ONLINE BUSINESS

Kevin Rose of Digg: The Most Famous Man on the Internet

Digg founder Kevin Rose is having so much fun, you could almost miss the fact that he's setting himself up to be an Internet-age media mogul.

Gregg Segal

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From a distance, it looks like a rock concert: a gritty part of the Brooklyn, New York, waterfront, where dive bars and cavernous clubs provide a backdrop for an endless parade of girls in skinny jeans and guys piloting fixed-gear bikes. On an evening in June, trickling into one of the unmarked doorways is a massive throng of young people. They are loud, obscene, and drunk with enthusiasm -- clapping, hooting, and bouncing up and down in place. Outside this dance club -- a massive box of bricks called Studio B -- a line wraps around the block for several hundred feet.

Something big is about to happen, but it's not a concert. The crowd is almost exclusively male, and there's a disproportionate share of khaki. The warm-up acts are a spiky-haired magician and a guy who attempts to pump up the crowd with exhortations like, "How many of you watch video on hand-held devices?" Yet somehow, the audience is eating it up, cheering every time someone mentions Apple, Twitter, or anything remotely technical. What we have is a gathering of iPhone-coveting, micro-blogging, honest-to-goodness geeks -- roughly 1,300 of them -- and they are all here to see Kevin Rose. He's the spokesperson for a new generation of entrepreneurs and the envy of pretty much everyone who dreams of making it big in technology.

Sometime around 7 o'clock, a cab pulls up, and out pops Rose. He's 31 years old, sturdily built and 6 feet tall, with a youthful mop of hair, wearing a tight black T-shirt. He has a small entourage in tow.

"Kevin," a loud male voice calls in the flat moo peculiar to frat boys and those pretending to be frat boys. Rose beams and strikes the kind of pose that only celebrities can pull off -- half a wave, half a shading of the eyes from camera flashes. "Keeevviin," another voice pleads. "Keeeevviiiin," as he disappears inside the club.

Several minutes later, Rose takes the stage for a taping of an online television show called Diggnation. The show is produced by Revision3, a company that Rose co-founded in 2005, and it was inspired by the wildly popular website Digg.com, another Rose creation. Digg is sometimes described as an online newspaper or a social search engine, but it feels more like a seedy bar that happens to serve news. Digg allows its visitors, mostly young men, to submit links to newsworthy items -- blog postings, images, newspaper articles, or online videos -- and write their own headlines and teasers. The stories, which frequently involve technology, scantily clad women, or Ron Paul, are automatically posted to the site and then put to a vote. A story with enough votes, or "diggs," lands on the homepage, bringing glory to the user who submitted it and torrents of traffic to the website that posted the original content. (Web marketers call this the Digg effect. It is powerful enough to catapult a site to the mainstream and even take down a company's servers in a matter of hours.)

If Google (NASDAQ:GOOG) imagines the Internet as an orderly place governed by clean lines, Stanford math, and general good sense, Digg embraces the chaos of mob rule. It is a place where serious business news -- "U.S. Government Helping to Arrange Sale of Lehman Brothers" (587 diggs on a recent afternoon) -- appears alongside what can only be described as trash -- "Dad Chases Nude Boy From Daughter's Room With Pipe" (2,557 diggs). There may be something disquieting about the fact that a website like this attracts roughly 30 million visitors each month -- twice the traffic of the website of The Wall Street Journal -- but it's evidence that Rose is onto something big. Digg has been the continual subject of acquisition rumors for the past three years, and Rose has found himself in meetings with Barry Diller, Al Gore, and Rupert Murdoch. No one can agree exactly how much Digg is worth, but valuations range from $60 million to $300 million. That makes Rose, who maintains a substantial equity stake, a very rich man.

A rich man with a TV show. For about 40 minutes every week, Rose and a bespectacled co-host named Alex Albrecht sit on a couch holding their laptops, consume several beers each, and discuss the top stories on Digg. As usual, the news value is questionable, and the show plays like a parody of a lad magazine. Tonight's topics include a review of the world's most innovative brothels, the best add-on for the Firefox Web browser, and a story of a geek whose wife forced him to organize his DVD collection. "My friends, marriage only leads to terrible things like this" is Rose's take on that story.

Thanks to this wholehearted embrace of juvenilia, Diggnation attracts roughly 200,000 viewers each week, which would make it a respectable cable television show were it on TV. A throwback to television's golden age, it makes money through sponsorships and on-air endorsements. Tonight's main sponsor is Microsoft (NASDAQ:MSFT), and, before the taping begins, Rose announces that he will be giving away several Zune media players to the audience. Almost immediately, the only woman anywhere near the front of the stage hoists herself onto someone's back and offers -- in jest, we can only hope -- to have sex with Rose, as the crowd noise reaches a terrifying pitch. Elsewhere, a man with a swirling red light affixed to his head gyrates wildly, like some kind of human squad car. Most everyone appears to be at least mildly inebriated and hanging on Rose's every move, word, and beer chug.

The event is fun if you are into that sort of thing. But it's also an expression of power. Rose has managed to put himself at the center of an ever-expanding new-media empire. In addition to Revision3 and Digg, he recently launched an Internet messaging service called Pownce. Thanks to Rose's star power and a well-designed website, Pownce quickly attracted more than 150,000 people, who use it to share music, videos, and links with their friends. This means Rose owns an online newspaper, an online television network, and an online communications platform.

Ladies and gentlemen, geeks of the world, please welcome Kevin Rose. He is the first vertically integrated Internet celebrity -- part Steve Jobs, part Howard Stern -- and the next media mogul.

Immediately after the taping ends, Rose is mobbed by fans waiting to have their pictures taken with him, and it is impossible to get close enough for an interview. Eventually, I give up and walk around the club as it empties. There is a young couple who drove six hours from Massachusetts, and a guy who flew in from Georgia. Another attendee explains that he likes Digg because "it's not all this old-media bullshit, like NPR or The Economist." I find out later that some 400 people had been turned away at the door, though Rose was kind enough to go outside and take pictures with them, too.

The cult of Rose is even more pronounced online. When Rose decided to shave his head, some 800 people watched live. The tech gossip site Valleywag follows Rose obsessively, chronicling his prolific dating habits and even his cell phone purchases. "[L]onely techies…feel like they're part of a big club," wrote the site's then-editor, Nick Douglas, trying to explain the Rose phenomenon two years ago. "It's like Oprah without all the books."

Where does this enthusiasm come from? "Geeks see themselves in Kevin," says Daniel Burka, Digg's creative director and one of Rose's closest collaborators. "He's one of them." In fact, what makes Rose different from, say, Mark Zuckerberg -- the Facebook founder and the only other young Internet entrepreneur whose renown approaches that of Rose -- is that he is eternally accessible, the kind of guy who seems ready to throw back a drink with whoever might saunter into his life. "Kevin is an Everyman," says David Sze, a Digg board member, a partner with the venture capital firm Greylock, and an investor in Digg and Revision3, as well as Facebook. "Mark Zuckerberg is an aloof, Harvard-brilliant engineer. Kevin is the guy who hangs out with everybody else. He's the guy you party with."

Over eight years, Rose has built a massive community -- one that he actively curates, corresponds with, and, occasionally, panders to. He has more than 64,000 Twitter followers, which puts him in second place after Barack Obama. He receives a thousand or more comments on Twitter every week -- a handful of which he responds to. Several weeks after I see Rose in Brooklyn, a Twitter user named Siders writes Rose five messages within a span of a few hours, beginning with, "I'm not trying to be weird, but I've been trying to catch you outside Digg to get your autograph." Rose eventually invites the young man in, still via Twitter. "Thank you very much, sir. You are my hero!" is the reply. Rose's Twitter fans find the exchange touching: "Pretty cool," writes one. Two others confess to having the same idea.

Rose says he tries to evade office drop-ins when possible, and he asked me not to print the exact location of Digg's offices. (The company takes up two floors in a warehouse in an industrial neighborhood near San Francisco's waterfront. And -- attention, stalkers -- you can look it up in the phone book.) I have flown to the Bay Area to try to understand the phenomenon that is Kevin Rose, and we are in a taxi speeding toward that semiundisclosed location. "We've had people stop in on their honeymoons," he says, shaking his head. "I was once pulled out of a meeting because we had an 11-year-old kid whose mom brought him."

Earlier that morning, I had met Rose in the studios of KITS, the city's alternative rock station, where he does an hourlong segment every month. Rose provides the station with a built-in audience and an endless wealth of quirky news stories, and the station gives Rose yet another platform from which to promote his mini media empire. I find him sitting alone in the lobby, wearing his usual uniform of jeans, fashionable sneakers, and a T-shirt. He is fiddling with his laptop, trolling for stories to mention on the air. "This shouldn't be too bad," he says, his voice hanging in a way that suggests he is not quite awake. "When I did live national TV, now that was nerve-racking."

We hear the show's deejay offer a plug, and Rose comes alive. He picks up his laptop, walks into the studio, and puts on the oversize headphones. Just as the weather guy is about to update listeners, Rose sends out a message to his Twitter admirers, inviting them to tune in to an online video broadcast of the show. "There are 524 people watching now," he says. "Let's see how many people we can get in there." By the end of the hour, there are more than 1,200, the second most the show has ever attracted.

For most of the hour, the questions are either innocuous or adulatory, but there is an exception. A caller, Peter in Santa Rosa, asks what, exactly, Rose does all day. Rose nods and then responds calmly. "I design future versions of Digg," he says, before the host redirects the question into safer territory. In the cab, I bring this up. "You know, I've actually thought about that a lot, and it's a valid question," Rose says. "But you want to get those questions out of the way as fast as possible, because it's such boring stuff. You've got to be entertaining; otherwise, someone hits the button and changes the channel." The television metaphor is not accidental: Rose launched his career as a production assistant on TechTV, the now-defunct cable channel bankrolled by Microsoft co-founder Paul Allen. In fact, given that Rose runs his life like some kind of a reality show, it's not even really a metaphor.

"Kevin is building a media empire in a whole new way," says Jeff Jarvis, a media consultant and the author of the forthcoming book What Would Google Do? When Jarvis gives presentations to newspaper executives looking to revamp their online efforts, he puts up a picture of Rose and says, "There's the next Rupert Murdoch." Says Jarvis: "What hits me about Kevin is that when he left his show, he didn't find a job at another network; he created a network." Jarvis believes that Rose is doing for the Internet what Ted Turner did for cable TV and what William Randolph Hearst did for newspapers. "He's the media mogul of the future," Jarvis says.

Today, Rose is the consummate technology insider. But, like so many of his fans, he started his career as a geek -- ambitious, obscure, and fascinated by all things technical. He grew up in Las Vegas with computers, writing his first program in second grade, building his own machines by the beginning of high school, and, before he graduated, working as a technician at the Department of Energy's Nevada Test Site. He started a little Web business, offering customized wallpaper graphics for Windows, as a freshman at the University of Nevada, Las Vegas, and left college by the end of his sophomore year. He never made any money from that first company -- in fact, he never really had a business model -- but it helped him land a job at a Bay Area start-up called NextOffice in 2000. Within a year, the Internet bubble burst, NextOffice went out of business, and Rose moved to Washington, D.C., where he muddled his way through the recession working for a defense contractor.

In 2002, he took a job as a production assistant at TechTV. Though Rose had been a fan of the channel, he saw the job as little more than a stopgap. "It was a way to get me back to the Bay Area," he says. He was a middling PA, but when he discovered a security flaw in Windows, executive producer Paul Block put him on the air. "In some ways, he was like Johnny Carson," says Block, a veteran television executive who early in his career was a booker for Carson. "He was tech's bad boy -- a guy saying things that no one else would say." Rose's ethically ambiguous suggestions, which earned him the on-air moniker the Dark Tipper, included hacking various computer systems, using explosives to destroy sensitive data, and, most memorably, attaching a rat zapper to a video game controller -- "So when you got hit in the game, you really got hit." He became so popular that the show's producers made him a host.

On December 13, 2004, Rose got in front of the camera and offered a pointed critique of Slashdot, a tech news site that would become Digg's chief competitor. "The only problem [with Slashdot] is you're relying on whatever the editor thinks is really cool," he intoned, pronouncing editor in the most disparaging way possible. "So what we've got is a couple of websites that give the power back to the people." The bulk of the segment was devoted to a discussion of Digg, during which Rose gave no hint that he had launched the site out of his bedroom a week earlier.

Rose started Digg with $1,200 and an insight about the changing nature of news. Thanks to cheap broadband and easy-to-use blogging software, there was suddenly an endless stream of news, gossip, and rumor about pretty much any obscure topic -- say, new versions of Linux or 9/11 conspiracy theories -- spread across millions of blogs and websites. Rose and others like him were spending hours digging through these stories and then passing them around to their friends. What, he wondered, would happen if someone harnessed that energy?

Rose signed up for a cheap hosting service and hired a Canadian programmer he met online. He designed the site himself, giving it a utilitarian -- even ugly -- look. It had no graphics, but it did offer something special: a way for anyone to get his or her news in front of lots and lots of people. In addition to his promotional efforts on TV, Rose started talking up his venture on his blog, which had nearly 10,000 registered users. In January 2005, he described Digg as "a friend's site and one of my favorite technology news websites."

Just a month later, a hacker somehow managed to download and post the contents of Paris Hilton's cell phone address book, and a link was submitted to Digg. Within a week, the site saw its traffic quadruple as the Hilton story wound up in The Washington Post and The New York Times. Digg had its first major scoop, and Rose realized for the first time that he was onto something. He left television the following month, with a plan to make Web videos for fun and to pay for his life by selling advertising on Digg using Google's AdSense service. "I'd always liked the idea of being independent and working for myself," he says. "I was sitting in my room thinking, If I can just make a few hundred dollars a month in ad revenue, I'll be able to support myself, pay my rent, and have a good time."

The site grew faster than he could have imagined. Rose rounded up $50,000 in angel funding, hired a real designer, and started getting acquisition offers. That summer, just months after Digg's founding, Jason Calacanis, the founder of Weblogs, offered Rose $4 million for the site. Rose said no. Instead, he persuaded his mentor, Jay Adelson, the founder of a data center company called Equinix (NASDAQ:EQIX), to join him as an adviser and then as CEO. The pair raised $2.8 million from Greylock Partners and some angels. "Jason could have had it, if he had been cool about it," says Rose. "But he was pressuring me so much that I kind of stepped back and said something isn't right." Calacanis was so taken with Digg that, after he sold Weblogs to AOL, he started a copycat site under AOL's Netscape.com brand. He even offered Digg's most active users $1,000 a month to defect. (The effort failed: Traffic was flat, Calacanis quit, and the Digg clone was moved off the Netscape homepage in 2007.) Digg's traffic, meanwhile, exploded. By late 2006, the site had 11 million users.

Somewhere along the way, Digg became a cultural touchstone, inspiring a rash of double-consonant copycats such as Mixx, Pligg, and Sphinn. Today, the website of nearly every large media outlet -- including The Wall Street Journal, The New York Times, and Fox News -- has a Digg button, a little advertisement that encourages readers to submit stories to Rose's website. When Rupert Murdoch's News Corporation bought the Journal last year, one of its first moves was to cut a deal with Digg by which the paper's online edition, for which the company normally charges $89 a year, would be made available to Digg users free of charge.

Meanwhile, Digg's influence, which has been most profoundly felt in the tech world, seems to be broadening. This fall, Adelson interviewed Nancy Pelosi at the Democratic National Convention, using questions submitted by Digg users in an online interview. The questions that received the most votes on Digg were read verbatim -- including hardball questions like, "Does your support for telecom immunity have anything to do with the fact that your husband has millions invested in AT&T (NYSE:T)?" Rose says more interviews are in the works: "I'm excited about it, because it's completely unfiltered. It's going to be a great way to get the masses' questions in front of people they'd never be able to talk to."

The idea of making the Speaker of the House take hostile questions from an anonymous user identified only as "Spkrcity" gets at the populist appeal of Rose and Digg. Beginning in 2003, Rose began producing a series of Web videos called The Broken. The show, which he described in the videos as "a little shady, a little underground, a little borderline illegal," featured Rose and a friend drinking 40-ounce bottles of malt liquor, swearing incessantly, and showing hacker-wannabes how to gain access to other people's wireless networks, how to crack Windows passwords, and how to build a battering ram to break down actual doors. It attracted two million downloads in the first year online and inspired Rose and Adelson to launch Revision3, with the tag line "Kill Your Television."

But if Rose presents a subversive face to the world, he approaches his business interests as seriously as anyone. Digg began in a series of notebooks, a few of which Rose still has stashed in his cubicle in Digg's headquarters. Rose's designs always start with a drawing representing the flow from one webpage to the next, and he eventually works them into complex diagrams. "Computers don't work for that kind of stuff, because they're not fast enough," he says. "I'll just sketch out a Digg page and say, 'How would this work?' and I can start scribbling and messing things up. Once I come up with something on a piece of paper, I fire up flow-chart software and just go to town."

When he's not designing Internet products or creating videos, Rose goes to the climbing gym. A few times a year, he goes bouldering, which involves attempting short, difficult climbs without using ropes. "In bouldering, each climb is called a problem, because it's not about strength," he says. "It's a puzzle that you have to figure out." It's also not a bad analogy for the work he does at Digg, which -- to answer the question of Peter in Santa Rosa -- mostly involves solving problems related to the way people use the site. Although Rose effectively controls the ultimate fate of the company at the board level, his day-to-day responsibility is restricted to marketing and product development. As CEO, Adelson oversees finance and partnerships with big media companies. Ad sales are outsourced to Microsoft. This allows Rose to act, as Adelson put it, "as a hit man." "The way I work best is sitting down in my cube alone with a piece of paper, sketching and drawing ideas," says Rose. "The last thing I need to do is worry about managing folks."

Managing his image is another story. Minutes after I arrive in San Francisco, a nondisclosure agreement drops in my e-mail inbox with a number of surprising demands. I, the business journalist, am not allowed to include any financial information about the company or to reveal any details about the personal life of the company's founder. When I refuse to sign -- what kind of profile includes no personal details? -- Digg's publicist, Lacey Haines, apologizes. "We've never allowed someone in the offices for so long," she says, even though I'm scheduled to be on the premises for just a day and a half. "Everyone is really scared."

Yet, in person, Rose doesn't seem scared at all as he acts the part of the incredibly laid-back executive everyone sees and everyone loves. He takes me around Digg's headquarters; the company just leased a second floor to accommodate its 75-person staff. He greets the inevitable company dogs, points out the free beer in the company fridge, and introduces me to the Ph.D. he recently hired. Later, during a "bug quash," Rose sits on the floor and eats sushi while 25 Digg employees gather around a large table and look for problems with a new feature that will offer personalized recommendations for readers. Rose leans back and holds court from the corner of the room. He finds a few bugs, offers some guidance to the manager leading the team, and then gets up to leave. "I can't wait till Day One," he says. "It's going to be freaking hot."

Around 4 p.m., employees again gather in the conference room to participate in an online geek-out, an "iPhone stack." The idea is to see who in the world can pile the most phones on top of one another. After reaching 10 and then taking some pictures, everyone starts drinking wine as part of the company's monthly Wine Wednesday event. It is all very much in line with the picture Rose likes to present of his company: geeky, fun-loving, and drunk.

But Rose misses the phone stack and the wine. He disappears into videoconferences and eventually leaves the office for a dinner meeting. The next day, he confesses that the image of the entrepreneur as partyer is more a character than it is a real person. "There's two different sides to what we do," he says. "When I do Diggnation, I'm partying with the fans. It's just us being geeks and going crazy, and when I'm here at work, it's a very different environment. I spend most of my nights going to the rock-climbing gym and drinking tea. And then once a month, I go to a party, and pictures get taken, and it paints a different picture."

Rose is quick to downplay the extent to which he is a public figure. "It's not celebrity," he says. "It's Internet celebrity." But for many Digg users, that distinction does not exist, and Rose concedes that representing the company -- "being the frontman," as he puts it -- is a substantial part of his job.

David Sze, the Digg investor and board member, says that Rose's real breakthrough, "the magic of Digg," was not his idea of having regular people vote on the news but the fact that he actually got them to do it. This is thanks to both his ability as a Web inventor and his sense of business as performance. "Kevin has an instinct for democratic systems and anything social," says Jay Adelson. "If we could figure out where it comes from, I think we'd all be going to school there." It's no coincidence that a master of online expression -- a guy who can get 200,000 people to watch him drink beer and make dirty jokes -- understands how to build a company that harnesses the desires of millions of geeks.

Of course, Rose is more than a geek icon, and he is eager to see Digg reach far beyond technology news. "We're not there yet," he says. "I want everyone to see Digg as a utility that can be used to help spread information." The idea is for Digg to be a conduit for personalized news and, eventually, personalized advertising. The recommendation feature, which launched in July, is a first step. It works by comparing your favorite news articles with those of other users -- so a political junkie would see lots of political news, while someone interested in stories like "The Saddest Male Models in the World" would have an endless supply of offbeat humor. Rose supervised the construction and design of the recommendation feature, beginning with notebooks, then whiteboards and flow charts, and eventually code. Early reviews have been mixed, but the total number of diggs increased 40 percent in the month after the launch.

Rose has steadfastly declined to comment on the acquisition rumors that surround Digg -- the latest involved Google buying the company for $200 million. But in September, the company raised $28.7 million from a group of investors led by Highland Capital Partners. Rose says the money will allow Digg to double its staff, move into a larger building, and expand internationally. The plan is to make Digg the next big media company. Most immediately, that means Rose is working on the product, but if building Digg means doing shots on camera or talking about the most innovative brothels, he is willing to go there, too.

Is this self-indulgence or self-sacrifice? Is it both? Rose's antics seem gimmicky and juvenile, but it's hard to argue with the results. He has figured out how to turn something as ephemeral as Internet celebrity -- whatever that means -- into a real company. "There are stories about me on Digg," Rose says, "where the top comment says, 'Who is Kevin Rose?' I love that. It's awesome. That's just Digg doing its thing."

Max Chafkin is a senior writer for the magazine. He wrote for the October issue about Ghanaian entrepreneur Herman Chinery-Hesse.

IMAGE: Gregg Segal
Last updated: Nov 1, 2008




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