Episode 140
Building independent media businesses
I was joined by Reid DeRamus to discuss the strategic and tactical decisions that go into building an independent media business. We discuss everything from choosing a business model, using the leverage of individual reputation, the value of consistency and authenticity, the mistake of over-reliance on optimization techniques, and the challenge of growth as tried-and-true methods wane in efficacy.
Transcript
Welcome to the rebooting show.
Brian:I'm Brian Morrissey.
Brian:This is a little bit of a different episode.
Brian:I'm going to have a repeat guest, Reid DeRamus.
Brian:Reid and I have worked together
Brian:across a bunch of different vectors.
Brian:I think going back to the pandemic, When
Brian:you were doing YAM.
Reid:when you were first getting started.
Brian:Yeah, when I was, I was just a cub.
Brian:and yeah, it was like a growth.
Brian:How do you describe?
Brian:Yeah, I mean, you're, you're basically like, this was during the pandemic, like 2020 going into 2021.
Brian:It there was a lot going on with, You know, people, the newsletter economy, and a lot of this shift to institution to individuals over institutions.
Brian:And, you know, you had a lot of experience and driving growth right at crunchy role and X
Brian:and and was like, a way to, like, build a growth engine.
Brian:Like, I
Reid:it's kind of an interesting place to
Reid:start because I've, that's the same thinking behind him as continue to rattle around in my brain, and I think it's a lot of stuff that we talk about.
Reid:So, before that, before like COVID, I was working in streaming video, went from Hulu to Crunchyroll to HBO max.
Reid:And my role was always rotating around, like, how do we grow these consumer subscription businesses?
Reid:So it was a little bit of like marketing and data and.
Reid:And all the, all these things, product and, and partnerships.
Brian:Yeah.
Brian:And then you joined Substack.
Brian:I mean, Yam joined Substack and, I think you, that's when we just sort of continued to
Reid:Yeah.
Brian:basically have the same conversations then with Substack, and then he left Substack and, you know, now we're just working together independently.
Brian:And I think a lot of the issues that we always talk about.
Brian:are very similar to issues that I talk about with, with other people who kind of have similar ish businesses.
Brian:So I don't want this to be about, the rebooting or whatnot, but I do think it obviously informs my thinking, in this, because I, I, I look at it.
Brian:Like I have two types of conversations these days.
Brian:Okay.
Brian:One is with people who are retrofitting old models.
Brian:I don't mean to be like rude about it, but they're, they're kind of managing decline, right?
Brian:and that is a big part of the economy.
Brian:There's incredible economic value in that these businesses are important and I believe they need to be retrofitted and they need to find new paths.
Brian:to, if not growth to sustainability, right.
Brian:at the same time.
Brian:It's kind of depressing, let's be real, but then I have different conversations with people who have businesses.
Brian:They said that look a lot like, you know, mine, or, you know, there's a lot of them out there and you can build a lot of these smaller, at least for now.
Brian:I'm not pretending that we're like, building Google here, but like, small, Smaller media businesses that are nicely profitable and are sustainable and the issues that people are dealing with are things like, how do I keep this?
Brian:Am I building like equity value here?
Brian:Or is this just you know, just all me?
Brian:Is it a quote unquote creator business?
Brian:This is like only fans, but with words.
Brian:and then, Which is strange, Substack keeps, keeps mentioning that, but we'll talk about that in a little bit, or it's like, okay, which path do I go?
Brian:Am I going to be like a subscription business?
Brian:Am I going to use publishing at the front end for a different business for a marketing services business or an events business?
Brian:What, what role does ads play?
Brian:Is this a newsletter business?
Brian:And so they're, they're different problems.
Brian:I think you call them like champagne problems.
Brian:They're good problems to have basically, you know, for the most part.
Brian:And then look, there's a lot of people who struggle, right?
Brian:There's power law and all this.
Brian:And maybe we could talk about that a little bit because, look, it's like any other market and it's, there are, There are some, some people who get to, I don't know if you want to call it like escape velocity, but you know, they get to a point
Brian:where they can build these into, into quote unquote real businesses.
Reid:Yeah.
Reid:So that there's a lot to unpack there.
Reid:The thing that, the setup behind Yem that I think is relevant to this was it looked like media was bending in a different direction.
Reid:And I think you probably saw this at Digiday too.
Reid:and we saw it in the streaming world too.
Reid:People, the future of media wasn't going to be more Disney's, more Netflix's, more New York times.
Reid:You'd have category winners.
Reid:There would be big media companies, but there wouldn't be a lot of them.
Reid:And we're still seeing like unthinkable rapid consolidation in the media industry.
Reid:That would have seemed totally impossible.
Reid:Not that long ago.
Reid:Like I remember at Hulu, we had news Corp and Disney as like owners, huge media companies that were competing fast forward, just a couple years.
Reid:And Disney is buying most of Fox's assets.
Reid:Like it's like totally crazy that all this happened so quick.
Reid:So at, you know, I was in, I was kind of, you know, neck deep in that world and it was becoming clear that more and more people are just going to pick up their phone and start their own media business.
Reid:And that seemed like a more exciting area to go explore.
Reid:But the obvious challenge was I in my head thought of like all the teams of talented people, like super talented people that worked on growing these media businesses that like an individual just did not have.
Reid:And you could think about that across product, engineering, marketing, partnerships, the whole org, you know, and so yam was trying to narrow that gap.
Reid:My work at substack was trying to narrow that gap and how we've been working together is also trying to narrow that gap because, you're an individual, you just don't have the same kind of growth or tech or monetization resources that like big media companies
Brian:Yeah.
Brian:And that's what I think really Substack nailed, right?
Brian:Is that Substack has narrowed the sort of publishing
Brian:function to as simple as possible.
Brian:It's a, it's, I
Brian:say it's
Reid:It's incredibly accessible.
Brian:right?
Brian:It's a media business in a box.
Brian:If you have something to say that, a group of people value, and you're able to be consistent, you can have.
Brian:A media business, and that's amazing.
Brian:Really?
Brian:I mean, like, amazing because, you know, look, media is going through, a tremendous amount of change right now, because the, the cost of distribution has has gone to close to zero and soon the cost of creation will will near zero.
Brian:And, What what's happening out there is that you're looking at a market where pretty much the advantages of having a big infrastructure have become liabilities.
Brian:I mean, this is a theme that I see with a lot of my conversations again.
Brian:They're bifurcated conversations.
Brian:And when I talk with people at these larger companies.
Brian:Right.
Brian:They're like, jealous of the fact that you know, something like me or other people like me, have like, incredibly low cost basis, because We don't have this incredibly important like infrastructure that, that, pretty much weighs you down.
Brian:And so you can do more
Brian:with less with a lot of the tools and platforms
Brian:out
Reid:Like every media company,
Reid:I mean, you got to kind of call it what it is.
Reid:Like every media company is bigger than they probably should be at this point, you know, in terms of headcount and functions, because I just think it, I can at least speak on behalf of the streaming world.
Reid:I'm not as familiar with you know, the public publisher business, but I feel like a
Brian:they, they, they're, they can cut a lot.
Brian:They can still cut a lot more.
Brian:I'm
Brian:telling you
Brian:that.
Reid:too, but like, it's just, that's where the Like you just don't need as many, you don't need as much tech support to build a media business these days.
Reid:You know, like payments has been commoditized CMS and CRMs.
Reid:there's so many off the shelf products.
Reid:You don't need to build this stuff in house.
Reid:Like you used to,
Brian:Yeah, and when you can subscribe like with a click, I mean, I think sometimes we sort of take a lot of things for granted these days, but like taking payments online was like nearly impossible.
Brian:It
Brian:was such a pain in the ass.
Brian:And.
Reid:It's the best example because we had a huge team of engineers at Hulu that worked on payments and you just don't, and they were like, you know, probably the highest paid engineers on that team.
Reid:Cause like, that's where the commerce is happening, you know, and it's massively important.
Reid:And like when we were at crunchy roll, we were using like chase payment tech for payments and chase is like one of the oldest banks.
Reid:Like in the world, I think, and for them to be, for you to be reliant on them for your online payments, it was not like the best place to be.
Reid:And then Stripe comes along and just makes it massively simple and easy to collect payments.
Reid:And that, that really has, I think, Radically expanded online GDP and like they're, you know, they're still a pretty young business.
Reid:So I think these kinds of things are, are very impactful.
Brian:Yeah.
Brian:and I think one of the things though, for a lot of sort of, what are we
Brian:calling these people?
Brian:it's not creators.
Brian:What's a, What's a,
Brian:good
Reid:I think, you know,
Brian:I, I do not identify as a creator.
Brian:I will
Brian:say that
Brian:someone called me like a
Reid:learned
Brian:influencer.
Reid:from sub stack Hamish in particular shout out Hamish, cause he was very particular about just like calling what it is writers, you know, so I tend to be long winded in this and say like, you know, It's people making videos on YouTube.
Reid:It's podcasters, it's people writing, it's all the above.
Reid:Sometimes it's media businesses.
Reid:I think when you try to label you try, it's like a, it's almost like you're, it's an act of reduction or, or
Reid:something.
Brian:no, I get that.
Brian:I think what's interesting about this, and I sort of think about the next phase of this is, you know, Substack originally started as a newsletter platform, right?
Brian:And now it is.
Brian:It is now far beyond a newsletter.
Brian:It is like a media platform.
Brian:There's obviously you have growth croissant.
Brian:You're doing video on it.
Brian:they're doing live video.
Brian:They're doing podcasts.
Brian:They're trying to and it's pretty clear that, you know, I think Hamish, you know, sort of jokingly talks about the only fans model, but I think that it is, you know, not that dissimilar in some ways in that you're going to be, there's going to be an amazing, you know, Number of people who are building businesses on that platform.
Brian:And I think that's amazing for, for them.
Brian:It abstracts all of the needs that a legacy publishing company have.
Brian:It is an incredibly, efficient model.
Brian:If you can, if you do have something, if you do have a connection to that audience, but I don't think it's the only way to do it.
Brian:And that's why I've.
Brian:You know, always been going on that.
Brian:I don't really necessarily believe in newsletter businesses because a lot of the newsletter businesses out there are, you know, they're really, their email marketing businesses.
Brian:And that's just different
Brian:than, than media, you know, I mean, an email marketing business is just, it's different.
Reid:I think when you like say newsletter, the vast majority of people think of like Southwest Airline emails from Southwest Airlines about like flight promotions, you know, like newsletters.
Reid:It's still, that's still kind of like in language for us.
Reid:I feel like, you know, so I totally agree.
Reid:I mean, I think, the idea of like sending, Long form text as a newsletter over email.
Reid:I still think is fairly niche.
Brian:yeah, that's true.
Brian:but I think, like, the next phase of a lot of this, and I think that's where it gets kind of interesting is, I mean, this is already obviously happening is, you know, people are going to build, you know, portfolio.
Brian:And newsletters are part of that portfolio, podcasts as part of that portfolio.
Brian:you know, having, doing maybe you know, events as part of that.
Brian:And this is just where things go because for, again, for a group of people, I think, you know, Substack is amazing.
Brian:But what I sort of saw when we were talking is it didn't really fit for the kind of business that I necessarily wanted to build.
Brian:And also just the opportunities that I saw on the market, right?
Brian:Because.
Brian:I, I'm in a B2B area, and there is a defined buy and a sell side.
Brian:Now, you can say that the buy side in my area is shrinking because of what I said before, because that's the publishers.
Brian:Basically, a lot of the legacy publishers, are there's You know, they're, they're not building the technology themselves.
Brian:They are, you know, mostly licensing that from, from SAS companies.
Brian:And so my, my clients, the, the sort of, sell side are the enterprise technology companies.
Brian:And this is, you know, B2B is a very defined category and, you know, you can come up with new ways to accomplish the same goals, but it's not like consumer media.
Brian:So for me, it always made sense.
Brian:To go well, I guess that's something good to discuss.
Brian:Like, for me, the obvious, like, opportunity was to basically just slot into the way the industry already worked rather than say, no, no, no, no, I'm just going to do all subscriptions, you know, and I think that's an important decision for people and there's trade offs.
Brian:to every decision, and I think when you're figuring out a business model, you have to be cognizant of one, what, what are the trade offs to the path I'm going to take?
Brian:Right?
Brian:And then two is, Is this, is this the end goal or is this a way
Brian:to get to the end goal?
Brian:You know what I mean?
Reid:Yeah.
Reid:I feel even if you're, I think one thing you've done really well is even though you were writing it as a free newsletter and having sponsorship be the primary source of income, especially for the first few years, you took it seriously.
Reid:You know, it was a, it was a very, it was still a professional product.
Reid:You published on time every, you know, two days a week, sometimes three days a week, as you mentioned.
Reid:And,
Brian:Oh God, I went, I went into some weird period
Brian:where I did three, three days a week for three months.
Brian:It
Brian:was terrible for
Brian:me personally.
Brian:I can't speak for the
Brian:readers.
Reid:I think it's really important to still take it.
Reid:if you want it to be like your primary source of income or your only source of income, then it's still really important if you're writing for free to take it seriously as a, and consider it as a professional product.
Reid:If you do paid subscriptions, it kind of takes care of itself because People are paying you
Reid:and that that'll put a lot of it's it'll put a lot of pressure on you
Brian:I think people need to be cognizant of that, right?
Brian:Because, you know, having your quote unquote audience be the, the customers provides a, a forcing function, particularly if someone is not used
Brian:to, It's not used to the grind of, like, publishing, right?
Brian:having spent a career, I think it's great that people are coming into the space.
Brian:You have, you know, for example, operational experience versus, you know, having worked in in newsrooms.
Brian:Right?
Brian:I think you bring a different perspective.
Brian:And I think a lot of those products are.
Brian:You know, for me, I don't look at it as an either or thing, but I think that that that's like an exciting area of
Brian:people who have, operational experience.
Brian:I mean, we know, C.
Brian:J.
Brian:Gustafson,
Brian:right?
Brian:I mean,
Reid:Yep.
Reid:Gergay with the pragmatic engineer.
Reid:Lenny,
Reid:obviously.
Reid:Byte byte go.
Reid:There's a there's a lot of examples
Brian:and they're unique in that they are able to do what they're doing is not like quote unquote journalism.
Brian:And that's, that's fine.
Brian:I think what they're doing is, is, is in some ways, more valuable.
Brian:but, you know, they're able to reliably produce
Brian:high quality professional content.
Brian:I don't know how else to say
Brian:it.
Brian:that that's not you that that's unique in some ways.
Reid:They're consistently able to deliver value to certain people.
Reid:And those certain people will pay them for it.
Reid:And that is that's That's a business, you know, that is, and I think if you've been in, capital J journalism, that can be frustrating.
Reid:Cause like they're doing really well.
Reid:And, but I think that's kind of the problem you got to solve.
Reid:You got to find your readers and you got to deliver a lot of value to them and, do that consistently over a period of time.
Brian:Yeah, right.
Brian:And like, I think for, you know, with the consistency, I think you have, a leg up if you're just used to doing something for many years.
Brian:I see a lot of people who come from the sort of professional, you know, they're experts and they have a, they have a, They think they have a lot to say, I guess.
Brian:I guess it would be a little bit of a criticism, but like, the reality is you know, most people have like five, five pieces in them, and then they, you know, they hit a wall, right?
Brian:Maybe they have 10 pieces.
Brian:And that was always why, when I was at Digiday, I wouldn't have regular columnists, contributed.
Brian:Pieces from the industry.
Brian:I have two reasons.
Brian:One is they were always just content marketing in disguise.
Brian:but two and I was like, why, you know, I don't know my mom and I said, like, why buy the cow and you can get the milk for free.
Brian:So I was like, that's a kind of conflict with the business model really.
Brian:but then the other one is just like, it was rare.
Brian:That people could consistently deliver, quality doesn't mean like it has to be home runs every time, but you have to show up and you have to do what you said you're going to do when you said you were going to do it.
Brian:things will come up every now and again, but you have to, I feel like if you're, if you're used to deadlines as like a journalist, it's all kind of, it's all made up in some ways.
Brian:I remember I used to have a weekly magazine deadline, and I would have to file it, 5 PM on, Wednesday and the magazine went to print on Friday.
Brian:It didn't make sense.
Brian:I mean, like, it didn't make sense, but I knew just because of you know, the schedule and everything, you just had to, hit that deadline.
Brian:So, you know, I think you did a piece with, with, Judd from, popular information where he talked about this, you know, once you're in the sort of thing, you just get up and you just do it.
Brian:that's what you do.
Reid:Yep.
Brian:and, and that's, you know, I think that's like a real skill.
Brian:So, but how do you, do you see this with people?
Brian:I think there's obviously a big shift from this institutions, individuals, and I think individuals have a tremendous amount of of leverage in these kind of businesses.
Brian:There's a ton of trade offs to that.
Brian:Right?
Brian:but how do you see people like thinking through, what type
Brian:of business they're going to build
Reid:Yeah.
Reid:It's really tricky.
Reid:I think like the, the main attraction to more of a sponsorship driven model is like kind of the obvious thing where you don't really have to paywall anything and, you can publish everything to everyone, with every post and that helps grow your audience.
Reid:that's kind of the, that was the main reason Packy has always kept his newsletter free.
Brian:this packing
Brian:McCormick from
Reid:Yep,
Brian:He's 233, 000 subscribers.
Reid:Yeah.
Reid:I mean, he's got, he's grown his
Reid:audience tremendously.
Reid:I still think there are pocket there, there's categories where you actually don't have to paywall anything to grow a paid membership, product.
Reid:I think it tends to be pretty heavily rooted in like the patronage.
Reid:like the, the reason readers are paying you is to support you.
Reid:And to help amplify your worldview or your writing.
Reid:when you're talking about like business finance tech, where people are making more clear cut decisions around why they pay for a product, does this thing help me make more money or not?
Reid:You tend to need to pay wall there, you
Brian:you'll get some, I always say, like, every brand has, a group of diehard supporters who
Brian:will, who will take that patronage route, they want, they want it to exist in the world, like, I think, you know, just to go back to Judd again, you know, what he's doing with popular information, it's at least politics adjacent, right, that in, in, that has a lot of passions, a lot of With it, and, you know, people feel it's part of identity for better or worse these days.
Brian:And so I think that provides a tremendous amount of leverage in that those exist in other categories.
Brian:It's just a much smaller, eventually, you need to get
Brian:into, like, a real value exchange.
Brian:I feel like the subscriptions.
Reid:That's something we've talked about too.
Reid:And we've, we've noticed like whenever you pay wall things, you get some paid subscriptions and I think the more, the more you like get into a consistent rhythm of that,
Reid:the better, and the more you learn what types of, I think the hardest part.
Reid:Is knowing what will drive paid subscriptions, you know, like what kind of story or what kind of, insights will drive people to upgrade to paid.
Reid:I think it's like a little hard for anybody who's like trying to do this.
Reid:But if you're getting into a consistent rhythm of doing it, you're going to sharpen your intuition over time.
Reid:And you may not be able to like, put your finger on it precisely, but I think you'll get better and better at it.
Brian:Yeah.
Brian:I mean, some of this, I see like, you know, you know, people like, you know, creating these, you know, different like spreadsheets to try to like, you know, reverse engineer it.
Brian:And, for better or worse, you know, I, I tend to go by a lot of late of instinct and it's just a different way of data collection.
Brian:and I saw this, you know, with, with building the subscription, program at, You know, there's basically 2 types of levers that we 3 types of levers.
Brian:Really?
Brian:You know, 1 lever of converting people was they got to see locks.
Brian:They got to hit walls.
Brian:Like, you just have to, you have to lead people.
Brian:I would always say to people.
Brian:I said, we need to create.
Brian:We need to create Phoenix here.
Brian:And and if anyone I, I once, Do you like when I was training for a marathon?
Brian:I do a 17 mile run in Phoenix.
Brian:It was the most frustrating thing in the world because Phoenix as far as I can tell, it's just all cul de sacs.
Brian:You can't get from one place to the other.
Brian:You just, you will end up in a cul de sac
Brian:all the time.
Brian:And it's frustrating at some point, but literally,
Brian:that's the
Reid:You should have just done you should have just done loops and a cul de sac
Reid:for the, for
Reid:the 26 miles.
Brian:But I was like, we got to get people into cul de sacs because, you know, once they see it and, and it adds up, ultimately, and then you had the, oh, I need this piece.
Brian:I need this piece either to do my job, or I need this piece because it, tells me how much someone makes, you know, or something of that sort.
Brian:You know, and that's why, you know, we, you know, We spent time collecting a lot of like pitch decks, right.
Brian:Is like trying to get this piece.
Brian:If you are, if you have like a pitch deck of how someone is selling.
Brian:People are going to pay you as long as you price it.
Brian:Right.
Brian:People are going to pay you to have access to that piece of content.
Brian:And that's just a different pathway.
Brian:and then the other 1 was what I, would be like pulses what I call and that would be you're going to have we're doing like a 4th, you know, 4th anniversary, you know, you don't want to discount too much.
Brian:You don't want to become gap, but like, you know, you do.
Brian:You do a promotion, you do, Black Friday or whatever.
Brian:What is it?
Brian:Cyber Monday.
Brian:Does that still exist?
Brian:Whatever you do that.
Brian:but it's all that to me, those were the three big levers.
Reid:I think some of this is science and some of it is art.
Reid:I think the
Reid:science part is like the product stuff, like the icons, the paywalls, celebrating the milestones.
Reid:making sure you're sharing your work often, bringing your audience on the journey with you.
Reid:I think all these things are like kind of good tactics.
Reid:And then I think the art piece is like, you, I think it's hard to make the, in the streaming world, we had like programming.
Reid:We always talked about like programming shows, movies, and finding what shows or what movies like would get people to pay is notoriously difficult.
Reid:You know, like people like things for unforeseen reasons.
Reid:And I think that's true in our corner of the internet too.
Reid:The reason somebody finally chooses to upgrade to paid from like an editorial perspective is a little bit of the art piece.
Reid:And I think you just got to try different things, fine tune how you pitch your.
Reid:You're paid membership, fine tuned the stories you're writing about all these things.
Reid:And I think over time you develop a sharper intuition and that is kind of the art piece, but you have to couple it with the science piece.
Reid:You got to, you got to show paywalls, you got to have the upgrade to paid button in the top nav.
Reid:You got to
Reid:do these things too,
Brian:Yeah, I mean, those, I would always say, I would always say it was like an 80 20 thing because everything has to be an 80 20 thing where it was like 80 percent was just delivering value on the core product and making, making things that are worth paying for, and then 20 percent is the optimization.
Brian:And then you have to do the optimization.
Brian:Well, it is incredibly important, but I would say like, without making things that are worth paying for longterm, you're kind of screwed.
Brian:if you're just, and I see this a lot of times where people are in my view.
Brian:Over reliant on optimization and sometimes into like growth hacks and trying to sort of engineer themselves to success.
Brian:And I think you see a lot of this, at least I see a lot of this in like Twitter threads, like I feel like the newsletter industry for better or worse.
Brian:That's why I say like a lot of it is, you know, an email marketing business because you know, a lot of, a lot of, a lot of people with.
Brian:There's a, there's a strong
Brian:sector within this that is almost like multi level marketing, get
Reid:right?
Reid:It's, it's like, it's like cost per click ads
Brian:Yeah, it's
Reid:like customer acquisition.
Reid:It's pure arbitrage.
Reid:Yeah.
Brian:Yeah, And I just, you know, look, the definition of arbitrage is finding some, some sort of scene before and it ultimately closes the, the, the entire economic value of, of arbitrage is that it finds the inefficiencies and then, then there's equilibrium.
Brian:And so those things, you close.
Brian:Now, if you can build businesses through finding those windows.
Brian:I
Brian:just, you know, ultimately, like life's too short.
Brian:It's just not my specialty.
Brian:So
Reid:Yeah, different strokes, different folks.
Reid:You know, I don't, it's not a judgment thing at those are viable businesses.
Reid:Sometimes, I do agree.
Reid:They, they tend to attract
Reid:competition because look like writing, writing it and actually writing things that deliver enough value to get people to pay is extremely difficult.
Reid:So I get, you know, the, the attraction to the arbitrage
Brian:right.
Brian:Yeah.
Brian:And you have to figure out your forms of leverage.
Brian:And I think, You know, for me, like I look at someone, I think we'll be doing a podcast on him soon.
Brian:Again, like Casey Newton, right?
Brian:you know, Casey has a set, a unique skill set that gives him unique leverage.
Brian:Right.
Brian:and if Casey, I'm sure was doing that business, you know, 15 years ago, he would, Do they would be a very different business, right?
Brian:Because like he built that up over many years.
Brian:but I, I do think that there's, you, you have to figure out your leverage in that.
Brian:And like experience is leverage.
Brian:It comes with, you know, there's trade offs again.
Brian:You don't have as much, you know, energy and there's a lot of you know, younger people who are, are, are better at, at hustling.
Brian:but I want to talk about like hybrid models, right?
Brian:Because one of the things is, you know, like a truism is you don't want to.
Brian:You don't want to recreate the structures and problems of the people you're trying to displace right so going down the same path of a lot of, you know, larger institutional publishers doesn't seem to me like a very good idea.
Brian:But at the same time like one of the things that I recognize with a lot of these publishers they struggle that they're trying to do so many different things.
Brian:Right, and figuring out the balance of how many different things you're going to do to me is one of the hardest parts of these kinds of businesses, because once you have some kind of foothold, you have a lot of again, good problems to have, you have a lot of options with where you can sort of go.
Brian:But your, your problem is, is just yourself.
Brian:And you can, you know, you can lead to basically, there's like the individual.
Brian:version of the peanut butter manifesto, which was this like famous memo that Brad Garlinghouse wrote at, at, Yahoo really sort of right when they began their decline.
Brian:And he was like, we are, you know, we're like our product roadmap is like peanut butter.
Brian:We just, we, we spread it as far as we can to the edges.
Brian:And it's so thin.
Brian:And I think that.
Brian:That sort of describes what a lot of people end up, end up falling
Brian:into, I think with a lot of these businesses and it's hard to avoid.
Reid:Yeah, so it's like hard to focus and it's hard to nail the sequence of what you should be doing over time.
Reid:Like I think the, the rebooting is a good example of this where it was like just the newsletter for a long time, then came the podcast, then really came like the rocketship of behind the sponsorship revenue where you're introducing research reports.
Reid:And the dinner series and web forums and in bigger in person events
Brian:I look at it.
Brian:It's like, when it first started, I mean, I have a year where I didn't really focus much on commercial stuff.
Brian:but, you know, I looked at it as I was doing consulting.
Brian:Right?
Brian:So, again, you know, the advantages.
Brian:That I saw that I had where I had a reputation and, you know, I had, you know, I don't know, like a couple thousand or 3000, you know, subscribers within the first month, because, you know, I've just stayed in place, honestly, in one field for a long time and hopefully done a good job too.
Brian:but that was like an advantage.
Brian:Right.
Brian:And, You know, I knew that I could sell, people would give you a chance.
Brian:Right.
Brian:I had some confidence in that.
Brian:but you know, I wasn't 25.
Brian:Right.
Brian:And, you know, I don't have some sort of extravagant lifestyle, but you know, you have to make more money.
Brian:And, you know, there was no ramen that was going to be had.
Brian:I mean, there's any ramen.
Brian:It was going to be at a poodoo.
Brian:It wasn't going to be out of a package.
Brian:So, you know, I, I supplemented it with.
Brian:With consulting revenue and it just gave to me, it was like, you got to like extend your runway to figure it out.
Brian:I just had four years of doing this and a lot of it kind of, it doesn't feel like that long in some ways, because I wasn't like, I wouldn't say I wasn't a hundred percent focused on it.
Brian:But the reality is, again, go back to the peanut butter thing is you have to do trade offs.
Brian:And if, if you can go all in on something for a couple of years.
Brian:That's amazing.
Brian:But for a lot of people, the reality is they're going to have to, it's going to be one part of a few different things.
Brian:I mean, I'm sure you see this with building any company, right?
Brian:I mean, I think.
Brian:We're in this stage where, you know, bootstrapping is now, cool, in some ways,
Brian:you know what I mean?
Brian:before it was like, oh, that means you can't, you can't raise a
Reid:You can't raise money.
Reid:Yep.
Brian:Whereas it was like all this weird default.
Brian:Whereas I see now
Brian:even, you know, the guy like Peter Levels?
Brian:You know,
Brian:he's
Reid:listen to the episode with, who am I
Reid:thinking of?
Reid:the really long conversation.
Reid:Lex, I think.
Brian:Oh my God.
Brian:yeah, I don't know if I'll do what is it like four hours?
Brian:yeah, probably maybe I'll do I like the guy because I think like he's become like a little bit of the the poster child, if you
Brian:will,
Reid:Cult hero of sorts.
Brian:Yeah, no, no venture capital.
Brian:He's like a digital nomad.
Brian:He's got seven different businesses or probably more.
Brian:Now, this is again, an extreme example of it, but I think it's always a good idea to, and again, it depends on your personal situation.
Brian:For me, it was important to de risk as much as possible, you know.
Brian:Like, I'm 50.
Brian:I can't, you know, not, you know, there's, there's only so many shots you get.
Brian:that's just the, that's just the trade off you get, right?
Brian:So I think the sequencing part was, was really important and it's still very important.
Brian:I think that the challenges of being, you know, when you go down a different path, right?
Brian:How do you, can you get on to a different path, if you will?
Brian:Right?
Brian:Because you end up diversifying these businesses and where you start is incredibly important.
Brian:cause I think a lot of times, I don't have a ton of regrets, but I think like looking back, I think I should have probably taken your advice a lot earlier and started subscription
Brian:slash memberships like three years ago.
Reid:I think it's really hard to shift your revenue mix over time.
Reid:It's something we've talked about, right?
Reid:if you end up, if you start with paid subscriptions and that's like over 90 percent of your revenue, it's actually kind of hard to introduce sponsorship revenue in a meaningful way, because it's just a totally different skillset and there's some friction, right?
Reid:You know, if you're, trying to grow paid memberships, you want to do things that are kind of different than what you want to do to grow sponsorship revenue.
Reid:And there's only so many hours in the day.
Reid:So some of this is just you know, where you're focusing your time and your effort selling a, a five, six figure sponsorship package is very different than trying to get hundreds.
Reid:Dozens, hundreds, thousands of paid subscriptions.
Brian:Yeah.
Brian:I mean, cause you're basically trying to operate like an e commerce business, but then you're, you're operating.
Brian:An agency business, you know what I mean?
Brian:And it's just like, they're very different dynamics.
Brian:And, it's just something I think for anyone, building these businesses, I wouldn't overthink it in some ways, because, I see, a lot of people who spend too much time at whiteboards and strategizing when they got to get to start, like, you're never going to figure it out.
Brian:Like I know we were talking about a membership, like what, three years ago.
Brian:I don't know.
Brian:It just started in February.
Brian:I can't say I figured it out
Brian:between that time,
Reid:honestly, I mean, you, I don't even think this is unique.
Reid:I've seen so many people get hung up right at the ledge over what should my pricing be?
Reid:What should my value prop be?
Reid:I mean, there are like hard decisions, but just know.
Reid:You're not going to get it right.
Reid:You're, and you're going to
Brian:It's fine.
Reid:yeah, yeah, yeah.
Reid:I
Brian:Nobody's going to protest.
Brian:you're going to like, the market's going to tell you where the pricing should be.
Brian:And you can use levers to sort of reach, you know, the market equilibrium.
Brian:And sometimes the market will tell you, and I think this is like something that a lot of people.
Brian:I sort of wonder sometimes is like sometimes, sometimes subscriptions aren't the answer.
Brian:Sometimes the business that, that you have that the market wants might not be the business that you want.
Brian:And I think that's a really interesting dilemma for people, right?
Brian:everyone likes to, to talk about kind of reminds me of like accountability or feedback.
Brian:People love to give it, they don't like to get it.
Brian:And, you know, listening to the market is the same way because, you know, sometimes the market will say, well, actually, what we really want from you is, is this other thing.
Brian:And, you know, I think balancing it out, you know, Jason Yanowitz talks, talk about this,
Brian:like on a podcast and I'm actually going to have him on later this month.
Brian:He's, you know, he's the block works, CEO.
Brian:and really one of the things that I really.
Brian:About what they've done is they've changed the business a few times over the, over the last, I don't know, seven years or so, you know, they, they really started, you know, As an events business, right?
Brian:And I know that very well.
Brian:Events are a very good way to fund a media business.
Brian:The problem is, again, you get it's very easy to get trapped as an events business, because, you know, the margins are good and events can really quickly swallow up all of your time and focus.
Brian:And sometimes it's hard to get off that, you know, That events crack, because it's different with media businesses.
Brian:And we were basically doing that a digit.
Brian:I mean, we were trying to build, we were building a publishing business on top of an events business.
Brian:And, it created, it was good because it funded it, but it created a lot of problems, you know, because the entire DNA of the organization was, was focused on events.
Brian:And, again, you know, bigger company, but I think, you know, going back to Blockworks, they've Gone through a couple of iterations, you know, and now they're on to, Basically using the media and the events to fund a data and insights business.
Brian:Now, what Jason says is you have to be, you have to know where you want to get to.
Brian:Right.
Brian:which I want to press him on, whether he really
Brian:knew that, that's where they would get to because I think a lot of times, people
Brian:connect dots, people connect dots in retrospect.
Reid:Totally.
Brian:It's always neater in retrospect, you know, because you're just going through the day and just trying to, you know, you're listening to the market and you're just trying to figure out like how to maneuver to, to where the opportunities are, I look at it as kind of similar to, you know, I think a lot of politicians get too much grief for quote unquote flip flopping when I'm like, no, the best politicians, sort of operate within a general lane, but then Yeah.
Brian:Sort of drift to where the currents are
Brian:going.
Brian:You know, I think that's just normal.
Brian:I think you do that in markets.
Reid:So back to, you mentioned, you know, wanting should have maybe launched paid subscriptions earlier.
Reid:What do you think kind of held you back?
Reid:Held you back from doing that.
Brian:I don't know, honestly, I mean, I think some of it was, I guess, my most charitable, explanation would be what I had, like a business that was working, right?
Brian:And I, I really believe that over complicating things.
Brian:Is how people get into bad positions.
Brian:Right.
Brian:And so basically the part of the business that the market was telling me, was valued was a lot was lead gen and in person activation, basically getting the right people in a room, connecting, connecting partners with people who are in the market for the kinds of technology or services that the partners were selling.
Brian:Right.
Brian:So it was.
Brian:You know, what I say is, you know, a lot of publishing, a lot of media businesses, the publishing is the front end to a different business.
Brian:I mean, you could argue a digi day.
Brian:The publishing was the front end to an events business.
Brian:I mean, because it mostly was 85 percent of the revenue is coming from events.
Brian:You're you're an events business.
Brian:I don't like, I mean, I don't think you need to sort of overthink it.
Brian:No, we were diversifying that when I was there.
Brian:but, you know, I think the reality of that is, you know, you, you, it's really hard to.
Brian:To operate any business, particularly when you don't have a ton of resources, so it's not like overcomplicating it.
Brian:And, you know, the reality is there's only so much surface area and, you know, you have to figure out what you want people to do in some ways.
Brian:Because I feel like a lot of these businesses that are niche are
Brian:about getting people to take
Brian:action.
Brian:Right.
Reid:If it's hard to know how the sponsorship business would have evolved, had you launched paid memberships earlier, like it may have not taken it off in the way that it did.
Brian:Yeah, but then I think it's also, I don't know.
Brian:I mean, I think, I think in some ways, yeah, I think it is mostly just over complication.
Brian:I think some of it is like, oh, you know, there's always a reticence.
Brian:I feel like with subscriptions and memberships, because you're never sure if, if, if
Brian:people are going to
Brian:convert and it takes a long time.
Reid:totally.
Reid:I mean, it's, it is really hard to do this kind of thing to build a paid membership model.
Reid:I will say though, if you're, if you're listening out there and you're thinking about it and you're thinking like, what should my price be?
Reid:What should my value prop be?
Reid:What should the name of my newsletter be?
Reid:like all these things are valid, important questions, but I just think it's so easy to get in your own way.
Reid:And so if you're, if you're listening out there and you're in that position, man, just try to get to pass the starting line and you'll learn a lot after that
Brian:I agree.
Brian:And I think also, my 1 thing I would also add is, and this is a topic we should discuss is equity value versus, you know, having a quote unquote lifestyle business for years.
Brian:You know, the, the word lifestyle business
Brian:was used as, you know, basically an insult.
Brian:insult.
Brian:It was, it was so weird.
Brian:It never made sense to me.
Brian:I'm like, this sounds kind of awesome.
Brian:I was like,
Brian:why is this, this is bad to, to have a business
Brian:that like fits in like with a really good lifestyle.
Brian:This sounds like amazing.
Reid:they've looked, they've been looking really good over the past couple of years as we've been in this like tech depression.
Reid:So
Brian:because the reality is like a lot.
Brian:There's a lot of lottery tickets out there.
Brian:And again, it depends on what your sort of risk profile is like, if you're in your 20s or something like, yeah, okay, take a flyer.
Brian:I don't know why.
Brian:There's always time to make it up.
Brian:But you know, if you're.
Brian:If you're 50, it's, it might not be the fourth quarter, but it's well into the third quarter.
Brian:let's be real.
Brian:I hope it's in the third quarter.
Brian:I mean, I live amongst a lot of
Brian:Argentinian retirees.
Brian:They're doing fine.
Brian:They're, they're playing beach tennis
Brian:and
Reid:yeah, got a sharp golf game.
Brian:I'm the only one writing an email newsletter at El Sazon every morning.
Brian:Um, But yeah, I mean, I think that's you
Brian:know, I, I think that's, it's smart to like, think through, think through that.
Reid:I mean, we've, so
Reid:we've talked about it, you know, like we see a lot of people who are, getting, I don't want to say like burned out, but just thinking about what, you know, alternative pathways and you might have a pretty decent cash stream and it's like, what do you do with it?
Reid:And if you try to sell it, buyers may say, well, I don't know how, cash stream, revenue stream is without you being involved with it.
Reid:And I, I actually do think, Although like all these like polls will say all the kids want to be YouTubers or whatnot, I still think it's like kind of a hard pathway for a lot of people to enter knowing that there's not amazing exit opportunities yet.
Reid:And I think that is like a, actually a really compelling problem to try to solve
Brian:yeah, that's actually a really good, you know, you talk about like private equity, like there is probably a good business to be had of providing an exit ramp to some people to, to people who have done a good job of building a, A business that's really tied to them.
Brian:Right.
Brian:And doesn't actually have that kind of enterprise value in the traditional sense.
Brian:Right.
Brian:But, like providing the pathway to.
Brian:Maybe realizing that the enterprise value is always going to be, lower, right?
Brian:I think everyone needs to sort of have their expectations in check.
Brian:In general, the enterprise value for publishing business for media businesses is, is,
Brian:is, is, low, like, I mean, I hear people and it's like, they're talking about trading at half revenue, you know, I mean, anyone who's been involved in any sort of M and a with any of these publishing businesses, let me tell you, it just goes to a multiple of EBITDA, you know, everyone can trot out the BI, you know, 11 X revenue, like that was, you know, put it in a time capsule.
Brian:it's not happening.
Brian:so I, I always think people shouldn't overthink it.
Brian:Right?
Brian:again, good problems to have is if, if the biggest problem you have is that you have a business that is producing, solid, reliable cash flow for you to have a nice life.
Brian:I would say, take the W to some degree and then figure it out.
Brian:Once you get there.
Brian:I looked at it as like.
Brian:How do you get to unsustainable, sustainable is how I put it in that using, you know, and a lot of that is just like seeing how far you can go, you know, quote unquote solo, solo with you know, fractional, people helping you scale yourself, right?
Brian:And then get to a point where you've generated enough cash flow that you can.
Brian:Figure out an expansion
Brian:path that takes some of the pressure off, you know, the individual.
Reid:You know, I've talked to a lot of people who hit the point of like income replacement where there's like almost no opportunity cost.
Reid:Like they, they're now getting paid the same amount that they would, if they were fully employed somewhere else, that is an amazing spot to get to, because now
Reid:you
Brian:took me till this year, by the way, read.
Reid:Oh, wow.
Reid:I thought you would have,
Reid:gotten there earlier, but yeah, I mean, it's, it's a hard point to get to with any, again, with any kind of business you're starting from scratch, you're growing it from zero and yeah, it takes a while to get it up to a point where you're, you
Reid:know,
Brian:Well, that's also the also the advantage of do it like there's trade offs everything but to doing it younger.
Brian:Or when you're like earlier in your career, right?
Brian:you know, I mean, look, I looked at it as also very practical.
Brian:And that's why I think I was like, okay, I can go and try to, get another job.
Brian:I had before, but this jobs are fewer.
Brian:Okay.
Brian:Because once you, it narrows quite a bit, particularly in this field.
Brian:Right?
Brian:And then on top of that, Those
Brian:jobs are, are, I'm not going to get the same, compensation anyway.
Brian:I mean, I
Brian:I didn't found Digiday, but I joined it when it was barely a company.
Brian:So you know, you, there's a lot of leverage in that.
Brian:and I was like, that's not going to happen.
Brian:The only way that I'm going to, I have to, I have to do this myself, or I have to just you
Brian:know, say, oh, I'm on
Brian:the downslope of my quote unquote career.
Reid:And from, and from what we were talking about earlier, you might be managing a downtrend in the business and that's not as much fun as growing the rebooting.
Brian:Yeah, I mean, you know, I just one of the other publications of the space, just you know, I just cut, four or five people there.
Brian:And that's the reality of these.
Brian:A lot of these businesses is even in B2B, which is a very protected area.
Brian:A lot of these businesses need to get a lot leaner and, you know, particularly.
Brian:I look at the dynamics of the publishing industry and, and, you know, I don't dwell on it too much, but the reality is the number of publishers who are in the market for the kind of enterprise software that my partners create is going to get smaller and there's going to be more consolidation.
Brian:And they're going to end up spending less on a lot of the software.
Brian:And so therefore the LTV to partners will go down and therefore the amount of money that they pay for leads or activations will also follow.
Brian:And so you have to be realistic about that.
Brian:I think there's tons of shares still to, you know, still to win, right.
Brian:By being more efficient.
Brian:but you know, that's why you have to figure out, at least I think about it as figuring out.
Brian:A membership proposition that balances that because, you know, a chunk of, we talk about this all the time, but like chunk of the audience, a large chunk is not really actually good candidates for the, that kind of enterprise software.
Brian:So I always think about audience segments, right?
Brian:That's why we've been working together a lot on this audience database slash see, I guess it's like a CRM at the end of the day.
Brian:To really understand a lot of these segments and be able to, you know, get them to take an action, you know, whether that's on behalf of partners or
Brian:if, or, you know, membership at the end of the
Brian:day.
Reid:Yeah.
Reid:I think that's, a big opportunity for the, what you like to maybe call trade publications, like B2B publications, because sponsors are still looking for.
Reid:More and more specific people to try to get in front of.
Reid:And rather than send out the same thing to all tens of thousands of subscribers.
Reid:You can start to get a little more targeted in, that you know, Facebook learn that that can help you make a lot of money from a advertising perspective.
Reid:A
Brian:Yeah.
Brian:and I think it sort of gets to, you know, they say about careers.
Brian:It goes from what you know to who you know, right?
Brian:I mean, I went to, I spoke at this event, the other day, this guy, Rashad Tabakawala, he spent a long time, ad agency executive.
Brian:He sort of put it together.
Brian:And, it was all about sort of the future of leadership and career.
Brian:And I went with, with, Troy Young and, and we did a session with, Andrew Swinland, who's, an agency executive.
Brian:And man, it was like, you go, I go into these rooms and I, it makes me feel old, right?
Brian:Because I see all these people and I'm like, I haven't seen you in 10 years, you know, it's like, It's really kind of true.
Brian:And I think sometimes people have to, you have to figure out your, who you're, what you know, business and your who, who, you know, business, because they can be very different, right?
Brian:There's a lot of who, you know, businesses, particularly in B2B.
Brian:and you know, the dynamics of those businesses are very different.
Brian:They're services
Brian:businesses at the end of the day, and you
Brian:have to
Brian:be
Reid:of networking.
Brian:Yes.
Reid:more like if you're, if you're like building a paid subscription business where you need like 000 plus paid subscribers.
Reid:Very different day to day than if you need if you're doing the people connection game, cause that takes a totally different approach and different skillset.
Brian:Yeah.
Brian:and I kind of looked at I've sort of always wanted to do both, you know, I think the who, you know, business is great.
Brian:I think, you compete with a totally different set of, of, of people.
Brian:It's not just publications.
Brian:You know, there's, there's lots of people in my area who don't do that.
Brian:Pretty much publish anything other than like LinkedIn selfies, but we compete in the marketplace on the who, you know, business, right?
Brian:if it's about getting the right 12 people in a room, there's a lot of different ways to do that.
Brian:You know, I mean, You don't have to write a newsletter or do podcasts to do that.
Brian:I think, I think creating content to me and that, that kind of who, you know, business, the, the content, yes, you monetize it, but it really gives leverage for the, the, who, you know, part is to get the right people in the room.
Brian:It's like the podcast I do like people versus algorithms.
Brian:I don't make any money off of it.
Brian:it actually costs money.
Brian:so you, Be like, why, why do it?
Brian:Right?
Brian:but I know when I run it, when I go to a room like that, I run into people who are like, I love, I love people who are sour rhythms, everything.
Brian:Some of them don't even know I vote.
Brian:I met the, the, the, just a former CEO of a, of a big media company, for lunch this week.
Brian:He didn't even know I had a newsletter, you know, which I looked at as, as a good thing
Brian:in some ways.
Brian:Yeah.
Reid:plugging more at the pre roll ads on a people versus algorithm.
Brian:like, I, I look at it as you know, you gotta, and again, this goes back to the peanut butter thing.
Brian:It's you have to figure out, you know, what job different things do.
Brian:and map it back to, your business again, the subset model, I think is great because it simplifies everything, but the reality is the opportunity for a lot of people is going to
Brian:be a little bit different.
Brian:I feel or I just felt it was for me.
Reid:Totally.
Reid:And I think Substack will evolve over
Reid:time.
Reid:incentives are there.
Reid:They have a revenue share business model.
Reid:And I think that really helps incentivize you to try to, help publications on subset, make more money.
Reid:I think the challenge right now is.
Reid:there is a little friction between building a platform, like one size fits all features, products, that kind of stuff, and trying to help, like the biggest publications get from like a million in revenue to 10 million in revenue, but I think that will, I think, this is pure speculation, but I don't think it's, impossible to imagine Substack doing more hands on stuff to keep those bigger publications.
Reid:On the platform,
Brian:yeah.
Brian:I think the trade, the trade off there is you're building a business on a platform.
Brian:Okay.
Brian:You're not truly independent in my view.
Brian:and look, I don't believe in purity or something.
Brian:I'm not a libertarian.
Brian:I'm grown up, but ultimately you do, I believe have to decide whether you're building a, whether you're going to build your business on, on a platform or whether you're going to build a platform around your business.
Brian:You just have to make, that is a binary choice in my view.
Reid:yeah.
Reid:We'll see how it shakes out.
Reid:Like, I think you could, one way to view it is that lens.
Reid:And I honestly think there's a lot of truth to that lens, especially today.
Reid:the other lens would be like, you hire substack as like your product and engineering.
Reid:Team, maybe a little marketing team in there too.
Reid:And you just pay them instead of
Reid:hiring, you know, instead of 10 percent of your revenue going to headcount for those functions, you're just hiring Substack to do
Brian:That's true.
Brian:I mean, that's kind of like the, that's how I see like Lenny Rachitsky's model in some ways.
Brian:I'm wondering, you know, how much of his business is, is
Brian:sub stack versus, non sub stack.
Reid:And if I think if you're at Substack, it's an interesting thing to think about.
Reid:if you can bring more of the things that he's paying people to do in house, you probably have a better shot at keeping some of the bigger publications on
Reid:Substack.
Brian:but like you did, you did a podcast with, with, with Paki, like you said, right.
Brian:And, you know, he was sort of, I guess he was kind of early.
Brian:I think about him as you know, I remember when he, when he.
Brian:When he wrote in his newsletter, you know, I think I
Brian:can make a million dollars.
Brian:I'm like, yes, you're going to you.
Brian:You're well,
Reid:But that was, that was a hot take at the time.
Reid:Like he was nowhere close to a
Reid:million and, and he was, he had a fairly small newsletter at the time.
Reid:I think it was like.
Reid:30, 000, 40, 000, you know, I mean,
Brian:but the growth dynamics when you see that, and so he's what I find interesting is, and I didn't actually get to get to listen the whole thing.
Brian:So I'm sorry if you guys discuss this is, you know, he never went down the paid path because he had something that was really working.
Brian:Which is
Brian:basically, I don't know, like a high end sponsor content business, you
Reid:yeah, it's the same, it's the same thing you bring up.
Reid:Judd brought this up, do every writer who I think has gotten into a position where they're doing extremely well is like really nervous about taking on more responsibility.
Reid:And rightfully so, because that's where things can teeter and you can, you know, if you take your foot off the gas with the thing that's working, then things can go in not so great directions.
Reid:I think Paki's hyper aware of that and it's working for, he's got a really great flywheel.
Reid:Why mess with it?
Brian:yeah, well, I think, I think you end up like taking out a calculator, right?
Brian:And you put 233, 000 in it, and then you say times 0.
Brian:05, and then you get a number, and then you say, let's just
Brian:say times 150, and that's how it happens.
Brian:Right, you're like, if I, if I convert 5 percent and I can charge them 150 dollars a year, that is,
Brian:let's let's actually do that.
Brian:What is that?
Brian:233,
Reid:compelling amount of cash, but I think the people, who, you know, there's a cost associated with it.
Reid:And I think the people who are good at focus, like kind of understand that at a pretty deep level,
Brian:Yeah.
Brian:No, I
Brian:mean.
Brian:Let's see, 233, 000 times 05, that's 11, 650.
Brian:Let's use the, what is Ben
Brian:Thompson at these days?
Brian:150?
Brian:I see more.
Reid:a revenue?
Reid:Yeah, I think it's
Brian:No, no, I mean like, what did he charge?
Brian:Let's just
Brian:say, Paki charge.
Brian:Okay, Paki, if you're listening, charge, charge 150.
Brian:dollars, okay?
Brian:You've got 1.
Brian:8 million
Brian:dollars.
Reid:yeah, it's not bad, but I think it obviously doesn't get there overnight and it comes with a ton of costs and you know, even 5 percent conversion is.
Reid:Is good on 230, 000 readers.
Reid:So it's not like these things just it's not like money just grows on trees type thing.
Reid:You know, like it takes a lot of hard work to support that kind of revenue stream.
Reid:With that said, Packy, if you are listening, I do think you could flip on paid memberships and probably generate some revenue just purely from the patronage model.
Reid:And I I've said that to you.
Reid:I've said that to him, said that to a lot of people, I understand.
Reid:The hesitation around it, but,
Brian:I'm not a believer in the patronage model, Reid.
Brian:I gotta say, I just think it's you'll get a certain number of people to do it, but, I don't know, maybe Packy's different because he's like really, really, You know, he's really tacked hard into this, you know, optimism lane, thing, which is, yeah, I'm sure it's very
Brian:appealing to a lot of people in, in the, tech community in particular, particularly,
Reid:what's the downside in having paid subscriptions on just from a pure patronage perspective?
Brian:yeah, I mean, that's a great, it's a great point.
Brian:I don't necessarily see the necessary.
Brian:downside to it?
Brian:I think it might actually just be, and this is the part I was going to get to, I think people don't, I don't want to say there's like a fear of failure.
Brian:I'm not saying this about Paki or anything like that.
Brian:maybe just more about myself, but you know, sometimes you don't want to like, you know, if things are working, you don't, you don't want to like people to say, yeah, this stuff's not that bad.
Brian:But it's, it's a little bit of I don't want to say both like an ego blow, but it's also a little bit demoralizing, right?
Brian:it's one thing.
Brian:It's what did they say?
Brian:It's you know, better to be thoughtful than open your mouth and leave.
Brian:No doubt.
Brian:sometimes it's it's better to think that you could do it rather than because it takes a long time
Brian:and it's a
Brian:little,
Brian:you know, and I do think that
Brian:that's a real thing
Brian:is,
Reid:think, especially if you have your type of background, like if you've been in journalism media for a long time and in your head, you're like, yeah, I could turn on paid.
Reid:I'd probably
Reid:make, you know, X amount of dollars.
Reid:But when you actually do it, it becomes like a factual
Reid:thing.
Reid:It's You know, objectively, you can look at the numbers.
Brian:Yeah, I mean, I'm doing fine, but I'm sure there was periods where I was probably texting you.
Brian:I'm like, is the paywall working?
Brian:I could swear.
Brian:Are you sure?
Brian:which, you know, look, these things take forever.
Brian:and that's just, I don't know.
Brian:That's, that's just.
Brian:That's the moat for these things.
Brian:final thing is just on, growth, because I mean, we, we talked a lot about growth sort of early on.
Brian:And, I have no, I have a lot of experience across a lot of different areas of publishing.
Brian:Growth was something that I never was really.
Brian:Good at exactly.
Brian:And by growth, I mean, you know, doing look, I come from a journalism background and I think one of the heart, like there's a bunch of benefits, but there's some downsides to it.
Brian:And you know, I feel like if you're from a journalism background, you kind of view, you know, do marketing is like icky or, you know what I mean?
Brian:It's like the Twitter threads era, I, I sat it out just out of maybe this is also back to you guys like this is just, this is this is
Brian:too grimy for me.
Reid:It's tricky, man.
Reid:I, I've been thinking about this a lot because I think the playbook that was used by a lot of the big newsletters today is no longer really, usable.
Reid:like Substack exists in the way that it does because Twitter.
Reid:Was what it was for a long period of time.
Reid:It was great for audience building.
Reid:And then you convert like a small percentage of that to email list.
Reid:You convert a small percentage of your email list to paid boom.
Reid:You got a business
Brian:yeah, that's the funnel.
Reid:that specifically Twitter and basically any external links, have been totally severed.
Reid:Like Twitter has become more of a siloed you act product.
Reid:And also I think there's some compelling data to point to it's not.
Reid:Doing as well as it used to.
Reid:I think you could apply the same logic across like a lot of the social, big social platforms like TOK, it's becoming harder to use as an audience building tool.
Reid:Like they, they're not as cool with like you linking out to do commerce elsewhere.
Reid:A lot of these algorithms are like interest driven in a way that.
Reid:Doesn't even really allow you to build owned audience.
Reid:so it's just a very different, tricky environment.
Reid:I'd wonder if you were starting, say you were like 25 and you didn't have the decades of experience and you were trying to build a media business.
Reid:Like the thing I've been thinking about is what the hell do you do today?
Reid:I think it's like, actually a really hard question.
Brian:Well, what kind of media business, I guess.
Brian:I mean, I don't know, maybe you shouldn't be building a media business at 25.
Brian:Maybe that's, a bad, maybe I'm like Grandpa Simpson, shaking his fist at a cloud.
Brian:I'm like, I don't need the competition from 25 year olds.
Brian:This isn't for you.
Brian:This is very complicated.
Brian:No, I mean, look, I look, I'm biased, obviously, but I think you have your best shot of building a media business.
Brian:If one you're in a niche.
Brian:the idea of building a, a general interest publication.
Brian:I talk with a lot of people and a lot of people have been in this business a long time, like literally nobody, nobody is talking to me about that.
Brian:They just do not see a pathway.
Brian:So maybe other people see a pathway for building, these big general interest publications, but I just look at what is happening and the reality is your best, in a niche.
Brian:Now, the way to, differentiate in a niche.
Brian:The, the most practical way of differentiating a niche is by having deep expertise in that area.
Brian:And, Jeff Bezos says there's no compression, algorithm for expertise.
Brian:so it's probably an unsatisfying answer, but I would, I would, you know, Go and
Brian:get that deep expertise, in, in a niche area.
Reid:it's similar to what Paki said, which I thought was really smart.
Reid:It's like
Reid:we were talking and he was like, I don't see as much opportunity around like the a hundred thousand plus newsletters anymore.
Reid:Like, I think those are kind of going to become more competitive and less.
Reid:Less opportunities.
Reid:But what you can do is try to focus on a very small group of people and you want them to be excited when they see your post show up and you want them like sharing it in small group chats and say, and like having that change people's mind within a very small group of people.
Brian:but like this idea and I just keep seeing, look, subset recommendations were amazing because I could basically not think at all.
Brian:About all this stuff that I don't like to, to, to think about and that I'm not good at.
Brian:I have no, bring no leverage to it, which is trying to figure out different seams in distribution in order to grow faster than organically possible.
Brian:Right.
Brian:So I was just, the best part about sub stack in my view is recommendations because it took care of the top of the funnel.
Brian:To some degree, you know, there was always people sharing the newsletter and finding it organically and they were so much more valuable than the, the recommendations, subscribers, but that, look, the reality is Casey wrote about this when you get off sub stack
Brian:growth becomes a lot harder, that is just a trade off.
Reid:What's like stopping posting on a social platform?
Reid:Like it's because there are growth loops within the substack ecosystem, recommendations, notes, credit cards on file.
Reid:That's the thing he brought up that was like specifically
Brian:I thought that was super smart, because like you have, you have to realize that that is gonna, that
Brian:is a real lock in.
Brian:It's something I didn't really totally fully
Brian:appreciate.
Reid:any friction around paying
Reid:for things is going to like harm revenue.
Reid:And.
Reid:When you have the, like Amazon's figured this out, Apple, they all have, they used to all talk about credit cards on file and for good reason, you know, you, if you have payment information, you can actually drive a lot more commerce.
Reid:Same thing with Substack versus any other newsletter platform where things are more siloed.
Brian:yeah.
Brian:but I think that's what I'm saying.
Brian:It's like a lot of times people want it's just like the get rich quick schemes, right?
Brian:It's, it's, you know, whether it's recommendations or whether it's beehive boosts
Brian:or spark loop has their own sort of thing.
Brian:And there's, you know, basically recommendations became, I mean, to me, this is multi level marketing, right?
Brian:It's like people are buying.
Brian:ads on Facebook or whatever, bringing them into an ecosystem and then, charging other newsletters.
Brian:Like pretty much everyone gets
Brian:passed around.
Reid:I think there's a crucial difference between some of these flavors versus the other ones, where if you put a price tag on it, it becomes transactional.
Reid:If it's more of like an editorial decision, like on Substack, I think that's kind of different, you know, like you have big newsletters helping out smaller newsletters.
Reid:And there's not really like a expectation that the smaller one's going to pay the bigger one.
Reid:You just, it's kind of goodwill.
Reid:It's kind of editorial.
Reid:And I think that's a different dynamic than charging money for these kinds of things.
Brian:Although there's a lot of
Brian:backroom dealing with this.
Brian:you know, I would get
Brian:people to be like, Hey,
Brian:you
Brian:scratch my back, I'll scratch your back and let's see.
Reid:Hey, that's that's totally okay.
Reid:If there is
Reid:some value exchange beyond that's monetary or closely related to it, but it's not baked into the feature in the way that, It's like front and center with other versions of it.
Brian:Right, and again, it's like the incentives,
Brian:you know, the devil is in the defaults
Brian:and,
Reid:Exactly.
Reid:you can see you can see the types of experiences that they yield to through
Reid:those, through those slightly different defaults.
Brian:yeah.
Brian:So, what, and then we'll wrap it up on this one, but what, what are the growth paths then outside of.
Brian:Because to me, that's the centrifugal force that will, that will lead most of the market to these platform solutions because the growth paths for a truly independent, publication are kind of closing down.
Brian:I look at it as an opportunity in some ways, there's sort of, it's like SEO, it's going through the biggest changes.
Brian:I Ever
Brian:right now.
Brian:Okay.
Brian:Hard.
Brian:Hardest has ever been,
Reid:And who would have thought like that seems so, so durable and defensible and boom
Brian:And like, you know, Facebook sort of, you know, they got out of that business.
Brian:Twitter.
Brian:I think the direction of travel on Twitter is fairly X, whatever you want to call it is pretty clear.
Brian:So, I don't know, what is.
Brian:What is the sort of growth path then?
Brian:Because you have to fill that top of the
Brian:funnel for independent Publications.
Reid:Yeah.
Reid:This is what I'm saying.
Reid:I think it's like a fascinating problem.
Reid:Noah Smith has this post that I've thought about a lot.
Reid:He wrote it like a couple of years ago, maybe, maybe like a year ago.
Reid:It was right around when all the Twitter clones were launching and he was talking about how the internet was becoming more fragmented.
Reid:And I think that's true.
Reid:And it's going to play out over, I think, an extended period of time.
Reid:Who knows, maybe it doesn't, maybe things bend back toward like everybody using Instagram and Twitter and Tik TOK, but it seems like the internet's moving toward a more fragmented world.
Reid:And the, you know, I, I think a lot about like the streaming businesses we We them on top of.
Reid:Everybody being on the same platforms, Google search, Facebook, and we had, or we had paid.
Reid:Marketing going through those platforms.
Reid:And we had organic marketing, you know, we, we had handles that we owned.
Reid:We posted there all the time, audience development, and all of that.
Reid:I don't want to say it's out the window, but it's not growing like it used to.
Reid:And so I still think if you're in your position, I think you've got to find ways to check the, check the box around sharing to social.
Reid:It sucks.
Reid:nobody likes doing this anymore.
Reid:It's like taking the trash out, but you, you still got to do it, you know, like that's still where audiences, and if you are
Brian:I'm gonna tell them I'm gonna tell myself this when I'm like logging into LinkedIn, right?
Reid:yeah, man, I mean, it's, it sucks.
Reid:Nobody likes, nobody likes doing this anymore.
Reid:but I think if you're, if you're in the game of trying to grow.
Reid:Top of funnel, email list subscribers, and all that is like really valuable and driving bottom line revenue.
Reid:Still, you got to find a way to share to social on the flip side.
Reid:I would try to shift the mindset to the packy thing of like, how can I care less about email list growth?
Reid:And how do I care more about like valuable views and valuable shares people responding to emails, which you've talked a lot about people leaving
Brian:sure
Brian:I think sometimes people get too caught up in dashboards and watching numbers on dashboards I always saw this as at previous jobs, like there was a lot of people who were viewing business metrics through dashboards, rather than you got to get close to the metal, you have to have, a feel for the business
Brian:in and how it is resonating and, you know, things like who you're hearing from, whether you're hearing from the right people, you know, for instance, if you have a, you know, Podcast or even a newsletter that features people, follow up with them and say, who, who did you hear from afterwards?
Brian:I mean, I look at the impact of, you know, when you look at a podcast, right?
Brian:It's, there are all these just like random numbers about listens, downloads and whatnot.
Brian:The test for me, if you're in a niche area.
Brian:And you're not just, you know, looking to, to do underwear ad reads or whatever.
Brian:Is, it's who do, who do people hear from?
Brian:Who do you hear from?
Brian:And then who, who do your guests hear from?
Brian:I always ask them, are you, and you know the strength of it.
Brian:Based on that, in my view, like, that's enough,
Brian:it's the kind of thing with people versus algorithms.
Brian:I hear from the right people and I'm like, okay, that, yeah, the captivate, stats are fine, but that's not, that's not sort of the main thing that I focus on at all.
Reid:but it takes a retraining your brain a bit.
Reid:If you were part of this like era of.
Reid:daily active user growth, monthly active user growth, email list growth, like all these top line metrics where you're trying to just shoot them through the roof.
Reid:This is a different mindset, you know, and I think we are, if we are moving truly toward a more fragmented internet, I think it takes like a slightly different perspective on valuable growth, not just growth for the sake of the numbers.
Brian:for sure.
Brian:All right.
Brian:That's a great way to leave it.
Brian:Thank you for spending all this time.
Reid:Love doing it.
Reid:Let's do it again
Brian:Okay, cool.
Brian:Awesome.
Brian:Thanks.
