[on-hold music] Welcome to The Rebooting Show. I'm Brian Morrissey.
This is a Las Vegas edition, so it might be a little patchy. I'm here for, for CES. I've been here 36 hours. I got lost in a casino twice last night.
It took me probably 45 minutes to walk, uh, back to the Aria from the Cosmopolitan, and they are right next to each other. So don't recommend that.
Anyway, f- I'm very excited for this week's episode, as I am for every week, but particularly for this week. I don't say that to every guest, Reid. Uh, because I'm joined by, uh, by Reid Ramirez. Reid is, uh...
Are you the head of growth? What are you? IC growth at Substack. You're running the growth stuff at H- Substack. That's what I'm gonna say. We're, we're a small team, so we're all, we're all trying to- I know...
you know, survive out here. [laughs] Okay. So I... Reid, uh, Reid is, is, is super smart on all things growth. [laughs] You, you had been at... No, you, you're not laughing. You are.
'Cause we had spoken before you actually joined Substack. You were doing YEM, and that was acquired by Substack, and you were building a growth engine for, for newsletters.
And I'm particularly interested in this subject for various reasons. And so I wanted to have you on in a bit of a therapy session, Reid, to talk about, like, how the hell we grow. Does that sound good? It does.
And I, you know, I also recently hopped on the other side of the table, and this is a counseling session for me as well. So- Oh, uh, yeah... I'm excited. We're gonna do it both sides. [laughs] 'Cause Reid is, Reid...
Everyone needs to subscribe to Reid's own Substack, uh, which is The Growth Croissant. Uh, there's no "the," but I'm gonna add a "the." [laughs] It sounds more formal. You like it? I know.
It's like- I mean, you can stop listening. Yeah. So as you can see that Reid is very dialed in on growth. Anyway, do subscribe to Growth Croissant because, like, you know, just like...
The, the first one was actually, it, it was really helpful because it's... You know, a lot of times people throw around things like LTV or, or what is it? CLTV, like, and don't really understand the math behind it.
But I wanna talk all things, like, about, uh, growth because, you know, look, any time you start one of these things, like, everyone...
Any time I get together with, like, a group of, of, like, solo-type people or whatever, it all comes... It, it's growth and monetization at the end of the day, right?
I mean, you gotta make the stuff, and that's one thing, but then you gotta grow your audience. And then, you know, you don't have a business without distribution, and then you gotta monetize.
So, you know, I wanna really focus in on the growth function. But, but to start, like, give us a little background of, of what you did at, like, Crunchyroll and HBO Max and stuff. Yeah. Yeah, okay. So I
grew up in the Carolinas and then, like, randomly joined, uh, Hulu in LA. I moved from Charlotte to West Hollywood. It was, like, a, a pretty big change in scenery.
And, uh, from there, I basically got super lucky to ride this, like, wave of value shifting from paid TV, cable TV, to streaming video.
And my role for the past decade at, uh, at Hulu and Crunchyroll has been around, like, how do we get more paid subscriptions for these, like, pretty big consumer products?
When I joined Hulu, it reminds me a little bit of today, uh, with, like, where we are with, like, the creator economy or, or whatever term you wanna throw to it. Reid is doing air quotes, everyone.
Where it wasn't, like, a guaranteed thing that people were gonna buy video over the internet. Yeah.
And when I walked into Hulu, I was barely qualified for any job, and so they were like, "Hey, just take this Hulu Plus gig," and because nobody thought it was gonna succeed.
At the time, Hulu was mostly an ad-supported free streaming product. College kids would use it to avoid buying, you know, uh, cable, and they'd be able to watch, like, the next day, uh, NBC primetime show.
Fast-forward 10 years, and now, like, the biggest companies in the world are fighting it out in the streaming wars, where, um, I think today, you know, I've been pretty shocked by, like, how many people pay for emails basically.
You know, that's what newsletters... Uh, I think it's awesome, and I, I hope that we see more of that transition happening where it's not so much the future...
Sorry, I'm get- like, going way off on answering your question here. [laughs] But I hope the future is less like Disney and Netflix. Those will still be around obviously. Yeah.
But I hope we see more, like, niche, uh, media companies operated by individuals or, or group small teams, and that's something that you've written about a ton, you know?
And I, I totally agree with, like- I'm gonna will it into existence, Reid. If I keep writing about it, I feel like it's gonna happen. [laughs] No, I think it is gonna happen. Yeah. Because I, I think the future...
I always say this, like, I th- or really think it's not a f- uh, the future, but a future of publishing, and I think it's a bright one, is building these, like, teams, whether it's one person, and I've had them on, like Casey, uh, Newton and stuff.
Whether it's building small teams, micro media companies, whatever you wanna call them, that are super lean and efficient and, you know, subscriptions is usually part of them. It doesn't have to be part of them.
But I think that it, it does provide, like, tremendous leverage when you have your audience be your, your customers. It's just, it's so much better. Yeah. That said, I do...
One of the other sort of things I, I believe is the publishing function is very robust and, and complicated.
And so you need to figure out an infrastructure to be able to do all of the aspects of the publishing function, which is beyond just, like, making content and, like, and, like, taking in subscription money.
Like, there's a lot of, like, stuff you gotta do. And I think that- Yeah... there are new tools and platforms that are developing that are gonna enable that, that you could never do that before. So I think this is...
This gets back into kinda where I was going. So when I was...
Like, the reason that drove me to, to start YEM, uh, the, and how we ultimately were introduced first, was this, like, I was thinking in the back of my head, all the teams at Crunchyroll and Hulu and HBO that were focused on, like, monetization, audience growth, like, all these things that didn't relateAt all to creating the actual core product, which were the TV shows or the movies.
That was like an enormous investment for these media companies. Head count, actual money being spent on Facebook, Google, all the ad platforms, TV ads, like all... Like, just
so much effort went into promoting the actual content that was, you know, kind of the core value prop. And I was looking at people doing really well on Substack or Patreon or...
And it struck me that all two of them didn't have any of those functions. They were having to do both.
They were actually having to create the product and turn around and write all these, like, LinkedIn posts or Twitter threads or- [laughs]...
figure out all the d- like, cross promotions, bartering, doing ad sales, which, you know, you've spoken about. I love it. I love it, Reid. That's what I'm doing here.
Outsource your content creation and just do pure- I'm, I'm shaking hands. I'm kissing babies. [laughs] Petting dogs. Just, you know. [laughs] I'm here with my, my partners at Outbrain, so...
But yes, it i- there is a lot of these functions that to get done, and I think one of the things, like, you know, we've always gone back and forth with, like, some of the Substack stuff, is, you know, the product is, has simplified the, the business model to a degree.
Some people, I'm like, I, I need flexibility for me personally b- because I just think in, in the area I'm focused on.
But it- it's hard to solve for every use case, is, you know, the reason it works is because it is a pure subscription model to me.
'Cause, like, you have to make difficult choices if you're gonna be, like, a solo person or just, like, a couple people. Like, you have to make hard choices about...
I say, like, "Oh, the best way to make money is many ways," but, like, there's, like, a corollary to that [laughs] because anytime, like, you're gonna add a, a, a business line, you gotta support that business line.
And there's a lot of, like, functions that need to be taken care of to be a real publisher. Well, okay, so then if, if we're talking about revenue streams,
I think it's, it's important to make sure those aren't, like, competing with each other. Yeah. I think that's something that's, like, often overlooked.
Like, one example when we were in the streaming world was, say you have a business that monetizes a lot via merch. Think about, like, Barstool or, or something in that camp.
And, uh, you have a TV show that you want to put behind a paywall to drive a lot of paid subscription growth. Those start to kind of, like, cause friction with each other. No, yeah.
'Cause now you have the T-shirt people saying, "Don't put it behind a paywall. I'm trying to sell more T-shirts." And you have the paid subscription people saying, "Wait, wait, wait, wait." Like, how are you- Yeah...
introduce these different revenue streams. Yeah. You create conf- I mean, that... But I don't know. Everything in life is messy. I... To me, it's just like that's how... 'Cause, like, we would always, like, a, a...
In my former job you have, like, a membership subscription program, right? And then y- you can count, like, on it. Like, the sales team will come over and be like, "Hulu."
[gentle music] I actually remember Hulu used to do this.
Like, Hulu is like, we have a big deal with Hulu to take down the paywall for, like, the new fronts or something like this. And, uh- Right... like, oh, that's interesting.
But here's the thing, like, we're building a different business line here, not, like, a, a, something to support an existing business line. Like, why would we do that?
Yes, it definitely creates conflicts because you end up getting... You know, your ad sales team says, "Well, you know, if only we had more inventory because too much stuff is behind the paywall." Sure.
So yeah, it's managing conflicts. [laughs] That was a big thing at Hulu. And Hulu actually was the best business model ever because it had ads and subscription revenue. Yeah.
Before Netflix, like, ruined that by making the consumer expectation that if you pay for something, there's no ads.
Hulu Plus was a dual reve- revenue stream business, and the ARPU was, like, the, the revenue per subscription was, like, back when Netflix was, like, you know, 8 to 10 bucks a month. So it was a glorious business.
But, um, you know, now everybody's had to introduce ad-free products, and now we've circled all the way back to ad-supported tiers and Netflix considering doing ads. Yeah. So.
So let's get, let's get back into the growth stuff because you gotta keep growing, right? And I think one of the, the challenges of newsletters is there's no...
I mean, nothing is easy, like, in, in life really, but all of the, the, a lot of the growth tactics, I feel like, that people are using, I, I use the word tactics, not strategy, 'cause I really do believe a lot of people, uh, have, like, an accumulation of tactics.
It's like, "Oh, Morning Brew did a referral program. Now I'll do referrals." And, like, it's going from tactic to tactic, which is fine.
I mean, it's like, it's, to me, it's, like, difficult to catch, to, to keep up, and so I just sort of, like, tune out a little bit on it. Probably not a great idea, but that's just how I cope. But, like, I don't...
I think the, the big challenge ends up being, like, how do you have, like, a regular growth machine, right?
Like, you need ultimately with, like, even with sales, like, to use sales, like you end up, you need a sales machine. Like, it's different having a sales machine than, like, selling, like, some ad deals, right?
And I think that's the big challenge is how do you get that growth machine? Because I think about, particularly with, let's use Substack, but I think about it, like, in relation to, to Shopify, right?
Like, Shopify, I think that there's a lot of corollaries in that Shopify provided a platform for independent merchants to, that, that they would never have been able to exist before.
What Shopify didn't solve for is really is growth, right? And they outsourced that to basically to Facebook and Google through, through ads. Right.
And then for a bunch of different reasons, that growth engine got cut off, right? And a lot of DTC companies struggle. Now how do you end up thinking about-The growth machine that is needed Yeah Is- No, totally.
Okay, so I think there's three elements, and we, we kind of wrote about these, uh, in a, in a recent Substack post. There is a, like, a, a network effect element that we're trying to create, um, within Substack.
Recommendations being kind of the, the centerpiece of that. But there's, there's other things that we're trying to do to, to create many or, or large scale network effects within Substack.
There is, like, having your own growth team, and that's what Substack Boost... That's, like, the promise, what we're trying to have Substack Boost be, um- Yeah. But let me just jump in.
Substack Boost is basically, like, an optimization engine for converting your free subscribers into paid subscribers.
Like, it's collecting a bunch of, like, data and signals and stuff, and so it's, it's making smart offers or pricing decisions that convert more people incrementally and produce more revenue. That's what it is today.
Okay. The long-term vision for that is for it to be like a light switch, where it's like, "You know my audience, and make more money." Yeah. That doesn't mean that there's no... Like, we also want the...
Everybody is different, and we want configurations in there so that you can go in and understand each of these elements that are within Boost.
You can go in and see the impact, you can understand what it is, and you can turn it on or off. Or, in certain cases, customize it.
Like, if it's an email within Boost, you can go in and adjust the subject, the copy, the call to actions, whatever it may be. So that, that's kind of, like, each publication,
uh, we're doing more and more, like, growth stuff tailored to each publication, and that's pretty different from network effects. Okay.
And then the third one is just, like, we're trying to stand up a process of, like, continuous improvement, and that's just, like, doing a lot of experimentation, trying to figure out, like, which parts of the product could be improved and just like, yeah, trying to get into a rhythm of always, like, doing things sort of gradually, incrementally, making the product better from a UX.
And that's both for consumers, subscribers, and publications authors. Yeah, I mean, it's like my pers- I, I think it's pretty generally agreed on. Like, recommendations was, like, probably the best
feature that's been shipped [laughs] out of Substack, I think. I think most newsletter writers would, would probably a- agree on that one. I mean, 'cause it, it works.
Like, and it's fairly frictionless, so, like, I do wish the analytics were better so that I could know, like, very easily, like, what the open rate is for Substack recommendation subscriptions versus, you know, ones that were obtained the old-fashioned way, by begging people to share the, uh, newsletter.
That's, uh, very interesting.
[laughs] I, I think that, like, speaks to, like, like, sort of how handcrafted a lot of the growth strategies, quote unquote, more air quotes, are, [laughs] um, out there when it's like, "Please share this newsletter."
I mean, I do it too, and I'm like, "Oh my God, really? Is this, like, how we're [laughs] gonna grow this?" But recommendations has been... And I think that's, like, that's got to be an important feature, right?
Because, like, without the network effects, you know, Substack, uh, might be just, like, an email tool that, where you can take subscriptions. Correct. Yeah. And it wasn't, like, an obvious home run fit either.
You know, I think this all predated me. Um, and Sasha and I, I... But, like, from what I understand, it wasn't, like...
There, there wasn't a ton of confidence that publications would actually recommend other publications or that, you know, it would kinda take off to the degree that it has.
But yeah, you know, I mean, it's, it's been transformative. It's driven millions of subscriptions and, and it's only been live now for, you know, eight or nine months. Yeah.
So on the growth, uh, aspect, 'cause everyone wants to grow, everyone wants to grow their newsletter. Subscribe to my newsletter. There's always the question about, you know, exhaustion.
Like, I just, like, I go in and out with the information, and I just, like, resubscribed and stuff like this. Oh my God. Like, they must send, like, 20 emails a day. Like, I- Yeah... I'm, like...
I, I'm really overwhelmed, and that's just the information. And I'm always like, maybe I'm, like, too shy because I get, like, annoyed at that, like, about, like, sending too much.
Uh, but, like, there's always the question of, of email fatigue. And then obviously how many newsletters can people, are people gonna pay for is always the other question. So let's tackle those two questions.
One, email fatigue, because, you know, I think you guys have been, like, sort of edging away from e- even being thought of as, quote, "an email newsletter company." And I think I have, like, mixed feelings about the app.
I think it's a great... It's a nice product. I like the, the direct connection that you have with email. But tell me about that. Like, how do you look at, first and foremost, the email fatigue?
And, and do you see that in the data at all? I think, um, power users are not as common as people may, uh, think. Like, the, the majority of people on Substack have one subscription.
Extreme cases, you know, people who have been subscribed for years. I know. When they, when they come in as scribe- [laughs] as subscribers, I was like, oh my God. You see it, right? Yeah. You, you see it... Yeah.
Actually, yeah, so I, I like sort of- I'm like, "Do you have a job? I, I thank you for the subscription, but do you have, like, a..." Yeah.
I almost think of it, like, at some point it's gotta be like, you know, having The Economist on your coffee table. You know, it's just like- Oh, boy... you're, you're...
There's a signaling element to it, but, um- Ooh, I like that. No, but- I want the, I want the rebooting to be that 'cause Economist is a real high price point. Yeah, I think...
But I do think fatigue is, like, a serious concern. I mean, it happened in the streaming s- space too. Like, there was this massive period of, like, unbundling where, you know, like AMC had a- Yeah. Like, you...
There was millions of a la carte options. Exactly. And then it kinda got reconsolidated. But there's... Yeah, I don't know. I don't really know how it would play out. I, I don't think it's, like, a...
I think it's probably something that's, like... I don't wanna say, like, overblown, but it...
I don't think it's, like, a, a big issue today.I think it's, we're more in, again, like we're more in that early stage space where, like, the vast majority of people still just don't really, like, read newsletters like a lot of the power users do.
Mm-hmm. And certainly not that many people pay for newsletters or pay individuals or small teams of people create content.
I think that's a bigger risk than email fatigue, you know, just like more consumer adoption of this type of behavior on the internet.
[gentle music] You mean, you mean the behavior of, of paying for a newsletter?
I mean, people obviously they're... It's now, at least in the US, like, I forget the figures, like, 15, 20%, like, pay for some form of, like, content, uh, online. Like, news content. Like, not entertainment stuff. Okay.
Obviously- Yeah. So if you're, if you include New York Times and Wall Street Journal and stuff like that's a... Or Business Journal, that's a bit different to me than somebody paying for, like, a individual- Oh, okay.
Yeah... individually operated small team. But of course those lines are blurry, you know? But I still just don't see...
Like, if you, if you were thinking about, like, all the paid subscriptions from Patreon and stuff, and then all the ones that are being operated by small teams, I think the, the total sum of those subscribers, free and paid, I just don't think that we're...
There's, like, that much... It's that prevalent of a consumer behavior yet. And I think we're still in, like, the rising tides lift all boats element. Like, when we were at Lulu, we weren't...
We were trying to, like, outrun Netflix a little bit, but it was more like whenever they were doing well, we were doing really well. And I, I think we're more in that zone than we are, like, zero-summing competition.
Yeah. So when you're... Like, the rule of thumb generally, but I think with Substack in particular, is to, is that most fall in the 5 to 10% conversion, right?
Like, I mean, it depends on pricing, it depends on everything, right? Like, but... And, and I, I talk with people. Like, I had Isaac, uh, Saw from Tangle on, and he's converted like 15%.
Not on Substack, he's, he's off Substack. But yeah, you, you have, like, outliers, but, like, it's fairly rare. Is that right? Is that correct? Is that what you're seeing? It's... It is all over the place.
Uh, but I'd say 5 to 10% is, like, generally a good, like, guidepost. But I mean, we have a lot that are below that, and we have a lot that are way above it. So, and it, and to your point, it depends.
So there's so much volatility on a publication-by-publication basis, and people price their products very differently. They do very different value props. Some people on Substack don't paywall anything.
Some people on Substack paywall everything that they do. Yeah.
Some people, like Doomberg is a really interesting example of, of, of somebody who had a very opinionated view on how to launch, uh, their newsletter, grow their audience, and then turn on paid.
So for the first year, everything was free. After that, everything's been paywalled, and they do a free preview on every one of their posts, but nothing is freely available anymore.
And they're one of the top publications on Substack now. Yeah. Yeah. I... It is interesting to see all, all the different strategies. But I guess my question ends up being, let's just use the 5 to 10%.
Like, at that point, you're capping your monetization with, like- Oh, yeah... with a small sliver of your audience. And I don't know, I've been in, like, publishing for a little while, that generally doesn't fly.
Like, I mean, like, why, like... I unders- Like, you can't have 90% of your stuff be, like, marketing. Totally, yeah. I mean, you...
When our last call, and this was, like, a pretty big light bulb moment for me, when you were take... When you, we were talking about the rebooting and, like, monetizing the audience and, like, you have...
Yeah, if your only tool is paid subscriptions, you're only gonna monetize 5 to 10% of your audience on average. I couldn't sleep at night, right. [laughs] It's worth thinking about.
I'm dedicated to monetizing a higher percentage of the audience. [laughs] And it's totally doable. Like I said, I mean, there's people who are way above 10% with just paid subscriptions. Yeah. But there's...
Some of our best performing Substack, the people who are entering, like, media empire mode, they're not just doing paid subscriptions. They have other revenue streams. Yeah. There is...
There's one, there's one company that still only does, one media company that only does paid subscriptions, and it's Netflix, and they're about to change. Yeah.
So if you, if you cut the line of thinking, if this corner of the internet is gonna [audio glitching] you need more than just subscription revenue- Yeah... to, to make...
If you want as many people as possible to do what they're doing here, you need more revenue options. Yeah. So let me ask that. So, so when, when are, when are we gonna have Substack Plus where you guys fill in the void?
Because, I mean, this is, like, a typ- This is my sort of skeptical hat is, and maybe it's 'cause I'm leaving Las Vegas in, like, an hour, but, like, inevitably this creates a problem that, like, Substack will so- step in to solve, right?
I mean, like, that to me is, like, the end result is that if you're only going to capture 10% of your audience with subscriptions, and there's some people, you need to get people into that funnel, there's probably gonna be i- inevitably a Substack Plus thing where you get access to a certain number.
I'm sure you guys are working on it, even if you won't tell me. Oh, you mean like a Medium style, you pay one to- I mean that, yes.
Like, ultimately, like- I don't think that'll happen, 'cause I think that breaks the, the bond between the writer and the audience.
We may do things that are in that, like, dance a little in that direction, but I, I don't think it'll ever be a, like, Medium style-I have fine. You're using Medium, but like, you know how to...
And like y- like y- the streaming, right? Like unbundling is always followed by some form of rebundling. The, the, the hope is only that the rebundling is smarter than the previous bundle. But like I understand that only
the, you know, that many people only have one Substack subscription, but I... And, and it could just be, again, focus group of one and stuff like this.
It-- but I, I f- it seems like there is a, a both a consumer need and also like a publisher need to have some kind of in-between state from the all or nothing kind of thing. Like it just...
I, I hear it like all the time. I mean, I don't like-- I haven't done like subscriptions yet. I'm going to eventually. Uh, but, uh, you know, there's lots of people who, who...
And, and we experience it ourselves, who are like, "Oh, I would like to have..." I mean, it's why people keep trying on micropayments.
I'm not saying it would be micropayments, but I would guess that there's a lot of people who would be like, "Yeah," like, "I'll pay like Substack like 10 bucks a month to be able to access five articles, like on different Substacks to participate in like whatever you wanna call Substack Plus."
Yeah. I think there are some compelling options that are in that direction, but i- if I were to put my newsletter hat on, and I'm offering a paid newsletter- Yeah...
I hear the word, I hear the capital B, bundle word, my, my mind goes to, "I'm losing my relationship with the subscriber," which is- Yeah...
not great, and I'm getting paid pennies on the, you know, dollar for what my newsletter is worth. And both of those, I think, are not very attractive. And that's one thing. Now, I think there's... And you're...
The, the problem space is real. Like if, if you're not monetizing 90% of your audience, there might be something we can do there to like help chip away at that. But I think we would always...
We-- There's some principles that we, that won't really, that we won't really like break to, to do that. What, like ads? No, I don't think... I mean, we've talked about this a lot. And look, I- [laughs]...
like probably, uh- I've been bugging Reid about ads for a while [chuckles] And I don't think there's like a s- super strong... Yeah, I don't wanna, I don't wanna like speak on behalf of, of Substack here. I know.
But I think like, I, I think there, there's a lot of people within Substack who feel that ads are a viable revenue stream and something that could help.
I think there's legitimate concerns with the types of content that can- Yeah... can lead to create this like where it's like down to the bot- you know, race to the bottom.
Um, and, uh, I think we wanna be careful- Yeah... to avoid that but like- And, and l- l- yeah, Hamish, like, I think, was tweeting just the other day about this.
Like, you know, and look, there's, there's no perfect model, and every model has upsides and downsides, and I get it.
Like the, you know, alignment is really important for any endeavor, and publishing is, is no different.
And you gotta align incentives a- a- as best you can, a- with the reality that it will always be imperfect to my degree. Like, I've never seen a publishing business model that has perfect, like alignment.
If, if you have like a rich benefactor, then, you know, you're... It's easy to say that you're not going to, that you're gonna write in a way that is to please that, that...
If you have subscriptions, they're gonna say, well, you're just preaching to like the choir of people who are like most, let's say, if you're like a political writer, that are most like extreme because... I don't know.
So it's, it's managing and trying to get the alignment as, as, as tight as possible, and I think, I think one of the things that, that is r- to me is like really attractive about Substack and the, the model is that when you can really align with the audience interests, it really goes against a lot of the shitty parts of digital publishing over the last two decades, where there's a clear misalignment between what is good for the publisher's business and what's good for the audience.
[gentle music] You know, one thing that I, I think you absolutely nailed is like you, you don't really care how many people are on your email list as much as you care about who is on your email list.
Yeah.
And I think that is what is really exciting about the way that the media space is bending, where like follower accounts and like, you know, total likes on something mean less than like who is commenting on your post or who you're...
the responses you're getting over email, uh, when you put- Yeah. That is for sure. Like, that's what I always like...
We talk about like signals, like, uh, you know, the, you know, the analytics can get a little better on Substack. But I always like say to people, like, "Look for like signals beyond like dashboards."
Like, and it's even like, you know, for me, it's like coming to CES and like you meet people, and you like, you hear things, right? And like, you know, they...
What-- How people describe what you're doing, uh, to me is like very important because like if there's... Go back to alignment.
If there's alignment in the way people describe how they perceive what you're doing and how you think of what you're doing, then you're in a good spot [chuckles]. Mm-hmm. And that matters. Yeah.
That's not in, that's not in a spreadsheet, I think. Yes. Totally agree. All right. So what else should we expect for new growth features from Substack?
We-- The needle that we always try to thread is for it to be impactful, for it to be super easy to turn on and use- Yeah...
and for the writer or the publication to be in control of whether that thing is on or off, and whether it's in their tone, verbiage, feels like it's coming from them.
So those are principles that we always try to like stick to. It's not easy. And one thing, going back to like, you know, we're talking about like how to grow in general, there's...
And the tactics, you know, the ever-evolving toolkit of tacticsThere's no silver bullet here, you know, and getting each individual subscriber, especially a paid subscriber, is massively difficult, and it takes a long time.
So I think the number one thing to do, and something that I think you've done really well, is just be consistent. Show up every week, put something on paper, put it out there. Yeah.
And, you know, you'll wake up in a couple years and you'll be like, "Holy shit, made a surprising amount of, amount of progress." But I wouldn't... Don't expect by some feature a ton of revenue.
That's so rare that- Yeah... that you f- you stumble into something. I know. And that's why I, I think people, people always gravitate to overnight success stories, I think, because we all want them. We all want that.
[laughs] We wanna wake up and, like, you know, it's like, "Oh, wow, this is amazing." And the reality is...
It's funny 'cause, like, I think my early candidate for word of the year, at least on the business side, is grind [laughs] 'cause, like- [laughs]...
literally it's the word that was used in, like, 80% of, like, the conversations I had in Las Vegas. And it's like, "Oh, how are things?" "It's a grind." [laughs] And that's just the reality. And, you know, I think
we sort of lost sight of that. You lose sight of that, like, in, like, you know, bubbly times.
But if you're, if you're gonna grow, uh, something, a publishing brand, and leave aside the sort of, you know, Milk Road ex- like, all this, like, cra- like, they're outliers for a reason. It's gonna be a grind.
It's gonna be, like, up and down and, like, you're gonna dink and dunk your way down the field. [laughs] Yes. [laughs] Yeah. And, and something like Milk Road, like, Sean and Ben are pretty expert growth people.
They have some audience before launching it. So I think often those are exceptions to the, to the rule, which is like, this stuff just takes a long time and takes a lot of effort. So yeah, just would double that.
It's a grind. Yeah, it's not easy. So, you know, I, I kinda emailed you about this. I'm thinking about, like, who is the audience for this thing, right? Okay.
And I actually think that's, like, a, a really important thing for anybody to consider if you're, if you're starting to, you know, put something on the internet.
And I waffle between, like, people who are trying to grow their newsletter and then people who are at, like, big media companies, and they're in the weeds of the data and they're, you know, they're starting...
They just have more resources around them, you know? And you saw the first thing, so it was like I, I... We're getting into, like, customer lifetime value. Yeah.
Which I think from Gimlet, a lot of the people that I worked with there connect in a pretty dedicated way. I don't think that's, like, a common thing to be curious about. You know?
Like, I, I don't know how many people on... writing on Substack really care about, like, customer lifetime value or using that to make strategic decisions. Yeah. But they should. Um, yeah. May- maybe. I don't...
Bri, I'm just, I'm just trying to- Well, I'm saying it's like, it's...
I, I understand what you're saying, but, like, just because you're, like, a writer doesn't mean you get a pass for, like, you know, anything involving equations and math.
Like, if you wanna run a business, run a business. If you don't wanna run a business, then, like, don't. But, like, I think you guys have abstracted a lot of stuff that have made it, like...
A- and it's really remarkable to be able to, like, set up, like, basically a media business in a box. Like, I'm like dealing with this. Like, if you don't wanna deal with QuickBooks, don't run a business.
Like, if you don't... Like, I...
Like, to me, it's like if you're gonna be successful long term, and you're gonna have subscriptions at the heart of your business, well, you better start to learn a lot of stuff, uh, because nothing is easy, everything is a grind, and you're gonna have to understand concepts like customer lifetime value and how to optimize to it.
I don't know. 'Cause- To me it's like it's early, it's, it's part of the maturation. Like, if you're, like, a year in to operating a, a, a business, right?
There's a lot of stuff you don't know, but that doesn't mean that you shouldn't learn, I don't think.
I, I think it's, like, one of those things that you, you kinda pick up through experience and then you forget about it.
And then at some point in the future, you're making a decision and you're kind of aware that there's, like, this invisible layer in your head that's like, "Oh, that's like I'm using this, like, CLV concept to help guide me to making the right decision here."
I hope that is the s- you know, where the, like- Yeah... it's not so much, like, number crunching. Right.
And also just thinking about it in a, in a really long-term way, 'cause that's what customer lifetime value is, where- Yeah... the...
You know, in any sort of business endeavor, you're usually l- you know, you're immediately gravitating towards the short-term jolt of, like, revenue.
And a sustainable models, like, that's what this podcast and my newsletter are about, require really thinking closely and optimizing to the long term. And I think we- Yes...
that's again, it's sort of like the overnight successors. We always gravitate towards these short-term, like, wins and stuff.
I'm telling you, anytime I have, like, there's, like, a newsletter gathering or something, [laughs] I'm, like, using quotes again, uh, everyone gravitates immediately to short-term tactics.
Like, "Oh, did you-" I think- "... So and so is doing this little thing and that thing" And I think that there's an opportunity to get people thinking, like, longer term.
I think, like, 99% of people on Substack are operating their newsletter from, like, a cash-centric perspective. They're looking at Stripe and they're like, "Nice, this money's coming in."
But I don't think anybody's, like, project... Not, I mean, anybody's strong. Yeah. I think it's very uncommon for people on Substack to forecast their business, forecast their cash flow, and say, "You know what?
I'm gonna make an investment today to actually ele- try to elevate that." I think there's probably room for, like, you know, growth acceleration.If, uh, that was more common. Yeah.
I mean, I look at it as the same sort of maturation of, like, Shopify. Like, I mean, I don't use Shopify, but, like, the... I'm sure the...
If you compare the product, like, five years ago to now, like, they have taken on incrementally, I just know from, like, our coverage in one of the sister publications at Digiday, you know, kept, keep adding on the everything that's needed to run an e-commerce business.
And they started with basically just being able to put up a storefront on the internet, right? But, like, if you're gonna run- Yeah...
an e-commerce business, there's a lot of other stuff you need to be able to do than just to set up a storefront. So I would assume that the same path will take place here. Well, let me...
I, I wanna go back to the, like, what I was trying to ask you, which is, like, have you thought- Oh, boy... how have you thought about your audience over time? Has that evolved? Do you struggle with it?
Uh, or have you always had, like, a pretty clear idea of who you're writing to and who you want the Rebooting to attract? I mean, broadly, yes. Like, I always think a- about it in terms of, like, apertures.
Like, you wanna be, like, narrow, but not, like, too narrow, right? Like, I think about it as, like, kind of like an ad, ad targeting.
Like, if [chuckles] you wanna, like, put, like, every single, like, okay, well, we just wanna reach, like, HR executives. Oh, okay. But we wanna reach HR executives that are in the Norfolk area.
Oh, and they also need to, like, be left-handed. And, uh, pretty soon you're gonna be like- [laughs]... "Whoa, this is a little too... Th- th- Yeah... this onion is, is sliced a little too thin.
It doesn't taste like anything." So I think that's, like, a common, like, issue.
So, like, I always thought about it as, you know, it was broad enough in that it's everyone who's involved in, like, building and operating sustainable publishing businesses, right?
I started with publishing really, uh, and media will come because, like, they're sort of different, right? Like, I don't really focus on, like, streaming and stuff like this just because I don't...
I mean, I know a lot, little bit about it, but I'm not, like... I, I don't have much expertise in that.
Like, there was other people, like, on my team that I would bring on people ideally to be able to cover that stuff in more depth because, like, you need to be, like, in the weeds on stuff.
So I thought about it that way, and I think to me, I think the, the biggest
challenge, I guess, is, like, how you conceive of what you wanna, like, make and then, like, what, like, how you, how you take the feedback loop of, of signals and stuff to feed that into how you change it to, to satisfy the audi- the audience that you end up attracting.
But broadly, I think, like, the types of people who have subscribed are the types of people who I want, uh, I would like to subscribe. I'm glad that they're subscribing.
[chuckles] I'm glad all of you have subscribed, anyone who is a subscriber. Yeah. [laughs] But yeah. I mean, uh, but some...
You know, there have been, like, pockets of stuff that, like, I've been, you know, surprised that I didn't, I didn't think that it would be... That I would have that concentration of people.
I mean, and one of the things that I do recommend that everyone, particularly, like, early on if you have it, like, is get all the emails. Do not...
First of all, turn off the email, like, thing for when someone unsubscribes. Everyone... Uh, you're going to get unsubscribes. I do... Like, I have... Day one, I turn that off. There's no upside to knowing that.
[laughs] Two, like, look at, look at the emails of people that subscribe. This is something I was bugging you about because, like, I want work emails because work emails tell me stuff, right?
When I see a type of company coming in repeatedly and stuff like this, I start to realize that I'm reaching a different pocket, and you're always trying to re- reach different pockets, and that's valuable to me.
I just love to, like, be able to see the types of people. I'm spending an inordinate amount of time Googling people, so I don't know if you could add this to the roadmap, like, 'cause, like, I need- [laughs]...
I wanna know, I wanna know what their, their functions are, you know? Like, I find it really interesting when I, like, went through and realized that, like,
I have, like, a lot of people who run, like, newsletter operations at publishers. And I'm like, "Hmm. Well, that's interesting." Yeah. You know, that's...
If let's just say, you know, you had a product or service that needed to reach, like, the people who, who run newsletter operations at these big publishers and small publishers and mid-sized publishers, you know, the Rebooting could be a great way to, to reach those people- Yeah...
efficiently. [laughs] Yeah. No, I think that's, uh... I, yeah, we've talked about that a lot.
I think it'd be awesome, like, if you, if you did, like, you know, connect your LinkedIn and then have that be part of your Substack profile. Yeah. Yeah. Something like that would be really cool.
Did your understanding of your audience change at all after your survey? Yes and no. I mean, did it understand? I think a lot of times audience surveys to me are... And I've tried to be, like, open about it.
A lot of it is, is... The, a lot of the utility is, is to me in the sales process and qualifying the audience for people. I mean, it's one thing to say, "Oh, I reached publishers."
It's another thing to say 68% of, of the audience are publishers. You know, it's... You can- Mm-hmm... I would say to people, "Oh, you know, my audience makes technology buying decisions."
You know, it's better when I say, you know, "72%, uh, make technology buying decisions." It, it helps, like...
But, uh, I think the secondary thing for me is to try to understand a little bit better the interest in the audience, and also just to test, like, future features. Like, I, like, I always am- Yeah...
I'm always wary of emailing too much, right? So I wanna see, like, do I, do I really wanna do, like, a daily product? Like, I know I personally can't write every day. Like, I just can't do it.
I mean, I could, but it would just be really shitty. Uh, but I wanna, like- [laughs]... expand the Rebooting and have it be more than just me, right? And so, but I wanna know, like, do people want a, uh, a daily product?
I don't wanna do personally, like, an- another, like, aggregation sort of email. But, like, I do think there's an opportunity to do, and I think it's important to have, uh, that, that daily habit. But- Mm-hmm...
for things like that, I think it's very usefulYeah. Yeah. Awesome. All right, I gotta leave it there, Reid. I'm gonna, I gotta get on Spirit Air. Are you really?
[laughs] This might be the last time, this might be the last time we speak. Well, it sounded like it was okay going out. No, it was fine. It was fine. It was fine. I had, I, I had the middle seat, but it was fine.
I keep telling myself that. Man took a blow. Exactly. So the trip back's gotta be better. All right, on that note, Reid, we're gonna leave it with it. Thanks for listening. Bye now. It's a grind.
[laughs] Check out Growth Croissant. Uh, I do recommend it. I'm really excited for it. Thank you so much. This was fun. Thanks, man. All right. [outro jingle] Yaron, welcome back. Okay.
Yaron, like, I always say, like, you know, the building a, a sustainable publishing business is hard. I mean, but the hardest of the hard is when we come to local news, right?
And I, and I can remember, I, I think I graduated from journalism school in like 2000. Do not recommend journalism school. Any students out there, don't, don't go.
But at the time, they were training us to be in, like, newspaper newsrooms and stuff like this, and the industry was completely shrinking. I was like, "Oh my God," like, "I gotta go in a different direction.
This is like... There's, there's not a lot of upside here." And it's gotten even worse. And there are a lot of, I think, promising initiatives and experiments going, going on right now.
I think they're beyond the experiment phase.
And, you know, I think pining for the old days of, like, when I grew up and I was reading the Philadelphia Inquirer and they had a Jerusalem bureau and, you know, it was this massive paper, [laughs] those days are not coming back.
But what do you think, are you optimistic at, like, this point in time of finding that sort of sustainable model for local? 'Cause it is a hard problem to solve. It's, it's definitely a hard problem. Uh, I
think as an entrepreneur where I get excited is those areas that are messy and in flux and changing.
Uh, for most people, I think those are viewed as just it's hard and it's, it's a, it's chaos and we're not gonna succeed. I think for the entrepreneurial, it's, uh, those are times of opportunity.
And I think one of the good things, uh, maybe happening for local is, is kind of we're unburdened from, from all the old stuff that was burdening, uh, many of the, uh, the local newspapers.
So, you know, the Philadelphia Inquirer does not need a Jerusalem bureau. I can, uh, I can save that cost.
[laughs] Uh, also everything that has to go with, uh, local print and, and trucks and all that, that, that is also sadly probably gone. Uh, but I think where local publishing can be really successful is, uh,
has an incredible definition of audience.
And I think one of the most important things for advertisers of all kinds is gonna be the ability to define a, a clearly defined audience, whether geographically or by interest, and that's gonna become much more difficult for advertisers with the third-party cookies, uh, going away.
And so, uh, folks that are smart about it, and I think don't try to go for the, uh, s- lazy, greedy solutions that work for national publishers, but rather really figure out...
You know, all publishing is, especially in advertising, is finding that intersection between what a passionate, defined audience is gonna be interested in and that an ad- advertiser might wanna reach.
And I think in local publishing they, they have a lot of the ability to do that. Yeah. So when we talk about, like, you know, user-centric or, or, like, customer first, audience first, like, models,
I think my greatest counterpoint is the local news experience, [laughs] in many... And this is beyond the United States. The British local news sites are, wow, they really go for it as far as the monetization.
It's a little aggro. You know, how, how does, how does local get out of that trap? Like I... When I see like a link to like a local news site, like I click on it with trepidation for what it's gonna do to my computer.
Yeah. So first of all, the Israel point. Uh, Israel is all local. It's so small, it's like a couple of the- [laughs] It's true... boroughs in, uh, in New York City, so everything is, uh, uh- It's hyper local. Yeah.
I think probably a lot of what we're seeing in the States and what you're describing in the, in the UK, uh, might be less an issue of local publishing and more an issue of the finances behind it.
You know, these were companies that were- Yeah... built over decades and then were taken over usually by private equity and folks like that. And,
you know, I think some of what we're seeing on, uh, financial lemon squeezing is, uh, probably a result of, uh, those financials behind the scenes.
It's like Toys "R" Us growing up was a great user experience, and it was a very successful company. Yeah. And then it became a debt kind of serving, uh, entity until it fell apart.
So to me, it's, uh, it's probably more about fresher starts of understanding who the, uh, local audience is, getting them to be very engaged.
And I think local is probably the, uh, the best example of where you can get a local audience that understands what the, the value of it is and gets engaged, but not trying to burden the publishing with, uh, you know, programmatic, national, uh, type advertising, which is really then you're in lemon squeezing territory.
Yeah. And I think that's, that's exactly the thing with local. Like, I, at least my...
I hope like the big national chains figure out like a path, but to me, like it's, it's likely gonna mostly come from independent and people starting from scratch.
Both because like the, the cost bases of a lot of these local publica- j- they just don't make sense anymore. They don't make sense, uh, at a, and for a variety of reasons.
And it's hard for me to think that, at least from what we see from the evidence of how, uh, some of these private equity companies have been operating these businesses, it does not seem like a, to put it mildly, a growth agendaI, I do think there are other places, uh, like Germany, um, I'm, uh, always impressed with their local, local publishers.
At least they're, they're folks that are very smart with thinking of, uh, how to be in a growth, uh, mindset and a user-driven mindset. I do think...
I, I agree with you that probably fresh starts and, and the individual starting it locally is probably the way to reignite this, but there is also value in clustering local publishers together just for the value.
You don't need every town and every city figuring out the technology stack and the KPIs and the dashboards and the, and all of that. There is value in, uh, going at it together. Yeah.
I just think that the, the models are gonna be leaner. I don't know what it, how it adds up, 'cause I think, you know, when...
I just did a podcast earlier today with, with Ryan Heaphy from, from 6AM City, and it's a really interesting approach that they're taking, like super lean.
They're focused on mid-size cities, and they're focused on keeping the, like, annual cost for each at this point at, like, $250,000. Like, I mean, it's, it's really getting down to like, you know, the studs, if you will.
[chuckles] And you know, the question is, fine, they're not gonna have the Jerusalem Bureau, but like, you know, how much can they do, like account...
I mean, they're not focused on like politics and crime and stuff like this.
But like, you know, I think when people are, are talking about the future of local, they generally are not talking about, "Oh, there's not a place for us to find, you know, what concerts are going on this weekend in Nashville."
They're talking about, like, who's keeping an eye o- on the city council and the school board generally. And I don't know, I don't know the answer to that.
I mean, I think it's a really, it's a much harder problem to solve for that kind of accountability journalism. It is.
But, you know, I think if we look, uh, more realistically at the history of journalism in general, there's never been a business model for- Yeah... uh, you know, for- Yeah...
uh, reporting the- The food section has existed for a reason, you know. [chuckles] Yeah. And the, uh, the classifieds is, is really what's, uh, funded journalism, uh, in the past.
And so, you know, I think it is probably about that combination of, uh, where to go this, uh, this weekend or what to watch in Nashville with having that fund some of the, uh, the local reporting.
But I think local publishers need to think local, and- Yes...
what I'm seeing in this, in this transition is some of them have, have thought, you know, we'll take what's, uh, worked for, for national and big and try to force it upon many locals, and many locals do not make one, uh, one big, uh, you know, one big destination for national brands and all that.
Yeah. It's like this like...
It, it's like you need to be like efficient and stuff like this, but I just see like with a lot of like local news, like particularly the large chains, it's like the way they're going about it, they're, they're draining the, their most valuable asset, which is the fact that they're local.
Like the, like enough with the... We do not need wire copy or, you know, in, I, you know, the, in Miami getting like, you know, the viral story from Dallas that, that you covered in another chain.
Like that's not, like you're gonna win- Yeah. It's, uh-... local. You're gonna win locally. [chuckles] Right. Right. Right. And, uh, to me, again, as an entrepreneur, that's what creates the, the opportunities.
I, I heard, uh, just a, a great story, this is probably 15 years ago, from a person I don't know personally, but uh, I think is probably one of the best local news entrepreneurs, uh, Rob Curley, I think is the, the name.
And he was giving a few examples of, uh, how they think about local publishing, but one that just really resonated with me, and again, I'm a father to three soccer players, uh, two of my girls are, are still active soccer players in the local leagues here, and what they, they would do, uh, with a story that he shared was, uh, they've got college students, so, uh, journalism, uh, students that would come and cover the, the local youth soccer games in the city, uh, that no one, no one cares about except for, you know, the few dozen parents that are, uh, the parents and the kids.
But they would cover them as if they're kind of, uh, NBA games and have them published on the, the local newspaper of, uh, you know- Yeah... "You scored a goal," and, and all that. And you start creating...
You, the people that are gonna follow those stories, the parents, the grandparents, the, uh, the uncles, cousins, and, and the children themselves, they're always gonna be reading it.
They're not gonna be saying, "You know, I need to read of a, uh, some national story somewhere else." They're gonna come there every week and see their photo and, uh, and all that.
That's, I think, the kind of, uh, local thinking that local publishers- Yeah... when it, it's a fresh start. Get a photo of every kid who scores a goal, paywall it, charge the grandparents. Yes. Yes.
[chuckles] It's a model. It'll work. Um- It'll work. It's about finding those local audiences, I think. [upbeat music] Thanks again to Jay Sparks of Podhelp us for producing this podcast.
To find out more about how you can get your own podcast, please visit podhelp.us and get in touch with Jay. We'll be back next week with, uh, another episode.
[outro music]