Group Nine Media’s CEO Ben Lerer believes his company is ideally positioned to take advantage of today’s constantly shifting technology and ever-changing consumer behavior to become a “legitimately massive” player in the digital media sector.
“We are not in lipstick-on-a-pig startup mode,” declared Lerer at the CornellTech@Bloomberg speaker series on Tuesday, March 7 at Bloomberg headquarters in New York City. “We have a longer-term view and are focused on the right stuff to build new formats and content.”
Group Nine was formed in late 2016 with a $100 million investment from Discovery Communications, creating a digital media giant with a combined total of more than 3.5 billion global monthly video views and a portfolio that includes the millennial-oriented brands The Dodo, Seeker and NowThis, in addition to Thrillist, which Lerer co-founded in 2004.
Lerer explained to the audience that the Discovery partnership made sense in light of today’s shifting media landscape, a greater focus on video content and the headwinds facing traditional television. “We saw an opportunity, not to create digital versions of existing television brands, but [to create] new brands that have awesome content built for the people who consume them.”
Increasingly, the first screen for content consumers is their phone. Group Nine’s extremely popular lineup of brands has great reach, thanks in large part to distributed platforms, and specializes in short-form videos – a format Lerer believes opens the door to “long-term monetization” through advertising and e-commerce. To wit, its news site NowThis achieves more than 2.4 billion video views per month, while The Dodo – a site for animal-enthusiasts founded by Lerer’s sister Izzie – boasts over 700 million, the science and exploration site Seeker garners 300 million and Thrillist accounts for upwards of 150 million monthly video views.
Lerer started Thrillist with his friend and fellow University of Pennsylvania alum Adam Rich as an email newsletter for roughly 600 of their friends in New York. It has since morphed into a successful lifestyle website that caters to hip young men in more than 30 markets around the world. According to Lerer, Thrillist Media Group’s content-and-commerce model – including the men’s fashion retailer JackThreads, which the company acquired in 2010 – was pulling in upwards of $100 million in annual revenue by 2015.
That’s when he decided to split the two companies. Over time, Lerer recalls, the brands had grown apart and “had less and less to do with each other.” This conclusion was bolstered by potential investors repeatedly reminding him that the two units were, in fact, separate businesses.
As a vertically integrated clothier that designs, manufactures and distributes apparel, JackThreads requires management with special retail expertise. “That wasn’t who we were,” Lerer acknowledges, adding that Thrillist will still be engaged in various forms of commerce, but probably not the kind in which it “holds inventory.”
Lerer is also managing partner at Lerer Hippeau Ventures (LHV), a tech-focused, seed-stage venture capital fund based in New York City, which was founded in 2010 by his father, media entrepreneur Kenneth Lerer, along with Eric Hippeau and Jordan Cooper. So far, the firm has invested in more than 300 companies, including the fast-growing eyewear company Warby Parker and women’s lifestyle site Refinery29.
Asked about the VC firm’s investment criteria, Ben Lerer insists it’s not so much about the company or a business model, but a “totally gut” feeling about the people and founding team behind it. “You have to trust them. Share a vision. Have things in common – a feel for what they are doing. And think that we can help,” he asserted. Lerer believes startup leaders should have a clear and precise view of what they want to do, but also be ready to pivot and change course when necessary.
All of these companies are within consumer-focused sectors and based in New York City, which, according to Lerer, reflects LHV’s conviction to “invest in what you know and can fully wrap [your] arms around” in order to become the pre-eminent VC firm supporting New York businesses.
Reflecting on his career, Lerer told the crowd that most of what he has accomplished – from the first Thrillist e-newsletter to the content-and-commerce model he built and now Group Nine’s digital media enterprise – was more improvised than by design. “All we did was try to move with the world, have the wind at our back to be in a place where we thought the moment was coming and create impact with the largest number of people.”
You can watch the entire discussion here.