Current Project: Reading books about entrepreneurs and sharing what I learned from them

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 31
• Total book digests created: 12
• Total blog posts published: 175
• Total audio recordings published: 103

This week’s metrics:

• Books read: 1
• Book digests created: 0
• Blog posts published: 7
• Audio recordings published: 0

What I completed this week (link to last week’s commitments):

• Read biography about the Newhouse family and Samuel “Si” Newhouse Jr.

What I’ll do next week:

• Read a biography or autobiography
• Create a notebook in NotebookLM using one of my book digests and get feedback from two people on it

Asks:

• None

Week two hundred thirty-five was another week of learning. Looking forward to next week!

Current Project: Reading books about entrepreneurs and sharing what I learned from them via blog posts and audio podcasts

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

What I struggled with:

• No material struggles this week

What I learned:

• ChatGPT’s custom GPTs allow you to upload “knowledge”—documents that ChatGPT will use in responses. After I uploaded several of the book digests that I created, the responses to my questions weren’t great, even after many rounds of adjusting the prompting.
• Some historical books about companies or families don’t provide enough depth about an entrepreneur’s journey. Still, they’re great tools for discovering more entrepreneurs and books about them.

Those are my struggles and learnings from the week!

After I wrote a post earlier this week, I became more curious about Reddit’s business and how it complements the Newhouse family’s media empire. I shared some reported numbers about the business in that post but didn’t dig into the business or its SEC filings.

When I get some bandwidth, I’ll read its entire form S-1 SEC filing and maybe its latest 10-Q filing too. It’s a pretty nerdy thing to do, but I always learn a ton when I read S-1s about companies I’m interested in (see here and here). I have some other filings in my queue to read first, but I’ll share what I learn from Reddit’s filings when I finish reading them.

I’ve learned a lot about the Newhouse media empire by reading Newhouse: All the Glitter, Power, & Glory of America's Richest Media Empire & the Secretive Man Behind It by Thomas Maier. In my post earlier this week, I shared that the family owned 26.5% of Reddit when the company IPO’d earlier this year.

I did some digging and found no filings indicating that they sold any of their position. This SEC filing says there’s an agreement with the Reddit CEO to vote Newhouse shares (owned by their Advance Magazine Publications entity) for certain nominees to the board of directors. The probability is high that they still own their 26.5% stake.

As of the writing of this post, Reddit’s market capitalization (i.e., valuation) is $11.2 billion (see here), which means the Newhouse family’s stake is worth just under $3 billion. I was curious how a traditional media-focused company obtained sizable ownership in a technology company.

Steve Huffman and Alexis Ohanian launched Reddit in 2005. Roughly eighteen months later, in 2006, Condé Nast, another Newhouse family company, purchased Reddit. In this tweet thread, Ohanian referred to the company’s sale and a “$10M exit.” I’m not sure if that was his share of the proceeds or the entire transaction amount, so I’d assume the Newhouses acquired Reddit for roughly $10–$20 million.  

That was eighteen years ago, and a lot has happened since then, including several fundraising rounds. Assuming the family invested in some of those rounds and covered the company’s early losses for years, they likely invested more than the purchase price. But even if those assumptions are accurate, their investment has paid off handsomely. Reddit, a technology company founded roughly twenty years ago, likely represents a material percentage of this family’s empire, which was born about a hundred years ago with Advance Publications.

The family’s empire has historically consisted of mature media properties such as newspapers, magazines, and cable operations that grew steadily but not rapidly. How the family deployed the cash from these mature properties led to the accelerated compounding of their empire (and wealth). They used cash generated from their mature properties to invest in a technology company with high growth potential because the cost of marginal replication of its product was zero. Said differently, if one person or a million people use Reddit, the cost to run Reddit doesn’t change much at all, let alone proportionally to user growth. Reddit could grow revenue and value faster than the Newhouses’ mature media properties. The Newhouses’ investment in a company whose business model had built-in leverage was the shrewd move that led to an outsize outcome and rapid compounding.

I haven’t been a fan of books that tell the history of a company or a group of people (i.e., a family). These books introduce numerous people but don’t go very deep into any of their journeys. I enjoy biographies more because the in-depth coverage of a single person’s journey usually includes challenges encountered, lessons learned overcoming adversity, and details about how they applied lessons learned to achieve their goals. Biographies get me thinking and often lead to new ideas and insights, which excites me.

Though books about the history of a company or group of people aren’t my favorite, I now recognize they’re useful for something: links to other people or companies in an industry or time period.

I’m currently reading Newhouse: All the Glitter, Power, & Glory of America’s Richest Media Empire & the Secretive Man Behind It by Thomas Maier. It’s about the Newhouse family and their media empire. But because it covers so many decades and so many people, it’s introduced me to other companies and founders I wasn’t aware of. I’ve ordered biographies about several people mentioned in this book.

My thinking on the value of reading this type of book has changed. While I’m not learning as much about an individual as I’d like, I’m being introduced to more people in the publishing industry and can read about each person’s journey. These books are good discovery mechanisms and help me understand industry periods. I don’t want these to be the majority of my reading, but they’re a helpful supplement to biographies.

Last week, I shared a post about Roy Thomson’s strategy for growing his media empire. It focused on cash flow. He bought small-town newspapers, many of them monopolies in their communities, that had strong cash flows. The newspapers were low to no growth in some cases but generated healthy cash. Roy then used those yearly cash flows to purchase more cash-flowing newspapers and other media assets.

I’m now reading Newhouse: All the Glitter, Power, & Glory of America's Richest Media Empire & the Secretive Man Behind It by Thomas Maier. It’s about Samuel “Si” Newhouse Jr. and his family’s media empire. This billionaire family owns numerous newspapers through Advance Publications and also owns Condé Nast, which publishes famous magazines like Vogue, Vanity Fair, GQ, and The New Yorker. Advance Publications owned 26.5% of Reddit when it began trading on the public stock market this year (see here, page 194). As of this writing, Reddit’s market capitalization (i.e., valuation) is just under $12 billion.

As I read more about Si and his family’s growth strategy for their media empire, I see that it’s similar to that of the Thomson family and others, including Warren Buffett and Mark Leonard of Constellation Software. The Newhouse family initially purchased cash-flowing newspapers and used the cash from those businesses to buy more businesses. They’ve done this over decades and built a sizable empire.

It’s notable that several people (and families) who’ve achieved outsize business success have used a similar strategy.

I’m curious to learn more about the Newhouse empire and family members, especially the patriarch, Samuel Irving Newhouse Sr.

A friend read my post about reading multiple biographies and autobiographies to understand an industry. He suggested that I also read books that explain how an industry works. His argument is that information in these books will fill gaps in my understanding of the industry that exist because everything isn’t covered in biographies. Reading both should give me a superior understanding.

I’m always open to trying new things, so I agreed to read a book on the media industry, given the biographies I’ve read recently. I’m going into this with an open mind, but I have some reservations. I learn best by hearing about the experiences of other people. If there’s no story, no personal journey, it may be harder for these books to keep my attention. We’ll see.

I’m excited to see if doing what my friend suggested resonates with me and leads to a better understanding of the media industry, or at least a subset of it.

Current Project: Reading books about entrepreneurs and sharing what I learned from them via blog posts and audio podcasts

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

Cumulative metrics (since 4/1/24):

• Total books read: 30
• Total book digests created: 12
• Total blog posts published: 168
• Total audio recordings published: 103

This week’s metrics:

• Books read: 1
• Book digests created: 0
• Blog posts published: 7
• Audio recordings published: 0

What I completed this week (link to last week’s commitments):

• Read biography about Roy Thomson and his son Kenneth Thomson
• Created first draft of a pitch deck
• Located commercial-grade book scanner in Atlanta
• Had one additional feedback session

What I’ll do next week:

• Read biography about Samuel “S.I.” Newhouse Jr.
• Continue tweaking the pitch deck
• Continue tweaking custom GPT

Asks:

• None

Week two hundred thirty-four was another week of learning. Looking forward to next week!

Current Project: Reading books about entrepreneurs and sharing what I learned from them via blog posts and audio podcasts

Mission: Create a library of wisdom from notable entrepreneurs that current entrepreneurs can leverage to increase their chances of success

What I struggled with:

• No material struggles this week

What I learned:

• The more information you upload to ChatGPT’s custom GPTs, the more the quality of returns diminishes.
• Study groups (e.g., Bible study groups or book clubs) are valuable because they bring people together to share ideas about what they read. The varied interpretations and perspectives are helpful.
• Chronology is likely the best framework for a dataset that captures a person’s journey.

Those are my struggles and learnings from the week!

This week, I was asked several times about my personal project, so I took the opportunity to work on my pitch. A few learnings:

• Starting by describing the problem and the emotion it creates in entrepreneurs got people hooked. Then when I said I’m solving the problem, they wanted to talk more about their experience with it.
• Technically oriented founders dove deep into how to build the solution.
• Communicating the supply-and-demand dynamics around the problem helped people understand the size of the opportunity.
• Expressing the “why now” resonated with people.
• Shorter responses from me were better and led to a conversation about the problem and the solution.
• When I shared my vision, it missed the mark. I need to work on this.

Getting the pitch right is a process. The best time to start was yesterday. The more I pitch and work on my deck, the better it should get.