Meet Sarah Lacy: Memphis native, mother of two, and founder and editor-in-chief of the Silicon Valley and technology-focused web publication PandoDaily. The name of her company comes from her fascination with a colony of trees in Utah called the Pando trees, known to be the largest and oldest known living organism. In describing why she started PandoDaily, Sarah explains how no matter what happens above ground, the Pando tree root system stays alive and continually shoots up new trees, and how it’s a perfect metaphor for what she loves about Silicon Valley: “It's not just individual hot startups of-the-moment; it's that unique startup ecosystem that continually shoots up new companies no matter how frothy or scorched everything above ground gets.” In my conversation with her below, she shares everything from personal anecdotes on bringing a baby to VC pitches when fundraising for Pando, to insights on how technology has become the leading story across the big four centers of power in the US economy, to how to trust your gut and not be afraid of doing things your own way.
You've covered business and technology for more than fifteen years. How did you decide to become a journalist, and in particular focus on writing about business and technology?
Going back very early, when I was growing up I never thought I would be a journalist, and certainly not a business journalist. My parents were both academics and there were weren’t any business people in my family. When I was in high school though, I was the editor of my high school newspaper, and we reached a point where we had to transition it over from moving print to computers for the first time. We didn’t have enough in the budget to produce something more than about six four-page issues, and we needed a way to increase our production. Our school had very limited resources and I didn’t really understand computers, so I decided to go to this local publication called the Memphis Business Journal since the daughter of the publisher and owner went to my high school. I made him the amazing business offer to underwrite the paper and get a small line in the masthead acknowledging the underwriting, and in exchange he would send someone to teach me Pagemaker and other programs. We didn’t have scanners so they would scan all our photos and we’d basically piggyback on the Memphis Business Journal run. It was amazing because it was this first case where I saw both planning a media organization and planning page counts and spreads, which would wind up getting me very interested in journalism. I also saw what technology and media could do to unlock journalism. My little private school could only afford to do something like six four-page issues with moving print, but once we moved over to computers we thought “let’s do a 12-page issue”, let’s do a 16-page issue!” It felt like there were no limits and that was really cool. Oddly notwithstanding, I thought I would go into law or politics or something like that, I did not think I would want to be a journalist. During that year when I was editing the paper I was the only one that knew how to use any of the technology, so I would be up until 3am laying it all out, fact-checking it and copy-editing it. I would hand my folders with my photos and materials to the Memphis Business Journal publisher and he would always say “You’re going to be a journalist, it’s in your blood!” and I would always say no I’m not…and low and behold I became one.
My first job was actually working for him during an internship in college, and that’s where I fell in love with business journalism. I feel like business people control and exert so much influence in our day-to-day lives, whether it's hiring and firing, all of us having retirement funds invested in the stock market, or the consumer products that we use day-to-day that dominate our lives. All of that is controlled by corporations, and increasingly tech companies. I feel like they don’t get the same type of coverage that politicians do, that celebrities do, that sports figures do in our culture. There are amazing stories, and the reason I like in particular Silicon Valley and venture capital is because there are still very dramatic stories. There were the good ‘ol days of movie moguls and their corporations of the past for instance, and I feel like Silicon Valley is the last place in American capitalism where one person who may be unbalanced, crazy, or just really driven will have this outsized effect because this person makes a decision that isn’t entirely rational. It might be a decision that no multi-billion dollar company could do, and at the end of it, very quickly that rational or irrational decision could affect millions of consumers, a lot of revenue and many jobs. These single individuals who frequently act out of passion, or drama, or intensity or in ways that aren’t entirely rational can have these wildly outsized impacts, and I think that behavior is something that needs a lot of scrutiny. Oftentimes these people are either totally lionized or totally criticized and there is not a lot of reporting down the middle. There is not a lot of reporting that understands that psychology, and it’s something that is so fascinating to cover because the impact of the technology industry is so huge.
How is PandoDaily different now from how you envisioned it to be when you started the company in 2011?
It’s so hard to think about. I think what we write about has been way broader than I thought it would be at the beginning. Coming out of Techcrunch, I didn’t think Pando would really be a trade publication, but I thought we would much more be this voice of Silicon Valley, this thing that everyone in the Valley had to read. And I think Pando hit this great slipstream in the market where tech was really becoming the story across every industry. And the money behind tech, the people who created all this money, and the platforms themselves were all becoming such disruptive forces in politics, in media and entertainment, in pretty much everything that you can imagine, practically every sector.
If you think about the big four centers of power of the US economy and business, there is (1) Hollywood and entertainment, (2) New York and finance, (3) DC and politics, and (4) then there is technology in Silicon Valley, and tech is the story across all of those centers of power right now. The money created by tech and the personalities behind the ideas and how they are taking this disruptive approach have become so dominant—you have Netflix winning Golden Globes—everything has gotten so muddy. I didn’t expect us to be so much at the forefront of that story.
Through your lens as a journalist, what are legal trends that you have seen in the past vs. new trends that you’re seeing now, for instance with the sharing economy? Is there a contrast with the Silicon Valley of the last boom vs. now?
There are always these waves of how much you should try to change the law or disrupt the law by just building a company and charging forward, and how much you should look for sectors where the law isn’t already clear. In the late 90s, with companies like Napster, there was this whole view of let’s push the law by just doing things, and then the law will have to catch up. I think music in particular was such a graveyard for startups for so long that it put a chill on the industry. Even people who were thinking about disrupting the crowdfunding space where people weren’t sure if it was entirely legal, or creating a file-sharing platform, were really scared after seeing what happened with Napster and that whole wave. I would always hear a lot of VCs say “well, we need to know that this is legally defensible before we do it.”
Now, we are in a wave of some companies taking the “come at me bro” approach of trying not to break current regulations. People always say that for Uber to build that big of a company, for instance, they had to be that aggressive and combative, but not all companies have taken the same path that they’ve taken. Other companies have said we want to work with the government to change the law and be as conciliatory as possible. It’s really similar to Spotify vs. Napster. Spotify was the first music company that said “we want to work with the industry” and did not try to villainize it—it was the first startup that didn’t say “we are going to raise $40 million and bleed you dry.” I think we are in general seeing companies saying we are going to build a business and government will react: the thinking is that with the mobile wave, everyone is going to want it, we will get so big so fast that government will have to follow. Within that way of thinking though I think there are still different tactics on how to achieve that.
What has been your personal experience like as a female founder? In your view what are some of the most important gender issues that face Silicon Valley?
In starting Pando, I certainly didn’t experience any overt sexism fundraising or hiring or anything like that. I think entrepreneurship is one of those things where it’s such a crazy thing to do that unless you’re Evan Williams or someone who has done it before, everyone is going to be looking for your weakness. Everyone has an endemic weakness that could be used against them. Are they not technical? Are they too old? Any of those could be the prejudice. Everyone is looking for a prejudice and the best entrepreneurs are people who aren’t held back by those things. So sometimes I think being counted out for gender or race could make you a lot stronger as an entrepreneur. Entrepreneurship is something you take, it’s not something you look for someone to give you. I think there is a difference in sexism in entrepreneurship in particular, and sexism in big-company, Fortune 500 management jobs where there is a glass ceiling and you are relying on someone else to move up the ranks.
When I was raising money for Pando I was on maternity leave and I didn’t have a nanny, so I literally took a baby with me fundraising, to meetings with VCs. I was a solo founder, and other than my 3-month old son, there was no other man in the room. There was no technical cofounder, no one who had built a business before, there were none of those factors that VCs typically look for. My round was oversubscribed by really amazing investors and no one was freaked out. One of the reasons why businesspeople feel like they can get away with sexisim is that women might have children and get distracted, and the work it takes to raise a child is hard. I literally had a baby with me in the meetings, and we still got funding. I do think that sometimes the sexism in the Valley can be overstated, but I do think there is still a lot of nasty rhetoric where lot of horrible stuff has gotten exposed. At the end of the day it’s hard to parse from the outside the question of whether the Valley is getting better or worse for women.
I think we are in this very weird place where there are more opportunities for women than there ever have been before, partly because many of the types of companies that are being built are mass consumer products that are selling to women. There are a lot of studies that have said that women are the primary decisionmakers of these types of decisions in the home when it comes to commerce, so there is recognition that you need women around the table. I think there is more corporate pressure too with all the big companies having to open up their diversity numbers to have women on boards and to have women involved. The needs of Silicon Valley companies are very nuanced now. You need people who are very good at marketing, good at advertising and good at other skillsets other than just pure building of algorithms and technology.
There are a lot more opportunities, but I think there is more overt sexism than I’ve seen in a very long time. I think we are in a situation where it’s both getting better and worse for women in in the Valley at the same time. We’ve had entrepreneurs say horrible things about women, there being very few repercussions, and VCs standing on stage saying how much they want to support women and invest in women, but who have portfolio companies saying and doing awful things. I’m not saying that entrepreneurs should be punished for everything they’ve said or done in their past—should Evan Spiegel be fired for e-mails he sent in college when he is building an amazing business in Snapchat? I don’t think that answer is a “yes,” but I do think there is a lot of hypocrisy. If there are people in the industry saying that first and foremost we need to be inclusive as a culture (which there are), then women need to really see that.
In general, I’ve never been someone that has been sympathetic to the view that there has been some big conspiracy of white male gatekeepers in Silicon Valley who are keeping everyone out. I think Silicon Valley is certainly not a meritocracy, but it is certainly more so than other industries. Coming from the South for instance, I’ve experienced way more sexism in the South. It depends on if you are trying to climb a corporate ladder and be the first female CEO of Google, or you are trying to be on boards, or you are trying to start your own business. If you are trying to start your own business and you’re a woman, the bar is probably slightly higher in that you need more experience and more connections to get there.
It sounds like there is a lot of work to be done at various levels. What types of change do you think would be the most effective or most important? Should more mature companies lead, where should the seeds of change be planted?
There is a role where large companies need to take leadership positions, because startups are going to say that if big companies can’t even do this, how can you expect us to do this with our skeleton budgets and our focus issues? We can’t take time to prioritize diversity, we can’t even find people we can afford, let alone prioritize diversity. Big companies have more resources and there is pretty much no excuse for big companies. Aileen Lee had a really great proposal—we would go in and do audits of companies on how female-friendly they are. It wouldn’t be just looking at the numbers but looking at a lot of other factors: retention, advancement, salaries, workplace culture. We would talk to women and ask how they feel being in those organizations, and come up with a “better business bureau” type score where you would feel like companies have been vetted. I don’t think it’s enough saying “well, there are this many women working in these jobs” because you don’t know if companies have found the right person. You certainly don’t want there to be tokenism among women, the idea that women are getting jobs just because they’re women. I think it would be great to have some way of really evaluating how the companies that are taking a leadership role in this are doing, by examining deeper metrics than just the number of women physically there.
I’ve often told people that you are like superwoman, running your own company, writing articles, doing live interviews, hosting conferences, traveling, raising two kids. What do you do to stay balanced and what are some of the things that you do regularly?
It’s funny because my kids have these Fisher-Price superheros, and Eli, my son, always refers to the one that looks like Wonder Woman as “mommy.” I think it’s probably just because she has dark hair, but I like to take it as a broader compliment than that!
I do a lot of things. For one, I just trust a lot of people and delegate. You just have to get past the idea that you have to control everything, either in your own company or in your personal life, and you have to find people that you can really trust. Feel ok about leaning on them. It takes a village to get me through the day. The most important things to me are building Pando into a great company and raising two amazing children. There are aspects of both of those things that only I can do, and then there are aspects where I’m not the only person. With motherhood, there are things like taking my kids to get haircuts—some mothers feel like if they miss the first haircut that’s the end of the world. That to me is not the most important thing—I want to be there to rock them every night, I want to be able to drop them off at school, I want to be able to go to the Thanksgiving recital, but there are certain elements that I don’t feel like I must be a part of. And same with Pando, I completely turned my schedule over to my assistant Kathleen, and my assistant and my nanny Megan talk every day. Kathleen plans my calendar and I know that anything in my calendar has childcare taken care of, and I don’t need to worry about that. The night before each day, I get an e-mail from Kathleen that lays out everything I’m doing the next day, and until I read that e-mail, I have absolutely no idea. So I live very much by what do I need to do right now, because I have total trust that Kathleen and Megan have covered every element of that. I know that I can get to every meeting and they are prioritized correctly. So I think the key is to have a lot of trust in others.
The big bottleneck with Pando early on was that I was running the business and I was running editorial, and those are two really all-encompassing jobs. The danger was I would retreat to editorial because it was what I knew, and the business side would really suffer. And I couldn’t delegate very well on the business side because I didn’t understand the business side very well since I had never built a company before. I think the big turning point professionally was when we acquired NSFW because I had sort of this co-founder that came in a couple years later and who I could completely trust in editorial, which allowed me to shift to running the business. So I basically have, between Megan and Kathleen and Michael Carney, David Holmes, and Paul Carr as my business partner, five people in my life who I have complete 100% trust in, and I can focus on the things that only I can do, and know that everything else will get taken care of.
And the other thing is I just go by my gut constantly. There are mornings when—this morning is a great example—where your gut tells you to do things a different way from how they’ve been planned. I got up early and worked out, and Megan called me and said Eli is really sad. He’s not having a fit, and he’s not acting up, but he just keeps telling me he’s sad. And that he wants to see mommy. There are lots of mornings when he is sad and he wants mommy to take him to school, and I say I can’t, I have to go to work. But then there are certain days when you feel like no, he just needs that today, and so I rushed home and I took the 30 minutes to take him to school even though I wasn’t planning on it, and I put other stuff off. A lot of it is that the same situation can present itself two days in a row, and I’ll have a different reaction to it because there are just times when your kids really need you. And if there are moments when Pando really needs me, and the kids really need me at the same time, I’m always going to pick the kids, because each moment of the kids’ life—they’re only 3 and a half exactly that one day—I only have so many times to rock them every night. Whereas we have decades to build Pando. And if I have to build Pando a little slower so that I can make sure that I am doing right by my family, then I am going to take that choice. I know that is a really unpopular view in the Valley, but I also think you build a more stable business that way, which I really think is healthier.
I also work out a lot. I’m a stress exerciser. I literally exercise about 9 times a week, borderline insane. I do other productivity tricks, like I make sure I rock the kids every night except Mondays, and Mondays I just work really late. I clear the decks that night and it’s great because it’s the night I know that there is no one waiting for me, or that I won't feel guilty for not doing something, and so I just work as late as I need to on Mondays. And then on the weekends I’m pretty much a mom unless someone really needs me. I usually don’t even open my laptop on the weekends which again is unlike how a lot of first generation blogs build themselves, but I think it gives me distance and perspective and hopefully makes Pando something that we can build for the long term.
From your years covering Silicon Valley and now having started your own company, what advice can you impart?
Trust your gut. In terms of work-life balance and everything else, I feel like a lot of women are always looking for a plan or a blueprint to follow, and I think every woman’s journey is so different. Every woman is a different kind of mother, everyone has a different definition of what “having it all” is. For some women having it all might be being able to take a month-long vacation every year, or having a nice car. That’s not my personal definition. Because everyone’s definition of “having it all” is so intrinsically different, I feel like everyone’s path to getting there is also so intrinsically different. I worry that a lot of women try to read Lean In, or look at what Marissa’s doing and they try to over-extrapolate. They think “well Marissa didn’t take maternity leave so I’m not going to take maternity leave.” No one should make that decision for you. Women need to have the internal fortitude to say “no, I need this time with my baby, I’m going to take maternity leave.” Or there is that whole scandal about whether insurance is covering egg freezing and whether it is implicitly encouraging women to make certain choices. Women are going to have to at some point take ownership of these issues. I think the media needs to understand that women are stronger than that, and women are going to do what’s best for their families and their careers and they’re not going to be freaked out by what some other high profile woman is doing. By the same token, women need to trust themselves more and trust their own gut more and not look for the answers elsewhere. As mothers, for instance, your body knows how to do everything when you’re growing a baby—you don’t have to tell it, it just knows. And similarly, with all the other acts of mothering you have all the answers inside you, you just have to trust yourself, and a lot of women aren’t raised to believe that they can trust themselves, trust their gut, and trust their judgment.
I think the same goes true for building a company as a woman and everything else. Don’t be afraid to do things your own way. With Pando, we have taken the tact that the most important thing to us is not going out of business because we think the kind of journalism we are doing is vitally important to the world. That may mean we have to grow smaller, and not lose control of the company for obvious reasons. That means we can’t raise as much money as other companies, can’t hire as fast, and can’t spend as much money on Facebook ads to get more eyeballs on pages immediately. There are a lot of ways that all this hampers our growth, but we think that in 10-12 years, we are going to be a very Vice-like story, where people think, how did this huge thing that we thought was this really small, niche vertical publication suddenly become this hugely interesting company? It’s not lost on me that The Huffington Post, which had a billion page views—huge mass numbers—was sold for $300 million, and Vice, which has nowhere near that and speaks to a very narrow audience, but very deeply and endemically, and delivers branded marketing for advertisers in a unique way in order to reach that audience, is now worth multiple billions. And I think it’s a playbook that people discount-discount-discount because it takes forever to build a media brand, but everyone at our company is totally fine if we just get to do this job, make good salaries and never sell a share of stock. It’s truly not about any kind of exit. I think that’s hard for people in the Valley to understand, but as long as we know that and feel that, we’re fine being misunderstood by a lot of people.
If you are thinking about starting your own company (or even as a general matter), prioritize people you can trust over people who are big names, or people who you feel like having them associated with your company will do something for you. All of those things can be good for getting press releases or getting additional investors, or maybe finding talent for your team or whatever else, but it’s a horrible feeling when things go sideways and there is someone on your team who doesn’t really have your back. It’s really scary to feel like there are people on your board or management team that you can’t 100% trust. It’s so much better to have someone who is maybe a B or C level VC, or someone who is great but isn’t at a top-5 firm, but is someone that you know will always have your back.