Can Puck’s CEO reinvent the news business for the influencer age?

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28:03Nilay Patel:Welcome back. I'm talking with Puck CEO Sarah Personet about the structure of the company. You've kind of gotten to my structure question. I ask everybody on Decoder to describe the structure of the company. It seems like you've got John Kelly. He's the editor-in-chief. Yeah. And so he operates deputy editors, it sounds like, in a bunch of verticals. Do they have reporters? Yes. So I'll zoom out. So John Kelly is both editor-in-chief as well as the founder of the company. He is truly just one of the smartest individuals that I've ever worked with. And I say that having worked with Jack Dorsey and Cheryl and so many others.

28:42He is really exceptional. So he oversees the entirety of our content organization. that's inclusive of Puck as a media brand. And that's inclusive of Airmail as a media brand. That's your big acquisition. Yeah, exactly. Yeah, we acquired Airmail back at the end of October. So I know you'll have questions around that. But Airmail is run by editor-in-chief Julia Vitale, who grew up underneath Graydon. She is absolutely exceptional. And she's come over to lead that team.

29:13Nilay Patel:That's Graydon Carter, the former writer of Vanity Fair who started AIMF. Okay. Correct. Just making sure I already, Like one of the things that's really interesting here is we have a young audience, a big audience. I'm not sure that they know what Puck is or what that history is. And I think this is one of the bigger questions I have for you as a whole, right? This is a pretty storied legacy that you're trading on. Buying airmail is a big deal that I do want to talk about because it was Graydon Carter, because that was his venture after Vanity Fair. I read his memoir. It was very fun. But I know my audience doesn't know any of these things.

29:43Nilay Patel:And actually the dynamic between do I follow Matt Bellany or do I care about Puck as an institution I think is one of the most challenging dynamics in all of media. And I will tell you I actually disagree with a few things you've said already. One, I think it's the platforms that have torn down the institutions. I don't think that they are a good partner for any media brand. And I think the idea that journalists and influencers are the same or should be the same is actually quite dangerous. And I would pull those ideas as far apart as I can because I think journalism is a process. It's a way of working.

30:20Nilay Patel:Being an influencer is a way of making money. And those things are not aligned. And I'm very curious how you can pull all of these ideas together and try to have the cost structure of the old way, the prestige of the old way, the Graydon Carter way, with the economics that are pulling everyone towards integrated brand deals and influencer world. Because it doesn't matter if the journalists are influencers, if they're not doing the direct brand integrations the influencers are actually doing to support that level of work. I appreciate your disagreement and it makes for a very good podcast. I would disagree with your disagreement.

30:56The thing that I would say is challenged in legacy media, and you can't really say that legacy media had it figured out because as you look around, we've seen just constant layoffs happening inside of the industry for the last, you know, five to 10 years. and Dylan Byers, who runs our media content, has written about it. One of the challenges with that is that the majority of layoffs were not coming from the sales teams, were not coming from the operations side. The people that were being laid off were the people that made the product, the people that influenced society, the people that helped to create a world that ideally would define what trust looked like in journalism.

31:43And that was the journalist. So for me, on the technology side, when I think of heroes inside of the organization, it's usually the product and engineering folks. But for whatever reason, the way that media grew up, it wasn't the people that were making the product. It wasn't the journalists. It was actually, like, those were the people that were ultimately being let go. And so where I think Huck differentiated itself.

32:12Nilay Patel:But the reason they were being let go is because they cost money and there was no money associated with their product because their distribution was torn down by platforms. Right? Like my biggest problem in my cost structure, and my reporters know I say this to them all the time, is that I pay them money and then they tweet for free. Right? This is like the dynamic in every newsroom in the world is that we give our work to other people's distribution for free all the time. And I know that you have a subscription model and that's different, but that is specifically the dynamic that has led to the hauling out of newsrooms, is that we don't control our distribution.

32:49Can we put the platform piece to the side for one second and just finish up the influencer?

32:54Nilay Patel:I'm really not sure how. No, no, I will. I will address that. But I don't because I don't think those two things are connected. And the reason for that is we do have a subscriber based model where our subscription revenue grew over 50 percent last year. And that is really critical. We do control distribution and our journalists are not a cost center. The way that we look at each franchise is thinking through the economics of each of those franchises. And we do a business, biannual business review with each of those reporters who anchor each of our franchises. So the operating leverage that we bring into this system still allows for the job to be done.

33:45The job to be done is not, and I wouldn't define influencers and creators only as those that do like integrated brand partnerships. But that's how they all make their money. That might be how they make their money, but Matt Bellany is very influential in the world of Hollywood because he is reporting on it. And that influence matters, but also the relationship that he has. This is why I started out by saying he goes so deep into his sourcing. And this is not an illustration of all of our journalists. But when you are in that industry, you know you have to read him because he is reporting on the inside story.

34:29He's giving you access to information that you would not normally have access to. And he does that with a high margin business. So, yes, our revenue model is twofold. You know, we have a subscriber revenue model and we have a commercial revenue model and advertising model. Those things that you're describing that you can't have a profitable business that is talent led and journalist led, I would disagree with. I think that is absolutely possible. And that is the reason why each of our journalists have equity and ownership in the company is because we want them to be incentivized to make hard decisions around cost.

35:22We are very diligent in those things. We also have the luxury of being four and a half years old and not having been built for the last 20 years. And so that's also why I consistently say it is, again, a real honor to be able to lead this company and to lead it through significant advancements in growth from a revenue perspective, from a content perspective, from a talent perspective, and then also from a subscriber growth perspective. perspective. We just hit over 100 ,000 paying subscribers. We have upwards of a million folks overall that are reading the publication. And that's significant. To get to your platform piece.

36:09Nilay Patel:Wait, actually, can I just ask you, the last public number from 2025 was 45 ,000. So the The 65 ,000 is from the airmail acquisition. I'm sorry, 55 ,000 is from the airmail acquisition to get to over 100. It is the last public number we announced with Brian Morrissey and the rebooting. I announced that we had hit 100 ,000. We don't break out, actually, the difference because that 45 ,000, I think, was a 2024 number. But with the acquisition of airmail, we well exceed 100 ,000. Okay. So you can just kind of back into it. You had one public number, you made an acquisition, you had a big jump to another public number.

36:52Nilay Patel:Does AirMail have the same structure? Do they have equity? Do they have a revenue share? Yeah. So right now with the acquisition, we're working through all of the employee-based comp for equity and ownership. It's all one collective company and all one same compensation structure. AirMail was a brand, right? Graydon Carter is a brand person. Vanity Fair was a brand. You were not really supposed to know who Graydon Carter was unless you were the sort of person who needed to know who Graydon Carter was. And then he was very important. Airmail was kind of built in that model, right? How many people worked at Airmail?

37:25I think we have 45, 45 to 50 people from Airmail and 45 to 50 people from Puck. We're about 50-50 in terms of talent overall. Although with the integration, just for your listener base, as you do an acquisition, one thing that you think about is the post-merger integration and how you bring two companies together, how you think about centers of excellence where you might have four finance people on one side and you have four finance people on the other side. So we did a lot of that synergy work. and usually when people say synergy work, they mean layoffs.

38:07Nilay Patel:Did you lay people off? We laid off a few people from the airmail side and a few people from the puck side. Yes, absolutely. We did. We were really thoughtful and really careful. We communicated that within the first 24 hours of the acquisition and reviewed where we felt like we had too many people within one team and then where we would port folks over from either side of the business. And then the total split between the talent who's supposed to go out and be the face of the company and make all the money and the management is what now? Management, we have nine people on our leadership team.

38:49And then we have across our journalists and editorial teams, probably 40 and then maybe Yeah, 40 to 50. And then the rest are in sales, marketing, our technology team. We have a very small strategy and ops team. One of the reasons I'm asking this is, you know, I have friends who've left big media

39:14Nilay Patel:jobs to go to Substack or Ghost or whatever. And then I have friends who have left Substack to go to another email provider because they think Substack's 10 % is too much. They're not getting the value out of Substack. You're taking more than 10%. Just describing that overhead for an individual journalist, that's a lot to pay into to support a sales team or whatever else you might have compared to the revenue market back. How do you justify the split you're taking from the individual reporters? From a compensation perspective, and we do on an annual basis, we look at our comps on compensation relative to the industry.

39:49And our journalists and editors -

39:51Nilay Patel:Wait, the industry is the media industry or the Substack industry or the Instagram influencer industry? The media industry. And our comps are well higher than or very much above the current comps. And then also our journalists, but all of our employees have equity and ownership in the company. So I feel very confident that the way we pay our people is very much aligned and incentivized with the holistic company. I think on the sub-stack side, so what - Wait, can I just ask about equity? Are you paying dividends on equity or is that just paper money? No, we are not because we're not a public company right now.

40:37Nilay Patel:I'm asking what the equity is worth. I'm the person who owns a bunch of paper equity in a media company. It's great. Sometimes I think about it. It doesn't pay the bills, right? Like, does it pay the bills for your people? Well, I appreciate that. Not at the current moment, but the value, and especially with the recent acquisition, but what everything was built on prior to that has made the value of the equity significantly higher. And as someone who was also at another company pre-IPO, I believe in ownership as a component part of a compensation structure. For your listeners, I would also encourage them to really consider that as well.

41:18There is a ton of value to think about your TTC, your total compensation package. So Neely, while I appreciate your point, I just want to make sure you're guiding your young listeners to be thoughtful.

41:31Nilay Patel:If you're going to get equity and it's going to pay off a huge number, you need an exit event. What's your exit event look like? That's a really good question. And right now, we are completely focused on continuing to grow. a successful company that we've built thus far and feel really good about that. So no exit strategy of the current plan. So I just want to stay focused on this for one second. Yeah. We're saying we're doing better than the media industry, which is dying and pays at low rates. We're not maybe doing as well as the influencer industry, the sub-stack industry, which if you're a winner at the level that you might need people to be a winner at, pays at extraordinarily high rates and that you're making up the gap with equity that is not liquid and there's no stated plan to be liquid.

42:14Nilay Patel:So should your employees expect an exit to pay that off? Let me just clarify, because that is not what I said. Sure. I said that the base compensation is at or above the industry level. And I feel the media industry, the media industry. People leave the media industry because they can get more money on Substack. That's what I'm that's what I'm asking. Well, so I think that's very interesting because we've actually done two of our acquihires prior to came from Substack. And that's because they don't feel like they're capable of monetizing the platform as well. It's also because the world of Substack, and I actually think Substack's a very interesting platform.

42:57I don't have a ton of internal knowledge about the company. I think what they're trying to do in terms of democratization is really interesting. But what we've found is that Substack tends to be a platform of solo operators. And many journalists are actually looking to be able to be independent and really be free to express the stories that they want to express, but also have infrastructure around them where they do have a sales team. They do have a growth marketing team. And that's the part that we've built out. So a lot of the calculations that you just went through are incorrect. And another example of that is each of our authors get bonused based on the subscribers that they acquire and that they retain.

43:59So they are incentivized to continue to grow. We're incentivized as a company to help them grow. And that comes back to them. So your total compensation package, I think you oriented a little bit too much around equity. But again, the purpose of ownership is that everyone should feel like they have a voice in the company. And that's a big part of what we're trying to create. But I think that the challenges that you're painting relative to the broader industry are very real, and I can appreciate that.

44:35Nilay Patel:Yeah, I'm just trying to understand what the value of being a part of the organization is. And Matt Bellany, we've talked about him several times here. Hi, Matt. We're big fans over here. He was profiled in the New York Times in November. And this is a quote. He said, it's safe to say I could make a lot more money if I were independent, at least in the short term. But I don't know. Do I want to be on Substack? That's some ambiguity, right? Like the thing that you could do on that platform, and I have a lot of problems with that platform as listeners of the show know very well. But the thing you can do on that platform is collect a lot more revenue without the overhead.

45:11Nilay Patel:All of my friends who go there say, I don't need all this stuff. I have fans on social media, and I can convert them to get paid over here, and I will make all the money for myself. So I'm trying to really just nail down. What's the value of being part of the greater organization and paying a higher cut even than you would pay to Substack for their marketing? Is it your sales team? Is it the growth marketing team? Is it product? How does that work? I think it's the collective whole. And, again, I don't agree with your calculations, but that's okay. I'm sorry. What calculations have I made that you disagree with?

45:43I don't think that we take a greater cut of –

45:48Nilay Patel:You don't think the overhead of working for Puck is greater than Substack's 10 %? I think that what we provide relative to scale from an advertising perspective and a subscriber perspective, as well as paying benefits, as well as providing bonuses, is higher. So that's where I'm coming at it from. I appreciate you continuing to pick at it, but I disagree with that statement. I mean, if you just said we provide health insurance, I think that's meaningful for a lot of people. Like, I get it. We provide health insurance. I have two kids, and that's always on my mind. You know, whenever someone asks me about going independent, I'm like, no, I have two kids.

46:29Nilay Patel:Like, and I love running my newsroom. But the dynamic for a lot of people I know thinking about this isn't I should go work for another company. It's the rewards for me are very high if I go on my own. And I think you're trying to sit in the middle of that, and I'm just trying to find the edges of how that model works. because if you end up in traditional cost structure, it won't work. And if you end up all the way over here, you're competing with a cost structure where the platforms get all the content for free. Or in Substack's case, people pay them for the content, which is maybe the best business model of them all.

47:04Nilay Patel:And somewhere in the middle is Puck, and I'm just trying to figure out how that model actually works. So you are correct. We do sit in the middle, right? And that's why we are able to get the incredible generationally talented individuals that we have, because we allow and support journalists, not just Matt, but Bill Cohan. I mentioned Ian Kreitzberg on the AI front, Lauren Sherman. We just brought on Kim Masters a year ago, Marion Manneker, Dylan Byers. These are incredible journalists that have some of the foremost voices inside of the industries that they write about and that they lead. They're a part of an organization, but they're also able to be independent.

47:59They do get health care, right? And that does matter. And they do have bonuses and they do have feedback that they get, but they're also not told what stories to chase. And the benefit of moving from a large media organization through to a sub stack of it all, the motivation for some might be money, but the motivation for many is independence. And we try to capture the balance between being able to be independent, but also having a support infrastructure in place that allows you to take some of those risks. It's quite special. And that's, again, I think the reason why we have a subscriber base that's also incredibly loyal and growing because they can feel that in the authors.

48:51Nilay Patel:When I talk to people at Substack or the people who have moved to Substack about that 10%, the justification is generally that Substack drives more subscriber growth than any other platform. And the people who have left Substack have seen a pretty rapid decline in how fast their subscribers grow. Substack has turned its app basically into a walled garden. They say they do email, but now you open it and it looks like a Twitter and there's podcasts inside of it. And they've made a little social network even though they claim they haven't made a social network. And that's fine, and it's working because it's driving a lot of subscriber growth for a lot of their people.

49:25Nilay Patel:When you subscribe to one sub stack, they sign you up for seven more. They have dark patterns in that app. That is their 10%. They will look you in the eye and say, we know people think this is a high number. And we say, if you leave, your rate of new subscribers will go down. And that's worth the 10%. And the second we stop delivering that, we know people are going to turn on. Is that the same for Puck? Is it health insurance plus subscriber growth? What's the mechanism for subscriber growth for you? I'm not an expert in Substack. What I can say is that many of the subscribers on Substack, at least from the Aqua hires that we have made, are not paying subscribers.

50:03The subscription revenue that I mentioned before is from paying subscribers and the growth is from paying subscribers. And so the additional benefit from having great base comp and then also having equity and having healthcare and health insurance and vacation policy and all that good stuff and folks to support you when you do want to go on vacation. Aside from all of those things, it goes back to the incentive around the subscriber bonus. So as I mentioned before, for the, our, our growth is driven by marketing. Our growth is driven by the content that our journalists create and the stories that they are, are selling.

50:51And then it's also created now because we're, we are building sort of multimodal franchises around these individuals, whether it's through event businesses. Also, all of our talent gets bonused on the events that they are a part of. So you have the subscriber acquisition bonus, you have a retention bonus, you have an events bonus, and that is our talent getting incentivized and paid for the work and the time and the energy that they're putting in. And that's really the crux of the value proposition. But again, I would go back to like, if you have any aspiring journalists on your pod, what's the motivation that they have around wanting to be a journalist?

51:44And if it is to be capable of reporting and telling independent stories and also being able to be financially compensated, I think that we are a rare breed of trying to create a company that fosters that. And that to me, again, when I think about the career choice to come here versus going to another big technology company, it was a strong motivator for me was that mission.

52:22Nilay Patel:We have to take another quick break. We'll be back in just a minute.

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55:36Nilay Patel:welcome back i'm talking with puck ceo sarah person about where new audiences for puck come from where does your growth come from right if if your folks are getting paid more if they're getting bonuses on subscriber growth where does the net new customer come from net new subscribers come from content that is that is like interesting and breakthrough i think a lot of the work that has been done. So scoops, right. Right. I understand, but you have to distribute the scoop somewhere. Where does it come from? I think, are you getting back to the platform piece that content is distributed? Yeah. Where's your top of the funnel?

56:12Is it,

56:13Nilay Patel:do you, when you make it, when whoever, when Julia Alexander is one of my very favorites, when she has a great story, is it search traffic that converts? Is it her tweeting about it? Is it Facebook reels? Like what, where does the net new subscriber come from? Yeah. There's, and you're, I would imagine you would understand this as well. It does not come from one singular place. We have the both organic side of leveraging social platforms. We absolutely encourage our authors to tweet about the stories that they have. We also have a social team of one that develops all the organic content and leverages the various platforms for that.

56:56We also have an incredible comms team that also helps to distribute the stories that are coming out of all of our political content all the way through to all the other franchises. And then also on the experiential side, whenever we are doing any type of event that obviously is talent-centric, we're talking about the work that they do and that those interviews are coming to life. So I think in this environment, and I walked through at the top of the hour, the transitions that have occurred, there is no longer a world where distribution is centralized into one, two, or three places. There's not a singular television network that you can advertise on and drive product and growth.

57:46There is not a singular platform that you can advertise on and drive growth. That fragmentation and disruption has been happening for over 20 years. So if there's anyone that is saying it comes from a singular source, that's amazing. But we leverage each of the various platforms and we leverage paid and we leverage organic in order to get the work out in front of net new subscribers.

58:17Nilay Patel:What's your biggest channel? Like if I go and ask a YouTuber, what's your biggest channel? They will say the YouTube algorithm. If you ask a substacker, what's your biggest channel? They will say substack, right? They're integrated with their distribution in very particular ways. They don't always love it. My joke is that every YouTuber gets their wings when they make a video about how mad they are at YouTube, right? This is a tense relationship between creators and their platforms. But if you ask them where the followers come from, it is the platforms themselves. What's your biggest channel? I would say our biggest paid channel would be social platforms as well as SEO.

58:54Now, within the industry and sort of the migration to zero click, we are transforming a lot of the way that even our site is developed and the way that we optimize for GEO. I mean, that's a big shift in the industry.

59:08Nilay Patel:Wait, I just want to define some terms. I'm the person who came up with the phrase Google Zero. You did? That's me. They love it. Did they really? I sure did. On this show, as a matter of fact, there's a whole episode about it. I think our listeners understand Google Zero is when Google stops sending search traffic to publishers. You've heard me talk about it a lot. GEO is generative search optimization, which is, I would say, as yet unproven and mostly snake oil. I don't know if it's snake oil, but I do remember when I was at Facebook and all, at least many people across marketing and businesses said that social was snake oil.

59:47And then I remember that same shift happening with mobile and that no one, great example, no one would ever watch video on their mobile phones. And now it's one of the number one consumption formats. So I can tell you this. As a business leader, I can't ignore the changes that AI is driving more broadly in the, not just in the industry, but in consumption. But I think you're very correct in saying that it's not proven out yet. And so it's not the singular channel and or the singular investment. But we are continuing to work on what does it mean to be organically discovered in a world that's Google Zero.

1:00:35So, again, I think that's really neat that you actually came up with that language because it's widespread across the industry.

1:00:44Nilay Patel:You can watch Zanar Pichai react to me saying the words Google Zero on this very show. It was a fun moment for everyone. I guess my question there is you don't have a singular top of funnel like a platform does. You don't have the bad model that the old media companies do. I'm not in any way saying that was a good model. Like, they're dying. We're watching them die. You can read Matt describe how Hollywood is dying, like, very specifically. The cost structure there is bad. Somewhere in the middle is your cost structure. And I'm just trying to figure out where you find the big growth from or if the plan is to remain small.

1:01:19Right?

1:01:19Nilay Patel:Because it feels like there's two choices to be made right now. Our primary distribution model is newsletters. We're not a technology platform. So the comparisons to YouTube or Facebook or Substack, we're not a technology company. We are absolutely a media company, a news and information company, a journalist-centric company. And again, the primary distribution is that our talent anchors a private email or private newsletter that gets distributed to an audience that is consistently growing related to paying subscribers. And then we also have a long leads list. And we use channels like CRM in order to continue to market to hot leads, new leads.

1:02:15that come in through discovery, whether it is, again, through our social platform leverage, whether it is through a referral that's coming from another reader that is excited and intrigued about a story and wants somebody else in their industry to understand what's going on. All of those things fill the top of the funnel that ultimately drive to ideally conversion of becoming a paying subscriber. So that top of funnel, I think, the way that I think about it is really there are paying and unpaid and the conversion of unpaid to pay so leads to subscribers is also a component part of that.

1:03:01Nilay Patel:You talk about social channels. One of the dynamics I think is really interesting in the world you're describing is whether or not the institution is important or the talent's important. It very much feels like your emphasis is on the talent. Do you run paid social on your talent's social media feeds? Because that's where the followers are. Or do you have the puck channel and you want people to follow that? Right now, we do not run paid social on the individual talents. As I'm processing it, I'm like, that's a really interesting conversation to come back around on with talent internally. The way that we've managed in the past and through conversations with them is that a lot of talent wants to own and run their own channel.

1:03:45And when they have questions or when they need support, they have a person that they can call on for that. But our primary growth has been through our owned and operated channels. But I like the provocation. So something I certainly will take back is if folks are open and interested in that.

1:04:04Nilay Patel:Well, this is the dynamic that I think it just is for everyone. The reason that a reporter leaves is they say, I have however many tens of thousands of Twitter followers. I can monetize 2 ,000 of them, and I'll make more money than you ever paid me. I've had this conversation. I'm sure you've had this conversation. There's a lot of this in the world. The platforms incentivize the people to participate, right? There's an infinite supply of teenagers who will make content for Instagram for free. And so they don't want the institutions to be powerful because you can't – there's not an infinite supply of news organizations.

1:04:40Nilay Patel:And so once you have a little bit of power there, you can't – you might have to pay some rates, right? The original sin of digital media is Jonah Peretti believing he could go so viral that Facebook would pay him money. And we all – that's what you're talking about, the pivot to video. you know, that was that moment right there. And it was not going to happen. And I think a lot of people knew it wasn't going to happen. And we all lived through it anyway. How do you operate in a world where you want the brand to be central to do the audience acquisition and the subscriber acquisition you're describing with the methods you're describing when all of the platforms want all the action to be by the people?

1:05:11I can't speak to the motivation of platforms today. I think you're correct. When I was at both of those platforms, what I saw is actually a real deep desire to actually support publishers. But again, I don't work at those companies. I can't speak to the motivations of them today.

1:05:34Nilay Patel:I think we can all see their motivations pretty plainly today. What I can say is for us from a Puck perspective, I'm not trying to compete with YouTube. I know I've already said this, that we're not a technology platform. We're not a technology platform. We are focused on covering the stories inside of the industries that have the opinion elite and people that deeply care about what's happening. that is what we are doing. And we distribute those stories, yes, through newsletters, and then also through a variety of other marketing channels. I know I'm not completely and totally answering your question, but I think it might be because I - I think you might be talking about the audience.

1:06:32Nilay Patel:I'm talking about the people who make the work, right, and the economic incentives of the people who make the work. I mean, And you're describing Puck as sort of like the fanciest collection of trade publications that has ever existed in the world. I don't know if that's how the people – I don't know if that's like what people want to do, right? I think people want big audiences. Like I think every reporter wants to be the most famous reporter in the world. And that's great. Like I think that is a perfectly aligned incentive with go get scoops, go get attention, write the best analysis, go be famous, right?

1:07:01Nilay Patel:And that's going to make everybody a lot of money. A collection of small trade verticals for the opinion elite is very different than that impact. And I think media organizations are losing people to platforms because that impact is so alluring. And then the opportunity to do things that are not journalism, to do integrated brand marketing, to do sponsorships, to go on the job. All the stuff I won't let my people do that I won't do. I won't even read the podcast ads. But it's all right there, right? You can get the big audience and you can get the big payday. And again, I'm just trying to find the boundary for Puck, right?

1:07:33Nilay Patel:You're kind of making it smaller. And I'm just wondering if that size is as lucrative, as impactful, and as incentivizing across all the metrics as maybe the big platform exit. I'm not quite sure if for the journalists in your world, it sounds like you're trying to encourage them to go to the platforms. I'm just seeing what's happening all around me. I've run this newsroom for like 15 years. You know, it's like we we sell what we sell here. Like my joke is that we sell our ethics policy. And that's what people subscribe to us for. Like, again, we just like won't do the sponsor reads. It drives my company crazy that I won't do the sponsor reads.

1:08:10Nilay Patel:Everyone can see the pot of gold at the end of the rainbow labeled Neelite does a sponsor. But I won't do it because I think what the audience pays us money for is the fact that you can't tell the newsroom what to do. I would like to believe my newsroom is bought into this and the economics makes sense inside of that. But you're describing this talent-led journalist as influencers model without the corresponding payoff that the influencers get. And that's the tension I'm just sitting on. I appreciate that tension, an appropriate stat to consider, because I think you're describing a world, and again, if your listenership is relatively young, it would drive everybody into the only career that they should have is to be an influencer.

1:08:56And I fundamentally disagree with that. What I do know of Substack is that it's about their top 10 % of authors make 90 % of the revenue. But I want everyone to hear that. The model that you are describing that everyone is getting massive paydays from these other platforms, the top 10 % are making 90 % of the revenue. What we provide is a platform, in quotes, not a technology platform, but a company that does support journalists. And yes, I would say that journalists are the original influencers, but influencers oftentimes just pop up a phone and make content about anything. journalism is a fundamentally different profession.

1:09:56You make the point from an ethics perspective, from a fact-checking perspective, from a legal perspective, knowing that if you write a story and somebody else comes after you and that you have legal support, those things matter in journalism. And that, in addition to being able to have audience growth that is a core focus of the company, being able to have commercial growth, being able to get paid for the events that you are a part of, for the subscribers that you are bringing in, I don't think is small. I actually think it is quite exciting and can be quite large. When you say the, if you look at the various categories, within Puck, airmail is a little bit different.

1:10:49That's sort of the, I think that the brand that drives cultural advantage. And I think Puck is the brand that drives professional advantage because it does go through each of these categories or industries that are anchored by our lead talent. And they're telling stories and they're reporting on what's happening at the top of the companies that drive these industries and the people that are making the decisions within it. But I don't think any of these industries in and of themselves are small. And I certainly think that the Puck portfolio is one that is not just about the individual industries, but actually about the interplay and the intersection of power and decisions that occur across each of those franchises.

1:11:41And that's also the unique value proposition that Puck as a brand brings. And that is very much supported by our talent. And I continue to be incredibly proud of the fact that I appreciate the tension between brand and talent, but I don't feel that tension internally. I feel like we are a brand and a company that supports talent so that they can do their job, which is to report.

1:12:14Nilay Patel:You mentioned Airmail is a little different. How is Airmail a little different? It is not focused on the professionals inside of an industry. It is because Puck will report on, again, the business of fashion, the business of our economics, things like that for the professionals that ultimately are in those spaces and or those that are very curious across those industries. Air Mail, from a cultural advantage perspective, is reporting on style, fashion, wellness. It has a global perspective on what is happening in the world. And that audience base is certainly opinionally, intellectually curious, but it's less of a B2P, a business-to-professional offering, and more of a B2C, a business-to-consumer offering.

1:13:07And that was one of the reasons why, from an investment thesis perspective, it made so much sense. We had less than like 6 % audience overlap, even though both very affluent and elite audiences, but very limited in terms of overlap overall. And so it's an awesome add to the portfolio.

1:13:34Nilay Patel:So Puck is, I mean, you're describing it this way. Puck is a collection of trade publications that people pay high rates for. There's a lot of value in that. I love a good trade publication. I won't rattle off all my favorites, but there are some very small, very focused trade publications that I think are maybe the best in the entire industry. Airmail is not that. Airmail is like a big fancy culture magazine. It's called Airmail because I think it was meant to be read on airplanes. Like there is like a moment for that kind of magazine to exist in first class in airplanes. Are you trying to move audience between them?

1:14:06Nilay Patel:The thing you don't have here is a bundle, right? You have a collection of individual newsletters, and you can't actually bundle them all up and say, here's the whole stack of value we provide. How do you move audience between individual trade publications where there might not be overlap, and then from that world to Airmail, which is a glossy culture magazine? On the Puck side, we actually do like a Puck subscription gets you access to each of the individual franchises categories that organically came up through Pupor that we've acquired and launched. On the airmail side, you're right that currently it's a separate subscription, and we're working through the product roadmap to figure out essentially what the either bundle offering is, the sample offering.

1:14:55Those are all underway. So probably within the next few months, So you'll see more from us on that side.

1:15:02Nilay Patel:Last few questions are running out of time. Thank you for being so generous. Are you profitable right now? We are very close to profitable. Like a dollar away or like a million dollars away? I'm not going to answer that question, but we're very close to profitable. I feel very good about our operating leverage as well. What's the runway of being profitable? I'm not going to answer that question, but I feel really good about where we are at and what we will deliver this year. The reason I ask about profitability is profitability is usually what allows you to drive growth, or you can choose to be really unprofitable and drive a lot more growth.

1:15:35Nilay Patel:Are you looking at more acquisitions? Are you looking to be acquired? How is this going to work for you? On the acquisition side, so one on the growth side, I think it's just good to state. So for growth, total revenue, we grew at 40 % last year. Ads, we grew at over 35%. Sub revenue, we grew at over 50%. And when we look at our fixed cost or recurring revenue, we're in a really solid place. And we also look at revenue per head just to think about structurally whether or not the organization is lean and driving operational excellence. So I think we're able to drive top line growth with real cost discipline in order to create a system that is scalable over the course of time.

1:16:27And that's why I feel good about being very close to profitable and the goal of that this year. Related to acquisitions, we're actually always thinking about various brands that could be additive to the overall portfolio. As I mentioned before, we've done a few acquihires prior to in order. And the investment thesis behind those acquihires was really to either break into a new category. So we did that with Marian Manneker coming over from Substack in order to break into the business of art through to the acquisition of retail diaries in order to drive more coverage for the readers and the subscribers that we had with Lauren Sherman's line sheet.

1:17:17So those are more like tuck-ins and smaller acquisitions. And then there are transformational acquisitions like Airmail, where that is additive to the collective portfolio and to the piece that you were getting at before, where we see that there's opportunity certainly for bundling and for access of readership across the various media brands.

1:17:41Nilay Patel:One of the reasons I ask about acquisitions is we live in a time of media mergers. like massive earth-shattering media mergers. In acquiring airmail, I think you have Jeff Zucker on your cap table now because he was an investor in airmail. There are rumors that he wants to build a big thing. He wants to buy Versant and have a newsletter division and run a big news operation again like he had at CNN. Is that something you've talked about? Is that something you would entertain? I'm not going to talk about who's on our cap table. I'm just curious. I love the curiosity. Because that's the big growth.

1:18:12Yeah.

1:18:13Nilay Patel:What's next for Puck? What should people be looking for? A few different things. First, the investments that we've made in D.C. around our both our Washington correspondent with Leanne, the experiential business that we have there. I think you're going to continue to see just more and more emphasis in our dedication to that market. Same thing with AI and with tech, the launch of that vertical this past year at a moment in time that we went AI first instead of tech first for very specific reasons. I think you'll continue to see more from us there. I think a lot of folks in the industry all migrated really quickly to video.

1:18:52I've been in the media landscape for quite some time, and I believe deeply in video, but I also believe deeply in doing it right and doing it well. And so, you know, we're spending time sort of thinking about what does that mean for our talent? What does it mean for our brand? What does it mean for our portfolio? So more to come there.

1:19:11Nilay Patel:I could do another full hour on how you plan to monetize video, but I won't keep you any longer. You have been very generous and very game to answer the questions. I really appreciate it. Thank you so much for being on Decoder, Sarah. Thank you. I appreciate it as well. Have a great day. I'd like to thank Sarah Persen for taking time to join Decoder. And thank you for listening. I hope you enjoyed it. If you'd like to let us know what you thought about this episode or really anything else at all, drop us a line. You can email us at dakotarattheverge.com. We really do read all the emails. Or you can hit me up directly on Threads or Blue Sky.

1:19:39Nilay Patel:We're also on YouTube, Instagram, and TikTok, all at Dakotarpod. They're all a lot of fun. If you like Dakotar, please share it with friends and subscribe wherever you get podcasts. If you really like the show, hit us with that five-star review. Dakotar is a production of The Verge and part of the Vox Media Podcast Network. The show is produced by Kate Cox and Nick Statt. It's edited by Ursa Wright. Our editorial director is Kevin McShane. The Dakotar music is by Breakmaster Cylinder. We'll see you next time.