we know how to distribute information to them. I think if you want someone who understands digital, then you should go look at Upworthy or BuzzFeed. They certainly have a better understanding, and they’re the ones who get it.

Now what we did get is that when we launched, our competitors were all newspapers. The world has just changed, and you’ve got to move on. There’s not a debate about the newspaper. We all know how the play ends—there’s no newspaper, people are getting information on screens the size of your hand, and you have to figure out how to get information to them first. There’s no mystery there. I don’t have some technological insight that gets me there. I just know that’s where we end up.

We benefited because we didn’t have this old legacy of being a big media institution. I was thinking about this recently, and I can’t think of a media company that we grew up with that’s ascended. They’re all managing decline, and I personally think that’s a drag. I’d much rather be ascendant in trying to manage disruption and success, as opposed to managing your decline, because it has such a cultural impact on your company.

If you’re always thinking about cutbacks and how to hold on to the old, you don’t have time to actually have enthusiasm for the new. And that’s what you see at The New York Times and The Washington Post—they’re in decline and they’re going to continue to be in decline. And to be blunt, we’ll be in decline if we don’t keep changing ourselves almost every six months. And I think that’s a challenge for everybody—it’s not just a media challenge. Everything is changing so rapidly that it makes everybody unnerved and it forces people to make stupid decisions. You have to be able to figure out how you can navigate it smartly, and if you can keep your nerves and navigate it smartly you can do really cool things in business, in media, in anything right now.

Though you already wear a lot of hats at Politico, you’ve added two more—president and CEO—at Politico’s new publication, Capital New York. What do you like most about working on the business side of journalism?

I mean I love the business side. I never thought I’d be a businessman; I’m a self-taught CEO. I’ve been a reporter my whole life. I guess I managed the night shift at Little Caesar’s when I was 17 and that’s the only thing. It just is what it is. We started this company and we figured, ‘Whatever, we’ll figure it out.’ And we did figure it out. And I think one of the things that I figured out is that I like leading, I like building stuff. I think that I’m decent at it, and I believe in protecting journalism—I really do.

How do you fund serious journalism? How do you protect that from decline in a time when it’s really easy for people to go and chase crap? That’s a tough thing to do, and I don’t think there are many people who come from the journalism world who would have business instincts. I think to protect journalism you have to sort of understand journalism and have those business instincts. My passion, at least for the foreseeable future, is building the business side of things.

What do you find most challenging?

The challenge—I don’t know. It’s like any other business, I think. Getting smart people, keeping smart people, motivating them. We have a good culture, which took us seven years to build. I think what we have is scalable, so your struggles are just how do you continue to protect what you build and then grow? We’re seven years in, and we’re just about to do a big growth spurt, but we waited until we cleared that hump.

We have a profitable company that’s stable. We have a big sort of bench of really good leaders who can go run stuff and have the authority to run stuff. I’m not unnerved by any of that—I’m excited by it. I think it’s fun, and I think we have a good plan. I think there are a lot of people who don’t understand the world we live in. They just spend a lot of time chasing myths and mirages because someone told them that’s what they should do, and you actually have to look at the metrics and think about what works and what doesn’t work, and you have to adapt your individual business, hire good people, and execute.

And—knock on wood—I think we’re well positioned to keep doing that, and that’s what’s fun for me. I mean you’re in business but you’re in a business that has some level of profile because people love to talk about politics. Whether I was covering the White House or doing this, I say I have the coolest job because it’s actually interesting. Most people’s jobs are interesting to them, but they can be kind of obscure. Everyone has an opinion on politics. The expertise we have from living in this town is a treat for people, and I think it makes for a more enjoyable company because you’re able to converse with almost anyone about almost anything.

Why did you choose to expand to New York and what’s your strategy for standing out in what’s often called a saturated media market?

That it’s saturated is a myth. I believe that people convince themselves that something is saturated, but they never really looked. When I look at New York, I don’t think coverage of politics and policy is saturated—I think it’s weak. I think that the coverage of media as a business—which is the other thing we cover—is exceptionally weak in New York. And we have a great business plan. We are able to sell a combination of high-end subscriptions and ads to be able to fund journalism.

We now have more reporters in City Hall than The New York Times. We have more reporters in Albany than any newspaper in the world. We have more people covering the business of media than anybody. If you can figure out a business model to fund that, then that’s great. Some people will say, ‘Oh, it doesn’t have the traffic of The New York Times.’ Well, I don’t want the traffic of The New York Times. Whether it’s here or in New York, I want the right 50,000 people reading it. I want people who are in government, in business—people who are serious and who need this information to be smarter, to do their jobs, to live their lives more effectively. That’s what I want. I don’t want the masses. I’m happy to have them and if they want to read our coverage then God bless them. But it’s not what we’re going after.

Why New York, then? It’s big and it has money. When you look at how can you fund journalism, you need to be able to sell ads and sell subscriptions, and New York is a great incubator. And for us it’s now about taking what we learned and testing it there. If it works in New York, then I don’t think it’s a mystery that we would then do it in California, in Boston, and in other places. And the early results are really good, which is very encouraging.

What’s your favorite D.C.-based show: Homeland, Scandal, House of Cards, Veep, or the West Wing?

I am a House of Cards fan, but to be fair to the others it’s the only one I have watched. I liked season one better than season two, but I think it’s a fun show. I think it gives politicians more credit than they deserve. I wish sometimes that they were that clever—they’re not that clever. What’s interesting about all of these D.C. shows is that as dysfunctional as Washington is, there is a Hollywood obsession and obviously a market obsession because they wouldn’t be producing these things if people weren’t actually watching.

What do you think can be done to overcome the gridlock that’s come to define Congress?

I don’t think much can be done to fix it in the short-term. I think we’re looking at least until 2022 to get out of this cycle. I don’t think there’s an outside force that can change the dynamics that have been set in force in the House. This is the reality: It is empirically polarized. I would basically agree with the president—he wouldn’t say this publicly—he thinks that it is empirically ungovernable. I think it is impossible to get anything through this House that is of consequence. How do you change that? You either have a massive wave, where one party has such overwhelming control; you have the public change what it wants from Congress; or you have some president come in who is charismatic and committed, and can somehow harness the will of the people to force Congress to act in a different self-interest. And I don’t see any of that happening in the short-term.

It’s a depressing view of politics, but I actually think it’s a realistic view. I think people have to quit watching Congress through the eyes of what they want it to be, and start realizing that you have to act based on what it actually is. It seems like I’m always pessimistic, but I’m just being realistic.

You have to talk to the individual members. What are they hearing, and what do they want? They don’t get a single call asking for gun control or immigration reform or a grand bargain that includes tax increases. It’s just not the world that they live in. And I think it’s hard to see that dynamic change much. I mean the reason the president is depressed is that he knows he can’t get anything done for the remainder of his presidency. You can’t do much by executive order. The stuff of consequence is done through the lawmaking process, and he can’t do it. He cannot bend Congress to his will, and there’s almost nothing he could accept that Republicans could also accept. That is just the reality of where we are at.

Does it change? I think change comes from presidents. I really think that’s ultimately where it has to come from—presidents who are capturing the imagination of the public and pushing Congress in a different direction. But it’s hard to do. We’ve gone through back-to-back presidents who came in with high approval ratings, were really likeable, and wanted to change the politics of Washington. But neither of them made it in more than 9 months before they gave up and became reflexively ideological and shut out the other party.

Markets do correct themselves at some point, though, and I think you see it. Why does [Representative] Cantor happen? Though surprising on an individual level it’s not surprising. People are so ticked off at Washington. That current is running powerfully through the country in ways that people do not fully appreciate.