Jack & Coke, page 14
Mr. Ranger, there are two motivations in this world: fear and money. As you consider our offer, please know that next time we will not provide you with a choice.
Everyone in the room was quiet. The reality of the letter was becoming clear. Some suspected the story that was in question. A proposed topic was making its rounds on Flint’s homepage and gaining support to the point where it was getting noticed in other mainstream news outlets. It was about the persistence of organized crime in certain American cities.
Jack spoke again. He held the paper in his right hand up for everyone to see. “Ladies and gentleman this is a threat. But I have news for Mr. ‘will not provide you with a choice’—we are not going anywhere and we will not be intimidated.”
Jack raised his voice, “Effective immediately, whichever journalist takes up this story will have the option to publish under my name.”
Above the portraits was a quote, now painted on the wall. Jack began speaking again pointing at the quote. “This is our mantra; this is why we do what we do. Flint Media will live and die by the people in this room. We will not fail if we remember why we are here.”
Jack stopped before repeating the quote that everyone had been staring at. “Sunlight is the best disinfectant.”
With his left hand, Jack reached into his pocket and pulled out the same lighter he had used so long ago. He held the flame to the letter until it caught. The first dancing fits of fire flowed upwards. For a brief moment, everyone stared as Jack held up the burning letter. He let go and watched it fall, half consumed by flames, to the floor. Jack stepped down from his chair and walked away. The rest stood watching the paper turn to smoke.
CHAPTER 52
Months passed. The organized crime story had been a success. There were no more cryptic notes aimed at Jack’s personal well-being and the general media had held the story up as a supreme act of journalism. Things were going well for Flint. Everything was going well except for the fact that they didn’t make enough money to pay their bills.
187 days.
That was Sean’s official count until cash flow became a big problem. And by big problem, Sean meant the sort of problem where you couldn’t make payroll, and you asked your staff to accept IOUs instead of paychecks. Flint Media was burning money. Hiring developers, hiring reporters, and just about everything else cost money; a lot of money.
Sean and Jack had discussed their options a number of times. The money that they thought they would raise wasn’t as ‘locked down’ as they had hoped. Ramping up the profit-making engine was always a possibility. It was possible to turn Flint profitable, but it would come at the cost of their long-term future. They would have to slash the workforce and close their most interesting projects. Yes, they could make profits this year, but it would mean they would be irrelevant in two years. Profitable, but irrelevant was not an option. They could take out loans, but the interest rates for cash-bleeding internet companies was not cheap.
As a first response to the imminent crisis, Sean and Jack began making the rounds to the various hubs of startup capital across the states. Together they crisscrossed the country from California to New York, Massachusetts, and Chicago. They made their pitches, sold their dream, and hoped it would all work out.
The offices of the venture capitalists were far less opulent than Jack had anticipated. When he first started making the rounds with investors, he was surprised by the non-descript buildings, nice-but-not flashy offices, and the relatively standard boardrooms that they contained.
Jack and Sean strolled into one such office today. The meeting began just like any other. They shook hands, exchanged cards, and made small-talk. When Flint Media was still a nobody these meetings took on a very different vibe. Pitching a VC was a bit like playing basketball; you must be mindful of the shot clock. In the early days, they were lucky if they got 10 minutes—if they even got a meeting at all. But now, Flint Media was somewhat of a known commodity. Meetings are a lot easier to get when you are a household name—even if you are a household name that doesn’t make any money.
The presentation began. It was a two-man pitch-team. Jack led off and spelled out the vision. Sean followed with the numbers: readership, influence, growth, and of course money. Jack swooped in and drove the message home.
“I like your team. I’m a fan of what you’ve done.”
A younger man in jeans and a blazer sat tapping his hands on the desk. He was mulling over his reaction.
“There’s a chemistry with you two. I like that.”
Sean and Jack nodded.
Another voice, this time from a woman in a checkered blouse. “The growth is impressive. What’s your hiring plan look like in the next six months?”
The discourse continued. The meetings were friendlier now, but friendly or not, this type of crowd didn’t waste time with easy questions.
“Honestly, this would drive me crazy. There’s no accountability. You say a story will take two months to complete and then it doesn’t see the light of day for half a year. It doesn’t seem like you’re very good at managing your team.”
Sean started to answer, but Jack put his hand on Sean’s shoulder and answered first.
“I get the frustration. It’s a tricky balance, but investigative work isn’t like manufacturing. You don’t know exactly how the story will end up. Schedules are good, but if you uncover something unexpected and meaningful you need to explore it.”
There was a pause as Jack searched for additional words.
“Look, Sean runs a tight ship on the ops side. Just ask anyone. Ask eFettro or check our books. It’s like clockwork. But we can’t run our investigative side like that. If you want great results you need to run it more like an R&D team. You need to pay smart people to explore and make mistakes. We give our journalists the reign to do the best job possible, and sometimes that means pushing out deadlines.”
There was soft laughter. The VCs had heard the ‘special snowflake’ argument before. It was standard practice for companies to coddle their ‘creative geniuses.’ Whether they are software engineers, creative designers, or in this case journalists, companies bent over backwards to keep those employees happy. But there was a balance that needed to be struck. Creativity must coincide with profits at some point.
The woman’s laugh was like a parent reflecting on the naiveté of a child.
A follow-up question. “So, tell me exactly what you need the money for.”
Sean took this question.
“To grow our subscriber base and to publish content more consistently.” He continued, “Right now, to keep costs down we have a core of full-time journalists that act as project leads and a pool of freelance journalists. We flex up and down, staffing each project with as many freelancers as the project lead needs. But to grow our subscription base, we need more content more often. The only way to do this is to bring on more full-time journalists and support staff, like developers, to scale the platform.”
A third put his pen down on the table. He had been taking notes. “It’s not for me guys. Sorry.”
The man in the jeans and blazer shook his head before asking another question.
“I didn’t see it in the deck. What’s your board structure right now? I assume eFettro has a seat?”
Jack responded. “It’s simple still. Just three so far. eFettro has one, seat and we have one seat for each of the founders.”
Jack motioned between himself and Sean.
“Got it. Small is good. If we came on we would need a seat, too. Obviously.”
Sean gave a nod. “Of course.”
The investor continued. “We’d probably push for an outside independent fifth director as well. You know… as a tiebreaker.”
Sean was visibly interested. “Tiebreakers are good. It sounds like we might be moving towards something?”
The investor adjusted his blazer. “I’m not sure. It’s interesting, but I just don’t like the smell of it. Why isn’t eFettro back in this deal?”
Sean rebutted, “We haven’t gone back to them because…”
The man waved his hand and interrupted Sean. “It’s cool. I get it. They’re bullies. I don’t want to be wrapped into another cap table with them anyways. Once is enough for me. How much of your soul did they take in exchange for the money?”
Jack stepped up. “None, it’s a good deal.”
“I smell a little desperation. Man, you’re either in bad shape, or they really screwed you over on the deal.”
Jack tried to continue but was caught off-guard by the comment.
The first investor chimed in. “Just don’t drop the soap… I mean ball… they’ll get ya.”
There was light-hearted laughing from those at the table who possessed the money. Jack spoke and addressed the third partner in the room. “Surely, you can appreciate what we’re doing here.”
There was a pause as the final partner leaned back in his chair. He was thinking.
“Mr. Ranger. Mr. Cosatiri. I admire what you’re doing. I really do. But the numbers just don’t add up for me. If companies could run on idealism, then I would invest. I’d probably dump the entire fund into Flint Media if that was the case. But idealism doesn’t fix cash flow.”
The meeting started and ended just like all the other ones before it.
It was a long flight back to New York City.
CHAPTER 53
There were 176 days of funding left in the Flint Media bank account.
“Rachel, I’m glad that you could fly out here on such short notice.”
Fresh from the airport, Rachel Warner walked into the Flint Media conference room trailing a small rolling suitcase behind her.
The usual pleasantries ensued. At the conference table were the four largest shareholders of Flint Media. Jack, Sean, Matt, and Rachel as the eFettro proxy.
“How are things at eFettro HQ?”
Rachel sipped water from her cup and smiled. She had a smile that was as infectious as it was devious.
In taking the investment from eFettro Ventures, Flint Media agreed to surrender both equity and a board seat. The board seat was currently occupied by Rachel. Jack liked Rachel. Perhaps, in a different context, they would be friends. She was personable, down to earth, and tactical—just like her business.
When she was younger, Rachel had climbed the ladder quickly at eFettro. Eventually, she was tapped to nurture its venture capital arm from its infancy and turn it into the juggernaut that it was today.
“So, to what do I owe the pleasure of changing my flight so that I have a stopover in New York City?”
Matt looked over to Sean. He was nervous.
Jack nodded. It was a risk they had discussed amongst each other. The headlines in the press would be great fanfare. The Flint Media employees would cheer. “Flint Media raises another X million dollars from tech giant eFettro.” But the founders knew the risk. Every dollar they took came with a string attached.
Rachel was nice enough. eFettro was keen on Flint Media.
Sean took the baton first. “We were holding out as long as we could, but we’re going to need a new capital infusion.”
Rachel’s eyebrows moved upwards in surprise. “Oh really?”
Jack followed up, “Doing what we’re trying to do is difficult. Journalism is old. You can’t reinvent it overnight.”
Rachel continued the silent thoughts in her head. Then she spoke. “You know I can’t do that, right?”
There was a pause in the room. No one was certain about the truth of that statement. It seemed like an easy out. Sean tried to make a rational appeal. “It’s really just about bridging our cash flow gap. We’re not constrained by opportunity; it’s just resources at this point.”
“How much do you need?”
Both of Sean’s hands were palms up on the table. “$30 million.”
“When do you need it by?”
Awkward silence. Jack bit his lower lip and shrugged his shoulders. Sean looked at Jack, Matt fidgeted. It was like a toddler who sheepishly told his mom that he’d broken the rules. No words, just facial expressions.
Rachel looked surprised. “It’s that bad?”
Sean just nodded. There was reluctance in Rachel’s body language.
It was Jack’s turn.
Jack thought back to the first time he had met Rachel. She had taken a leap of faith with Jack to bet on Flint Media and together they’d been on a wild ride. Rachel had been a great advisor along the way, she helped make partnerships, and she opened the right doors.
“Look, Rachel, what we’re trying to do takes time. This little cash flow thing… you can make it go away with the snap of a finger. It will let us make Flint Media the established player it deserves to be. We’re going to do for journalism what Airbnb did for travel and what Netflix did for movie lovers. The best journalists in the world aren’t going go to work for The New York Times. Rachel, they’re going to work for us.”
She wasn’t interested. Jack could see that. But he couldn’t let her walk out the door. Flint Media needed this too badly.
Jack stared across the table and looked at her directly in the eye. “Rachel, please.” His tone was low, he was serious and pleading. “Don’t let us lose what we’ve done. Don’t let everything we’ve done fizzle out.”
There was a sigh. She leaned back in her seat. Jack moved his hands to his face. The emotional tightrope is an exhausting line to walk.
“Okay. We can work something out, but it’s not going to be cheap. Jack, if you need this money so badly you’re going to need to really show us something.”
There was a pause in her words before continuing. “When eFettro doubles down, we don’t lose. We don’t want lifestyle businesses. We need 15x or 20x returns. Do you know what I mean?”
Jack wasn’t sure what she meant.
“We’ll make you a new deal but it’s going to be contingent on you showing me a better plan. This company needs to make twice the noise, twice as fast, and it needs to start making money.”
“Know this, Jack. If you take this deal I’m going to push you. eFettro is going to push you. You are going to have to grow up fast. Flint Media isn’t an idea anymore. It’s a business, and right now, it’s not a very good business.”
This was a challenge. But he didn’t have much of a choice in whether he could accept or deny it.
Jack exhaled and pushed his chair back. He stood up. “Thank you.” The words finished his long out breath.
Sean took the cue and stood as well. He extended his hand to shake Rachel’s.
As Rachel stood, she pulled out her phone to check the time. “Guys, look. I’m going to send you some new terms tonight. I don’t need an answer today, but this money won’t sit around past the end of the week.”
Sean answered. “Okay, we’ll let you know our thoughts, and then we can finalize.”
Rachel smiled. “Your thoughts? No, no. There won’t be any negotiating this time around.”
Jack’s ears perked up. He looked at Rachel. It was clear that she knew what he was thinking. The price was going to be steep.
“In the meantime, Jack, I’d suggest that you and your team think of ways to blow this thing out of the water and start breaking some bigger stories.”
CHAPTER 54
It was like the good old days. Jack and Sean both sat with glasses in their hands, leaning back, and talking about the future. Only this time around the chairs were replaced by bean bags, and the trusted surroundings of the college apartment were substituted for empty office space. It was late at Flint Media. It was dark outside, but the game room was unnervingly bright, flooded by the artificial fluorescence that only exists in the American office. A bottle of Jack Daniels was on the floor. It was mostly untouched; the CEO needed his wits about him tonight.
It seemed like every important decision between the two of them happened in a similar manner. Why break tradition?
Sean exhaled and leaned his neck back as if breathing towards the sky. His collared shirt was unbuttoned, his sleeves were rolled up, his hair was ruffled. Today had been a long day.
“That deal is rough.”
There was an affirmative sound from Jack. The details of what eFettro proposed were none too pretty. Rachel made good on her promise. The good news was that there was an additional $30 million in it for Flint Media. But the price was steep. Every dollar came with a contingency. The $30 million came at the price of another 15% of the company and an additional board seat. They made their displeasure known. They called, and they tried to negotiate the price down. But there was no room. eFettro would not budge. Rachel was a woman of her word.
Jack looked over at Sean. “Does it say who the new director is?”
Sean thumbed through the papers he had printed out and stopped on a page with a photograph and biography.
“Some guy named Dean Allen. Never heard of him. Apparently, he’s a big deal according to his bio.”
Jack forced a laugh. “I’m sure he’s smart.”
Jack kicked a soccer ball that had rolled near his feet. “So, do we take it?”
The ball bounced off the far wall and dribbled into the hallway.
Sean sipped his drink. “We don’t have much of a choice.”
Sean was right. They didn’t have much of a choice. How many pitches had they done? Too many to count. Jack swirled the amber liquid in his glass and watched it splash around the edges.
There was a certain inevitable truth before them. Sitting here in their glorified arcade only delayed what had to be done. “I started this so we didn’t have to answer to anyone, and here we are.”
“You can’t take dollars from the man and expect to run your own show.”
Jack looked at his friend. He raised his glass, and they both took a swig. “Here’s to that.”
But Jack wasn’t ready to give up just yet. There was still liquid in his glass, and he would postpone as long as he could.
“Hey man, even Zuckerberg owns less than 30% of Facebook.” Sean was right, as usual.
Something else was troubling Jack too.
