Dan Shipper & Nathan Baschez on Building Everything

Jacob: Let’s set the stage because a year ago, this whole concept of Everything wasn’t really a thing. Can you both take a minute and talk about each of your individual publications and then explain what Everything is, and how this idea came to you? Let’s start with you, Dan.

Dan: It started off with Superorganizers, which is a newsletter that I write, which is on productivity. Basically, I was just super fascinated about a year ago with all the productivity systems that I use, and other people use, and I was actually really interested in not starting a newsletter but starting a software company around it. That’s my background. I figured I could start with a newsletter because I really liked writing, and it felt like a good way to develop an audience and learn how to basically how to build a software product as I was writing the newsletter. I started it and people just loved, they love the newsletter. It just started taking off and I was, “Well, maybe I could just start newsletters.”

I got really psyched about the space, really psyched about paid newsletters, and really psyched about business newsletters in particular, because I was, “Well, I guess people are more likely to pay for business newsletters than for other types of newsletters, and that’s the area that Supeorganisers is in any way.” I started getting psyched about starting more business focus newsletters. That’s when I called Nathan.

Nathan: What Dan didn’t say is that he’s this incredible writer that’s been writing on the internet for a long time. The way that I first found out about Dan was on the internet on Hacker News, where his essays are on 2011, 2012-ish would frequently be their perch at the top waiting for me every time I arrived to Hacker News. I was aware of Dan’s work before we were friends, and then we became friends for a while, and we wanted to work together. When Dan called me, we had already been talking on the phone on a regular basis about Superorganizers in his newsletter.

It was never something that we would do together, it was just me rooting on my friend. Then, I was working at Substack previously, and I was doing this San Francisco co-founder dating scene thing and working on a bunch of different projects. It was a lot of fun, but I didn’t have the thing yet, and so when Dan called I was just “Oh, you’re interested in the paid newsletter business, or you’re interested in B2B topics? This is something I’m very interested in to and have some experience and so let’s do this.” We started working together basically around then, and that’s when I started Divinations.

Jacob: You guys, you both had your newsletters, but then when you both launched, or when Nathan, when you launched your newsletter had you and Dan already started talking about doing Everything as well?

Nathan: Oh, yes. We had a lot of ideas about what we wanted to do, but it was all pretty abstract. When we really started talking, we were like, “Okay, what’s the best first step? Do we go out and try and recruit other people, or build something?” It was just, obviously, the only thing to do for us at least, but we just have to see if we can do it ourselves, and see what that’s like. Because we have to learn what it takes to make these things successful in order to have really any credibility trying to attract other people to do it with us.

We put the bundles stuff or the larger– we’ll build a bunch of these newsletters or work with people or whatever, to the side. Really for several months, we were just focused on writing and building an audience and building up independent subscription businesses. I’m really glad that we took that approach, it was a lot more organic of an approach, and I think we learned a lot of stuff from that time. That was really critical that if we had just whatever, raise some money and hired some journalists or whatever, I think we would have been pretty clueless. Now we have slightly more of a clue than we would have if we taken that route.

Jacob: I want to understand a little bit more about how the various newsletters work within the Everything ecosystem. As far as I know, Dan, you own Superorganizers, and Nathan, you own Divinations, but then Everything is a bundle above that. Can you talk about what the structure is between your two newsletters, everything, and then the other newsletters that are in that bundle?

Dan: Maybe I can take a step back and describe what Everything is. Just generally, we’re building a bundle of business-focused newsletters. What we want to do overall is have a bunch of writers writing on different business-focused topics, but in one bundle, where readers can pay one price and get access to everything that we make. The differences between what we do and what other types of media companies might do is we want to focus specifically on analysis and commentary, and we want to write from the practitioners’ perspective. We want to write things that if you read it, it makes you better at your job, and with a really big focus on quality thinking and quality writing. In terms of who owns what, Superorganizers and Divinations, it’s part of a company, I guess the company owns it at this point.

Nathan: Yes, we incorporated, we signed on the IP to the company, so the company owns Superorganizers and Divinations.

Dan: Functionally, Nathan owns Divinations, and I own Superorganizers.

Nathan: Call me the general manager.

Dan: Then the idea is to have a bunch of other writers who write for the bundle that each own their own publication in the sense that they have editorial prerogatives to write about what they want and all that kind of stuff. Then in some cases, the company is going to own what they make, and then some cases, they’ll own it. I guess we’re figuring that out, but we’re all publishing under one banner, the Everything banner, and we all have this similar set of things that we want to do. Like we all want to write about business topics, we all want to focus on analysis and commentary, we want to write from practitioners’ perspective, but everyone’s in their own niche and gets to write in their niche under the banner.

Nathan: The owner– just to put a finer point on the circumstances around who owns what or whatever. We’ve done a deal with people who already have a newsletter, they already have it as an independent subscription business, and so we basically strike a licensing deal, we’re like, “Hey, we’ll include your content in our bundle, people could also buy it separately if they want, all the copyright, all the IP is yours, but we’re licensing it, and we’ve worked out, basically, a compensation agreement or whatever in exchange for licensing it.”

Then for other people, we’re creating new stuff from scratch, we’re hiring writers to support them, we’re doing a lot in-house that’s like more of a traditional media company thing, and so in that case, maybe the company owns the IP. Honestly, we’re very interested in figuring out a way to make it easier for people to, essentially, own more of the upside of their work and to have more of their own banner, but still balance that with getting a lot of the benefits in terms of distribution, and creation support, and financing, and all that kind of stuff, health care, or whatever. Whatever you need that we can do to help unlock talent to express what they want to make more fully.

Dan: To add on to that, we’re still honestly figuring out the specifics of the actual IP, who really owns what. For example, Nathan works on a newsletter and a talk show with Legion, who’s a really talented investor and Substack has their own newsletter, and they basically record a talk show together, called Music Creation, it’s on the passion economy, and they have a guest every week where they interview the guest.

They do that under the Everything banner, and then we go and take that recording and turn it into newsletter articles. That’s one of the ways in which we can unlock content and ideas from people without them having to necessarily write all of it themselves, or even own a newsletter. We’re working on a bunch of different models like that, where we can take people in different ways and have them write for us effectively, even if they’re not even writing.

Jacob: Now that I understand the corporate structure, or how the various newsletters fit into that bundle. I want to try to visualize the flow of a subscriber dollar. I’m already a subscriber, but let’s say that I wasn’t and I signed up for a yearly subscription to Everything. It’s $200 a year, what happens, so where does that money go? Does it just go into one general pot and then at the end of the month, you start divvying it up to writers? I’m just curious how that is, and I have a series of questions to follow.

Nathan: Yes, totally. The first answer is it gets complicated, so buckle up, we can dive into the weeds if you want, but just it is getting complicated. Also, we really don’t fully have it figured out and this may change over time, and we’re really quite limited by what’s possible within Substack, so this is nascent for everyone and a lot of different meanings of the term nascent.

I just want to give some of those caveats, but I think we’re very happy to go into it. Also, anyone listening, if you have ideas for how we could do this more efficiently or more fairly or whatever, we’re definitely interested in them. Basically how it works, so you pay $200 and Stripe takes their fee and then Substack takes their fee after the Stripe fee, so I don’t know what is left after that, I think it’s like $170 or something like that, but there’s fees basically that come off the top. Then it goes into the company bank account, basically. At the end of the month, or sorry, and then you get an email because you subscribed and you fill out a form and you basically say, what’s the primary publication that you signed up in order to get content from?

Let’s say you’re a huge fan of like Tiago Forte, so you put Praxis, you signed up primarily for Praxis. This is a crude way of allocating revenue, but it felt like the most transparent, basically. It’s just like, let’s just ask people who did they primarily sign up for and not make it a multi-select thing. That revenue gets attributed to Praxis and then we have a revenue split agreement with Praxis based on the details of like Tiago situation. Those revenue splits may be different depending on the publication because some publications maybe we’re taking on a lot of the risk.

We put the thing together, we hired a full-time employee or whatever to– or freelancers to create the thing. Others like Tiago, it’s just like a licensing deal. He’s really done all the work and created all the content. So it’s going to be different for every publication, but we allocate that revenue to that publication basically in its entirety, but then we update it by resurveying people that we haven’t actually done this yet, because not enough time has passed since we’ve started this model.

The plan is, let’s say you came in because of Praxis and because of Tiago Forte, but you ended up becoming a fan of something else, and so maybe a couple of months later you get a survey and it’s like, “Hey, what’s your favorite newsletter within the bundle?” Then if you pick something else, then your revenue switches basically. We just keep reallocating the revenue that way, and then the one, the additional complexity is not everyone will fill out the survey.

Each month we take the bucket of revenue from people that didn’t fill out a survey and allocate it proportionally based on the people who did fill out the survey. If there’s like $100,000 of, I mean, I wish we had this, $100,000 of new MRR or whatever, one day we will, we would take that pie and divide it according to let’s say 30% of people said that they signed up for your newsletter? Okay, you get 30% of that $100,000 of MRR if that was new from that month if that makes sense. Then when the subscriber churns, that revenue just goes away basically.

Dan: Yes, so to make it really simple, we figure out how many people are primarily subscribed to read a particular newsletter, and then of those people, we figure out there’s a revenue split between us and the writer to give them a percentage of that revenue, and we figure that out by doing a survey and by asking people, who are you reading?

Jacob: My $200 comes in and I say, “I’m reading Divinations, that’s my newsletter,” so therefore in this case, Nathan would get, if you weren’t also part of everything, but you would get a chunk of that money based on a split that you agreed to with the, with the company. Now, what about all the other writers that I’m also reading? Do they also get a cut based on their consumption, based on the consumption of their content? Or is it just whoever brings the reader in gets the money?

Nathan: Well, it’s whoever brings the reader in and retains the reader, just as the quick caveat there, but Dan, go ahead. What were you–

Dan: Yes, so right now in the model we have now, it’s just whoever brings in the reader gets the money. We’re going to change that over time. I think part of the question is what if someone’s reading multiple newsletters? In the model we have now, basically what we’re contemplating is people will typically subscribe primarily for one. That’s what we found. They’re primarily going to subscribe for Divinations or for Superorganizers or for Praxis, but they also kind of like some of the other newsletters, and they’ll read a couple of those. They’ll read a couple of those like maybe on a weekly basis, but they’re really super fans or they’re really like one in particular, and so we’re going to allocate most of the money to that publication.

I think in the future we could evolve the model where we ask a question like, what’s your secondary– what’s the secondary publication you read or the tertiary publication you read, and give a little bit more money to those authors. We haven’t done that yet. One thing that we do is we also have an affiliate model where, again, when someone signs up and you give us $200, and in that same survey we ask who referred you and if you’re referred by someone else in the bundle. If you’re in the bundle and you tweet about the bundle and someone signs up because of you, you get an affiliate fee of that person’s revenue until they churn as well. We have an initial way of compensating writers, even if they’re not the primary reason that someone is subscribing

Jacob: Who is doing your books, because this sounds like a lot of work.

Nathan: Yes, right now that’s basically like indecent, right? There’s a very small group of creators we’re working with that we have a lot of trust with and we’re being extremely transparent with it. This going to be the thing that needs to be like an audited system that’s written with very battle-tested code and spits out a really detailed paper trail and explanation for why who is getting what?

We want it to be a very high-trust thing. I think transparency is the best way to have that trust. It’s definitely going to get complicated for sure. It’s like notorious with all sorts of bundle models like this. That’s a fact of life of bundling is like, the hardest part about creating a bundle is figuring out how to allocate the proceeds of the bundle in a way that feels fair and transparent to everyone.

Spotify grapples with this. Netflix grapples with this, and of course, Netflix now is more focused on buying content rather than licensing content outright where they’ll just pay a flat fee. This is just basically part of the complexity. When you ask who’s doing our books, I mean, right now it’s like it’s us and we’re figuring it all out. We’re not here to present this as some solved-scaled thing. We’re here to present this as, this is an interesting thing we’re trying, we’re trying to do well, we’re learning and we anticipate running into problems that we will then fix. It’s like the way you grow startups, you try a thing, you see if it works, if it works, you try and do it bigger, and then something will break inevitably and then you just fix the broken thing and then you keep going.

Dan: Just just to add a little bit more color on that. What it means in practice is it’s Nathan and I but mostly Nathan at this point, the day before the month ends with a bunch of scripts, basically figuring out the answer to this question, running a bunch of codes, spitting out some spreadsheets and then manually checking to make sure that we’re right. It’s hard. I think we’ll automate more of it over time, especially as it gets more complicated, but we’re trying to make it work as well as we can with what we have right now.

Jacob: Can you talk a little bit about the logic behind the survey because one of the issues with bundles is they always lead to– when paid by consumption they always lead to just really bad content, which is why some people say that medium is just not that great. Can you explain a little bit more about the logic of, and the way I describe it is the logic of paying the creator that is the reason that someone doesn’t churn? Can you talk about that a little bit?

Dan: I think for us, what we want to do, the reason we’re not starting off with like a pay-by-article model is because that can incentivize people to write really salacious headlines or try to get things to go viral and a bad quality audience. The reason that we are paying people based on the survey is that it’s one way for us to measure the relationship that an author is building with their reader. If a reader is filling out the survey and saying, “Hey, you’re the person that I really want to read,” that’s a sign for us that that author deserves to get paid. It’s a sign that the author is creating something that is of value and that is building a deep relationship of trust with a certain segment of readers.

That’s what we want to incentivize because people are writing really high-quality content and building a trusted relationship is the thing that attracts more paying customers. One way to get at that is the survey. We’ve considered other models and maybe Nathan, you might want to talk a little bit about some of the stuff we’ve considered and where we might go with it in the future. For now, especially because we’re on Substack, we’re a little bit limited in all of the things that we can do to measure that. Some of what we do is a workaround to work within the constraints of what we have. Sending out a survey is the easiest thing that we can do to get at the measurement, but that relationship between the reader and the writer is a thing that we’re trying to measure.

Nathan: Yes, I don’t have too much to add there, but just we definitely don’t want to move to a model that creates adverse incentives. Like, “Oh, people are constantly hounding people for likes or claps, or we’ve got people writing really long stuff because it rewards time spent reading or something like that.” I think these kinds of problems are why the algorithms that allocate money or attention, like in the case of YouTube, it’s like the recommender algorithm is the thing people are trying to game rather than some revenue allocation algorithm.

It all has the same effect of warping behavior because people try and figure it out and normally they create really complicated, opaque systems that evolve in ways that aren’t understandable by creators. It can create a lot of frustration. I think it’s one thing if it’s a recommender algorithm, but it’s a totally different and worse thing if it’s your money. There’s something really nice about just being transparent with readers. We’ve even talked about what if we just create some screen where we just ask readers like, “How would you your revenue to be allocated?” Or something like that, and just be really straightforward with like, “Yes, this is how this is being used. This is what this is for.” It’s kind of not gameable.

As long as you assume the results of the survey are representatives, you can account for the people who don’t fill out the survey, which inevitably to some degree is flawed. Then the question is, how flawed is it actually? How unrepresentative is it really? Then that’s a pretty good starting point, but I have no doubt that we’ll have to evolve it and change it, and it’s for sure going to break as we add more people and figure out different people are in different situations and have different preferences.

We would like to have a deal that’s one size fits all, and really transparent, but also feels really fair. It’s like there are tensions between these things. One size fits all and simple and transparent and fair, there’s some things that are maybe more fair, but it creates a lot more complexity which trades off with simplicity or transparency maybe because it’s harder to understand. It’s a big challenge for sure, but it feels kind of fun because it’s like there’s no perfect solution, but there are definitely better and worse solutions. It feels like there is a solution that we can find and that we can evolve over time that’s good enough basically. I personally find it fun every month when I have to run the script.

Every time we’re talking to creators and we’re thinking about like, “What’s the most fair way to do this?” Because genuinely we’re not creating this company to screw over writers. [chuckles] You know what I mean? It doesn’t make any sense. Writers can just go on their own if they want to. We have to prove to someone like you who you may consider doing some licensing deal with us or whatever, but you’d only consider if we had your trust and we’ve got to earn that. If we lose that, then that’s the entire business. The whole point is we’re just fans of working together collectively, and we think that for us it fits our preference and what helps us personally create our best work.

I think there’s also a lot of people who maybe their financial situation or whatever, it’s hard to leave your job or dealing with healthcare, whatever. There’s lots of voices that I think can be supported by a system that’s somewhere in between the good entirely on your own system and the traditional model of a media company.

Jacob: I think the answer to this is no but is there a point by which the economics don’t work? Traditionally with bundles, if you continue to add more writers, the same $200 just gets diluted across more people. It sounds as if that’s not the case because of how you compensate based on the survey. Is that a fair guess?

Dan: Yes. That’s a good guess. I think crucially for us, the way that this continues to go to, we hope we’ll continue to expand is because we can expand into a bunch of different niches, like the horizon of niches hopefully that we can expand into gets larger and larger and larger, and because people are primarily subscribing for one or a couple of people in the bundle, we can hopefully expand the bundle each time we add a new writer into new markets with new readers that want to pay for that writer or that small set of writers and then divide the revenue accordingly among them.

It’s not a situation where there’s a finite revenue pie or something like that and each new writer we add you have to keep dividing the pie more or you have to raise prices. Hopefully, when we add a new writer, we’re doing that because that writer is going to expand the audience enough to pay for them.

Jacob: How does a writer leave? Like I’m on my own, so I own my email list, I own my own Stripe account, I own my content, but with everything, I’m part of your bundle, the money goes through you. Let’s say I wasn’t everything newsletter writer and I decided I wanted to leave and take with me my stuff, how did I do that?

Dan: This is a thing that we’re figuring out. We need a good exit plan for people because no writer’s going to work with us if we haven’t figured that out. Right now what we’re saying is basically when you come in write for us, you can leave with your list. We’ll give you a copy of your list and we’ll do that. That seems to be a pretty good deal for people because it’s more or less risk-free. There are questions about who gets the writing, and the details of that is A, we’re still figuring out, and B depends on the situation. If you came in and had a bunch of writing already or obviously you’re going to keep that.

If we pay you to create writing in addition to some revenue share, then there’s something to figure out there. Maybe in some cases, we own the writing, or maybe in some cases the author owns the writing and they license it to us and we can keep it since we paid for it, but they can go publish it somewhere else behind their own paywall. There’s a couple of different things that we’re trying to figure out for how to end things appropriately.

The general rule is we want writers to feel okay about being able to leave. We’re not trying to lock people in. We want people to be part of the bundle because it provides a lot of value for them, not because they’ve been sucked into this ecosystem that they can’t get out of.

Jacob: I did recall, or I do recall seeing that there was a job posting a couple months ago for freelance writers. I think Paul submitted that on LinkedIn. How are you thinking about these writers? Will they supplement the various newsletters in the network? Will they create new newsletters? How are you thinking about those various newsletters? Those various writers?

Nathan: Yes, totally. This is a very active conversation because there’s the traditional model of media where there’s a very small number of publications and everyone is a freelancer or a full-time employee writing under someone else’s banner. Then there’s the new model of media where everyone has their own umbrella and every person is entirely their own thing. The truth is different people want to do different things. What if I want to research a story for three months? Can you really do that if you have your own subscription newsletter audience? No, you have to create stuff. You have to create value at least on a weekly basis probably.

There are people out there that don’t really want to do that. There’s different kinds of writing that we could help enable and publish in the bundle. The way that we compensate that, whatever makes sense for the person given the value they’re bringing to the table, the risk that they’re taking off the table, et cetera, I’m confident that we’ll be able to figure out different things. Basically, yes, it’s a mix of paying freelancers or hiring full-time people, having people be more owners with the revenue share where they’re really responsible for the publication. There’s a mix of all these things.

Actually, one of the biggest value propositions that I think we can provide is, say you want to make a media operator into something that’s bigger than you so that you’re not writing it at two times a week on your own every single time. You want to bring in other contributors, you want to systematize it. If we can develop a playbook to do that, I think that that could be really helpful, because there’s a lot of common lessons in infrastructure that we could provide.

Then also the risk capital to do it because hiring someone usually you take a hit and then they end up paying for themselves eventually. There’s a curve there that can be difficult for an individual writer to take on. Maybe these are things that the bundle could help with too, both in terms of essentially money and expertise and access to talents and all the other stuff. Maybe it’s easier for people to– There’s some shared resources that can float between publications or whatever. A graphics editor or– There’s all this kind of stuff is the things we want to provide that makes it a better experience for the reader, but it’s really difficult to do if you’re totally on your own.

Dan: To flush that out a little bit more, I think the way that looks for us today is for Superorganizers and Divinations, these are publications that are up and running that have been started by Nathan and I, and we’re used to doing all of the writing, but it’s getting to a point where it’s very hard to basically write really great stuff twice a week and also run this company, this bundle.

That’s a place where we’re experimenting with bringing in more people that maybe don’t own Superorganizers or own Divinations, because I think it’s great for us to retain some editorial input because we know the audience and all that kind of stuff, but can start to take some of the weight off of us and we can start to build it into a little bit like a mini publication with more than one writer.

I’m doing that, for example, where my Superorganizers interviews, I’m working with different freelance writers and freelance editors to put them together so that I don’t have to write every single word. I still write a lot and I do all the actual interviewing, but I’m spending less time turning a transcript into a really great interview. That’s one split. Then the other split is for publications that are not ours, what we’re focused on is less freelance people and more people that we think could come in and own a newsletter and be the Jacob or be the Nathan of their own newsletter because that’s the way we think it’s most likely to succeed.

If we just wanted to start a newsletter, Nathan and I have the vision for it and then we just hire a bunch of freelancers to do it. It’s very unlikely to be very good, especially because Nathan and I don’t have the time to put in to just start 10 newsletters at a time. What we can do is find 10 people who each have their own vision and set of skills, and then arm them with resources and expertise, and an audience to start to build that newsletter on their own in a way that’s much quicker than they would if they were not working with us.

Jacob: What you’re describing is, and I guess to answer the question from one of your podcasts, I guess was a week ago, are you a media company or a technology company? You’re describing a media company. Everything is a media company?

Nathan: Yes, we’re 100% a media company. We’ve got a little bit of a different model maybe than a traditional magazine, or a book publisher, or whatever. It’s this interesting new hybrid thing that feels kind of like native to the world we’re coming up in, which feels like maybe is the future, this newsletter thing, or whatever. Definitely, we’re a media company, I think that it really helps to have some technical DNA so that for instance, when Dan is writing an article about productivity, and he thinks of an idea for an app, we could build that app or hire someone to build that app and competently manage it, or whatever. Then offer it as a part of the bundle that makes super organizers and more broadly the Everything bundle, more valuable, that’s amazing. We’re a media company, for sure.

Jacob: All right, so let’s pivot to one of the biggest things that a media company does, which is audience development. How does Everything think about audience development? Is it mostly done by the individual or does Everything have its own strategy for bringing users into the bundle? Then to add more to that, have you all experimented with paid user acquisition? If so, how would that work from a revenue split perspective?

Dan: Yes, so I think for us, I mean, right now, obviously, we have a core audience. We have about 22,000 people in our list, so we’ve done a bunch of audience development. That core audience is going to continue to grow. Then as we bring new writers into the bundle, they are going to bring their own audience. Those writers are going to have to do some work to develop a relationship with their audience and bring new people in, that’s how they get paid. That’s how it’s going to grow for both of us, but because we have this base, what we can do is transfer some of our distributions, some of our existing audience to that new person and help them to accelerate their progress.

Essentially create a network inside of all of the different newsletters that we run, where if someone’s writing about productivity, like maybe Superorganizers links to them, and we can provide traffic to a new productivity-focused newsletter, and create distribution for just reaching that way. In terms of paid acquisition, we’ve done maybe a little bit of tests. I think our focus is really writing really great stuff, because that brings in audience, and the way we do that is find writers.

We think that finding more writers will produce more great writing, which will produce more audience. It’s really as simple as that. It’s simple, but it’s actually pretty hard. I think that maybe at some point we’ll reach a point where we’re doing more advanced, like paid ads, and we can take writer A and figure out what Facebook Ads work for them and help them build an audience that way, but that’s really not our focus right now. Our focus is on finding more writers, writing great stuff, and bringing in more audience that way.

Nathan: Yes, I think the key just to add on to that is going to be to a lesser extent, our ability as Everything to drive people through some Everything a little means, and more to be really good at cross-pollinating. There’s two components of that, one is selecting who’s a part of the bundle, because if we’re full of a bunch of mediocre stuff, and the trust gets lost, or if we’re full of a bunch of stuff, that’s maybe good, but there’s like zero audience overlap, then there’s not very much opportunity for us to be good at cross-pollination, but then also for us to figure out the right placement. How do we interlink between articles in a good way? How do we create good sort of like bundle level products like the Sunday Digest or something that Dan did a really big–

We were continually been running [chuckles] experiments on it. Then Dan did a take on it this last week that works just incredibly well. We put a survey at the bottom of every article we do and the percent of people that said our bundle digest was amazing, was typically 15%. Pretty low compared to most of our articles are usually in the 50% or 60% range, but the experiment that Dan ran this past weekend of just changing the format, basically, and putting in a lot more different stuff, increase that to like 50%, so great that increases our ability to direct attention basically because we’re creating a better editorial product that can drive people from liking publication A to also liking publication B and C.

Jacob: We’re both built on Substack. It is exceptional for launching newsletters very quickly, but you both mentioned a couple of times the fact that you are limited a little bit by what you can do. Have you guys thought about what an owned CMS or an owned Everything would look like for you guys, where you hand much more control?

Dan: The question of the hour, I feel like I knew you were going to ask that question. I think our answer right now is we love Substack, and they’re the people that have enabled us to build this as a business. I wouldn’t have started a Substack or started a paid newsletter if they didn’t exist, so I think we’re pretty grateful to them. Nathan, obviously wrote some of the early code for that, so grateful to Nathan for that, too.

I think that Substack as a platform right now isn’t fully built for what we’re doing. They’re built for journalists that want to write a newsletter on their own. They have built some features for us like the bundle feature that we’re currently using that work, but we definitely need more functionality from them to make it an amazing experience. I think for now, we’re super happy with them, we are running up against the limits of what they do, we’ll see how it evolves. I think if Substack’s platform evolves in our direction, we’ll want to stick around and if not, we may have to look in other directions. That’s where we are for now.

Nathan: Yes. It’s understandable, because the stuff is so new, it’s not like there’s a huge market for newsletter bundles you know. [chuckles] I think there’s a much bigger thing that Substack it’s good that they’re focused on, like the individual writer. That’s like the vision from Substack from the start. Then also from the start, there’s the idea that individual writers could get together and confederate in some way. That’s awesome and that’s like what we’re doing. It’s cool that it’s a part of it, but we’re bumping into complexities right, where it’s like, “Oh, it’d be nice if we had XYZ or whatever.”

Because it takes work and time and learning to optimize systems. I think we’re running a slightly suboptimal system, but Substack is such a– I feel like it’s almost underselling it to say Substack calls are coming to exist, it’s literally like, “Would any of us really be talking about paid newsletters, if it weren’t for Substack?” Maybe, maybe some other company would have come along and made it a thing, but I really feel like Substack should get credit for a lot of what we’re seeing right now in terms of the resurgence of interest in this business model.

Because Ben Thompson had been doing it for a long time. Memberful had existed for a long time, there’s a new set of people that are doing it because I think Substack came around and of course, I’m biased. I’m like, “Whatever.” I’ve got to disclose that I used to work there, I’m shareholder or whatever. I think they deserve a lot of credit, and I think that the product is awesome, especially if you’re using it for the things that it’s really meant to do, which is drive this solo newsletter approach.

Jacob: I tell people that– I wrote this in my one-year birthday email that I sent out that I made the decision to launch a newsletter, wrote the first piece, and launched all in the same day. I would never have been able to do that before Substack. The speed in which you can do something is really quite nice. The fact that it is just out of the box is it is quite nice. I am curious to see how companies like yours, and some of these other multi-writer publications, how they evolve over time. That’ll be very interesting.

Nathan: Yes.

Jacob: I want to move to my absolute favorite topic. Nathan, you and I have gone back and forth on this many times.

Nathan: Advertising versus subscriptions.

Jacob: That’s advertising,

Nathan: Did I guess it–

Jacob: You did, you did. You’ve ran an ad for Techmeme Ride Home Podcast, which we’ll call that free promotion for them right now. Why did you do that? How did that come together? How did you price it, and how did your readers take it?

Nathan: Yes, totally. Oh, man. This was such a fun thing because, we’ve been sitting around this thought in our head that maybe we do some ads, it’s not like we’re never do any ads or whatever. The purpose of our company is not anti-ads in any way. It’s just that the heart of it is it’s a subscription business and that’s what we wanted to focus on and prioritize obviously, but some point we might do it or whatever. I always assumed it might be a long way off.

There were some people that had reached out to us previously to run ads and it just didn’t feel right. For whatever reason, it just didn’t like seem the right thing, but when Brian McCullough of the Techmeme Ride Home Podcast reached out to me, it was very hard to say no to, because I’m just a fan. I listen to his podcast every day and I’ve been listening to his work from before that of the Internet History Podcast, which is also really good.

It’s just very easy for me to recommend his podcast. That, I think, was a huge factor. Then, also I think we’re a little bit further along and it feels interesting maybe more now to experiment with that than it did when we had just launched the bundle or something like that. I ran it by Dan and he was like, “Let’s give it a shot.” This is funny because actually, it was all happening as Dan was going on vacation. I asked Dan, I was like, “You’re going off the grid. Should I ping you if there’s an update here and you want me to–” Dan’s the CEO and I’m the president or whatever, the second in charge or something like that.

I was like, “Do you want me to update you and see whatever your approval?” He’s like, “Whatever, make it work.” Like, “You just go ahead.” Basically, when Dan was off the grid, Brian and I negotiated the deal and the CPM and all that kind of stuff. Basically, I just proposed $1,000 per newsletter, which works out to about a $62 CPM. My reasoning was, although it’s an expensive CPM, we’ve never run an ad before. I’m actually putting in the work to make it a pretty good ad product, I think, and going pretty above and beyond on that front. There’s a short blurb at the top and then a long segment at the bottom about it.

I felt like it’s a small enough audience that even though the CPM itself is high, it’s a really high-quality nascent audience and maybe you wouldn’t be willing to pay that CPM if we had a 100X to scale we have. Given our scale, given the quality of the audience, I think it was probably worth a little bit more. It just came out to a roughly round number of like $1,000 per send basically. That’s what the deal was. We talked about it on our podcast. We recorded a podcast with him. We have a podcast called Talk Therapy, where Dan and I just talk about what’s going on with the business.

We had Brian on as a guest and it was a lot of fun to talk about his end of the ad deal or whatever. The feedback was pretty good. It’s not like a lot of people emailed in cheering us on for ads. I think, Jacob, you’re the only one. We had a lot of good response from it. There was like one negative response, but it was just like, “Hey, I’m paying, just so you know, since this’s your first ad ever.” It’s lame to be a paying subscriber and to have an ad, but whatever.

Anyway, I think it went really well. I don’t think we’re going to go out looking for tons of other advertisers, but we may do it again opportunistically for products we really love. It’s one of those things where at a certain point, we’ll probably have to have more of a strict strategy around it. I think that it’s a pretty natural fit advertising with this model, because advertising works best when there’s a stable recurring audience. It’s hard to put ads in books or movies because ahead of time, you don’t really know what the audience will be so much, and so it’s a little tricky to value it if you’re integrating the app with the content or whatever as a publisher versus some sort of platform or whatever.

We have a relatively stable audience that we can sell against, so it feels like a pretty good fit. We just want to make sure that really, it’s very clear that the priority is subscriptions and we may do it as a side project opportunistically, especially because we’re not raking in tons of dough yet. It’s very useful actually to have a couple extra thousand bucks for us to run the company. Anyway, it was a fun experiment.

Jacob: Welcome to the world of advertising. Now, you are officially a diversified media company.

Dan: We have to do events to be truly diversified.

Jacob: We’ll do that in 2021 or 2022. Looking forward, what does the future look like for everything over the next three years?

Speaker: Dan, tell us about the future of everything.

Dan: I was about to make the joke. [laughs] I think, for us, it’s going to look a lot like what we’re doing, but more, where I think we have the opportunity to both find, hopefully, really, really high-quality business writers and add them into the bundle across a variety of topics. That can be anything from the broad categories that we’re in right now like productivity and strategy, to industry verticals like waste management or space, to job roles like marketing or product management. Even to newsletters that cover specific companies would be interesting, so like Stripe or Apple. We think there’s a market for that.

Anyway, we feel like there’s an endless number of niches that we can cover here. I think the future is us both finding writers that are in those spaces and adding them into the bundle, and then also developing those writers in those newsletters internally and bringing them to the world, either by finding someone who knows something about the space and has some writing skills and giving them a deal that lets them go out and own that niche and own that newsletter and have a rev share on it. Or another thing that we really want to do and want to try that we’re doing already is, we think that there are a lot of people out in the world who they have this twinkle in their eye for their industry no matter what it is.

Waste management is the thing that we always bring up, which it sounds like the worst, most boring thing in the world. I think that there’s someone in the world that has a twinkle in their eye about waste management. It’s the kind of person that you sit down at dinner and you’re like, “Oh, this guy does trash,” or, “This person is trash.” They’re just so compelling. We want to find people like that. Even if they don’t write, pair them with writers and use that as a way to bring their ideas into the world and make their voices heard to people that need to hear them or want to hear them in their industry.

We think it’s a shame that there are so many unwritten voices out there. TBD, whether or not that works, I think, we’re learning this as we go. We do think a lot of the best business knowledge is locked up inside of people’s heads and we think this might be a really good way for us to unlock it. That’s not to say that we’re going to do a trash vertical tomorrow. I think for now, what we want to do is expand organically within our niche. Our very small niche is productivity and strategy and maybe investing is another one that we’re creeping into.

Nathan: Some may call strategy a trash vertical.

Dan: What we want to do is build by adjacency. Ideally, in the next newsletters that we have in the bundle, they still make sense with productivity and strategy. They still are adjacent to the audiences that we’re already serving, but they’re slightly different.

Nathan: There’s overlap.

Dan: Exactly. What we want to pay attention to, especially in the early days, it’s much more important in the early days than it’s I think later is, when you added something new to the bundle, you want some new audience, but you don’t want to break the overall value proposition of the bundle. You want people to be able to look at the bundle and be like, “I get this thing if I go there.” Those are the things that we’re balancing. We think that over time, we can build by adjacency until we’re so far out that it’s something that you wouldn’t think that we could cover today. That’s the idea.

Nathan: Another way just to tack onto that that I think everything will look different in the future, hopefully, is it feels just much higher quality. I think our stuff is pretty high-quality now, but it feels like we’re at the very beginning of what we can do or even what’s possible with business writing generally. I mean that in a lot of different ways, like better reported. Also, just more beautiful, hopefully. We have a meeting every Friday that is probably unusual, and I think we’re going to want to keep doing it, called Great Writing, where it’s like a show and tell.

You just bring something that you thought was really nice piece of writing and like today, I brought Of Mice and Men by John Steinbeck and talked about why I thought the first couple paragraphs worked and showed an example of how I tried to use a similar technique in the past couple articles that I wrote. Dan will bring like an Annie Dillard novel. Like today, he showed a passage from article in 2011 from some guy writing in the New York Times or whatever.

There’s just all this random stuff. I think that really, our highest goal is to reach something that could possibly last and have real intellectual and aesthetic value. I don’t know to what degree we’re achieving that yet, but I feel like we should, since we’re trying really hard. Meanwhile, we’re smart or whatever and we can hopefully attract other people that we can learn a lot from and can show us how to do even better, that the product will feel really different maybe in like nine months from now than it does now.

Also, we’re working on some branding stuff that I think will elevate everything. It’s really important to us that it feels really carefully considered and crafted in that. It really respects that people have a lot of choice now more than ever in what they pay attention to, and there should be more beautiful things in people’s lives, and those things should feel like they treat them as the intelligent humans they are. There’s just a lot of stuff on the internet and what’s the point if that’s all you’re trying to do?

Jacob: Obviously, you both were pretty new to media. What are some mistakes that you’ve made, either as individuals in this journey or as an organization that you’ve learned from, and how did you learn from those?

Dan: A lot. I will also say Nathan’s been in media for a long time, so I’m more of the media noob of the duo.

Nathan: By a long time, Dan means since 2013 or ’14 [chuckles] if you count what I was doing at General Assembly, which is not exactly media, although my part of it was closer to media, maybe more like 2015, but not like that long.

Dan: He’s got some experience, certainly more than I do. I think that I, in particular, I guess both of us, we’re learning a lot about how idiosyncratic it is what we do. For example, I do these Superorganizers interviews and I just made it up. I never read an article about how to do an interview or how to format it or whatever. I just record an interview and then just figured out how to write the intro and then wrote the bottom of it and whatever, and I thought it was pretty good and people seem to like it, but I really thought that if you get a professional writer in there, A, they’re just going to be able to bang that out incredibly quickly, and B, they’ll probably know how to do it in a way that I don’t even know how to do that’s way better than I could have ever thought of.

It turns out that there’s when you use the word writer or editor, that means an incredible number of different things to different people in different situations. It’s like using the word programmer. It’s like, “Well, what kind of programming do you do? What do you specialize in? Do you backend into a front end? Do you do python? Do you do whatever?” There’s as many types of different being a writer as there are being anything else in the world.

I didn’t really realize that. I just thought anyone could do this because I’ve never done it in a professional context before, and it turns out if you get a writer that’s used to writing interviews in a certain way or not used to writing interviews at all and mostly does nonfiction work or maybe mostly write writes fiction, none of those people can just see what you’re doing and then just do it perfectly the first time.

They may not ever be able to do it perfectly because they may be just better at doing something else, and so I think one thing that I’m learning or we’re learning over time is that you can’t just get any writer or any editor to go in and do the thing. There are certain types of people that do the things that we do well, and it’s really important to go and find those people, or if you’re using someone that doesn’t know how to do it well yet you need to be prepared for the fact that they’re going to take some time to learn how to do it. Just because someone says that they’re a writer and they’ve been doing freelance writing for a long time doesn’t mean that they can do this specific thing. That turned out to be pretty surprising to me, actually.

Jacob: Then my last question to end on a note of excitement. There are going to be, I believe over the next few years, many new people who come into media. I think it’s going to be centered around a lot of these niche topics. We’re going to have a lot of new media operators. What is some advice you’d give other new media operators about launching a brand new media company?

Nathan: It’s hard to give blanket advice, so I can– I don’t know. Dan, does anything clear come to mind for you? Because I can say some things, [laughs] but I am so hesitant about blanket advice because it’s very circumstance dependent.

Dan: Yes. I have the same hesitation. I guess the thing that comes to mind for me is pretty much the advice that Nathan and I always give people when they ask, “How do I start a newsletter or whatever?” I think that if you’re going to go start a new media company, you can go and just make a bunch of plans and raise a bunch of money and do everything in a vacuum, but the best way to do this stuff, at least in our experience, has been just doing it in an organic way.

If you have someone, if you’re talented enough to go and write, you should just start by writing first and building your audience yourself and taking it from the ground up that way instead of starting a large organization first, which I guess some people do, but yes, it’s really just about the grind of sitting down in front of a computer and writing every day until people start to pay attention to you, and it’s not about– Even if you’re not going to go build a big organization from the beginning, it’s not about planning, “Oh, this is my exact niche.

This is the exact thing that I’m going to write about.” I guess our experience has been, you just start writing and the niche or the thing that you’re going to cover comes to you over time, and gets more well-defined over time, and the planning is usually wasted. That’s only relevant advice for a certain type of media starting person, but that’s the best I can do.

Nathan: I like that. I think another good one is, this media, I think is pretty inherently personal. People who create great stuff take a lot of pride in what they do and they’re very particular about it and they’re very finicky about it, right? The best stuff comes from people who care deeply, and caring deeply can be challenging when people are working together [laughs] on things, and I think that there’s a lot more of that in my experience in media than there is in tech because in tech, you’re an engineer, you’re a product manager, you’re a designer, you definitely care a lot about what you do. You have strong feelings.

It can be difficult sometimes to come to agreement and come to alignment with other people who also have strong feelings, but I think in media it’s so much more. It’s like, “Whose byline is this? Who is this thing by?” It’s like a reflection of that person. It’s a little bit more close, and so to the extent, you’re rubbing up against difficulties there with whoever you’re working with.

I think seeing a coach or a couple’s therapist or whatever is such a valuable thing and it makes you a better person individually. It makes you a better person in other aspects of your life besides work. I think Dan and I have come a long way as for a long time friends, and then business partners, and then just figuring out how to do this thing together and still enjoy spending time together has been fascinating.

That may not apply to all partnerships or whatever, but I think if you’re wondering about it or curious about it, it’s probably a good idea to do it, especially in media, I think where people, it’s so personal, what you’re creating is such a reflection of you.