Cognito caught up with former Bloomberg Market Structure journalist and now Future of Finance reporter at Quartz, John Detrixhe. We talked about the future of the sector and financial journalism, and what he is really looking for in a story.
OM: Can you tell me about Quartz. What’s the editorial agenda?
JD: We aim for a global audience. You have publications like The Atlantic, which is perhaps explaining America to America, or even America to the rest of the world. I would say Quartz has a more global perspective. I think what Quartz is also trying to do is arm you with interesting ideas; finding the sweet spot between what is interesting and important.
OM: What’s your day-to-day beat as Future of Finance reporter?
JD: My typical ‘Quartz day’ is a combination of balancing my work on short articles with research on longer features. I plant a lot of seeds, and I’m speaking to new people, thinking of fresh ideas and hopefully these are maturing at different times. What I’m trying to avoid is commoditised news. If I’m covering something everyone else is, and writing in the same way, then it may not be useful for readers. The goal is to write about it differently, provide a new perspective.
OM: What are you looking for from PRs and how do you think the relationship should work best?
JD: At Quartz right now, I get a lot of pitches, maybe a 100 emails a day, so I can’t always read everything. Patience is key. It’s helpful if a PR knows what I’m writing about and that gives me confidence that the pitch is relevant.
OM: How has financial journalism changed in the last 10 years?
JD: The change has been Facebook and Google – they’ve sucked a lot of the advertising revenue out of the industry. There is a lot more competition now. You’ve got large players like Bloomberg that slowly pick up the innovations of the smaller media companies.
The New York Times apparently recently hit $1 billion in subscriber revenue, which is really impressive. But I wonder how much of that is subscribers signing up for the content and how much is a political reaction to the Trump election? My guess is that some of their traction is down to a kind of philanthropy.
OM: I want to turn to your move from Bloomberg to Quartz last year. Your first piece after you left was on Bloomberg. What does the future look like for the firm?
JD: While it’s going to remain important for a really long time, I think the company needs to figure out new ways to generate revenue. That said, I don’t think anyone is going to ‘out Bloomberg’ the Bloomberg. These things are sticky and monopolistic.
Yet, if they don’t find new ways to make money in five or ten years, then they’re going to have a problem. Looking to the future, there will be fewer traders doing what they do now. More processes will be automated and competitors are posing an increasing threat. And I don’t think any of this is lost on them.
OM: On the subject of America’s tech giants. Much has been made of Amazon’s move into financial technology with Amazon Web Services (AWS) particularly. Does this have a role in the future of finance, or are they simply overreaching?
JD: What I’m hearing from my colleagues back from Davos is that big tech knows regulators are coming for them. I got the sense that some are pre-empting this a bit – you know –making offers to regulate themselves. I don’t know if you’ll see anti-trust regulations just yet, but these are real issues. I think regulators are far more understanding of ‘home-grown’ companies than they are foreign ones. If Amazon were a French company operating in the U.S., they’d probably be much more regulated by now.
Looking at their push into financial services, they will probably make some gains in areas like payments but I don’t how much luck they’re going to have becoming an ‘Ant Financial’. The regulatory environments are too different.
OM: Blockchain, artificial intelligence (AI) and the Cloud are never far from the headlines. Which one of these has the greatest potential and which is the most hyped?
JD: I feel like blockchain is the most overhyped. Just because the use-cases, while really important and transformative for some market plumbing, are narrower. I think it’s different with AI. When you use Alexa, it is amazing what it can do sometimes, but the limitations are also still frustrating.
It reminds me of the early dot com days using modems, when you’re sitting there thinking, this is really cool, but waiting for it to load for ages. It’s obviously not quite there yet. But if AI gets anywhere close to where experts say it can, that is going to be revolutionary.
OM: You’ve written about tech valuations a lot lately. What’s your evaluation of the market?
JD: The whole private funding market is probably overvalued. There’s too much money there and it will be interesting to see what happens when funding starts to dry up, whenever it is that takes place. I’ll be interested in seeing what happens between the public and private funding market once private sources of funding start to dry up a little.
There are plenty of conversations being had now about the viability of public markets when there is so much capital in the private funding market, like venture capital, private equity and now ICOs. But we don’t really live in a normal world right now. Monetary policy is nothing close to normal.
OM: Are ICOs a sustainable option for start-up funding or just a fad?
JD: There are two sides to this. A lot of people will say that private funding locks most people out of investing in innovative companies before the IPO stage. But on the other hand, I don’t think ordinary investors really need access to ICOs.
We’ve already figured out you generally can’t beat the market by investing in individual stocks, that’s why people, especially ordinary retail investors, spread out their risk through ETF products. But now with ICO funded start-ups and the surrounding hype, people seem to have forgotten this….
OM: Before we wrap up, can you tell us what story you’ve been most proud of so far?
JD: It’s a tough question. A piece I liked was on XTX Markets, an emerging trading firm. That was cool because they were new, largely unknown and really interesting. There was nothing commoditised about it. With Quartz, we had an interview with Robert Shiller about bitcoin that got some attention. It was the right interview at the right time.
Oliver Mann is an Account Manager at Cognito in London