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It Ain't Easy Being Queen

Sarah Lacy was supposed to rule the tech-media blogosphere. But there have been a few glitches along the way.

Sarah Lacy never even talks about free time anymore. Her upstart tech blog, PandoDaily, has overtaken every crevice of her home, her brain, and her life. So, naturally, the three hours she carves out of an insanely busy Monday in mid-June to try on flouncy, tight-bodiced, 18th-century French gowns at a San Mateo costume shop is for work, not fun.

     Lacy has a coveted invitation to Yammer CEO David Sacks’s 40th-birthday fete, at the Fleur de Lys mansion in Los Angeles, and his period attire requirements are very specific. In addition to her own outfit, Lacy’s in charge of her husband, Geoff’s, costume; she’s even had her assistant make a lace cravat for him, complete with a video on how to tie it. Getting to the party promises to be no less complicated. Lacy, her one-year-old, Eli, and her 70-hour-a-week nanny are flying to Las Vegas, where Geoff is working two weeks a month on a project with Zappos founder Tony Hsieh. From there, Lacy and her husband will hop a plane to Los Angeles. But a scheduling snafu means that she suddenly has to wedge in a round-trip back to San Francisco to interview Fab.com’s CEO at the Commonwealth Club. Meanwhile, her newest Pando hire, a guy who’s just arrived from Toronto, will be crashing at her modest Mission house/headquarters while she’s away. Lacy deadpans, “I hope he’s not a jewel thief.”

     Discussing the logistics a few days before the party, Lacy—a curvy brunette with an intermittent Southern accent, whom Gawker once called “the hottest reporter in the tech world, ever”—looks frazzled but sounds genuinely excited. In tech media, which is booming every bit as much as the industry it covers, success hinges on a blogger’s ability to be in the scene, not just reporting on it. Lacy has made her journalism career off being an insider—rubbing elbows with Mark Zuckerberg, lunching with the PayPal Mafia’s billionaire investors, and playing a central role at Michael Arrington’s TechCrunch, the groundbreaking blog that turned an unsexy corner of the trade press into a hugely competitive (if shamelessly geeky) pop-culture obsession. “Technology is that cultural thing that defines this generation,” Lacy says. “It’s like the way people followed bands in the early days of Rolling Stone and felt like they were understanding the voice of the generation.” Her goal as PandoDaily’s CEO is to provide a clearer window into that culture than anyone else—by which she means a slew of competitors including the Verge, the Next Web, AllthingsD, GigaOM, VentureBeat, Business Insider, Wired.com, and the still-mighty TechCrunch.

     But in a scene as crammed and cutthroat as the current iteration of Silicon Valley, every journalistic opportunity is a potential ethical minefield. Sacks’s “Let Him Eat Cake” party proves to be no different. The alterations on Lacy’s dress aren’t even done when rumors begin swirling that Microsoft is buying Yammer, which is basically a Twitter for businesses, for $1.2 billion. What is nominally a birthday bash, it turns out, is actually a closing celebration in disguise.

[ADDITIONAL READING:  Silicon Valley According to Sarah Lacy]

     As the rumor mill churns, Lacy bangs out a PandoDaily post begging Sacks not to sell. After leading with a couple of paragraphs about the strictly off-the-record birthday party—followed by an aside in which she calls some unnamed Yammerers “grade-A morons” for unwittingly leaking news of the acquisition by talking too loudly at the Creamery, a techie-beloved café in SoMa—Lacy predicts that the messaging platform will go downhill under Microsoft ownership. “If Yammer sells,” she glibly warns, “it’ll take itself out of the game.”

     The next day, Lacy, sweating profusely under her massive garment bag, is just getting through airport security on her way to L.A. when she glances at her iPhone. All she can do is laugh. Sacks has sent an email flatly uninviting her. The party has gotten too much publicity, he claims; he no longer wants journalists there.

     As one wag on her 15-person Pando crew puts it, Lacy has suddenly gone from Marie Antoinette to Marie Ban-toinette. Not one to take a dis sitting down, she spins Sacks’s rescinded invitation as a form of validation. “When someone says, ‘Fuck you, you’re not invited to my party’—well, I know I’m doing my job.”
 

     In September 2011, Lacy was feeling the first twinges of labor with her son while simultaneously fielding desperate texts from Arrington, her friend, mentor, and boss. “Are you in sitting on the couch, drinking tea kind of labor; or screaming, blood all over the walls kind of labor?” he messaged. “Because I need to talk to you.” Arrington was making a last-ditch effort to buy back his own baby, TechCrunch, which he had sold a year earlier to AOL for a rumored $25 million, only to watch the relationship implode as questions arose about his launching a startup investment fund. Arrington’s plan failed, AOL dumped him, and not long afterward, Lacy quit too.

     As Arrington’s trusted protégé, she found no shortage of investors who were interested in backing her next blogging venture. This January, having raised $2.5 million in venture capital between breast feedings and diaper changes, she launched PandoDaily. (The name comes from an enormous tree system in Utah whose ancient roots keep shooting up new growth, regardless of fire or frost—a perfect metaphor for the Valley, Lacy says.) Arrington, an investor and member of her board, immediately proclaimed Pando “your new favorite news site.” Translation: The tech-media king had abdicated—long live the queen.

     Yet for all the potential of this new journalistic endeavor (one of the Valley’s buzziest commentators, backed by some of its biggest investors, and endorsed by the visionary who practically invented the insider tech blog), Pando’s first several months have been “a day-in, day-out slog,” Lacy admits. “There are days when I feel like we’re taking over the world, and days when I feel like we should just return all the money.”

     The most unexpected and demoralizing challenge has been TechCrunch itself. Far from disappearing into the void, the site has staged something of a revival, with Arrington announcing in April that he would once again play a high-profile role at the mega-successful conferences that are a key part of its brand. That, Arrington wrote in a missive on his personal blog, subsequently led Lacy to boot her onetime mentor off her board and out of her life. Arrington declined a request for an interview, emailing, “These just tend to be kicks to my groin, so no, not really interested in participating.” Lacy won’t say much on the matter either, except to admit that “the Mike thing wasn’t easy. We were really, really close friends.”

     Meanwhile, Lacy has had to face off against the same sort of conflicts that muddied Arrington’s tenure at TechCrunch. The VCs who are her backers (Ron Conway’s SV Angel, Marc Andreessen, Peter Thiel, Greylock, and Accel, to name just a few) also invest prolifically in the types of startups she covers, an overlapping of interests that has invited consistent heapings of scorn. “Tech Industry Buys Itself a Mouthpiece,” Gawker proclaimed at Pando’s launch, after which an SF Weekly blog post railed against the ongoing tech-media “circle jerk,” noting that “[Pando’s] owners, in one way or another, nearly always have some kind of financial stake in the ‘stories’ it runs…. [Its] lack of ethics is at the very core of its being.”

     Lacy’s standard defense is that because everyone’s an investor, she’s beholden to no one, which is true only to a point. What is more believable, given the streak of idealism that persists amid the blind spots, is her desire to create “a paradise for reporters,” a sustainable platform for tech coverage that will still be a leading industry player in a decade or two. “Sarah wants to produce high-quality journalism that is an important voice in the Valley,” says Margit Wennmachers, an Andreessen Horwitz partner (conflict of interest duly noted). “Her belief is if she does that well, there will be a way to monetize that.”

     But to do that, Lacy has to buck a lot of the tech blogosphere’s most insidious trends—half-baked gossip masquerading as news; sourcing from Twitter instead of humans; every-other-minute posts aimed at driving up page views and ad rates and jacking up relevancy rankings on Techmeme’s closely watched Leaderboard. “I think we have advantages that a blog like TechCrunch doesn’t have,” Lacy rationalizes. “They have to defend being No. 1 on Techmeme at all costs.” Lacy has no such worry: PandoDaily’s Leaderboard ranking was in the high 20s through early summer, but by early September it had slipped to No. 38.
 

     A successful startup “isn’t something someone hands you on a silver platter,” Lacy wrote earlier this year after being asked to give a talk on “momtrepreneurs.” “The roots of Silicon Valley are full of stories of immigrants and minority groups who experienced bigotry and made it anyway. Why should women be any different?” It’s not lost on Lacy that the hurdles she’s facing with PandoDaily are only heightened by her family situation: a husband who’s away half the time, a one-year-old clamoring for attention, and another baby due in April. And yet, as she wrote in her momtrepreneurs post, “The thought I have most days: This is not as hard as I thought it’d be.” She sees a kindred spirit in new Yahoo chief Marissa Mayer, who has refused to put her ambitions on hold just because she’s pregnant, and she likes that Yahoo— screwed up in so many other ways—hasn’t expected Mayer to stand down. “I feel like people always see pregnant women in this country as disabled, and it really irritates me,” Lacy says. “Pregnant women are among the most resilient people on earth.”

     Lacy, 36, got her start as a business reporter in her native Memphis, “a city of people hustling, just trying to get by,” she says, “an underdog city.” At the lowly San Jose Business Journal, where she went to work in 1999, “no one would invite her to anything—no one cared,” recalls Wennmachers, who was a marketing executive back then. “But she worked late and she got up early, met the people, did the stories. She was very entrepreneurial.”

     Lacy first crossed paths with Arrington at a conference in the mid-2000s. She reminded him, he has said, of one of those wisecracking reporter gals in “a black-and-white movie [with] a press card stuck in her fedora,” who nonetheless “really understood what makes Silicon Valley tick.” Lacy viewed journalism like a Survivor quest: “You have to use whatever you’ve got to fight your way out.” (Quipped another reporter once: “She leads with her breasts.”) By 2004 she had “clawed” her way to Business Week, eventually landing her own “Valley Girl” column.

     It helped that Lacy completely identified with the innovators she covered. “I’m not really comfortable unless there’s some kind of risk—either physical or mental,” she says. She was great at spotting talent and trends, a knack that led to one of her biggest coups: a 2006 cover story on Kevin Rose, the 29-year-old founder of Digg, under the headline “How This Kid Made $60 Million in 18 Months.” The piece is sometimes cited as a seminal moment in Web 2.0, heralding the arrival of a new generation of geek geniuses. It also caused Lacy no end of grief. “People freaked out: ‘Oh my God, you’re inciting another bubble,’ they said. I’d never had people whom I’d never met come at me with such hatred. I didn’t want to leave the house.”

     Her first book, Once You’re Lucky, Twice You’re Good, about the 2.0 startup scene, resulted in more pissed-off people. “I wrote what I felt was the truth,” she says. “Some of the things [the Digg guys] were most upset about were things they had said. [But] I have it on tape, there’s no disputing it. Kevin and I didn’t talk for a while.” She adds, “To me, this is the central angst of being a journalist in the Valley. You want every relationship to be a little off-kilter”—meaning not a real friendship, but not all business, either—“and that’s a hard place to live in.”

     But Lacy (Twitter handle @Sarahcuda, personal website PredictablyRabid) had a reputation for sometimes veering too far off-kilter. Take the incident almost every detractor brings up, her keynote interview of Mark Zuckerberg at the 2008 South by Southwest Interactive Conference, which was widely panned as a giggly, flirty, self-absorbed disaster (sample reviews: “one of the worst things in Internet history”; “she made women in tech look like we sleep our way to the top”). “Seriously, screw all you guys,” Lacy tweeted to her critics, but she also took their snark to heart. “It made me keenly aware that, even if you are good at interviewing people, even if it’s someone really interesting, you have to be in a certain mode—you can’t ever take it for granted. It’s made me more paranoid, and I think being paranoid is good.”
 

     Another key lesson she’s learned from her 13 years in the Valley is that a website is never enough. Just as Arrington used his TechCrunch Disrupt Conference to forge a community of successful entrepreneurs and wannabes, Lacy has made a PandoMonthly speaker series a key part of her vision (and has redeemed her reputation as an interviewer in the process). The price of entry is a ramen-budget $20, but the past year’s lineup is worth billions: Facebook cofounder Dustin Moscovitz; Zynga’s Mark Pincus; VCs Peter Thiel, Reid Hoffman, and Ben Horowitz; and Matt Mullenweg of WordPress (i.e., all Lacy’s buddies). “These aren’t people who take [just] any speaking engagement,” Wennmachers notes.

     Yet the PandoDaily site itself has been something of a disappointment. The spare, random-seeming collection of posts (a brief on Jivox’s new music downloads, a riff on Politify’s relaunch, the occasional 1,500-word think piece) evokes a department store closeout sale: some gems, but overall the offerings are unsatisfyingly thin. Some days nearly half the posts are snippets of conversation from the previous night’s PandoMonthly talk. Though there are laudable attempts to break out of the Valley bubble and cover international tech news, the overall feel is, frankly, amateurish, with neither the gravitas nor the edge to stir up a rabid community of commenters. “There’s no larger-than-life personality stamping its mark on everything,” says Milo Yiannopoulos of the London-based tech blog The Kernel. “I don’t see the visionary editorial leadership that drives great, addictive blogs.”

     Lacy’s own posts, which account for only 10 to 15 percent of those on the site, have plenty of personality and smart analysis, but not a lot of filters. The occasional video spots that she does with her fellow TechCrunch alum Paul Carr can seem more self-indulgent than self-deprecating. (“I decided I’m going to be more proactive about my need to lose weight instead of just bitching about it. I have a whole closet of clothes I don’t fit into…. Jesus Christ, I think we’ve veered into my own personal therapy.”) Even Pando’s chairman, Wired Digital cofounder Andrew Anker, finds this grating, though he also points out that “ranting from the gut…makes really great media.” Yiannopoulos is less forgiving. “I don’t think she’s good at navigating the space between public and private personas,” he says. “I think she misjudges what to put out there.”
 

     By 9:30 a.m., Lacy’s single-floor row house, on Capp Street near 19th Street, is already an obstacle course of laptop cords and half-full coffee cups. Depending on the day, up to 15 Pando staffers and freelancers sit on every available chair, pounding on keyboards and jabbering on cell phones, stepping over the baby gate to get to the one bathroom, while the nanny plays with Eli in the kitchen. Lacy bops in and out, writing headlines, racing to VC meetings in the Valley and back to SoMa to visit a startup, flying off to New York or Los Angeles for PandoMonthly talks. She’s frequently still at her computer in the wee hours, when she finally has the solitude she needs to write. The fact that Geoff is away half of the time makes life both easier and more difficult. If he were in town more she’d have more help, but the Pando staff would have to go someplace else.

     On this Monday, Lacy starts the morning with a Zumba class in her living room, hair piled high, hips rolling, alongside three employees. “It’s [my assistant] Oni’s solution to my freaking out about losing the baby weight,” she shouts over the music; then she moans as the maracas kick in, “Oh no, the single, double, double.” Some folks from British Airways are coming by to pitch a partnership in hopes of groovifying the airline’s image, so she ducks out early to shower, returning barefoot with a headful of curlers. Meanwhile, Amanda, a Stanford grad who joined Pando in March, is venting her frustration. As one song abruptly ends, she jabs her hand in the air and yells, “Ay! Take that, TechCrunch!”

     Lacy’s own way of punching back is to try to fundamentally change the tech-blog culture that her ex-employer-turned-competitor helped create. “Most bloggers right now sit in a room, find stuff on the web, and rewrite press releases to be first on a story,” she says. “Nowadays, you’re a superstar reporter if you call one source.” At Pando, she’s set the bar higher. “You need a unique take on something. You need a minimum of two sources—in a reported story, it goes without saying, but also for an opinion piece.”

     She’s wary of Pando becoming a cult of personality, even if the result is that, for the moment, the site lacks a unifying focus and voice. “Once Mike was gone,” Lacy says, “it was clear how much TechCrunch relied on him. I don’t want that here.” With Baby No. 2 due to arrive next spring, creating a sustainable organization is a major priority. “I need to be able to be away from the blog for a week or two at a time and know that it can survive.”

     But building the right team has been a challenge. “A lot of what we’ve had to do is discover talent that wasn’t in the tech blogosphere and help develop it,” she says. When someone quits—as Amanda did in August—Lacy dreams of being able to say, “Oh, I’ll just go to the ‘awesome reporter store.’” (Although she did recently snag as an editor Adam Penenberg, the hotshot journalist who uncovered Stephen Glass’s string of fabricated stories at the New Republic.) Meanwhile, she has a site redesign and a long list of other to-dos vying for her attention. “We’re only doing 5 percent of what we want,” she says. “What’s gone by the wayside for me is breaking news. The writer in me is letting the editor in me down.”

     Which is a shame, because when Lacy is on, she’s dynamite. Case in point: the Yammer kerfuffle. Two months after her post arguing that behemoths like Microsoft kill innovators like Yammer, Sacks (his $1.2 billion deal safely closed) went on Facebook with his own tirade, conceding the same point. “I think silicon valley [sic] as we know it may be coming to an end,” he wrote.

     But any temptation Lacy might have felt to gloat was lost when the story broke on TechCrunch, not PandoDaily. When she finally weighed in—more than two days after Sacks’s post—her words seemed almost plaintive. “What makes the irrationality of Silicon Valley so powerful is that people in the thick of it have no concept that they’re being irrational. Every entrepreneur thinks his startup will make it.... Over and over again you hear this from entrepreneurs: If we’d had any idea what we were taking on, we never would have started this company.”

     On the phone a few days later, Lacy refuses to give up on her own irrational dreams. Starting Pando with a baby in her arms might have seemed “crazy,” she concedes. But it was “something the Valley really needed.” She still believes in the importance of Pando’s mission. “I just hunker down and raise both”—her child and her blog— “at the same time. It’s sort of like raising twins.”

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For Lacy's take on five of this year's biggest stories in tech, read on.