ep. 82 - Jon Steinberg


Jon Steinberg is the founder and CEO of Cheddar, a new video media company sitting at the intersection of business news and culture. He was named to Ad Age’s 2015 40 under 40. He sits on the board of Bustle and is an advisor to TheSkimm and Taboola.

He was most recently the Chief Executive Officer of DailyMail.com North America.

Steinberg grew U.S. revenue 45% while at Daily Mail and doubled direct advertising revenue. He played a leading role in building the company’s digital media assets in the US, including Daily Mail’s acquisition of Elite Daily and the launch of TrufflePig, a JV with Snapchat and WPP.

He joined DailyMail.com from BuzzFeed where he was President & Chief Operating Officer, responsible for business management, company operations, finance, and social advertising operations. Under his leadership, BuzzFeed became a global and profitable social advertising business working with over half of the top 100 brands. He grew the company from 15 employees to over 500. In 2012, Steinberg was named one of AdAge’s Media Mavens.


ep. 82 - Jon Steinberg

Gail Davis: Jon Steinberg is the former COO and president at Buzzfeed. The former CEO of DailyMail, North America, and currently the founder and CEO of Cheddar, a video-based media company that was launched [00:01:00] in 2016 that caters to the millennials. Having led or worked with many of the major brands shaping millennial content consumption, Steinberg, is the content and trends expert to turn to when it comes to understanding the next generation of consumers.

Steinberg discusses the challenges facing modern businesses. What it takes to retain a competitive edge. How to spot trends before they happen. And how to grow exponentially by accessing the millennial consumer.

[00:01:30] Steinberg is able to relate to audiences that are both established in, and new, to the digital space. Sure to be a provocative conversation, we'd like to welcome Jon Steinberg to today's episode of GDA Podcast.

Kyle Davis: Hey Jon, how're you?

Gail Davis: Welcome.

Jon Steinberg: Thank you guys for having me.

Kyle Davis: We're happy to have you here. It should be fun.

So, to help ... I know we just read the long list of accomplishments and I know that I recently watched an episode of Planet of the Apps, which we can talk about ... Which we will talk about here soon. [00:02:00] But to help our listeners have a better understanding of who you are as an individual, tell us about your upbringing, and kind of how you got into media and, you know, your early days at Buzzfeed.

Jon Steinberg: Sure. Well, I grew up mostly in New York City. Certainly from third grade until I graduated high school. And, my big break I guess was, even when I was in high school I got this amazing internship at Walt Disney Imagineering working [00:02:30] just as an intern, or a gopher, on theme park attractions, which was pretty interesting. It was a little bit like the movie Big.

And, I did a lot of different things. I worked on Wall Street. I was a consultant at Booz Allen after business school, but I sort of found my way with a start up that I went to in 2003, 2004 called Majestic Research, which was an independent, data driven research firm. From there I went to Google where I was just a mid-level person. And then, you know, a couple other hops along the way and I [00:03:00] found myself at Buzzfeed in 2010. And that was really the moment for me. 2010 Buzzfeed wasn't much of anything and by 2014, you know, with a lot of team effort, there was a bunch of revenue, and there was 500 people, and the site was giant, and it kind of had become a thing.

Kyle Davis: Yeah. I'm looking at the numbers here, and I think when we spoke a few months ago you said at the time when you were with Buzzfeed when you started it was 15 employees, and then by the time you left there it was over 500, and [00:03:30] doing exponential revenue, and whole bunch of other stuff.

A company like Buzzfeed, or any, you know, company really experiences exponential growth ... What are some things you have to put into it beginning, and then I guess, what's that process like throughout?

Jon Steinberg: I think it's stressful for most people because I think the people that tend to be good at these things haven't done them before. And that creates, you know, [00:04:00] kind of a learner's mindset. So you approach things in new ways, which is what allows you to actually achieve them, but then your inexperience, just by virtue of the fact that you haven't done it before, so the ideas come because you're sort of inexperienced, but then the inexperience is always a threat of you not being able to take the business to the next level.

My first two years at Buzzfeed were very hard. That created a lot of humility, and I was pretty beaten up by that point so when things started going our way I just never really took it for granted.

Kyle Davis: [00:04:30] Yeah. I've heard some other entrepreneurs say, you know, when they started their company this level of naivete that they had really helped them make much more riskier decisions in comparison to, you know, 4 or 5 years of experience after the fact. So, I'm glad you mentioned that. I'm just kind of curious, what are some of those risks and things that, you know, you took in the early stages, or just sound crazy today, I guess?

Jon Steinberg: I don't think it's the risk. I think that [00:05:00] obviously these are high risk ventures and that's why they have big pay off or big failure, but I think more important is just that you are someone who comes from an incumbent industry. You've always things a certain way and you assume that you know something as a result of the fact of what worked in the past. It's very, very dangerous. It can prevent you from doing new ideas. You know, when I got to Buzzfeed I had never sold banner ads and, you know, banner ads just struck me as something that was really crappy and I didn't have any interest in it.

[00:05:30] The conventional wisdom at the time in 2010 was that native advertising, basically advertorials, which became our core advertising product at Buzzfeed, you know, wasn't big enough and wasn't scalable, and everybody was saying, "You should just start selling banners." People who had sold banners before. So, this idea of approaching things with fresh eyes, and approaching things with a learner's mindset, and questioning everything, that's the key, ultimately, to being successful, or blowing yourself up.

[00:06:00] It goes one of two ways. I mean sometimes, you know, it's a little bit of both.

Kyle Davis: So, for those people who are listening who maybe have an understanding of what Buzzfeed is today, sometimes they see, like, the cat videos, or the listicles that, or the quizzes that tell you what year you were born, or whatever. What was Buzzfeed in its nascent stages? And then, what did you help turn it into, aside from going from banner ads, as an example, to, you know, advertorials. You know, selling GE [00:06:30] space or something like that.

Jon Steinberg: Yeah. There were two key bets that made Buzzfeed successful. One was in place when I got there, which was, Jonah Peretti, the founder had made the bet that social traffic was going to be enormous and social. You know, namely Facebook was going to be the way people got their information, both their lighthearted entertainment and their serious news content as well too.

And that bet had already sort of ... The chips had already sort of been placed on that square at the time that I got there. And then, I [00:07:00] know the thing that I was the most involved with was saying that, "Let's bet the whole company on this native advertising thing." And there had been a handful of experiments that Buzzfeed had done around native advertising at the time, and it just struck me that, you know, I liked the long odds of it. I knew that doing something different would give us an opportunity to have a different conversation with the brand. It struck me that display advertising wasn't something that worked particularly well, so there wasn't much worth competing in over there. And then that was the second big bet. [00:07:30] So, those two things ... There was a lot of creativity and content-type insights. Hiring Ben Smith to do the politics was a seminal moment as well too. But I always think of those two bets as being the really ... One on revenue, one on traffic that really made the whole Buzzfeed thing work.

Kyle Davis: For people who, again just at a cursory glance don't really, just think of Buzzfeed as this aggregator of cat videos like I said earlier. There really is a very serious news component [00:08:00] to it. So in hiring somebody like a Ben Smith ... For me, I mean I remember my first experience with Buzzfeed was like 2011ish. I remember now, like during the campaigns and everything since then I've sort of seen much more real, really hard-hitting journalism at Buzzfeed. And so, it's really refreshing and it's also very easy to digest.

Gail Davis: I'm curious, obviously ... I'm a journalism major and I sit on a board at the Gaylord College at the University of Oklahoma. Their journalism school, and I mean, obviously we talk a [00:08:30] lot about how media is changing. And in my lifetime I've seen a lot of changes, but looking towards the future with where you sit. What media trends do you think we'll encounter in the near future?

Jon Steinberg: Well the one that I'm working on now that I'm the most obsessed about is this kind of transformation of television. It's very much like the newspapers going to web, and all the newspapers getting crushed. And the difference here is that the cable news audiences are just unbelievably old. I mean, CNBC's viewer, average viewer, is 64/ [00:09:00] 65. CNBC, which is our largest competitor, their average viewer is 67. And there is one of two scenarios. One scenario is that cable news just completely goes away, and the other scenario is that it gets reinvented. And people need to reinvent it. And, you know, both in terms of - What is the content? What is it focused on? Who are the people on air? And what is the delivery mechanism? We think that, you know, if we do those three things we have a chance of creating first a business network, we're had some nice early [00:09:30] success. And subsequently a mainstream news network that we think could replace incumbent cable news machines.

Gail Davis: Maybe this is a good time to segway, and explain to the audiences that may not know exactly what Cheddar is, because it's a unbelievable concept ... Are you still recording live from the floor of the New York Stock Exchange daily?

Jon Steinberg: We're live 8 hours a day now from the floor of the New York Stock Exchange, with a studio in the corner of the Flatiron Building. We're at the White House daily now on the, I think [00:10:00] it's the, I don't know if they call it North Lawn or the West Lawn, or whatever they call it. We have a studio in L.A. that we just spun up as well too. We've got one right behind me in the office here. And we cover technology, media innovation, politics ... We had Senator Tim Kaine, the former VP candidate of the Democratic Party was on our air this morning. We have founders on the days of their IPOs. We cover start ups. We covered a start up today called Brandless that just got announced, [00:10:30] that had 30 or 50 million dollars in funding that sells unbranded products for $3 a piece. Every product they sell is $3. It's about innovation, entrepreneurship, science, technology, rockets landing on their tails, talking speakers, self-driving cars, you know, all that good stuff.

Kyle Davis: So I have Sling TV, not Sling. I have a Roku. Sling is part of it. But, I watch Cheddar like all the time on there.

Jon Steinberg: Thank you. [inaudible 00:10:57]

Kyle Davis: Well thank you. [00:11:00] But what I like about it, and I think you mentioned something brilliant about, you know, the transformation that television is going through, and you talk about the demographics that watch. You know some of your competitors like a CNBC, or Bloomberg, or something like that, and how they're older, and you can even tell when they bring on the guest, and even the personalities that they have on air ... It's just more button-up, you know? It's very like Wall Street-esque. Whereas like the on-air talent that you have, and the content that you talk about, and just how fresh it's [00:11:30] delivered. It's very ... It's for this wise kind of millennial generation going into like their 30s. Or at least I feel that way.

Jon Steinberg: Yeah. Stylistically the topic coverage is different. The anchors are younger. Stylistically it's different. We do a lot of what I call breaking the fourth wall. Which is, the fourth wall being the wall between the audience and the viewer. The wall where the screen sits, and we talk to the viewers. We have a camera in our control room, so we can go there and talk to the control room. You know, it's just a different vibe.

Gail Davis: [00:12:00] I'm still stuck on the changing of future television, because every month when I get my cable bill ... You know, what? Like $110, $120 and I only watch just a few hours of TV. And of course I'm that older age generation of this combo here. And I look at it and I go, "Why am I paying that much money?" And then I just throw it aside and don't think about it. Well I mentioned it to Kyle one day and he's like, "You need Sling. You get to pick your channels." And I didn't even know that was out there. [00:12:30] So I know it's changing. Yeah.

Jon Steinberg: I think it is less about people like you cutting the cord, which is sort of an ironic term, because you keep the cable line for broadband but you get rid of your TV service. It's really cutting the, or throwing out the cable box is really the model really. It's more about, you know, it's a pretty big hurdle for you to say, "I want to rip this out of my house. And I'm going to have them come and pick it up." You know, it's sort of easier just to kind of in some ways stick with what you know [00:13:00] and is expensive. $110 a month is. Imagine if you're graduating college now or getting your first apartment and you already know that the cable box is the crappiest thing in your house. You know like, why would you want that? You have an iPad. And why are you going to get that? To have them come and install it? Like when you're watching YouTube, and you're watching Facebook, and you're watching Twitter, like why would possibly ... And you have apps on your phone. Why are you going to want to have that in your house?

Gail Davis: Yeah.

Kyle Davis: I think that's a great point and it goes to the delivery mechanisms, or channels really, that you're [00:13:30] using to deliver Cheddar to your audience. I mean we mentioned Sling is one of them but you can watch live feeds on Twitter. I believe YouTube. Facebook. I mean, you're really kind of omni-channeling it in that sense.

And so what are the benefits and what are maybe some of the setbacks that you're seeing right now? And where do you see it kind of going in the future?

Jon Steinberg: We think about ... We have what is called an unauthenticated feed, or the free feed. And we put certain amounts of content that is about 3 hours a day, we put out in various [00:14:00] forms free. But we're at 8 hours now, going to 10 hours, and to get the full-paid feed, all 8 hours, you need to be on Sling, or Amazon, or subscribe directly to us. And we're going to be on a handful of new systems in Q4 through Q1 of 2018. So we're more judicious of the content. We're protective of the content. We don't want to devalue it by just throwing it out there for free, then it's not of use to anyone who seeks to create a bundle that the consumer values and subscribes to.

[00:14:30] So, I think we're been more judicious with that. We haven't left our fate totally in the hands of Facebook, which I think is dangerous.

Kyle Davis: And I mean, there are other media companies that really just rely on Facebook but they're not necessarily in your realm. I'm just thinking of one off the top of my head, like Deluxe, or something like that, that's almost all of their consumption comes from Facebook and Facebook Live.

Jon Steinberg: Right. There's not much of a business in that.

Kyle Davis: How would you ... I know how you monetize, but how would you monetize something [00:15:00] like that using a model that's just there?

Jon Steinberg: I don't know. I'm not convinced that, you know, creating little videos that get millions of views is much of a business. Right? It's something that Facebook created consumption around as a result of the fact that people look at a newsfeed on their phone with the sounds off. Right? Are you talking about like Super Deluxe?

Kyle Davis: Yeah. Super Deluxe. That's it.

Jon Steinberg: Yeah. You know, I look at some of that stuff sometimes. It's not particularly clear to me that that's a business.

Kyle Davis: I look at the same thing [00:15:30] with like meme generators on Instagram. There's some people who have millions of followers, and it's like, "How do you make money off this?" And then every once in a while you get it. They do a product placement or they come out with a Rose called whatever. And that's how they do it. Whereas

Jon Steinberg: Tonnage doesn't always translate into businesses. I mean, file sharing sites and pirate sites get a lot of traffic but they're utterly un-monetizable. You know, Reddit is another classic example of something with enormous amounts of traffic that you can't make money off of. You know, [00:16:00] the biggest things in the world aren't necessarily the most profitable things. What I always like to say is, CNBC is relatively small. Viewership is 150 to 160,000 people according to Nilson. You know, I believe the estimate is that they do close to a billion dollars a year in revenue. There are riches in niches, so to speak.

Kyle Davis: So, kind of going the route that you've gone ... Maybe it's probably more important to talk about how you've kind of figured out some of the monetization with Cheddar. You know, [00:16:30] thinking of the listeners just harking back to what we just talked about with Buzzfeed doing these kind of like advertorials [inaudible 00:16:36] what you're doing with you know advertising within Cheddar.

Jon Steinberg: We do what's called a live read, which is we have brands like Fidelity, HP, Duncan Donuts, Goldman Sachs, Allied Bank, Trade Station where we thematically integrate the content to the show. We put a sponsorship [00:17:00] logo in the bottom of the screen. We read a segment that they are the sponsor of. And you know with Fidelity we actually use their applications on the screen during the show to look up stock prices and other technical indicators. And then we've done surveys to show that the purchase intent, the audience awareness, [inaudible 00:17:19] goes up dramatically as a result of the exposure of this stuff.

And sort of harking back to during the 50s, you know like, the Camel Caravan Hour and things of that nature. We try to [00:17:30] make the thematic tie a bit tighter but that's more or less what we do.

Kyle Davis: So, it's almost like everything old is new again.

Jon Steinberg: Yeah. Exactly. All the good stuff is always the older stuff. You know?

Kyle Davis: I think so.

Gail Davis: I saw that Fast Company put you on their list of most innovative companies, and considering you just launched last year, that's pretty cool to come in at number 7, so congratulations to you on that.

Jon Steinberg: Yeah, look. I like that stuff because it helps with the audience. It helps more with the advertisers. I mean people [00:18:00] read these lists, but you know, I don't get too high on my supply. I know that everything we have is fragile and that we do 8 hours a day and if we do a great show Thursday, we still have to wake up Friday morning and do it again. And there's this kind of grind to it and this fact that, you know, that do rack the fifth with whatever you publish the day before. I try to keep everybody here on their toes and not their heels.

Kyle Davis: [00:18:30] Do you find that there might be some benefit right now to doing 8 hours because it really allows you to focus on the content, and the protection of that content that you put out there, versus kind of like willy-nilly throwing you know, some happy segment about a dog or something like that on there?

Jon Steinberg: 8 hours is a lot. You know, there's not many start-ups with 60 people that do 8 hours of live programming. It takes...

Gail Davis: I thought it sounded like a lot too.

Kyle Davis: I know. I know it kind of sounds like a flippant thing but like it ... Does that make sense?

Jon Steinberg: It's Sisyphean. I mean, it's so large, you know. [00:19:00] And we really gotta get to 10 hours, and I think we to launch another network as well too. So, it's like the work is never done really.

Gail Davis: And then, I believe you formed a partnership with Propagate to make it more international. Can you tell us a little bit about that.

Jon Steinberg: Yeah. So Propagate are the people that produced Planet of the Apps. Ben Silverman of NBC, president of NBC brought the office to the U.S. And I got to know them through the Planet of the Apps show and they [inaudible 00:19:24] division take our content and clip it up and try to sell it under something that we're calling [00:19:30] Cheddar World where we'll sell the international rights. And they're making steady progress on that and I think we'll probably have something on that by the end of the year or to the beginning of the new year.

Kyle Davis: So let's talk about the episode you just had with Cheddar ... Not with Cheddar. With Planet of the Apps. I think what Apple Music kind of doing with having its own show is a smart maneuver on their end but, I'm just kind of wandering, what was that experience like and you know, you had people I really like, like Will.I.Am and Gary V on there. [00:20:00] And then you also had Jessica Alba and Gwyneth Paltrow. So what was that experience like?

Jon Steinberg: It was surreal. I mean, I had never been a part of anything that was produced at that scale. The number of cameras. The amount of production facilities. The sets. And the parts of it that were real were shockingly real. I really had to go down that escalator to give the pitch. We did it in one take. You do have 60 seconds to say your thing. The voting of the judges is real. [00:20:30] It was just a level of, you know, one take that I wasn't used to before.

Even when we do live here. You know, when we do live on Cheddar, if you don't say something right the first time, you're part of a segment, people stumble naturally when they do live television. But it isn't like 60 seconds to people that are seeing you for the first time who vote whether or not they like your company or they think it's junk. That's a different exercise.

Kyle Davis: Yeah. It's interesting that they put a lot of emphasis on [00:21:00] that 30 second or 60 second elevator/escalator pitch in that regard.

Jon Steinberg: Yeah. It creates drama and it's surely the most interesting part of the show and makes sense to me.

Kyle Davis: So I watched this episode recently. You made an interesting comment and I'm paraphrasing and please correct me if I'm wrong but you said something like, "I'm not making the content they want. I'm making the content I want."

Jon Steinberg: Yeah.

Kyle Davis: I'm curious as to what you meant by that.

Jon Steinberg: I think [00:21:30] if you make the content that people want or the content that Facebook tells you that works you get slotted into this sameness. People want what they know they like and ... What works on the platforms can often be the least interesting things. I mean to your point about Super Deluxe. Like Super Deluxe performs really well. I'm not really interested in making Super Deluxe Content. I mean A) I just don't want to do it and B) Then you're just copying somebody else and [00:22:00] you don't have a brand and you don't stand for anything. So my view on it is whenever I get asked, you know, "How big is the market for what you do?" My answer is always, "Big fucking enough."

And if it's small and lucrative, it's small and lucrative. And if it's bigger than we expected too. Look, at each stage you pulse check yourself on how big is your business. And you know when I started the business it's post-money valuation [00:22:30] 12 or 13 million dollars. I think 12 million dollars. You know, if the day after I closed that somebody offered me 25 million dollars for the business I might have sold it. Right?

You know, most entrepreneurs won't admit that but you know ... I thought the business was worth $12. Right? Today if somebody offered me, you know, $100 million for the company I wouldn't take it. So, you have to make your own determination about what is value, your own determination of what you want to make, and I think you [00:23:00] look at each point in time and you say to yourself, "What's the market size of the thing I want to make?" If you back out and you say, "I'm gonna, I'm gonna come up with an idea and work at something and create content that has a large accessible audience." I mean ultimately you'll wind up being a pornographer. That's what has the largest possible audience, if that's your starting point.

Kyle Davis: Yeah. I mean I guess it's true. Yeah. It's like 7% of the Internet that gets something [00:23:30] like 97% of the traffic.

Jon Steinberg: Or you'll start an illegal file sharing site. You know, I mean, those are always the two examples that I give. If your motivation for everything is like you know, "What's the biggest audience?" You'll make low quality content.

People didn't know they wanted House of Cards, and this is the famous Henry Ford line, which is, "If I asked people what they wanted they would have said faster horses." The role of the entrepreneur is not to make what [00:24:00] he or she knows for sure has the biggest possible audience. It's for them to make calculated bets that they can create demand or solve a problem that people know they have or don't know they have. And it's a huge bet.

I was talking to one investor when I did this last round and he said to me, "I know all the reasons why this could work. We're vet out and remove all the reasons why this couldn't work as part of our diligence." And I said to him, "That's not how this works. There's a thousand [00:24:30] reasons why this could fail." Where else do you get to put in a few million dollars and buy single digit percentages of companies that could be worth a million dollars for zero. That's what we're doing. It's called ... It's high risk. High return venture investing. And venture business building.

Kyle Davis: Yeah, I mean, I think for people who maybe aren't ... I think a large part of our audience comes from more traditional businesses whether they be family businesses or more established ... [00:25:00] I hate to say legacy, but you know, they've been around quite some time. And they're not so used to these fundraising rounds and going through this process of getting more capital. Vision sharing and getting the buy in from people. To kind of add to what I'm saying, I've heard one CEO tell me, "It's about getting people to see what they need but they didn't know that they needed it."

Jon Steinberg: Yeah.

Kyle Davis: And so, [00:25:30] I would like it if you could you know paint what this picture is like to go from angel investing or seed investing to [inaudible 00:25:39]

Jon Steinberg: I think the perception amongst a lot of people is, "Okay. What are venture funded businesses?" And a lot of this is based on the dot com stuff that a lot of people lived through. And this is true, some businesses, but just not all of them. So what is the, the dirty picture of the venture- [00:26:00] back start-up. Okay. It's the raises and burns through tens or hundreds of millions of dollars with no hope of ever being a real business and either flames out or is acquired. Right? Like that is the ... That is sort of what the uninitiated might think. Right?

What is it in its best case scenario when managed by people that truly care and are using it the right way? Well, let's pick a conventional example. New drug development by a pharmaceutical company. [00:26:30] Right? Tens if not hundreds of millions of dollars in drug development, test trials, FDA certifications, no profits, no revenue, and then the drug is approved. In which case, it is granted a patent and an exclusive [inaudible 00:26:47] reward all of this venture financing, and then the company often goes on to make billions of dollars in revenue and is incredibly profitable. Or the drug is turned down, doesn't [00:27:00] work and the company goes out of business, and that is what that capital was needed for. That R&D period.

Start ups are effectively the same thing.

You cannot bootstrap a media company like ours. There is no way to have enough revenue ... First of all, how are we going to have advertisers if we don't have content? How are we going to have a live network if we don't first have a live network? Now we were good at working with brand clients, and we were able to get revenue going pretty quickly, but [00:27:30] we're always building programming, buying production equipment ahead of the schedule of when that stuff becomes monetizable.

I've been pretty transparent about our numbers. Since we started the company, we'll do 10 million dollars in revenue this year, and to date we have lost and spent on cap x. We've lost 3 million dollars and our capital expenditures have been you know, call it 1.7 to 2 million dollars. So all in, 5 million [00:28:00] dollars has gone out the door to build a cable network.

There was really no scenario to do that whereby day one we would be profitable enough ... I mean we could have dead financed but how does a company with no revenue and no track record get debt? Right? So there's a class of businesses where you have to invest and build something before the revenue starts coming in.

Kyle Davis: It's like building a race car. [00:28:30] You can't just drive it off the lot and expect to win. You gotta invest a lot of time, effort and energy to building it up, before you can even test it.

Jon Steinberg: Or its better. You can't be in a NASCAR race without buying a race car. Right?

Kyle Davis: Exactly. Well maybe that's a better one. And a driver.

Jon Steinberg: When people say, "Well why do you have to lose all this money?" That would be a bit like saying to a NASCAR driver, "Why do you have to spend all this money and buy a car before you win a NASCAR race? Why can't you just win a NASCAR race running really fast?"

Well, it doesn't work like that. You need a multimillion [00:29:00] dollar car and pit team.

Gail Davis: How important ... I'm a member of EO, the Entrepreneurial Organization, and so obviously I'm surrounded by people who started their own companies but how important do you think this whole entrepreneurial spirit is within companies? Or even within larger organizations? To have this mindset to better benefit the growth of the company.

Jon Steinberg: Well I thought you were going to go somewhere else with that. I thought you were going to ask me like how important is it to individuals [00:29:30] or to America or something like that, but I kind of like your question better actually.

I am stunned by how slow and how bureaucratic large companies are. And it seems like despite all the innovation going on in the world right now ... You know, I'm not that old. I'm only 40 years old, so I've only really been in the professional workforce, let's call it 18, 20 years something like that. I think the lethargic-ness and the slowness of the large companies is at an all time high. And when I look at [00:30:00] the slow growth we have in this country, a lot of it is because you've got these giant companies with people that don't move with a sense of urgency. And these big companies over-value doing nothing and protecting things, and they think that that is less risky than taking risks. However, I think what has been the big insight in the past few years is, with new companies coming out of nowhere and eating the incumbent people's lunches.

[00:30:30] You know, they have recognized that you can lose it all in the space of a few years. Look at retail. You know? We went through ... Amazon is around what? 15, 20 years at this point now. We went through a period of time where it was, "Well, people are still going to want to go to JC Penny and Sears." "Well, the malls are still good. People still want to touch and feel things." Meanwhile, there was always people on the fringes saying, "You know what. No. I know I don't think so. We're going to have this big shift that's going to go on." Then in [00:31:00] the space of, really, a handful of years, everybody bought everything on Amazon and every mall and every hard line retailer, and every department store got destroyed.

And, they were just slow and wealthy and happy and leaving work early, and you know, that's what happens to you.

Kyle Davis: One of my clients at a previous company that I worked for when I was selling software into the e-com space was a very well [00:31:30] established brick-and-mortar location doing something like 7 billion dollars a year in revenue but they totally lost sight and never really had a laser focus on new retail tech coming in, or e-commerce kind of adventures. And now they're about to be sold to some other company because they just didn't have the foresight to think about what would come, and they set up a incubator lab, too little too late. I mean like, set up like 3 years ago and it's just not enough.

Jon Steinberg: [00:32:00] Yeah, and I think that the recognition of this stuff is really hard and difficult. And when you've got multi-billion dollar businesses that are in decline it's very hard to have enough self-awareness and enough hustle to say, "You know. We gotta make a change here."

Kyle Davis: And I think that's kind of ... I think that's the point that people need to understand, is that

Gail Davis: Companies have to innovate. Have to have kind of a start up culture almost, maybe.

Kyle Davis: [00:32:30] There's benefits in being agile.

Gail Davis: There you go.

Kyle Davis: Alright. Cool.

Well, hey Jon. It's been a real pleasure. And for the Claudine members that are listening, if they would like to have Jon Steinberg come and speak for them, for their event, you can do so by contacting GDA Speakers at 214-205-7258 or by going to GDAspeakers.com.

For today's transcript and everything else related to the podcast, and for a link to see some videos from Cheddar, you can do so by going to GDApodcast.com. [00:33:00] Thanks again, Jon.

Gail Davis: Thank you, Jon.

Jon Steinberg: Thank you so much guys. It was a pleasure.