Why Nobody Trusts the News — And How to Fix It

26:52So it's not, again, it is flawed, but everything's flawed. Is there a concern on your end? I know you say Axios is crushing it. Um, and, and, you know, you guys are, and Politico sold for a billion dollars and Axios ended up selling for more than half a billion dollars. It's working. But I think journalism and journalists as an entity, they seem to be on the decline. If we look at the number of local journalists per capita, it's just been decimated over the past 20 years, down 75%. And I wonder if in the world of journalism, there is a concern that the world of having an opinion is a more profitable world.

27:35Or the world of running a social media platform where anyone can say whatever it is that they want to say. That makes more money because it's more, it taps into the senses, there's rage bait. There are all of these things that we know are bad for us, but ultimately we can get kind of addicted to. And so how do you think about that? This possibility that doing the clinical work might not be as good of a business model. That's why I was very clear when I was saying that we're killing it. I'm not saying that in a boastful way. I'm saying it that like I'm trying to show you that it is working really well in a very kind of elite audience environment.

28:14That's not necessarily a great mass population environment. And what you said is totally true. Empirically, there are far fewer journalists, exponentially far fewer journalists in local media than there were 10 years ago or there were 20 years ago. So it is much harder to get a job in most facets of journalism than it was a decade or 20 years ago. I think that's bad. I think that having more journalists, particularly outside of Washington, D.C., particularly outside of covering business or technology, would be a great gift to humanity. Because I believe in the power of journalism. I started in local journalism in a small town in Wisconsin, so I believe powerfully in it.

28:55Do I think that it can be revived? I do. I do think that in real time we're seeing maybe a reappreciation of reporting and a reappreciation of human verified truth. Not by everybody. And again, these things are – these ebb and flow. But I do think that particularly in a world that's dominated by artificial intelligence, which it will be. It's going to be an AI world. This idea of human verified, human vetted intelligence delivered by a person is going to rise in value. And the reason that I think it rises in value is that at some point soon, we're all going to have some freaky device on us that's going to give us Einstein level intelligence across every single topic.

29:47But all of us are going to have Einstein level intelligence. So it's going to be human nature to want something differentiated from what everyone else has. And I think that's where people in journalism, human connection around topics is going to matter profoundly. I do not believe that AI is ever going to get a source to tell them something that a human could get them to tell you. I don't think AI is going to be able to pick up when you tell me something, but you got a weird look on your face. I could tell you're bullshitting, right? Like there's going to be these things that only people can do.

30:21And then there's going to be the connectivity of wanting to talk to a person, hear from a person. Know that not just a machine was verifying something, but that a person spent the time, and hopefully a person you've developed some level of trust with, has spent the time to verify this. So I feel like there is a reappreciation of human reporting going on. I think that that will rise in value. I'd say I'm more bullish on our business today, particularly this year, than I've probably been about media as a business in 15 years. I feel like there's some variables that are really working in our favor now.

30:59I think artificial intelligence, once media companies realize how to use it to take out some of the cost that is in non-differentiated areas. right at the end of the day if you're a media company my product is high quality content you can't get anywhere else everything else is just a commodity to help you produce it well that commodity and producing it in the past cost a lot of money so if you can take that cost and you can shift a lot of that cost into hiring a lot more journalists then i think that you start to have a better product it probably runs at better margins that's producing the differentiated content which which is the human verified and validated layer, I think that that will have real value.

31:42And so that's my hope. I don't think it's delusional. Again, like I get paid to run a business. It's my day job. And I think, try to think deeply about how do we make this work because it is a neat thing. It's an important thing. And I do think that there's some variables that are now looking more attractive for media. We'll be right back.

32:12Support for the show comes from Engine. The companies winning right now aren't cutting travel. They're booking smarter. Here's the reality. The average business traveler spends 45 minutes booking a single trip on a legacy platform. With Engine, that booking time drops to as little as two and a half minutes. And its AI-powered personalization gets faster the more you use it. Multiply that across your team every trip every year. That's not a perk. That's a competitive advantage. Last year, Engine customers saved more than$300 million on travel. And with the Engine X card, get up to 10 % back on any hotel booking.

32:4633 ,000 businesses have joined. Now it's your turn. Get$500 when your business signs up and starts traveling at engine.com slash founders. Engine X Visa commercial cards are issued by Fifth Third Bank N.A. member FDIC. Earn up to 10 % back in points on eligible Engine travel purchases. Actual reward rates vary by purchase category and may change. points of no cash value and are redeemable for rewards through our program. See full rewards terms for details. Go to engine.com slash x slash rewards dash terms.

33:21We're back with Jim Vanderheil. At a sort of practical level, what role would artificial intelligence play in a media organization like Axios? Because, I mean, kind of hearing you describe what you're describing, part of me thinks that what's going right for media is that maybe it's not really disruptable by AI because it's so obvious to us what the value is in human centered reporting, in journalism that is done by people. And I can't quite understand exactly what role AI would actually play. So how are you thinking about AI in terms of integrating it or not integrating it into your business.

34:01Well, let me give you a super specific example because I think this will give you a good lens into what I think will happen over the next three to five years. Take local news. Local news is an almost impossible business pre-AI. Why did all those reporters you talk about lose their jobs? Because the economics of local news went to crap. Well, we'll go back in time. Local news used to be, I have reporters, in a building I'm paying for, printing words on the paper that's produced by a printing press I either own or lease. I'm then taking that paper, paying people to roll that paper into a ball, paying to put a rubber band around it.

34:46Then I'm paying a boy or a girl to put it in the back of their basket and throw it at your house. All of that to get the product is just the word, the word on that paper, all of that money to get that word to you. Then along comes the internet, takes away the newspaper. So you take away some of the cost. Still the expectation of like, I'm working for a big company. I'm sitting in a big office building. You still have a lot of cost. COVID comes along. Now people are used to not working from home. Okay, now we don't necessarily have to have an office. We don't have to have a printing press. We don't have to have a paper.

35:24You still have all of the things that it takes to assemble news. Underneath a reporter is all kinds of activity, right? We've got to be able to produce that content. That content has to go through an editing process. Then someone has to match that to a visual. Maybe that visual has to be created. Then it has to be put on a website. Then someone's taking that and they're putting it into an Instagram format, a LinkedIn format. What if you could use artificial intelligence to do everything other than the reporting? So a reporter is building the content. They're doing their job. They're doing their reporting.

36:01But underneath that, you've created an AI that helps you do the copy editing. It's reading it. It's knowing that it needs a visual or a data visualization. It creates it for you. It puts all of that together. You then hit the button and it gets distributed to your website and you use artificial intelligence to break that into an Instagram version, a LinkedIn version, a Facebook version, a whatever comes next version. Now you've got mass distribution for your reporters at a very light cost. That's what we're doing with Axios Locals. We're now in 43 cities. We're building what we call the super system.

36:38We've been working with OpenAI and others to build out all of the stuff underneath it. I can tell you that each passing week, the stuff we're able to build is kind of blow-your-mind stuff. And the model that I just described will happen. A big part of it will be launched by the end of this year. But I think over the coming years, other people will see this, and they'll be able to do variations of that. So even the work that you guys do, you have this, I don't know how you guys view your kind of podcast and content kingdom, but you have all of this. You still have a team of people that are spending a lot of time to try to get more derivative value out of that content.

37:17All of that is going to be done by machines. You're going to be able to do that if you haven't already done that. So you might be able to get a bigger audience, might be able to find more ad slots for advertisers, and you might not need as many people to do that. And so I think that that is like how it's going to work. Where I don't think AI is useful or very useful for 99.9 % of people is like, it's not going to write your story. It's not going to replace human journalists. It's excellent at research. It can be helpful with some of the writing. It's definitely good at challenging and helping you see some blind spots potentially in a story.

37:55But what I have found and where I would put Axios in the not just media companies. I'd say we're probably in the upper 2 % to 5 % of non-Silicon Valley companies in terms of using AI. So I think we're lab rats. But I've watched journalists. Like most of them find it most modestly useful right now. I personally find it exceptionally useful, but I use it a lot. And I've put a lot of deep thought into it over the last couple of years. But most of my reporters don't. They're like, eh, it's okay. It helps a little bit with research. And that's fine because I want the reporters reporting. I want them talking to people.

38:28I want them breaking news. I want them applying analytical judgment that a machine can't apply, often drawn from understanding the people, understanding the historical context, understanding the piece of news as it sits in the broader context of today. You mentioned that you think that AI doesn't really have a role in writing, in doing the writing itself. Maybe it has a little bit of a role in terms of research. I mean, right now we're at a place where AI is pretty powerful at conducting in-depth research, collecting the research, putting it together, also helping with writing. but we also know that a lot of the time the AI is wrong.

39:07It says things very confidently that it seems accurate because of the way that it's presented, but sometimes it's factually incorrect. And then you say, hey, I think you're wrong. And then it suddenly reverses course and tells you a different thing. Are you concerned about that at all when it comes to just the way that we consume information, the idea that AI might be telling us things and we're just going along for the ride, assuming that it's correct. And in that vein, would you ever think about putting some policies in place around the usage of AI when it comes to your reporting? We already have policies.

39:44We don't discourage people from utilizing it, but every line in any story has to be completely owned by a reporter and the editor. It has to be human, verified, and vetted. And what you're saying is true, not to be in defense of AI, because what you're talking about is real. It does confidently say stuff that's stupid occasionally. To be honest, sources occasionally confidently say things that are stupid. Editors confidently say things that are stupid. Does AI do that more often than people? Debatable depending on the person and depending on how much you've refined your AI. And so I think the trick is understanding that it has real limitations right now.

40:25It has amazing, like amazing capabilities. Like I find it astronomically helpful to my day-to-day work. I find it to be a phenomenal researcher. Now, I've got all kinds of multi-layered fact-checking and stuff that I've built into my system and stuff. But even then, it could still be flawed. What people don't understand is to really get – the reason I think only 1.5 % of people are getting exponential value out of AI right now is people haven't fully grappled with how much work you have to put in. on the front end to get AI to be truly magical. You just have to feed it, not just a ton of information about yourself and a ton of information about what you care about.

41:08You have to be ruthless and brutal in correcting it and saying like when something's wrong and telling it to commit to its memory and helping refine it and perfect it over time. I will say if you do that, I find parts of it to truly already be at superhuman levels. But again, I also put a ton, a ton of work into it. I find this to be the most intellectually electrifying period by far. I have never seen the world more interesting, more scary, but more interesting. My God, this technology, what we've built, turning sand into superhuman intelligence, this idea that it's not absurd to think that we might build a data center in the sky, the idea that a tiny nation like Ukraine might potentially defeat the Russians because of a$35 ,000 drone.

41:59We're just living in the future. We're living in a world I did not think would come this quick. And I just find it endlessly fascinating, endlessly fascinating. And the fact that we have access to so much information to try to understand this moment, I just, I still feel like a little kid. Like I can't sleep some nights because I just want to get up and learn and understand and write and try to help people understand this moment. And, you know, again, like I'm in the media and I have the time maybe because I run a media company to do this, but I encourage young people to think that way. Like this thing, I'm very down on what young people are being told about this country and about artificial intelligence.

42:46Like there's no doubt you shouldn't cheat with it. And if you've got to use ChatGPT to write, you probably have bigger functional problems. that you need to deal with. But this idea that like, oh man, it's scary and you're screwed. I don't know what they're talking about. Like the unemployment rate is like 4.4%. When I was taking economic classes, I was told it wasn't even structurally possible to have unemployment this low. I'm watching kids come into Axios who are 22, 23, 24, 25, who have natural proficiency and ability to use artificial intelligence, getting to do things that it would have taken me 15, 20 years of career work to be able to do.

43:28It's a great time to be getting into the workforce if you're spending the time to think about what's happening, if you spend the time to figure out how do I use these technologies as a force multiplier for the work that I do, if you come at it with some level of optimism. And I'm not a doughy-eyed dope. I know that there's problems in the country. I know that things are better for some people than other people. But I think things are a lot better today than most people think they are. And I think there's a lot more opportunity, particularly for young people. And I'd spend less time worrying and whining and more time doing.

44:03And I think you're going to find that you can really do some pretty exceptional things. I think this probably ties into your story of starting several companies. And I think something that's kind of interesting is you transitioned from reporter to guy who manages reporters into someone who actually started a business. And now you're more of a founder, owner, operator. Tell us a little bit about that transition from going from writing stuff to then starting companies. It was wild, right? We just had this idea to start Politico. We did it. Like, it wasn't a lot of thought. I was like, okay, one day I'm going to have to be a founder.

44:43One day I'm going to be an entrepreneur. One day I'm going to be a CEO. Say, I'm a journalist, man. Like, let's go do this. It sounds fun and I think we can do it. Well, once you do it, you realize, oh, this is like a real living, breathing company. It has needs. It needs management. It needs leadership. And so I had to learn to become a leader. And I had to learn about all hiring, firing, all these things. It's not like you can't read about it in a book and do it. You just have to do it. And I had never fancied myself. I was never an editor. I never managed anybody. I've said many times, like, until I had to help run Politico, the only management I ever did was the night shift at Little Caesars when I was in high school, right?

45:29And that's, like, I don't know if that gets you ready to run a media company. But you learn. You put those reporting skills to work. You pay attention. I think I have the humility to know what I'm not good at and to pick up the phone and call people who are a lot smarter than me. A lot of people have been very generous over the years in helping me understand the things that I don't understand. I'm a relatively quick learner, so I was able to pick things up. I'm a very hard worker. I've always worked a ton of hours. And so I do the work that it takes. And it's kind of intoxicating and, to be honest, maybe a little addictive.

46:01Like I love it. Like I love starting companies. I love running companies. I love stories. I get just as excited when we break a story today as I did at Brilliant News or at Roll Call. And that's invigorating. And so, you know, now, yes, I guess we're – this is our second – we also have XS HQ, so maybe third company. And, you know, but I'm still running it. I still write all the time. I don't feel that different than I did 20 years ago other than I know a lot more. And I probably have more capabilities than I did 20 years ago. But I tell any young person, I would tell any old person, if you can be part of a startup, if you can take an idea, especially an idea that people say is crazy, and you can will it into existence, it is one of the greatest things you can do that's legal and that you get paid for.

46:49It's crazy. You learn so much about yourself. And you learn so much about humanity. I know more about people, the good, the bad, and the ugly, because of starting companies and watching people in the good and the gory and the glory. Like you just see things and you become almost like a student. You're an anthropologist. You're watching like this weird species of a human and like how do they behave? What motivates them? Why do weird people do weird stuff all the time? I mean, that's the funny thing about being a CEO. yo, by the time you hear about something happening with people, it's the weirdest shit you could possibly imagine.

47:29It's just wild. The stuff that like, wait, wait, someone did what? And it gets so weird that like by the time you're 55 and you're running your second company, almost nothing surprises me. I'm like, oh, okay, that happened. But it's a neat thing to do. And I think, by the way, I think that's gonna be another advantage of AI. And I'm not an AI optimist. I'm kind of an AI realist. There's definitely days where I'm quite dark about what AI could do to society. So I just want to talk about some of the good parts, which are, I do think it's going to is and will be a lot easier to start a company. I think it is and will be a lot easier to be a one or two or three person company.

48:07And not necessarily you're trying to create a new chip to sell to NVIDIA. It'll be easier for my brother to run his construction company in Oshkosh. It'll be easier for our two plumbers to turn that into a franchise or maybe get rid of of stuff that most of these guys don't want to do anyways. They hate doing bids. They hate doing the paperwork. It's just going to be easier. I think that could be really cool. I think that's a really neat thing. And I think given that it's kind of in the blood of Americans to start stuff, I think that that could be a very positive dimension to this. And so you guys talk to founders all the time.

48:41I'm sure you pick up a similar pattern of it. It's just a neat thing to do. And I think a lot of people think you can't, like, there's like, you've got to be special to do it. Like, I don't know. If you can work hard, you have an idea and you have passion around it, there's no IQ test. There's no, you went to a certain university. You didn't have to work at Goldman Sachs or do two years at McKinsey. None of that stuff matters. None of it. None. Your GPA, who gives a shit, right? Like, it's like, do you have a good idea? Can you will it into existence? Do you have the grit? That's the stuff that matters.

49:13You mentioned how you've kind of seen all the facets of humanity, really, from running a company? Because I think running a company, it's like you're managing people. You're just dealing with people. I think that's sort of what you explained there. What have you learned about people from managing companies? What about humans has surprised you, disappointed you, delighted you from running these companies and from managing all of these people? The effect that you can have of a leader is 100x more than people realize. Almost instantaneously, how I carry myself is contagious. If I'm an activator, the people around me are activators.

49:59If I'm not a yeller, they don't yell. If I don't talk crap about other people, they don't talk crap about other people. The opposite of all that's true. The minute that I'm yelling, the minute that I act like it's okay to be a jerk to your colleagues, The minute that I'm a clock puncher, the minute that I'm passive, all of that stuff trickles down. You see this every time you have a new president in office, how instantaneously the body language, the actual language changes. So I think that's been really, really interesting. I think people need to be led. Like most people require constant intervention to get them focused on like, how can I be better?

50:38How can I do more? not necessarily work more hours, but like, how can I make sure that I'm doing the right things in the right order? We've got a book coming out in September called Simplify. And the whole reason that we wrote that book is that we've seen this magic. If you just sit down with an employee and simplify their job, tell me the three things you need to do in order to crush your job. Are those the right things? Are they the right order? Now tell me the three things that you do that you think are stupid or that you think someone else could do better. Let's have a discussion about whether we can kill them.

51:11And then let's figure out what are the three things that maybe could be automated. I'm gonna help you automate them. This idea of just staying on people, a thing I'm testing right now at Axios is this idea of a monthly mentality. I'm writing about this for this weekend. I just had a board meeting and I had like this aha moment because it's been sitting, it's been just sitting there in the back of my mind. Someone said, oh, we're going to do this. We have a four-month plan or a six-month plan. And I thought to myself, that is pure fantasy. How could anybody in this world know what the world is going to look like even six weeks from now?

51:47And that was basically the conclusion I came to. It's like me operating in a media environment, my line of sight is now six weeks. Anything beyond that, I have shaky confidence in. That's how fast things are changing. And so it just requires, if things are changing that fast, that means you've got to really simplify what you're focusing on. Simplify the work that you're actually doing. Even simplify the words that you're using to describe it so that people can understand it quicker and move quicker. I think we're headed into this wild, wild era of things moving faster, both information and capabilities, than any institution or any individual could possibly keep up with.

52:32It's going to require a total rethinking about how we structure our companies and how us as individuals structure our day. And that's – we ended up writing this. We started it a little bit before AI really, really took off. But it's going to hit just when people are going to need a Bible for an operating system for, man, how do I do this? And I think that Simplify book will help people do it. And so simplifying things is a big thing that I learned for others. And then the power of communication. Like I always knew about the power of it as a writer, like to be able to move things if I put the right words in the right order, right?

53:09But how much how I articulate things or a manager articulate things matter. You've got to be so crisp, so consistent. You have to say things over and over. Only when you've annoyed the living hell out of yourself has the other person started to hear you. because you have to realize the environment you're operating in. People are getting 150 emails a day, 120 ticks, Tinder alerts, phone calls. Oh, my God. Think about all that. That brain strain. So the only way you can get through is repetition and repetition hopefully of like very strong, memorable words so you're penetrating. And it's just such a – it's a different way to think about things.

53:56So the power of communication has been good. there's some people you can't change, right? That took me the longest. That was probably that my biggest flaw held the longest was I definitely can get a little too swept up in somebody who's like super productive or super smart. And I would overlook that they were a real asshole. And when we started this company, I said, no, we're never doing that again. If you're the most talented person in the world, if you're a jerk and I've confronted you about being a jerk and you're an unreformed jerk, you're going to be a fired jerk. And we've done it a bunch, a bunch of times.

54:34And that was the best thing I ever did because now we might have, and it hurt because there's a couple of people who are driving a lot of revenue and so it sucked to do it. But it's the best thing we ever did because now we've got this atmosphere where people are super ambitious, but everyone likes each other. And not that they're, they're kind and kind, like Silicon, you can't be kind. You can actually be kind and really ambitious and really productive. Like I don't, I can't remember if I've, I don't think I've ever raised my voice in 15 years. I certainly did in the early days of Politico. But you learn, right?

55:06I don't raise my voice. I don't, I don't blame other people. I take the blame. Like all these like little things. And now I'm surrounded by people that do that. And it's, it's kind of beautiful and fun. And I don't, I had this goal 10, 12 years ago of like, I just want to do interesting things with people who give me like positive energy. And I want to like purge like crappy people. And I think that's a very minority. I don't think most people are bad. I think that there's definitely people who are damaged from their childhood beyond my repair. And that like, I just can't, right? If like I often, it'd be illegal to do, but if I could do one thing in job interviews that is illegal would be to really explore people's childhoods because it almost always, you can kind of reverse engineer like things that I just can't fix.

55:51Like, we can't, my culture can't fix it. But once you do that, then you can have a lot of fun with really smart people. So as we wrap here, for any young people listening to the show who want to create a successful company, you started two very successful media companies. What would be your number one piece of advice to a young person? If you have a really good idea and you have authentic passion for it and you, and this is a very important and, And there's a very plausible way you can make money from that idea. You should do it. You probably will fail like most do. And that is okay. It really is okay.

56:32Because especially when you're young and you don't have to care for kids or you don't have to care for a partner, you don't have to care for parents, it's your risk time. That's your risk years. Take the risks if you can. And you'll learn so much about yourself. You'll learn so much about other people. And it's just a beautiful thing. It's a neat thing to go through. And be more thoughtful about your career, especially if you're young listening to this. Sorry, but 70 % of your waking hours between now and 65 or 70 are going to be spent at work, going to work, or bitching about work. So why don't you have the novel idea of doing everything in your power to make that as enjoyable, satisfying, and rewarding as humanly possible?

57:20Be much more maniacal about that. We spend so much time obsessing about these things where we get to spend an hour a week if we're lucky. Why don't we get the work part right? And that will flow into your personal life and probably liberate you to do more in the fun part of your life. And we get at that too in the book about really helping people to simplify what do you want out of life and how can you get rid of all the dumb stuff you're doing out of habit that's keeping you from doing that. And if you don't have a system, you're not going to do it. You're just going to drift like a piece of wood on a raging river.

57:54Jim van der Heij is the co-founder and CEO of Axios. Jim, this was fascinating. We really appreciate your time. I appreciate you and thank you for your interest.

58:07This episode was produced by Alison Weiss and engineered by Benjamin Spencer. Our research associates are Dan Shallon and Kristen O'Donoghue. And our senior producer is Claire Miller. Thank you for listening to the Prof2Markets Founder Series. We will see you next month with another founder story.

58:36The average business traveler spends 45 minutes booking a single trip on a legacy platform. But the companies winning right now aren't cutting travel. They're booking smarter. With Engine, that booking time drops to as little as two and a half minutes. And its AI-powered personalization gets faster the more you use it. Multiply that across your team every trip every year. That's not a perk. That's a competitive advantage. 37 ,000 businesses have joined Engine. Now it's your turn. Get$500 when your business signs up and starts traveling at engine.com slash founders.