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[on-hold music] Welcome to the Rebooting Show. I am Brian Morrissey. I am joined by Jasper Wang.

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Jasper, Jasper's official title is the business guy at Defector. At least that's what I, I've decided to call you. That's fine. Everyone calls me that. I'm totally fine with that.

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[laughs] And for those that do not know Defector, it's now five years old, and it is a worker-owned media company. It sprang out of Deadspin, the dearly departed.

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It's not departed, it's basically departed, old Gawker Media property that was then taken over as part of G/O Media, which is also departed. There's a lot of, there's a lot of departed in, in these stories, Jasper.

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Yeah, do these media brands ever die? It's hard to say. Who knows wh- who owns them at this point.

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Well, you know, with SEO, that's an interesting point you make, but, like, with SEO being so much less reliable, there is the possibility that media brands will go back to dying again, because it is nearly impossible to kill a media brand because there is always, there's always some value to be wrung out of it.

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And so you find a lot of these, these media brands whose, I like to say, their corpse is being paraded around the town square, the SEO town square. [laughs] No, that's, that's fair.

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Maybe once AI comes and goes in, like, twenty forty-five, we'll see Gawker five point zero show back up. Well, yeah.

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I mean, look, Gawker got exhumed by Brian Goldberg [laughs] very briefly, but we won't go, we won't go too deep into that. That's for a different, that's for a different episode.

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One of the things that I really like about Defector, Jasper, is that you guys publish these annual reports.

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I had you on after one last year and asked the question about, like, whether you guys had, like, kinda hit a ceiling, because, I mean, you're very transparent with this business, and this business is, is structured differently.

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So let's start there, because what I want to get at is the current state of the business within the context obvious- obviously of the overall market and the overall economy, but also the, the structural, I don't wanna say abnormalities, but unique aspects of the structure of Defector, where I'm reading through it, and I'm, like, thinking, like, I'm trying to play...

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I'm trying to cosplay, like, financial analyst, and I'm like, "Ooh, you've got a structural problem here, uh, that might, that is inhibiting your growth," if, if growth is the actual end goal. Maybe it's not.

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I don't know. So let's, let's start there. For those who are unfamiliar, explain the peculiarities of the Defector model. Yeah. So Defector, we've been around for five years now. We f- were founded with 19 people.

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Eighteen writers and editors, all of whom formerly worked at Deadspin, and myself. And we organized the company as a worker cooperative, so that group of 19 people owned 100% of the company.

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We took no outside investment. We have no outside stakeholders. Each... We're up to twenty-seven people now, and each additional person that we hire does get some additional equity stake in the company.

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And we operate most things with one person, one vote. In some cases, decisions are simple majority. In some cases, they're super majority with two-thirds vote. In some cases, things go out to committees.

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Some well-prescribed number of decisions sit with me directly, or the editor-in-chief directly, but largely we do not make choices unilaterally, and certainly not big strategic choices unilaterally.

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And so, you know, Brian, you, you, you sort of talking about the trajectory of this company, you know, we, we have been a subscription-first business for this entire time. Mm-hmm. The first two years were, like, growth.

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We were, you know, just twenty twenty to twenty twenty-two, it was just growing well. No secret sauce there, just blocking and tackling, growing well.

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Year three was a story of still good acquisition, but much worse retention. That was a pretty high inflation year in the overall US macro climate, so we, we saw pretty high churn that year.

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And then year four and five have been stories of excellent retention, so the people who are with us are really with us for the long haul. But acquisition has been a struggle.

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And, you know, part of that is just stuff that every media company's going through with, you know, Twitter falling apart and AI taking over Google searches.

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So distribution is just this big question that everybody's going through. And, you know, part of it could be structural.

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Like, we just might be a company that is forty thousand paid subscribers, give or take a couple thousand, depending on what part of the year we're in. And, you know- Yeah...

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we, like, sort of build other revenue streams in other directions, but that just might, you know, maybe we'll be forty-five thousand in a couple years.

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But, you know, I don't really think there's a version of this company run the way we wanna run it that is shooting for, you know, whatever, sixty, eighty, a hundred thousand dollars, not even fifty...

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Sorry, a hundred thousand subscribers, probably not even fifty thousand subscribers- Yeah... in the near end. Like, this is sorta what it is in the near term. Right.

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So, I mean, year one to year two, I think you had, like, nineteen percent growth, and then year two to year three, eighteen percent growth. You're feeling good, smelling yourself. You're, you're doing great.

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[laughs] And then, like, the wall hit. It was, like, two point two percent, and then this, this last year from year four to year five was about one point one percent, which is...

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You know, I mean, when, when we were talking about, like, revenue, that's almost shrinking, really, when you think about it. Um, the general way of, like, thinking about these things is... And it...

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Like, look, tech has infected all of business, right?

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And particularly, you remember the media business when it was cosplay and tech companies, and the idea that there would be hoc- hockey stick growth because the near limitless TAM of the internet.

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You know, that didn't, that didn't really work out so much. And so what I'm w- I guess what I'm, what I'm wondering is-Is this- is this what sort of

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one, is it the trajectory that you guys had anticipated or is this like, y- you know, you, you just wanted to get it up and running and get, and be able to make this into a sustainable business, and now this sort of ceiling looks like it's around the five million mark, at least for this model, unless you make major changes, and it doesn't seem like there's an appetite for that?

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Yeah. I guess there's a couple ways to answer that. The, the sort of five-year horizon, right? If you had told me in twenty-twenty that in five years- Yeah...

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we would be roughly this size, I would've said, "Oh, that's incredible." Like, that is, you know, well done in the media environment where you didn't take outside money.

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But I would not have guessed that this was the trajectory it would've been. Like, the first two years were just up and up, and in fact, you know, we got ten thousand subscribers in our first basically twenty-four hours.

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And so that, you're like, that's not linear, right? Immediately you're like, "Oh, okay, great. We've got a really safe and stable level of support." So I'm, I'm grateful for that, but that's not necessarily...

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You know, the day before we launched, if you had told me we would end of the day with like five hundred subscribers, I would've been like, "Oh, great." Like, that's good, that's good momentum.

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So the fact that it was like two years of really high growth and then sort of leveling off, I guess I would've been surprised in twenty-twenty.

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If you, you know, the last time we did a, a big forecast, we reforecast basically every six months, but you know, sort of in a real meaningful way every twelve months.

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And I think we, we plugged in, we were hoping to do something more like, you know, five percent revenue growth year over year, so sort of we've already built it in such a way that, okay, that's like, that's okay.

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Like, it doesn't change anything really compared to what, where we were at twelve months ago.

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I would say some of that is like, some of that is just like a timing matter of the P&L, where, for example, we moved the Normal Gossip is our big podcast, our big live tour- Mm-hmm...

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usually happens this spring, we moved it into the fall.

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So that's something like a hundred and fifty thousand dollars of revenue that, you know, it's, it's not that it's not there, it's just not reflected in the exact, you know, revenues that we shared here. So whatever.

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Right. That had, in the spring we'd be talking about more like a couple percent of, of growth. But, you know, the broader point is still right.

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Our retention, you know, we model retention and acquisition separately, and retention has actually outperformed, like we're just the people who are into us remain into us month to month.

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They come to the website, they come to the homepage day after day.

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But new acquisition has just been slower and it's been lumpy, and you know, I, I, I think I mentioned this in the annual report a little bit, like we, we had a bunch of government worker subscribers who we had to comp once they got laid off during the DOGE efforts.

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You know, we were just talking off mic before about sort of the vibe of a recession, even if the economic indicators are not saying it's a recession, you know? Yeah.

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That sort of comes out of r- retail spending first and foremost.

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So on the subscriber front, you know, I think what I would say if I think about the next year or two, we're still fighting the good fight, we still wanna reach new people who don't know Defector's deal, we wanna convert people who know Defector's deal, and maybe might consider subscribing, but that business line is just not gonna be ten percent growth year over year.

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I think the other stuff, we're still pretty nascent as, as a matter of, you know, like what is our ad product. We still have space to be doing more in the podcast space. Mm-hmm.

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You know, we won this grant, so we sort of add a consulting line item to the work that we do.

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So, you know, I think the overall revenue picture is rosier, but yeah, on the subscription side, we're very, we're very realistic about this.

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You know, if I could get three to five percent subscription growth year to year from this year to next year, I'd be thrilled. So you, you keep subscribers, right?

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But you, but acquiring subscribers has proven to be more difficult. Yeah. Right?

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So un- unpack that because, I mean, obviously you, you'd mentioned in the annual report that, you know, Defector started with a whole bunch of things in its advantage, basically, in its favor, excuse me.

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Just the reputations, the, the, the sort of PR value of the walkout from, from Deadspin absolutely helped, you know.

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There, I think the, that time was one of a lot of changes going on, and we saw like a big increase in, in subscription. Substack is like, you know, taking off.

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It became, you know, subscribing to writers who, who you like and support became a normal thing, right? You know, those things, those, you know, those things fade over time, right? For sure.

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I think, you know, there's a, there's a piece here that is, I mean, I, I bet every company wonders this, of just like what of this is just secular trends of like- Yeah, exactly...

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we- And you never know You never know, right? You never know. I'm not the one to say. There's some amount of subscription fatigue.

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We've heard about the worst phrase, subscription f- fatigue, for years and years, and I, I am sure that's true.

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But you know, like Defector is a, a particular thing of how we wanna cover sports and culture from a pretty, you know, progressive labor friendly lens.

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It just, it might be the case this is sort of a moment in the trajectory of the country or, you know, how people understand sports and understand culture that like we are pretty much operating at more or less the, the ceiling today, and that might be true too.

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And like that's, I mean, I don't know. I, I, I think that's okay. Like, ideally we would do more. We could create more jobs, we could bring more people on, we could, you know, do more ambitious reporting.

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We could increase the freelance budget and the travel budget and all these things, but if this is what it is for at least the foreseeable future, I think that's, that's decent enough.

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And you know, again, our subscribers are really, really loyal, and so I think-If this is, if this is what it is, that works until, you know, people on staff say it doesn't work anymore, right?

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Like, until we, we have too many divergent theories of what this company should be and what each person's role should be.

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But for now, I think people are mostly grateful to just, you know, have a pretty safe job in, in media where you can be reasonably well-read and, you know, wake up tomorrow knowing that you have a say in the direction of your company and you're not gonna get laid off, which is more than most people can say.

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Yeah, that's true. When you look back, like, so do you think that the, the unique ownership structure, I mean, 'cause you're, you're, you're very candid, like, in, in the report.

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And look, the unique ownership structure has a ton of benefits to it, right? But clearly, I mean, you're talking about taking votes on all these kinds of things.

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Like, I'm just like, [chuckles] oh my God, this must take forever to make some kind of decision. And, like, getting anyone on board, I don't care if everyone, like, gets along the best, like, is, is almost impossible.

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I, I... at least in my experience. Maybe I'm like, I, I've had different experiences with groups of people.

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But how much is, is the ownership structure now just a structural impediment or just a reality to the fact that it, it would be easier, I'm sure, to grow this business without th- with- without this kind of ownership structure?

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Yeah. I mean, I'm not gonna say it's an impediment. It's a feature, not a bug, of- [chuckles] Yeah... how we've been set up. Is there a version of this company that is not set up this way that has an easier growth path?

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Maybe, but, you know, it like, risk equals reward. That's the first thing you learn in corporate finance 101. And so- Yeah...

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there'd be a- if there were higher growth, you would also be taking on a certain more amount of risk, right?

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And so it's just kind of like what is the first principles of what a company is for, and a worker-owned cooperative, the company is for keeping jobs for the workers, right?

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[chuckles] And so these 27 people, like, keeping their jobs stable is sort of the most important thing for me as the business leader here, and I work around the margins there.

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And, you know, that is additional revenue streams and doing the best with what we can on the subscription side.

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And, you know, I, I should say for us, it is not just a labor side principle of, you know, how we want to organize. It is also marketing.

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Like, if tomorrow we announce, "Hey, we are, you know, taking outside-" Sure...

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"shareholder money, and, you know, we're gonna streamline this organization so we stop making it so everyone is a worker owner and has a vote." Yeah. We'd lose a bunch of new- Meet our new partners at TPG. Yeah, right.

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Exactly. [chuckles] We'd, you know, we'd lose a big chunk of people who are giving us money in part because they, they like the, the cut of our jib, even if they're not reading the site every day. Yeah.

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So, you know, I don't take that, I don't take that lightly, the idea that, you know, this is- Right... th- like this is what it is. Like, I am not sitting here dreaming about what if I ran a different sort of company.

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Like, yeah, you know, what's the thing? You know, if my grandma had wheels, she'd be a bicycle. Like, this is just the company I run. [chuckles] That's a great point. Well-deployed line.

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So subscriptions is, you know, like look, when you hit, when you hit a wall with subscriptions, you can optimize and you can like eke out some, some more.

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And, and obviously paid acquisition is an area that reading through the port, I mean, you guys are just under, I guess, they would call it under-leveraged in that for a bunch of different reasons.

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I mean, some of which are, are simply, I mean, I, I would call them ideological. Like, I mean, you don't use like Facebook, Meta as like a acquisition platform. I mean, it's pretty effective. Yeah. Right.

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You could call that ideological. You know, we've, we've explored here and there of like how do we plug into- Well, it's making business decisions not based on business. That to me is ideological. Yeah.

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You know, I mean, I don't, I don't shy away from that at all. You know, being organized- Yeah... as a worker cooperative is, is ideological, and we have plenty of- Sure...

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other things that are, you know, some, some amount of ideological and some amount of, you know, marketing. Sure. Yeah. We, we, we are under, under-invested in paid.

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I think there is, there is an argument that even if we were, did not want to plug into the Meta ecosystem, there were ways to do more paid acquisition.

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The other piece of this is we are just very, we are very lightly staffed on the business side of things, right? So part of it is just like- Right... what is my personal capacity to do that and expertise at doing that?

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You know, I think there is a version of this that says, "Hey, next year we are contracting with some sort of a firm that knows how to do this, and we are dedicating real budget to doing it," and, you know, trying to see if that is a- Right...

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a, a thing that is worthwhile.

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You know, if I had to describe how my time is being allocated going forward, it is more on other revenue streams and, you know, making sure those have a, a fair chance here, whether that's the ads or, or the podcast or the consulting side of the business.

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So yeah, you know, it's all about bandwidth. I like don't, I can't, I can't deny that- Yeah... like we're under, under-resourced or under-invested there. Right.

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So talk to me about then the other business lines are much more likely for, for growth, right? Like, and ads, obviously, we talked about ads like, like last year. But again, it's like one of those chicken and egg thing.

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It's like you need, you need to, you need to be out there in the markets. I mean, ads are not bought, they're sold. That was something that I was told early on that I've always remembered.

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And you don't have like an ad sales team, right? So you've got... So tell me about like where you see the growth prospects between, you know, ads, you're gonna be putting them in for, I think, logged o-out users, right?

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But like, there's also the podcasts, right?

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Like, so Normal Gossip has, you know, you've, you've got a franchise there on your hands, and I'm sure that there are, there are a lot of different growth opportunities when you have, when you have those kinds of franchises.

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But tell me where you see the growthYeah. So on the, on the ad side, on-site ad side, we are h- are working with buy/sell ads.

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I will be totally honest that our first year of direct sold with them has not been particularly strong. You know, we've, we've like picked up sponsors here and there, but it's not a repeatable pipeline now.

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We are in a non-exclusive relationship with buy/sell ads, so if anybody's hearing this and wants to, you know, pitch me on doing more- There we go...

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direct ad sales, I would be gladly, you know, give you the market chunk of whatever you, you bring in. Yeah. And it's just a 10% finder's fee to the Rebooting LLC. Yeah, that's right. Yes.

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Make sure you're CCing Brian there too. Something like that. [laughs] It took us a while to get the programmatic solution on buy/sell ads running on the site.

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Part of that is technical, part of it is just, like, experimenting to make sure the quality of the ads aren't so low that, you know, it, it's, it's, you know, hard to defend.

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So, you know, we do have programmatic backfills- That's holding you back right there in a marketplace, [laughs] Jasper. Yeah, right.

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So I think, you know, right now our monthly run on, on that combined does add up to a six-digit number over the course of the year, although we haven't, didn't have programmatic running until, fully until June, so it's not really reflected in the annual report.

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Okay. So I think there's this part of that, of just, like, better monetizing the couple of million page views of, you know, not logged in or not subscribed users.

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You know, also by the way, we, we made the choice not to show, uh, ads to subscribers. We have had subscribers be like, "Show me some ads, it's fine." So o- or, you know, you can imagine a world- Yeah...

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in which, hey, we rethink our subscription tiers and, like, s- one of the lower tiers is yes, you get unlimited access and X and Y benefits, but you are seeing ads.

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So there's sort of just, like, fine-tuning that balance between ads and subscriptions to make that all work. So- Yeah. What is your, what is your conversion rate for to paid?

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It's always a tough number to quote because we effectively brought in the first 10,000 subscribers on zero conversion, right? Like, or like 100% conversion. Mm-hmm. So, you know, our email- Sure...

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list right now is like 250,000, and our- Mm... subscriber list is 40,000. And then, you know, the month to month of page views is just however million s- we can get to, you know? It's sort of a hits business, right?

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So, you know, whatever you want your... N- I think most people quote the numerator to denominator as unpaid, uh, people gave you their email address- Yeah... so the 40 over to the 25, or the 40 over the 250.

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But even then, again, that's a little bit of a, a, a false comparison when the first 10,000 people gave us their email address and their money at the same time. Right.

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So you, you wrote about all of the, the sort of advantages that Defector had on, on launching and, and you also mentioned, you know, starting a consulting practice.

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You've, you've informally, I'm sure, fielded a lot of inquiries from those who are interested in going down this path, because, like, I think anyone who has operated as a journalist within this insane media ecosystem [laughs] of the last couple decades probably pines for a different model.

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Like, and that the idea that the people who were in charge of this industry for the last 20 years leading it [laughs] leading it out of this ditch is, is seems like maybe not the, the best approach, so why don't we try something different?

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And I think, you know, Defector has been, has been part of that, right? So what do, what do you s- w- e-explain a little bit about what you're gonna be doing because...

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And, and also just about worker collectives and whether this model is extensible considering all of the advantages that Defector had out of the gate.

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I think the best way to tell this story is starting from shortly after Defector launched- Mm-hmm...

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my colleagues and I would field requests to have conversations with groups of other journalists who are like, "How do we do what you do?"

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And that has been consistent over the years, sort of tied to, or frankly tied to layoff cycles of, you know, people showing up in our inboxes and asking for advice on how they might think about doing this.

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And we generally say, "Yes, we're glad to talk to you."

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We generally caveat that with, you know, we had a lot of advantages, and we also caveat it with, we only did it the one way we did it, and that's not necessarily how you should do it.

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And that is true on, like, how you think about your public-facing go-to-market strategy.

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It's even true on the basis of, like, we are a New York LLC owned by a Delaware corporation, which is stupid, and, like, I wouldn't set it up that way, right? So- Yeah... but I don't...

136
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It's not like I've talked to a bunch of lawyers and accountants and, you know, worker cooperative experts to tell me, you know, what I should recommend.

137
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So it's been a couple years now where I've been talking to foundations about, "Hey, what if we just, um, build this out a little bit?"

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You know, a little bit of money to just research it and just say, like, "Here are some legitimately good answers, well-researched answers that we can sit behind, templatize some of the, you know, operating agreements."

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Like, "Hey, here's the logic tree of, like, the type of business you wanna run, and therefore you should organize like this. Hey, you don't even have a co-founder that you know.

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Like, here's the checklist of, like, how to figure out if you guys work well together."

141
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Because frankly, in the early going of some of these work cooperatives, it's basically, it's basically like couples therapy, just, you know, getting people on the same page and, and there's just a lot of moving pieces here where we...

142
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There could just be some central infrastructure.

143
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Some of that is worker-owned specific, some of that is applicable to any emerging journalistic endeavor, and yeah, you know, we would love to, to be a clearing house for, for some of that work. And I should say,

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I am new to the idea of looking across all the journal- journalism support organizations-If anybody is listening to this and saying like, "Oh, we offer something like that," and I would say, "Wonderful. Reach out.

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Would love to partner. I don't wanna reinvent the wheel." Even some of these places, it's just like, "Hey, here's the resources, and the resources live somewhere else," and that's great. But I would also say

146
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if you're offering these things, you gotta do a better job of, you know, being out there and being visible, because people have been- Yeah...

147
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coming to us for years asking for this, and so a little bit of this is just us saying, "Okay, well, let's, let's do it. There's clearly a demand for it, and, and we're gonna- Yeah... you know, help out where we can."

148
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But no offense to the, the, these, these organizations, and I'm sure they're wonderful, but the reason people come to you is because you have literal experience doing this, right?

149
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Like, it's not some sort of theoretical study where they got a grant from the Pritzkers or someone to, you know, to come up with these things in a lab at a J school. You've been in it, right?

150
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And so when you look back, like, what are the, what would've been, like, say, the three big advantages of the worker collective and what, you know, in candidness ha- have been the trade-offs? Yeah.

151
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I mean, the, the benefits here are I am just a person who believes that... A- and this gets back to the first 10 minutes of our conversation of, like- Mm-hmm...

152
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a strategy that is 100% correct, quote-unquote, theoretically correct, but that people are not on board for, is a useless strategy.

153
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So in some ways, I'm like, okay, look, the, the compromise position that everybody is on the same page at, on, and all running towards together, I would pick that strategy every single time.

154
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And so ultimately, everyone is bought in, and everybody feels ownership because they, in fact, have ownership.

155
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And I think that just creates this virtuous cycle of like, yeah, people are out there, they're, they're both doing the journalism for themselves and, and reaping the benefits, and they're thinking about the business.

156
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And it's not so combative between, oh, the business side and the editorial side.

157
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Not that it is combative at every other publication, but, you know, it's not them and us, and, you know, we're the sort of like pure journalists, and they're the, you know, dirty money people.

158
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Like, we, like we're all- I mean, it's pretty adversarial. Have you seen what's going on at Conde Nast? I mean, it's, it, it can get pretty adversarial- It can get pretty adversarial...

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with the, like, Post-it wars and, you know, Business Insider, they were putting, the union was putting flyers up around, you know, people's neighborhoods in Brooklyn Heights and doing, you know, running up on, on their editor-in-chief on a Citi Bike with the cameras out and whatnot.

160
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Like, this is hardly, like, the recipe for a collegial working environment. Yeah. So at Defector, we, we are, we are all those things. We wear all of those hats.

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We are the employees, we are the owners, we are the, the shareholders, we are the coworkers, we are the friends.

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And so sometimes it's complicated to wear all those hats, but ultimately it's actually better to trust each other to be able to b-balance- Yeah... those hats, you know?

163
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And I think that's reflected not just in the editorial product, but, like, your internal processes, like, you, you, everyone is committed to following the, the, the...

164
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You, you have a disagreement, you go through our restorative justice process because that's what we've agreed, that is what we do, and everyone has been trained on it.

165
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And, you know, like, that is holding up your commitment as a co-owner in this, in this company. So, you know, the, like, on... There, there you go, right? Like, I, I think- Yeah...

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everything sort of ties into the fact that everybody, everybody has that. And you have the transparency, right? Like, you, you tell me you don't want to take that revenue opportunity, that's great.

167
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Well, we gotta work together then to plug the hole in the budget that that was supposed to take on.

168
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And so I, I think our, our journalists are, are just, you know, better business thinkers about the world of journalism than your average American journalist right now. Yeah. So what have the trade-offs been?

169
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Obviously, you move slower. Yeah. I mean, that seems pretty- You know, we, we do move slow, and there is an element here. Again, this is a, this is a feature, not a bug. It is not a command and control leadership.

170
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So if you have an idea, you wanna nudge the direction of the ship, you have to be out there building a quorum of support for that, right? And I think it is a...

171
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You have to be a political animal, I think, in a way that you don't otherwise have to be in your workplace necessarily, and sort of be okay that these things take a while, and you're, you know... Like, for me,

172
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y- ads, the, just the talk about an example for myself, every year, I have said, "Hey, we gotta get some ads on the page."

173
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And the first couple years when the subscription business was growing, you know, buku well, nobody wanted to listen to me, but I'm like, "All right, I'm biding my time."

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And, you know, I get to year three, I get to year four, I'm like, "Hey, I've been, I've been saying it. I've been making the case. Now is my moment, but I have been doing that work of having you hear that message."

175
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And now people have, you know, come around to the idea that this is a, a revenue stream that we need. And, you know, there's a version of that in just, like, everything that we do.

176
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On the editorial structure side, on the revenue side, on, you know, operational processes, these things just, they, they just take a while. Yeah.

177
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Uh, one of the other things that you mentioned, I wanna get into, like, the, the, I think this can be both, like, a trade-off, a good and a bad, right?

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Is, you know, you have 100% retention of, of, um, of, of employee owners, I guess. I mean, that's, like, the sort of advantage is, like, you know, most media companies see, like, a revolving door of, of people.

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And it's really hard to have continuity, and you're trying to build a brand. You're also trying to build, like, collegiality, as I said. And so that's great, right?

180
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And obviously, the people who started Defector really wanted to work together. It wasn't like they just sort of, like, randomly ended up there through responding to a LinkedIn job post.

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And, and that I'm sure has a ton of ben- benefits.

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But you flicked at a little bit the downside in yourIn your annual report in that, you know, when you have-- when you, when you keep one hundred percent, you know, the risk is, and I don't mean this necessarily in a bad way, it's like the product doesn't evolve as much.

183
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I mean, I would always think it's like having new people come in means new energy and new ideas from the outside. Yes, it's disruptive to lose people, and you never, you know, love to lose people, et cetera.

184
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But the reality is, anyone who's, like, run an organization knows you kinda need, you need, like, new blood sometimes. I went to, like, a Catholic grade school.

185
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We didn't, like-- I went to school with people, like, in the first grade, and it was, like, seventh grade, it was the same kids. It was, like, weird.

186
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[laughs] And some other ki- a school closed down and, and their kids came to, uh, and they were, like, that was like, wow, that's a real big change.

187
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Talk to me about how that, a-about both sides of, of the a hundred percent retention. Yeah. I mean, I think you've basically nailed it.

188
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Like, a, a company that is always has turnover, it just, you're constantly relearning, and you're, you're constantly in flux, and, you know, I don't think anyone really does their best work when there's too much employee turnover.

189
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And then on the other side, it's exactly what you said. You know, y-new voices are important, and bringing in new blood, you know, is, is what keeps organizations lively.

190
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You know, we have grown, so we've grown from nineteen people to twenty-seven people, so, you know, we've, we've, whatever, added fifty percent heads, and, and that's adjusted the culture in ways that are, are good.

191
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But yeah, I mean, just like strategically, right? If tomorrow an organization of a similar size but not the same structure said, "Hey, we're gonna start investing in, I don't know, our WNBA coverage," let's say, right?

192
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You would just say, "Okay, the next time we lose two staff writers, we will just hire two new people who know how to write about the WNBA."

193
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And for us, like, that just doesn't come around that often, and so what do you do about that?

194
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Well, you have people on staff who are willing to add that to their beat, but, you know, inevitably they do have to drop something from their beat in order to, to make that work, and, you know, you just, you're not moving as fast.

195
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Like, we-- even if we know where the ball's going, we can't chase it that aggressively. So, you know, like yeah, it's, it's two sides of the same coin. That's just how it goes.

196
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Are there other trade-offs that we didn't get to? I think those are, those are just about it, yeah. So I'm, I'm interested in, like, are you surprised there aren't more examples of many defectors out there?

197
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There are, right? Like, I mean, there's, there's like Discourse Blog, Racket, Hellgate, 404 Media.

198
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I mean, so there are, there are people pa- you know, going down this path, and to me, like, you know, the, the defining f- is, like, are you worker, or in this case, journalist-owned, like, right? To a degree.

199
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To a large degree. And that's my definition of it. Yeah. Yeah. So, you know, part of our, our work right now in winning this grant and building these shared services is just touching base with a lot of these folks.

200
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So, you know, Hellgate, Racket, Range out in Spokane, Coyote Media out in the Bay Area, 404 Media, the Fifty-First in DC, Aftermath is video game coverage, Hearing Things is music coverage.

201
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You know, there's, there's a handful more out there. And so, you know, our, our, these were-- many of these folks I was previously in touch with.

202
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We're sort of, you know, formally interviewing them and seeing how they're doing and, you know, what needs they have.

203
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And yeah, I mean, I think, as I said in the, in the annual report, being a worker cooperative is an operating model, and it's a governance model, but it is not a revenue model. And so- Mm...

204
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all of these folks have to find that balance, right?

205
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Of like, yes, we're, we're, we're living our ideals as a matter of governing, but, you know, ultimately, you just gotta get blogs on the page, and you gotta get, you know, find one way to monetize it or another.

206
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And to some extent, what we're saying here is, like, let us help you figure out, like, let us worry about some of those things you've been thinking about, and you try to free up more time to just blog. Like,

207
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w-we, we will offer you the bookkeeping help or the, you know, forecasting help. We'll offer you the HR support. We'll, we'll do some of the vetting of tech providers.

208
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You know, some of that is, like, just general business admin, some of that is more worker cooperative, and, you know, hopefully that gives you more time to just blog, which is the thing that you actually like doing.

209
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Yeah.

210
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I feel like this is part of, you know, we talk all the time about this, like, shift from institutions to individuals, and there's tons of examples of people who have successful newsletter businesses or podcast businesses or YouTube businesses, creators, et cetera.

211
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And then there's, you know, obviously legacy business models, right? And, you know, the question always ends up becoming, what does a rebundling look like?

212
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And we see a lot of-- we see some, like, media companies trying to, like, dabble in that, but they dabble, right? And it's like, I think about Puck, right?

213
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And, like, Puck makes a big deal about their model being totally different, and, like, Matt Belloni's, like, their number one star, and The New York Times is like, he owns, like, about one percent of the company.

214
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And that's a different model. That's, that's, you know, basically just it's, it's regular compensation with, with, with, with some upside. There's nothing wrong with that, uh, of course. Of course, yeah.

215
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I think, I think what the question ends up being is what does a smart, and it's not gonna be one thing, but is this seems like it would be one option for what a rebundling sort of looks like.

216
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Because a lot of the people who I talk to who are, you know, in that sort of independent camp, you know, it's not just about the money.

217
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Like, it's, it's, and then a lot of times it's, uh, I think, I feel like the, the money people always, always think it's about the money because they're money people. Right. [laughs] Go figure.

218
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And then they, like, come in contact with people who have, like, you know, who optimize, [chuckles] for lack of a better word, to, like, other things, a broader set, and they're like, "I do not, I do not compute."

219
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But it's about more than money. It's like, it's, it's about, it's about autonomy. You know, I've been watching, like, Pluribus, and I think [chuckles] it's a good exploration.

220
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You can kind of, like, ap-apply it- Yeah, yeah, yeah...

221
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a little bit to, to the current media landscape.But the question ends up being, what does that kind of rebundling look like that gets the right balance between the autonomy, yes, be- having s- ownership of your work and I think, you know, what happened at Deadspin and overall really, I think in the aftermath of, of Gawker to Gawker Media left a, a bad taste in, in a lot of the sort of creators, if you will, for lack of a better words, mouth.

222
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Like it just, this model, particularly around like private equity or private equity-like ownership wringing, wringing the val- the last drips of value out of, of brands is distasteful to many, I think.

223
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[laughs] You know, I celebrate capitalism, but I, I fully recognize, you know, the, its rough spots, and the question ends up being like, what, what do these models look like that have...

224
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Everyone wants the best of both worlds. They want the sort of stability of a, a more institutional media model, right? At least historically it was. But they want the autonomy of, you know, to be independent. Yeah.

225
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I mean, I should say here that we won this grant from Press Forward, and by we, I mean Defector and Start.Coop. Start.Coop- Mm-hmm...

226
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is a Boston-based nonprofit that focuses on accelerating worker ownership in the economy. So they are very much about worker cooperatives as well.

227
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However, the grant is for, quote unquote, "labor friendly independent media." And there's- Okay... a specific reason why we didn't say, you know, we're cooperatives.

228
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O- one is, if you were going by a strict definition of worker cooperatives, we're not even getting that much scale in terms of like making the shared services work. Like, you can't have shared...

229
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Like, ideally, shared services, purchasing co-ops, et cetera, like you would have a, a, a big enough scale where you can say like, "Hey, we're, we actually get some leverage on this, and we can, you know, negotiate prices or, or- Yeah...

230
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or whatever." And then there's a second piece here that is i- many, there are people operating out there who would not describe themselves as a worker co-op. Maybe they want to move in that direction.

231
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Maybe they are operating effectively as a worker co-op, or, you know, it could be the case in 24 months, and they're, they're not using that language.

232
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And, you know, the, the word, further reasons I think about are the, the independent newsletter writers who, you know, you see people have this conversation all the time where they're like, "You know, I, I'm grateful that I have paid subscribers.

233
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I also feel trapped that I have to get two newsletter out every single week." Yeah. "I don't know how to get health insurance, and I can't go on vacation," right?

234
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Like- I, it's funny, I had this exact conversation with, with a guy in Europe who's considering going down this path, and his first question was a very European question.

235
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[laughs] He was like, "Can I take two weeks vacation?" [laughs] Which I loved. I was like, "Maybe this path is for you." Yeah.

236
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And, and, you know, there, there are people who, you know, have that, have the, have the, the leeway with their audience and, and, you know, are established well enough that they can say like, "Yes, I take these couple weeks off around the holidays and a couple weeks off around or in the summer," and, you know, their business is fine.

237
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But, you know, people feel more precarious than that. And so, you know, what can we do here to make it more attractive to people to say, "Hey, we're gonna join forces"?

238
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I, I've been joking saying that like some of these things, if they are profitable, will be figured out by Substack in the next 18 months. Like, they have to grow into their valuation, right?

239
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So if there's a way to figure out ad sales for, you know, small independent publishers, they're gonna figure it out. If there's a way to do bundling profitably on a product basis, like they gotta figure it out.

240
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I mean, I don't know anybody at Substack.

241
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I'm just talking out of my ass, but I'm just sort of saying like, you know, these are just the, the opportunities out there that now that we are sort of matured, that people understand what it means to be a solo media operator, you know, what are the next opportunities?

242
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And I think the version that I am working on is like a little bit more, whatever, worker-forward ideological on how to make that work.

243
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But I think there's a capitalism-forward version of that that also is the same thing, right?

244
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If you can convince more people to take this jump because they feel like they have the resources to have a little bit of a safety net or, you know, they know that there are the products out there that can help them do this, then, you know, we're basically saying the same thing.

245
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Yeah. And I think that there are different, like there's different people who are doing... It's more like the centralized services sort of approach.

246
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Like there's like collective media, which to me is like funny 'cause I was telling the founder like there was an old ad network called Collective, but I'm the only person who probably remembers it.

247
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But, you know, and it's like a journalist first centralized services model that has a, a, a lot of flexibility around the types of relationship. I think it's gonna...

248
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To me, like this is not like a technology challenge, obviously. It's a business model innovation. Like there has... The business model... That's why I was Web3 curious for like half of a summer- I remember, yeah...

249
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in 2021 because [laughs] it was not the most becoming phase. It was like my goth phase.

250
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[laughs] But mostly because like, you know, when you like the precepts of it, I'm like, yeah, this is g- like there should be some kind of like kibbutz-like, like model in media and, you know, but then, you know, you get into the details and the details get very messy.

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I think one of the challenges that I find with a lot of these shared services models is they operate from a, and I'm not saying this about collective media necessarily, but like they operate from a mindset where the centralized like service comes first and the nodes come second in some ways.

252
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They like, they still haven't gotten the, the right balance where, I mean like in, in, in this model, the, the power is, you know, by definition with the journalists, the workers. They own everything, right?

253
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When, when you're talking about a shared services model, you know, the question ends up being who, who ends up being, you know, sort of in control?

254
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Is it the centralized platform?And, or, or is it the, is it the individuals who operate on the platform? Yeah. And I think that is the, the challenge. It, it...

255
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I think, you know, oftentimes people talk about this from a data perspective of, like, who owns the data.

256
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The version of this that I've been wrestling with, and our, our working team has been wrestling with, is around revenue, of, like, if we're offering you revenue services and we're saying, "Hey, leave it, leave it to us, you know, we'll build your subscriber base"- Yeah...

257
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like, that is, I, I think two things. One is now you're telling them you're gonna do the hardest part of their business, is like figuring out how to reach the audience and then get them to pay.

258
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So are they really the entrepreneurs here that own this business? And then two is that's the... That is a place where you're gonna fail more often than not.

259
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And so if you present yourself as the, the person who's offering that service and then you fail, then your bundle of services has failed. Versus if what I'm offering you is bookkeeping and HR and legal templates, right?

260
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Like, there's no failure there. Like that just... Like, I did the- Yeah Like, I, I gave it to you and, and, you know, you, you did the best with what you could. But that's the...

261
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But that's necessary but insufficient, isn't it, Jasper? I mean, like, ultimately what, what people need is it... Like, media's a simple business.

262
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It's like you make the product, you distribute the product, and you sell the product.

263
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And, like, any- anybody who's on, like, the independent pa- like, what they, what they always, what they always want is revenue and they want, they want a- audience growth distribution, right? Yeah.

264
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And y- I, I'll be honest to say that I think that's a place where there are lots of people out there trying to sell those services, so that may very well be a place where we choose to partner more, you know?

265
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I, I, I don't wanna shout out anybody- Yeah...

266
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in particular, but certainly they're in my inbox, you know, prior to starting this project of trying to sell those services to me, and it may very well be the case that that's a place where we can partner.

267
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You know, I would... There are lots of, as we're- we've been doing these interviews, there are lots of places where people need help, where they are...

268
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It's not that they, we would do a better job than what they're doing, it's that they're not doing it at all.

269
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You know, the version of this is, like, if you are doing well enough that you might hire somebody new, that is a huge undertaking to go from your founding team of worker-owners and then bringing anybody else in, right?

270
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Like, when it's just the founding team, that's basically a blood oath. Like, uh, maybe you have- Yeah...

271
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worked together previously at a previous place, you have all, you know, signed the owner agreement, and, like, you just go. And everyone is on the same page, you know how to work together, you do everything, you just go.

272
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The moment you add somebody else in here, well, now you have to start thinking about onboarding. You have to start thinking about what happens if there's a disagreement. You don't have a employee handbook.

273
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You don't have employee insurance.

274
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You don't have any number of things that make it so that you can actually bolt somebody on and have pretty good confidence that they know what they're supposed to do, and that's just a place where, you know, we talked to a bunch of people who were like, "Yeah, we'd consider hiring.

275
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We don't know how to hire. We don't even have a, you know, HRIS. We don't have a PEO because we just, you know, basically transfer money from the checking account into our own bank accounts.

276
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Like, that is how we operate right now. Like, we don't have any sort of this infrastructure." And so that's just to give a shout-out to the back office stuff, right?

277
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Like the- Yeah For sure, most people need help is on the revenue side.

278
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But what I'm saying is there's, there's a class of work cooperatives out there that, you know, they're not being served on the, on the true back office side. Yeah.

279
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What was the, what was the term you used for, like, if someone has, like, a dispute or something that, that they have to... It sounded kinda dystopian. I, I liked it. Oh. Well, we use restorative justice at Defector.

280
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Yes. What is [laughs] restorative justice? Sounds like someone really got injured. It wasn't like, you know, I don't wanna put the autoplay video ad on the page.

281
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[laughs] Although some autoplay video ads you would need restorative justice. The, the...

282
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It's in opposition to, like, the retributive justice, which is what our criminal justice system is, which is just like there's a rule- Okay... and you broke the rule, and, you know, as part of the rule- Yeah...

283
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we know what the punishment is. Restorative justice is, like, much more, "Okay," like, "you have been harmed, and what are you looking for?" And maybe all you're looking for is for somebody to say sorry.

284
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You're looking for somebody to just explain what they were thinking. You're looking for someone to say, "Hey, I'm... It's just not gonna happen again that way."

285
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And so, you know, the, in sort of lefty orgs, low hierarchy orgs, we, we, we talk about, a lot about restorative justice.

286
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But, you know, in addition to restorative justice, we have an outside HR partner, so if you're saying there's a discrimination complaint or a harassment complaint, there's a place for that to land.

287
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It doesn't just tear apart the company because, you know, we're all now threatening to sue each other.

288
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So, you know, the, like, you gotta have a little bit of foresight on this, especially if you're gonna bring in additional people beyond the founding team. Yeah. Do you remember the, like, Holacracy period? Oh, sure.

289
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Yeah. Yeah. [laughs] You're with a few people I could mention Holacracy to that would actually be like, "Oh, yeah, sure." [laughs] Yeah, I'm, I'm, like, kind of reminded of that where, you know, there's a lot...

290
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I, and, you know, I wanna be, like, very optimistic about a lot of these mo- the, like, newfangled models. Like, as I said, I mean, I, even for a half a summer, was Web3 curious.

291
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But I wonder, like, you know, Holacracy sort of, you know, in most cases that I read about, like Zappos and whatnot, it did- just did not, it did not take, take hold, and I think it's really difficult to do those things in larger organizations versus...

292
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And that's, you know, basically I think anyone who's worked in a company has, unless they're at the top of it, has completely chafed at the hierarchy of it. Like, it's completely arbitrary, and it's like,

293
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it's belittling to, like, just to operate as a human being, like, to ask someone for, like, permission to, [laughs] like, spend a week with your family. It's just weird. What is the...

294
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Like, what are y- like, what are your thoughts about, like, how realistic, just to, like, wrap it up, like, these kinds of models are?

295
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And then also, like, what are some examples out there, maybe they're not, like, you know, specifically worker-owned or journalist-owned, that you think are interesting in trying to get this balance correct? Yeah. So

296
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I think-I w- I wanna be really eyes wide open about this. Like, I'm not going around saying the worker-- the future of media is worker-owned. Like, I'm, I'm not y- I don't wanna get too high on my own source supply here.

297
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You know, I wrote in the annual report, it's like the extent to which the amount of jobs that are being lost in journalism every year is thousands and thousands, and Defector is a 27-person shop here.

298
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You know, a lot of these work cooperatives are, like, three or four or five-person shops.

299
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You have to add up a lot of five-person shops in order to make up for 1,000 lost jobs in the, you know, corporate media environment. So I'm not saying this is the future.

300
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I'm saying it is one model I think that is replicable in a lot of different local news deserts especially.

301
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You know, you, you need a couple of people to figure out how to sustain a couple of jobs, and they gotta figure out how to work together without being, you know, rolled up by the, the next hedge fund that wants to get into the newspaper business.

302
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So- Yeah... you know, uh, it is one solution. I'm hopeful it is a meaningful solution. It is one of many solutions that could be out there.

303
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Again, I am very open about Defector had a lot of special advantages, and people shouldn't just assume they're gonna get subscription revenue. I, I sit on the board of Hellgate, and I always point to them.

304
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I always say, "Hey, that's actually the version that people should be talking about," because they were-- they started with four, they're now seven journalists.

305
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They knew each other a little bit from being around New York, but it's not like they all got laid off at the same time and, you know, sort of had some unifying experience there that they could pull audience for.

306
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But then they launched, and all it is is just good journalism. Like, those are guys who are just breaking news. New York City obviously so huge, you can find news stories everywhere.

307
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You know, found the coverage areas that really resonated with the people who felt like they couldn't read it anywhere else. And, you know, three years later, they're interviewing the new mayor on stage.

308
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You know, they're running a, a live stream on election night. And that's just-- that's seven people, mostly subscription-driven. A couple of rich people wrote them some checks at the beginning, and, like, that works.

309
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And not every media environment is New York, but, you know, not every place has the cost of living of New York.

310
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Not every place has the, you know, sort of like bureaucratic, the stuff of getting a business off the ground that N- New York State has.

311
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And so yeah, I'm always pointing at Hellgate when people ask me, you know, who they should be talking to. Yeah, that's a great point. Awesome. Jasper, thank you so much. Really appreciate you doing this. Yeah.

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Always, always a pleasure to talk to you, Brian. [outro music]