We've had conversations [chuckles] with people who have pitched us on exactly what you're proposing. S- you know, say like, "Hey, you shouldn't care about these people out in the hinterlands.
What you care about are the five hundred people who have the huge ad budgets- Yeah... who can spend a ton of money in your pages, in your digital pages." And I, I take the point- [laughs]...
and, you know- I feel a but coming here, Steve.
[upbeat music] This episode of the Rebooting show is brought to you by House of Kaizen, which collaborates with leading publishers and brands to optimize their entire subscriber journey, from marketing to product experiences, in order to achieve net growth and sustained recurring revenue.
Growth is on everyone's minds, and it's a big theme of the episode you're about to hear with Steve Hayes, CEO of The Dispatch.
But growth measured on count of subscribers is ultimately unsustainable when it comes to subscriptions.
The value of each user to the business varies significantly in subscription products, requiring the discipline of revenue-based evaluation and optimization to drive meaningful and sustainable growth.
Each stage of the subscriber journey should be expected to contribute revenue and thus customer lifetime value, with targets defined by dollars rather than other measures.
To find out more about how House of Kaizen can help you deliver sustainable revenue growth through research-based performance optimizations, visit houseofkaizen.com. That's Kaizen with a K and a Z. That's K-A-I-Z-E-N.
Thanks, House of Kaizen.
[upbeat music] Welcome to the Rebooting show.
I'm Brian Morrissey. Each week, I talk to a guest who is building a sustainable publishing business. A couple quick reminders before we get into the show.
One, if you do like this podcast, please leave it a rating and a review. They're very much appreciated. And if you really like it, share it with someone who you think would find it valuable.
I find this is how podcasts finds new audience. I've also found that podcast growth is exceedingly difficult, at least when it comes to the overall number of listeners. I...
The depth of engagement with podcasts is amazing, but getting a wider audience for them is definitely a long-term activity. The other reminder is to check out a second podcast I do. It is called People vs Algorithms.
I do it with Troy Young and Alex Schleifer.
We have a really good episode up this week, or at least I enjoyed doing it, and it's about how, how we make decisions, and we apply some frameworks of how we do that with the difficult decisions that many are facing in the publishing business right now.
So do check that out. Just search for People vs Algorithms wherever you get your podcasts. So this week, I am speaking to Steve Hayes, the CEO of The Dispatch.
I had Steve on this podcast previously, and I'm very focused on what he and his team are building at The Dispatch.
It started as a collection of newsletters on Substack, but has since graduated onto its own platform as it builds a center-right, fact-based political news and analysis brand.
And my bet is that we're gonna see more publishers emerge along the lines of Dispatch. It's a group of like-minded but different individuals under a common brand.
I think we're seeing this in many different publishers trying to figure out where to strike that balance between the power of, like, individuals and quote unquote personal brands, and the advantages of having an institutional brand.
And I think The Dispatch is striking a very interesting, um, balance there. The other reason that I'm very interested in Dispatch is because it's doing well, right?
So The Dispatch now has forty thousand paying subscribers, and that's not people paying one dollar a year on cut-rate intro offers.
They've been able to convert as much as fifteen percent of their free newsletter audience to paid, and that is unusual. So I wanted to get into it with Steve in order to pick up any tips that I can get for this.
Here's a conversation with Steve. [upbeat music] Steve, thank you for joining.
We last actually talked, like, s- I guess, like, less than six months ago, but I like to, like, keep tabs on these publishers that to me are like...
I don't know, I think what you guys are doing is, like, part of a future for sustainable media, and so let's talk about it. No pressure. Well, we sure hope so. [laughs] Well, you've go- you've gotten this far.
It's been, like, what? Three years plus now. Yeah, a little over three years, yeah. And it's funny 'cause, you know, we've talked a couple times.
We talked at my old job and then, and then here, and I think one of the things that stood out, and we'll see if it's still true, is it's sort of gone faster than you thought. Yeah, I think that's definitely true.
I mean, the g- the, the, the growth side has been m- more robust than we had imagined, certainly than our earlier projections had been.
I don't know where we, where we, we thought we'd be at, at this point, but we're sniffing forty thousand paying members, and we definitely didn't think that. So, you know, that's... it's been great.
Obviously, that's, that's what you want. That's what you hope for. Managing growth is its own set of challenges, right? I mean, it's not... You, you have to hire faster than you thought you were going to.
You, you come to certain proverbial forks in the road before you thought you were going to.
In our case, you know, we talked about, uh, you and I talked about o- our decision to, to leave Substack, which was a tough decision.
Love the platform, love the founders, think what they're building is cool, but that sort of came upon us and, and now we're talking about ads and sponsorships, which was always part of our original vision for what we were gonna do at The Dispatch.
ButGone on Substack. We didn't do it for a while, so lots of, lots of things lots of things in front of us right now. Yeah. Well, let's talk about sequencing, 'cause I think that's, like, important.
I think a lot of times, I know I feel this sometimes [chuckles] just myself, it-- there can be the temptation to try to do too much at once, right? Right.
And, like, when you're starting something new, being able to say no to things is incredibly important, and understanding that you're not gonna be where you wanna be immediately, and it might take longer and, and whatnot.
You guys started on Substack, right? Right. And you had raised some money, which is a little different than most people on Substack.
So the, the goal was always not to be, like, a, you know, a, a hardy band of, like, you know, independent writers who get supported by, by the audience, but to build- Right... like, a regular publishing company, yes?
It was. It was.
I mean, I think we saw ourselves as sort of living in this space between establishment media outlets and the things that we had been a part of at The Weekly Standard and National Review before this, and this new creator economy.
And what we wanted to do was find ways that the creator economy made sense and made it attractive for creators to join an established company like the one we were hoping to build, but also borrow the, the sort of strengths that established media institutions have that could provide to creators.
And we try to build something that's, that's so- that, that's a hybrid of sorts, and I think for the most part, it's worked.
W-we-- There's not s- there's not quite the technology, or we don't have the technology to allow us to do exactly what we wanna do when we started, but, uh, but we're getting there and, and, you know, we think this, this hybrid model works.
So the... But the model to begin with, y-you didn't immediately charge people, 'cause I think one of the interesting things- Right... about sequencing these things is...
And it's, I think it's actually different if you're an individual.
If you're an individual now, I think, and you're truly going that, like, quote-unquote, "personal brand" or whatever, someone brand personality, I have no idea what it is- Right...
I think you can-- I think you should actually start, like, paid probably from, from the get-go, at least with, like, a founding option, because I, I think that there's a dynamic that's slightly different and less transactional in this area when it's an individual, right?
Yeah. I mean, you get some of that with Dispatch, obviously. People want this thing to exist. It's less like, oh, when you subscribe to, like, The New York Times or The Wall Street Journal, it's much more transactional.
But explain, like, w-why you started without the subscriptions. Yeah. W-we-- I mean, it was sort of a process over the course of a year.
We raised some money in the spring of twenty nineteen and set up, you know, what was basically a holding place website where people would come and give us their, their email address. Jonah left National Review.
The Weekly Standard had been shut down in December of twenty eighteen. So we just wanted to give people a place where we said, "Hey, we're working on something.
If you're interested in finding out what it is, you know, give us your email." So we collected a, a good number of, you know, thousands and thousands of emails just doing that.
Jonah was sort of gradually building up what he was, was doing, was continuing his, his podcast.
And then we launched on Substack Octo- early October of twenty, uh, nineteen, and as you say, you know, we sent free newsletters out and had some free website posts from that point through, like, mid, end of February, and then we turned on payments.
And, you know, it was... From our perspective, we thought it was important to give people a sense of what they were gonna get if they did pay, and so we did it for a long time, and we had imagined three months.
We talked about it with, with Chris Best and, and Hamish and Jay at Substack, and this was sort of their best, best guidance. I think it worked out pretty well for us.
It allowed us to, to really dramatically build how many people we had on our, on our free lists before we went paid, and then we went paid and, and, you know, those were a good couple weeks for us.
[gentle music] How, how big was the, the free list when you went paid?
You know, I knew you were gonna ask me that. I don't know off the top of my head, but I wanna- I want this for myself... say in the neighbor- This is, this is all for my, this is all for my purposes. Let's get it right.
[chuckles] I wanna say it was in the neighborhood of, of, you know, sixty, fifty, sixty thousand that we had built to that point. I could be, i- uh, that could be a little bit low. Okay.
But the other key thing that we did was we launched with these founding lifetime memberships, and this was something that, um, I had gone to a conference, journalism conference in, in Europe, had a conversation with a, a couple people, including somebody who started a newsletter, a political newsletter in Italy, who talked to me about how he had launched this lifetime membership to his newsletter.
I think it was, I think it was three hundred euros for, for lifetime, thirty bucks, uh, or thirty euros a year, and had had great success with it.
So we launched ours at fifteen hundred bucks for a lifetime membership, and, you know, I think we thought we were gonna get a couple dozen, three dozen, and we ended up getting several hundred kinda right from the outset, and that's continued to grow sort of steadily.
We're, we're gonna cut it off here, I think, shortly.
But, uh, if you're talking about building a foundation of reader revenue, that gave us this sort of cash injection early that allowed us to be flexible and do some more aggressive hiring than we had planned.
It turned out to have been a pretty important decision. Okay, so when you first launched paid, right, like, so there, there was, like, a flood and you're like, "Oh my God, this is gonna be major."
'Cause I always think, like, any brand, particularly when you go into subscriptions or membership, there's a certain number of people who are going to pay, and they are going to pay whether y-you actually have anything or not.
Like, I used to joke- Right... at my old place that, like, we could start memberships and not actually do anything, and the same number of people roughly would, would convert, like...
And then it gets into the, the hard work.Yeah, I mean, I-- that's-- It's really interesting that you say that. So, so I think there was par-- certainly that was partially at play for us.
I mean, at the time, both Jonah and I were still at Fox News. We were on pretty regularly. You know, we'd been familiar to people on the center right for, for years.
And, you know, in our cases 'cause we're, we're getting old, decades.
But, but I do think part of what people were signing up for was this mission, and part of what we were promising was to be different than so many existing, uh, media organizations on the center right, both in terms of the delivery mechanism and how we were going to be communicating with our, our, our readers and our members and our listeners, but also in terms of what we were offering.
Just the mission was very different.
I mean, we were really emphasizing fact-driven analyses, uh, heavy reporting at a time when, you know, in our view, so many places on the center right had turned toward the, the more efficient, you could argue, uh, cheaper models of, of opinion mongering.
And certainly, you know, in the worst cases, just pure hot takery, right? Anger for anger's sake, get people pissed off so that you can get their eyeballs and you can monetize the scale. Well, we didn't wanna do that.
We said, "We're gonna do this differently. Our, our stuff is gonna be a little longer. Some people think it might be too long. Our stuff is gonna be more contextual. It's gonna be reported. We're gonna insist on facts.
We're gonna have an internal fact-checking regime."
So we wanted it to be the kind of, the kind of, uh, editorial product that people could take to their skeptical friends on the, on the center left and say, "Look, these guys have done the research, but here's their argument for school choice."
Or they could take to their MAGA friends and say, "You can't say the election was stolen. Look at the research that they've done. Look at the people they've talked to. Look at the work they've put in."
So I do think the fact that, that what we were offering was, was f- you know, in our view, very different from what existed, at least on the center right, was a big selling point and has fueled our subsequent growth.
Yeah. But do you think it has, like, more... Like, to me, like, this kind of publication and this brand, it's more closer to, like, a magazine than it is to, like, a news site in the digital era.
And I mean that because, like, every single digital news site has become the same amalgamation of, like, stuff for clicks.
And I feel like magazines are, in some ways, poised, [chuckles] I wrote about this a little while ago, like, for a comeback in that, like, I feel like the new ki- Like, you can have a curated bundle that most news sites, they end up disaggregating every single piece of content and, and doing unit economics for page views and yield, and it leads to, like, an incoherent, like, mess in my view.
Yeah, I mean, uh, uh, it's a very good question. I mean, this is-- We are, we are deep in magazine nerdery here, and, and I, I sorta love it. I mean, both Jonah and I came out of magazine journalism.
When I went to grad school, this is ages and ages ago, that was my concentration, uh, at Columbia, was magazine journalism. Oh, me too. So I'm a, I'm a magazine guy. Love magazines.
And in a certain sense, I think you're right. I mean, there is... Uh, uh, what we're doing feels on a day-to-day basis like running a magazine.
Where it's different is that there's not the sort of, particularly when I go back to, to my days in print, like pre-internet print magazines, there's not the coherence on a day-to-day basis of a magazine.
You know, there was a voice, there was something that you could- Yeah...
you, you sort of rounded out and presented to people, like, with a, with a bow on it when you published your magazine, when you hit print, or when you sent it to the, the publishers.
That, that's harder, I think, in this case, in, in particular because we are bundling these very different voices covering very different topics, and in some cases, in many cases, in fact, our topics and our writers overlap.
It's, it's a hard thing, I think, for writers to get used to, thinking like, "Wait, I'm writing the politics newsletter.
I'm gonna be covering this, you know, what's happened at the RNC winter meetings in California," and the Morning Dispatch might also be covering what happened at the, the winter meetings.
And Chris Stirewalt, which writes a politics newsletter, might be covering. And Sarah Isgur, who writes another politics newsletter.
We could all be writing about the same things or the same sets of things, and I think initially there's this, there's this, you know, inclination, and I had it myself, to say, "Oh, we've gotta be-- to very sort of carefully, uh, assign who can do what in that context."
Yeah. We've just given up on that. And my argument is redundancy is our friend. Embrace it.
It's okay if people get this because it's not gonna be the case that everybody who signs up for the Dispatch politics newsletter also reads the Sarah Isgur re- newsletter, also reads the Chris Stirewalt newsletter, also reads the Morning Dispatch.
Now, there will be some overlap. I just don't think that's a killer. I think- Yeah... I think people will, will read through that.
Yeah, I totally agree because I think when you're doing this kind of, these kinds of brands, they are-- Like, you're trying to find the balance between the institutional brand and the individual brands, right?
Like- Right... I think of the Dispatch's writers all having, quote-unquote, "individual brands." They have reputations unto themselves, and there's not, like, one institutional voice, I think what you're saying.
Like, where- Right... everything has to be totally consistent because that is inimical to, like, human beings being themselves to some degree. Right, exactly.
So you, you have to accept, you know, it's kind of like freedom is messy. Like, you have to accept that [chuckles] that there's gonna be overlap because you're not trying to be a comprehensive...
You know, it's like the New York Times. It's like every-- It does not exist unless it's in The New York Times, and I have always felt like- Right...
a lot of publications expose their, like, organizational structure and force it on the reader. [chuckles] You know what I mean? Yes. Yes, yes. It's like I have to decide- Absolutely...
whether this is in technology or business. I'm like, "Well, it's both, of course," but like [chuckles] Right, exactly. No, I mean, I, I...
Look, uh, so much of journalism is im- is imposing sort of order and structure where it doesn't exist, right? And a lot of times, I think it feels phony.
I mean, I, I can't tell you how many times I read, you know, a newspaper story about some messy political happening, and they've imposed this sort of structure from above.
You know, if, if you wanna be charitable, it's to help readers understand what's happening. Oh, yeah. If you wanna be less charitable, it's because, you know, the journalist is lazy and- Well-...
just wants to say what- Or the, or the editor... he or she thinks, right? Or the editor. Or the editor, right.
As an editor, I can cop to the fact that, like, I would get this stuff and be like, the reporter would be like, "It's so complicated. People say this, but they say this and this."
I'm like, "Well, you gotta, like, stick your foot in the ground and get north-south, you know? [chuckles] Let's get downhill on this." And you do. Yeah, you do. I mean, it, it's, it's interesting.
I mean, we, we sort of embrace the gray. We, we tell people if things are complicated, that's okay. Life is complicated. Yeah. Be complicated. You know, provide a guide.
Give them, give them sort of a, a sense of, of how you see it, but I don't think we need to oversimplify.
You know, we've-- As we've thought through this, you know, there's a big debate obviously in sort of newsletter world, creator economy world about whether growth is, it comes because of personalities and, and individual journalist brands, or whether you can do sort of subject matter newsletters that will work.
And w-we've said basically both.
We've, we've got certainly plenty of people who write newsletters, we think they're very good, uh, under their own names, with their own audience, bringing in new people because, you know, Scott Lincicome from the Cato Institute writes on, on trade and, and economics, and he's got a following.
He's terrific, he's funny, he's a chart fiend, and people come to read Scott Lincicome. But we also have the Morning Dispatch, which is something a little closer. It's as close as we've got to an institutional voice.
Just daily, sort of long morning newsletter. Gives people a big sense of what's going on, helps people catch up in sort of quick, quick hits at the top, but then a long reported item or a couple of items every day.
And, and it's, it is our... I mean, we don't have an, an official institutional voice, but that's, that's as close as, as we have to one, I'd say.
[gentle music] So how do you find the right people, right?
'Cause, like, you're not, like... I mean, you guys are center right, you know, and but you're not, like, ideological to some degree, and I, I think... I mean, I don't know. Like, I, I think some people are...
They're at different places because they're humans, and they have different, like, viewpoints and stuff like that. And so I'm wondering how do you end up figuring out... I mean, is it like putting together a band?
It is sorta like putting together a band. I would say, you know, w- we've had very good fortune on the, on the editorial side and our editorial side hiring. You're right that, uh, I mean, certainly we're center right.
We don't apologize about the fact that we're center right. We tell people that. It's in our launch manifesto, the thing we published on the first day.
And what we say is, you know, our, our reporting and our analyses are informed by a perspective that could be broadly described as center right.
Now, what that means is different from, from person to person on staff, and we have certainly some people who would describe themselves as center left, some people who would describe themselves as center right, some libertarian conservatives, what have you.
So in, in that sense, we are ideological. But, you know, in, in particularly the reporting that we do, we're not pounding people over the head with, with ideology. We're not saying, "You've gotta believe this.
You must do this." I hate the use of the word must. And w-we encourage our reporters just to go report the stories. Now, they come vaguely from, from center right backgrounds. Some of them stronger than others.
But they just go and ask questions that occur to them because they live and live on the center right, and their worldview has led them to the point where they look at things from that perspective.
And then they just go and report. And we have people who do more analytical work for us or commentary, you know, that will be making arguments. But again, those arguments are rooted in fact. This is not pure hot takery.
It's, you know, as often as not, it's sort of a, a synthesis of information that they've gotten, that they've read elsewhere, that they bring together in some sort of a coherent argument that makes it make sense.
So on the editorial side, we've had real good, good luck with hiring. We've had trouble hiring on the, on the business side, and, you know, part of that goes back to the point you made earlier about sequencing.
Led with the editorial side. We said, "We need to get the editorial writer, or this thing's never gonna work." Yeah. So all of our hires from the outset were editorial side hires.
We brought on a, uh, a guy named Justin Fritz from The Athletic, who did retention and engagement for them. He came in, initially led our, our marketing operation, and now is our, our COO.
He's a fantastic addition, really terrific.
But we've been, we've been trying to hire a growth marketing director for, like, three years, and it's just, it's just hard to find either somebody who sort of, you know, would be enthusiastic about the product in the way that we want him or her to be, or understands kind of where we live in this weird space between a creator economy and the, the old school media- Mm-hmm...
uh, economy before it. But we've had trouble hiring- Yeah... frankly, on the, on the, the business side. It's been a challenge. Yeah. So get in touch. Steve's gonna give me, like, a ten percent cut on first-year salary.
Ten, right? [chuckles] Anyone who's in the growth marketing- Sir, wait, Brian, are you, are you breaking news here? Are you launching a s- a, an executive search? [chuckles] While you were talking, it just hit me.
Like-I did.
I actually had a podcast, at my previous podcast, where someone reached out to my guest about investing in their company, and they became business, like, partners, and I'm- I'm still waiting for the cut off of lubricating this deal, but didn't happen.
But like- I mean, at the very least, a nice steak dinner I, I would- Yeah, I, I'll take anything at this point. No, like, so I think that's an interesting point because, like, you...
Everything is, I've just noticed, like, usually parts of a business are farther ahead than other parts of the business, and it's just like they're never e- even, and, like, anyone who says they are I think is lying.
But- Right... and, you know, if you're coming particularly, you guys were very editorial driven, right? And I think that creates- Yeah...
a different product, and it, and the sequencing becomes different because those of us who come from the editorial side naturally think that the editorial's the most important thing in this business, [laughs] right?
I'm sure if you come from the sales side, you probably are like, "Sales solves everything." So, you know, that's like- But you do at the end of the day, I mean, you do have to have something to sell. You do.
So that is, I think, sort of, you know- So- That's the argument. Yeah, yeah. But people in the sales side will get people to make the sale, you know. But, like, talk to me about, like, having subscriptions at the core.
I mean, we talked about, like, adding in, you know, other sources of revenue.
I think, I think most sustainable publishing models will have a few ways to make money, although not too many because I think a big mistake that a lot of publishers have made is chasing every single source of revenue- Right...
and having these bloated infrastructures in order to support that, that, you know, make it really difficult, you know, to have, like, full utilization for these things. What would've been the advantages of having subs?
You said 40,000 paying subscribers, right? Close. We're getting there. Okay. Okay. Just short. What percentage? What- how many are in the free?
I would, uh, t- total we are at, like, 230 so do the math, so just short of 200,000. Wait, you've converted, like, 40,000 out of 230? That's really high. Yeah, yeah. Just short of 40,000.
I don't wanna be accused of, of- Oh, my God... exaggerating here. [laughs] No, you should start, like, a spinoff. Forget about this. [laughs] Do some growth marketing spinoff. You should not be hiring.
You should be [laughs] doing a consulting practice. Although you don't wanna get into services. So yeah, I mean, I think that's, like, amazing that you've been able to.
What are you, like, what have you found that, that works as far as, like, converting people? I mean, I assume that, like, a majority of that is organic and s- Yep... like, not, like, paid acquisition.
Nothing against paid acquisition. I get all these, these, like, operator types anytime I'm like, "Why don't people talk about paid and stuff?" They're like, "There's nothing wrong with it." I'm like, "Fine. Jesus.
Why are you so sensitive?" Yeah, we're [laughs] we're, we're open to, we're open to more paid. [laughs] We- we've done some, I would say we've done some, some spark experimenting on, on paid acquisition.
But, I mean, part of the reason that that ratio is what it is is because the numerator, the, the, you know, ballpark of 40,000 is, was driven by organic growth and came early.
So we, we really grew that substantially very early, and we're, we're now really focusing more on top of the funnel and, and making that denominator bigger as we continue to try to convert.
But to answer your question directly, I mean, I think the, the most successful campaigns that, that we did were mission-driven campaigns.
And, I m- I'd love to tell you, and it would probably be smart, our advisors would probably tell, tell me to tell you that, you know, talk about the very sophisticated operation that we had to- [laughs]...
you know, precisely segment- Yeah... our audience. Call it- It was really- Call it a growth engine. See, now- The gr- yes. N- The growth engine. Yeah, yeah. I've gotta get the lingo. Yeah.
Now you have- I, I need to get the lingo if I'm- Now you have a SaaS business too. You got a consulting practice- [laughs] right... and you got a SaaS business. It's great.
So we, we knew that the, the mission pitch was very... To people, I mean, w- we found this when we were pitching this idea to investors.
We explained to people, "Hey, there's this huge gap in the center, center right for reported news, reported, you know, sort of news and, and analysis."
And sort of everybody wherever they sat on the ideological spectrum would nod their head and say, "Yes, I see the opening you see." And it turns out that opening was a lot bigger than we thought.
So I think the mission-driven pitches that we've done have been sort of easily the most successful.
And we would do, you know, a campaign of a week where we would have our writers, everybody from, you know, from Jonah Goldberg, who's well-known and has a huge following, to new hires do a sort of why I'm at The Dispatch pitch, conversion pitch, and, and those were, were very successful early on.
We haven't done as many lately because we, when we migrated off of Substack, we didn't wanna be pushing people to convert to a website that might have had hiccups and things. So we slowed that down- Mm...
but we're, we're prepared to ramp it back up here pretty soon. Yeah, but that's also sequencing, I think, because I think early, early on the mission-driven stuff is your, gonna be your most powerful leverage, right?
Because there's... I mean, you guys launched with community, you know, and a lot of people say community. I wanna talk about what that means for you guys.
But, you know, when you're in these areas that are community-focused and you have a reputation, you have a tie with these people, you're gonna convert a lot of people to the mission and stuff. Yes.
Inevitably, you're gonna have to do the blocking, and I'm as- assume that's why you're looking on the growth marketing side, 'cause you have to start to do the blocking and tackling and mitigating of churn and, and grinding out the LTV and the CAC and, and lots of- Yes...
the grotesquerie that is involved [laughs] in running what's basically an e-commerce business. Right. I think that's right.
The, the big question for us, and I'm, this, I'm just, like, I can, I can hear Justin Fritz, you know, our COO and, and marketing guy listening to this and cringing. Why is Steve being so, so open about this stuff?
W- we definitely have to do that. I think for us, the question is, w- where does that low-hanging fruit that you talk about, where does that end?
Because if you'd have asked me when we launched, I would've said, "Mm, I don't know, 10,000 in?"You know, and here we're well, well beyond that, and I feel like there's more to get for us.
I feel like our, our, you know, our big challenge remains letting more people know, you know, A, that we exist and, B, why we exist.
And the more people that know that, the, the faster they come and, and, you know, the conversions happen pretty quickly. So I do think that's, that remains our big challenge.
And we have some advantages there that a, a sort of a traditional creator economy startup wouldn't have. I'm on... You know, I've got an NBC News analyst role. Jonah's on CNN. Sarah Isgur's on ABC.
You know, we have people who are out on television, people who are doing other podcasts and radio, and that, and that certainly helps get our name out there and, and build the brand.
[upbeat music] But I mean, it's pretty clear that you're converting at a really high rate. Like, I mean, really high. For that kind of scale, I hadn't heard of...
Like, I had Isaac on from, uh, Tangle, and, yeah, he's converting at, at a very high rate, which I remember 'cause I wrote, I was like, you know, "Oh, five to ten percent," and he had written me and he's like, "I'm way higher than that."
Which I find interesting. I don't know if it's this particular area 'cause it's a fraught time in politics, and so [laughs] I think it's a good time to have, like, that kind of mission.
I don't- But I do think that it has a lot of tie, but, like, it's pretty clear you probably just need to build the top of the funnel, I mean, 'cause you're converting a lot of people. Right. Right.
I think that's, that's, you know, that's our focus- Yeah... from here on out. And we, there are things... You know, we, we talked before about why we chose to leave Substack. Yeah.
And, you know, one of the, one of the reasons was we thought we were-- we'd be better positioned to, to sort of push ourselves beyond where we lived for the time that we were on Substack.
And I will say again, loved our time on Substack. Um, really no complaints. Fantastic- Yeah... working with them on, on helping us grow.
We thought there were just things that we could do to be a bit more creative to grow that top of the funnel. Yeah. And also, I mean, and Jonah made this point in a podcast you guys did.
Substack is somewhere in between being Facebook and being Mailchimp, right? And like- Right...
and they're probably moving more towards being Facebook than Mailchimp, and I'm sure Andreessen Horowitz would probably approve with that deci- [laughs] of that decision. Although Mailchimp's a massive business.
But nobody, nobody ever talks about your Mailchimp, like I notice. I'm going on Mailchimp, yeah. Yeah. I'm like, subscribe to my Mailchimp. But maybe, we'll see. How has that been? It's always rocky switching platforms.
I always think it's like divorce, it should be the last option 'cause [laughs] it's gonna be really, really bad. Yeah, it's- Just inevitably. Switching platforms just sucks. That's why people don't switch platforms.
That's why Salesforce, like, continues on [laughs]. It does what it does, yeah. I mean, it's-- I'd, I'd say it's been, it's been good. It's-- We've had hiccups, for sure.
I mean, I think there are certain things that you, you can plan for, and, and we did a pretty good job internally, I think, of planning for them.
There are other things that are gonna be unforeseen, and then you need to encounter them as you go.
And of course, one of the main advantages to us originally building on Substack was that we didn't have to hire a, a tech team. Yeah. We didn't have developers. We didn't have a CTO.
We were in the middle of, of going out to, to market for a CTO when we first had our conversations with, with Substack, and I will tell you it was a very compelling pitch that they made to us.
[laughs] "You don't have to hire a CTO. You don't have to hire developers." So we didn't.
And again, Justin, uh, you know, who has a little bit of background in, in this stuff, has been, you know, sort of our, our main troubleshooter in making sure that, that we sort of get up to speed and can do the things that we wanted to do when we chose to leave and, and we're there.
I mean, I think we're there. We feel good about where we're, where we're headed now. But yeah, some, some rough moments. Yeah.
How about you, like, 'cause one of the things from that podcast you talk about, like, you, you guys have grown faster, right, than you expected, which is-- these are all good problems to have, right?
They're amazing problems to have. Right. Right. But what about, like, I mean, 'cause, like, you've been talking and you're not able to write as much as anymore.
Like, your job is different probably than you thought it was gonna be a couple years ago, right? Totally. Totally. Right. We talked about this a little on email- Yes...
'cause like I was like, "Steve, please do this podcast 'cause I'm like completely behind and stuff," just to be totally transparent here. [laughs] And you were like, you laid out what your day looked like.
I mean, not to like, you know, make- be like, "I'm so busy," but like it's the reality of trying to like... It's not juggling knives, it's juggling chainsaws. [laughs] Right.
And I hear this from Jonah all the time, "Steve, you're not writing and reporting like you said you were going to when we first talked about this." And of course, he's right. I'm doing a little more of that.
I'm doing more reporting now. You know, not a lot for sort of stuff that goes out under my own byline, but I'm doing more reporting. And we're, we're launching this new Dispatch Politics newsletter, uh, this week. Yeah.
And I'm gonna be contributing a lot of reporting to that. Again, probably not really under my byline, but I ho- I hope to be helping with that.
But yeah, it's a very different role than I had [laughs] than I had originally imagined. And, and yeah, I think, you know, when I was talking to you, I was, I was trying to prepare. I was on Meet the Press Sunday.
I have an investor letter that's late. I like to get this out at the beginning of the year where I need to get that out. I'm doing some editing. It was just, just a lot of different stuff.
And of course, the, the upside of that is it's, it's all so interesting, right? I mean, you're not-- it's not monotonous, that's for sure. It's like different stuff every single minute of the day.
But, but it's not a good, it's not a good place for, for us to be long-term. I've said from the very beginning of this thing, if this business, if this business has me really running the day-to-day business,
you know, f- in perpetuity, it's not likely to be a successful business. [laughs] So w- we're working to, to shift some roles around and, and, uh, do some additional hiring. [laughs] Yeah.
No, but I mean, that's like inevitable. You just have to get over the hump. I, I don't, I don't know if it ever gets like completely easier, but you get used to it at the very least. Right.
See, you've-- you know this world, right? I mean, this is- Yeah... this is what you do. You're doing, you're doing all of it, right?
The- Yeah, yeahI'm like- The editorial, the newsletter, the podcast, the- Yeah, I was- The ad sales... I was invoicing, I was invoicing this morning, let's put it that way. There you go.
Which is like, so you're gonna add ads, and like that adds like an entire... Like, 'cause I think one of the things with these kind o- of businesses is getting down the complexity is incredibly important, right?
Because- Right... publishing companies have become overly complex, and that has led to bloated infrastructures, that's led to incoherent strategies because, like, when you become complex, you...
I mean, we all experience this going on websites. There's, there's people, there's different departments at cross purposes and like, "Okay, what do you want me to do? Do you want me to get the push notification?
Do you want me to subscribe? Do you want my email? Like, what do you want, like, at this point?" [laughs] Right. And that, that's inevitable.
And I think it comes at such a high cost with, you know, smaller organizations that it's simplicity, like you were saying, the pitch from Hamish and Chris, like being able to take the complexity of technology and plat- kick that can down the road is very attractive.
Very. But then you see ads, right? 'Cause you've got 240, 250,000 people who are getting, like, an email, and you're not monetizing, and stuff like this, and you're like, "Okay." S- Yeah. Yep.
I mean, we had always planned, I mean, at launch, we had talked w- about, actually I think in your, your podcast with, with Isaac Saul, you said it, and everybody comes up for these euphemisms for ads.
S- Well, we had one. I was laughing when- Oh, yeah... you said that because ours was tasteful sponsorships.
[laughs] Because we, you know, we wanna be careful about br- what, what brands we, we, uh, we put on our, our platform, what brands we allowed it to, to partner with us. But we had always planned to do some- That's so...
By the way, C, let me just jump in here 'cause that's always the first step when people on this podcast say that, and then, like, I go to their site and the Trump challenge coin, like, placement is like greeting me.
[laughs] Yeah, so that will not happen. That'll never happen.
Look, part of the reason we did what we, what we did was becau- I mean, if you, if you look at, I, I, this is of course true across the internet, but it was increasingly true in our view on the, the sites that we spent the most time on, on the, on the center right, it's you have to fight through, like, eight autoplay ads, and you can't really get to the content.
And so with the dispatch from the beginning, all we've had is the content. I mean, there are not ads. So we're, we're working through exactly how to do this and, and how to, to lay it out.
But we had said from the beginning that we wanted to do tasteful sponsorships, and we're well aware that we have been leaving revenue, a considerable amount of revenue, on the table in order to make sure that we got the editorial stuff right.
Mm-hmm. And the user experience, I mean, everybody talks about user experience. Now, I think most people mean it when they say we wanna preserve the best user experience.
We really, really mean it when we say we wanna preserve the best user experience. I think people do come to us to- Okay... a certain extent because they can get it without having to fight through the crap.
Well, here's the thing. It's like I will totally say that yes, people find the user experience very important when they accept the trade-off of lower revenue.
Making a decis- because every decision involves trade-offs, and when it comes to user experience and publishing websites, the trade-off is money. Right.
There's a reason that, like, those autoplay video ads are, like, everywhere, and it's revenue, it's RPM. Right. And usually publishers have the dial.
Like, I know a lot of people go after the content rec companies and stuff, and with some good reason, but ultimately publishers have the dial.
They can turn it towards quality or they can turn it towards revenue, and 98% of the time they turn it towards revenue.
Right, which is frankly i- in, in my view, part of the reason not to get involved in that game in that way. Yeah. Right?
The problem is once you create the incentives and once that revenue becomes really easy to get, people go get it. So we're not gonna create those incentives. We wanna do this differently.
We d- we really ca- I can't at this point see building in a ton of ad tech into the newsletters.
Uh, eh, there are certain ways in which we're willing to experiment, and as I say, this is a pro- we're in the middle of this discussion right now. Yeah. So we haven't made firm decisions on it.
But there are certain things that, that we, you know, these are promises that we made to our, our members early about the no autoplay and all of the, the sort of no clickbait.
We're not gonna do the boxes and with- Yeah... clicky, misleading stuff. I mean, part of what we think we're doing is solving for the trust problem in journalism.
It- I don't understand how media companies can say, "Trust me on our editorial side. We promise we're giving it to you straight. But oh, here we're, we're feeding you tons of bullshit on the business side.
And so yeah, click in this little box where nobody even believes that the headline is true. Like, it's manifestly, obviously demonstrably false, but click it because it's gonna help us make a couple bucks."
Like, how do you treat your readers or your members that way? I just don't understand it. It s- it sends the- Yeah...
opposite message that we wanna send, and I'm willing to take a pass on the revenue in order to send that message, the opposite message.
Yeah, 'cause I, I do think that, and I, I'm hopeful, I actually am optimistic about media [laughs] that the next crop will not repeat the same m- mistakes of the past.
And there's a lot of, like, blame that gets placed externally on platforms, et cetera, et cetera, et cetera, ad tech, everything. But ultimately you make decisions about how you're gonna run a business.
And I think- Right...
the way a lot of these businesses became funded and the way they became operated, there was just a fundamental misalignment of incentives there, and usually the misalignment came between the audience and the business.
[upbeat music] Just common sense. I think about a restaurant and I'm like, if the restaurant treats the customers like shit, I don't think the restaurant has a- Yes...
good, good chance of li- surviving because restaurants always close, right? Much like publishers. So, like, I think there's- Yes... some similarities.
[laughs]Well, and I, you know, I mean, um, uh, it's, it's entirely possible that I've overlearned the lesson that I got at The Weekly Standard. You know, I was, uh, editor-in-chief of the magazine.
I was sort of in on all the business side meetings. We were run by a company called Media DC, owned by a, a billionaire out in Colorado. I was in on the business meetings, but I didn't have much say.
I didn't-- couldn't really determine what was happening.
And over the years, I had seen The Weekly Standard go from a place that premium brands wanted to be associated with, they were in our pages, in a lot of Washington, D.C., Boeing, McDonnell Douglas.
We had, you know, retail, premium retail brands in the magazine to the point where, you know, near the end it was like, "Come get your toe fungus cream." And look, if people have toe fungus- [chuckles] Hey...
I guess you can make an argument that y- you're giving them something that they might want.
But it was obvious to me, at any rate, that the premium ba- brands didn't wanna be on the, the page or on the, the website next to the, the toe fungus ads, or in some cases actually worse.
But it was also the case that we were sending a message to our readers about what we thought they would want. And our- Mm...
readers didn't see themselves that way, and there was this big sort of brand projection, audience self-perception misalignment that I think was... it was real problematic for The Weekly Standard. Yeah.
I always go back to, like, creating rooms that people wanna be in, right? Like, 'cause I think, like, particularly- Yes, yes...
on, like, I'm in a, like, very niche area, but I think about, like, you know, how do you create a room that people really wanna be in?
And, like, sometimes, like, with publishing, like, you're basically creating, like, a room.
Like, whether it's, like, in an event or, like, in a newsletter or something like this, because people talk about community, and you're not gonna have a community if you're creating a room where people are like, "Where the hell is the exit?
Get me out of here." [chuckles] Right. No, I completely, I completely agree. And look, I mean, w- w- you, you mentioned community earlier. We do think we're building something special. Yeah.
And I think it's in part because of the decisions that we've made and what we've said about what we're trying to build. It attracts a certain kind of m- member. But, but how do you bake that into the business model?
'Cause I think a lot of these k- things come down to whether it's, like, the misalignment is there needs to be, like, an alignment between, like, everything, right?
Like, your product, your business model, it all needs to, like... And you're always gonna end up making trade-offs and stuff like this. But it- Sure... needs to all, you know, reinforce each other. Yeah.
I mean, it's a good question. And, and, and as I say, I don't, I don't wanna sound like I know all the answers or pretend to know all the answers. We're figuring this out as we go.
But I think one of the things that, that we look back on as a pretty important thing to have done was this thing at the beginning.
On our first day, we published this thing internally, we call it the manifesto, and it just lays out some of the... I mean, literally, I think the headline was, "What Are We Doing?" Yeah. I read it.
And it just lays- I just read it. I reread it this morning... lays some of this stuff out. Yeah, and in a certain s- sense, it, it boxes us in, but boxes us in, in, in a pretty important ways.
Because, you know, if we do something that's not consistent with what we've laid out there- Yeah... especially as a pretty mission-driven organization, we hear from our members about it.
And, and in my view, we should hear from our members about it.
Like, if we have told them that we're gonna do this thing, and then we're doing something else, they should let us know, and they sh- they have a right to be pissed.
They should say, like, "Hey, I, I signed up with you and you're not doing what you told me you were gonna do." Yeah.
So that, that ends up, I think, being, being pretty helpful, uh, for us in terms of reminding us sort of this is the sort of, this is the core of who we are. Yeah. And also, I mean, like,
it's a point of leverage, I guess, at some point, because, like a lot of publications, if you're run by, like, I don't know, I'm making up the name of a private equity firm, Clarium Capital, maybe it exists, I don't know, like, you're not gonna, you're not gonna put anything like that out there because, like, that's not how these companies are run at all.
And- Right... if you're gonna, like, build, like, a different type of model that is more around a community and stuff like this, you should say what you stand for.
And I just see, like, a lot of publications failing at that very basic thing where I look at them and I'm like, "I have no idea what you stand for at all." Like, it doesn't mean- Right...
you have to be, like, completely just, like, mono-focused on one thing, but I don't know. Point of view is important. [chuckles] Like...
I think people are sort of y- yearning for something to believe in, and it, it is particularly true in, in the media space. I mean, so many people are disaffected by the media.
I think this accounts in part for, for what you talked about with, with Isaac Saul and the, the success of Tangle. [upbeat music] You've probably heard about the debt ceiling.
We are probably gonna have some big, great, giant economic crash. However, there is a hard reality about a debt ceiling showdown.
The majority is only five, which will shrink to four if Representative George Santos is forced to resign. Some on the left saying, some on the right saying, I'm gonna give you my take.
I mean, he's doing, he's doing a newsletter that's actually very similar to an explainer newsletter that we were gonna do at launch, and that we still might do one day.
But it's great stuff, and he mentioned 1440, which is everywhere advertising itself as a source of unbiased news and has two million f- free subscribers now.
I mean, I think people are looking f- for, for these places that are kind of taking a stand. Yeah. It... Again, I wanna be clear.
The reason that you and I are having this part of this discussion is because we are considering ads and sponsorships. I mean, we do ads now on our podcasts.
And we're going to expand because we think it'll allow us to reach more people and do, do more of the work that we think is, is worth doing. But we're gonna do it in our sort of particular way.
We wanna be clear and consistent that- Yeah... this was the value, these were the values that we launched with, and these are the values that we still hold.
Well, I think the, the critical question is, at least for me, if I was thinking about this, is like, can you get at, like, the, the money, the pots of money that, like, Axios and, like, the rest of the DC publications are f- are feeding at that trough?
Because, like, then you're out of, you're off a spreadsheet to some degree.
I mean, yeah, you always have to perform.But like that area of advertising, I mean, there's a reason that Semafor launched like, uh, with like a Washington focus.
I know your focus is sort of overlapping to me 'cause it's not like just like the-- you don't write for insiders to me. Like- Right...
people who are informed and stuff like this, but it's not the, you know, the Washington, like the people who get excited because they're in like in an elevator with like the Department of Health and Human Services undersecretary.
Like it's just- Right... a weird world. [chuckles] It, it is a weird, weird world. You're right.
Yeah, I mean, w- w- w- you know, this, this is one of the questions, frankly, that we're, that we're working through right now because w- we have pitched ourselves from the beginning as a place that sort of n- normal people who, who don't get excited about the undersecretary of Health and Human Services can go to, to understand this kinda crazy and chaotic moment.
You talk to, you know, tra-travel the country, talk to, talk to anybody, regardless of where they live on the political spectrum, they look at Washington and they say, "I don't get it. Like, it's total chaos.
This-- none of this stuff makes sense." And we think that we can say to them, "Come to us for sort of a good faith understanding of what's happening." That's what we've provided. I think that's why we've grown.
Fundamentally, like that's why we've grown. We've promised to do that, and we're doing it. We've had conversations with people who have pitched us on exactly what you're proposing.
S- you know, say like, "Hey, you shouldn't care about these people out in the hinterlands. What you care about are the five hundred people who have the huge ad budgets- Yeah...
who can spend a ton of money in your pages, in your digital pages." And I, I take the point- [chuckles] And, you know- I feel a but coming here, Steve. Well, look, I- [chuckles] I understand what they're saying.
I mean, you know, the, if, if the discussion hypothetically were turn your business to be like one that doesn't care about the people you said you cared about at the outset, well, that's a hard no from, from us. Yeah.
But if, if the, if the, the question is, "Hey, can you reach all these people outside, but also, you know, put tasteful sponsorships in front of people who want to reach certain people inside the Beltway?"
I mean, we know for a fact that we're very well read inside the Beltway. We have good readers throughout Washington in very powerful places. I'm sure that's valuable to, to advertisers. Yeah.
Uh, we're willing to have that conversation.
I do think to, you know, to go back to, to your conversation with, with Isaac Saul, I mean, some of the things that, that he said about how he chooses advertisers and how they have to be brand aligned, same thing with Fourteen40.
They're, they're thinking about these things in, in interesting and thoughtful ways, and, and, you know, we're paying attention. Yeah. I wonder how long that'll last, though.
I mean, like, you know, Instagram, Kevin Systrom was like reviewing every ad for a while and stuff like this.
So i- it'll end up, you know, obviously, I think a lot of these publications- Are you predicting that we're just gonna sell out? Is that, is that what I hear you saying? Well, no.
I think, I think the challenge in, in this area is you, you have like, I'm sure like you've done the audience survey.
I bet you have like, you know, a nice demographics for an audience, you know, high net worth to some degree. You know, they, they make money. Correct.
They're interested in stuff, and they'll-- yeah, they're very attractive. Here's the problem. Every agency, not every agency, but agencies and advertisers know politics. They don't want politics.
They don't care if it's center right, left right- Right... right right, left left, doesn't matter. Get me away from politics, and I think that is- Yep...
an incredibly sensible decision on their part, where the area that people want the politics is to influence like regulators, the people who like, uh, decide on how industries are going to be treated by the government and stuff like this.
So like getting caught in between is always, is always a challenge because even if you have a very attractive audience, there's politics, and you'll just get like wiped away because you talk about politics. Yeah.
I mean, I th- I think that's right. I think that's an obstacle. You know, do I think the Dispatch is more sort of brand safe than lots of other places? I do.
I mean, I think, you know, you're, you're, you're not, not only are you not likely- Yeah...
to come to the Dispatch and read some crazy conspiracy theory about X, Y, or Z, you're likely to come to the Dispatch and find us debunking those crazy conspiracies.
So, you know, because we anchor what we do in reporting and facts and truth, I think that makes us a little safer.
But I think, I mean, you're undeniably right that people want to avoid politics, uh, altogether, and I-- it's hard to, it's hard to fault, fault that reasoning.
Okay, so just to wrap things up, so you've got forty thousand paying subscribers. What's the goal? You're- Just short of forty thousand. Just short. Wow, buddy- I keep adding the asterisk. Yes.
[chuckles] You know, like you're, you're supposed to like- Everybody's exaggerating what they're doing and what they've got. You're supposed to inflate the numbers, Steve.
Like, I mean, it's like- No, this is the point... rule one is in- This is the point... inflate the numbers. Round up and then round up again.
[chuckles] Yeah, we-- if we're rounding up, if we're rounding up, that's, that's- What is it like-... that's where we live... measure twice, cut once? It's like round up twice.
[chuckles] What's the goal for the end, by the end of the year? Uh, w- we have three different goals. We have a, an aggressive goal, a moderate goal, and a conservative goal, and we are actually in the process.
We had these conversations as everybody does, November, December timeframe. We're in the process of sort of revisiting them and trying to figure out- Yeah... how to think about them in ter- in, in this economy, right?
I mean, are people gonna be bleeding subscribers?
We've been fortunate that when we've seen engagement typically in, or, or, or especially in political news consumption drop, and in some cases fall off a cliff, we've continued to grow.
You know, the trajectory was really high and up and to the right at the beginning. It's leveled off a bit, but we were growing. So, you know, we're confident that we'll be able to continue to grow.
I think the, the trick for us is coming up with a reasonable set of expectations. So I don't, I don't have a number, and I'm not, I-- you know me well enough at this point- [chuckles]...
to know that I'm not, I'm not just dodging for the sake of dodging. We don't actually have one. Yeah. No, I like that there's sort of three different goals because the reality is like you sort of have to.
I'm glad you said that because I have to say it because I'm like, "I don't know." Because you have to because like things are gonna...
How things shape, shape up is like a lot of it is like out of your hands, particularly like early on with businesses. You just have less visibility into, which makes it difficult to me, like- Right... like, I don't know.
But it's good to hear, actually. Uh, awesome. We'll leave it there, but thank you so much, Steve. Really appreciate it. I always love these conversations. So let's call it. Yeah, this was great. All right.
I appreciate it. Thanks, Brian. Thank you so much for listening. Again, please do send me your feedback. My email is bmorrissey@therebooting.com. Thanks a lot to Jay Sparks, who is producing this podcast.
If you're thinking about doing your own podcast, and again, they're hard to grow, but the depth of engagement is amazing, so don't let that scare you off. Get in touch. Jay can help you out. He is at podhelpus.
That is podhelp.us.
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