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[upbeat music] Welcome to the Rebooting Show. I'm Brian Morrissey.

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This is a little bit of a different episode. I'm gonna have a repeat guest, Reid Remus. Reid and I have worked together across a bunch of different vectors, I think going back to the pandemic when you were doing YEM.

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And when you were first getting started. Yeah, when I was, I was just a cub. [laughs] And YEM was, like, a growth... How do you describe YEM?

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I mean, you were, you were basically, like, this was during the pandemic, like 20- Yep... 20 going into 2021, and there was a lot going on with, you know, people, the newsletter economy, and- Yep...

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a lot of the shift to institut- to individuals over institutions. And, you know, you had a lot of experience in driving growth, right, at Crunchyroll- Yeah...

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and Max, and, and YEM was, like, a w- a way to, like, build a growth engine. Actually, it's kind of an interesting place to start because I've...

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That's the same thinking behind YEM has continued to rattle around in my brain, and I think it's a lot of stuff that we talk about. Yeah. So before that, before, like, COVID, I was working in streaming video.

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Went from Hulu to Crunchyroll to HBO Max, and my role was always rotating around, like, how do we grow these consumer subscription businesses?

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So it was a little bit of, like, marketing and data and, and all the- all these things. Right. Product and, and partnerships. Yeah, and then you joined Substack. I mean, YEM joined Sub- Substack, and I think you...

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That's when we just sort of continued to [laughs] to- Yeah... basically have the same conversations then with Substack.

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And then you left Substack, and, you know, now we're just working together independently, and I think a lot of the issues that we always talk about are very similar to issues that I talk about with, with other people who kinda have similar-ish businesses.

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So I don't want this to be about the rebooting or whatnot, but I do think it obviously informs my thinking in this. Because I, I, I look at it... Like, I have two types of conversations these days, okay?

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One is with people who are retrofitting old models. I don't mean to be, like, rude about it, but they're, they're kinda managing decline, right? And that is a big part of the economy.

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There is incredible economic value in that. These businesses are important, and I believe they need to be retrofitted, and they need to find new paths to, if not growth, to sustainability, right?

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At the same time, it's kinda depressing. Yeah. Let's be real. [laughs] But then I have different conversations with, with people who have businesses, I said, that look a lot like, you know, mine or, you know- Yep...

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there's a lot of them out there, and you can build a lot of these smaller, at least for now... I'm, I'm not pretending that we're, like, building Google here.

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But, like, smaller media businesses that are nicely profitable and are sustainable, and the issues that people are dealing with are things like how do I keep this...

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Am I building, like, equity value here, or is this just, you know, just all me? Is it a, quote, unquote- Yeah... creator business? Is this, like, OnlyFans but with words?

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And then, which is strange, Substack keeps, keeps mentioning that, but we'll talk about that in a little bit. Or it's like, okay, which path do I go? Am I gonna be, like, a subscription business?

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Am I gonna use publishing at the front end for a different business, for a marketing services business or an events business? What, what role does ads play? H- is this a newsletter business?

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And so there, there are different problems. I think you call them, like, champagne problems. They're good problems to have, basically- Yes... you know, for the most part.

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And then, look, there's a lot of people who struggle, right? This... There's power law in all this, and maybe we could talk about that a little bit- Yep... because look, it's like any other market, and it's...

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There are, there are some, some people who get to, I don't know if you wanna call it, like, escape velocity. But- Yeah...

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you know, they get to a point where they can build these into, into, quote, unquote, "real businesses," right? Yeah, so that, there's a lot to unpack there.

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The thing that, the setup behind YEM that I think is relevant to this was it looked like media was bending in a different direction, and I think you probably saw this at Digiday too, and we saw it in the streaming world too.

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People, it wa- the, the future of media wasn't gonna be more Disneys, more Netflixes, more New York Times. You'd have category winners. There would be big media companies, but there wouldn't be a lot of them.

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And we're still seeing, like, unthinkable rapid consolidation in the media b- industry that would've seemed totally impossible not that long ago. Like- Mm...

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I remember at Hulu, we had News Corp and Disney as, like, owners, huge media companies that were competing. Fast-forward just a couple years, and Disney is buying most of Fox's assets.

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Like, it's, like, totally crazy- Yeah... that all this happened so quick. So at, you know, I was in...

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I was kind of, you know, neck deep in that world, and it was becoming clear that more and more people are just gonna pick up their phone and start their own media business, and that seemed like a more exciting area to go explore.

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But the obvious challenge was I, in my head, thought of, like, all the teams of pe- talented people, like super talented people that worked on growing these media businesses that, like, an individual just did not have.

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Right. And you could think about that across product, engineering, marketing, partnerships, the whole org, you know? And so YEM was trying to narrow that gap. My work at Substack was trying to narrow that gap.

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And how we've been working together is also trying to narrow that gap because- Yeah...

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if you're an individual, you just don't have the same kind of growth or tech or monetization resources that, like, big media companies have. Yeah. And that's what I think really Substack nailed, right?

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Is that Substack ha- has narrowed the sort of publishing function to as simple as possible. It's a, it's, I say it's like a media business- It's incredibly accessibleRight. It's a media business in a box.

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If you have something to say that a group of people value and you're able to be consistent, you can have a media business, and that's amazing, really.

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I mean [chuckles] like, amazing because, you know, look, media is going through a tremendous amount of change right now because the, the cost of distribution has, has gone to close to zero, and th- soon the cost of creation will, will near zero.

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And what, what's happening out there is that y- you're looking at a market where pretty much the advantages of having a big infrastructure have become liabilities.

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I mean, this is a theme that I see with a lot of my conversations.

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Again, they're bifurcated conversations, and when I talk with people at these larger companies, right, they're, like, jealous of the fact that, you know, someone like me or other people like me have, like, incredibly low cost bases.

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Because we don't have this incredibly important, like, infrastructure that, that pretty much weighs you down. And so you can- Yeah... do more with less with a lot of the tools and platforms out there.

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Uh, like every media company, I mean, you gotta kinda call it what it is. Like, every media company is bigger than they probably should be at this point, you know, in terms of head count and functions.

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Because I just think- Yeah... it... Well, I, I can at least speak on behalf of the streaming world. I'm not as familiar with, you know, the publ- publisher business. Yeah.

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No, no, no But I feel like a lot of those companies are- They, they, they can cut a lot. They can still cut a lot more, I'm telling you that. [chuckles] I mean, it sucks too, but, like, it's just- Yeah...

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that's where the... Like, you just don't need as many, you don't need as much tech support to build a media business these days. You know? Like, payments has been commoditized, CMS and CRMs.

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There's so many off-the-shelf products. You don't need to build this stuff in-house like you used to. Yeah.

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And when you can subscribe, like, with a click, I mean, I think sometimes we sort of take a lot of things for granted these days, but, like, taking payments online was, like, nearly impossible.

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It was such a pain in the ass. And- I mean, it, it's the best example, because we had a huge team of engineers at Hulu that worked on payments, and you just don't...

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And they were like, you know, probably the highest paid engineers on that team, 'cause, like, that's where the commerce is happening, you know, and it's massively important.

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And, like, when we were at Crunchyroll, we were using, like, Chase payment tech for payments. Mm-hmm. And Chase is, like, one of the oldest banks, like, in the world, I think.

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And for them to be, for you to be reliant on them for your online payments, it was not, like, the best place to be.

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And then Stripe comes along and just makes it massively simple and easy to collect payments, and that, that really has, I think, radically expanded online GDP.

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And, like, they're, you know, they're still a pretty young business. Yeah. So I think these kinda things are, are very impactful. Yeah.

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And I think one of the things, though, for a lot of sort of, what are we calling these people? It's not creators. Well, yeah. What, what's a, what's a good term?

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[chuckles] I think, you know, at, at Substack- I, I do not identify as a creator, I will say that. [chuckles] Well, the thing I learned- Someone call me, like, a B2B influencer.

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[chuckles] The thing I learned from Substack, Hamish in particular, shout out Hamish, 'cause he was very particular about just, like, calling what it is. Writers, you know?

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So I tend to be long-winded in this and say, like, you know, it's YouTube, it's people making videos on YouTube, it's podcasters, it's people writing. It's all the above sometimes. It's media businesses.

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I think when you try to label, you try, it's like a, it's almost like you're, it's an act of reduction or, or something. Yeah. No, I get that. Yeah.

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I think what's interesting about this, and I sort of think about the next phase of this, is, you know, Substack originally started as a newsletter platform, right? And now it is, it is now far beyond a newsletter.

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It, it is, like, a media platform. There is, you know, obviously you have Growth Croissant, you're doing video on it. They're doing live video, they're doing podcasts, they're trying to...

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And it's pretty clear that, you know, I think Hamish, you know, sort of jokingly talks about the OnlyFans model, but I think that it is, you know, not that dissimilar in some ways in that you're gonna be, there's gonna be a- an amazing number of people who are building businesses on that platform, and I think that's amazing for, for them.

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It abstracts all of the needs that a legacy publishing company have. It is an incredibly efficient model if you can, if you do have something, if you do have a connection to that audience.

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But I don't think it's the only way to do it, and that's why I've, you know, always been going on that I don't really necessarily believe in newsletter businesses.

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'Cause a lot of the newsletter businesses out there are, you know, they're really, they're email marketing businesses, and that's just different than, than media, you know?

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I mean, an email marketing business is just, it's different.

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I think when you, like, say newsletter, the vast majority of people think of, like, Southwest Airline, emails from Southwest Airlines about, like, flight promotions. You know?

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Like, newsletters, it's still, that's still kind of, like, in language for us, I feel like. You know? Yeah. So I totally agree.

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I mean, I think the idea of, like, sending long form text as a newsletter over email, I still think is fairly niche. Yeah. That's true.

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But I think, like, w- the, the next phase of a lot of this, and I think that's where it gets kinda interesting, is, I mean, and this is already obviously happening, is, you know, people are gonna build, you know, a portfolio.

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Uh, a- and newsletters are part of that portfolio. Podcast is part of that portfolio. You know, having, doing maybe, you know, events is part of that.

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And this is just where things go because f- again, for a group of people, I think, you know, Substack is amazing, but what I sort of saw and when we were talking is it didn't really fit for the kind of business that-I necessarily wanted to build, and also just the opportunities that I saw on the market, right?

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Because I, I'm in a B2B area, and there is a defined buy and a sell side. Now, you could say that the buy side in my area is shrinking because of what I said before, 'cause it's... That's the publishers.

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Basically, a lot of the legacy publishers are, you know, they're, they're not building the technology themselves. They are, you know, mostly licensing that from, from SaaS companies.

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And so my, my clients, the, the sort of sell side, are the enterprise technology companies.

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And this is, you know, B2B is a very defined category, and, you know, you can come up with new ways to accomplish the same goals, but it's not like consumer media. So for me, it, it always made sense to go...

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Well, I guess that's something good to discuss.

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Like, for me, the obvious, like, [laughs] opportunity was to basically just slot into the way the industry already worked, rather than say, "No, no, no, no, I'm just gonna do all subscriptions," you know? Yeah.

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And I think that's an important decision for people, and there's trade-offs to every decision.

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And I think when you're figuring out a business model, you have to be cognizant of, one, what are, what are the trade-offs to, to the path I'm gonna take, right?

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And then two is, is this, is this the end goal, or is this a way to get to the end goal? You know what I mean? Yeah. I feel even if you're...

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I think one thing you've done really well is even though you were writing it as a free newsletter and having sponsorship be the primary source of income, especially for the first few years, you took it seriously.

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You know, it was a, it was a very, it was still a professional product. You published on time every, you know, two days a week, sometimes three days a week, as you mentioned, and- Oh, God.

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I went, I went into some weird period where I did three to three days a week for- [laughs]... three months. It was terrible for me personally. [laughs] I, I can't speak for the readers.

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I think it's really important to still take it, if you want it to be, like, your primary source of income or your only source of income, then- Oh, yeah...

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it's still really important if you're writing for free to take it seriously as a pr- Yeah... and consider it as a professional product.

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If you do paid subscriptions, it kinda takes care of itself because people [laughs] are paying you, and that- Yeah, it's a forcing function... that'll put a lot of pr- it's, it'll put a lot of pressure on you to deliver.

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A- yeah. And I think people need to be cognizant of that, right?

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Because, you know, having your, quote-unquote, "audience" be the, the customers provides a, a forcing function, particularly if someone is not used to, is not used to the grind of, like, publishing, right?

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Having spent a career... I, I think it's great that people are coming into this space who have, you know, for example, operational experience versus, you know, having worked in, in newsrooms, right?

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I think you bring- Right... a different perspective, and I think a lot of those products are...

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You know, for me, I, I don't look at it as an either/or thing, but I think that, that that's, like, an exciting area of people who have operational experience. I mean, we know CJ Gustafson, right?

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I mean- Gur- yep, Gurgi with- Yeah... the Pragmatic Engineer. Lenny, obviously. Byte by Go. Yeah. There's a, there's a lot of examples. And y- like, they are unique in that they are able to do...

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What they're doing is not, like, quote-unquote, "journalism," and that's, that's fine. I think what they're doing is, is, is in some ways more valuable.

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But, you know, they're able to, to reliably produce high-quality, professional content. I don't know how else to say it. That, that's not u- That, that's unique in some ways.

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They're consistently able to deliver value to certain people, and those certain people will pay them for it, and that is, that's a business. You know, that is...

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And I think if you've been in capital J Journalism, that can be frustrating 'cause, like, they're doing really well and... But I think that's kind of the, the problem you gotta solve.

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You gotta find your readers, and you gotta deliver a lot of value to them and do that consistently over a period of time. Yeah. Right.

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And, like, I think for, you know, with the consistency, I think you have a leg up if you're just used to doing something for many years. I see a lot of people who come- Yeah...

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from the sort of professional, you know, they're experts, and they have a l- they have a, they think they have a lot to say, I guess. Um, this [laughs] might sort of, I guess would be a little bit of a criticism.

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But, like, the reality is, you know, most people have, like, five, five pieces in them, and then they, you know, they hit a wall, right? Maybe they have 10 pieces. Yep.

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And that was w- always why when I was at, at Digiday, I, I wouldn't have regular columnists contributed pieces from the industry. I mean, two reasons.

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One is they were always just content marketing in disguise, but two, and I was like, "Why?" You know, I don't know, my, my mom would always say like, "Why buy the cow when you can get the milk for free?"

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So I was like, that's a kind of conflict with the, the business model, really. But then the other one is just, like, it, it was rare that people could consistently deliver quality.

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Doesn't mean, like, it has to be home runs every time, but you have to show up, and you have to d- to do what you said you were gonna do when you s- said you were gonna do it. Yeah.

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Things will come up every now and again, but you have to... I feel like if you're, if you're used to deadlines as, like, a journalist, it's all kind of, it's all made up in some ways.

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I remember I used to have a weekly magazine deadline, and I would have to file at 5:00 PM on Wednesday, and the magazine went to print on Friday. It didn't make sense. You know [laughs] what I mean?

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Like, it didn't make sense, but I knew just because of, you know, the schedule and everything, you just had to hit that deadline.

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So, you know, I think you did a, a piece with, with Judd from Popular Information where he talked about this. You know, once you're in the sort of thing, you just get up, and you just do it. That's what you do.Yep.

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And, and that's, you know, I think that's, like, a real skill, so. But talk to like, how do you... Do you see this with people?

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I think there's obviously a big shift from this institutions to individuals, and I think individuals have a tremendous amount of, of leverage in these kind of businesses. There's a ton of trade-offs to that, right?

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But how do you see people, like, thinking through what type of business they're going to build? Yeah, it's really tricky.

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I think, like, the, the main attraction to more of a sponsorship-driven model is, like, kind of the obvious thing, where you don't really have to paywall anything, and you can publish everything to everyone with every post, and that helps grow your audience.

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That's kind of the... That was the main reason Packy has always kept his newsletter free. I think it makes sense- This is Packy McCormick from, from Not Boring. Yeah, Not Boring. Yeah. Yeah. He has 233,000 subscribers.

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Yeah, I mean, he's got... He's grown his audience tremendously. I still think there are pocket... There- there's categories where you actually don't have to paywall anything to grow a paid membership product.

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I think it tends to be pretty heavily rooted in, like, the patronage. Like, the, the reason readers are paying you is to support you and to help amplify your worldview or your writing.

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When you're talking about, like, business, finance, tech, where people are making more clear-cut decisions around why they pay for a product, does this thing help me make more money or not? Yeah.

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You tend to need to paywall there. Yeah. You know? You'll get some. I always say, like, every brand has a group of diehard supporters who will, who will take that patronage route. They want- Totally...

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they want it to exist in the world. Like, I think, you know, just to go back to Judd again, you know, h- what he's doing with Popular Information, it's at least politics adjacent, right?

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That, and, and that has a lot of passions with it. Yep. And, you know, people feel it's part of identity, for better or worse these days. Yes. And so I think that provides a tremendous amount of leverage in that.

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Those exist in other categories. It's just a much smaller... Eventually, you need to get into, like, a real value exchange, I feel like, with subscriptions. That's something we've talked about, too. Yeah.

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And we've, we've noticed, like, whenever you paywall things, you get some paid subscriptions. And- Go figure [laughs]...

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I think the more, the more you, like, get into a consistent rhythm of that, the better, and the more you learn what types of... I think the hardest part is knowing what will drive paid subscriptions. You know?

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Like, what kind of story or what kind of insights will drive people to upgrade to paid. I think it's, like, a little hard for anybody who's, like, trying to do this. Yeah.

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But if you're getting into a consistent rhythm of doing it, you're gonna sharpen your intuition over time. Sure.

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And you may not be able to, like, put your finger on it precisely, but I think you'll get better and better at it.

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Yeah, I mean, some of this I see, like, you know, you know, people like, you know, creating these, you know, different, like, spreadsheets to try to like, you know, reverse engineer it.

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And for better or worse [laughs], you know, I, I tend to go by a lot of, like, of instinct, and it's just a different- Yeah... way of data collection.

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And I saw this, you know, with, with building the subscription program at, at Digiday, was, you know, there was basically two types of levers that we... Three types of levers, really.

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You know, one lever of converting people was they gotta see locks. They gotta hit walls. Yeah. Like, you just have to, you have to lead people.

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I would always say to people, I said, "We need to create, we need to create Phoenix here." And, and if you- anyone, I, I once do, like, when I was training for a marathon, I do a 17-mile run in Phoenix.

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It was the most frustrating thing in the world, 'cause Phoenix, as far as I can tell, is just all cul-de-sacs. You, you can't get [laughs] from one place to the other.

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You just, you will e- end up in a cul-de-sac all the time, and it's frustrating at some point, but literally, that's the biggest lever.

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You should've just done, you should've just done loops in a cul-de-sac for, um- Yeah, exactly... for the 26 miles.

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[laughs] But I was like, "We gotta get people into cul-de-sacs," because, you know, once they see it and, and it adds up, ultimately. And then you had the, "Oh, I need this piece.

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I need this piece either to do my job, or I need this piece because it tells me how much someone makes," [laughs] you know, or something of that sort. Yeah.

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You know, and that's why, you know, we, we spent time collecting a lot of, like, pitch decks, right? Is, like, trying to get this piece... If you are...

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If you have, like, a pitch deck of how someone is selling, people are gonna pay you, as long as you price it right. People are gonna pay- Yep...

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you to have access to that piece of content, and that's just a different pathway. And then the other one was what I, would be, like, pulses, what I call.

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And that one would be you're gonna have, we're doing, like, a fourth, you know, fourth anniversary. You know, you don't wanna discount too much. You don't wanna become Gap.

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But, like, you know, you do, you do a promotion. You do Black Friday or whatever. What is it? Cyber Monday? Does that still exist? Whatever. You do that. Mm-hmm. [laughs] But it's all that.

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To me, those were the three big levers. I think some of this is science and some of it is art.

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I think the science part is, like, the product stuff, like the icons, the paywalls, celebrating the milestones, making sure you're sharing your work often, bringing your audience on the journey with you.

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I think all these things are, like, kind of good tactics. And then I think the art piece is, like, you... I think it's hard to make the... In the streaming world, we had, like, programming.

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We always talked about, like, programming, shows, movies. And finding what shows or what movies, like, would get people to pay- Mm... is notoriously difficult. You know?

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Like, people like things for unforeseen reasons, and I think that's true in our corner of the internet, too.

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The reason somebody finally chooses to upgrade to paid, from, like, an editorial perspective, is a little bit of the art piece, and I think you just gotta try different things, fine-tune how you pitch your-Your paid membership, fine-tune the, the stories you're writing about, all these things.

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And I think over time you develop a sharper intuition, and that is kind of the art piece. But you have to couple it with the science piece.

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You gotta, you gotta show paywalls, you gotta have the upgrade to paid button in the top nav. You gotta- Yeah... do these things too. Yeah.

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I mean, those, I would always say, I would always say it was like an 80/20 thing, 'cause everything has to be an 80/20 thing, where it was like 80% was just delivering value on the core product and making, making things that are worth paying for, and then 20% is the optimization.

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And, and you have to do the optimization well. It is incredibly important. But I would also... Like, without making things that are worth paying for long-term, you're kinda screwed. If you're just- Yeah...

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And I see this a lot of times where people are, in my view, over-reliant on optimization and sometimes into, like, growth hacks and trying to sort of engineer themselves to success.

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And I think you see a lot of this, at least I see a lot of this in, like, Twitter threads. Like, I feel like [chuckles]

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the, the newsletter industry for better or worse, that's why I say, like, a lot of it is, you know, an email marketing business because- Yeah... you know, a lot of, a lot of, a lot of people with...

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There's a, there's a strong sector within this that is almost like multi-level marketing get-rich-quick- Right... schemes. [chuckles] It's, it's like, it's like cost per click ads- Yeah... against- It's arbitrage...

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like customer acquisition. It's pure arbitrage, yeah. Yeah. And I just, you know, look, the definition of arbitrage is finding some, some sort of seam before and it ultimately closes.

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The, the, the, the entire economic value of, of arbitrage is that it finds the inefficiencies and then, then there's equilibrium. And so those things close.

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Now if you can build businesses through finding those windows, I just, you know, ultimately, like, life's too short, it's just not my specialty, so I choose not to- Yeah... do that. Different strokes, different folks.

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You know, I don't-- It's not a judgment thing. Yeah. Those are viable businesses sometimes. I do agree they, they tend to attract competition. 'Cause look- Yeah...

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like writing, writing and actu- writing things that deliver enough value to get people to pay is extremely difficult, so I get, you, you know, the- Right... the, the attraction to the arbitrage play. Right. Yeah.

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And then you have to figure out your forms of leverage. And I think, you know, for me, like I look at someone, I think I'm gonna be doing a podcast with them soon again, like Casey Newton, right?

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You know, Casey has a set, a unique skill set that gives him unique leverage, right? And if Casey, I'm sure, was doing that business, you know, 15 years ago, he would, it would be a very different business, right?

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Because, like, he built that up over many years. But I, I do think that there's... You, you have to figure out your leverage in that, and, like, experience is leverage. It comes with, you know, there's trade-offs again.

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You don't have as much, you know, energy and there's a lot of, you know, younger people who are, are, are better at, at hustling. But I wanna talk about, like, hybrid models, right?

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Because one of the things is, you know, like a truism is you don't wanna, you don't wanna recreate the structures and problems of the people you're trying to displace, right?

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So going down the same path of a lot of, you know, larger institutional publishers doesn't seem to me like a very good idea.

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But at the same time, like one of the things that I, I recognize with a lot of these publishers is they struggle that they're trying to do so many different things, right?

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And figuring out the balance of how many different things you're gonna do, to me, is one of the hardest parts of, of these kinds of businesses.

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Because once you have some kind of foothold, you have a lot of, again, good problems to have. You have a lot of options with where you can sort of go, but your, your problem is, is just yourself. And you can- Yep...

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you know, you can lead to basically there's like the individual version of the Peanut Butter Manifesto, which was this, like, famous memo that Brad Garlinghouse wrote at, at, uh, Yahoo, really sort of right when they began their decline.

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And he was like, "We are, you know, we're like our product roadmap is like peanut butter. We just s- we, we spread it as far as we can to the edges, and it's so thin."

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And I think that, that sort of describes what a lot of people end up, end up falling into, I think, with a lot of these businesses, and it's hard to avoid. Yeah.

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So it's, like, hard to focus and it's hard to nail the sequence of what you should be doing over time. Like, I think the, the rebooting is a good example of this, where it was, like, just the newsletter for a long time.

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Yeah. Then came the podcast. Then really came, like, the rocket ship of behind the sponsorship revenue, where you're introducing research reports and d- the dinner series and web forums and, and- Yeah...

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bigger in-person events too. I, I look at it as like, when it first started, I mean, I had a year where I, I didn't really focus much on commercial stuff. But, you know, I looked at it as I was doing consulting, right?

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So again, you know, the advantages that I saw that I had were I had a reputation and, you know, I had, you know, I don't know, like, a couple thousand or 3,000, you know, subscribers within the first month because, you know, I've just stayed in place, honestly, in one field for a long time, and hopefully done a good job too.

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But that was, like, an advantage, right? And- Yep... you know, I knew that I could sell. People would give you a chance, right? I had some confidence in that. But, you know, I wasn't 25, right?

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And, you know, I, I don't have some sort of extravagant lifestyle, but, you know, you have to make more money. And, you know, there was no ramen that was gonna be had.

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[chuckles] I mean, if there was any ramen, it was gonna be at a Cudo, it wasn't gonna be out of a package. So, you know, I, I supplemented it with, with consulting revenue, and it just gave...

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To me it was likeYou gotta like extend your runway to figure it out. I just had four years of doing this, and a lot of it kind of it doesn't feel like that long in some ways because I wasn't let...

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I wouldn't say I wasn't 100% focused on it, but the reality is, again, go back to the peanut butter thing, is you have to do trade-offs. And if, if you can go all in on something for a couple of years, that's amazing.

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Yep. But for a lot of people, th- the reality is they're gonna have to... It's gonna be one part of a few different things. And yeah, I- I'm sure you see this with building any company, right?

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I mean, I think we're in the stage where, you know, bootstrapping is now cool in some ways. [laughs] You know what I mean? Before it was like, oh, that means you can't, you can't raise a round or something.

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You can't raise money. Yep. Whereas with like all this weird default, whereas I see now even, you know the guy like Peter Levels? Yep. You know?

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[laughs] He's like a- Just listened to the, the episode with, who am I thinking of? The really long conversation. Lex? Lex, I think. Right? Oh, my God. Yeah. Yeah, I don't know if I'll do... What is it, like four hours?

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Yeah, probably. Maybe I'll do it, but I, I like the guy 'cause I think like he's become like a little bit of the, the poster child, if you will, for- Cult hero of sorts. Yeah. No, no venture capital.

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He's like a digital nomad. He's got seven different businesses or [laughs] probably more. Now this is again- Yep... an extreme example of it, but, uh, I- I think it's always a good idea to...

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And again, it depends on your personal situation. For me it was important to de-risk as much as possible, you know? Like I'm 50. Yeah. I can't, you know, not... You know, there's, there's only so many shots you get.

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That's just the deci- that's just the trade-off you get, right? Yeah. So I think the sequencing part was, was really important, and it's still very important.

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I think the, the challenge ends up being, you know, when you go down a different path, right, how do you... Can you get on to a different path, if you will, right?

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Because you end up diversifying these businesses, and where you start is incredibly important.

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'Cause I think a lot of times I don't have a ton of regrets, but I think, like, looking back, I think I should've probably taken your advice a lot earlier [laughs] and started, started subscription/memberships like three years ago.

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Yeah. I think it's really hard to shift your revenue mix over time. This is something we've talked about, right? If you end up...

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If you start with paid subscriptions and that's, like, over 90% of your revenue, it's actually kinda hard to introduce sponsorship revenue in a meaningful way because it's just a totally different skill set, and there's some friction.

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You know?

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If you're trying to grow paid memberships, you wanna do things that are kinda different than what you wanna do to grow sponsorship revenue, and there's only so many hours in the day, so some of this is just, you know, where you're focusing your time and your effort.

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Selling a five, six-figure sponsorship package is very different than trying to get hundreds, dozens, hundreds, thousands of paid subscriptions. Yeah.

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So it's just hard to- I mean, 'cause you're basically trying to operate like an e-commerce business, but then you're, you're operating an agency business at the... You know what I mean?

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[laughs] And it's just like they're very different dynamics, and- Yep...

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you know, it's just something I think for anyone building these businesses, I wouldn't overthink it in some ways because I see a lot of people who spend too much time at whiteboards and strategizing when they gotta get to start.

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Like, you're never gonna figure it out. Like, I don't- Yeah... we were talking about a membership, like, what, three years ago? I don't know, it just started in February.

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I can't say I've figured it out [laughs] any between that time. Honestly, I mean, you... I don't even think this is unique. I've seen so many people get hung up right at the ledge over what should my pricing be?

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What should my value prop be? I mean, there are- Yeah... like, hard decisions, but just know you're not gonna get it right. No. You're... And you're gonna probably- It's pixels. It's fine. [laughs] Yeah. Yeah, yeah.

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I mean, at the end of the day- Nobody's gonna protest. You're gonna like... The market's gonna tell you where the pricing should be, and you can use levers to sort of reach, you know, the market equilibrium.

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And sometimes the market will tell you, and I think this is like something that a lot of people, I sort of wonder sometimes, is like, sometimes, sometimes subscriptions aren't the answer.

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Sometimes the business that, that you have that the market wants might not be the business that you want, and I think that's a really- Yeah... interesting dilemma for people, right? Everyone likes to, to talk about...

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It kinda reminds me of, like, accountability or feedback. People love to give it. They don't like to get it.

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And, you know, listening to the market is the same way because, you know, sometimes the market will say, "Well, actually what we really want from you is, is this other thing."

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And, you know, I think balancing it out, you know, Jason Yanowitz talks, talked about this like on a podcast, and I- I'm actually gonna have him on later this month. He's, you know, he's the Blockworks CEO. Yep.

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And really, one of the things that I really like about, about what they've done is they've changed the business a few times o- over the, over the last, I don't know, seven years or so.

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You know, they, they really started as an events business, right? And I know that very well. Events are a very good way to fund a media business. The problem is, again, you get...

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It's very easy to get trapped as an events business because, you know, the margins are good and events can really quickly swallow up all of your time and focus, and sometimes it's hard to get off that, you know, that events crack because- Yeah...

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it's different with media businesses. And we were basically doing that at Digiday. I mean, we were trying to build... We were building a publishing business on top of an events business, and- Mm... it created...

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It was good because it funded it, but it created a lot of problems, you know, because the entire DNA of the organization was, was focused on events. And- Yeah... again, you know, bigger company.

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But I think, you know, they, ha- going back to Blockworks, they've gone through a couple of iterations, you know, and, and now they're onto-Basically using the media and the events to fund a data and insights business.

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Now- Yeah... what Jason says is you have to be- you have to know where you wanna get to, right?

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Which I- I- I wanna press him on whether he really knew that that's where they would get to, because I think a lot of times people connect dots- Easy to connect the dots looking back... people connect dots in retrospect.

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[laughs] Totally. It's always neater in retrospect. Yeah. Mm-hmm. You know, because you're just going through the day a- and just trying to...

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You know, you're listening to the market, and you're just trying to figure out, like, how to maneuver to, to where the opportunities are.

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I look at it as kinda similar to, you know, I think a lot of politicians get too much grief for, quote-unquote, "flip-flopping," when I'm like, no, the best politicians sort of operate within a general lane, but then sort of drift to where the currents are going.

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Yeah. You know? Mm-hmm. I think that's just normal, and I think you do that in markets. So back to you mentioned, you know, wanting... should've maybe launched paid subscriptions earlier.

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What do you think kinda held you, held you back from doing that? I don't know, honestly. I mean, I think some of it was...

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I guess my most charitable explanation would be, well I, I had, like, a business that was working, right? And I, I really believe that overcomplicating things is how people get into bad positions, right?

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And so basically the part of the business that the market was telling me was valued was a lot, was lead gen and in-person activation.

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Basically getting the right people in a room, connecting, connecting partners with people who are in the market for the kinds of technology or services that the partners were selling, right?

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So it was, you know, what I say is, you know, a lot of publishing, a lot of media businesses, the publishing is the front end to a different business.

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I mean, you could argue at Digiday the publishing was the front end to an events business. I mean, 'cause it mostly was. 85% of the revenue was coming from events. You're, you're an events business.

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Like, I mean, I don't think you need to sort of overthink it. Now, we were diversifying that when I was there, but you know, I think the reality of that is it, you know, you, you...

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it's really hard to, to operate any business, particularly when you don't have a ton of resources.

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So it's not like overcomplicating it, and, you know, the reality is there's only so much surface area, and, you know, you have to figure out what you want people to do in some ways. Yeah.

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'Cause I feel like a lot of these businesses that are niche are about getting people to take action, right? If... It's hard to know how the sponsorship business would've evolved had you launched paid memberships earlier.

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Yeah. Like, it may have not taken off in the way that it did. Yeah. But then I think it's also... I don't know. I mean, I think, I think in some ways it... Yeah, I think it is mostly just over complication.

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I think some of it is like, oh, you know, there's always a reticence, I feel like, with subscriptions and memberships because you're never sure if, if, if people are gonna convert, and it takes a long time.

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[laughs] Yeah. Totally. I mean, it's, it is really hard to do this kinda thing, to build a paid membership model.

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I will say, though, if you're, if you're listening out there and you're thinking about it, and you're thinking like, "What should my price be? What should my value prop be? What should the name of my newsletter be?"

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[laughs] Like, all these things are valid, important questions, but I just think it's so easy to get in your own way.

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And so if you're, if you're listening out there and you're in that position, man, just try to get to get past the starting line. And you'll learn a lot after that. Yeah. I agree.

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And I think also, m- my one thing I would also add is, and this is a topic we should discuss, is equity value versus, you know, having a, quote-unquote, "lifestyle business."

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For years, you know, the, the word lifestyle business was used as, you know, basically an insult thinly veiled as a- Yeah, derogatory term [laughs]... insult. It was a der... It was so weird. It never made sense to me.

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I'm like, this sounds kinda awesome. I was like, "Why is this- Yeah. [laughs]... this is bad to, to have a business that, like, fits in, like, with a really good lifestyle? This sounds, like, amazing."

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[laughs] Like, what are you talking about? They've looked, they've been looking really good over the past couple years as we've been in this, like, tech depression, so. Yeah.

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Because the reality is, like, a lot, there's a lotta lottery tickets out there, and again, it's depends on what your sort of risk profile is. Like, if you're in your 20s or something, like, yeah, okay, take a flyer.

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I don't know. Why not? Yeah. There's always time to make it up. But you know, if you're, if you're 50, it's... It might not be the fourth quarter, but [laughs] it's well into the third quarter. Let's be real.

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[laughs] I hope it's in the third quarter. [laughs] I mean, I live amongst a lot of Argentinian retirees. They're doing fine. They're, they're playing beach tennis and- Yeah... they're okay. They're good.

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Got a sharp golf game. I'm the only one writing an email newsletter at, uh- [laughs]... El Saul every morning. [laughs] But yeah, I mean, I think that's, you know...

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I, I think that's, it's smart to, like, think through, think through that, 'cause- Yeah, I mean, we've, so we've talked about it, you know.

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Like, we see a lot of people who are getting, I don't wanna say, like, burned out, but just thinking about what, you know, alternative pathways.

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And you might have a pretty decent cash stream, and it's like, what do you do with it?

248
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And if you try to sell it, buyers may say, "Well, I don't know how strong this cashstre- revenue stream is without you being involved with it."

249
00:41:57.510 --> 00:42:08.004
And I, I actually do think, although, like, all these, like, polls will say all the kids wanna be YouTubers or whatnot, I still think it's, like, kind of a hard-...

250
00:42:08.014 --> 00:42:18.804
pathway for a lot of people to enter knowing that there's not amazing exit opportunities yet. And I think that is like a, actually a really compelling problem to try to solve. Yeah.

251
00:42:18.844 --> 00:42:22.184
And- That's actually a really good, you know, you talk about like private equity.

252
00:42:22.284 --> 00:42:38.404
Like, there is probably a good business to be had of providing an exit ramp to some people, to, to people who have done a good job of building a, a business that's really tied to them, right?

253
00:42:39.454 --> 00:42:53.644
And doesn't actually have that kind of enterprise value in the traditional sense, right? But like providing the pathway to maybe realizing that the enterprise value is always going to be lower, right?

254
00:42:53.724 --> 00:43:04.364
I think everyone needs to sort of have their expectations in check. In general, the enterprise value for publishing business, for media businesses is, is, is- Not much anyway... is low. Yeah.

255
00:43:04.404 --> 00:43:08.444
Like, I mean, I hear people that's like, they're talking about trading half revenue, you know?

256
00:43:08.884 --> 00:43:19.864
I mean, anyone who's been involved in any sort of M&A with any of these publishing businesses, let me tell you, it just goes to a multiple of EBITDA, you know? Yeah. Everyone can trot out the BI, you know, 11X revenue.

257
00:43:19.944 --> 00:43:26.924
Like that was, you know, put it in a time capsule. It's not happening. So I, I always think people shouldn't overthink it, right?

258
00:43:27.184 --> 00:43:41.064
Again, good problems to have is if, if the biggest problem you have is that you have a, a business that is producing solid, reliable cash flow [chuckles] for you to have a nice life, I would say take the W to some degree- Yeah...

259
00:43:41.074 --> 00:43:49.524
and then fig- figure it out once you get there. I looked at it as like, how do you get to unsustainably sustainable, is how I put it.

260
00:43:49.584 --> 00:44:01.824
In that using, you know, and a lot of that is just like seeing how far you can go, you know, quote unquote solo. Solo with, you know, fractional people helping you scale yourself, right?

261
00:44:02.404 --> 00:44:15.444
And then get to a point where you've generated enough cash flow that you can figure out an expansion path that takes some of the, the pressure off, you know, the individual.

262
00:44:15.963 --> 00:44:24.784
You know, I t- I've talked to a lot of people who hit the point of, like, income replacement, where there's, like, almost no opportunity cost. Like they- Yeah...

263
00:44:24.824 --> 00:44:30.834
they're now getting paid the same amount that they would if they were fully employed somewhere else. That is an amazing spot to get to. Yeah.

264
00:44:30.864 --> 00:44:39.364
Because now you have all the upside- It took me till this year, by the way, Reid. [laughs] Oh, wow. Yeah. I thought you would've gotten there earlier. But yeah- No... I mean, it's, it's a hard point to get to.

265
00:44:39.444 --> 00:44:46.824
With any, again, with any kind of business you're starting from scratch, you're growing it from zero, and yeah, it takes a while to get it up to a point- Yeah...

266
00:44:46.844 --> 00:44:56.004
where you're, you know, um- Well, that's also the, also the advantage of do- Like, there's trade-offs to everything, but to doing it younger or, or when you're like- Yeah... earlier in your career, right?

267
00:44:56.224 --> 00:45:08.894
You know, I mean, look, I looked at it as also very practical, and that's why I think I was like, okay, I could go and try to get another job I had o- before, but those jobs are fewer, okay? 'Cause once you- Yeah...

268
00:45:09.044 --> 00:45:19.184
it narrows quite a bit, particularly in this field, right? Yep. And then on top of that, those jobs are, are-- I'm not gonna get the same compensation anyway. I mean- Yeah.

269
00:45:19.224 --> 00:45:26.533
And, and you might be- I didn't found Digiday, but I joined it when it was barely a company. So, you know, you, there's a lot of leverage in that. And I was like, "That's not gonna happen." Yes.

270
00:45:26.533 --> 00:45:35.044
The only way that I'm gonna... I have, I have to do this myself, or I have to just, you know, say, "Oh, I'm on the down slope of my quote unquote career."

271
00:45:35.584 --> 00:45:45.444
And from, and from what we were talking about earlier, you might be managing a downtrend in the business, and that's not as much fun as growing the rebooting. Yeah.

272
00:45:45.784 --> 00:45:52.284
I mean, you know, I just, uh, one of the other publications of this space just, you know, "Yeah, just cut four, five people there."

273
00:45:52.344 --> 00:46:01.784
And that's the reality of these, a lot of these businesses is even in B2B, which is a very protected area, a lot of these businesses need to get a lot leaner.

274
00:46:01.884 --> 00:46:22.394
And, you know, particularly I look at the dynamics of the publishing industry and, and, you know, I don't dwell on it too much, but the reality is the number of publishers who are in the market for the kind of enterprise software that my partners create is gonna get smaller and- Yep...

275
00:46:22.424 --> 00:46:36.304
there's gonna be more consolidation, and they're gonna end up spending less on a lot of the software, and so therefore the LTV to partners will go down, and therefore the amount of money that they pay for leads or activations will also follow.

276
00:46:36.404 --> 00:46:44.704
And so you have to be realistic about that. I think there's tons of shares still to, you know, still to win, right, by being more efficient.

277
00:46:45.224 --> 00:46:55.324
But, you know, that's why you have to figure out, at least I f- think about it, is figuring out a membership proposition that balances that because, you know, a chunk of...

278
00:46:55.824 --> 00:47:06.154
We talk about this all the time, but a chunk of the audience, a large chunk, is not really actually good candidates for the k- that kind of enterprise software. So I always think about- Yep... audience segments, right?

279
00:47:06.224 --> 00:47:12.344
That's why we've been working together a lot on this audience database slash C- I guess it's like a CRM at the end of the day.

280
00:47:12.784 --> 00:47:26.964
To really understand a lot of these segments and be able to, you know, get them to take an action, you know, whether that's on behalf of partners or if, or, you know, membership at the end of the day. Yeah.

281
00:47:27.084 --> 00:47:43.004
I think that's a big opportunity for the, what you like to maybe call trade publications, like B2B publications. Because sponsors are still looking for more and more specific people to try to get in front of.

282
00:47:43.124 --> 00:47:51.684
And rather than send out the same thing to all tens of thousands of subscribers, you can start to get a little more targeted.

283
00:47:52.124 --> 00:47:59.504
And that, you know, Facebook learned that that can help you make a lot of money from a- Yeah... advertising perspective. Yeah.

284
00:47:59.784 --> 00:48:11.384
And I think it sort of gets to, you know, they say about careers, it goes from what you know to who you know, right? I mean, I went to-- I, I spoke at this event the other day, this guy Rashad Tobaccowala.

285
00:48:11.604 --> 00:48:13.644
He's been a long time Ad Age executive.

286
00:48:13.684 --> 00:48:25.426
He sort of put it together-And it was all about sort of the future of leadership and career, and I went with, with Troy Young and, and we did a session with Andrew Swinburne, who's an agency executive.

287
00:48:25.886 --> 00:48:34.186
And man, it was like you go... I, I go into these rooms that I f- it makes me feel old, right? Because I see all these people and I'm like, "I haven't seen you in 10 years," you know?

288
00:48:34.496 --> 00:48:40.476
[laughs] And like it's really kinda true, and I think sometimes people have to...

289
00:48:40.516 --> 00:48:47.456
You have to figure out your who - your what you know business and your who do- who you know business, 'cause they can be very different, right?

290
00:48:47.575 --> 00:48:56.076
There's a lot of who you know businesses, particularly in B2B, and you know, the dynamics of those businesses are very different.

291
00:48:56.085 --> 00:49:02.286
They're services businesses at the end of the day, and you have to be realistic- A lot of networking. Yes. Probably a lot more...

292
00:49:02.316 --> 00:49:12.036
Like, if you're, if you're, like, building a paid subscription business where you need, like, 10,000 plus paid subscribers, very different day-to-day than if you need...

293
00:49:12.136 --> 00:49:23.556
If you're doing the people connection game, 'cause that takes a totally different approach and different skill set. Yeah. And I kinda looked at... I've sort of always wanted to do both, you know?

294
00:49:23.616 --> 00:49:31.236
I think the who you know business is great. I think you compete with a totally different set of, of, of people. It's not just publications.

295
00:49:31.316 --> 00:49:42.276
You know, there's, there's lots of people in my area who don't pretty much publish anything other than, like, LinkedIn selfies, but we compete in the marketplace on the who you know business, right?

296
00:49:42.476 --> 00:49:54.266
If it's about getting the right 12 people in a room, there's a lot of different ways to do that, you know? I mean- Yeah... you don't have to write a newsletter or do podcasts to do that.

297
00:49:54.456 --> 00:50:07.046
I think, I think creating content to me and that, that kind of who you know business, the, the content, yes, you monetize it, but it really gives leverage for the, the who you know part, is to get- Yeah...

298
00:50:07.046 --> 00:50:18.746
the right people in the room. It's like the podcast I do, like, People Vs. Algorithms, I don't make any money off of it. It would actually cost money, so you'd be like, "Why, why do it," right?

299
00:50:18.996 --> 00:50:28.676
But I know when I run it, when I go to a room like that, I run into people who are like, "I love, I love People Vs. Algorithms," everything. Some of them don't even know I have a...

300
00:50:29.236 --> 00:50:41.776
I met the, the, the just the former CEO of a, of a big me- media company for lunch this week. He didn't even know I had a newsletter, [laughs] you know? Which I looked at as, as a good thing in some ways.

301
00:50:41.856 --> 00:50:50.576
Yeah, sounds like an opportunity. You need to be plugging more at the pre-roll ads on, uh, People Vs. Algorithms. Yeah, but like I, I, I look at it as, you know, you gotta...

302
00:50:50.596 --> 00:50:59.956
And again, this goes back to the peanut butter thing. It's you have to figure out, you know, what job different things do and map it back to your business.

303
00:50:59.996 --> 00:51:15.076
Again, the Substack model I think is great because it simplifies everything, but the reality is the opportunity for a lot of people is going to be a little bit different, I feel. Or I just felt it was for me.

304
00:51:15.116 --> 00:51:20.336
Totally, and I think Substack will evolve over time. Like, uh, 'cause the incentives are there.

305
00:51:20.896 --> 00:51:29.756
They have a revenue share business model, and I think that really helps incentivize you to try to help publications on Substack make more money.

306
00:51:29.816 --> 00:51:39.216
I think the challenge right now is there is a little friction between building a platform, like one size fits all features, products, that kind of stuff- Oh, yeah...

307
00:51:39.336 --> 00:51:49.056
and trying to help, like, the biggest publications get from, like, a million in revenue to 10 million in revenue. But I think that will...

308
00:51:49.176 --> 00:52:01.616
I think this is pure speculation, but I, I don't think it's impossible to imagine Substack doing more hands-on stuff to keep those bigger publications on the platform. Yeah.

309
00:52:01.626 --> 00:52:12.106
But I think- But I think the trade off, the trade off there is you're building a business on a platform, okay? You're not truly independent in my view. And look, it... Th- I, I don't believe in purity or something.

310
00:52:12.176 --> 00:52:21.036
I'm not a libertarian. I'm grown up. But ultimately you do, I believe, have to decide whether you're building a...

311
00:52:21.096 --> 00:52:30.036
Whe- whether you're gonna build your business on, on a platform or whether you're gonna build a platform around your business. You, you just have to make... That is a binary choice in my view.

312
00:52:30.376 --> 00:52:38.476
Yeah, we'll see how it shakes out. Like, I think you could... One way to view it is that lens, and I honestly think there's a lot of truth to that lens, especially today.

313
00:52:38.986 --> 00:52:49.356
The other lens would be, like, you hire Substack as, like, your product and engineering team, maybe a little marketing team in there too, and you just pay them- Yeah, that's true... instead of hiring, you know...

314
00:52:49.796 --> 00:52:55.556
Instead of 10% of your revenue going to head count for those functions, you're just hiring Substack to do it. That's true.

315
00:52:55.756 --> 00:53:06.476
I mean, that's kinda like the Le- But- That's how I see, like, Lenny Rachitsky's model in some ways. So I wonder, you know, how much of his business is, is Substack versus non-Substack. And if...

316
00:53:06.676 --> 00:53:10.096
I think if you're at Substack, it's an interesting thing to think about.

317
00:53:10.296 --> 00:53:19.996
If you can bring more of the things that he's paying people to do in-house, you probably have a better shot at keeping some of the bigger publications- Yeah... on Substack.

318
00:53:20.436 --> 00:53:27.676
But, like, you did, you did a, a podcast with, with, with Packy, like you said, right? Yeah. And you know, he was sort of... I guess he was kinda early.

319
00:53:27.686 --> 00:53:36.566
I think about him as, you know, I remember when he, when he, when he wrote in his newsletter, you know, "I think I can make a million dollars." I'm like, "Yes, you're going to. [laughs] You, you will."

320
00:53:37.046 --> 00:53:46.626
'Cause like- But that was, that was a hot take at the time. Like, he was- Yeah... nowhere close to a million and, and he was... He had a fairly small newsletter at the time. I think it was, like, 30,000, 40,000. Yeah.

321
00:53:46.626 --> 00:53:50.056
You know, I mean it- But the growth dynamics, when you see that... And so he's...

322
00:53:50.376 --> 00:54:10.936
What I find interesting is, and I, I didn't actually get to, get to listen to the whole thing, so I'm sorry if you guys discussed this, is, you know, he never went down the paid path because he had something that was really working, which was basically, I don't know, like, a high-end sponsor content business, you know?

323
00:54:10.986 --> 00:54:13.776
[laughs] Yeah. It's the same, it's the same thing you bring up. It's a...

324
00:54:14.076 --> 00:54:28.048
Judd brought this up.Do-- Every writer who I think has gotten into a position where they're doing extremely well is, like, really nervous about taking on more responsibility, [chuckles] and rightfully so, 'cause that's where things can teeter and you can...

325
00:54:28.088 --> 00:54:40.448
You know, if you take your foot off the gas with the thing that's working, then things can go in not so great directions. I think Packy's hyper-aware of that, and it's working for- He's got a really great flywheel.

326
00:54:40.808 --> 00:54:47.548
Why mess with it? Yeah. Well, I think, I think you end up, like, taking out a calculator, right?

327
00:54:47.708 --> 00:55:02.168
And you put two hundred and thirty-three thousand in it, and then you say times.05, and then you get a number, and then you say, let's just say times one fifty, a-and, [laughs] and that's how it happens, right? Totally.

328
00:55:02.188 --> 00:55:13.988
I mean, it's- You're like, if I produ- if I convert 5% and I can charge them $150 a year, that is... Let's, let's actually do that. What is that? Two thirty-three thousand.

329
00:55:14.048 --> 00:55:22.488
I mean, I'm sure it's a pretty compelling amount of cash, but I think the people who... You know, there's a cost associated with it for...

330
00:55:22.508 --> 00:55:38.908
And I think the people who are good at focus, like, kinda understand that at a pretty deep level. Yeah. No, I mean- How much is it? Say 233,000 times.05. That's 11,650. Let's use the...

331
00:55:38.928 --> 00:55:47.908
What is Ben Thompson at these days? A hundred and fifty or is he more? Of revenue? Yeah, I think it's probably ballpark. No, no. I mean, like, what he, he charges. Let's just say- Yeah, price... he charges. Price.

332
00:55:47.988 --> 00:55:56.568
Okay, Packy, if you're listening, charge, charge $150. [laughs] Okay? You've got $1.8 million. Yeah, it's not bad. Yeah.

333
00:55:56.588 --> 00:56:10.328
But I think it obviously doesn't get there overnight, and it comes with a ton of cost, and, you know, even 5% conversion is, is good on 230,000 readers, so it's not like these things just...

334
00:56:10.518 --> 00:56:19.698
It's not like money just grows on trees type thing, you know? Like, it takes a lot of hard work to support that kind of revenue stream. Yeah. With that said, Packy, if you are listening, I do think- [laughs]...

335
00:56:19.818 --> 00:56:28.388
you could flip on paid memberships and probably generate some revenue just purely from the patronage model. And I, I've said that to you, I've said that to him, said that to a lot of people.

336
00:56:28.708 --> 00:56:35.568
I understand the hesitation around it, but I do think- I'm not a believer in the patronage model, Reid, I gotta say. I just think it's...

337
00:56:35.608 --> 00:56:48.348
You'll get a certain number of people to do it, but I don't know, maybe Packy's different 'cause he's, like, really... You know, he's really tacked hard into this, you know, optimism lane thing, which is...

338
00:56:48.457 --> 00:56:59.478
Yeah, I'm sure it's very appealing to a lot of people in, in the tech community particular, particularly. What's the downside in having paid subscriptions on, just from a pure patronage perspective?

339
00:56:59.868 --> 00:57:11.248
Yeah, I mean, that's a great, th- that's a great point. I don't necessarily see the necessary downside to it. I think it might actually just be, and this is the part I was gonna get to, I think people don't...

340
00:57:11.308 --> 00:57:18.788
I don't wanna say there's, like, a fear of failure. I'm not saying this about Packy or anything like that, maybe just more about myself. But, you know, sometimes you don't wanna, like...

341
00:57:18.828 --> 00:57:23.008
You know, if things are working, you don't, you don't want [chuckles] people to say, "Yeah, this stuff's not that valuable."

342
00:57:23.168 --> 00:57:29.908
It's, it's a little bit of a, I don't wanna say both, like, an ego blow, but it's also a little bit demoralizing, right? I think- It's one thing... It's, what do they say?

343
00:57:29.968 --> 00:57:39.268
It's, you know, better to be thoughtful than open your mouth and leave no doubt. Sometimes it's better to think that you could do it rather than, because it takes a long time. A, a million percent. And it's a little...

344
00:57:39.328 --> 00:57:45.048
You know, and I do think that that's a, a real thing, is, um- I think especially if, if you have your type of background.

345
00:57:45.228 --> 00:57:54.478
Like, if you've been in journalism, media for a long time, and in your head you're like, "Yeah, I could turn on paid. I'd probably make-" Yeah, exactly. "... you know, X amount of dollars."

346
00:57:54.888 --> 00:58:00.568
But when you actually do it, it becomes, like, a factual thing. It's- Like, is this- You know, objectively, you can look at the numbers. Yeah.

347
00:58:00.708 --> 00:58:09.748
I mean, I'm doing fine, but I'm sure there was periods where I was probably texting you, I'm like, "Is, is paywall working?" [both laughing] "I could swear. Are you sure?"

348
00:58:10.328 --> 00:58:17.918
Which, you know, look, these things take forever, and that's just... I don't know. That's, [laughs] that's the moat for, for these things.

349
00:58:18.088 --> 00:58:29.748
Final thing is just on growth, 'cause, I mean, we, we talked a lot about growth sort of early on, and I have no... I have a, a lot of experience across a lot of different areas of publishing.

350
00:58:29.808 --> 00:58:36.828
Growth was something that I never was really good at exactly. And by growth, I mean, you know, doing...

351
00:58:37.367 --> 00:58:50.508
Look, I come from a journalism background, and I think one of the har- Like, there's a bunch of benefits, but there's some downsides to it, and, you know, I feel like if you're from a journalism background, you kind of view, you know, do- marketing as, like, icky or...

352
00:58:50.888 --> 00:59:01.688
[laughs] You know what I mean? It's like the Twitter threads era. Yep. I, I sat it out just out of, um, maybe this is also back to ego. I was like, "This is just, this is, this is too grimy for me."

353
00:59:01.988 --> 00:59:17.188
[laughs] It's tricky, man. I, I've been thinking about this a lot because I think the playbook that was used by a lot of the big newsletters today is no longer really usable.

354
00:59:17.288 --> 00:59:29.048
Like, Substack exists in the way that it does because Twitter was what it was for a long period of time. It was great for audience building, and then you convert, like, a small percentage of that to email list.

355
00:59:29.088 --> 00:59:40.628
You convert a small percentage of your email list to paid. Boom, you got a business. Yeah. And- That's the funnel... that, specifically Twitter and basically any external links, have been totally severed.

356
00:59:40.968 --> 00:59:50.048
Like, Twitter has become more of a siloed UX product, and also I think there's some compelling data to point to it's not doing as well as it used to.

357
00:59:50.568 --> 01:00:02.198
I think you could apply the same logic across, like, a lot of the social, big social platforms like YouTube and Instagram and TikTok. It's becoming harder to use as an audience-building tool. Like, they- Yeah...

358
01:00:02.218 --> 01:00:13.018
they're not as cool with, like, you linking out to do commerce elsewhere. A lot of these algorithms are, like, interest-driven in a way that doesn't even really allow you to build owned audience.

359
01:00:13.608 --> 01:00:27.364
So it's just a very different tricky environment. I'd wonder if you were starting, say you were, like, 25And you didn't have the decades of experience, and you were trying to build a media business.

360
01:00:27.404 --> 01:00:36.844
Like, the thing I've been thinking about is, what the hell do you do today? I think it's, like, r- actually a really hard question. Well, what kind of media business, I guess? I mean, I don't know.

361
01:00:36.944 --> 01:00:46.504
Maybe you shouldn't be building a media business at 25. Maybe that's so bad. Maybe I'm like Grandpa Simpson shaking his [laughs] fist at a cloud. I'm like, "I don't need the competition from 25-year-olds."

362
01:00:46.924 --> 01:01:02.024
[laughs] Uh, this isn't for you. This is very complicated. No, I mean, look, I, I... Look, I'm biased, obviously, but I think you have your best shot of building a media business if, one, you're in a niche.

363
01:01:02.674 --> 01:01:12.524
Y- t-the idea of building a, a general interest publication, I talk with a lot of people, and a lot of people who have been in this business a long time, like, literally nobody, uh, nobody is talking to me about that.

364
01:01:12.564 --> 01:01:24.064
They just do not see a pathway. So- Yeah... maybe other people see a pathway for building these big general interest publications, but I just look at what is happening and, and the reality is you're best b- in a niche.

365
01:01:24.484 --> 01:01:36.284
Now, the way to differentiate in a niche, the, the most practical way of, of dif-differentiating a niche is by having deep expertise in that area. And- Yep...

366
01:01:36.344 --> 01:01:48.784
Jeff Bezos says there's no compression algorithm for expertise. So it's probably an unsatisfying answer, but I would, I would go and get that deep expertise in- That's kind of what-... in a niche area.

367
01:01:49.284 --> 01:01:59.104
It's similar to what Packy said, which I thought was really smart. It's like we were talking, and he was like, "I don't see as much opportunity around, like, the 100,000-plus newsletters anymore."

368
01:01:59.164 --> 01:02:05.304
Like, I think those are kind of gonna become more competitive and less, less opportunities.

369
01:02:05.884 --> 01:02:18.484
But what you can do is try to focus on a very small group of people, and you want them to be excited when they see your post show up, and you want them, like, sharing it in small group chats and say...

370
01:02:18.624 --> 01:02:26.714
And, like, having that change people's mind within a very small group of people. Yeah. But, like, this idea, and I just keep seeing...

371
01:02:26.984 --> 01:02:48.144
Look, Substack recommendations were amazing because I could basically not think at all about all the stuff that I don't like to, to, to think about and that I'm not good at, and I have no le- bring no leverage to it, which is trying to figure out different seams in distribution in order to grow faster than organically possible, right?

372
01:02:48.264 --> 01:02:57.434
So I was just... The best part about Substack, in my view, is recommendations because it took care of the top of the funnel to some degree. You know? Yeah.

373
01:02:57.444 --> 01:03:06.584
There was always people sharing the newsletter and finding it organically, and they were so much more valuable than the, the recommendations- Yes... subscribers.

374
01:03:06.864 --> 01:03:20.044
But that r- look, the reality is, Casey wrote about this, when you get off Substack, growth becomes a lot harder. That is just a trade-off. Well, it's like stopping posting on a social platform. Like, it's...

375
01:03:20.134 --> 01:03:29.274
Because there are growth loops within the Substack ecosystem. Right. Recommendations, notes, credit cards on file. That's the thing he brought up that was, like, specifically impacting- Yeah... subscription revenue.

376
01:03:29.274 --> 01:03:38.044
I thought that was super smart because, like, you have, you have to realize that that is gonna... That is a real lock-in. It's something I didn't really, totally, fully appreciate.

377
01:03:38.264 --> 01:03:51.324
Any friction around paying for things is gonna, like, harm revenue. And when you have... Like, Amazon's figured this out, Apple, they all have... They used to all talk about credit cards on file, and for good reason.

378
01:03:51.364 --> 01:04:01.864
You know, you... If you have payment information, you can actually drive a lot more commerce. Same thing with Substack versus any other newsletter platform where things are more siloed. Yeah.

379
01:04:01.884 --> 01:04:07.244
But I think that's what I'm saying. It's like w- a lot of times people want... It's just like the get rich quick schemes, right?

380
01:04:07.484 --> 01:04:17.824
It's, it's, you know, whether it's recommendations or whether it's Beehiiv, Booze, or Spark Loop has their own sort of thing, and there's a, you know, basically recommendations became...

381
01:04:17.884 --> 01:04:31.284
I mean, to me, this is multi-level marketing, right? It's like people are buying ads on Facebook or whatever, bringing them into an ecosystem, and then charging other newsletters.

382
01:04:31.324 --> 01:04:42.324
Like, pretty much everyone gets passed around. I think there's a crucial difference between some of these flavors versus other ones, where if you put a price tag on it, it becomes transactional.

383
01:04:42.904 --> 01:04:48.064
If it's more of like a editorial decision, like on Substack, I think that's kinda different. You know?

384
01:04:48.104 --> 01:04:59.464
Like, you have big newsletters helping out smaller newsletters, and there's not really, like, a expectation that the smaller one's gonna pay the bigger one. You just... It's kinda goodwill.

385
01:04:59.524 --> 01:05:10.714
It's kinda editorial, and I think that's a different dynamic than charging money for these kinda things. Although there's a lot of backroom dealing with this, you know. I would get people- Yeah...

386
01:05:10.724 --> 01:05:19.204
who are like, "Hey, you scratch my back- And, and that's okay... I'll scratch your back, and let's see-" [laughs] Hey, that's, that's totally okay if there is some value exchange beyond...

387
01:05:19.264 --> 01:05:28.864
that's monetary or closely related to it, but it's not baked into the feature in the way that- Right... it's, like, front and center with other versions of it. Right.

388
01:05:28.944 --> 01:05:34.864
And again, it's like the incentives, you know, the devil is in the defaults, and, um- Exactly...

389
01:05:34.924 --> 01:05:45.774
you know, you s- You can see, you can see the types of experiences that they yield too through those, through those slightly different defaults. Yeah. So what, like... And then we'll, we'll wrap it up on this one.

390
01:05:45.844 --> 01:05:51.124
But what, what are the growth paths then outside of...

391
01:05:51.144 --> 01:06:07.344
'Cause to me, that's the centrifugal force that will, that will lead most of the market to these platform solutions because the growth paths for a truly independent publication are kinda closing.

392
01:06:07.404 --> 01:06:19.784
Now, I look at it as an opportunity in some ways. There's sort of... It's like SEO. It's g-going through the biggest changes ever- Yeah... right now, okay? Yeah. Hard, hardest it's ever been. And who would've thought?

393
01:06:19.844 --> 01:06:29.238
Like, that seems so, so durable and defensible, and boom.Yeah. Changed almost overnight And like, you know, Facebook sort of- Yep... you know, they got out of that business.

394
01:06:29.688 --> 01:06:39.998
Twitter, I think the direction of travel on Twitter is fairly, X, whatever you wanna call it, is pretty clear. Yep. So I don't know. What is, what is the sort of growth path then?

395
01:06:40.048 --> 01:06:52.568
Because you have to fill that top of the funnel for independent publications. Yeah, this is what I'm saying. I think it's, like, a fascinating problem. Noah Smith has this post that I've thought about a lot.

396
01:06:52.608 --> 01:06:56.628
He wrote it, like, couple years ago, maybe, maybe like a year ago.

397
01:06:56.668 --> 01:07:06.668
It was right around when all the Twitter clones were launching, and he was talking about how the internet was becoming more fragmented, and I think that's true, and it's gonna play out over, I think, an extended period of time.

398
01:07:07.108 --> 01:07:18.548
Who knows? Maybe it doesn't. Maybe things bend back toward, like, everybody using Instagram and Twitter and TikTok. But it seems like the internet's moving toward a more fragmented world. And the...

399
01:07:18.588 --> 01:07:28.058
You know, I, I think a lot about, like, the streaming businesses we built. We built them on top of everybody being on the same platforms, Google Search- Mm-hmm...

400
01:07:28.058 --> 01:07:40.548
Facebook, and we had or we had paid marketing going through those platforms, and we had organic marketing. You know, we, we had handles that we owned. We posted there all the time, audience development.

401
01:07:40.628 --> 01:07:47.258
And all of that, I don't wanna say it's out the window, but it's not growing like it used to. Yeah.

402
01:07:47.278 --> 01:07:57.908
And so I still think if you're in your position, I think you gotta find ways to check the, check the box around sharing to social. It sucks. Nobody likes doing this anymore. It's like taking the trash out.

403
01:07:58.418 --> 01:08:04.008
[laughs] But you, you still gotta do it, you know? Like, that's still where audience is, and if you are- I'm gonna tell-...

404
01:08:04.108 --> 01:08:12.068
trying to grow email lists- I'm gonna tell myself this when I'm, like, logging into LinkedIn, right? [laughs] Yeah, man. I mean, it's, it sucks. Nobody likes, nobody likes doing this anymore.

405
01:08:12.088 --> 01:08:23.748
But I think if you're, if you're in the game of trying to grow top of funnel email list subscribers, and all that is, like, really valuable in driving bottom line revenue- Yeah...

406
01:08:23.808 --> 01:08:26.208
still, you gotta find a way to share to social.

407
01:08:26.788 --> 01:08:46.228
On the flip side, I would try to shift the mindset to the Packy thing of, like, how can I care less about email list growth, and how do I care more about, like, valuable views and valuable shares, people responding to emails, which you've talked a lot about.

408
01:08:46.308 --> 01:08:56.217
Oh, yeah. Yeah, for sure. People leaving comments. I think sometimes people get too caught up in dashboards and watching numbers on dashboards. Um, I always saw this at, at previous jobs.

409
01:08:56.268 --> 01:09:05.688
Like, there was a lot of people who were viewing business metrics through dashboards rather than you gotta get close to the metal.

410
01:09:05.908 --> 01:09:17.308
You have to have a feel for the business and, and how it is resonating and, you know, things like who you're hearing from, whether you're hearing from the right people.

411
01:09:17.348 --> 01:09:27.868
You know, for instance, if you have a podcast or even a newsletter that features people, follow up with them and say, "Who, who did you hear from afterwards?" I mean, I look- Yeah... at the impact of...

412
01:09:28.408 --> 01:09:34.848
You know, when you look at a podcast, right, it's... There are all these just, like, random numbers about listens, downloads, and whatnot.

413
01:09:34.858 --> 01:09:46.348
[laughs] The test for me, if, if you're in a niche area and you're not just, you know, looking to, to, to do underwear ad reads or whatever, is it's who do, who do people hear from? Who do you hear from?

414
01:09:46.408 --> 01:09:56.217
And then who, who do your guests hear from? I always ask them, are you... And you know the strength of it based on that in my view. Yes. Like, that's enough. It's the kind of thing- You gotta re-...

415
01:09:56.217 --> 01:10:06.398
with people versus algorithms. I hear from the right people, and I'm like, "Okay, that... Yeah, the Captivate stats are fine, but that's not, that's not sort of the main thing that I, I focus on at all."

416
01:10:06.948 --> 01:10:09.408
But it, it takes a retraining your brain a bit.

417
01:10:09.548 --> 01:10:23.648
If you were part of this, like, era of daily active user growth, monthly active user growth, email list growth, like, all these top-line metrics where you're trying to just shoot them through the roof, this is a different mindset, you know?

418
01:10:23.708 --> 01:10:36.028
And I think we are... If we are moving truly toward a more fragmented internet, I think it takes, like, a slightly different perspective on valuable growth, not just growth for the sake of the numbers. For sure.

419
01:10:36.408 --> 01:10:52.808
All right. That's a great way to leave it. Thank you for spending all this time. Reid, this was very therapeutic. Love doing it. Let's do it again soon. Okay. Cool. Awesome. Thanks. [outro music]