Struggling to Sustain Investigative Journalism

At The Atlantic, senior editor Derek Thompson recently interviewed Steve Blank, “a professor at Berkeley and Stanford and serial entrepreneur from Silicon Valley”, about the implications of the Facebook IPO for Silicon valley.

The Menlo Park company went public with an opening valuation north of $100 billion, and I expected Blank to use the moment to celebrate Silicon Valley’s innovation and success. Instead, he said the IPO was “the beginning of the end of the Valley as we know it.”

Blank’s argument is simple. Rather than fund those things that take time to bring to market, venture capitalists are likely to see the Facebook IPO as a call to double down on social media investments, with the expectation that the payoff will come faster and with much better multiples.

In Blank’s estimation, the losers are longer-term investments in science, engineering and medicine. As he tells Derek Thompson:

“If you’re a VC firm, you’re tossing out your life science division. All of that stuff is hard and the returns take forever. Look at social media. It’s not hard, and the returns are quick.”

I don’t know enough about Silicon Valley to fully evaluate Blank’s claims, but his argument parallels the lament for sustained investigative journalism that newspapers seem challenged to make these days. When demands for revenue are immediate, newspapers (and other media properties) understandably pursue things that drive sales and traffic.

Stories like those behind the Pentagon Papers, Watergate, Iran-Contra or the missing WMDs take time and meticulous reporting to bring to the public. If our investment strategies can’t sustain them, then we’re left with the media equivalents of “federal government grants, and the NIH, and Musk, and Google.”

Blank says he doesn’t have a fix for Silicon Valley, and I don’t have a business model that protects investigative journalism. I’ll see if I can change that this year. Whatever the answer, it probably starts with us, not the government.

Brian O'Leary

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.