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[upbeat music] I was their first Substack, but- That's what I mean. You are, like, the original, even though I hate the term Substacker.

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[upbeat music] Welcome to the Rebooting show, where each week I speak to people building sustainable media businesses, big and small.

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I'm Brian Morrissey. This week, I spoke to what I jokingly call Substack royalty, the person who started it all by being the first writer on Substack.

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And as an aside, I refuse to use the term Substacker or Substack writer because I believe the entire point of this newsletter trend is for writers to have control and ownership, and that extends to their brands.

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Anyway, I speak with Bill Bishop. Bill has long written the Sinocism newsletter, which offers perspective on Chinese politics and business.

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We spoke about his experiences in the early internet publishing days as a founder of MarketWatch, how he accidentally became a newsletter writer, as many of us did, how the subscriptions model is critical for alignment with the audience, and about the inevitable trade-offs of operating a solo business.

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But before we get to the conversation, I wanna share with you a quick message from our sponsor, House of Kaizen.

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You know, I talk with people like Bill who are building sustainable publishing businesses by putting subscriptions and membership at the center of their business models.

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House of Kaizen works closely with publishers and other companies with subscription programs to build sustainable revenue growth through research-based performance optimizations.

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Now, sustainable growth comes from delivering on both subscriber, subscriber's goals and business goals throughout each stage of the product journey.

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Customer research reveals subscriber goals, while introspection clarifies the company goals, and then KPIs can be defined to represent measurable success for both parties throughout the journey.

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And in my view, that kind of alignment is both overdue and critical. You know, there are always trade-offs in life, but you have to strike the right balance.

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Find out more about how House of Kaizen works with marquee publishers and brands to make this happen by visiting houseofkaizen.com. That's Kaizen with a Z.

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Big thanks to Matt, Peter, and the team of House, House of Kaizen for sponsoring the Rebooting show. Really appreciate it. Now on to the conversation with Bill.

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[upbeat music] Bill, thanks a lot for, for joining the podcast. I feel like I'm talking to Substack royalty. I gotta be honest with you. [laughs] No, no, no. But th- um, thanks for having me. It, it is...

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I like those guys. I was their first Substack, but- That's what I mean. You are, like, the original, even though I hate the term Substacker, you're, like, the original, the original one. So let's go back to that.

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Like, what... Like, 'cause you, you know, I'm standing on, on your shoulders here as a newsletter [laughs] as a newsletterer, as I'm trying to make a, a term. Like, how did you get started in this?

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'Cause, I mean, your, your career earlier, you know, before you started, uh, Sinocism was, you know, you were one of the founders of MarketWatch. So let's, let's walk us through the sort of background up to Sinocism.

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Sure. So, so out of grad school, I ended up at a startup in... or not... at a company that had come out of bankruptcy in San Mateo, California in 1995 called Data Broadcasting Corporation that had, uh,

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had its own what, what was called tickered plant to deliver real time US stock market data, and had a handheld device called QuoteTrack, which was using this FM side band. Older folks may remember the ads from CNBC.

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And this was '95, right, when the internet was happening in Silicon Valley. Uh, and there was, uh, the, there was a guy at the company who was like, well, you know, he had a media background.

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He's like, "Well, we should start a website and put up stock quotes." And so we had one of the first stock quote websites on the internet that was free. And then it was the whole how do you differentiate data's data?

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Oh, well, let's add news. So started doing headlines. And it was free. And back then, financial information was actually quite hard to get. It was expensive. It wasn't in real time.

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It was, you know, it was either very expensive subscriptions like Bloomberg or TeleRate or Dow Jones, or, you know, you got it through your broker, or you, you had to get special software.

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And, and so we ended up, he was the smartest guy in the company, so I went with him, and we s- wrote the business plan for what became marketwatch.com, and that's how I got into sort of online media.

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Back when 1997, we spun out this little division in a deal with CBS, and then in '99 we were the first IPO of the year. I mean, it was crazy. We were like...

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For a long time, we were the second highest one day gainer after theglobe.com, if you remember theglobe.com. [laughs] Oh, I remember theglobe.com. Yeah. Now we've gotten into my wheelhouse.

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[laughs] Like, do you remember, I think it was actually a CNBC segment where the, I forget the name of one of the founders, he was dancing in like plastic pants.

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If anyone, like, you should actually look up this, this amazing- I mean, we can find the video and put it in show notes. I think I remember that. Yeah, yeah, yeah.

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I forget his name, but- He was dancing on the top of a table, and he was like, "I got the money, I got the girls," and like it was... I guess these days- Yeah, no, we were- You would call it cringe these days.

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No, absolutely no. We were a corporate startup, uh, so, so we were not a, uh, we weren't dancing on tables in plastic pants. But, but it was, uh [laughs] it was an interesting...

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It was definitely an interesting ride, and it was also just sort of, you know, my first real sort of trial by fire in online media, sort of Web 1.0.

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And, you know, it was very interesting to sort of, frankly, as, as my, the, the, the f- the founder, my, my boss for a long time, Larry Kramer, kept saying, you know, the, you know, basically thank God for Dow Jones and its, its obsession with paywall because it, you know, they, we, we were the classic disruptor where they, you know, Wall Street Journal, Dow Jones couldn't put all their stuff up for free.

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Bloomberg couldn't disrupt itself.

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So we were able to come in, and there were lots of other companies that were trying to do free financial information and news, but we were able to get the branding and the money and sort of have a- Yeah...

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somewhat of a first mover advantage. And, you know, e- eventually we, we sold the company to...

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We were public for a long time, and then in two thou- end of 2004, we sold the companyTo Dow Jones for $1 more than our IPO price, which was a victory considering what happened- [laughs]...

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in the early 2000s with the first dot-com bubble. Yeah. I remember that. I was actually... Do you remember a publication called Silicon Alley Reporter? Of course. It's my... It was my first job.

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I was, I was, uh- Oh, yeah... I was a re- I was a reporter there. I had no idea what I was doing. I got- Well, there, there was a lot of us in the, [laughs] in the Web 1.0, right?

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[laughs] I mean, I was like, I started after the NASDAQ collapse in, I think it was April of 2000. And- [laughs]... it was...

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I always describe it like it was like going to a party where you're completely sober, and like the bar had shut down, but everyone was so drunk they didn't know that the party was over. Yeah.

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And, and so it was- And kept hoping the, kept hoping the liquor truck was gonna arrive, [laughs] like sort of- Yeah... it, it's coming, it's coming again, right? Please give us some more.

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And, and, and you realize- But that was-... that's it. Yeah, that was also a different time because there was a lot of, you know, enthusiasm for advertising-supported models. I mean, you...

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I mean, Marketwatch used that as leverage, right?

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Like, you know, the leverage was all of these, all these people like Bloomberg, Wall Street Journal and stuff, they're, they're behind paywalls, and we're gonna like be open, and we're gonna have much bigger audiences, and we're gonna be able to make up for that in advertising.

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Yeah. No, that's right. And, and my... You know, I was actually, I was not a journalist. I was on the business side. Yeah.

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And, you know, my, my last few years at the company, I left right as the sale to Dow Jones was happening in 2000, 2004 to move to China, was I was in charge of the, the consumer website.

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So I was in charge of the advertising business, and I... In charge of our nascent, uh, subscription business where we were trying to sell sort of online newsletters. No, it was... We, we had a big audience.

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It was, you know, measured in the tens of millions on a, on a good month. And at the time it was, you know, things like, you know, we...

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It was a big deal, and Adweek wrote about it because we did an ad, I think it was for an airline brand where like the ad sort of, it was not just a banner ad, but then the ad like sort of moved down the page.

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And it was this amazing innovation, right? [laughs] This is like the da- the days of like iBlaster- Yeah... and stuff like that. Good.

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And then we had a, and we had a, a interstitial, like when you come to the front page and you got a full screen interstitial that you could sell for a lot of money, which was early days.

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And, you know, we avoided the sort of the excesses of, say, forbes.com, for those who remember Forbes, which eventually became unusable. I mean, it sort of still is. Um- It's still around. [laughs] It's still around.

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No, no, it's still around. It's still- It's had multiple owners, but the, the website itself is a little hard. Still unusable. I mean, um- I mean, sorry to my friends at Forbes, but- Yeah... like tough- No, no...

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tough topic... but, but it really- It's unusable... but, but it really was, you know... And so you could see sort of...

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And, and all the arguments about, you know, time spent versus sort of allocation of dollars across radio, TV, print, et cetera.

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And meanwhile, you know, time's, time's surging on the internet, and so therefore it's gonna shift.

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And, you know, the arguments you make during the roadshow and to investors about sort of why, you know, why you wanna get in now because it's, this is where it's all going. And a lot, you know, a lot of the...

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It's true, right? I mean, you look now at those charts about time spent and ad dollars, obviously, you know, the internet is- Yeah. It, it did happen. It just happened

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longer than people expected and, and also had to go through a lot of pain.

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[gentle music] The, uh, the...

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Well, also the money, those, those lines met, but the money went to... Didn't go to publishers. It mostly went to platforms. Yeah. No, that's right. And I'm, I'm so...

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Thank, thank God I'm not trying to do a, a ad-supported financial information website right now because it's just a- Yeah... I mean, it...

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And you see, and you see it with the Vox and BuzzFeed and those guys and just how hard it is to build a, a business, uh, uh, at scale based on mostly advertising, especially when you're trying to have a cost structure of a full news operation.

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Yeah. It doesn't really- That's rough... it doesn't, doesn't work financially. Okay. So I wanna get back to that but, like, so you made the pivot to China. You'd, you'd studied, I assume, Chinese and, and- Yeah.

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I, I took, I started Chinese in college. I went there in 1989 for a semester abroad, and then I spent a year in Taiwan after I graduated, and then a year and a half- Huh...

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working in Beijing in the early '90s before going back to grad school in the States and ending up in Silicon Valley. Uh, were you there for Tiananmen? Yeah. I was a junior at- Wow... at Peking University.

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First semester, I, I went to a grand total of like three weeks of classes 'cause our, our teachers were all grad students.

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And, um, there was a hol- the sort of the, the, the Lunar New Year holiday, and then classes started, and then they all sort of went on strike to participate in the protests. Yeah.

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It must be like unbelievable though to like go back to China now, having been there like in the late '80s, like just the, the amount of changes- Different... seems super fun. I mean, the, the...

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And the, the speed and the magnitude of changes is... It, it feels like, like living several lifetimes. Yeah. So, so you went to, to China, and, and what were you doing there?

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When I went back in the early, the early '90s- Yeah... I thought I wanted to be a journalist. Uh, wasn't really sure.

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I got, I got a job actually working as a translator, uh, translating Chinese literature, and then I got a job working as a news assistant to the Bal- bureau chief of The Baltimore Sun. I did that for about 18 months.

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Then I decided, um, I needed to make some money, and this wasn't the way to do it. So I went back to grad school in DC and sort of was more, then more interested in figuring out how to get into some kind of business.

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Yeah. Okay.

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But you went back- I mean, actually I thought about, I thought about the government, but the year, the year, my, my second year of grad school, the, uh, it was the '94, '95, and like the State Department canceled the foreign service exam for budget cuts.

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Oh. So- Yeah, that was the bad timing. If it was after September 11th, they started pouring tons of money into the State Department, I think. Um- Yeah, yeah, but not, not so much- And then, uh-...

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not so much China-related stuff, but yeah. So anyway- But-... it, it just, it was all, it was very serendipitous.

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And, you know, when I, when I finished grad school, I just called aroundYou know, trying to find somebody to talk to about getting a job, because it, it wasn't a b- it wasn't business school, it was, it was this international studies program at Johns Hopkins.

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And just a guy I'd gone to college with who... And played soccer with, his dad was, uh, had, had bought out this company out of bankruptcy, which was this company called DBC, Data Broadcasting Corporation- Yeah, yeah...

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in San Mateo, and they had a China thing. So I got hired as, like, the China guy. Okay. So you sort of, like, took a detour, and then you went back in 2004. So what were you doing- Yeah...

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like in 2004, and- So, so in 2 thou-... led up to Sinocism? So we were in the process of selling MarketWatch, and, you know, I didn't wanna stick around, and it's been seven years, and I was ready for something else.

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And I had a friend who had, had done an early online, uh, video game company in China, sold it, made some money, was starting another one.

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And so I decided to go move to Beijing to work on that with him, and that was a total disaster. Lost, lost a bunch of money. I mean, we were idiots. It was a big market, we just didn't execute.

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But we did that through basically 2005, 4-5, until s- second quarter of 2008 before we had to shut the thing down 'cause we ran out of money. It was not related to the, like, the financial crash.

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It was not related to Chinese regulation. We just were... We didn't execute. But I was there. My now wife was... She was, sh- she was splitting her time between Manhattan and Beijing, and we met there.

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And she was an entrepreneur, so we decided to stay. And you have a startup that fails, you lose a lot of money, it tends to be bad mentally for a while, and so I was not in a great place.

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We had little kids, and I was kind of stay-at-home dad, which has turned out to be great, but I also needed to do something.

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So I ended up starting a, you know, active on Twitter, and I started a blog on WordPress writing about China. Yeah.

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And, and sort of played around with that for a few years and had one about technology and then sort of this one, one about sort of more general stuff.

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And the one about more general stuff is what ultimately became Sinocism, which I think I renamed and, like, launched in, I think it was either late 2011 or January 2012. I should know that, but I forget.

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[laughs] You gotta get the dates right. And it was free. I mean, it was blogging, it was WordPress.

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I tried Google Ad Network for, like, a week and realized you'd make, like, $10 a, a month, and so it was just a waste of time. And so I just did it for, I just did it for, you know, basically no way to monetize it.

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It was just sort of I wanted to do it and have something to do. But what did the... Uh, what was the opening you saw?

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I mean, obviously, like, I always think that there's, there's great, uh, opportunities when you have one foot in two worlds, right?

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And so I always think, you know, places, you know, things like China, whether it's politics or economics, culture really, like, it's, it's difficult for, for people who don't have any background in China or understand Chinese to understand the dynamics.

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So I, I mean, the opening I saw was I was not, I, I, I was not very happy with the Western media coverage of China.

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You know, I had a unique set of experiences in the, uh, sort of the business world but in technology world in, in Silicon Valley, but then also in, in China. I had an academic background.

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My academic focus when I was in grad school was around sort of Chinese elite politics and economy. And, you know, my Chinese is, is good, and I'm able to sort of, you know,

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process information in Chinese very quickly, and it just felt like there was a, you know, there was just a way to add some, add a different voice into the, uh, sort of the discourse around China. Mm.

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And the fact that I was in Beijing was useful, and it was a different time in China too where a lot more people were accessible and talking, and there was just a, a lot better information flow, not just for foreigners, but for, for, for Chinese people as well.

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Yeah. What, what did you think that Western media got wrong about China then? I mean, it's, it's just, you know, a lot of it, there's, like any

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publication or media outlet, you know, there, there's a lot of the, a lot of the coverage is driven out from outside the country. Mm-hmm.

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And so even if you had a really good reporter on the ground, you know, they were being pushed to do things that were sort of s- sort of driven by the views or the prism of back in headquarters was one.

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Two, you know, it's a...

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Again, not a lot of the reporters, at least at the time, had sort of a co- a, a combination of sort of really great, really, really strong Chinese, uh, an academic background, as well as real experience in business, and so much of China at that time was a business story too, as it is now.

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Mm-hmm. Oh, yeah. Yeah. Okay. So how did, when did the newsletter come about?

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So, so it was, it was really where, where it, it got more interesting was in 2012 at the beginning of the year when there was this big leadership transition where, you know, Xi Jinping was gonna take over later in the year or everyone believed that, although there was, you know, it wasn't official yet.

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And then there was this, this scandal where a senior Chinese politician was detained.

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It turned out his wife had killed a British guy a, a few months before, and it was just massive, and there was a whole set of corruption scandals that erupted.

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And that was just at a, it was a moment when it, it was very good to have a, have my own blog and, you know, had access and some friends and some, some insight into what was going on.

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And what was interesting is the reason it became a newsletter was back in the day, I was using FeedBurner, if you guys remember FeedBurner, that Google- Oh, yeah... Google bought.

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You still, you do RSS, and they had an option where you could- Yeah... have your feed be sent as an email.

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And, and so I think it was in March of 2012 or early April, right when this big case was sort of going where this Bo Xilai had been put under investigation and his wife, you know, murdered this British guy and she was getting in trouble.

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And, you know, I, I was writing about it and sort of talking about it in, in my newsletter, and I had a friend who at the time was, was one of the most followed people on Sina Weibo with, with s- many millions of followers.

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It's a sort of a, a sort of like Twitter but different, but sort of.

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And this friend basically tweeted a, a, or put out on a, on, on Weibo a, a link to one of my posts, and it was, like, the most traffic I ever got for about 12 hours, and then, then the blog was blocked, and it was never to be, never to be unblocked by the great firewall in China.

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And so what that meant for me was, like, okay, how do I figure out how to get people to be able to read it?

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And so then I decided to turn on the email newsletter option in FeedBurner.And so started just building it up as whenever I write a post, it would automatically get sent out as an email. And so that was 2012.

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[gentle music] And then I realized actually having an email newsletter is much better than having a WordPress blog.

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Okay, so talk to me about that. Why? 'Cause you were early on this [chuckles] so like wh- what did, what were you seeing? What were the signals that you picked up that were like- Well, you have a relationship...

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oh, wait, this is, this is the hack. Yeah, no. You have a relationship with, with people. You get feedback. You're in their inbox. It's a, you know, you're pushing it to them.

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They don't have to go sort of c- open their browser, click on something and go find it. Everyone looks at their email, so you show up in their email and then they may interact with you. They respond to you.

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They end up talking to you and just because of the nature of what I was writing about, it turned out I got a lot of really interesting people who were my readers who then would talk to me and tell me stuff, and have conversations, and made me sort of much smarter about some of the things that were going on.

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And, and so ultimately what I did, just as about business models, is as I developed, like I said, you know, my, my company had failed. I was, I was a stay-at-home dad.

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My wife was really busy, and so I couldn't have a full-time job, and it, you know, again, this turned out to be a blessing because my kids are thinking about college now and like I look back and realize that time with my kids is...

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Having time with your kids is the ultimate luxury. Mm-hmm. Especially while they like you. They don't really like you when you're a, when they're teenagers- [laughs]... but it's a whole different podcast discussion.

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I tried actually, I was living in China, I was like, "Okay, maybe I should try and make some li- make some money off this."

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So I did sort of the, I figured, hey, it's a socialist country, at least, you know, I might as well do the socialist approach. So I said, "Hey, if you wanna give me money, give me money," right?

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I sorta did the voluntary donation approach. And, you know, I got a little, I got some money, right? I got enough to sort of make it interesting for a couple years, but it wasn't scalable.

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I got sick of it, a- basically running pledge drives every quarter, and so I stopped doing it for a while. And then I just got bored and was like, you know what? No one else is doing it. I should do it again.

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And so I restarted it, and this is now into like 2015. And then I, then I started getting to know Ben Thompson, who really is the godfather of sort of paid newsletters outside of the sort of financial newsletter space.

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Just as an aside, I mean, back at MarketWatch, we had launched a subscription business with several, um, several, several folks where it was, you know, it, we were...

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The, the, the financial newsletter business has been around for a long time, and back, back when we were- Yeah... say, doing MarketWatch in the nin- you know, it was paper.

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You would get like a paper every, you know- Yeah... you'd get an actual mailed copy every month, and then it was a big innovation if you got a PDF. That was like- Big deal... oh my God, these guys are- I remember-...

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like so on the edge of like the possibility of technology. Yeah. I re- Grant's Interest Rate Observer- Yeah. Yeah, yeah, yeah... was always like, I mean, it was like- He may still be paper. I don't know.

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Some of these guys still are. [laughs] And it's like, like really expensive. Like, I mean, a great price point. So it was a multi-hundred million dollar a year business, the universe of financial newsletters.

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We actually bought the consumer reports of news- financial newsletters called Hulbert Dig- Hulbert Financial Digest in like 2003, I think, with this idea that we could aggregate and become sort of the rating service for financial newsletters.

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So anyway, we started our own business at, at MarketWatch, spent seven figures building a subscription management system, right? It was like, how do you get paid? How do you... It was, it was a nightmare, right?

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Because nobody- Yeah... had these... No, there was no off-the-shelf solution. There was no cloud solution for payments or whatever. It was, it was a nightmare.

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So anyway, fast-forward 2015, I'm, I'm now using, you know, I use WordPress. Um, at that, FeedBurner, Google, you know, as usual, killed a useful product, so FeedBurner- Yeah... was like gone.

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So I was using Mailchimp and had this kludge where I'd write in WordPress, and then I'd send it out in Mailchimp. And I got to know Ben Thompson, right, who runs Stratechery.

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A- and, and he was like, "Bill, you don't understand. Y- you gotta start charging. You don't, you don't..." You know, he... The whole pitch about why, you know, your audience is the world.

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Anyone who exists in China is a potential paying subscriber. You are leaving huge amounts of money on the table by doing this for free.

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So he finally convinced me, and that, the fact, and that I needed to pay tuition for my kids, I was like, I should probably get serious about- [laughs]... like turning this into a business.

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And so 2015-ish is when I, and I, I really started thinking about it. And then I, I, 2016 had sort of hacked together,

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figured out with a little bit of help from Ben, sort of some sort of a, a kludgy hack with WordPress and Memberful and Mailchimp to have a subscription back end.

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And then starting in, well, I launched it, starting in early, I was gonna launch in early 2017, and then, uh, both my parents had health issues. So I had to go help out and basically- Mm...

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couldn't, couldn't start a new business when I knew I was gonna have to be spending a fair amount of time helping them with stuff- Yeah... here in DC and then another part of the country.

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So I delayed it and then it was that point, I think in like April or early May of 2017 that I heard from Hamish McKenzie, who's one of the, the co-founders of- Mm-hmm... Substack. 'Cause I'd known him.

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He had been a reporter. He'd covered China. He'd interviewed me. I, I just... He said, "Hey, you know, I know you're thinking about this, and what do you, what if we come and meet you?

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Because I'm working with this guy from Kik, who'd been at Kik, and we're thinking about doing something." So they came, they came to DC, they gave me the pitch, and I was like, I mean, I like them. They're smart.

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Kik was a, you know, Kik didn't have a great business ending, but it was a serious technical platform, right?

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So I figured, like they have the technical chops, and I'm their first customer, [laughs] so they're gonna build all the stuff that I need, so I mean, what's the downside, right? And so I ended up working with them.

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We s- did a beta, like a beta launch in August, and then we went live in October 2017, and it was the full on, they took care of everything, everything. I didn't... All I had to do is write my newsletter.

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And I imported- Yeah... the list I'd been building. You know, I was lucky.

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I started with a list of 30,000 people-That I just imported into, into Substack and launched with this list of 30,000 and said, "Hey, you know, here starting X date, it's gonna be paid, and click here."

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And, you know, we got a good, good, good, uh, good feedback on the first day. And I, I realized like, "Wow, I'm gonna get this many new setups every day?" Right? [laughs] I know.

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So and then of course by day three you're like, "Well, wait a minute. It's... That's it?" [laughs] It's a slog. Yeah. It's a slog. And then, and then it's a...

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You know, I mean, fortunately it's, I've grown it every year, but, but you realize you have sort of the initial pop, and then it's, and then it is a you have to consistently show up and consistently deliver a product, and you consistently build that business.

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And, you know, it, it is not a straight up and to the right. It is a up and sideways, and down a little bit, and then back up, and plateau, and up, and you keep going. Yeah, I always saw that at like my previous job.

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Like, at launch, everyone gets overexcited- Yeah... and stuff like this, and I would just be like, "Ah, it's nice and stuff."

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But we had, like, one, like, social media war room, like, responding to, like, you know, tweets and there's like, "Look at all these people who are signing up and stuff."

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And they're like, "Yeah, talk to me at day three then." [laughs] That's the... It's like a marathon. Yeah. Yeah, yeah. Yeah.

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Ev- everyone's like, everyone's all, like, high-fiving and, like, loud and stuff like this in the beginning, and, uh, chatting. And then, like, you get to, like, mile, like, 12 or so and it gets pretty quiet.

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[laughs] Yeah. Yeah, yeah. [laughs] And then, and then, and then you just gotta hunker down and be consistent and, and it's, you know, it's nice to start with a decent living, right? I mean, that, that was- Yeah...

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for me, that was key. Had it the first couple days been pretty disappointing, then I probably would've said, "You know what? It doesn't make sense." But it was, it was enough of a response.

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And I know, I know the Substack guys have talked about this too.

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So they said it was a big enough response that they also saw potential in this, their sort of general business, not just, obviously not just one single newsletter about China.

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But in general, like, holy cow, there are people all around the world who are actually willing to pay for content from individual creators, individual contributors. Yeah.

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So w- how, how has your approach evolved over the years? I mean, 'cause you've been doing it the longest of, of anyone on Substack. [laughs] Yeah, no, it's interesting.

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So, so when I started the newsletter, I, I, you know, I, it, I was like, just like, you know, I, it wa- it was, you know, I- I see myself it- it's like a, a, a commentator, analyst, and kind of a meta editor, right?

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I mean, I'm not a journalist, but, but I, I, I sort of, for me, my view has always been, well, let me, let me, based on my own sort of skill set experiences, I have an interesting view.

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What I, what I think is interesting about what's going on in China and what, what's being said about China. And so I would put together a newsletter from that perspective.

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And, you know, a lot of it was Chinese sources in Chinese language.

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And my attitude, at least the beginning when it wasn't really a business, was like, well, I'm just doing it for people who are pretty special- pretty specialized, pretty serious, you know, and, and I'm not gonna translate a bunch of stuff because if they, if they're assist on China, they should be able to read it themselves, right?

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And then once, once you turn it to business though, it's like how do you... Obviously you, you wanna keep it growing, you wanna make it bigger. And then one of the, one of the real tensions is how do I

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make an appeal to a broader audience, but at the same time- Yeah... stay true to sort of a more specialized approach?

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Because there's a lot of general stuff out there about China, any topic, that people aren't necessarily gonna pay for.

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And, and so I've come around to, I think I've, you know, I'm still growing, not, you know, it's still double digit growth, but I'm, you know, I'm not gonna be like the top 10 on Substack in terms of a- annual revenue.

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I just don't think the market is that big for the kind of stuff I do, but it's big enough to make a very nice sort of lifestyle, you know, kind of a lifestyle business living for me. Yeah.

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And I think that's like I, I wrote I think a post a little while ago called, like, Widening the Aperture.

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Like, 'cause, like, you have to get the aperture right, and sometimes it's, like, too narrow and- But it can be too wide too...

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and you get, right, and then you get pushed, 'cause I think we all know the sort of too wide of aperture with the sort of this, the scale publications like of the last era.

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[gentle music] But also there's the risk of getting too narrow, right? Like in some point, like- Yeah... you need to, you need to have it broaden a little bit, you know? Uh, no, that's right. Yeah.

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And, and that's a, it's a constant, it's a constant tension. And, you know- Yeah... I, I, I definitely still struggle with it. And, you know, to be honest, you know, I've been doing this newsletter for, for a long time.

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The formats is I, I've, I've adjusted it a bit over time, but there are days when I just wanna blow the whole thing up and start over.

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And, [laughs] you know, on the one hand, I think in some ways it might end up being better. But on the other hand, you know, I have a l- I have thousands of people who are used to a certain thing.

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And, you know, having worked in other products before- Yeah... is, you know, a big change to anything that people are used to, you're gonna get a lot of people who don't like it, even if ultimately- Ah, yeah...

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it's better. A- and so I'm just sort of trying to, like, shift things at the margin.

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And the other thing is just, and, and I know, I mean, you have obviously with your, with your audience and some of the listeners, I mean, a fair number of people who are writing their own newsletters.

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I mean, it, it is a, it is not easy to do this four to five days a week consistently. Like, I mean, I'm, I'm, I'm actually... I- if I sound sick, it's because I've had COVID.

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I'm finally feeling better today, but I've had it for, like, 12 days now. And you can't really take two weeks off if you're the- No. [laughs]... only person working at the newsletter. Yeah. No- You know?...

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I mean, I think that's like, I think...

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I mean, people, like, you know, call it burnout and stuff like this more nowadays, but, like, you know, the reality is if you're, if you're making stuff from scratch, and particularly if you're doing it, like, several times a week, it's a grind.

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And it i- uh, like, you have to just, like, get through it, I guess. I mean, I've only been doing this- Yeah... for two plus years, but yeah, it's hard.

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No, you gotta, you gotta like it, and you gotta, and you, it's gotta be, you gotta be writing about stuff that you actually can add value one way or the other.

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My approach, like, like, I, I don't do what B- you know, like Ben Thompson, Su- Sutech- Sutechkuri, you know, he's three or four days a week he'll have a sort of a think piece.

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And my view early on was, with trying to do this about China, was China's too big and too complicated. I'm not smart enough to be able to write a cogent-Useful think piece three times a week, right?

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It just, it just doesn't, like, uh, it, it doesn't, isn't where I think the value add is going to be. And so that's why I've, I do my format more.

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And then of course, I get some people like, "Well, you gotta write more of these think pieces." And so there's a, there's definitely a tension there. There's also just the, the reality of time and output.

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But one thing, just the other point is around cost structure is- Mm. You know, one of the reasons I've looked at, you know, I, I did MarketWatch.

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I looked at doing a sort of a tech information-related startup when I was in China for Indian English, is, you know, you have to really understand what... how big your addressable market is.

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And so like lang- information about China for an English language market, if you're like a specialized research firm where you can charge thousands or tens of thousands of dollars a year, that's one market.

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A more sort of broader-based, not necessarily consumer, 'cause I have a lot of institutional clients, my prices are like $168 a year, $15 a month, and there are some different kinda group subscriptions. And my...

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I think my average annual subscription is somewhere, like, I should know the number, but it's like $110 a year or something, 'cause I have some older pricing, whatever.

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But that is a, that's an easier decision for an institution. But my point is, my addressable market for my product, sort of what my product is and what my price point is, it's not that big.

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And so I have to be very careful. Like, I can't hire a bunch of staff and build up this big cost structure, or it just isn't a business. Yeah. And that's, I think that is the biggest, like, challenge, right? Yeah.

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And I think, like, I... Because these, these models work, and I think one of the things that's amazing about, like, what Substack has did, and, uh, i- is that it, it took all of the infrastructure costs off the plate.

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You don't have to hire a developer, you don't have to...

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And first of all, there's like, there's opportunity costs because trying to manage all these things, I mean, I know this 'cause, like, I've been doing, like, sponsorships and, like, you know, I love all my partners, but, like,

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sometimes I feel like, you know, making the product is like, you know, sort of a last-minute thing, [laughs] to be honest with you. Yeah. Because- No, running, selling sponsorships, it, it's hard. It takes time.

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Yeah, it does. Yeah. There's a lot of meetings, and there's a lot of back and forth. Yeah. There's a lot of invoicing and, you know, if you have, you know, if you're lucky... I mean, it's good problems to have, right?

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It's better, it's better to have like, you know, a, you know, a lot of clients to, like, take care of than no clients to take care of if that's your model. But I think it's important to get the infrastructure right.

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But how did you determine how big the addressable market is? Because, I mean- So-... China is like a massive market, obviously.

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It is, but I mean, if you look at, like back in the MarketWatch days, we had looked at, like, part of my job at one point was international work, and so we set up a, we set up a joint venture with the Financial Times and Pearsons in the UK called FT MarketWatch.

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And of course, I think the day we signed the deal was the day the market collapsed [laughs] in 2000. But that, you know, different...

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And then we were also looking at doing one in Asia, and so spent a lot of time looking at the time, you know, the legacy English language media, you know, like the Business Week, Wall Street Journal Asia, the few other, and sort of how they, from an ads, 'cause we were an ad-supported business, like ad-supported what the market was.

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And it was very small, and the advertisers were like travel, right? Yeah. Because it was, it was a very... It wasn't like I'm selling a product about tech, or I'm selling a product about finance. Mm.

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It's a much broader, where I'm selling a product about China, so it just, from, from that perspective, for me, just, I didn't do a, like, a bunch of market research when I did Cynicism. I, I didn't do any.

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I think I did one, like, Google or SurveyMonkey survey at some point. [laughs] But I'd already launched.

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But it was more like, okay, just from my previous experience, there's a market there, but it's ni- it's gonna be a more of a niche thing.

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And so, and then when I launched on Substack, I mean, because I'd been doing this for free for so long, and I'd, you know, I'd built up this list, I had thir- l- just over 30,000 people, and I figured, again, that was why the first day I got, you know, and my, my conversion range is, I'm, I'm within the 5%, 5 to 10% sort of paid versus free lists band- Okay...

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that I think is on the lower side now. I mean, you know, it's, it's, I'd like it to be higher, but I was definitely within that band when I, when I launched.

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And, and, and, and so for me, I was like, okay, if I can make this into, you know, if I can get, like, 2,500 subscribers over the next few months, that's, uh, that'll be a fine business.

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I can, I can make a living off that. And it's gotten bigger, but, but my, but my point is, is my general view was the market's not gonna be that big.

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I underestimated how big it could get, but in terms of, you know, I see, like, there, there are several other companies that are trying to do newsletters about China.

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There's one that raises money, so they have to, you know, they, they, they've been using these crowdfunding platforms, and so they a- it's great, actually. They have to post their financials, you know, and SEC filings.

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And, you know, I see where they are in their newsletter business, and it's, it's smaller than my business.

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And I, you know, you can see their cost structure, and it, it makes me feel more confident in sort of just the belief that while this is a very interesting business, it is, it's one of those businesses that's not one you raise money for.

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Right. It's a business you run, you control costs.

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I have some contributors, you know, and I've, I've had some more in the past in China and then stopped using them because of the, h-how fraud it became to have somebody working for, like, an American- Mm-hmm...

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media operation.

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But the thing is, and this is something that Ben Thompson said, and that, you know, early on when he was trying to convince me I needed to charge, and the Substack guys get it too, which is like, I mean, with these platforms, like with Substack, your audience is the world.

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And so if you're gonna write about, for example, like write about gardening or write about how to grow vegetables in your garden, you know, there are people all over the world who are interested in that.

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So you just, like, you can find these niches, and the niches are almost infinite, and within each niche, if you become one of the, one of the sort of most respected or most well-known people, um, you can make a living in that niche.Yeah.

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I think Substack just changed with showing, like, where your subscribers are by geography. So it's good to say- Yeah...

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it's, like, 100, 142 different countries, and I think the advantage of a subscription model, 'cause I always thought about this in my previous job, was that we could make money off of people in markets where we really couldn't make money.

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Yeah. Like, because if an advertiser didn't ask about geotargeting, 'cause there'd be these people in Sweden, and the company only operated in- Right...

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you know, the United States and, like, a couple of, of other markets in Europe.

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But we were still showing them, like, ads for their products, and we were just hoping probably that the advertiser didn't ask to sort of geotarget. [laughs] Yes. But guess what?

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People in Sweden pay a lot for subscriptions. It's good to be a Swede, I, I think, because they convert quite a bit.

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And so all of a sudden it's like you're making money off people, you have a global media business where if you have just an ad model, it's really difficult. No, that's right, and- and I mean, I- I- I...

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S- you can hear me, right? I had a little- Yeah, yeah. Yeah, yeah... flicker there.

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So, so I mean, back to the ad model, I mean, obviously I, you know, I was, I was in charge of our ad business at, you know, we had a bunch of salespeople, really good, you know, s- very strong sales team, great head of sales.

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You know, I've looked at that repeatedly. Could I build some sort of a complimentary ad product for my newsletter?

247
00:38:04.080 --> 00:38:08.500
I mean, one of the things that's been great about Substack, and I should say because I, I mean, I'm saying nice things about Substack- Yeah...

248
00:38:08.520 --> 00:38:14.400
I liked it so much that four months after I launched, I insisted they let me become an angel in the round they were raising.

249
00:38:14.520 --> 00:38:38.080
[upbeat music] So I'm also an angel investor in Substack because I just, they were...

250
00:38:38.140 --> 00:38:47.820
I really like what they're trying to build. But so what has come out of it, you know, they launched... And my, my list grew. I, I had a deal with Axios. I was one of their first newsletters.

251
00:38:47.860 --> 00:38:58.420
I started the Axios China newsletter, and that was a different discussion, a foray into advertising and what works and what doesn't work even when you have a sales team trying to sell stuff.

252
00:38:58.960 --> 00:39:05.360
But part of the deal was, you know, I brought my list over, I did the stuff, but if I ever left, I could take the combined list back.

253
00:39:05.400 --> 00:39:13.820
And so I went back when it ended, I went, I- I had a list of now 60,000 free newsletters that they had helped grow- Wow... and I helped grow, too.

254
00:39:13.860 --> 00:39:19.580
Substack has launched this recommendation thing where you, you can recommend other Substacks. I'm sure you have it, and I- I- Yeah...

255
00:39:20.020 --> 00:39:31.780
I, my, my free list has been, you know, growing consistently, but it really shot up sort of when they launched this last year. And so now I have, like, 142,000 free, 142,000 people on my free email list.

256
00:39:32.220 --> 00:39:46.229
And so I think, okay, should I do a free weekly where I do a weekly sort of more general China newsletter, less, less sophistic- less sort of dense as, as Sinocism is now, and then try and sell advertising?

257
00:39:47.000 --> 00:39:54.400
And I keep going back and forth, and I may get there. It's a lot of work to both write the free weekly- Yeah... but then as you know, it's a lot of work to find the sponsors.

258
00:39:54.420 --> 00:40:06.650
And so I just haven't yet had the right conversation where someone says, like, "Look, if you do it, we'll sponsor it for three months," and therefore I know that sort of I got money in the bag, so it's worth trying and it's worth the time.

259
00:40:07.200 --> 00:40:20.040
So maybe it'll get there, but it is something where I think like you did with your newsletter and there's, and see some other ones where Substack does not help you sell ads, they don't help you insert ads, but it's really easy to just sell the ad and put a text block in with a link, right?

260
00:40:20.580 --> 00:40:27.100
Yeah. You also don't have to pay them then for doing that. No, exactly. I mean, and then it's, it's... [laughs] No, and exactly, and so, like, for me, I mean, just I'll...

261
00:40:27.140 --> 00:40:33.870
I'm not gonna tell people what I make total, but I will tell you that, like- Oh, shit, come on. I thought I... Well, you know, Sub- Substack takes 10- You were leading up to this. Yeah, yeah, yeah, yeah.

262
00:40:33.880 --> 00:40:42.680
But Sub- Substack- 38 minutes of, like, foreplay. We're... This is where we're going, Bill [laughs] Well, this is all you're getting, third base. So Substack, Substack takes 10%, right? That's public.

263
00:40:43.200 --> 00:40:51.940
Then you pay, you know, you have to pay Stripe, and Stripe charges a per-transaction fee and then, like, the credit card fee, and then you have refunds and chargebacks and whatever.

264
00:40:52.340 --> 00:41:03.440
So my average take every month for every dollar that someone... Like, every dollar I make in gross revenue, I get basically 85%. So I get 85 cents when all the other- Yeah... fees are gone.

265
00:41:03.550 --> 00:41:17.080
And that's fine because even if you're not on Stripe and you're running on a different platform, you're still gonna end up with, like, around between whatever that platform charges you and all the, you know, the credit card fees and the Stripe, you can't get away from those.

266
00:41:17.660 --> 00:41:24.100
You're still gonna end up at, like, 7% or 8%, best case. Yeah. And it's- And you s- then you... And then you have to pay- It's a trade-off... for customer support.

267
00:41:24.240 --> 00:41:34.600
And I don't pay, and then I don't pay for customer support. I don't pay for development. I don't do anything. And so even as the numbers get bigger and the money I pay to Substack gets bigger, I, I like, like, for me,

268
00:41:35.520 --> 00:41:44.990
you know, especially with the way they're bringing in new customers with this sort of the recommendation, all the cross stuff they're doing, it's like- Yeah... you know, this is free marketing for me. So- Yeah...

269
00:41:45.020 --> 00:41:49.399
so it continues to be, like, a good, like a, like a good value for me.

270
00:41:49.430 --> 00:41:57.060
And then like you said, if I could figure out how to then build out a weekly ad business that I keep 100% of the revenue and I, I don't have a sales force.

271
00:41:57.340 --> 00:42:07.330
Y- I don't know if you have people selling for you and you have to pay commission, or you just do it yourself, so then it's 100%. I have, uh, uh, uh, Paul Circut. He's, uh, helping me on the sales front. There you go.

272
00:42:07.330 --> 00:42:16.709
Okay. And it's a trade-off. Like, you know, you gotta, like, you know, you obviously pay commissions and stuff like this, so you need to, you know, get, get the order size, like, higher than what you're- Right...

273
00:42:16.720 --> 00:42:23.620
paying out. And it's- To make it interesting. Yeah. Otherwise, like, just do it, you know, yourself to some degree, although, you know, I'm not, like, a professional salesperson.

274
00:42:23.680 --> 00:42:30.240
Although if I keep doing it, I might as well become one. I don't know. I've been doing it for now [laughs] for a little bit, so maybe I am a salesperson. I don't know.

275
00:42:30.270 --> 00:42:37.320
Um- Well, we are, I mean, we, we, we're running a business. You are a salesperson. Yeah. I mean, and, and, and- No, no, no, I know. Yeah. I, I say sales. We're... I, I wrote a thing. We're all in sales.

276
00:42:37.380 --> 00:42:41.930
We've always- Yeah... you know, most just, we're all in sales. Oh, you did? I missed that. Okay. Yeah. Yeah, yeah. No, I did it. I did it a few years ago. We're all in sales. Okay.

277
00:42:41.940 --> 00:42:45.330
But, like, there's a difference between being a seller, you know what I mean? Like, you're- Yeah, yeah, yeah, yeah.

278
00:42:45.980 --> 00:42:53.420
But it's, to me, it's been, like, I, I like it because, like, in any business you gotta, like, talk to your, your, your customers, right?

279
00:42:53.500 --> 00:42:58.736
And, like, I think the, the hard part of any, um-You know, business that has a hybrid.

280
00:42:59.036 --> 00:43:03.836
I just had Steve Hayes on, like, and we were talking about the hybrid model with The Dispatch, you know, 'cause they're gonna be going- Mm-hmm...

281
00:43:03.916 --> 00:43:13.606
into advertising because, you know, look, if you're converting, I'm just gonna make up like seven and a half percent, I'll take the mid- midpoint. Seven and a half percent of the, uh, 142,000.

282
00:43:14.076 --> 00:43:22.936
You know, you don't need an MBA from one of the top schools to be like, "We're not making money off [laughs] of 92.5% of the audience."

283
00:43:23.396 --> 00:43:36.796
It would be good to not just use that 92.5% as the top of the funnel to filter down, because a lot of these people are never gonna convert, so, you know, we are in some ways leaving money on the table.

284
00:43:36.876 --> 00:43:37.956
No, they- It's just a trade-off.

285
00:43:38.336 --> 00:43:48.996
And that's actually what's, what I'm s- been seeing, and I know other publishers are seeing this too, is, like, a lot of us have seen the jump in the number of free subscribers because of the Substack recommendation features.

286
00:43:49.026 --> 00:43:52.296
Yeah. The thing is, is those are less qualified people. Oh, yeah. Right?

287
00:43:52.656 --> 00:44:05.336
And so I've seen my conversion rate go down even though the free list goes up because these are people who are, maybe they're not signing up because they've come to my content or seen my content, they're signing up because they sort of clicked the button that was sort of- Yeah...

288
00:44:05.346 --> 00:44:13.266
pre-populated, right? And that isn't necessarily bad, but it's a different kind of customer. So to your point exactly, then it becomes, well, how do you monetize...

289
00:44:13.426 --> 00:44:17.776
If, if you, if your goal is to maximize your revenue, how do you monetize that cohort?

290
00:44:18.336 --> 00:44:35.236
And that is where a, a sort of, some sort of regular free product where you can put advertising, it makes a ton more sense because what I've seen, and I regularly sort of send out offers and, you know, you can filter and pick out bits of the list to send to and the response rate is not, it's not great.

291
00:44:35.296 --> 00:44:40.966
I mean, I've run direct marketing campaigns before, paid people to do it, and like... So it's not awful.

292
00:44:41.436 --> 00:44:48.276
They're never that great for a lot of these things, but it's definitely gone down as the number of users has increased and they're less qualified.

293
00:44:48.646 --> 00:44:55.396
And so it is a challenge from a business perspective is how do you monetize, how do you maximize the revenue potential for those people?

294
00:44:55.686 --> 00:44:58.836
And that's why I think, like, your conversation with Steve Hayes, I mean, it makes...

295
00:44:58.996 --> 00:45:08.636
It- finding a way to then sell advertising in a product that fits for these people makes a lot of sense if, if your goal is to maximize your revenue. Yeah. Let me ask you this. Like, I, I...

296
00:45:08.656 --> 00:45:15.476
'Cause I feel like a lot of people with newsletters, particularly when they're tied to, like, an individual, they reach this point where they can go in two directions.

297
00:45:15.516 --> 00:45:24.815
You either go, like, you know, like Ben Thompson, I believe, I've, I have never talked with, with him, but like, you know, it seems to me he's pretty much gone down the Ben Thompson route.

298
00:45:24.876 --> 00:45:33.176
It's him, and he, he's decided, it's like you, you could imagine there would be people who would come to him and be like, I would guess, would be like, "Hey, let's make this, like, a bigger publishing brand.

299
00:45:33.436 --> 00:45:43.496
You should be hiring people. You know, you've got the capital." He's gotta be doing super well. Like, I think he's taking a little bit, because I know you're doing work with him. That's very authentic. I like that.

300
00:45:43.576 --> 00:45:53.196
Sorry, my, yeah, my, uh, that's- [laughs]... that's, that's Tashi. He had to get a word in. Sorry. Tashi. Okay, good. I like that. This is a group thing. [laughs] Uh, very authentic. But, uh, oh yeah, Ben.

301
00:45:53.336 --> 00:45:59.756
Like, I see, you know, you're, you're doing work with him, like, and I wonder, like, how you think about, you know, it being...

302
00:45:59.776 --> 00:46:07.896
Because there's a tremendous amount of leverage, uh, that exists when it's a, a solo endeavor, you know, financial leverage for one.

303
00:46:07.936 --> 00:46:19.396
But, like, how you thought about, like, c- continuing down the path of it being, like... 'Cause you wanna keep it very lean and stuff like this versus maybe I could make this into a bigger thing.

304
00:46:19.536 --> 00:46:31.076
I could hire, you know, other people who, who cover other aspects o- of the China story. No, it's interesting. And you, you should, if you can, you should try and get Ben on to talk. I mean, he's, he's great.

305
00:46:31.106 --> 00:46:36.426
And so I do... You know, he has launched this broader bundle where he's actually- Yeah...

306
00:46:36.456 --> 00:46:49.036
he's got his newsletter, and then he's got several podcasts, and so he started one that he's on, um, he hi- he hired a professional host who'd done a, uh, had a history in, uh, sports journalism and podcasting, and, Andrew Sharp.

307
00:46:49.116 --> 00:46:59.476
And so, so he talks to Andrew every week on the Sharp Tech podcast. I talk to Andrew every week on the Sharp China podcast. Andrew then has his own basketball podcast, and I think he's got a couple others coming.

308
00:46:59.516 --> 00:47:09.476
And then he does one with the really fame- the Daring Fireball guy, John Gruber, called Dithering. Yeah, yeah. And it's all bundled into his podcast. And so he's, he's, but he's not charging anymore, right?

309
00:47:09.576 --> 00:47:16.496
It's act- so he's actually, he's expanding his product universe. It's, it's kind of an interesting move, but

310
00:47:17.496 --> 00:47:26.436
y- you know, ultimately, and I think ultimately that makes him, if at some point, I have no idea, but at some point Ben is a sort of a goat, goat brand in tech coverage now.

311
00:47:26.836 --> 00:47:34.756
At some point he could get picked up by somebody and start a conference business like Code did. Kara Swisher- Yeah... and Walt Mossberg did. I mean, he, he could probably pull that off.

312
00:47:35.136 --> 00:47:42.856
For me, on the China stuff, I mean, it's certainly something I think about, and I subscribe to all the other newsletters out there, and I know many of the people who do them.

313
00:47:43.916 --> 00:47:54.186
It just goes back to, like, comparing what Ben's doing with sort of technology versus sort of what I'm doing with China. It's a, it's, the technology market is bigger in terms of what- Yeah...

314
00:47:54.196 --> 00:47:58.036
people pay for and what advertisers will pay for. It isn't... Like, having

315
00:47:59.276 --> 00:48:33.076
just worked in big media, now doing small media, looking at sort of building businesses around content about China [gentle music]

316
00:48:33.356 --> 00:48:34.516
it is very

317
00:48:35.656 --> 00:48:52.146
hard to figure out how that scales to a revenue level that supports a pretty significant operation in terms of people, unless you're focused on the much higher, more expensive end around research, selling into financial customers or doing- Yeah...

318
00:48:52.176 --> 00:49:04.060
like, specific kinds of research work where you're effectively, like, a government contractor, and you can get, like, a big fat contractor from, a big fat contract from one or, one or more sort of like-Government agencies.

319
00:49:04.300 --> 00:49:08.840
Yeah, that's a good point. I mean, I guess- That's a, that's a different business. That's a totally different business, not... Yeah.

320
00:49:09.440 --> 00:49:18.100
It's a different business, and you have to decide if you're gonna change your entire business. Yeah. How do you end up thinking about enterprise value, though? I mean, what my company's worth?

321
00:49:18.260 --> 00:49:23.080
Yeah, well, I mean, like, because, like, I mean, I think everyone probably should think about it, right?

322
00:49:23.220 --> 00:49:30.880
Like, I mean, 'cause, like, if you're building a business, it's like, you know, people, people use lifestyle business as, like, a pejorative, and I'm like, "Sounds pretty good." Like, I don't know why not.

323
00:49:31.030 --> 00:49:39.140
[laughs] That's not a... I mean [laughs] not a pejorative to me. Like, I, I don't... Why is that a bad thing, to have, like, a nice lifestyle, and, like, make money and do stuff that you wanna do?

324
00:49:39.280 --> 00:49:53.150
Sounds pretty good to me. But yeah, there is the question of, of, of enterprise value. If, if, if a... If the brand and the company, it does not exist without you, obviously the value is lower than- Yeah. Yeah Right?

325
00:49:53.180 --> 00:50:06.500
No, and, and I think, I mean, I look at that- Trade-off... as it's a trade-off. And for me, you know, I, I, I'm... I didn't build this to sort of sell it, and it's not... It's, it's sort of not in my plans.

326
00:50:06.560 --> 00:50:14.160
A- and, and like you said, at some point you'll do something else, and then what happens to it? And I, I, I don't know. But for me, the, the focus...

327
00:50:14.300 --> 00:50:22.600
I'm not focused on sort of how do I dress this thing up to f- to figure out what an exit is. No, I know. I do like, like I said, I mean, this one company that does something similar, not...

328
00:50:22.680 --> 00:50:30.400
They have other stuff they do, and they have a, you know, they do... But they do have a newsletter business that's a, that's a not insignificant sort of part of their revenue.

329
00:50:31.180 --> 00:50:37.200
And they, you know, they're trying to raise money at, like, $40 million valuation, and they don't make any money. And I'm like, "Oh, God, this is great. I hope they get it."

330
00:50:37.300 --> 00:50:48.360
[laughs] Because, like, [laughs] on a, on a, on a sort of a, not only on a sales, from a cop perspective on sales, but also on profit, you know, "Hey, this is what I should be worth, but I'll take a discount.

331
00:50:48.400 --> 00:50:53.120
There you go," right? Yeah, yeah. Um- I don't know. Maybe these newsletter business will become like dentist office. You know?

332
00:50:53.240 --> 00:51:02.150
Like, the dentist office would be like, you know, once the, once the dentist got to a certain age, they sort of like, you know, pass it off to, like, another, like, younger dentist. Yeah. I mean, it does- I don't know.

333
00:51:02.150 --> 00:51:09.080
Maybe that'll happen in newsletters. [laughs] There, there are days when you're at... It's 4:00 or 5:00 o'clock, and you're like- Uh... "What's my newsletter today?"

334
00:51:09.130 --> 00:51:16.100
[laughs] Where you feel like you're at the dentist office. So I don't know. Maybe that is a good, uh- Yeah... analogy. They always come out. I was in the dentist office this morning before this call.

335
00:51:16.160 --> 00:51:25.920
Like, at, like- [laughs]... 8:00 AM at a coffee shop being like- Yeah... "I've got to finish this before I talk to Bill." And, and, and- Um-... it always, it always comes out. Yeah, no.

336
00:51:25.980 --> 00:51:28.619
It's, it's so, so, so, you know, I, I don't know.

337
00:51:28.680 --> 00:51:37.100
I mean, it, it'd be great, it'd be great to, like, wake up one day and somebody gives you a big fat offer, you know, and then you get an earn out, and you work somewhere for three years, and, you know, then you move on or whatever it is.

338
00:51:37.130 --> 00:51:47.740
Yeah, yeah, yeah. But, but it's also, like, you know, especially these days, and, like, who, who, who... What's the universe of likely buyers? And what, what are their valuations?

339
00:51:47.760 --> 00:51:55.720
And what pressures are they under, you know? And sort of how have multiples and, and, you know, multiples compressed so much over the last year just with the, the general market.

340
00:51:56.140 --> 00:52:06.040
It's, it's like this is, this is not a great time to be selling even if you wanted to be. Yeah. I... Final thing I wanna talk to you about is, like, how do you find the community element? Because I think a lot of...

341
00:52:07.240 --> 00:52:16.309
You know, we've, we talked about it here, but, like, you know, the dynamics of newsletters really do sort of lend themselves to community aspect. And I know it's an overused term, but...

342
00:52:16.940 --> 00:52:28.060
And I, and I say it mostly just 'cause I've, I've written f- for a lot of different types of publications, and the level of interaction in this particular type of media is completely different than anything I've seen in, in other types.

343
00:52:28.120 --> 00:52:35.120
You, you literally hear from people. They write, like, long letters to you and stuff like this. Yeah. [laughs] Yeah. And there's a whole bunch of different reasons for that, and I think it's amazing, and it's...

344
00:52:35.220 --> 00:52:43.520
Actually, it's one of the most gratifying things of, of doing this, to be honest with you. And, but it lends itself. It's like, is there a community here? 'Cause community is also, like...

345
00:52:43.560 --> 00:52:52.480
You know, it's another form of leverage. I wrote about leverage [laughs] today. And I see what you're doing, like, with the, like, you know, Substack Chat. I'm not totally sold on, on the, the chat feature.

346
00:52:52.560 --> 00:52:58.680
I'm glad that they're, they're trying these things. But because I do think, like, someone is gonna, like, figure out the community aspect.

347
00:52:58.790 --> 00:53:07.890
It's not a Slack channel, and it's not Discord, I don't think, 'cause Discord is, like, crazy. Yeah, no, I, I mean, I have a Discord server for, for cynicism. [laughs] And, and it... You know what?

348
00:53:08.000 --> 00:53:17.960
It was like, there were some people who like it, but I resisted for a long time. And a year plus in, I'm kinda like, "Eh, probably would've... Better to just not do it." Yeah. I mean, it depends.

349
00:53:18.080 --> 00:53:30.449
Some, like, like, for example, one of the, if not the top newsletter on Substack in terms of revenue, the business model is you pay to participate in the community, right? It's not... You're not paying for the content.

350
00:53:30.880 --> 00:53:37.910
You're paying the... so that you can comment and talk to other people, and that is the Letters from American by Heather Cox Richardson. Yeah. Where, where...

351
00:53:38.080 --> 00:53:42.730
And, and so, and so for some authors and some newsletters, community is really the thing.

352
00:53:42.860 --> 00:53:52.400
I mean, obviously, she's great in what she writes about, and people are there because they like what she writes, but it's also being part of this broader group. Yeah. You know, I have, I have a...

353
00:53:52.440 --> 00:54:01.900
I do a weekly sort of discussion thread, sort of open thread. Sometimes I post questions, sometimes I leave it open. And, you know, some days I get a lot of people, some days it's not that, you know, not that many.

354
00:54:02.640 --> 00:54:07.120
You, you have the, like... I, I limit it to paid subscribers only because, again,

355
00:54:08.360 --> 00:54:16.800
if you open it to everybody, you just end up having to deal with a lot more sort of hassles around comments and spam and people getting kinda nasty.

356
00:54:16.840 --> 00:54:26.980
Wi- within the, the group that's already paying you, I think generally there's a, there's sort of a just a better level of discourse. And that's, that's the hope for also the, the Substack Chat bit.

357
00:54:27.260 --> 00:54:34.840
And it, you know, it's early days. I was one of the first beta testers, and I know they're rolling it out, and there's some things I really like about it. There's some things I think are like... But they, they know.

358
00:54:34.860 --> 00:54:45.140
They're working on it. What... How much it really takes off, and, you know, some publications have massive use, and some publications, like, you know, like, no. Nobody's there. You post something and no one replies.

359
00:54:45.380 --> 00:54:56.530
But community is important, and it's one of those things where, again, like, some people wanna participate, and you wanna be able to give them that option because it's, it's part of the overall...

360
00:54:56.660 --> 00:55:11.172
It's part of what they're paying for and what they see as value in being part of this broader communi- community related to, be it cynicism and China-related newsletter or something about, say, gardening or US politics or crypto or whatever.Right?

361
00:55:11.232 --> 00:55:21.092
And so it's, I think it's important to offer community. It's also, I think, you have to be very careful that it doesn't get crazy with spam, and that's why at least- Yeah... starting with

362
00:55:22.312 --> 00:55:30.422
only paid subscribers can participate makes a lot of sense. And I have, I have removed a couple subscribers who just are like, I'm like- [laughs]... "Please, you gotta stop doing this."

363
00:55:30.472 --> 00:55:38.972
They don't do it, then I just give them a refund and say, "Go away." And- Oh, okay... well, I mean, you know, it's my- No, you gotta... it's my newsletter. It's my community, right? I, I like that, yeah. You know?

364
00:55:39.072 --> 00:55:46.432
No, you gotta do that. And they're not happy, and I, attack me on Twitter and whatever. You're like, you know what? Oh, really? Yeah, whatever. Who cares? I mean, it's, move on, you know?

365
00:55:46.472 --> 00:55:53.212
[laughs] Not, not you, but I'm saying to the person, it's like, whatever. You know, I, you, we have a community. I asked you to- Next question. Yeah. I got a bunch of... I go, "No, no.

366
00:55:53.312 --> 00:56:01.772
I got a bunch of, I got a bunch of complaints. I asked you to stop. You basically said I'm being an idiot, and it's my right to do this 'cause I'm paying you." And I'm like, "No, it's my community. Go away." Yeah.

367
00:56:01.872 --> 00:56:11.072
Well, no, that's- And that was it. And that's what's different about this. What, so final thing I, I wanna talk to you about is, um, is the motivations of, of people who subscribe, right?

368
00:56:11.142 --> 00:56:17.052
'Cause, like, you talked about, like, the early subscribers I feel like, and I've talked to, like, lots of people, and I've experienced this before.

369
00:56:17.152 --> 00:56:25.872
I always think that every brand has, like, a certain amount of people who will convert pretty much no matter what. Like, no matter what you said, like, they're gonna convert.

370
00:56:25.912 --> 00:56:30.412
They're the, you know, the most passionate people. They want this thing to exist in the world.

371
00:56:30.472 --> 00:56:41.552
It's almost less of, like, a pure transaction in the economic sense, but more, I don't wanna say patronage, but there is a patronage element to that. And then the hard work becomes, gets in.

372
00:56:41.612 --> 00:56:48.252
Like, where do you see that with appealing to people? 'Cause I think that particularly with newsletters that are tied to, like, an individual,

373
00:56:49.172 --> 00:56:58.492
it, it provides, like, an amount of leverage again, like, so again, I just wrote about this, that is different from, like, an institutional brand, like a MarketWatch or something like that.

374
00:56:59.452 --> 00:57:20.312
Oh, to- no, I totally agree, and I think it, it is a, again, just because of my experience both in China, my business experience, my academic experience, other experiences, you know, I, I have a, I have a view that not everyone agrees with me, obviously, and some people think I'm an idiot, and some people think I'm a horrible person, and plenty of people think I'm not that bad, so they subscribe.

375
00:57:20.332 --> 00:57:27.191
I mean, if y- if you're, if you're writing a newsletter, you gotta deal with the fact that... And, and if you're active on Twitter, you have to deal with the fact that some people are just gonna hate you.

376
00:57:27.242 --> 00:57:34.092
[laughs] For, for whatever reason, right? I mean, seriously, right? So but, but I- I gotta go through your replies on Twitter, Bill. I don't know what's going on in there. I gotta see.

377
00:57:34.122 --> 00:57:45.492
[laughs] Um, my favorite is one, I'm both, I'm both a Sinophobe and anti-China, and I'm also, like, someone called my newsletter Sino-Communism because I'm, I'm too much of a panda hugger, sort of Communist Party lover.

378
00:57:45.592 --> 00:57:50.412
So it's like- Ah... you can't win. So you just have to focus on what you think you wanna, you know, what you think makes sense, and write it.

379
00:57:50.712 --> 00:57:56.832
But to your point, early on, definitely, people who paid me were people, like, they wanted to be patrons. They wanted to see this product keep going.

380
00:57:57.452 --> 00:58:06.432
And, and then, you know, one thing I, again, I go back to a conversation I had with Ben Thompson, he's now become a friend and I do work with him, but early on when he was really like, "Bill, you really should charge.

381
00:58:06.472 --> 00:58:21.612
You're crazy that you're not trying to monetize this," was he said with his newsletter, he said, what was really interesting is that there was a moment in time when basically it almost became, like, a liability at work that you weren't reading to TechCrunch because everyone else was reading it,

382
00:58:22.912 --> 00:58:23.232
right? Yeah.

383
00:58:23.242 --> 00:58:36.012
And so if you can, if you can get to that moment where people feel like if they're not subscribing, they're missing something that they need for their professional career, for example, that gives you a lot of leverage in the business and a lot of staying power.

384
00:58:36.112 --> 00:58:48.552
Particularly if it's, if it's needed for, to do your job, and first of all, it's, it's ideally expensable, and, uh, but it's just, it's, you know, obviously that's why B2B to me is preferable to B2C.

385
00:58:48.612 --> 00:58:53.052
If you, if you [laughs] it's a preferable model. Um, in general. Yeah, I mean, I have both.

386
00:58:53.132 --> 00:59:08.352
I have a lot of group subscribers, I have a lot of institutions, I have a lot of individuals, and, but from a, from a price point, one of the reasons I picked the price I did was I knew that pretty much almost every person, like, who would read it could probably ex- expense it without having to go get permission.

387
00:59:09.172 --> 00:59:18.182
Yeah, you keep it under 200. Well- Yeah. Or-... I think Ben actually, if I do have him on the podcast, I'll tell him, he, like, basically set the rate for, like, newsletters. [laughs] Like, it's, like, above and beyond.

388
00:59:18.412 --> 00:59:23.072
Like, he set the, I guess that's, like, the Mendoza Line, like 200. That's what they used to call it in baseball. Yeah.

389
00:59:23.112 --> 00:59:37.172
I mean, I, I saw where, where I picked my price point, I mean, I saw it also looking in the financial newsletter world, and one of the things we realized, and, and maybe this is, I haven't done the research in a long time, but back in the early 2000s was it basically was like a barbell where you could s- you could, you could charge- Yeah...

390
00:59:37.182 --> 00:59:47.952
a little bit amount of money, you get a lot of subscribers, like, up to, like, 200 bucks. But if you went from, like, 200 to 8, 900, people are like, "Nah, it seems like a lot, but maybe you're not doing the value."

391
00:59:48.012 --> 00:59:54.932
And so, and so basically there was kind of a, a dead zone, and then if you charge, like, $5,000, you could get a whole different group of people, like hedge funds, who would pay for it.

392
00:59:55.452 --> 01:00:05.562
And so you had to be, you, you, you, you know, it's, that's why I don't think you see a lot of, like, $498, $499 a year newsletters, right? It's a bad mix of sort of the size- There's some...

393
01:00:05.562 --> 01:00:10.432
the number of people who are willing to pay. There's some, but I don't think they're that big. Like, like Bear Cave, you know what I mean?

394
01:00:10.552 --> 01:00:19.782
Like, stuff that's like, you know, that's for, like, short sellers, and, you know, that's a, and they're very specialized in- Yeah... in their audience, I feel like. All right. This has been one of the longest.

395
01:00:19.932 --> 01:00:24.792
I could go on, like, all day, Bill. We didn't even talk about China. Sorry I talk too much. So yeah, sorry I t- talk too much.

396
01:00:24.912 --> 01:00:37.132
[laughs] I wanted to talk about Xi, what's going on with the COVID, like, chaotic exit, but we'll do that another time. Thank you so much for joining. Again, Substack Royalty, it's a pleasure. Oh, thanks for having me.

397
01:00:37.512 --> 01:00:44.052
I love your newsletter. And when, when are you gonna start charging? Soon. Soon. Good. You pushed, and I appreciate that. Yeah. No, I'm good. I, I'm trying to figure it out.

398
01:00:44.372 --> 01:00:50.482
This is all basically just free consulting for me, Bill. Let's be clear. Uh. [laughs] All right. No- I get-... and I, and I'm happy, um...

399
01:00:50.772 --> 01:01:01.992
No, but I'll just say, like, like, for me, I like your newsletter because, you know, yes, I write news about China, but I have, you know, I've worked in online media for a long time, and I've looked at this as a business too, not just as sort of a creator.

400
01:01:02.582 --> 01:01:11.122
And I found your newsletter, I forget how I found it, I think maybe on Twitter a few months ago, and I'm like, "Okay, this guy's really smart," 'cause I actually learn something in every, in every issue. Oh, thank you.

401
01:01:11.162 --> 01:01:18.512
And you want to think that with your newsletter, be like, "Okay, I will pay for this if you start charging," because it's actually very useful. Yeah. Good.

402
01:01:18.792 --> 01:01:26.652
I love to hear that, and that's definitely going in my sales kit, so thank you. Oh, there you go. I'm happy to help out, so [laughs] All right. Thank you, Bill. Appreciate it. Thank you.

403
01:01:26.812 --> 01:01:33.432
[gentle music] Thanks so much for listening. If you like this podcast, I hope you do, please check out another podcast I do. It's called People vs.

404
01:01:33.592 --> 01:01:40.472
Algorithms, where each week I'm joined by Troy Young and Alex Schleifer, and we connect the dots at the intersection of tech, business, and culture.

405
01:01:41.132 --> 01:01:50.832
I've never listened to the All-In podcast, and I'm probably gonna continue that, but I'm told that it's broadly in the same genre, although with far less politics from what's on All-In, at least from what I'm told.

406
01:01:51.412 --> 01:01:59.992
So check it out wherever you listen to your podcasts. It's People vs. Algorithms. Also, big thanks to Jay Sparks of Podhelp Us for producing this show.

407
01:02:00.012 --> 01:02:06.112
Find out how Jay can help you with your podcast or to launch a podcast by visiting podhelp.us.

408
01:02:06.292 --> 01:02:24.892
[outro music]