0:00

Oh, markets got a nice bump today.

0:02

You get a good feeling about your room? Yes.

0:04

Can I get these vibes from them? You know? I want

0:06

your room like, wake up on his

0:09

twenty twenty one side of the bed one day.

0:11

Just be like, you know what? Times forget

0:13

back then. We caused cataclysmic damage

0:15

that needed to get unwound at some point, but

0:17

While it was up, it was all good. Did I really

0:19

need to keep bringing down the hammer out? Let's take

0:22

this FOMC meeting off. I'm

0:24

gonna post the story at Instagram just on

0:26

a beach with a drink.

0:29

Who got the truth? Is

0:32

it you? Is it you? Is it you? Who

0:34

got the truth now? Is

0:37

it you? Was it? You? Was it you? Sit

0:40

it down. Say it straight. Another

0:42

story on Welcome

0:46

to season eleven episode eight

0:48

of Acquired, The podcast about great

0:50

technology companies and the stories and playbooks

0:53

behind them. I'm Ben Gilbert, and I am the

0:55

co founder and managing director of Seattle based

0:57

Pioneer Square Labs, and our venture fund,

0:59

PSL Ventures. And I'm

1:01

David Rosenthal, and I'm an angel investor.

1:04

based in San Francisco.

1:06

And we are your hosts. Today,

1:08

we are telling the entire history

1:10

and strategy of stratigraphy. and

1:12

we are joined by the man himself, Ben

1:15

Thompson, on the eve of Stratecri's

1:17

ten year anniversary. Stratecri

1:20

is innocently billed on his website

1:22

as the business strategy and

1:24

impact of technology. Stratekri,

1:26

as Ben puts it, started as

1:28

some guy in Taiwan with no access.

1:31

Today, Stratek Re is a powerhouse, shaping

1:33

the thoughts and conversation of the entire

1:36

technology industry around the world

1:38

at the highest levels. Ben has

1:40

interviewed Mark Zuckerberg, Jensen Huang,

1:42

Satia Nadella, Sundar Pichai, Rich

1:44

Barton, Meredith Kopit Levien of The New York

1:46

Times, Pat Gelsinger of Intel, and John

1:49

Carlson, and many, many more,

1:51

many of which are regular readers.

1:53

He is the father of aggregation theory,

1:55

the most important business framework

1:58

developed in the last twenty years. And

2:00

Ben really pioneered the subscription

2:03

newsletter business model. We sat

2:05

down with him to talk about a bunch of his

2:07

recent changes going big into podcasting,

2:10

bringing on cohost and expanding the empire,

2:12

and even now launching a Strotectory property

2:15

that he does not appear on at

2:17

all. Regardless

2:17

of what your business model

2:19

is, regardless even almost of what your content

2:22

is, I don't think there's any creator.

2:24

Certainly not any business creator

2:26

out there today who doesn't

2:28

directly or indirectly look to

2:31

Ben and say, you inspired

2:33

me, you paved the way for what

2:35

I do. I mean, we certainly feel that way. I feel

2:37

that way. David, I even feel like you're in

2:39

my friendship developed early on from

2:41

reading Ben's pieces

2:43

and sharing them with each other with our thoughts. We

2:45

have these old email threads in twenty fourteen

2:47

of you and I discussing Ben's writing.

2:50

Totally. We might talk about that on the episode

2:52

here. Well,

2:53

for our presenting sponsor this episode, we are back

2:55

with Fundrise CEO, Ben

2:57

Miller, and we asked him to share with us what

2:59

his inspiration was for launching the

3:01

Fundrise Innovation Fund.

3:03

So technology will disrupt

3:06

every sector. including Venture capital.

3:08

I don't believe any VC would

3:10

argue their immune, happen

3:12

to commerce, happen to news, entertainment, public

3:14

markets, etcetera. but

3:17

just like every other incumbent, they

3:18

may have trouble imagining it. And

3:20

so the mission of our company, Fundrise,

3:24

is bring about that sea change.

3:26

So how do we do it? So in my experience,

3:28

what happens is

3:30

an industry ages

3:32

and

3:32

the stories it tells itself which

3:34

were once true, become

3:36

no longer true. Did you saw this

3:38

play out in real estate?

3:40

Yeah. So typically in a financial industry,

3:42

the essential story is

3:44

about alpha. The incumbents

3:46

raise money and create alpha. That alpha

3:48

is usually about deal picking, making

3:50

the best investments. And

3:52

in other financial markets, for

3:54

example, public markets, technology

3:57

made those markets more transparent and more

3:59

efficient over time and that alpha went away.

4:02

and Vanguard basically consistently

4:04

beat the best hedge funds in the world. So

4:07

that's going to have venture capital. It'll

4:09

start where I think we're starting, which is mid

4:11

to late stage companies where there is a lot more data.

4:14

And that's what we're doing. The Fundrise Innovation

4:16

Fund is a public mutual fund. It's

4:18

like a vanguard for the private technology

4:20

markets. And so

4:21

if I can paraphrase, it's less

4:23

about picking the winners to guarantee

4:26

alpha but more about increasing

4:28

transparency and access so

4:30

that more investors can just get the

4:32

benefit of beta. These correlated returns

4:35

where when the market goes up you're

4:37

invested in that asset class that you get to go

4:39

up with it. Right? If you'd indexed into

4:41

cloud from twenty twelve to twenty

4:43

seventeen, And you just

4:45

said I'm gonna find data that indicates

4:47

the top ten or twenty percent of companies

4:49

with product market fit, you would have

4:51

done great. I learned this in two thousand

4:54

eight, the cycle and the market

4:56

is way more powerful than individual.

4:58

You think you're adding alpha, but you're actually

5:00

riding these mega trends. I

5:02

mean, it's gonna happen to venture. For

5:04

sure, it's inevitable. It happens to

5:07

every sector. I just wanna be

5:09

the one helping to it. And

5:10

for Foundees, once you're at that stage,

5:13

the

5:13

actual natural best fit and form

5:15

of capital for you is the

5:17

equivalent of mutual fund public market

5:19

capital. and that's what you're bringing for the first

5:21

time to the industry.

5:23

Right. Exactly. Our

5:24

thanks to Fundrise. If you want to

5:27

join the over three hundred and fifty

5:29

thousand individuals investing with

5:31

Fundrise, you can click the link in the show notes.

5:33

And if you're a founder and you want to get in

5:35

touch, about having the innovation fund to participate

5:37

in your next funding round. Email

5:39

not v c, that's N0TVC

5:41

at fundrise dot com.

5:43

After this episode, come hang out with

5:45

the other thirteen thousand smart thoughtful

5:48

members of the acquired community at acquired dot f

5:50

m slash Slack. We'll all be talking about

5:52

it. Without further ado, this is

5:54

not investment advice. This show is

5:56

for informational and entertainment purposes

5:58

only, and now onto

5:59

our interview with Ben.

6:02

Ben Thompson, welcome to acquired.

6:04

Thank

6:04

you happy to be here. It's great to have you with

6:07

us. We've done surveys over the years of our audience

6:09

and we say, what is the number one topic

6:11

you'd wanna see us cover or a person we should have on the show

6:13

and your name comes up many, many times. So

6:15

excited to be doing this. You'll promise me I was

6:17

number one. No. You'd feel like there's a bit of a

6:19

left out going We asked who the number one was

6:21

and you were very high in the rankings. Well,

6:23

we have another number one though that is very

6:25

near and dear to our hearts, Ben, searching

6:28

his email today, and he sent me an

6:30

image over text that was very sweet. It

6:32

was the first email between

6:34

us, and it was about contradictory. Okay.

6:36

Fine. I'll take that. David

6:38

and I, I think, got drinks and we're talking about

6:41

Uber, and it was your don't blame Uber piece

6:43

from twenty fourteen. Yeah.

6:45

Well, it's kind of interesting and retrospect

6:47

to think about that. I think that was about healthcare

6:50

and rights and workers and

6:52

things on those lines. it's pretty

6:54

interesting. You could probably write a similar piece

6:56

about easy money and the macroeconomic

6:58

environment and lots of pieces. So

7:00

mean, it's funny. I haven't thought about that piece in

7:02

years and years. I usually have

7:04

a very good memory of everything that I've written,

7:07

but every now and then, I will encounter

7:09

piece, whether someone linked to it, or

7:11

I'll come up when I'm searching for I mean, I'm the number

7:13

one user. I'm just trying to research. built

7:17

that for yourself. I completely forgot

7:19

that. I wrote about that. Usually, I would

7:21

go back and read it back, oh, that wasn't bad. Sometimes I

7:23

go back, like, I don't know I don't know about that

7:25

one. But, yeah, it is what it is.

7:27

That is what happens. You've written thousands of

7:29

posts over approaching ten years

7:31

now. It's just prolific. It's interesting. I

7:33

went back and just read the early days preparing

7:35

for this, you've posted you imported from a

7:37

tumbler in two thousand and nine that are,

7:39

like, all the way back in the back catalog. Yeah.

7:42

I've started multiple blogs through the

7:44

years. I thought they were relevant and interesting.

7:46

And also, I think it's useful

7:48

to have a back

7:50

catalog when you launch. And something

7:52

that I do when I watch podcasts now

7:54

is it's important to sort of establish

7:56

the first time someone encounters you

7:59

that

7:59

this isn't just a flash in the pan sort of thing.

8:02

It's something that is interesting. You mean

8:04

like doing thirty episodes of dithering before you

8:06

released a single one? you know, in

8:08

that case, we really wanted to

8:10

figure out what that podcast should

8:12

be. And then also working with

8:14

Johnny can be a bit of perfect is, so it took us

8:16

that long in the website looking to sell you wanted it

8:18

too. Guys, I don't know anybody else like that.

8:20

There was a technical component that went to that

8:22

as well. But I think it's good for both sides.

8:24

It's good for the creator

8:26

because if you can't

8:28

have the discipline and sort of

8:30

stamina to build up a back catalog,

8:32

you're probably not gonna have the discipline and stamina to

8:34

keep going for a long time. So it's

8:37

almost good internally to sort of

8:39

get that done. But then also when

8:41

someone encounters it and then they feel,

8:43

wow, there's an excitement, not just in

8:45

anticipation of new

8:47

episodes that'll be down the road,

8:49

But, wow, there's already a whole bunch of stuff here for me to listen

8:51

to. And if you like the first one, he goes into a second

8:53

one. And I think that sort of second one

8:55

is super important. This is the point I

8:57

made about writing in general,

9:00

anyone can come up with one really good post or

9:02

one really good podcast. I don't mean to say that

9:04

dismissively. I think there's a lot of people out there through

9:06

smart insights I think a very

9:08

distinct skill and

9:10

capability to come

9:12

up with interesting things consistently.

9:14

And the sooner you can demonstrate that

9:17

to someone, the sooner

9:19

they are going to take

9:21

advantage of whatever means you have to follow

9:23

or just Scribe or whatever it might be

9:25

because it's not just a promise

9:27

of consistency, but it's evidence of

9:29

that. And I think that's really important

9:31

to online businesses in

9:33

general. I think

9:34

about that element a lot.

9:36

I also think about every

9:37

piece of content you create is a

9:40

churn opportunity. David and I

9:42

regularly look at each other mid episode and we're

9:44

like, okay, is this of acquired quality?

9:46

Or is it actually net negative for us

9:48

to release this episode? Because we've now

9:50

reduced the average quality of

9:52

a thing that someone

9:54

comes to expect from us. Yeah. I mean,

9:56

well, thanks for putting the pressure on me right

9:58

up there. I better make sure this is

9:59

interesting. But interesting because I

10:02

would push back against that a little

10:04

bit. And this

10:04

is why the consistency part is important. I mean,

10:06

there's an ongoing discussion. I think there's

10:08

that new social network post news or something. And I

10:10

just saw a thing on Twitter. I didn't actually fall through, but they

10:12

wanna do micro payments for articles, which

10:14

I think are terrible. And

10:16

there's

10:17

a tendency and a lot of things to get

10:19

overly indexed on

10:21

the consumer, which kinda sounds wrong.

10:23

Like, why wouldn't you want to give the consumer exactly

10:25

what they want? But just to take

10:27

the most obvious example, if a creator

10:29

is not making money, well, the consumer

10:32

may get what they want, which is free content, but they're

10:34

not gonna get it for very long. there is a

10:36

short term perspective versus a long term

10:38

perspective, which well know it by charging for

10:40

this, I can do this over the long run. But from

10:42

a micro transaction perspective, I think one of

10:44

the issues is to

10:46

create the piece of content is very time

10:48

consuming. And then, obviously, you get

10:50

the free distribution on the back end. You have zero marginal

10:52

cost on the back end. But the problem is

10:54

you have a timing mismatch with micro

10:56

transactions between when the payments made and

10:58

when the investment is made. And so

11:00

you wanna put a lot of time into an article and

11:02

then hope it gets traction. So I

11:04

can not just make money, but also

11:06

repay what I'm doing from there. And I think

11:08

that the way to think about

11:10

publishing online is

11:12

what are you selling? I think when you get in

11:14

the trap of thinking you're selling single

11:16

episode or selling a single article, that's

11:18

actually getting the incentives wrong. What I'm

11:20

selling to my subscribers is

11:23

consistency and yes,

11:25

certainly a quality bar. When I write something that

11:27

I'm not happy with, I'm miserable for the next

11:29

twenty four hours. Or if it's the end of the week, I have to

11:31

wait till next week, and that really sucks. because

11:33

I certainly have the drive and

11:35

compulsion to make sure that what I put out is

11:37

high quality. But at

11:39

the same time, there's an aspect of

11:41

what I'm actually selling to

11:43

my subscribers. And this is more of an

11:45

implicit promise, but I think it's the reality is

11:48

the consistency and the

11:50

regularity and the knowing that something happens, you're

11:52

gonna be able to get my take on it.

11:53

And I think that's where subscription

11:56

pricing does make much more sense for

11:58

content production because in this case, you're

11:59

actually getting the money upfront. The money is

12:02

funding the work as opposed to the

12:04

work being a speculative bid

12:06

for the money. And one thing

12:08

that I've pushed over time

12:10

and I'm very happy about is

12:13

trying to get people to sort of annual subscription. So I

12:15

think my audience at this point is like seventy percent

12:17

annual subscriptions at a hundred and

12:19

fifty bucks a year. Is that right?

12:21

It's

12:21

twelve dollars a month, a hundred and twenty dollars a year. So

12:23

you do get a twenty four dollar discount

12:25

by being annual. You save on the straight fees.

12:27

Yeah. It's like a sixteen dollar difference.

12:29

So that certainly makes a big difference. But

12:31

then also, I just

12:33

think it's good for me and it's good

12:35

for my customers to know that,

12:37

look, I have a chance to make it up to you. your

12:40

Internet media business

12:42

about the business of technology

12:45

is a very

12:45

different business than our Internet media business

12:48

about the business. technology across

12:50

a number of dimensions. Right? There's obviously the

12:52

business model, your primary business

12:54

model versus our primary business model, you

12:56

being subscriptions, us being advertising,

12:58

but

12:58

there's also the periodic nature of

13:01

content. I think one of the reasons

13:03

we feel such pressure

13:05

on each episode is We're only

13:07

dropping one, maybe two episodes a

13:09

month. How many pieces of content are you doing a week

13:11

at this point? Well, less than

13:13

I once did believe it or not. usually

13:15

three written pieces, one interview,

13:17

two sharp tech episodes, and two dithering

13:19

episodes. So I guess that

13:21

is eight pieces of content. when

13:23

I first started the daily update, I was doing

13:26

two free articles, five paid

13:28

articles, and a podcast. So that was eight. So I guess

13:30

I'm doing more now, but revealing my secrets,

13:32

podcasts are easier to do than correcting,

13:34

so it feels easier today than it was

13:36

back then. It certainly

13:38

is a lot I don't think that

13:40

will always be the shape of it forever. But

13:42

yeah, there definitely is a lot more than two

13:44

per month, so it's a fair pushback. Alright.

13:46

So because this is acquired and

13:49

I'm playing format

13:50

police David, I'm gonna take us back

13:52

to the beginning, and we're gonna try not

13:54

to dwell too long because Ben, I know you've told your story elsewhere,

13:56

but I think it's important for context. So you

13:58

get this inkling out of an idea that you

13:59

can do this and

14:01

you have idea for a way to cover the

14:04

intersection of strategy and technology in a

14:06

differentiated way than has

14:08

been done before. and you decide that you

14:10

wanna start doing it. I think you are

14:12

still doing it while you're at

14:14

Microsoft in twenty fourteen. Is that right, Ben?

14:16

I had started tons of blogs through the

14:18

years. Ice in some respects

14:20

felt I had missed out because

14:22

I'm the same age as folks like

14:24

as requiring and Matthew Glasius and,

14:26

you know, I was right here for the school newspaper

14:29

and, you know, I started a blog and I'm

14:31

like, man, if I had sort of kept with it,

14:33

you know, I could doing what they do. And

14:35

then John Gruber started doing fireball around two

14:37

thousand three. And so there was some

14:39

aspect of, like, well, it's a bummer I missed out on that. it's

14:41

like the famous Mark entries and you show up in

14:43

Silicon Valley and you feel like, oh darn, it's already

14:45

all happened without question. So,

14:47

you know, suddenly people push me, you should write again, you

14:49

should do it. I think I did those Tumblr posts

14:51

while I was at business school. And, yeah,

14:53

I mean, it was definitely something that I

14:55

always wanted to do just from a

14:58

personal self interest perspective.

15:00

But also, it's not enough to

15:02

just want to do something. There needs to be a

15:04

market. There needs to be an opportunity. The way

15:06

I always put it is there's lots

15:08

of sites writing about the products.

15:11

And Wall Street is writing

15:13

about the financial results, but there's a big

15:15

gap in the middle there. You know, like, what

15:17

is the strategy that goes into the products,

15:19

like, what are the margins and the business models

15:21

that undergird those products that drive to the

15:23

financial results? How does

15:25

company culture impact decision

15:27

making? why do companies do stupid

15:29

things? This is a common question

15:31

in business school and you would

15:33

do these interviews, interview prep you're

15:35

the first year doing second year students, then you're helping the

15:37

first year students. And my favorite

15:39

question was always, what's a

15:41

decision or a product company has

15:43

made that you think is a bad idea or you disagree

15:45

with. And everyone always have an answer to

15:47

that, but the more interesting question is the follow-up

15:49

question, which is why did they

15:51

do that? And what you would see is a lot

15:53

of people, their answer

15:55

really was because they're stupid.

15:57

And the reality is no one at these

15:59

companies is

15:59

stupid. A very popular choice back then

16:02

is Microsoft making the Zoom players. Like,

16:04

that's a dumb idea blah blah blah. Well, why did

16:06

Microsoft do that? It's not just

16:08

useful for critique but

16:10

it's also useful for saying

16:12

where companies should go. So I

16:14

think probably Microsoft. Either

16:16

Microsoft or Facebook are probably my two

16:18

biggest successes as far

16:20

as an analyst. You know, I think particularly

16:22

Microsoft where I think

16:24

I very clearly

16:27

articulated what their issues

16:29

were. And also by understanding

16:31

those issues, the sort of organization they

16:33

were, the sort of capabilities they were, and

16:35

not just the weaknesses that entailed, but

16:37

also the strengths that entailed, where

16:39

they should go, and the sort of

16:41

strategy they should adopt. And that's

16:43

basically the strategy they have adopted and obviously

16:45

it's tremendously successful. But there's

16:47

no one writing that sort of stuff back in

16:49

twenty thirteen. one of the things we

16:51

thought about a lot was we

16:53

are not journalists, and we came

16:55

at this from having worked

16:58

in the industries that

17:00

we're talking about and obviously you did too having

17:02

been at Microsoft Apple and plenty of other

17:04

places. Was that in your mind like

17:06

everybody you mentioned As recline, Grupo is different.

17:08

We'll talk about Grupo later, but they were

17:10

journalists. They came out of the media,

17:12

whereas we were all coming out of

17:14

the industry. Yeah. It's

17:16

interesting. I wouldn't classify

17:18

either quinorglazingist as journalist. I mean, they

17:20

were bloggers. That's what they

17:22

were. And they ended

17:24

up as somewhat journalist.

17:26

Although, I would say both of them, their

17:28

best work has always been

17:30

more analysis than

17:32

journalism. I mean, maybe it's a stupid classification. But

17:34

I think about journalists as sort of

17:36

writing about what is happening at

17:38

best, uncovering facts. Analysis

17:41

is explaining why it

17:43

happened. And opinion is some

17:45

aspect of saying what you think should

17:47

happen. those have certainly gotten

17:50

conflated over the years. That's probably a

17:52

different discussion. But

17:53

analysis and opinion, I

17:56

think, do

17:56

go together to some extent, but it's actually a

17:58

line that I'm actually pretty careful about.

18:00

I really try to not break news.

18:02

That's actually an explicit

18:04

choice on my side. I mean, it was an easy

18:07

decision to make at the beginning because I knew no

18:09

one. I like foreign Twitter followers when I

18:11

started. Everything that I

18:13

wrote was self generated. Right? It was just

18:15

my own insight, my own view of the situation. You

18:17

didn't have any particular access. No

18:19

access. A negative access. I sort of

18:21

felt like it's hard because I couldn't write about Microsoft because I

18:23

was some on there. I think

18:25

that of my work experience, the

18:27

Microsoft bit, was certainly the most

18:29

impactful, not just because of what I

18:31

learned about Microsoft, but just what you

18:33

learned about big companies, I think, in general. And

18:35

it's

18:35

very easy on the outside to

18:39

anthropomorphize

18:39

these companies. And, like, a single entity

18:41

sort of making this

18:43

and doing what you want doing what you don't. And the reality is,

18:45

hits thousands and thousands of people. There's

18:47

massive coordination problems. Everyone has a different take,

18:50

different opinion. which is why the

18:52

culture stuff is so interesting, which

18:54

is why the broad

18:56

shared understanding of what a company is

18:58

and is not capable of. is

19:00

so important to understanding why companies do what they

19:02

do because actually tends to be much

19:04

more impactful than single individuals and

19:08

definitely seeing individuals below, like, the

19:10

CEO level. And even then, what

19:12

constraints the CEO's actions? Is a pretty

19:14

significant thing?

19:14

but they had to build a team to get

19:17

apps for Windows eight. And so

19:19

I was responsible for

19:22

social media,

19:22

other than Facebook and Twitter.

19:25

So, I guess,

19:28

blogging. I was responsible

19:30

for publishing So all

19:32

the book publishers, Amazon, Kendall, things on those lines,

19:34

I was responsible for

19:37

lifestyle So I really got to know the publishing

19:39

industry very well both on, like, the magazine

19:41

side, the newspaper side, book publishing

19:44

side. And all that was

19:46

certainly useful learning

19:48

for writing about those industries,

19:50

but

19:50

also very useful for

19:53

understanding apps or dynamics, developer

19:55

dynamics, it was super fun,

19:57

very busy, very high trying to get stuff out

19:59

the door, working with, you know, half

20:01

build SDKs and flying all over and

20:03

working with developers. And then sucked after the

20:06

fact. But it was about up until then. So I

20:08

was at

20:08

Microsoft, and I remember

20:10

my wife and I

20:11

knew it was our first episode of Hawaii.

20:14

I think this was the winter of

20:16

two thousand twelve to thirteen and

20:19

sat down and talked about it. It's like, yeah, it's probably gonna

20:21

be time to move on

20:23

pretty soon. I mean, anyhow, Microsoft

20:25

was always a bit of an upset. I was always sort

20:27

of an Apple person. That was my obsession.

20:30

I wanted to work at Apple. the good fortune of being

20:32

able to intern there.

20:34

And I was at Apple University when

20:36

Apple University had just started. And the original

20:38

vision for Apple University was that it's gonna

20:40

be really focused on Apple has this notion

20:42

of like the top two hundred, although I think it's actually today

20:44

more like top three hundred or something. They go

20:46

to this big company Retreat. They're the ones that

20:48

know all the future plans and are that's going on, and

20:50

that's really sort of the decision makers at Apple.

20:52

And it's not necessarily by management

20:55

position. Like, there's ICs that are, you know,

20:57

we have no management responsibility, but are, you know, sort

21:00

of part of that core. That was an

21:02

amazing experience. And

21:05

really, trying to figure out, like, what makes Apple Apple sort of

21:07

defining the culture. And

21:09

it did seem problematic that

21:11

it's very hard to write culture down

21:13

because then that's kind of a recipe

21:15

I think for sort of ossification and getting sort of

21:17

walked into something. What is interesting

21:19

is it was written a lot about as this

21:21

sort of Steve Jobs initiative. And,

21:23

you know, I'm sure he ok'd it, but he had basically no

21:25

involvement at all. Tim Cook was very

21:27

heavily involved. Like, the whole Tim Cook doctrine

21:29

thing that folks talked about during during

21:31

the earnings call, that was at Apple

21:34

University first. Did you coin the Cook

21:36

doctrine? No. I think

21:38

Horace Deju did from a CIMCO. Oh,

21:40

yeah. The reality is his culture comes

21:42

from doing and it doesn't come

21:44

from saying. And there's

21:46

a issue, like, if you've made decisions based on

21:48

data. Right? It's inherently backwards looking because the

21:50

data has to be generated first. And

21:52

I think there's analogy to culture

21:54

along those

21:55

lines that and the concern

21:57

about writing it down and getting focused

21:59

on that is you're sort of locking

22:02

yourself in. Like, cultures are very, very

22:04

powerful. It's the

22:04

way that you coordinate a

22:07

massive company and keep

22:08

it going in the broadly same direction because

22:10

there's so many things that you can articulate.

22:12

You can articulate that this is the way we do things.

22:14

If you did, you would be bogged down like

22:16

the transaction cost. of communicating every

22:19

little detail are massive. And so

22:21

culture keeps you going in the right

22:23

direction, but culture is also very

22:25

dangerous because if you have to

22:27

change direction, suddenly you realize you're in a straight

22:29

jacket. And I do

22:31

wonder if writing

22:33

stuff down and saying this is the way we

22:35

do things is actually, like, sewing the

22:37

striped jacket. I'm not sure how that pays off.

22:39

Right. Culture and process accomplish the same

22:41

goal in many cases. And so either it

22:43

can be done in a process lightweight because

22:45

the culture sort of facilitates it getting

22:47

done, but then you have no

22:49

processes to change something if the culture is no longer

22:51

facilitating what you wanna do. Yeah.

22:53

I think that that's an interesting way to put it.

22:55

Culture is probably the processes that

22:57

can't be written down to some extent

22:59

because it's just an understanding of this is how

23:01

we do it. I left that

23:03

summer feeling like this is not the

23:05

right thing for me. You get to business school.

23:07

You have to get a job. Everyone else is getting

23:09

jobs and you feel you know, and it was pretty tough for me.

23:11

Can you feel like what you do immediately

23:13

after business school? Like, have there such weight

23:15

to that career decision? And then you just, like,

23:17

yeah, whatever is, like, a dumb Well, I

23:19

was hell bent on being in tech.

23:21

And I had lots of opportunities

23:23

and offers. Obviously, consulting was an

23:25

option. It's interesting. It's not a very non

23:27

traditional background. an English teacher in

23:29

Taiwan, you know, I built a sort of

23:31

distributed presentation system for a

23:33

a group of schools here. So there was like some sort of

23:35

like tech angle per se. But, really,

23:37

I was just, like, gonna go teach from Taiwan. We, you know,

23:39

back to sort of the Esrecline mavaglesias,

23:41

you would kinda cut from that cloth before

23:43

getting into tech. Right? Like, you were polycyne

23:45

major. Right. You worked in politics?

23:47

Yep. And honestly, a lot of that was

23:49

my background, and I grew up definitely

23:51

blue collar, but my parents were

23:53

Minnis and you're in a small town of

23:56

two thousand, like, the pastor is, like,

23:58

the most educated person around by

23:59

and large. So there's an

24:01

aspect, well, alternative to

24:04

working in the factory around the farm

24:06

is you go to college and you'd

24:08

be like a professor or something. There just

24:10

wasn't even any awareness

24:13

any sort of opportunities. And

24:15

I think it's very not well

24:18

understood by elites in general

24:20

and people on the coast where

24:22

it's not a lack of opportunity. It's a lack

24:24

of even knowledge that there are opportunities

24:27

elsewhere. And

24:28

so for me, going to

24:30

their University of Wisconsin was like this big act

24:32

of rebellion and like, oh, I'm not gonna go to a

24:34

bible college or I'm not gonna go to

24:37

whatever. And in retrospect,

24:40

had the grades and test scores

24:42

to go somewhere, you

24:44

know, I mean, South is a great school, but I probably

24:46

could have got to an idly scores. I didn't

24:48

even apply. that just wasn't on your

24:50

radar screen. Not even on my radar

24:52

screen, not on the radar screen of anyone around

24:54

me. And I think this is a perspective

24:56

that is probably not very well

24:58

understood by a lot of our audience, I think, to

25:00

say the least. And so I

25:02

actually love I was very

25:04

intuitive. I like I was the first person I knew around

25:06

me to get an email address to sort of be

25:08

online. Did you get the

25:10

Internet at home before you went to college or was college

25:12

your first experience No. I pestered

25:14

and pestered my parents to get

25:16

Internet. I mean, I think we started out with like a

25:18

Juno account, which is just email

25:20

only. Oh, wait. Was you know the one that was a Desha spin

25:22

out? Yes. That was an incubation

25:24

at Desha when Bezos was there

25:27

before Amazon? Yep. It was like a stand

25:29

alone client that was email only and then

25:31

emerged with net zero. Yep.

25:33

So even in college, you know, I was

25:35

super online, me and my group of friends, in the

25:37

dorms an extra year just because of the broadband

25:39

connection. Broadband is used very loosely

25:41

here. I think it's like two megabytes up and down. because I

25:43

worked in the suit in his paper, which I loved.

25:45

One of the things that

25:46

did at the newspaper was

25:49

I took over

25:49

the editorial section in

25:52

my senior year so

25:54

we sat down and we had five things that

25:56

we wanted to see happen. Well, first, we decided

25:58

number one, editorials will only ever be

26:00

about things that affect students. And what we

26:02

did was look, We're gonna write an editorial

26:04

every single day, Monday through Thursday. Friday, the

26:07

whole page will be given away to guest columns. We're

26:09

gonna write an editorial every single day, matter

26:11

what and we're gonna write about these five issues.

26:13

And did that mean you writing an editorial

26:15

every single day? Well, so we had editorial

26:18

board, but basically ended up me writing editorial every single day. It's

26:20

what it came down to. Not every day with

26:22

the vast majority. And it's

26:24

interesting because there is certainly there's

26:26

an what ended up doing with my career. Right? This

26:28

sort of daily hitting

26:31

points, having to generate content.

26:33

But it was, number one,

26:35

just from a practical perspective, it was

26:37

fun and interesting. It's something I definitely

26:40

enjoyed. And number two, it worked of our

26:42

five sort of things we

26:44

had goals. We accomplished four of

26:46

them.

26:46

though So I wanna go forward to

26:49

you leaving Microsoft Give

26:51

me the emotional moment where you're

26:54

like, it feels like it could

26:56

work. Like, I think there's

26:58

something here. I think I have content

27:00

market fit. Well,

27:01

so to go to the back to the wide trip, there

27:03

was an aspect about going to Microsoft.

27:05

It's like, well, I should go to a place

27:07

that is directly oppositional to everything I

27:09

believe in. Right? And can I make changes

27:12

at Microsoft? You know, very sort of

27:14

arrogant. Really, I learned a lot from Microsoft

27:16

as opposed to the other way around. I sort

27:18

of signed up for knowing this is probably not

27:20

where I was gonna be long term. And

27:22

after that trip

27:23

is when I did start stratigraphy, I

27:27

wanted to figure out a way to back some point. My wife's from

27:29

Taiwan, and we enjoyed living

27:31

here. Also, again, I just felt

27:33

like there was this hole and

27:35

opportunity. And I sort of looked at Gruber as

27:37

someone that was like, well, he did

27:39

it, but it was also pretty

27:41

clear that an advertising based

27:43

model was probably not going to work. I mean,

27:45

that was obviously a a regular theme of mind about

27:47

the centralization of advertising under Google and

27:49

Facebook and that world of starting a

27:51

blog and throwing out some Google ads was not

27:53

going to be a viable one. What

27:55

made you think that? To my mind at

27:57

least, there is a very

28:00

viable and robust alternative history

28:02

where Sterectomy is an

28:04

advertising business model. Well, I

28:06

think that I would have to have started

28:08

much earlier. And I

28:10

think Gruber's model is the right one where I

28:12

think it is actually underrated that. I think he

28:14

actually kind of invented native advertising

28:16

because you read piece of content that he

28:18

writes, and one of them just happens to basically be an

28:20

admin. It's the same format, same content as what's

28:23

there. And I would bet the

28:25

rate of consumption to encountering

28:27

it for his ads are like higher than

28:29

almost anything else out there. And

28:31

obviously, Facebook does that at

28:34

scale. and it's all automated, self serve, and

28:36

you scroll through, and there's different pieces of content you're interested

28:38

in, and then some of them are ads. But you didn't

28:40

think you could do the same thing that

28:42

John does. Well, I thought that

28:44

was a possibility, a potential leg of

28:46

the stool. But number

28:48

one, I didn't know that I could do the

28:50

same foreman. I mean, what works

28:52

very well is because most of his stuff are

28:54

short snippets and wink out. It's very easy to

28:56

check-in and read everything. I

28:58

ended up moving more towards

29:00

longer pieces. I mean, I did and

29:02

play around with that format.

29:04

And it didn't seem right to me.

29:06

And then also, just strategically,

29:09

you could see where things were

29:11

going. this idea that

29:14

users are going to Google, going to social

29:16

media. And that's the

29:18

best and most obvious place to put

29:20

advertising. That's where the users are, understanding about them, all

29:22

those sorts of things. You know, advertising is

29:24

an ROI measurement. It's

29:26

not just what's your return, but also how

29:28

much work do you have do to get it. And

29:30

why would someone wanna go to a small blog and

29:32

put the effort of putting an ad there?

29:34

It

29:34

didn't seem like a very scalable possibility.

29:39

And meanwhile, At

29:39

the same time, there been this new company that was something

29:41

called Stripe. And it seemed

29:43

viable to me that if you thought through the idea, look,

29:45

if I produced super highly differentiated

29:48

content, that is something

29:51

that is not gonna appeal to the whole

29:53

world, but to the people who like it, they'll

29:55

really like it. And if you have that

29:57

sort of

29:58

audience, you

29:59

should maximize your revenue per user,

30:02

and the way to maximize your revenue per user

30:04

is to charge them a subscription. and

30:06

the tools were then becoming available to

30:08

sort of do that just to validate the

30:10

point real quick. And, David, this is my

30:12

pushback on there being an alternative history where

30:14

Strotectory could have been ad driven. for

30:16

anybody who doesn't read during fireball and doesn't know who

30:18

John Gruber is that we're talking about quick lesson

30:20

when Ben says that he invented the infeed

30:22

advertisement, you go to daring fireball

30:24

dot net. yes dot net. And you see the same exact

30:26

website that's been there for ten, close to

30:28

twenty years at this point, and most of

30:30

it is links out to other things.

30:32

some of its well thought through pieces, and

30:34

some of it is sponsored post. And

30:36

I consumed just like many other

30:39

people the entire feed in an RSS reader

30:41

and the sponsored post would show up just like any

30:43

other post in an RSS reader. Now

30:45

I think the set of people who are likely

30:47

to use an RSS reader and who are likely

30:49

to go directly to dairy fireball dot net.

30:51

Does the place where they're intentionally typing in

30:53

URL or clicking a bookmarks bar

30:55

and going to it? that set

30:57

of apple nerds is far more likely

30:59

to do that behavior than anybody else in the world.

31:01

The world is shifting away from going

31:04

directly to pages and a lot of

31:06

your readers are like, I'm just getting my news from Twitter and wherever else

31:08

at this point, and I'm not doing the RSS thing.

31:11

Yeah. I think the more niche you

31:13

are, interestingly, that does pay off

31:15

subscriptions. It can also work well for advertising. I

31:17

think Gruber was at the right place, the right

31:19

time for Apple for sure, not

31:21

just in terms of Apple's growth,

31:23

but all sold the explosion in the App Store. There was a

31:25

period where you would have lots of apps as a

31:27

sort of featured things. And so it

31:29

works great for him. again,

31:31

I did have sponsored posts a

31:33

little bit when I did go independent because

31:35

I figured I'd have multiple revenue

31:38

streams. I didn't remember that. How

31:40

long did you do that for? Oh, like six

31:42

months. Again, the ROI wasn't there for me either.

31:44

I couldn't charge that much. and it was a

31:46

big hassle and getting it arranged. And then

31:49

also, there's a lot of complicated

31:51

factors, like pushing people to email was not a

31:53

good fit for that. And so I

31:56

started Streckery pretty clear that

31:58

subscriptions would be the core model. I was

31:59

gonna try lots of things to monetize. Clear

32:02

to you though, but you pioneered that. I mean,

32:04

there was no sub stack. I think in

32:06

many ways, substack was I don't know the exact

32:08

history, but probably modeled after

32:10

you. Yeah. No. Substacks, CDEC,

32:12

says Sierczakarina Box. That was

32:15

their So this was a big innovation. Yeah.

32:17

I mean, I think like the subscriptions did exist.

32:19

I think on Wall Street in particular,

32:21

but they were generally like twenty thousand

32:23

dollars. and you would get all the hedge

32:25

funds to subscribe and the banks if that model

32:27

still exists. And it's it's actually a a very very

32:29

profitable one. But what I do think

32:32

strategically innovated was sort of

32:34

subscriptions at scale where

32:35

you're charging a low price

32:37

relative to twenty five thousand dollars or

32:39

ten thousand dollars and you're

32:40

doing on a self serve basis. People sign up with a

32:42

credit card. And again Stripe was a really important part

32:45

of making this possible, but there were

32:47

no real subscription tools. Like, I had

32:49

to actually hacked it all

32:51

together when I first started. There was, like,

32:53

Wordpress subscription tools, then there was Stripe

32:55

and you had to glue them together, and

32:57

it was sort of a big mess when I started. A year after

32:59

I started a company called MemberFUL then

33:01

launched, which I switched to them. That big

33:03

thing is definitely much easier.

33:06

And then, obviously, I I have my own system now. You've

33:08

worked with an outside development agency to custom

33:10

build software for which you are the

33:12

only user to publish Protect right

33:15

now. Right? Yeah. Well, I mean, at the beginning, it

33:17

was all me. Like, I built my own page and

33:19

I did all that integration myself. And I'm

33:21

not really a developer, so it was very

33:23

happy. Actually, one

33:25

of my nightmares was when I watched

33:27

the paid product. So, sergeant

33:29

Stackery, I messed around format a little bit

33:31

at the beginning. Actually, the real pioneer

33:33

who I should mention was Andrew

33:35

Sullivan. And

33:36

he had

33:37

this manic posting schedule, like,

33:39

tens of posts a day, and you did have a team to help

33:42

him on the daily dish. And

33:45

he switched to a subscription when I think

33:47

he left the Atlantic. was

33:49

successful. Like, he quickly was

33:51

doing a million dollars in revenue a

33:53

year, but he sort of maintained

33:55

that manic posted schedule that kind

33:57

of made sense in an advertising driven world where

33:59

you want people always coming back and getting lots of

34:02

impressions. And the paywall

34:04

was super loose. It was like thirty posts and

34:06

then you hit a paywall or something. And the reality is what

34:08

happens he burned out. I think he had some health

34:10

issues and he ended up bleeding. And it was funny

34:12

because when

34:14

he left Everyone's like blogging's dad, it's finished, was a

34:16

failure. And I looked at him, I thought, like, no, I think this

34:18

was actually a huge success. One of the

34:20

problems was he

34:22

had this posting schedule

34:24

and system and then you try to drop a paywall on

34:26

top of it. And so when I thought about trajectory,

34:28

I wanna do the opposite. where

34:30

I wanted a subscription to not

34:32

feel like from a customer perspective that

34:34

I was taking stuff away, but that

34:37

I was giving them more. just

34:39

from a psychological perspective. And so once

34:41

I realize I definitely wanna do a

34:43

subscription model, I started becoming super disciplined

34:46

about never writing more than twice

34:48

a week. this was back in twenty thirteen when I joined Security. my

34:50

plan was for subscribers, if

34:52

they subscribed, they'd get more.

34:54

And it would be like an

34:56

exciting purchase as opposed to automating a paywall. This sucks. And your audience

34:59

that you were building up before putting the

35:01

paywall in would still keep

35:03

getting the same. That's right. And so

35:05

my initial model was still daring fireball like where I figured, oh,

35:08

I'd have big articles.

35:10

And then if you

35:12

subscribe, you're get a whole feed of a

35:14

bunch of little stuff, my commentary on news

35:16

articles, I built a new

35:18

website again as a not

35:20

very good web developer. And

35:22

the metric I was paying attention to

35:24

was people who visited

35:26

the home page on days I didn't post.

35:29

because to me those were people

35:31

that were hoping I had written and

35:33

they wanted more from me. And I

35:35

figured the classic, if I could XYZ

35:37

of y. But I thought if I get ten percent to this

35:39

audience, that would be something that would be

35:41

reasonable and that metric was pretty high.

35:43

I mean, I didn't appreciate than just how powerful social

35:45

media was and publishers bimonth

35:48

social media, but those are publishers with

35:51

old business models. If you have a new business

35:54

media is a godsend because you basically get

35:56

free marketing. What a lot of people

35:58

don't what about you don't understand understand

36:00

is I think a lot of writers give away way too much content on Twitter and

36:02

they're out there posting. It's like, why should I read your site

36:04

when you're just telling me everything you think on

36:06

Twitter? And The reality the

36:08

power of social media is not that it gives you

36:10

another platform. I have a platform at strecker dot

36:12

com. What it does do is

36:14

give all my readers

36:16

a platform to tell other

36:18

people, wow, this site's really great. Look how

36:20

smart I am for having a take on this thing that

36:22

Ben wrote, which you can read about on his website.

36:24

Right. If you share something

36:26

that's great, you get the likes and you get the retweets and you get

36:28

the status of people feeling like, wow, this person

36:30

is sharing good stuff. And

36:32

that's really powerful. This

36:33

is probably an angle you

36:36

mentioned the marketing and recent quote when I thought I was too late. In this case,

36:38

it turned out I was early. I

36:40

was the only person doing this

36:43

sort of model out there And

36:45

there was still an era of twenty

36:47

thirteen Twitter, twenty fourteen Twitter where

36:50

people would share links

36:52

to something and it would break through if it was successfully good. This

36:54

is also where the principle of

36:56

having the second article be

36:58

good

36:58

is super important.

37:00

know, and this is I think unique to the

37:02

social media era where people follow link to a

37:04

site and they have pay no attention to

37:06

what the site is. They don't even know what it is.

37:09

basically a Twitter article for all types of purposes. So

37:11

I did want the site to be sort of visually

37:13

distinct. So I did like a custom font, which

37:15

back then was very rare. That was sort of

37:17

a new thing. I had the orange,

37:19

you know, there weren't very many orange ice back then, and I did a lot of these sort

37:21

of hand drawings, which were very

37:24

visually distinct.

37:26

the Ben Thompson iPad hand drying. You're a good artist. The

37:28

boats, even in the first post,

37:30

the sailboats, was quite good. Yeah.

37:33

Take goodness for iPads and the ability to sort of

37:36

edit that nicely. But the reason for

37:38

that is what I was really thinking

37:40

about was, oh, hey, they found an article

37:42

like, oh, that's a good article. a day later,

37:43

a week later, a month later, they follow another

37:46

wink. And like, wow, that's

37:47

gone. Wait. I've been on this site

37:49

before. It's triggering my memory

37:51

And that's really, I think, the key moment. And it's like,

37:53

oh, yeah, I'm gonna follow this guy on Twitter or I'm

37:55

gonna put this site in my bookmark. So I'm gonna put

37:57

my RSS reader or whatever it

38:00

might be. And that's sort of the key thing that I

38:02

think you want to accomplish. This

38:04

is one of my big criticisms of

38:06

sub stack

38:08

I mean, it's interesting because social security, I think, is achieving some degree of

38:10

network effects where everyone's familiar with it, that

38:12

your payment's already on file. All that

38:15

stuff is true. but nothing visually about SubSec is

38:17

memorable. Every single site looks the same. And,

38:20

also, they'll be reading a post

38:22

after, like, bring down the address

38:24

bar number. Who am I reading again? The

38:26

kerning's also weird. This is a weird

38:28

typography in it, but I'm like, it always looks slightly

38:30

wrong to me when I'm reading the

38:32

body text. Yeah.

38:32

I agree. Does trajectory even the name? I know in

38:34

many respects it's a bad name for

38:37

a word-of-mouth sight to be a name that

38:39

no one

38:39

knows how to pronounce. not

38:42

audio word of mouth to sight. It's a --

38:44

Word of tweets. -- it's super

38:46

memorable for good or bad

38:48

reasons. It's one of those No

38:50

exposure is bad exposure sort of

38:52

things. More importantly, the URL existed,

38:54

the Twitter handle existed. It didn't

38:56

exist in Google Search. So there was plus

38:58

or minus When did you come up with

39:00

it? The name that I've always been the most

39:02

jealous of is a Simcoe, again, to go back to

39:04

Horace Deju. It has all

39:06

those qualities. with the advantage of being pretty noticeable and

39:08

easily available. So in

39:10

retrospect, I always make fun of the

39:12

trajectory name because it's easy to make

39:14

fun of But

39:16

I do think there's a lot of positive qualities to it that

39:19

are underappreciated from this

39:21

memorability aspect. But there is an

39:23

aspect where it is harder for

39:25

adults. And people are afraid to say it because they're worried they'll say it wrong. And if

39:27

they say it, they don't wanna spell it, so

39:29

it's not perfect by

39:32

any means. It is based on the

39:34

strategic movie bit. Right? Where it's supposed to be strategicory?

39:36

Yeah. So it's strategy and

39:37

tech.

39:39

And, yes, there was a strategic bet. And so then

39:41

I'm like, well, I should pronounce a strategicory. That was a terrible idea. I think I did that

39:43

for the month. Didn't even

39:46

say on the website it's

39:48

pronounced strategicory Yeah.

39:50

At the very beginning. Yeah. And then I quickly realized that was a very bad

39:52

idea because it is strategy and taxes should

39:54

be trajectory. Yeah. Lots of poor decisions. It's very

39:56

easy to look back and see all the good ones.

39:59

But this is how you build brands. The only way is

40:01

to, like, do this stuff. I feel like every

40:03

single time we talk to someone who

40:06

built something in their own

40:08

image from first principles with their ideas

40:10

in a super opinionated way about how they

40:12

wanted to sort of like birth their

40:14

Internet child into the world. It has all

40:16

these really rough edges for a

40:18

while. Yeah. And that applied to lots of pieces. I

40:20

mean, I had my people visiting the home

40:22

page of days I didn't post. So in the meantime,

40:24

what's up? I was really looking for a

40:26

job at Microsoft where I could still blog.

40:28

Isn't that all jobs at Microsoft? You just kinda chill

40:30

and do plenty of time to blog? But I couldn't

40:32

write about Microsoft soft. And also, it

40:34

was getting a lot of attention. Again, I was

40:36

surprised at how quickly it

40:38

blew

40:38

up. I mean, this is where the other Gruber

40:40

story comes in where and

40:42

appendicitis, so I'm laying in a hospital bed, getting ready for surgery, and

40:44

I'm like waiting around for a few

40:45

hours. I had

40:47

waited to

40:50

email John because for the same principles at the beginning, I wanted to have a

40:52

body of content, not just like an introductory

40:54

poll say, oh, check out my new blog. How many emails does he

40:56

get about

40:58

that? Right? And

40:59

so I waited a couple months or a month or so when I emailed

41:01

and say, hey, been a big fan. He had just been

41:03

on a podcast

41:03

on his origin story, and he also worked the

41:06

newspaper in XYZ

41:08

So I shared that, you know, like, a rule related to this. I regret

41:10

not doing what you did back in two thousand

41:13

three, but I'm giving it a shot now. Here's

41:15

a few articles I'd be interested. and

41:18

I heard nothing back. I didn't notice spots. And so,

41:21

you know, I had my surgery. He

41:23

was very successful. No problems. couple

41:26

later, I'm at Microsoft, and I get

41:28

an email from him

41:30

pointing out

41:30

that I made a grammatical error. I

41:32

think it was really a Jive Jive

41:35

Jive, like, I used the

41:36

wrong one. And he's like, I make this mistake

41:39

all the time. He's like, tell me the etymology

41:41

of each one, and that's all

41:43

the emails said. No closing.

41:46

Like, I love your work or just like, no, full

41:48

stop. It was just explaining that I used the wrong

41:50

word and what different words meant, what I probably meant

41:54

to use. So I thought, well, he's probably gonna post a link to the site. So I was

41:56

very excited. So I'm, like, sitting on the analytics page, and I'm

41:58

sitting on Danny Fireball, seeing what he

41:59

will post. And I was

42:02

hoping for just a short link. Right? He has

42:04

all those short snippets. Instead, he

42:05

it's a full article and

42:07

he starts out saying, all my

42:09

readers should be reading this new site I've discovered.

42:11

I've discovered, of course, college

42:14

trajectory. It's the best new site I've

42:16

encountered in years. and they list, like,

42:18

three articles that I've discovered with

42:20

the help of its author. Right. He's

42:22

like, you said, this article this

42:24

article, it's like, five hundred words of

42:26

just the most glowing praise

42:28

imaginable. And then he gets to the

42:30

end. He's like, but for the first time, I

42:32

disagree with Thompson. And then he spends another

42:34

thousand words saying why I was wrong about something,

42:36

which was fine. I mean, I think he was wrong. I know it's

42:38

the start of a beautiful friendship. Do

42:40

you remember numerically

42:40

what happened to your traffic after

42:43

that? So the

42:43

thing I always was indexed on was

42:45

Twitter followers because that was a very

42:47

clear metric of people who had

42:50

affirmatively decided that they wanted to know

42:52

what I had to say. And I

42:54

don't think it's the case anymore, but for a long

42:56

time, my percentage of subscribers

42:58

actually followed was a fixed percentage

43:00

of my

43:02

Twitter followers. paid

43:02

subscribers were up fixed percentage. Like, people who subscribed

43:04

to the daily update? Yeah. Which meant

43:06

I

43:06

knew my limiting factor on subscribers was

43:08

awareness of who I was. So

43:11

I had five hundred Twitter followers when

43:13

he posted that. And within

43:15

twelve hours, I had fifty hundred

43:17

Twitter followers. And That sounds very small. I mean, I

43:19

have two hundred and thousand some followers. Now, tripling

43:22

out hour over hour is a great rate to

43:24

compound that.

43:26

That's right. And also, it was a lot of people that

43:28

were also bloggers or writers

43:30

or influential. There was

43:33

two step changes, instructors growth. That

43:35

was really the first one for sure. The next day, I get reached out by

43:37

the

43:37

head of strategy at Microsoft or a week later. He's

43:39

like, hey, can I we have a meeting? I'm like, gosh, shit.

43:41

I'm in trouble. he

43:43

gets summoned to the principal's office. At least it's not the head of PR.

43:46

That would have been way worse. So

43:48

he ended up

43:48

being with him. He wanted to hire me. He's like, well,

43:50

I'll he'll bump you up to level sixty five.

43:53

you know, I kinda wanna look at This is Kurt Delbeni. Who was the

43:55

head of the strategy at the time? No. His name

43:57

is Charlie Songhurst. Oh, yeah. So

44:00

and I kinda

44:00

sipped about it. I knew he was probably leaving soon.

44:02

He believing shortly after he's like, no. Go live in Taiwan. Just fly back once

44:04

a month. It'll be fine. But fortunately,

44:06

I turned him down. But All

44:09

this is a circuitous way to say, I did feel I needed to

44:12

leave Microsoft. Like, this thing was taking it off.

44:14

It wasn't sustainable. Number one, I

44:16

quit right

44:18

about Microsoft. and it was stuff that people at the highest levels cared It

44:20

wasn't, like, writing about the finer

44:22

details of VPNs or something

44:25

along those lines. And so I'm looking for a job and up

44:27

in automatic, and that's where I met Matt. So you weren't

44:30

looking for a job in your, like, heart

44:32

of hearts. Were you hoping that

44:34

you could someday not have a job? Without

44:36

question, no. She definitely was my plan. You

44:38

just felt like you couldn't do it yet. Yeah. I

44:40

mean,

44:40

I had a family. Like, you know, I had business school

44:42

debt. I needed to have a job that paid the bills. I wanted

44:44

to find a job that would let me

44:45

continue to do this. So,

44:48

automatic

44:49

worked out it actually

44:51

worked out even better because I was, like, hired

44:53

as, like, a growth engineer or whatever, which

44:55

I didn't really know anything about. But

44:58

then the team I was

45:00

on shortly after I was there to building, like, a new back

45:02

end of WordPress. And so

45:04

there was nothing for me to do. We didn't have a

45:06

product out But

45:08

fortunately, there was a little bit of pushback internally because

45:10

I was becoming this very visible blogger. It's like,

45:12

what the hell like, this guy's working for us? I thought

45:14

we're just to have because back then,

45:16

Automatic was one of the few distributed companies who live in

45:18

where he wanted to. So I as soon as I got the job, we

45:20

moved back to Taiwan, and you

45:22

weren't supposed to have a second job for

45:24

sort of obvious reasons. And I think Matt did

45:26

run some interference for me where

45:28

he's like, no. Don't worry. He's good. And the

45:30

one thing I did do

45:32

for automatic like is, I went

45:34

through a lot of the company what they were doing, and

45:36

I wrote this big strategy document

45:38

about where they're at, what they should do. It

45:40

had some impact, I think, on where they ended

45:42

up going. you guys should buy Tumbler? Yeah. That was at the time when they were it

45:44

had been a very small company. And at

45:46

around that time, they decided to raise a lot of money

45:48

and grow into being sort of a much

45:50

bigger one. again, I don't know how

45:52

much impact I had. Matt says I had a big

45:54

impact. He may be being generous. I don't know.

45:56

But I I kinda actually end up working mainly

45:58

directly with Matt. And he mostly

46:00

left me alone, and then he would have a

46:02

question or whatever, and then I would think about it and write

46:04

something up and come back, well, nominally being the

46:06

growth engineer for this team that did not have a product

46:08

in the market. So I owe automatic a lot, but it was also very

46:10

stressful. I felt really guilty. I'd say I'm

46:12

like, I'm really devoting all my

46:14

energy and time to this trajectory and I'm

46:16

getting fade.

46:18

by automatic. Just that was internally very stressful to me.

46:20

And, you know, that wasn't the idea, like,

46:23

I mean, I sound cliche, but I, you know,

46:25

braze in a Midwest blue collar

46:28

tone. Like, I'm getting paid far more than I've ever made any time my life

46:30

and I don't feel like I'm devoting

46:32

all my time and energy to this company that

46:34

was very internally stressing.

46:36

And so

46:37

though I

46:38

got this job to be like a consultant for this company

46:40

that wanted to expand Asia Pacific. And

46:43

I'm like, well, I can do this consulting

46:45

job, and then I can

46:48

make sure that you're gonna pay things. I couldn't do that once that automatic again. You couldn't

46:50

have a separate pay job while being there. And

46:52

so you left automatic to go do this

46:55

sort of potential consulting thing. Well, no. First,

46:57

I left automatic because I'm like, I

46:59

need to build this subscription

47:01

bit and this new

47:03

website. consulting job. So I left automatic. I'm

47:05

working on building this. What happened was that

47:08

construction shop fell through it. It just didn't

47:10

materialize. Oh,

47:12

no way. you burned the boat and then there was no

47:14

car. So I watched the Checkatrade and

47:16

the idea was you would log in, you get this much

47:18

fuller experience.

47:20

and I watched it. And number one, I had something wrong with

47:22

security certificate. So the first twenty four hours no

47:24

one can make a purchase. And so

47:27

I'm like up thirty

47:28

six hours straight. I barely slept for the week before because I'm, like, finalizing

47:30

the site. I stupidly had, like, reached

47:33

out to, like, Cara Swisher at Rico,

47:35

and so she had prescheduled post that

47:37

was gonna downsize going paid. And so I got this stupid artificial

47:39

deadline that made zero difference other than

47:41

stroking my ego. And

47:43

so it was awful.

47:44

It was a horrible experience. But the worst

47:46

thing was

47:46

that the product sucked. It was super

47:49

confusing. I didn't achieve my

47:51

goal of having a good experience for nonpaying

47:53

customers that was ideally lure them in. And for

47:55

paying customers, it didn't work well. It was

47:57

very janky, and it sucked. It was

47:59

really,

47:59

really bad. So over

48:01

the weekend, I'm just miserable. And I know

48:03

I

48:03

screwed up and I burned my bridges and all this

48:06

sort of thing. And I realized

48:07

that, look, I messed up. the

48:10

business model's right. The product's wrong.

48:12

So over the weekend, I tore the whole thing

48:14

out. I went back to the

48:16

old website. and I told the people that subscribed, I'm like,

48:18

look, I appreciate you subscribing. The

48:20

formats all wrong. What I'm going to

48:22

do is

48:24

for your subscription, I'm just gonna email you. I'll

48:26

email you once a day with the extra

48:28

stuff that I promised you. And

48:31

so I felt completely and utterly ass backwards

48:33

in the email. I thought it would all be

48:35

on the website. I've been thinking this whole time. I'm like, we

48:37

have not talked about email once. Yeah. And

48:39

by mentality is always the chef's website first and

48:42

foremost, but it's like, look, I'll deliver you this extra

48:44

stuff via email. And it will also be on the

48:46

website, on the sidebar, and you'll it'll be

48:48

archived there. but you're gonna get an email. And it worked out

48:50

in the long

48:50

run. In the short run though, I had

48:52

a one day

48:53

goal for new subscribers well,

48:55

I guess a two day goal because the site wasn't operable for the first

48:58

day. I had a one

48:59

day goal, a one week goal, and

49:01

a one month goal. and I

49:03

failed to reach all of them and failed pretty significantly, honestly, to reach

49:05

all of them. And so I'm there. I've

49:07

given up this six figure job

49:09

living in

49:11

Taiwan, business school debt

49:13

and an idea that I thought could work but did

49:15

not seem to be working very well.

49:17

And it was very,

49:19

very stressful. I mean, I stopped paying all my credit cards because

49:22

especially back then Taiwan was very cash centric, so I

49:24

needed to preserve cash.

49:26

I was, you know, not sleeping. I also

49:28

watched a podcast at the time, which was

49:30

exponent with James Allworth. So I am

49:32

writing, as I mentioned

49:34

before, seven times a week, plus doing a

49:36

podcast. I'm doing all the editing for the podcast,

49:38

all the all this sort of

49:40

stuff. And I thought I'm gonna have to, like, go teach

49:42

English again to, like, pay the bills at the same

49:44

time. And then I

49:44

think, like, the first month when

49:46

I tore all that out, I screwed up the subscription, so I double charged the whole

49:48

bunch of people, set up process all these refunds,

49:51

all those customer support. And it

49:53

was

49:53

pretty tough. I watched it

49:56

in April. This is April

49:58

twenty fourteen, fifteen. Twenty

50:00

fourteen. So next year, it'll be

50:01

ten years directory, but nine years of

50:04

it being my job. So fast

50:06

forward to the summer. We're back in the

50:08

states. My wife and I had planned a

50:10

long standing trip. We're gonna go

50:12

to Paris. and we the kids with my parents. You fast forward there a little bit, but you

50:14

must have some thoughts in those intervening months where you're

50:16

like, well, shoot, I'm just gonna have to give up on all

50:18

this. Right? Yeah. But, like, there was certainly a

50:20

prime factor.

50:22

I couldn't bail on it. Like, I mean, no one thought I would succeed. I had lots of

50:24

people reach out, be like, hey, bad, I love you,

50:26

but subscriptions are not a thing on the

50:28

internet. It's not

50:30

gonna work. and a lot of people

50:32

intact, especially VCs, which is weird because they always know exactly

50:34

what's right. No. They're a very conventional wisdom

50:37

driven, I think, So

50:40

I can still picture it. I was sitting at the kitchen table

50:42

at my parents house in Wisconsin

50:44

and you looked

50:45

at the numbers and

50:46

numbers and subscribers

50:48

were

50:48

more than April, June was more

50:50

than May, and July was on pace to be more than June,

50:52

and we're still talking like a couple hundred,

50:55

not very many. oh, and I'd also have, like, multiple levels. So some

50:57

of everybody bought, like, a three and hour level where I was supposed to, like,

50:59

chat with them and have subscriber calls and all this

51:02

sort of stuff. Yeah. Everybody starts that way

51:04

and then quickly gets rid of

51:06

it. And I'm also trying to do, like, sponsored

51:08

posts, really just an overwhelming amount of

51:10

stuff. But I looked at those numbers, I'm

51:12

like, I think it's going

51:14

to work. And so

51:16

I paid off all the credit cards that had been

51:18

running out for the last few months. My wife's like, should

51:20

we cancel the trip? Like, no. We're not canceling this trip.

51:22

you know, she was very mad at me. She was like, you threw away this six figure job. And so

51:24

I didn't wanna tell her all poorly things were going.

51:26

You didn't give her access to the

51:30

analytics. No. Of course not. Like, no. We're not cats ago. Triptics are going great.

51:32

But so we flew to Paris, ran the credit cards

51:34

all back up again, of course. And

51:36

in Paris, I remember I

51:39

would wake up every morning at four:zero a.

51:41

m. sit in the bathroom and write a daily update.

51:43

And then my wife would wake up and we would sort

51:45

of go for the day. and that ended

51:47

up being truth. It just sort of kept increasing. I mentioned there was two big step

51:49

changes, the Gruber one being the first one.

51:52

In November,

51:55

I actually ended up reaching a thousand, which is my

51:57

one year goal. So I hit my one year

51:59

goal

51:59

much

51:59

earlier than I expected, one year, a hundred dollars a

52:02

year, a hundred thousand dollar run rate. thing about exponential

52:04

growth. You missed the early goals, but you nailed

52:06

the later ones. Yeah. I don't think exponential

52:08

growth really applies to my business, but maybe more

52:10

so at the beginning. There's more of an exponential curve.

52:13

And the problem with a word-of-mouth business and

52:15

that special growth is people run out of

52:17

people to talk to, and so that's the limiting

52:19

factor. Right? It's only the new

52:21

subscribers give you the exponential. Right. There's a little bit

52:23

of exponential with every new subscribers. They will tell

52:26

new people, but networks

52:28

get exhausted. And so it's more than linear, but it's if

52:30

you zoom out, it's really linear is the way this

52:32

sort of growth works. But so what happened was

52:36

in November,

52:37

november I

52:38

put a little post out. First, I simplify my model, so no more of

52:40

this three hundred level cheap level, one

52:42

price and one product. That's all

52:46

you're getting. And then number two, I'm like, hey, I got a lot of subscribers, business

52:48

model works. You know, this is definitely gonna

52:50

be my job sort of

52:52

going forward. And

52:53

in the next twenty four hours, you got two

52:55

hundred fifty new subscribers. By far, the

52:57

biggest step change in my subscriber growth.

52:59

Did all the VCs email you again and

53:01

say, Ben, you're a genius. Will you please

53:03

come talk to our portfolio companies? I was right about

53:05

my metric of people visiting the home page and

53:07

days I didn't subscribe. What

53:10

I was wrong about is that the vast majority of people thought I

53:12

would fail and go out of business. They didn't wanna lose

53:14

their money. And so

53:17

they didn't subscribe. But once it was clear, I would

53:19

be an ongoing entity that, like, oh,

53:22

okay. I guess, my money will be safe,

53:24

and so I will

53:26

now subscribe. I was

53:28

right about the market.

53:28

I just I didn't understand that psychological

53:30

aspect. One of the things I think

53:32

is great for sort of the I went back to

53:34

the subject, make it easy to pay.

53:36

I think the real great thing for SubStack and SubStack writers today,

53:38

it's not that it's easy to pay,

53:40

but people aren't scared to give their

53:42

money to some random writer out there and

53:45

they previously and now they're not. And I think

53:48

that's really great. It's something I'm very proud of.

53:50

Wait. So what was it about years where they

53:52

suddenly became

53:54

not afraid? because I had a thousand subscribers. I was making a hundred thousand dollars a year. It was

53:56

that they thought that before they knew that

53:58

you were secure, that you might just

54:00

stop writing, and then they would have paid you, and then they

54:02

would get nothing

54:04

for it. right. I think that that was really the case. And so

54:06

then since then, you've never had a growth

54:08

explosion like that since that twenty five percent

54:10

growth in

54:12

one day. but it's been sort of slow and steady since

54:14

that point. That accidental

54:16

email hack, how do you think about it?

54:18

Now you say you still think

54:20

about Stuttgart, primarily as a website. But how do you think about email now?

54:22

Like, obviously, it's a big part of what

54:24

you do? Yeah. Well, it

54:26

is, but It's

54:28

not. I mean, I think if you see the stuff that I've

54:30

done, for example,

54:32

now you can consume the

54:33

daily update via

54:36

a podcast. or my articles via

54:38

podcast. I think that's actually very

54:40

much in line with my

54:42

vision and view of trajectory,

54:44

which is This is a publication that I write, and I will make it

54:46

as easy for you to consume in the way you

54:48

wanna consume as possible.

54:50

And back in twenty fourteen, that meant

54:54

sending emails. And certainly, there's all the advantage of emails that

54:56

everyone's talked about. It's a fee that everyone checks

54:58

daily. You don't need permission to get

55:00

into there. There's

55:02

no algorithm. you know, it's funny

55:04

because I think once that came

55:06

along, it became overwhelming and people started

55:08

setting up rules to send all

55:09

their emails to a folder, which they never

55:11

checked. your packets are the same problem, a self

55:13

imposed algorithm, which is where podcast is

55:15

great. It's the same idea. It's a feed

55:17

that people check that, I

55:20

mean, it works through polling, but to people, it

55:22

feels like push. And that's certainly

55:23

a great thing from an independent

55:25

publisher perspective. And I think in line

55:27

with my vision. I mean, one of

55:29

my criticisms of Substack was I think they were too

55:31

email centric to start. Again, I think the web

55:34

experience is important. It's super important

55:36

for growth. because that's where people find out about stuff is often via social

55:38

media and sharing links.

55:40

And email is a tactic. It's not

55:42

a strategy. And

55:44

at the end of the day, the strategy is about

55:46

differentiation. It's about consistency.

55:48

And I want

55:49

it to be

55:50

easy to use and fit in your life

55:53

and email was a way to do that. Again,

55:54

sort of backed into now podcast and

55:57

way to do that. You can

55:58

get structured articles on all the SMS, which gives

56:00

you a link and you can read on the website

56:02

obviously have always had RSS. And I just wanna make it as easy for you

56:04

to access the content that you're paying for as

56:06

possible because that sort of makes

56:09

old and going. you know, you

56:12

about this model is

56:14

number one from a writer perspective. All

56:16

I really need to worry about is

56:20

keeping

56:20

my subscribers happy. And so, like, you know, should this

56:22

be

56:22

a free article? Should it be paid? Well, you know

56:24

what? If it should have been free, but it made

56:27

it paid, That's fine. subscribers feel like they got a great article that they paid

56:29

for and they feel good about that. And that

56:31

recurring revenue is really really powerful.

56:34

And then also, that's my

56:36

marketing channel. them telling other people about that this is good and you should sort

56:38

of check it out. And one of the things we do with

56:40

Passport is a big wave

56:42

of stuff spreads is people

56:44

forwarding emails. and Passport is

56:46

the technology infrastructure you've built

56:48

to enable. Other people

56:50

to build stratigraphy like experiences if they're

56:52

whitelisted by you, how does that work? No.

56:54

It's just my stuff for now. I mean, obviously, we would love to make it broadly available, but

56:56

it's not all finished yet and there's

56:59

customer support issues and things that

57:01

would entail that. But something

57:03

that I would like to do. But one of the things

57:05

we did with that is I winked to myself a

57:07

lot, which people make fun of and deserve really

57:09

so because it's kind of a a writing joke between me

57:11

and my readers. But a way

57:13

I think about trajectory is it's a live thing. It's an ongoing

57:16

sort of journal of my

57:18

attempt to understand the world, to

57:20

understand technology. And

57:22

sometimes I was right about something, and I was always fun to

57:24

point back and say, I was right. Sometimes I was wrong. And

57:26

it's like, why was that wrong? What mistakes that

57:30

I make? sometimes there's a trend and it's like, well, this happened back then and

57:32

this happened here. And then, again, I think

57:34

about it as being sort of a live thing and so

57:36

waking back to myself is a way to

57:38

do that. it's also a

57:40

great way to trigger that

57:42

second article sensation where you read an

57:44

article and then there's a link right there and you go

57:46

read another article, well, that was also really good and

57:48

then there's YZ. So one of the things that I wanna do with Passport was how

57:50

can I really leverage email forwarding to

57:52

accomplish this, especially when I'm looking to

57:56

paint articles? So, like, one of

57:58

the things we do there is every link to myself

58:00

in a

58:02

trajectory

58:02

email is

58:03

tokenized, and that token goes one link deep.

58:06

So even if the emails forwarded to you,

58:08

you can go read old stuff. So you get

58:10

that second article sensation, if you're in that second

58:12

article when you click another link, now you're gonna paywall.

58:14

And then you're gonna realize, oh, I have to pay to get

58:16

this. But there's

58:17

all these little bits

58:20

pieces that

58:20

the subscription model makes possible,

58:22

which is really leaning into just serving your customers,

58:24

trying to make it as good of an experience

58:28

for them as it can be. And the other really important

58:30

about subscriptions is there is

58:32

always debates about, oh, people are just right for

58:34

clicks and blah

58:36

blah blah. And then the publishers or the editors that come

58:38

back say, no. We don't even show our

58:40

writers their quick numbers. Like, they don't know. All all

58:42

we want them to do is

58:44

write content. And I think that's

58:46

so foolish because everyone wants feedback. They want

58:48

affirmation. They wanna know, did I do

58:51

a good job? And if you don't even get access to your quick

58:53

numbers, where do you go? You to Twitter. Like, what are people saying about

58:55

me? Right? You will find a way to figure out

58:57

if you've resonated

59:00

or not. Right? And and who's on Twitter? The

59:02

biggest loud mails. Right? I'm one of the things I

59:04

I word on Twitter about Twitter

59:06

very early

59:08

on was I would be very engaged on Twitter.

59:10

I'd be responding to people. And it's only that occurred to me. I'm responding to the same ten

59:12

people or thirty people or whatever it is.

59:14

Right? So true. Yeah. you're

59:17

engaging with point two percent of your

59:19

audience. Right. And so that's a fixed

59:22

number. And meanwhile,

59:22

I have a feedback mechanism which

59:24

is my subscriber number which is going up, which

59:26

means I know

59:27

there's a huge number of people

59:29

that like and appreciate and are sharing.

59:31

And it's all dark matter. I don't know who they are. I don't

59:33

know where they are, but they like

59:36

what I'm doing. and I need

59:38

to anchor on that. Not worry about

59:40

what the Wild House of Twitter are saying. And so

59:42

subscriptions give this

59:44

feedback mechanism as feedback mechanism for people that will never email you, that will

59:46

never contact you, but they will pull out their credit

59:48

card and they'll give you money. And

59:50

I think that's

59:52

so valuable and so

59:54

positive from an incentive structure. Now there's

59:56

a downside where subscriptions

59:58

are niche. Right? And I do

1:00:00

think you tend up. People will

1:00:02

if they dislike you, they could stop paying. And there a worry and a

1:00:04

challenge that you're not like tendering to your audience

1:00:07

or whatever it might be. I

1:00:09

think I'm kind of lucky because I was so

1:00:12

early, because I was the only person in the

1:00:14

space doing this sort

1:00:16

of stuff. I got

1:00:17

to a large enough audience size where I could not care.

1:00:19

And if someone wants to cancel

1:00:20

the description, I don't care. In fact, if someone

1:00:23

comes back and if they are

1:00:26

just over the top rude or disrespectful or insinuating things

1:00:28

about me, I will not just cancel their subscription. I

1:00:30

will refund them their entire purchase and say,

1:00:32

please just never come isn't

1:00:34

the nice thing about a approachable price point. You're actually, your dollars

1:00:37

are insignificant to me because my number

1:00:39

of subscribers is so much

1:00:42

larger it's very different than, like, if Apple decides to stop advertising on Twitter, it's

1:00:44

like, oh, crap. 0000 I'm so sorry. I'm

1:00:46

so sorry to come back. Yep. That's exactly

1:00:49

right. And again, would I be able to

1:00:51

do that when I had a very small number of subscribers? No. But I mean, it was easier

1:00:53

back then because, I

1:00:54

mean, I started in twenty

1:00:56

thirteen and the

1:00:59

entire opinion of the tech press and Wall Street is that Apple was doomed because, of

1:01:01

course, we'll grab the windows mac blah blah blah. So

1:01:03

I had the lowest hanging fruit in the

1:01:05

world to sort of thick.

1:01:07

Right? It'd be like, no, I don't think Apple's do them, to be

1:01:10

honest. You know, and that's why I wrote that white paint

1:01:12

Christian was wrong because all the disruption people were

1:01:14

like, yo, apples for

1:01:16

sure screwed. unless they go down market. I'm like, no. I don't think they need to go down

1:01:18

market. And so that was great

1:01:20

because if Dalko is writing anything

1:01:22

that controversial, And

1:01:24

so I didn't even run into any issues where people would

1:01:26

try to hold over me. And by the

1:01:29

time I got into issues where

1:01:31

that mattered, I would large enough

1:01:33

that it didn't matter. I was fortunate in that regard.

1:01:35

For our second sponsor of

1:01:36

this episode and all of

1:01:39

season eleven, thank you for

1:01:42

a great season. We have one of our very favorite

1:01:44

longtime members of the acquired

1:01:47

family, pilot dot com. dot com

1:01:49

pilot sets

1:01:49

up and operates the entire

1:01:52

financial stack for startups and growing

1:01:54

companies. That means your finance,

1:01:56

your accounting,

1:01:58

your tax, even higher level, CFO like services, like investor

1:01:59

reporting, all of which,

1:02:02

as we've talked about, all season, you

1:02:04

would either

1:02:06

be hiring a big four, not a big five accounting firm

1:02:08

to do for you or building out your own finance

1:02:10

team or doing it yourself

1:02:13

as a founder. none of which are

1:02:15

good decisions or good leverage on your time and resources as

1:02:17

a startup. Pilot is a much

1:02:20

better decision they take literally all

1:02:22

the headache

1:02:24

of finance and accounting off of your plate as a founder

1:02:26

and a startup team, and they provide

1:02:28

you with their own team of experts

1:02:31

actual financial accounting experts, and

1:02:34

technology to set

1:02:34

up your financial infrastructure and run it

1:02:37

right. Now we've talked about this a lot on

1:02:39

this show, but it really is worth talking

1:02:41

about this defining characteristic of pilot. They integrate with the APIs

1:02:43

of all the modern start

1:02:45

upgrade platforms like

1:02:48

Stripe and Brex Gusto, Shopify Square, etcetera. But

1:02:50

most importantly, the next five

1:02:52

that come after that, they know

1:02:54

how

1:02:55

to make that work seamlessly

1:02:57

with your company's books so you can always use the best tools

1:02:59

available to you and trust that

1:03:01

your accounting bookkeeping

1:03:04

provider will have the ability to keep

1:03:06

up. Stripe itself is an investor in the company alongside

1:03:08

Sequoia Index and Bezos Expeditions.

1:03:13

There are no other accounting firms in the

1:03:15

world that can say that. So if

1:03:17

you are still using QuickBooks on your own

1:03:19

as a founder or paying

1:03:22

someone to Integrate

1:03:22

a bunch of stuff on your behalf or paying an old school accounting firm,

1:03:24

head on over to pilot dot com

1:03:26

slash acquired, make your life easier,

1:03:30

Thanks

1:03:30

to the pilot co founders, Waseem, Jessica, and Jeff,

1:03:33

for providing this awesome twenty percent

1:03:35

discount for the first six

1:03:37

months of service. if you go

1:03:39

to pilot dot com slash acquired. Thanks,

1:03:41

pilot. Thank you, pilot. Can you

1:03:42

share, like, what does the shape of the

1:03:45

curve look like in terms of

1:03:47

if you graph it on the x axis is time

1:03:50

and on the y axis is number of

1:03:52

subscribers from the start up

1:03:54

Stryker today. We talked about going

1:03:56

up to a thousand and then step

1:03:58

Even if it's like relatively linear,

1:03:59

has it sort of tapered off over

1:04:02

time? Like, are

1:04:04

you saturating the

1:04:06

world of tech people

1:04:08

who care about business strategy?

1:04:10

Yeah. It's interesting

1:04:10

because there's been different periods where it actually

1:04:12

I thought it was started taper and that actually accelerated.

1:04:15

And this is probably twenty eighteen, twenty nineteen around there. Over the

1:04:17

last couple of years, it has tapered off.

1:04:19

It's not quite what

1:04:22

it was. which is fine in terms of the growth. It's tapered

1:04:24

off. I paid subscription revenue. If it stays

1:04:26

flat, you're in great shape. Yeah. Well, and

1:04:28

then also I

1:04:30

raise prices a couple years ago, which

1:04:32

is the only time I've raised prices. And I still kind of mildly regret it. It's funny because

1:04:34

everyone's like always your prices too low,

1:04:36

you should raise prices. that's

1:04:40

definitely the absolute easiest way to increase

1:04:42

revenue. I

1:04:42

think the easiest thing for

1:04:45

me to do would be to just keep doing

1:04:47

what I'm doing and just raise the price

1:04:49

a dollar a year every year. And for sure, my revenue

1:04:51

increase would very much

1:04:53

outweigh

1:04:53

my churn. I honestly,

1:04:55

the biggest change that happened when I did raise prices

1:04:58

was it didn't affect growth at all,

1:05:00

except that I had a lot more people switched to annual

1:05:02

subscriptions because I, like, preannounce is, like, hey, if you wanna

1:05:04

get a year at the old price, which is great because I

1:05:06

want people and I know subscriptions as we sort of

1:05:08

discussed at the beginning. So I

1:05:09

could do that. I think

1:05:11

my view on it

1:05:13

has always been I think on the Internet in

1:05:15

general, the markets are much larger than people think. I thought it was much larger than all the folks

1:05:17

that are critical of my model thought, and it's been larger

1:05:20

than I

1:05:22

thought. all along. Right? I thought it would take five years to build or to watch as my business.

1:05:24

It took a year. And I would

1:05:26

rather explore the edges of that

1:05:28

market how big it is as

1:05:30

opposed to sort of maximizing my revenue too soon. And so

1:05:32

that's sort of number

1:05:33

one. Number two is

1:05:35

I do wanna have an impact. I

1:05:37

do want people to read

1:05:40

by deaf admission, the larger your subscriber base, the

1:05:42

more your sort of marginal customer

1:05:44

is not aware of you, is not immersed in the

1:05:46

space. Their willingness to pay is going to

1:05:48

be lower. And so when

1:05:50

you start raising prices, you're gonna hit a

1:05:52

wall very fast, I think, as far as subscriber growth,

1:05:54

sort of by definition. That's sort of

1:05:55

number two. the sort

1:05:57

of shift over the last

1:05:59

couple years has been, well,

1:06:01

is this it? I've reached my natural base or whatever

1:06:03

it might be, which is again, massively

1:06:06

larger than I ever expected. I just

1:06:08

wanted to pay the bills. Yeah.

1:06:10

Like tens of thousands of people

1:06:12

that pay you to read

1:06:14

your work and millions of people that, I'm sure,

1:06:16

come to your website and read the free product. Like,

1:06:18

there is a real market

1:06:20

for this. definitely push back on the

1:06:22

millions. I think it's interesting

1:06:24

because I do think this is an area

1:06:26

where I do feel I got there in time. I think the

1:06:28

ability to spread on social

1:06:30

media on Twitter has really diminished. You know, Twitter famously really started

1:06:32

devaluing tweets with links

1:06:34

a few years ago. which

1:06:37

I think has made the product much worse. I mean, that's how we end up

1:06:39

with all these threads because those spread

1:06:42

more. threads. Oh my god. Yeah.

1:06:44

Which all should be blog posts So I think that

1:06:46

has hurt the other thing that has hurt my

1:06:48

growth, frankly, is releases

1:06:50

off as a podcast. So

1:06:52

my subscribers love it. half

1:06:54

of my subscribers now listen instead of read, which is That's how I consume

1:06:57

every single post. Yeah. And then the

1:06:59

other good thing is people would churn

1:07:01

because emails would build up. and

1:07:03

they look at their inbox, they'd be like twenty

1:07:05

hundred emails, and

1:07:06

they're like, why am I paying

1:07:08

for this? Whereas an eight minute podcast

1:07:11

just feels I can knock this off real quick.

1:07:11

So it's been very good for

1:07:14

churn, but the problem is people don't

1:07:16

share podcasts.

1:07:18

Right? You listen to a podcast. You go to the next podcast. You do XYZ

1:07:20

Whereas if you're reading something, it's super easy

1:07:22

to tweet it or to forward the email. Click forward.

1:07:24

Yeah. Yeah. So I do think that

1:07:27

might be the biggest issue on why my growth slowed down, to be

1:07:29

honest, which is fine. It is what it is. And you're

1:07:32

obviously leaning more into podcasts. Right? I

1:07:34

did face a decision this year,

1:07:36

which is growth is somewhat

1:07:38

leveled off. Do I raise prices? And

1:07:40

just sort of be happy with the base that I

1:07:42

have? And I

1:07:42

figured it'd be

1:07:43

worth a shot to see if

1:07:45

I can restart growth. in this

1:07:47

case, by sort of working to increase and

1:07:50

broaden the value

1:07:51

of a secondary subscription and

1:07:53

not just my own

1:07:56

content. So watch Dithering with Groover. Obviously, he's now my podcast partner a

1:07:58

couple years ago. That was like an add on, so you

1:07:59

pay extra and you get dithering. And that

1:08:02

was really on the let me make more money

1:08:04

for my best subscribers. That's a way to raise prices

1:08:06

on my best subscribers without explicitly raising

1:08:08

prices. Right? Who's

1:08:10

lunching, dithering, business decision

1:08:12

or just a this is gonna be a fun thing with

1:08:14

a good friend or both? Oh, both. And then also I I

1:08:16

had this technology for pay podcast.

1:08:18

That was a way to do it. And so,

1:08:20

yeah, we watched it. It it's been successful. I mean, it

1:08:22

has you know, I think, like, from day one, we have, like, ten thousand subscribers.

1:08:26

And then it's sort of level test. It's it's kinda like where we stuck. We didn't churn at

1:08:29

all. But, like, how do you grow paid podcast? It's

1:08:31

we haven't done anything around free

1:08:34

episodes and marketing. We will but that was a de facto price raise of my

1:08:36

best customers. And when I wanted

1:08:38

to

1:08:38

sort of explore this space, it's

1:08:40

like, well, is my market as

1:08:42

big as it can be? And

1:08:45

Is there a way to sort of

1:08:47

go broader? I figured out the newsletter thing. Like, I think subscriptions make tons

1:08:50

of sense for podcasts.

1:08:52

because people get so attached to a podcast, they get so attached to

1:08:54

a particular host, and it becomes such a part of their routine to

1:08:58

a much greater extent than

1:09:00

reading, which is sort of more of an affirmative choice. I have

1:09:02

to go read this where it's like, oh, this is my podcast player. I guess I'll listen to this next. And so I think it's

1:09:05

a great product

1:09:08

for subscription. but it's

1:09:10

totally unclear how do you actually build a podcast, particularly a paid podcast. It's really hard

1:09:12

to get people to

1:09:14

start to listen to it.

1:09:17

And so in general, I think writers tend to

1:09:19

succeed with podcasts because writing is a good marketing medium. Again, it

1:09:21

spreads easily. You just pass

1:09:24

the URL people

1:09:26

become familiar, like, oh, yeah, I'll try your podcast because

1:09:28

I like you as a writer. But if you're just

1:09:30

a pure podcast, how do you sort of grow?

1:09:32

And so what

1:09:33

I've decided to do is gathering is no longer gonna be an add on. It's gonna

1:09:35

be a part of a stratospheric subscription. So now again, your

1:09:38

stratospheric is worth more.

1:09:41

you have this sort of extra piece and you got

1:09:43

it for quote unquote free. So you don't sell it separately at all. Well, it is available separately. Again, it's cold with John

1:09:45

and still don't know if your subscribers maybe don't like

1:09:47

me because they wanna Drive

1:09:51

they can. But it's no longer as an add on Shrekori. If

1:09:53

you are Shrek transcriber, you get dithering. It's

1:09:55

part of your subscription.

1:09:56

Watch the new

1:09:57

podcast called Shrek

1:09:59

Tech

1:09:59

that, again, there's

1:10:00

both free episodes and paid episodes. It's available to

1:10:02

all structure subscribers. So your

1:10:03

subscription is worth more. And so

1:10:05

people are

1:10:06

sort of opting in just to

1:10:08

make the point clear, because I've listened to every single

1:10:11

episode of Dithering, including the backhaul, like, before you launched. I'd started resale listening to Sharp Tech and,

1:10:13

of course, Sharp China, which you're

1:10:15

about to talk about. it seems

1:10:17

to me that Sharp Tech and Dithering is sort of like, well, I

1:10:19

get Ben and I get Ben's thoughts and I get a lot

1:10:21

of the same thoughts and I basically am

1:10:23

picking whether I like Andrew

1:10:26

or John Better, and I'm also picking

1:10:28

the format and duration of the

1:10:30

episode. Yeah. Right now, the

1:10:33

bundle is kind of a joke because it's

1:10:35

mostly just me. Right? And different flavors have been. I only have

1:10:37

so many opinions. I have a lot of opinions, but I only have

1:10:39

so many. So it's not in

1:10:43

its long term place now for sure. And it's

1:10:45

very tricky

1:10:46

because there is an extent

1:10:48

to your point about

1:10:50

if you release a bad episode of Acquired, you

1:10:52

know, do you worry about churn?

1:10:54

Am I diluting what trajectory is to

1:10:56

someone? It's no longer just an email. And

1:10:58

now I'm reintroducing the possibility that people feel overwhelmed with content. And then they also feel like, oh, Ben's repeating

1:11:02

himself

1:11:02

all the time.

1:11:05

I think there's a lot of underrated

1:11:07

risks in doing what I'm doing. But number one, I think WatchGuard China was

1:11:09

a good signal

1:11:12

to my audience of

1:11:14

what I do want to sort of accomplish

1:11:16

going forward. Well, that's a collaboration with Bill Bishop who writes Sinosysm

1:11:18

and it's the first introductory product that I'm not on. But

1:11:23

I think it's a important topic. Understanding China. I

1:11:25

think it's of a

1:11:27

similar tone and quality level

1:11:29

of what you should expect

1:11:32

from trajectory. Do I expect all strategic drivers

1:11:34

listed? No. Of course not. Some people like me specifically, and I'm not on there, so they're not gonna be interested. But

1:11:36

I think for

1:11:39

a lot of folks, it's like, well, I

1:11:41

keep hearing lots of news from China. Where do I go? I'm

1:11:43

already a secondary subscriber. There's this other product here.

1:11:46

And if they become a regular I've now decreased my

1:11:49

churn that much more for that sort of

1:11:51

person. And I think, again, a big part

1:11:53

of subscription is just churn management. It's

1:11:55

like, I wanna make sure

1:11:57

this is a one time subscriber and you get that recurring revenue over time.

1:11:59

As you might have imagined, there are plans for other podcasts

1:12:01

sort of be added in

1:12:03

the long run. And

1:12:06

we'll see what happens. I mean, growth has, I think,

1:12:08

picked up over the last couple of

1:12:10

months, so early indicators are that

1:12:13

it's working. where I'm increasing the value and will make

1:12:15

up for the cost. Would I make as much if I just raise the

1:12:17

prices and didn't bring on the additional

1:12:19

cost of paying for Andrew

1:12:23

and other broadcasters and he's on those lines? Probably not. Again, the

1:12:25

revenue maximizing thing for me would be

1:12:27

stayed with them before and just write

1:12:29

your check right now. And it's nice

1:12:31

and simple. Yeah. But number one,

1:12:33

I've always been worried about getting stale. I know I have critics I hear about on Twitter who think I already

1:12:35

am, but they're point two percent

1:12:39

of your audience. Well, who knows? They're very hard

1:12:41

on doing it. Right? Number two, one of the things I'm so proud about was Shookery. I always have most of them

1:12:43

known for Shookery, but I'm so proud of

1:12:46

the business model and that it exists.

1:12:48

And the

1:12:50

fact that sub stack is out there,

1:12:52

and there's hundreds or thousands of ordinary people making their living, doing this.

1:12:54

And I feel responsibility for that in a very positive way.

1:12:59

And I really wanna get this working

1:13:01

for podcasts. I think there's a

1:13:03

similar opportunity. And so helping

1:13:05

to help pioneer that is fun.

1:13:07

building software is fun even though it's cost me a lot

1:13:09

of money as you might have imagined. Producing

1:13:11

new podcasts is fun. Figure

1:13:14

out this bundle thing is fun. how do you cross link stuff? Like, you if

1:13:16

you listen to the Checkatrade episode because we

1:13:18

know who you are because it's a unique

1:13:20

feed to you, you

1:13:22

could just add another without having

1:13:24

to sign in or do anything,

1:13:26

like, really smoothing out this experience of cross promotion. It's

1:13:30

fun. And I think I'm fortunate enough that trajectory has

1:13:32

been successful enough, that I can make

1:13:34

choices that at least in the short

1:13:38

term are more optimal for figuring stuff

1:13:40

out and having fun even if

1:13:42

it's not revenue optimal. And obviously,

1:13:46

there's upside maybe it'll end up being a huge thing and and I'll

1:13:48

make much more money than I ever would have just

1:13:50

doing trajectory. But I do feel very fortunate that

1:13:53

I can make that choice in the short to medium

1:13:55

term. nice thing about having no outside shareholders. You're your own little Zuckerberg

1:13:57

over there ruling by Fiat on whatever

1:13:59

sounds most fun to you.

1:14:01

You're no activist shareholder. No.

1:14:04

For sure. I actually thought

1:14:06

about building a sub stack a few years before they watched, actually had a team together, and it ended up falling apart.

1:14:09

But my

1:14:12

big hesitation was always

1:14:14

I just wasn't sure if it would be venture scale. And from my perspective, if

1:14:19

you have the stamina capability to

1:14:22

produce regularly. Subscriptions are amazing ability to sort of bootstrap. And,

1:14:24

again, you're asking people to

1:14:26

pay for the regular pressure content.

1:14:29

It's actually a very straightforward transaction and can be

1:14:31

sort of very sustainable. How many of those are venture

1:14:34

scale businesses? I think

1:14:37

maybe not as many. And you're right. It comes with a bunch of

1:14:39

compromises. It comes with trade offs. You have to optimize in certain ways. And I think venture

1:14:41

is a phenomenal thing. I think

1:14:44

I'm not antiventure

1:14:47

at all, just anti venture for me first. I

1:14:49

don't think it would make much sense. I

1:14:51

like the lifestyle, so lifestyle business

1:14:53

for me. You were talking to

1:14:55

two venture capitalists, who have a business

1:14:57

which is structured the same as yours. So I love that we've had this part of the conversation because I was really

1:14:59

curious, I mean, selfishly, for

1:15:04

us, I'm curious your

1:15:06

thoughts on there are corporations that have large numbers of people that

1:15:08

are make

1:15:09

products that

1:15:12

are scalable. And then at

1:15:14

the opposite end of the spectrum, there's being talent. a solo business, but business is being other people's

1:15:20

productions. but the internet has enabled this

1:15:22

whole new class of stuff, like stratigraphy, like acquired, like not boring, like, what

1:15:24

have you? How big do you think this

1:15:26

third class of whatever it is we are

1:15:28

can be?

1:15:30

Is that part of what this experiment is? For sure.

1:15:33

Like, I'm not passionate about like

1:15:35

meta's business prospect. I definitely have

1:15:37

takes on it. I think that's the other

1:15:39

company I've mostly been pretty right about over

1:15:41

the years along with Microsoft or probably my two

1:15:43

long standing best calls. but I'm

1:15:45

not, like, waking up in the morning, killing myself, like, with their stock goes up or down, I

1:15:47

don't really care. You're not gonna go work it better.

1:15:50

I'm not gonna work it

1:15:52

better. I think that's a pretty safe

1:15:54

I mean, if that wants to buy me for a hundred million dollars, I guess, I'll earn out, but You'll rest Yeah. I

1:15:58

will rest

1:15:59

invest. Yes. I

1:16:01

mean, Mark, you're listening. But what does get me super excited

1:16:03

I am really passionate about is this completely

1:16:07

new arena of possibilities and I

1:16:09

think new jobs that are made possible by the Internet. And actually one of the reasons I actually

1:16:12

am in

1:16:16

general favorable towards meta is I think

1:16:18

they're an essential component in the broader ecosystem of niche businesses. Because

1:16:20

if the entire

1:16:23

world is your audience, how

1:16:25

does the world find out about you? I'm lucky because

1:16:27

I produce content that people want to talk about. And so they share it

1:16:30

for free on Twitter.

1:16:32

Right? if someone makes, like, a really cool

1:16:34

new piece of clothing or accessory, like, people aren't gonna talk about that on Twitter, like, you need a way

1:16:36

to advertise. And I think that's what Facebook

1:16:38

advertising has always been the best at.

1:16:42

and I think is really valuable and so

1:16:44

I am in general a big defender

1:16:46

of that because it actually is in

1:16:48

line with what I am personally very

1:16:50

passionate about which are the economic opportunities made possible

1:16:52

by the Internet. What the Internet does

1:16:55

do an industry after industry and

1:16:57

this applies to creative talent as

1:16:59

much as anything else, is number one,

1:17:01

there's always a barbell effect. You're either very large or very small. You're very large, you

1:17:03

get scale, you get aggregation effects, and

1:17:07

then you can make massive investments or acquisitions. No. You can immediately

1:17:09

feed that to hundreds of millions or billions

1:17:11

of people and

1:17:14

get a payoff. or you take advantage of the Internet and open

1:17:16

source software or wherever it might be

1:17:18

or different platforms and your cost structures are

1:17:20

basically zero and you only need a thousand

1:17:22

true fans like the thousand true fans was

1:17:25

one hundred percent true. That was by guiding vision and ended up

1:17:27

being the case. And so if you're stuck in the middle, which all the

1:17:29

old publications were stuck in

1:17:31

the middle, they weren't big

1:17:34

enough to get aggregation effects. Their cost structures were way too large to handle a fractured audience. They were all in

1:17:36

trouble and got a lot of traction about

1:17:38

saying they were doomed and then they were

1:17:40

doomed. Like

1:17:43

you're saying about, that's why they hate social media. But if you're on the low

1:17:45

end of the barbell, like, oh, it's like, you love social

1:17:47

media. No, that's right. It's an amazing asset.

1:17:49

So that's number one. The owner

1:17:51

has its effects. Number two, the Internet

1:17:54

has winner take all effects in specific markets. So it's

1:17:56

gonna

1:17:57

be hard for someone to

1:17:59

be a

1:17:59

generalist tech and media

1:18:02

analyst and do what

1:18:04

I do. It's possible. I mean,

1:18:06

there's people that are very good. but

1:18:08

just because I got there first. But

1:18:10

that doesn't mean there's

1:18:11

only one analyst role available.

1:18:13

There's a guy

1:18:15

Neil Seibert, I think. Well, it's like an research department in a bank. Yeah. You

1:18:17

can write about Apple. And he very much

1:18:20

mimics his business after me. He was

1:18:22

pretty early too, so he actually did a

1:18:24

lot stuff himself. He's done a really great

1:18:26

job. He's been an independent Apple analyst for eight years or something like that,

1:18:28

which is fine.

1:18:31

He read most Apple every single day.

1:18:33

Believe me, there are people that want to hear about

1:18:35

Apple every single day. And so that's an example where it

1:18:37

seems like we're doing

1:18:39

the same thing but we're in different

1:18:41

markets. This is what the internet makes possible. Is the key to success on

1:18:43

the internet is you wanna be

1:18:45

the biggest fish in the

1:18:48

pond, but The success

1:18:50

metric is not competing with other fish. It's finding your own pond. The opportunity is broad. It's not

1:18:55

deep. Like in each pond, there's probably

1:18:58

only be one or two fisces that survive. Right? But there's an infinite number of potential ponds.

1:19:00

You can define

1:19:03

your pond in very specific

1:19:06

parameters. I'm still surprised there is not someone that runs from Amazon every day. Like, it's a massive sprawling business. There's so

1:19:08

many things to write about. I

1:19:10

think you'd probably send you all Google

1:19:14

Casey Newton basically writes about social media every single day.

1:19:16

It's been Christmas for him over there because of

1:19:18

the Twitter stuff, but that's fine. I

1:19:21

feel guilty about Twitter too often. It's very

1:19:23

exhausting I cover lots of other stuff. There's other things to talk about. And so I'm writing

1:19:25

about it more than I want to, particularly yesterday.

1:19:27

I really didn't want

1:19:30

it on Twitter. Obviously, Twitter take on Apple is gonna be everyone's

1:19:32

been anticipating it. Right? It's the super

1:19:34

bowl of Ben Thompson fans. I kinda

1:19:37

have to write about it. Right? Right. But

1:19:39

Casey, like, that's the expectation is that he read about social

1:19:41

media. So he's read about Twitter every single day for,

1:19:43

like, a month, and that's exactly what people

1:19:45

want. And I'm glad he exists from

1:19:47

my perspective. Hey, if you want Twitter

1:19:49

coverage every single day, go re case of you. That's a great thing for my perspective. And I think that sort of

1:19:51

defines this market. And so,

1:19:54

number

1:19:55

one, I'm really

1:19:56

one i'm really proud

1:19:58

that this business model for newsletters exists. I think it should exist for podcasts.

1:19:59

And I think

1:20:02

part of that is

1:20:04

just figuring out the mechanics

1:20:06

of it. Like, how do you market? How do you grow stuff? I haven't done a good job marketing my paid podcast, I would say,

1:20:09

other than

1:20:12

leveraging Checkatrade. but that's the

1:20:14

number one we want to work on. Obviously, there needs to be should there be some video stuff, like, there should be, you what's

1:20:16

the ratio of free stuff to

1:20:18

clips, to snippets, things on those lines?

1:20:23

we're actually experimenting that more with Start China and Start Tech, where

1:20:25

even if you're on the free feed or you're getting

1:20:27

more clips and snippets. Also,

1:20:30

I think that the technological aspect is important. It's funny,

1:20:32

even free podcasts. It's like, oh, we're gonna have

1:20:34

a guest on. Go as to his podcast. Go

1:20:36

to your podcast player, search for

1:20:38

XYZ and it's like,

1:20:41

offloading this huge number of steps to the user, hoping they follow through and

1:20:43

do it, whereas we've built something where go

1:20:46

to your show notes, click

1:20:49

the link. Boom. It's your podcast player. Like, I

1:20:51

think that's something that's gonna be important to sort of, yo, the sharing stuff is really tricky

1:20:53

because people don't share podcasts

1:20:56

naturally. So I

1:20:58

wanna figure that stuff out. And it's gratifying.

1:21:01

Again, not just because it's fun and

1:21:03

new and different than my day

1:21:05

job, but also that is my passion.

1:21:07

My passion is these sort of businesses, the Internet not the

1:21:10

internet

1:21:11

just destroying

1:21:13

old business models, but making new ones possible, and not just the

1:21:15

big guys, but like for individuals as well. And so

1:21:19

at very fortunate that

1:21:20

I sort of get to

1:21:22

do both.

1:21:22

Yeah. I wanna switch

1:21:24

gears and ask

1:21:25

you about aggregation theory. There's

1:21:27

a multipronged quest in

1:21:30

here. So the business that you're running is far, far,

1:21:31

far superior to a thing that I'm sure you've been asked a

1:21:33

zillion times about why don't you

1:21:35

write a book? You

1:21:38

make a hundred and fifty dollars a year per subscription, at least

1:21:40

that's what I pay for the full bundle, I think.

1:21:42

No. You got a refund and a discount to a

1:21:44

hundred and twenty. Alright. Then I pay a hundred

1:21:46

and twenty dollars a year. Yeah. Dithering is now wrapped

1:21:48

into a trajectory subscription. So, yes, I should be clear for doing

1:21:50

listening. You got a credit on your subscription. we

1:21:54

did not issue refunds, but you did get a

1:21:56

credit. But that is to say, I have no idea

1:21:58

what I'm paying, and there's some segment of your

1:22:00

listeners that are so wildly price insensitive about

1:22:02

what you do that it doesn't So it's probably hard

1:22:04

to price discriminate on them. Yeah. No. It should look to me for pricing

1:22:06

strategies because I know it's not optimal. But anyway, my quick math was

1:22:08

if you did a hundred and fifty dollars a year and

1:22:11

I know it's a hundred and twenty and

1:22:13

you assume some five year lifetime on customers, and you compare that to like what you

1:22:15

would make selling somebody a book once, which is

1:22:18

what? Twenty dollars times

1:22:21

seven percent goes to the author. It's literally

1:22:23

five hundred times more revenue to you to do what you do versus writing

1:22:25

a book. And on

1:22:27

the other hand, there's something

1:22:29

that you've become known for in aggregation theory and some other topics around the edges

1:22:31

of it that sort of

1:22:34

deserve a canonical work It's

1:22:37

sort of the modern Porter's Five Forces.

1:22:39

It deserves a canonical than something that's been edited

1:22:42

and revised and attached and

1:22:46

rethought through. So have you thought about

1:22:49

what form canonical Ben

1:22:51

Thompson topics would

1:22:53

take? Yeah. Ariation theory is the obvious one.

1:22:55

I time have book be seventeen. mean, I was

1:22:58

writing about the ideas of

1:23:02

variation theory from the very beginning. It's

1:23:04

hard to imagine, but back in twenty

1:23:06

thirteen, again, like, back then, people thought

1:23:08

Apple was doomed. people thought the Internet

1:23:10

was inherently decentralizing. Oh, it was not long after the Facebook IPO, and it was a

1:23:12

disaster. Yeah. Facebook was dope. Well,

1:23:14

then Microsoft was the other thing.

1:23:18

I was able to come out of the gate with really four takes

1:23:20

that were probably, I totally forgot

1:23:22

that. But one, Apple's not doomed.

1:23:25

They're actually gonna be doing very, very well.

1:23:27

Number two, the Internet is centralizing. It's not decentralizing.

1:23:29

Everyone's understanding the dynamics are

1:23:31

completely wrong. Again, today,

1:23:33

everyone understands that, but

1:23:36

it was believe it or not very controversial a

1:23:38

decade ago. Number three,

1:23:38

this is what Microsoft should do. Like, there actually is a

1:23:39

clear path forward. They're

1:23:42

not doomed to your relevance.

1:23:44

And

1:23:44

then number four, Facebook is way more dominant and valuable than

1:23:47

anyone

1:23:47

thinks. And so that was a again, like I

1:23:49

said, lots of low hanging fruit

1:23:51

to sort of pick. it's

1:23:53

easy. You're being self depreciated here, obviously, but I think a big part of the reason this is behind Ben's

1:23:55

question to you of, you know, it

1:23:59

deserves kinocoric. The reason

1:24:01

these are accepted clues and realities now is in large part due to your

1:24:03

work. It is a bit of humbling to be a

1:24:05

writer because I think people would understand

1:24:07

all those things Had

1:24:10

I not written it? I think at best, they understand

1:24:13

that maybe a few months or at best

1:24:15

a year or two before

1:24:17

it becomes common knowledge. and that's just the reality of

1:24:19

the game. The Edge you can provide is usually

1:24:21

measured in sort of months or years or a

1:24:24

very low number of years. I

1:24:26

do think irrigation theory should be a book. It was probably again more pertinent at the height of all these sorts of Maybe it's

1:24:28

still pertinent

1:24:32

now, but Number

1:24:33

one, now there's just a logistical issue I write every day into your point and make way more

1:24:35

money every day than I would writing a

1:24:38

book. So that's number one.

1:24:41

Number two, there's a fear

1:24:43

factor, which is people think I'm very

1:24:43

productive, but I in

1:24:46

reality have

1:24:47

daily deadlines that sperm

1:24:50

that productivity. In the absence of those

1:24:52

daily deadlines would terrify it be in terms of

1:24:54

a book. And number three, there's a second fear

1:24:56

factor, which is a book is frozen in

1:24:58

time. And if I were to have written an aggregation theory book a couple years ago,

1:25:01

I probably would have centered on Netflix. And

1:25:03

that ended up being wrong. It was

1:25:05

wrong in

1:25:06

another way that I wrote about

1:25:08

where Content

1:25:08

is super important. That's how you

1:25:10

break away from aggregators having high diversion content. And I had the balance wrong

1:25:13

between Netflix's

1:25:16

aggregation, effects versus the power

1:25:18

of content. And so I'm very fortunate to write that book. Whereas now, I was still wrong,

1:25:20

but I have the medium and

1:25:22

ability to go back and say, well,

1:25:26

I was wrong. This is where I was wrong. What does this

1:25:28

mean for Discovery Time Warner? What does this mean for

1:25:30

Disney? What does this mean for the other platforms?

1:25:32

So that

1:25:33

is a fear factor. And

1:25:35

then number four, I

1:25:36

think there's an aspect, yeah, maybe there's

1:25:38

a treatment, but trajectory is very much of the Internet. I think a nature of

1:25:41

the Internet is it's

1:25:43

transient. It's not permanent. Again, another thing

1:25:45

people got wrong. I think actually one of the biggest mistakes Twitter made, and it's understandable no one

1:25:47

could have seen it at the time, but Twitter should

1:25:50

have had disappearing tweets from day one. It

1:25:52

should have always

1:25:54

been just in the moment sort of social network. I

1:25:56

think it would be a much better product. I don't

1:25:58

see that they should still do it now. People

1:26:01

experience it and think of it as in the moment

1:26:03

product and then are stuck with this

1:26:06

archive that induces fear,

1:26:08

induces

1:26:08

ruin,

1:26:10

and it

1:26:11

reduces the facade of what it's like to be on Twitter.

1:26:13

That's a big reason why Twitter's not what it used to be

1:26:15

because now people are scared. Well, to

1:26:17

the aggregation theory point, I think I've heard you make

1:26:19

this argument before, but articulating it the way you have

1:26:21

over the years and revising it on

1:26:24

stratigraphy is

1:26:26

actually a better product. than if you were to, like, have written a book five

1:26:28

years ago. Oh, I so disagree, David. It makes it

1:26:30

really difficult to explain what it is to people. I'm

1:26:32

like, okay. If I'm on the board of

1:26:34

a company and I'm trying to, like,

1:26:36

explain to them that they need to reframe their

1:26:38

thinking and think about aggregation theory. If someone's like, what's that? I'm like, I actually don't

1:26:41

know what to

1:26:44

send you. Like, read these things in this order to

1:26:46

watch this guy contradict himself and say when he got wrong and then sort of take away what you think

1:26:48

the modern interpretation is.

1:26:50

I think you're both right.

1:26:52

there should be set in stone trees. Honestly, there's just

1:26:54

a matter of priority. I mean, I think, again, it

1:26:57

would be good

1:27:00

to share and point you this thing and go read this. To

1:27:02

be clear, I'm in the middle of massive self franchised right now for explaining why this is the case. So take everything

1:27:06

I'm saying with a grain of salt. And the other thing is I'm just having more fun

1:27:08

and more interested in building software

1:27:11

and figuring out podcasts and I

1:27:15

would like to think, oh, a book is just really about

1:27:17

my ego and putting it out there. So I'm not

1:27:19

that sort of person. I

1:27:21

just wanna give back a creative community. That's why I said,

1:27:23

I'm definitely in rationalization mode. You're definitely

1:27:25

rationalizing. But, no, I should write

1:27:27

a book. I just haven't. I don't know

1:27:30

if I ever will. but I agree that I

1:27:32

should have, by now, written a book. But

1:27:34

a last one last quick question

1:27:37

on aggregation theory. Obviously, you were building up

1:27:39

towards it even as you said at the time, I think.

1:27:41

Was it one or two years you were doing stratigraphy before

1:27:44

you wrote the first post? this

1:27:46

is actually an example of the

1:27:48

power of branding. I wrote articles that were basically

1:27:50

allegation theory, well before I wrote allegation

1:27:51

theory. But giving

1:27:54

it a term and pointing it is what

1:27:57

made it stick. And actually, some of

1:27:58

those articles that I wrote

1:27:59

before, there's one I think it was

1:28:02

called economic power in the age of abundance.

1:28:04

doesn't have the same ring to it. I think it's

1:28:06

a better articulation of our aviation theory in many respects. I wrote it in twenty

1:28:11

fourteen, I think. good ring to it? Number two

1:28:13

is one of my least read articles up to that

1:28:15

date. Just no one got it

1:28:17

or understood what I

1:28:19

was talking about. And it's a weird thing as

1:28:21

a writer. Like, there's things that I'm thinking about now or that I know I will write

1:28:24

about, but it's not the right time.

1:28:26

And there's something you just learn over time

1:28:28

where you

1:28:30

can be too early as a writer too. This kinda

1:28:32

goes back to, like, I didn't know how to communicate.

1:28:34

Right? Like, I remember I was in there's

1:28:37

some meeting at Microsoft, and we walked out and

1:28:39

my manager's like, Ben, you're the only person in

1:28:41

the room that actually understood the issue and what

1:28:43

we should do. And absolutely

1:28:46

everyone, no one understands talking about and people are kind of annoying to you.

1:28:48

And he's like, the problem is we want to

1:28:50

get to h, but everyone in that room

1:28:52

is

1:28:52

on a. And you cannot

1:28:54

talk about h. You have to

1:28:57

talk about b and then assist

1:28:59

JRD. It is JR. Yes. And it's funny because that applies to

1:29:03

writing online too. Number one, sometimes

1:29:05

I'm wrong, so it's good to wait or to be sort of sure. But number two, there's

1:29:07

an aspect where there's just the right time in place

1:29:10

for things. There's always stuff I'm sort of