Wondery: Hernan Lopez

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32:11Hey, welcome back to How I Built This. I'm Guy Raz. So it's around 2016 and Hernan Lopez has a top job in television. But after becoming a fan of podcasts like Serial, he starts to think about launching his own podcast company. When I talked to my boss at the time, Peter Rice, and I told him, well, I want to start this podcast company and this is what I like to do. And he said, oh my God, that sounds like such a fun idea. I don't know that we'll be commercially successful, but I believe in you and we'll make the first investment at Fox. And so they put a$250 ,000 dollar check. So my question, I mean, here you are now, you are, you know, at this point, you know, you're going to start a business and you have a lot of connections, obviously, and a lot of experience, but still risky because it's 2016, podcasting is, you know, it's blowing up, but it's still, you know, not clear.

33:12Did a part of you think, well, I'll try this and if it doesn't work, I'm sure I can go back and work as an executive at media company. Part of me thought that that was a fallback, and I talked to a lot of people in my internal circle. And to be frank, a lot of people thought I was crazy about going into this new space because the whole industry was thought to be worth$125 million. Yeah, which is nothing. I mean, a bunch of people are competing for market share, they're competing for$3,$5 million,$10 million. That's right. And I'm saying thought to be because the industry itself didn't have an official estimate.

33:51So at the time, this is 2016, you leave Fox and you decide you're going to start your own podcast network. And let's talk a little bit about what that was going to be because obviously you were inspired by Gimlet and what Alex Bloomberg and Matt Lieber were doing there. We did an episode on them a couple of years ago on this show, which is a really interesting story and worth listening to. But let's start with the reaction. I mean, I'm sure most people around you are like, you know, this is great, Heron. Go for it. Did you feel any sort of, I don't know, underneath the surface that there was people were like, this is a weird idea.

34:30Like, what is he doing? Oh, no, they did. It wasn't very much under the surface. I remember talking to colleagues that were wondering, like, what the heck is Hernan doing? And it was just very – 2016 was tough. It was in a number of ways. So because we have that$250 ,000 check from Fox and then a few friends and former colleagues also offered to invest and we raised another 200 grand. And I thought, okay, this is easy. But then this is where it gets interesting. I try to go and raise money from venture capital the way that Gimlet had raised money and the phones stop ringing. You couldn't, even with all of your industry experience in your background, you couldn't raise any venture capital money in 2016.

35:19I could not. I talked to, I stopped counting the no's after I hit 50 on venture capitals. And they all had different versions of different reasons, and they were legitimate, by the way. So, the industry was super small. I was a solo founder in my 40s with no experience in starting a business from the point of view of they were looking at it and had spent too much time at what they thought was a cushy corporate job. And so, yeah, we just hit a wall. Well, tell me a little bit more about this. I mean, you're going from a guy who flies to Buenos Aires or Berlin or, you know, Singapore, wherever. And like you're being chauffeured into these boardrooms and you're the boss from Fox and you're meeting all these people.

36:07All of a sudden now you're like being brought in for meetings and, you know, sitting in conference room where everyone's like, OK, why are you wasting our time? What is this about? pretty much and setting up my own printer and then trying to find out how to do payroll and it gets worse actually. So on top of that, my husband at the time was in the hospital for a couple of months and then was unable to work for the rest. So I was, yeah, taking care of him, dipping into my own savings every month because we were unable to fund the company. And there were many points in 2016 that I said, what am I doing?

36:49And I was ready to give up. How many people were you able to hire from that initial seed funding? We hired six people very early on. We had somebody in sales and a head of the operating office, a chief content officer who had been with Fox for 20 years. And this is a major sort of figure. So he probably got some equity because you couldn't possibly pay him what he was getting paid at Fox. That's right. That's right. Yes, he did. And we had somebody in charge of recruiting shows. One of the things I learned at Fox was that it's almost impossible to create a media brand with just your own content.

37:37You have to combine content that you produce with content that you license from others. And that was the model for Wondery as well. So, Hernan, when you started this out, right, I mean, you've got to raise the money and start a business. But at the same time, you had to make great shows, right? And you wanted to do something different than what was being done in public radio at the time or at a company like Gimlet. So what was it that you wanted to do? So I wanted to bring everything that I learned in 25 years in television to the area of podcasting, from storytelling style to marketing to business model.

38:17But the first product that we wanted to launch were audio dramas. It hadn't been done much. It was only maybe one or two audio dramas. and I essentially wanted to create those Hollywood soundscapes with characters and sound design and essentially turn it into scripted audio. And we did. We launched this great show, I thought, or we all thought at the time, called Secrets, Crimes, and Audio Tape. It was an ongoing audio drama and it hit only number two on Apple Podcasts And we couldn't get to number one because there was this one other show that launched at the same time called How I Build This.

39:02Have you heard of it? Wow. Did not know that. Yeah. Sorry about that. That's when I became a listener of How I Build This. And again, I think what we learned in Secrets Crimes was that there were so many people that the audience for an audio drama was limited. But podcast listeners loved true stories. That's how I fell in love with podcasts. So the insight was that we could actually tell true stories, but following the Hollywood playbook of character development, cliffhangers, high stakes, and sound design. And also I should say that at Fox, we paid a lot of attention to sound. We were often fond of saying that sound is where the motion comes from.

39:51Yeah. I'm sure you heard the story that you watch a horror movie with the sound turned off and it's not scary at all. And then the marketing playbook of trailers and super trailers and podcasts about the podcast and how to build momentum. One of the most difficult things is how to create urgency for something that is evergreen. That's something that my colleagues in the movie studio used to talk about a lot. It's interesting because what you were doing was sort of reviving old style radio drama, but updating it and modernizing it. And I guess the difference, the big difference was that what you – public radio, right, or even Gimlet, which is rooted in public radio, was still about journalism.

40:33And that's not what you wanted to do. You could actually tell stories in a different way that were more focused on entertainment. That's right. And by the way, the reason why I didn't follow what Alex and Matt and other people in that space were doing was that they were so good at it that I did not think that I could do a better job at doing what they were doing. So there was a space to do something completely different. I mean, when you listen to a show like Radiolab or This American Life, they're so beautifully produced. They're very, very hard to make. I mean, most people don't understand the amount of work.

41:10and so that was not what you, you did not, I mean, you were not trying to recreate that. You couldn't compete with that. I could not compete with that and quite honestly felt that there was a bigger opportunity in the one space that Wondery was creating in which we were alone. And by the way, that first year, did you even attract any advertising? I did, but just didn't make enough money to pay for the cost. So the first year we lost a ton of money. And I remember looking at the P &L statement by the end of that month, and we had maybe$10 ,000 in revenue. And you had a staff of six? We had a staff of six.

41:51And$10 ,000 ain't going to cover those costs. Nope. No, they wasn't. And I remember thinking, oh, my God, what did I do? Like even if we get to 10 times this, this is still not going to cover the cost. Even if we get to 100 times this, it's not going to be a big business of the scale that I thought that it would. But look, I mean, there are times at which you have to overcome every no that you get and you have to be able to distinguish between the helpful no's and the unhelpful no's. And I got some of both. Every time that I went to a venture capital meeting and they told me, no, we cannot fund you because the time is just not there.

42:45That was one thing. And it was hard to respond to that. But there were times where they were saying, look, we cannot find you now because we don't want to fund a business that relies primarily on third-party content. Because we think that at the end of your agreement, those margins can be completed away. We can fund you if you bring a significant amount of your revenue coming from your own content. If you own a property. Right. And I said, but that's precisely what I'm doing. That's our plan. Believe me. Yeah. And they said, yeah, come when you've done it. So you get through 2016 and you get to 2017 to launch Hollywood Crimes.

43:31Yeah, Hollywood and Crime. Hollywood and Crime. And that show was a hit. But what was it about that show that like – because I think that show really changed how you thought about what Wondery should be doing. That was the first show in which we realized that if we tell a true story with the Hollywood playbook, with character development and with stakes and with sound design, then people were going to listen. And it was also the show in which we tried the marketing playbook of having a launch campaign that allowed people to get excited about the show. It wasn't an accident that we launched in the first week of January.

44:14We knew that nobody else was going to launch a show at the same time. So our chance of getting to the top of the Apple podcast chart, which at the time was really important. Yeah. It was a way of really getting more people to see you and see your show and see your brand and see what the Wondery logo was. Just we put a lot of attention into all those details and that sometimes are overlooked. Let me ask you about how you sourced producers at the time, even 2016, 2017. I mean, now there's lots of people who know how to make audio because podcasting has exploded. But then it was pretty much the only people who knew how to make really high-quality audio programs were in public radio.

45:01That is true. And we really were paying attention to who was out in the market. We were going to podcast meetups. And I think it helped that we were the only ones in L.A. Everybody else in the East Coast was competing with the same pool of talent. And we're the only ones in L.A. And people who were in our world sometimes were really working for Hollywood projects that essentially allowed them to pay the bills. And they were doing audio as a passion project on the side. How did you – you'd gone from – let's be honest, having people kiss your butt when you're running Fox, okay. being this guy like, oh, Hernan is coming to the building, guys.

45:42I've seen this play. I've been in places where people talk about the boss like they're a god, which I think is unhealthy, but it happens, especially in Hollywood, to going to the guy who's going to podcast meetups at dive bars in Los Angeles with like 12 people showing up and you telling them about this new thing you're starting. But I think that has always been one of my skills. that have been always adaptable. I remember growing up in Argentina and just seeing how realities can change from one moment to the next. I think that gives anybody who comes from a similar environmental background the ability to just adapt.

46:24And at the same time, there was this sense of community in the podcast industry that everybody was excited every time they met somebody who understood what they understood. and we all felt that over time, everybody else will get it too. But we just are excited to be at the early stage of what we now realize was a new golden age of audio. All right. So by 2017, you've made your first few shows, right? And you're starting to bring in some advertising revenue, but you're still struggling to attract investors, right? Because you haven't really had a hit show yet. But then, of course, something happens.

47:03I guess the story I understand is that the LA Times basically approaches Wondery because they want to launch their own podcast. I mean at this point, other media outlets like the New York Times were jumping into podcasting, right? So understandably, the LA Times wants to get in on the action. And so what? Do they just call a meeting to bat around ideas with you? That's right. And they went around the room and they pitched different stories that they had been working on. And at the third one, I said, that's the one. What was the story they told you? It was Dirty John. And what was the actual story?

47:40It was a story about a woman in Orange County who had been tricked by this grifter who obviously pretended to be who he was not. And she fell in love with him. His name was John Meehan. John Meehan, exactly. And her daughters really did not like him. And there was a really high stakes family drama of two generations of people who are not seen eye to eye. And it was this incredibly rich psychological thriller and with a completely unexpected ending. And then finally, we went to the Apple podcast team and actually shared with them the first episode of the show. They loved it so much that they agreed to give us what at the time was called the Beyonce treatment, the takeover of the top carousel of the Apple Podcast app.

48:37And this put us on the map. Could prove the concept of even if you didn't own this IP, you could show that what you were able to do with it. And that presumably would convince people that there was a huge potential here. That's right. And we could go to any meeting and say, we are the company that made Dirty John. In the middle of that happening, we got an approach, finally looked like we were going to raise money. And one major company agreed to essentially fund our CSA at$5 million at a$25 million valuation. They'd give you$5 million at a$25 million valuation. This is a major, I know who it is, but you don't want to talk about specifically who it was.

49:26It was a major LA player. That's right. We'll even call it a global player. Global player. Okay. And they made an offer. It's not an investment firm. This is a player in the industry. And they made an offer to make a 20 % investment in Wondery. So that was exciting. That was good news. That was very exciting. And then I felt, okay, now we are finally going to be able to take this to the next level. We shook hands and then don't hear anything for a couple of weeks. And the corporate team calls to be out and says, actually, we've been looking at the deal. And we decided that instead of investing, we want to buy your company outright for the same valuation.

50:10For$25 million. That's right. And tempting, yes. You probably could have walked away with 15 million bucks. Maybe even more than that at the time. But I said, no, what I really wanted to do is what you guys promised and we shook hands on, which is do an investment run so that we can make this company a lot bigger and have big plans. And there's this Dirty John thing that you guys don't know how big it's going to be. And believe me, it's going to be great. And they said, well, either we buy the company or nothing. There's no investment. And I was tough. But I ultimately decided to just not take the offer because I just was confident that we were about to hit something big.

51:00When we come back in just a moment, why Hernan says no to a new offer to buy Wondery before saying yes to Amazon. And how his life turns upside down when he's embroiled in a federal bribery case. Stay with us. You're listening to How I Built This.

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54:33Hey, welcome back to How I Built This. I'm Guy Raz. So it's 2017 and Hernan has just turned down a$25 million offer to buy Wondery, the company he started less than two years earlier. And instead, he's betting on the success of the new podcast that he's about to launch with the LA Times. So you were taking a risk. I mean, even if Dirty John was a success, it wasn't necessarily going to make tons of money. Not only that, but also, I'm sure you heard this before, that it's very often that happens that a company that makes you an offer, you turn it down. That's it. You're done with a company. It's not that they're going to come next year.

55:15Sometimes they do. I mean, there are cases where a company keeps chasing the valuation up, but more often than not, you're done with a company because they're going to feel bad that you turned them down. And it kind of poisons the relationship. In some respects. And this was a company that you need a relationship with. I did. And then, look, we're all good. We still remain in our relationship. But yes, I was very mindful. Okay, that's not going to be ultimately the buyer of my company. But so, you know, we went and launched Dirty John in October of 2017. And it really hit the zeitgeist. It was number one on Apple Podcasts for 30 days straight.

55:59It made something like 2 million listeners within the first month per episode, way more than we have predicted and so on. But you know, Guy, the one thing that made me proudest of was that we kept hearing all these stories about mothers talking to daughters and vice versa, about listening to Dirty John and saying, you should listen to Dirty John to find out about toxic relationships and red flags. And that's where we finally hit what Wondery was meant to be. We came up with a name for it, what we called Emotionally Immersive Storytelling. True stories with a perspective that allowed listeners to immerse themselves in the shoes of all the people in the story and to understand what was happening to them.

56:49And I think that was, from that moment on, the defining trait of every Wondery show. So once that show really kind of hit, I have to imagine you're coming back now when you're going to investors because you're still at this point working on the initial seed money and the money you're putting in. And just ballpark, do you know how much you were in like from your own cash? Seven figures. I can't tell you exactly how much, but it was seven figures. And that was, I mean, you clearly were, you know, made good money as an executive at Fox. Was that scary to you or were you like, you know what, I can put in seven figures, I've got it in the bank?

57:33Oh, God, it was scary. Yes, because I was, you know, I had two kids and my husband at the time had gone back to work, but he was still building his medical practice. So this is your retirement money. That's right. Yes. And again, there was a non-zero chance that this could go nowhere, that there will be no buyer or there will be no wonder in the future, that nobody would see the value in it. So you, in 2018, with the momentum of Dirty John, go back to investors. Did you go back to any of the investors that you talked to previously? Well, actually, one of them called me back. In October of 17, I got a call from Alan Patrick of...

58:18Of Greycroft. Of Greycroft. And many people consider him the father of modern venture capital. He called me up for a meeting in New York. And he eventually became the lead investor alongside with Leroy Hippo and Advancing, Sherry Redstone Company. But that took several months. But it was easier to attract the money at that point? It was easy because at the same time, he had listened to Dirty John every episode, so he understood emotionally. And also, we felt that we couldn't rely on only miniseries. So at the time, we came up with this concept of the always-on shows that also came from the emotionally immersive storytelling.

59:02The first one was American History Tellers. It was a show that allowed people to put themselves in historical moments. And so that was the first show. And then we had also lined up Business Wars was the second show that we created. And that allowed us to essentially have wholly owned Wondery shows that in the future would allow us to have a library that made Wondery Plus possible. And Wondery Plus is your paid subscription service. That's right. So in that year, 2018, really, this is the – because you start in January 2016, tough year. 2017, start to get some momentum, and then Dirty John, and then 2018, now you're working on other programs.

59:46You're going to have Dr. Death, which is going to be another huge success, and Gladiator. But I guess in that year, 2018, you actually started to talk to a serious acquirer just two years in about buying you out. They called us, and again, this was a call that I wasn't expecting. It was maybe nine months after, or maybe eight months after we closed our CSA run, which had valued the company at$22 million, so less than - Is the Graycroft investment - That's right. ... that they led, that valued the company at$22 million. $22 million, so less than what I expected a year before. And this company says, Hernan, we've been following, and they hadn't bought any companies in the podcast space.

1:00:36Can you tell us which company it was? I'd rather not. Can you give us a hint? Like, was it what kind of company? It's a tech company that a lot of people use every day. And it's a what kind of tech? Content tech. It's essentially media. Yes. It's both media and tech. And at that point, they had not purchased any podcast companies. No. So they contacted you. They contacted me and said, Hernan, we actually were fans of what you've been doing and we've been following and we would like to make an offer for your company. And so first I told them, look, thank you. I'm very flattered. But quite honestly, we just literally raised money, as you know, from VCs and VCs are not in the business of investing so that somebody will buy the company in nine months.

1:01:24So in order to make this work for their perspective, you would have to value the company at something that just wouldn't make sense for you. And they said, well, can we try? So we exchanged an NDA, some basic information. They came with an offer that was four times when we had raised that. It's over 80 million bucks. Again, hard to say no from the perspective of, okay, if this was my business, maybe it would have been tempting, but it wasn't my business anymore. I had great investors and a great team, and it was just scratching the surface of what we could do. And we knew that, again, Dr. Death had come out, Gladiator had come out, and we knew that the following year we would do that times two or maybe more.

1:02:18but we, yeah, we turned them down. I mean, this was a, I mean, 80 million, you would have probably walked away with maybe half of that, maybe a little bit more. Your investors would have been happy. They would have gotten a pretty decent return. That would have been an amazing outcome. But at this point, you felt like the momentum was on your side that you could confidently say no. I had. So for that, for all those reasons, it was a scary thing to do. But I was having a lot of fun. And I always thought that there was a chance that we could even take the company public one day. So there were a number of options.

1:02:54But regardless, I felt that I had taken investment from some of the best and brightest investors in the venture capital world. And it would have been disappointing to them to essentially sell that quickly, even if it was Fortran's what they invested at. How were you – what about your pipeline of like content creators? How did you develop a pipeline, especially as there was more money coming into the industry with other content companies who were now starting to write checks, significant checks? How were you able to compete when you didn't have an endless pool of money to do that? I think it really helped us that we were in L.A.

1:03:39and we're kind of alone in L.A. and a lot of people had listened to Dirty John. The other thing that helped us was the fact that Dirty John, even though it was owned by the LA Times, very quickly got optioned to television. It was turned into a very successful television show for Bravo. And it really put us in a position where because we were in Hollywood, we could give creators the potential of having their show be turned into a television show because we were starting to show that there was a track record. But every time that a pitch came to us, we thought, could this be turned into a high stakes, character driven, interesting human story that will resonate with showrunners because it would resonate with viewers?

1:04:34For example, if somebody came to us and said, I have this open case and nobody has been able to solve it, and I want to create a show of me trying to solve it, we would always say no thank you, because one of the most tried and true things in Hollywood is that you need to have a satisfying ending to a story. And when you don't have a clear ending, people will not recommend the show to other people. It's just as simple as that. In 2019, Gimlet gets acquired by Spotify. It was really one of the first major acquisitions of a podcast company. It was big, it was over$200 million. You must have thought that was a good sign for Wondery.

1:05:22I thought so, yes. I mean, you knew that this thing that you were starting, I mean, I think you were clear about it. You want it. Your goal was to eventually have it be acquired by a larger player in the industry or in media. When you take an investment from venture capital, that's something that you have to accept, that venture capital will want an exit. And the only two ways of exiting a company are either selling to another company or going public. And I thought the more likely outcome was to be acquired, but it was a chance if the company had gotten a lot bigger to go public as well. Hernan, were you ever concerned already in 2019, you know, Gimlet gets acquired and now the advertising is starting to really grow?

1:06:08And it was clear that podcast advertising was going to grow. At the same time, more podcasts were coming online, so the competition was going to also grow. But in the back of your mind, did you ever think, you know, we cannot depend on advertising revenue alone because look what happened to newspapers and, you know, ads, not just print ads, but online ads were declining and, you know, and you could see that that could happen in podcasting. There was going to be a race to the bottom to charge the least amount of money. Were you thinking about that? Were you like, we got to figure something out here to develop new revenue streams?

1:06:48Yes. And remember, that's what attracted me to cable television at the very beginning, the fact that they had dual revenue streams. And so when we raised our Series A, I presented to our investors a five-year plan, not year by year, but essentially told them, look, in 2022, I want to be here. And I want us to have so many listeners and so much revenue. And of that revenue, so much needs to come from our own original content. And so much needs to come from international. So much needs to come from sources other than advertising. We were putting all in a bucket. And yes, revenue diversification was a key goal of ours from earlier.

1:07:33All right. 2020, Gimlet had sold the year before. It's looking very good for the future of Wondery, and you find out that you have been indicted by the federal government, alleging that when you were at Fox your previous career, that you were involved in a bribery scheme to acquire the rights to soccer, TV soccer games for Fox networks. First of all, were you aware that you were being investigated? I was shocked, a thousand percent shocked, as was my lawyer. This actually happened in April of 2020. So we had just gone to work from home, everybody in the team. I had two third graders doing school from home and we were being hit with advertiser cancellations and listener dropping and we felt all this great thing that we had built now was under question.

1:08:33But I first, let me take you back to what happened. Yeah. Remember when I was at Fox, this is 10 years before we, our business had hundreds of entities all over the world. Some of them were wholly owned. Some were joint ventures. One of them, a joint venture in South America was being run by a partner who unbeknownst to us had been bribing soccer officials in South America and taking tens of millions of dollars for himself for years before we bought into the joint venture. And when he got caught in 2015, he decided to become a witness for the government, and he falsely implicated a number of people, including my colleague and myself, as being aware of what he was doing and not stopping him, which for U.S.

1:09:29law is the same as doing something. But your point was that, yes, I hear you. There was clearly the evidence shows that bribery happened. But me as a Fox executive, I was not aware of it. That's right. So this guy said that I knew what he was doing and I did not stop him. And that's a lie. You pleaded not guilty and you had to post bail because you faced prison time, which I'm sure was very stressful. The thing is you decided that you would not leave Step Down from Wondery, that you would continue to run it in light of this indictment. Did you have investors who were like, hey, maybe you should step aside for a while and just deal with this?

1:10:16Not a single one said that. We had, if anything, the one thing that got me through, Guy, was an amazing group of friends and my family, my now husband at the time. in time we were just starting dating, my employees, every single person supported me because they knew my character. They knew that what this guy was saying was a lie. And they were just determined to help me get through. So how are you, I mean, obviously the case was not going to go to trial for a while, but you are now in the process of dealing with just the psychological effects of having to prepare for trial and lawyers. And from what I gather, I think Fox, now at this point owned by Disney, covered your legal costs.

1:11:05But you still had to sit for – you were going to have to sit for depositions. You were going to have to talk to lawyers. You were going to have to – a considerable amount of your day-to-day time, which already was probably full spending it on trying to make Wondery bigger. You'd have to carve out maybe up to a quarter of your time, maybe a third of your time, and devote it to this trial and this lawsuit. It wasn't as much ever because the process works in slow ways. And there are times, obviously, preparing for trial. But that was not for two years later that, yes, I was spending a lot more time.

1:11:37I eventually had to wait three years to get my case heard before a jury. Meantime, you were also, you know, you were the face of Wondery. But everybody around you, you say, said, don't, you know, stay, do this. You were committed to doing this. You were committed to growing the company, but I wonder at that time whether you started to think that maybe this would be the year to sell Wondery. So around that time in the summer, we were approached by an investment bank that had been working with saying that there was renewed interest in Wondery. Stitcher had just been bought by SiriusXM and Serial Productions by the New York Times.

1:12:20The Ringer was bought by Spotify. There were a number of acquisitions, but there were multiple people that were still interested in the space. And we had hundreds of shareholders, including every single employee in Wondery was a stakeholder. And we had, at the time, I was the minority owner with my family of Wondery. I had significant stake, but more people than me on the majority of the company. And there were lots of conversations in the board, and some people wanted us to continue to build. But ultimately, we came to the conclusion that taking the deal with Amazon was in the best interest of the company.

1:13:04So you got offered, it's not been reported the exact amount, but anywhere from between$200 million to$400 million by Amazon to acquire Wondery. And pretty great. Pretty great result. for you and for the shareholders and stakeholders. Yes, yes. And most importantly for me as a founder, would allow me to see Wondery become the best possible version of what it could become. I knew that Amazon had the resources and the wherewithal and the motivation just to turn it into something a lot bigger than I could probably do on my own. And so I'm very happy that we ended up. doing that deal. So, okay. So you're, and you leave Wondery in 2021 after the acquisition goes through, but it was bittersweet because you now had to deal with this lawsuit, this indictment.

1:14:06And in March of 2023, you were found guilty of these allegations by the federal government, that you were involved in this scandal. The case relied very heavily on testimony from this one man who had already pleaded guilty in 2015, Alejandro Borzaco. You knew that you were going to appeal. You appealed immediately, but still it's like, okay, here we go again. And in that time between the appeal and then what eventually happened, which we'll talk about in a moment, how did you just get through the day? I mean, you faced 20 years in prison at that point. I mean, how did you react to that possibility?

1:14:54It's really something that you just need to find in yourself. And I talked to a lot of people who went through adversity that they did not expect. I read this book called Ikigai. it's essentially a Japanese philosophy about how to live a longer and more fruitful life and that's the other thing that helped me get through reading lots of meditation trying to stay with my routine as much as I could trying to spend a lot of time with the kids spend more time virtually with my parents who came to visit me yeah, all of that So September of 2023, a federal judge threw out the conviction basically determining there was not enough evidence to convict you of wire fraud and bribery.

1:15:47That must have been an unbelievable relief. I can't describe it. I mean, getting that call on that Friday night on Friday before going into a long weekend from my lawyers, they themselves could not find the words. because we were always confident that this was going to be the outcome ultimately. We just didn't think that it was going to happen at this particular stage necessarily, but we were all confident that this was going to ultimately be the outcome. But yes, I was obviously very happy. I mean, there could still be the possibility of an appeal from federal prosecutors, right? I mean, there's still a possibility.

1:16:27There is a possibility, yes. But I am living my life as if this chapter is over because I know that the truth is in my side. And I'm having seen the strength and the weaknesses of our legal system. And actually, there's research, even despite the presumption of innocence that we all taught in school, people that go to serve on a jury believe that indicted equals guilty. And deep down, I was one of them. And I'm embarrassed to admit it, but I was one of them. And it took me to go through this grueling experience to realize that not only indicted doesn't equal guilty, but sometimes guilty doesn't equal guilty.

1:17:08You work in podcasts. I worked in podcasts. I'm sure you listen to many stories of wrongful convictions, and you just don't think that it could happen to you until it does. Aaron, I'm curious to get your take on podcasting, the industry in general, because, you know, there's still money that's being made in podcasting, no question about it. But it's changed a lot since 2016. Since 2012, when I started, there are millions and millions of podcasts now in English alone. And it's harder for new shows to scale. Advertising is more competitive. There have been all kinds of articles about it, and there have been budgets cut and layoffs at places like Spotify.

1:17:50I mean, they basically shut down Gimlet. There have been layoffs at NPR and Vox Media and Sony. I mean, I wonder if you think this is just part of the cycle of any business, or do you think this bodes badly for the future of podcasting? I think, look, I don't know much about specifics because I don't get the data that I used to get when I was in the industry. But yes, there might be pockets that are less financially viable than they were before. But as a whole, the industry continues to grow. And in fact, there are lots of companies that are pushing to add more video to podcasts. and I think we're still in the early innings of podcasts in different languages.

1:18:41So I think the industry has lots of room for growth, absolutely. Do you feel like your timing was fortuitous? I definitely remember at the beginning I talked about being too early or too late and maybe it was a year too early. But yes, my timing was really, really fortuitous in that if I try to launch Wander, the exact same version of Wander in 2018, I don't know that it would have gotten to where it did. Because by that point, it was already too competitive. It was already a lot more competitive. So, I mean, here you are, this guy who came from Argentina with broken English to the U.S. when he was 27 to try and make a life and rose up the ranks at Fox.

1:19:31And here you are, you know, 25 years later, wealthy and having created a pretty significant business that has had a cultural impact on American media. And so when you kind of reflect on your story, Hernan, on where you got to, where you are now, how much of where you are do you think has to do with your skill and your work ethic? And how much do you think has to do with getting lucky? I think that over my life, I've probably been at the 0.1 % of lucky and at the 0.1 % of unlucky at different points in my life. And sometimes you don't know when bad luck can become good luck later on, but you can control that.

1:20:22No matter how much luck you have or don't have in your life, hard work is essential. Yes, there's always some degree of luck in every success story, but people often don't tell you about the degrees of bad luck that happen in success story. And again, you can only control what you do and how you respond to events around you. That's Hernan Lopez, founder of Wondery. Since leaving the company in 2021, he's co-founded another business called Danvis, which makes digital displays for showcasing NFTs and other kinds of digital art. Anon has also launched a nonprofit that helps young professionals from marginalized communities get ahead in their careers, which, by the way, often includes accent coaching.

1:21:18Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show. And as always, it's free. This episode was produced by Chris Messini with music composed by Ramteen Arablui. It was edited by Neva Grant with research help from Alex Chung. Our audio engineers were Gilly Moon and Maggie Luthar. Our production staff also includes Casey Herman, Carla Estevez, JC Howard, John Isabella, Catherine Seifer, Carrie Thompson, Malia Agudelo, and Sam Paulson. I'm Guy Raz, and you've been listening to How I Built This.

1:22:02if you like how i built this you can listen early and ad free right now by joining wondery plus in the wondery app or on apple podcasts prime members can listen ad free on amazon music before you go tell us about yourself by filling out a short survey at wondery.com slash survey Jose.