How BuzzFeed CEO Jonah Peretti took an instant messaging bot and turned it into a $1.5 billion media empire

buzzfeed

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. 

Peretti recently spoke with Business Insider’s US Editor-in-Chief, Alyson Shontell, for the podcast “Success! How I Did It.”

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.  

The following transcript has been edited for clarity and length.

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

Buzzfeed CEO Jonah Peretti

Peretti: I was doing what most students do, which is procrastinate. I had to write my master’s thesis. Instead of writing my master’s thesis I was surfing the web, surfing the information superhighway. This was in January of 2001, so still pretty early days of internet culture. Nike had just launched something called Nike ID where you could customize your shoes and you could put your name underneath the swoosh, so I tried to customize a pair of shoes with the word sweatshop under the swoosh, and they rejected the order. 

We had this email exchange back and forth where they said, “It’s inappropriate slang.” I said, “No, it’s in the dictionary. It means a shop or a factory worker’s toilet under healthy conditions.” They wrote back another excuse and at the end they said, “Look, we just reserve the right to not put that on the shoe.” I said, “Okay, I’ll change the ID, but can you at least send me a picture of the 10 year old Vietnamese girl that stitches the shoes together?” Then they didn’t write back after that.  

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 Breitbartandrew breitbart

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…”

I was like, “What?” I was Googling her. It’s like, Who is this fancy lady we’re in business with? I said, “Listen, if I’m going to go into business with someone, I need to meet her.”

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

Buzzfeed

Shontell: You all created Huffington Post. It became — and still — is a giant success. You did figure out how to merge these viral ideas. You seemed to have a natural knack for it but then with also tech and algorithms and data. That was the first time it’s really been done before. 

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. 

Shontell: You did that once and then while you’re at Huffington Post, you start what becomes Buzzfeed, right? You did that while doing your job there?

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

buzzfeed ceo founder Jonah Peretti

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. 

Shontell: Now some media companies are trying to make it cool to be niche and smaller scale. They’re saying, “We just have a small loyal audience. Who needs all those readers?”  

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
Source: http://www.thisisinsider.com/buzzfeed-jonah-peretti-startup-success-how-i-did-it-interview-podcast-2017-5

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