Dan Frommer runs a popular newsletter called The New Consumer, which discusses topics on technology and consumer brands. Beginning his career at Forbes, Dan has a long history in the technology field.
His extensive experience includes Editor in Chief at Recode, Vox Media’s tech and business news publication, and technology editor at Quartz. He also spent years building up Business Insider as its second employee.
In this episode, Dan discusses how email is the most effective way to reach influential people, explaining how he leverages his newsletter, The New Consumer, in a way that will capture the attention of CEOs, board members, and investors.
Dan shares newsletter insights, including:
- Important questions to ask yourself about newsletter tools.
- Avoiding the optimization trap.
- How he creates a quality experience for his readers.
Links and Resources
Dan Frommer Links
- Dan’s Newsletter: The New Consumer
- Dan’s Website: FromeDome
- Dan’s Other Website: Points Party
- Twitter: @fromedome
Episode Transcript:
Nathan: [00:00:00]
In this episode I talk to Dan Frommer. He runs a popular newsletter called The New Consumer. He’s had a long career in tech, tech journalism, he started at Forbes and then he was at Quartz and Recode and was basically employee number two at Business Insider, and worked to build that whole business for a long time.
And he’s always had this one-man-band sort of style, which really resonates with me. That’s basically where you learn to, design code, you know, put together plugins, build out your site, as well as writing and publishing and being a journalist and all this other stuff. So he’s done something really impressive and going from the editor in chief of Recode, which is a publication owned by Vox, which is quite large and popular, to running The New Consumer, which he’s had for two years now.
It’s more than paying his bills. He’s earning a full-time living from it and he gets to control his own destiny. I love it. We dive into all kinds of interesting topics. We talked about why he has only an annual subscription, rather than going for just monthly, like most people do with paid newsletter, his tech stack, what he thinks about free versus paid subscribers and so much more. Let’s dive in.
Dan, Welcome to the show.
Dan: [00:05:00]
Thanks for having me.
Nathan: [00:05:02]
So I want to go back a little bit, as we talked about in the intro, you’ve got all kinds of history and journalism and everything else. Now you’re running your own newsletter, so when you got into journalism, where did you think that that career would end?
What was the pinnacle? You know, like, as we go through the, the years, like. Was it ending with editor and chief of, of Recode? Like how far ahead did you, did you think? And,sand what did success look like when you were just starting out?
Dan: [00:05:31]
Yeah. I’m from Chicago originally. I, you know, my background is both in, creating websites, web design. I started doing web design and, and building websites when I was in middle school, in the nineties, and then I went to journalism school at Medill at Northwestern. So my background and my interests have always kind of been at the intersection of.
Journalism like real ethical. proper journalism, but also creating new things on the internet. So new media brands and building websites, building audiences, and I’ve always kind of, I guess, optimize my career for both of those things. so that’s, that’s one way to say, like, I never really sat back and was like, Oh man, I really need to work at the New York times or the wall street journal or something like that.
snothing against those places. It’d be cool to perhaps, you know, contribute there one day or something like that. But there wasn’t some bucket list where I was like, I must work for. A big network or a big newspaper or something like that. I, you know, I actually started my career interning at,sthe public radio station in Chicago WBZ.
And I really did a lot of,syou know, I trained to be a broadcaster. I was really interested in broadcasting, but,swhen I moved to New York to start my professional career, it was clear that. All the jobs were in what was called digital or interactive journalism. And also that’s where my skills were really helpful.
sit, it actually was useful that I knew how to edit pictures and build webpages and. you know, and do video work because most, most of my peers were not trained to and, and thought that that wasn’t really part of their job. So,snot only was able to do that, but I really enjoyed it and I still do now.
So, you know, thinking, thinking back now, 15 years ago, there was never a point where I was like, Oh man, I really need to get a big title at a big magazine or at the New York times or something like that. I didn’t probably know. Right then, you know, my first job was, was at Forbes, which was kind of, but the, the forbes.com.
So it was like the interactive,ssubsidiary of Forbes magazine. So I got to see that kind of big brand. Big media world, but,salso be kind of on a scrappier side of things. And, and from there it just kind of became like, you know what, what’s something interesting that I could work on. that, that took advantage of both my interest in storytelling and journalism, but also,sadvantage of the, of the tools of technology.
Nathan: [00:08:07]
Yeah, that makes a lot of sense. And I have a similar background of, you know, starting in high school of figuring out HTML and grabbing books in the library and trying to, trying to piece it all together. And that served me a lot. Do you think that,slike journalists today or anyone getting into. Writing or building an audience.
Do you think that pursuing those skills of video and code and, and maybe some simple design is worthwhile and worth the effort, you know, in addition to figuring out and learning how to be a good writer.
Dan: [00:08:36]
It’s certainly helped me a lot. You know, I hate to prescribe something to someone because you can do great stuff without any of it. but it really helped me a lot. I, you know, I, I really love being a one man band, which is, it is a term that was used a lot in like broadcast media, where you would have to, you know, hold the big camera over your shoulder and shoot and edit and do that kind of stuff.
[00:09:00]sI never had one of those jobs. Those were some of my peers starting off in, you know, small town, local,sbroadcast,steams where you had to do that because there were no resources. I, I love being kind of a one man band on the internet though. Creating my own website, doing my own writing and reporting,syou know, editing my own work, producing it, publishing it, promoting it, all those things.
Those are skills that I developed in newsrooms. So, you know, I was lucky to be able to work in some really great newsrooms where I learned a lot of those skills. What I would say is kind of, if you’re interested in visuals, if you’re interested in multimedia, Do learn those skills, whether it’s, you know, in a job or at nighttime,syou know, in your spare time, on, on nights and weekends or in a course or something like that,sthose are, those can be hugely valuable skills.
If those are, if that’s the kind of work that you want to produce and publish.
Nathan: [00:09:56]
Yeah that makes sense So as you’re going through, [00:10:00]syour career, when did, when did newsletters come onto your radar as something that you wanted to pursue?
Dan: [00:10:07]
It’s interesting, you know, newsletters of course have been around for the duration of the internet or at least the duration of email. One of my absolute favorite newsletters started off probably in the early 2000s It was the DWR design notes newsletter from, from the founder of design within reach.
sit was kind of the first editorial newsletter that I remember really loving. And then, you know, when we were starting Silicon alley insider in 2007, we were writing about DailyCandy and Thrillist as kind of an exciting model. that, that, you know, money was, was flocking to, and then of course,syou know, there’s the new newsletter, boom.
And, you know, I don’t think there was ever a point even now where I was like, Oh man, I really, I really want to be doing newsletters, but it really is a useful and elegant format for two reasons. One is that. everybody checks their email. You know, this is, this is,sprobably a known cliche to say, but it’s true.
Like the most important people in the world, unless they have four levels of assistant,sare still reading their email. And so is everybody else So it’s a really great way to, to reach the most influential people who, you know, are truthfully like not really on Twitter and if they were in the past, they’re probably on it less than they were before.
They’re not really on LinkedIn. They’re not really on Facebook, but they’re really on their email. So it’s a great way to reach important people. And that is kind of the foundation of my publication in the new consumer. I’m writing for the people who are running these companies, the CEOs, the board members, the investors, those people still read email.
The other reason I love email and kind of picked it and settled into it is that it’s a, it’s a place to be really conversational and personal in your writing. You know, you’re. If you think about the context of email. You’re kind of bunched in between perhaps other email newsletters and,syou know, invoices and receipts and that kind of stuff.
But you’re also sandwiched between personal notes and professional notes from people. So if you’re trying to be an individual with a voice. Email is actually a place where that works. you can, you know, it’s, it’s not all about the first person writing about me, me, me, me, me, but it does let you be more conversational, have a little more of a tone to your writing.
That doesn’t really work. If you’re, you know, writing a news article for a Newswire like Bloomberg or Reuters, or even someplace like the New York times where. They’ve certainly allowed people to have more of a voice recently than they had in the past, but it still is kind of an institutional voice and not really yours.
Nathan: [00:12:48]
Yeah, that makes sense. So what did it look like when you’re, you’re at Recode and you’re looking to, what was the conversation that you’re having as you’re looking to start the new consumer?swhat, what things were you looking for as to like, is this a good idea?sand actually making the switch, what was on your mind?
Dan: [00:13:06]
Yeah, I’ve been thinking about it for many years, even before I started it at Fox in, at Recode. I so my, my first job was@forbes.com. My second job was starting business insider. I was the second employee there. It was called Silicon alley insider. When we started in 2007, the idea was. We were going to be kind of an East coast tech crunch covering the New York startup scene.
sI lived in New York for the last 15 years until moving to California this year. We are. And,sand that’s where I really firsthand caught the, the startup bug actually worked for a startup college. So I knew that they were fun,seven before that, but, you know, being able to start. Alley insider with three of us at a, at a desk, essentially in the, in the back loading dock of another startup.
And then four years later have over a hundred people working at the company. It showed me that there’s a lot of room for entrepreneurship and innovation in digital media. So. I left there after four years and started my own publication back then. I’d also been really heavily influenced by a guy named John Gruber who doesn’t really do an email newsletter, but he is a solo indie publisher,swho has, you know, made a great career from his site, daring fireball, which mostly writes about the world through the lens of Apple.
sand then Jason cocky and some other of the Indy. Publishers, you know, back then, bloggers, I guess you would call them. So I started a site in 2011 called splat F, which was going to be my kind of. Indie news tech analysis blog also kind of through the lens of Apple and similar companies. I wrote a lot about Netflix and the early streaming business Quickster was one of my first stories there.
sand it did really well. I got like a quarter million readers my first month or something like that, which is a lot for a new site. and I was, but I was monetizing through ads, which just doesn’t work super well for niche media. there were some really great ad networks back then that were designed for niche publications, but wasn’t really a successful business doing that.
sat least by that time, 2011. Things were kind of starting to dry up in the ad world where programmatic was starting. You really needed scale. That video ads were a big thing. Worked really well for big, big mass sites like the verge or, you know, New York times or, or Yahoo or something like that. It didn’t really work super well for a niche site.
So I did that site for, for a few years. you know, I had a really. Nice deal with an ad network where they were paying me a good guaranteed rate, but probably weren’t selling that many ads. So it wasn’t really a sustainable thing. I didn’t want to sell my own sponsorships. That’s a whole other job. so, you know, while I had a great time publishing that side, I ended up and then I ended up doing another startup,swhich was entirely different.
sbut then ended up going back to work for, you know, established media companies. Quartz was, was my next job,swhich was kind of a startup at the time within the Atlantic group. And then I went over to Vox media, which by that time was a pretty big startup. I think I was probably over employee 1000 at that point.
So,seven though it was still felt like a startup,sit wasn’t always, so anyway, so had been thinking this whole time, like, all right, well, what’s my next thing. There were a lot of, a lot of startups and kind of indie publications that I really admired. And they weren’t really monetizing through ads.
One of them was Hodinkee, which is a, a site about,smechanical watches and kind of viewing the world of, of luxury through, through really fine watch craftsmanship. They were making money through product sales and through e-commerce, which was super interesting. my wife works for a publication called the business of fashion, which was started in London and they were one of the pioneers in paid subscriptions for professionals, you know, costing several hundred dollars a year.
That was something that I was aware of and thought was interesting. And then of course, you know, the, the real big influence was Ben Thompson and Stratec Curry, which really smartly used the newsletter as a function of a paywall. you know, there’s always been a, a website component to Stratec Curry, but.
He was able to use the email, the access to the email newsletter and the fact that it was pushed. And the fact that it was really gated by the fact that people don’t share email accounts to set up individual subscriptions charge what at the time seemed like a lot of money, a hundred dollars. Although we know that as actually.
And then an incredibly great value. If you read Stratec Curry and work in the tech industry, you’re getting thousands and thousands of dollars a year worth of educational value from a hundred dollars subscription, which he has since increased, modestly the price. but that’s when I started seeing email as, as a tool that could help me a run that indie publication that I always wanted to run and be okay.
suse the subscription and membership functions as kind of a gating mechanism. And that’s where email, in addition to being able to access everybody that I wanted to access and have that kind of personal voice too. It was a really great paywall function. And that’s kind of how I landed in the world of email.
Nathan: [00:18:28]
Yeah. I mean, you’re absolutely right. That like newsletters are great for the personalized it feeling like you can. I mean, I’m just thinking about the different editorial voices that each publication will have and, and writing your own newsletter. You can define exactly like this is the voice that I want to have.
This is the way that I want to interact with my readers. And even,sat least for me, I like, I love the replies to the email. Is that something that, that you’ve pushed with your audience of asking people to reply and share feedback or,sis it more, you know, just the one to many side.
Dan: [00:19:03]
you know, not as much as I should. I do get a lot of replies. They’re very thoughtful. occasionally I’ll ask someone like, Hey, should I post, you know, do you want me to publish this? And sometimes they’re like, nah, not really. You know, I didn’t really, I didn’t really edit it or write it in a super eloquent way.
So I’m still working on that. It’s interesting. Like one of the things that definitely is different than I thought it would be is the format of my newsletter. You know, I, I,syou know, I, I grew up reading a lot of magazines. I love the idea of the way that magazines are formatted. I also read a lot of like newspaper columns when I was a kid.
I always thought that I would have a newsletter that had a lot of modules to it, like an introduction. And like maybe some, some short pithy takes somewhere either at the beginning or at the end, and then maybe a longer piece. And then maybe some other things that were like, Not even texts, like they were either a graphic or a chart or something like that.
Anyway, that this is all to say. I did not imagine that my newsletter format would be a 1500 word essay most of the time, but that’s kind of what it’s turned into. And I mean, it’s working,speople like them they’re I think, valuable and useful. They let me get the depth that I want, which is super important to me.
sI’m not, I cannot ever write shallow stuff that everybody else publishes. I just would go out of business. there’s so much commodity facts and data out there. I could never compete with Bloomberg on the level of like just aggregating facts quickly. So I don’t want to, I want to have depth and analysis and a point of view.
sand it’s turned out that like, The, the format that really works for me for that is like a 1300 to 1800 word essay. but I still do want to get back to this idea of like other, other formats, other modules replies are certainly a version of that. [00:21:00]syou know, I’ve been very fortunate to build a sizeable community of readers and.
They’re really smart people who work in the field that I write about. So I’m very flattered and lucky in that sense, and then figuring out how to get their thoughts into the newsletter. you know, beyond just like interviewing them and writing stories about what they do, which I do do,sfiguring out how to get more of that kind of conversational element into it is something that I’m working on for this year.
Nathan: [00:21:27]
Yeah that’s, that’s super interesting of just what you thought your expectations would be going in. then what it turned out to be like. I see a lot of people writing newsletters. Yeah. And maybe someone like Tim Ferriss, right. With the five bullet Friday where it’s these quick little hits and, and you see that.
But honestly, the newsletters that I see doing the best are the ones that are taking the approach that you have of like longer form, original thinking from a unique perspective. and so I’m trying to think if, if there’s very many people that have built an audience through the short form quick,sLike the, the board and newsletters, the highlights.
Does anyone come to mind?
Dan: [00:22:08]
I mean one that I love is Benedict Devin’s, who has had an interesting career. He started off as a, as a, I believe a, an equity analyst covering telco stocks,sthen became a venture capitalist at Andreessen Horowitz and has now gone independent with a subscription newsletter. He has a really fantastic kind of bulleted newsletter with, I believe, well, over a hundred thousand subscribers,
Nathan: [00:22:35]
Yeah
Dan: [00:22:35]
like 300,000
Nathan: [00:22:36]
side of
Dan: [00:22:37]
Something like that. Yeah. and the reason he does so well, I think is not just because he does a good job curating the bullet points, but he has a very, very good way of having a succinct take on things that is both educational and also kind of makes you think a little bit and doing that in a way that is not patronizing.
Or cynical. there were a lot of like angry takes on tech and. While entertaining. I don’t find those tremendously useful for anything. perhaps they’re useful at, at, you know, getting people mad on Twitter or something like that. But I think Benedict Evans knows the right stories to pick. And then also seems to have just a really smart take on a lot of things.
He has also since,syou know, and, and he was blogging in the background. So he w he was writing those longer pieces as well. That has kind of become the hybrid model of his newsletter. Which I, you know, and love and, and happily pay for. there’s others, you know, there’s a really great one in the e-commerce industry called 2PMswritten by a guy named Webb Smith who has built a, you know, he’s built it.
More,ssophisticated business than just newsletters. He has a forum and that kind of stuff. He’s a great curator. There’s another one called lean Luxe which is a really great curated list of links. they’re out there, but certainly the, you know, when I think of what I’m trying to do, it’s kind of a hybrid between journalism and analysis and.
Format-wise I actually take some inspiration from wall street research or, you know, corporate research. I read a lot of stock analysts notes and research reports from places like McKinsey and BCG and those types of places. And. You know, I would never call what I’m writing a white paper. I don’t understand why people are attached to that format or concept.
sI download a lot of those. I never really finish reading them. but I, you know, I, I try not to, I try to intersperse my text with,scharts and other visuals and try to create kind of a, you know, an, an experience that’s both educational, but also. Maybe not entertaining, but kind of entertaining, like fun to read and to experience
Nathan: [00:24:59]
Yeah, that makes sense. you know, one thing on the, on the numbers and everything from your newsletter, you should, we were talking before that, you know, you’re earning a, full-time living from. from the newsletter, a question that I had going in is you have exclusively a paid newsletter. A lot of people have this hybrid model, right.
I have a free version and you know, and then the paid version you’ve gone all in on paid. Can you talk about,swhy you went on unpaid and, and then, you know, why isn’t there a free or a freemium model to that, to your newsletter?
Dan: [00:25:32]
sthe answer is that time,sis, is one thing. So the truth is actually there are some free articles,sand I, I started off kind of envisioning one free article for every two paid articles. It’s just that I, I, you know, for various reasons, like the
thinking from
I started writing the new consumer, my wife and I moved to Paris for four months.
So there was just, you know, Paris was kind of the reason why I wasn’t writing that third post every week. there are other, other, other reasons since then,sI do try to, you know, I aspire to have more free content. I think that is certainly a way that people find out about you. There’s no doubt that articles that are free reach, you know, at an exponentially larger audience than ones that are paid.
I publish probably a free article every month or two. My goal is to get that to about. Once a month or twice a month. one thing I just did that was free. However, is this is this massive project that I launched in December called consumer trends, which was a collaboration with a venture capital firm in New York called coefficient.
And what we did is basically 102 slide deck of the biggest trends that we thought were going to matter. Looking forward that, you know, the Corona virus had had this. Phenomenal impact on, you know, basically all of life, but especially the industries that we focus on, consumer packaged goods, food and beverage,syou know, things that people consume.
And so instead of writing a, although there is a 4,000 word version of it, which was basically my script for the video version,swhich I’ll also publish for free. Pretty soon, there there’s a hundred, there’s 102 slides and. And what I did was published that document for free. the video is free that the script will be published for free for folks who don’t want to flip through the slides.
And then what I’m doing for subscribers is kind of deeper dives on some of the topics. So that’s where I’ll do the, you know, 1500 word essay about what was four slides in the deck becomes a whole topic for, for deeper discussion and analysis. With the membership. So that’s,syou know, in terms of how much time it took to produce that, it definitely kind of equals the equivalent of if, if I had been publishing free articles every week or two on the site,sit just happened to be published in one huge.
Peace at the end of the year. you know, my plan kind of going forward is to do more big, huge projects like that, which I think really make, make up for the time and the value that they create. And then also do some more free stuff over time. And maybe even open up one thing I’ve done is open up some stories from the archives that I felt.
Maybe didn’t get the attention that they deserved. I did an interview with a co-founder of a beloved chain, chain of Indian restaurants in London called and I published it. I think March 17th or something like that, like right. As everyone went into panic about lockdown. So that piece kind of didn’t get the attention.
I thought it deserved at the time. So I opened it up for free and I’ve been promoting it since then. and it’s reached a lot more people than it would have had it been paid. you know, another very obvious thing I need to do is kind of tweaked my homepage of my website a little so that when people are landing on it, And learning about the value proposition of my paid services.
They’re also seeing, Oh, here are some free articles,sthat kind of give a sense of, of the, the point of view, the voice, the topics, the analysis, and hopefully those add up to, you know, a better, a better paid service. And also,syou know, being able to reach folks who are perhaps students or something like that.
And can’t, or shouldn’t be paying $200 a year for my paid subscription.
Nathan: [00:29:34]
in
case Right And I think you correctly pointed out that you don’t want it to be the reason that I thought that you didn’t have free like Oh I favorited or retweeted your announcement tweet your earliest, not prominently on your website And so it really everything guides you from the friends and supporters it’s like pay $200 and like actually support I have lots of questions about thatsone is,sfirst, what effect do you think that has had on conversion rates? Because I imagine it only having a paid option you then you’re free you know, your traffic to immediate,spaid conversion, paid subscriber is going to be higher because that’s The primary offering volume is that a factor in why you have it set Yeah we’ll go with
Dan: [00:30:15]
email
Nathan: [00:30:16]
volume by the
Dan: [00:30:17]
when I launched, which was almost two years ago, it was a conscious decision. You know, I knew I would get a lot of attention by launching. It was still. you know, relatively early in the era of paid newsletters,syou know, I was fortunate to,sbuilt up a following on Twitter and kind of throughout the tech industry during my career.
So I knew that my launch would get attention. I knew that I also needed to generate paid memberships in order to do this as a full-time job. And so, so I kinda didn’t, I don’t know, I didn’t, I don’t want to overthink all these things, but. I didn’t want to give people an easy out like, Oh, I’ll just sign up for the free plan.
And, you know, we’ll see if it’s worth paying for, I really wanted to kind of give people a strong incentive to become, you know, early, you know, effectively angel investors by,swithout getting any equity, of course, by signing up by putting down their 200 bucks,sit was only annual subscriptions at that point.
And I’ve since experimented with a couple other options I did later at a, a free. Tier of,sof newsletter that I’ve. Underutilized,sone of the things that’s kind of a challenge is that member full doesn’t make it easy to just plop your email in and sign up. Member full is the tool I use for managing my membership.
syou know, I’ve kind of talked to them about it. They’re there. Drawbacks to that as well. they, they use a JavaScript pop-up I don’t promote the free newsletter anywhere though. Really accept kind of as the option of last resort on the
Nathan: [00:31:54]
producing
Dan: [00:31:55]
page where I describe all the, all the newsletter subscription offerings, however, that big trends report I launched new consumer.com/trends.
You will see that one of the in fact, the first option that is being displayed is if you want to access this for free. Just sign up for a free account. You don’t have to pay anything to read all of this. And that’s where, you know, over the last month, thousands of people have signed up to read to read this free product.
Now I all of a sudden have a list that’s big enough that I should actually be doing something with it. So one of my big projects for this year is figuring out, okay, what is something that I can offer to those free members on a reliable cadence that is. Worth receiving,swhether it’s,san entire free article or summaries of some of the paid are paid work, I did,sor something else, something completely different.
Maybe that also goes to the paid members. Maybe that’s my Friday five thoughts or whatever it is. I have to think of. something that is useful and that I actually want to produce, and then I can send it to perhaps both of those lists and eventually drive more of those free members into paid memberships.
sbut that’s kind of, one of the big plans for this year is figuring that out.
Nathan: [00:33:12]
Yeah, I like it. Well, there’s a lot of things,sthat I want to highlight in that first. There’s something that happens. Like if you, as you build this reputation and friends in the industry and everything like that, and you venture out on your own, you do this new thing, which so many people are either have done or thinking about doing then what happens is you got all these people who are like, Oh yeah, I want to support Dan.
And so what does supporting. Dan look like in this case. Right. And I think you correctly pointed out that you don’t want it to be subscribe to the free newsletter or Oh, I favorited or retweeted your announcement tweet. Like, no, I want, you know, from, from the friends and supporters, to pay $200 and like actually support this new venture.
And so by giving that as the only option. I think that works really well. I think just from a psychology perspective,swe’ve seen that, well, a couple of things, one, you see that on Kickstarters where, when people come out with Kickstarter, if there’s whatever that cheapest option is,sum, often people would just go for that.
And so you see average order volume, or I don’t even know what you’d say. Yeah, we’ll go with
order volume, go up just by the fact that they make their cheapest option, like $30 instead of $5, you know, or, or that kind of thing. And then another thing from that is, like I mentioned, you’re going to have a higher conversion rate to the site because that is the, the primary call to action.
sand so I think that’s great. And as you also pointed out the, the annual subscription, right, it’s going to have lower churn. There’s more of an investment. People are saying like, okay, I’m going to try out your publication for a long period of time. so I think all of that is good. Now looking through your site.
I’m I totally agree. I like, I think now that you’re established, you should have more of that free option. And actually one thing that I would do is take those like greatest hits articles that you have of, you know, maybe the five that you’ve made free over time that you really want people to read and bundle that we could tweak and optimize the site it out, like try it out for free.
Get these five articlessand those automatically go out once per And that is a good way to perfectionism as a creator is a good way to not get anything done and so now that you not make any progresssbut yeah and on the on the testing side of things coming from like the software world where the big free report.
Right That’s accessible. That’s a PR worthy that’s worth spreading around like there’s clearly a lot Yeah The effort that goes into it that’s such a good to my site It’s still not enough like traffic and new signups to really like do many statistically I think that approach of you know always having great content behind the paywall, over this as an the last two years doesn’t apply to you because the We’ve seen You know you’re like I would have to run this test crazy What are your thoughts for it to be statistically significant where I should
Dan: [00:36:08]
Yeah, I guess one of the, that to me, one of the most interesting things about this kind of line of work or career or whatever you want to call it is the fact that small decisions like that matter. one of the parts of it that. Kind of, I don’t want to say aggravates me, but it’s challenging. It’s like, it’s hard to do too many tests.
Like you can’t really, yes. You can do AB tests on like subject lines and that kind of stuff, but it’s hard to really test things like that. Like I can’t go back in and launch a second time, this time with a free option and see, Oh, did I get, you know, 50,000 free sign-ups because I launched and therefore my conversion rate.
You know, even if it’s like one or two or 5% from that leads to a stronger outcome at the end of the first year, like it’s so easy just to overthink those things. And to me, like those are yeah. Interesting academic questions and,syou know, I hope that the answer is never like, Oh man, you missed out on a 10 times bigger business.
sbecause of anything like that, like, you know, as, as, as I’ve heard on previous versions of this show, like. You really just have to create great stuff on a reliable basis. And, you know, as I always say, like my, my, the secret to success in media is be interesting every day forever. And, and that has nothing to do with, you know, how you position the signup buttons, or whether you charge one 99 or $200 or anything like that.
It’s just like, can you maintain a level of, of quality and,sYou know, and, and be essential to people over a long period of time, then you’re going to be fine, no matter what, at least I hope so. And, and so far it’s, it’s worked out. So,syou know, I, I think about things like, Oh, what if I, what if I did this gimmick that’s free?
Or what are I, what if I try this other thing over here, or do I need a drip campaign or all these things? It’s like, yeah. And you do, you know, for, for many months, actually, probably over a year, I didn’t even have a free. sorry if I didn’t even have a, an automatic welcome email going out to people, which is idiotic.
I know that’s the first thing I should have set up. And now I do, and people like it and it’s giving them, you know, access to some of my best work, either the free folks or the paid folks. And, and now you’re right. Like what, what other campaigns can I set up that maybe re-introduce people to viable work from the library and the archive that.
syou know, they, they would not have seen otherwise. And that’s, again, another kind of another project for this year is figuring out how do I surface my archives better? And how do I take advantage of the fact that I now have, you know, probably over 200 articles that members can read and probably a dozen or, or more articles that,sthat visitors can read for free when they’re coming to my site.
So that’s kind of a project for the first half of the year.
Nathan: [00:39:11]
nice. Well, another good point of that is. One just start. Right? Cause we could, we could tweak and optimize the site forever and you’d be like, Oh, I only get to launch one time. And so I need to make sure that it’s perfect. And that is a good way to perfectionism as a creator is a good way to not get anything done and you know, not make any progress.
sbut yeah, and on the, on the testing side of things coming from like the software world where I spend all my time now, Like we have all this traffic and we can run all these AB tests, but like, even on my blog, I’ve got about 25,000 email subscribers to my site. It’s still not enough, like traffic and new signups to really like do many statistically significant tests.
So a lot of times when you read about AB testing or these other things, it’s like look as an individual creator It doesn’t apply to you because the math doesn’t You know, you’re like I would have to run this test for nine months for it to be statistically significant where I should actually trust the results And so I think you’re spot on that. A lot of that stuff is great to read but it doesn’t really apply
Dan: [00:40:19]
Yeah. I mean, even, even when I was,syou know, at, at Fox media, we were, you know, we were fortunate to have. Tens or hundreds of thousands of subscribers to our our Recode newsletter. And we would do these AB test subjects. And the open rate would, would maybe vary by, you know, less than a percentage point. And at that point it’s like, all right, just go with your gut.
Like, what’s the, what’s the best subject line. and don’t overthink too many things.
Nathan: [00:40:47]
yep. That makes sense. one other thing that I want to talk about is pricing. And so you have,syou know, the, the price of $200 a year. Is that the price that you started with.
Dan: [00:40:58]
surprise. I started with pricing is a huge question. you know, I had folks giving me advice to charge more than that, like a thousand bucks a year. at that point, Ben Thompson was at a hundred. There were a few other paid newsletters run by kind of friends or acquaintances that were in the hundred dollars to $300 range.
sI had, you know, I knew that business fashion was charging two, 300, $400 a year for their professional membership. I also knew that investor newsletters were charging many thousand dollars a year for their membership. So,sto me, I, I thought about kind of what, what feels right. you know what, what’s an amount that I feel appropriately values my work, but isn’t kind of.
Like a jerky amount to charge. And I
Nathan: [00:41:48]
math
Dan: [00:41:49]
to 200, it just felt like the right number, the way I kind of backed into it was, you know, w what would,swhat would it cost to have a nice business? Lunch was just the two of us in New York city. If we went out for sushi or something like that. Not 200 bucks. So, you know, if this is the equivalent of my member,smy subscriber taking us out to lunch once a year in exchange for my brain, 50, 50 weeks out of the year,sI think that’s a pretty fair value exchange.
I anticipate most people are expensing it or otherwise justifying it as a business expense or as a professional membership or as educational media. So. I feel comfortable with that. I did some experiments with monthly and,sand now I have quarterly memberships, monthly, monthly. It was fine. I didn’t love it.
sI want people to feel like they’re investing in me for more than a month. you know, there weren’t a lot of people who would sign up for a month and then quickly turn off auto renew and. You know, gobble up everything and then disappear. That wasn’t really a huge problem. I haven’t really studied churn in depth, you know, there’s just so many variables.
sit’s at a level I’m fine with, so I’m not, not paying too much attention to it. obviously I want to be, I want it to go down and I want it to provide more value to, to readers, but it’s not like a huge problem. but, but I switched to quarterly as kind of an introductory point. Cause I figure, you know, three months in right.
If people aren’t loving it, like they shouldn’t have to pay for it and read it. and if they are, that gives them kind of an entry point where they’ve seen enough of my work, you know, I, I kind of think as every issue, as an experiment in like topic tone, length format, structure, point of view, all of these things.
And over three months you get enough. You know, enough iterations
Nathan: [00:43:44]
traffic and we
Dan: [00:43:44]
that to, to get a sense of like, this is either something you want in your life or you don’t, and then you can either kind of upgrade to an annual membership and pay less on a monthly basis, or just keep cranking with quarterly. And I think that’s a pretty good amount of time for people to get it.
Good sense.
Nathan: [00:44:01]
Yeah, that makes sense. So over this time, like the last two years, since you launched a new consumer, We’ve seen like sub stack rise, like crazy. What are your thoughts on building, you know, on an independent platform? You know, you’ve got member full MailChimp plus Stripe, Yeah So since you’ve been writing about tech for a long timesI’d love your take on sub stack versus media
Dan: [00:44:22]
yeah, not truly independent. CausesI didn’t write my own payment processor language. Right. you know, you’re, you’re in any line, you’re always kind of relying on suppliers. I, you know, for me
This whole thing, the only reason I do this and the entire reason I do this is because I want control. I want to control over my time, primarily. I want control over what I think about and what I do. And I want control over the experience for the member and the reader. And, you know, I want them to have a clutter-free reading experience without any intrusive ads. I don’t want them to ever have to click off of a pop-up. all these things are really, really important to me, to the degree where I’m willing to risk my career and my life to operate my business this way.
So,stools are extremely important to me. hopefully they also play a role in that user experience and therefore, you know, I thought substantial. W was fine. if it was the only option I had, I would’ve probably been happy using it. I might use it for another project. I have that,sI’m currently paying MailChimp way too much money for,sfor a free newsletter that I, that I am not even sending out.
So.
Yeah, that’s point’s party, which was kind of my first experiment when I was still working at Vox media, I was like, what’s it like to make a newsletter? Huh? Why don’t I spin up a friend’s newsletter about credit card points and see how I like writing newsletters. and I learned very quickly, wow.
Newsletters are a lot of work. and also it’s very expensive to host a list on MailChimp with something like 3000 signups,sthat I’m not sending out. So,sI’m still working on that one, but. and I’ll probably, it was hard to write about airline points during, during COVID, like who,
Nathan: [00:46:15]
Right. Yeah. I w I have more airline points now that I know what to do with that. I’m just dreaming
Dan: [00:46:21]
yeah,
Nathan: [00:46:21]
what I could possibly redeem them for. So,
Dan: [00:46:24]
totally. Yeah. Yes. Exactly. So that’ll be a good, a good thing for me to restart with pretty soon. but anyway, so yeah, tool sets like I think sub stacks fine. It’s all in one. I like controlling the way my homepage looks. I like being able to pick out. Fonts from an independent font Foundry in New Zealand and use those for my website.
I like being able to tweak the WordPress template when I want to tweak it. And I was able to put together kind of a stack of, of tools that,syou know, and I happened to see them in use for. Stratec Curry and for Kottke and some other sites and, and, you know, member full, thankfully worked straight out of the box.
There were no challenges implementing it. it’s actually a very, very well made tool. And so I was very happy with that, that stack that I was using MailChimp,sWordPress member, full and Stripe. I have no. Secret desires to, to move off or anything like that. Like it’s all, it’s all great. I think interesting because it has massively lowered the technical and kind of infrastructure,sbarrier to entry.
And I think it is allowing folks who are, you know, either less technical or just have no interest in running tools to start newsletters and. you know, and, and build subscription and membership based businesses. So I’m all for it. I think it’s great. It’s hopefully putting some pressure on member fold to improve their product.
I love competition,sespecially in the, in the marketplace for tools. And will it grow into, you know, the valuation, it needs to make Andreessen Horowitz a bunch of money?sI would say there’s not a clear yes or no answer to that yet. We’ll see. But,syou know, I’m, I’m glad they’re doing what they’re doing.
Nathan: [00:48:20]
Yeah. So since you’ve been writing about tech for a long time,sI’d love your take on sub stack versus media. Right. Cause I feel like four years ago, five years ago, medium started this, this big rise. and actually when you look at the numbers from the medium puts out and they’re still growing like crazy, we just are all I’ll speak for myself.
I have this perception, you know, that some of the people who were Yes they a lot of
Dan: [00:48:42]
people
Nathan: [00:48:42]
two years ago are now writing on sub stack. So I’m curious as to your take as to why, you know, what, what medium potentially missed and what sub stack is capitalizing on.
Dan: [00:48:53]
Yeah, well, first let’s caveat that like medium probably only still exists and only was able to raise the amount of money it was able to raise because of Williams is the founder and CEO. And, you know, the fact that he built blogger and Twitter,sgives him the ability to raise capital and operate at a loss and just kind of figure things out because he’s at Williams and he wants to, and,sthat’s fine with me.
I, you know, I, I probably had a. You know, at first I was really intrigued by medium because they put so much effort into a really great offering tool. Which is something that most publications and content management systems don’t really,sit just, you know, you’re, you’re stuck using a commodity Wiziwig editor or, you know, WordPress now has, has many years later now tried to do their thing with Gutenberg, which I don’t love, but I tolerate. but yeah, medium was really special because it put effort into the offering tool and the reading tool. And the idea was let’s democratize publishing tools and let anyone write whatever they want. they they’ve gone back and forth now several times with owned and operated content or licensed content, you know, they were powering the ringer when it launched. sand they have since hired some really, really talented teams of journalists who work for medium writing publications, like one zero and marker, and a bunch of things like that. So it’s been interesting to see how, you know, you even say that they compete with their own. Publications now in some ways by,sby hoping to command more and more of,suh, of the attention by their owned and operated properties, or at least using that as kind of the, the thing that, that brings people in.
And then perhaps either, you know, sort of like a, you know, any recommendation and algorithm then recommends cheaper content to people over time. Et cetera. Some of that won’t happen with medium because media, sorry with sub stack, because sub stack isn’t run by ed Williams. although I think the sub stack folks have, have done a pretty good job so far kind of building, building,sprominence and getting attention.
sI think. To me, one of the more interesting questions is at what point does Substack kind of start becoming competition for some of its writers? you know, is there a big bundle at some point that Substack says, okay, for a hundred bucks a year, everyone gets access to all of our publications and they can’t opt out of that.
Or, you know, if they do opt out of it, we’re not going to include them in our recommendation algorithm. So many things, I mean, should, should sub stacks include, should you be forced to include links to other Substacks at the end of your newsletters? Should you, you know, should you build awareness for other publishers on the network because you’re part of sub stack.
Are you, do you own your brand or is Substack the brand that you’re contributing to? There are a lot of there’s nuances to all of those things, but it’s a question of. You know, are you really running an independent publishing business by using Substack Or are you just kind of, and they’re never going to say this like building up their machine that then they will use to build something way bigger than the sum of all of its parts.
sthat’s an execution thing. That’s a, that’s a product vision thing. I won’t pretend that anyone’s figured all that out yet. You know, a lot of that stuff could happen. None of it could happen. We’ll see, but so far, I would say, like, if you’d asked me a year ago, what I thought of sub SAC, I would have said, they’re not doing a good job, getting prominent people using sub stack in the media industry.
And I would say that a year later, like they did a really good job last year, getting people
Nathan: [00:52:46]
two years
Dan: [00:52:47]
Casey Newton and Maddie Blasius,sand other folks to, you know, set up shop on sub stack. And there were, you know, there were. Sub stack originals, like,syou know,sI think he did as the name of it. Like there were, there were folks like that,slong before, of course,syou know, the biggest one or one of the biggest ones was cynicism, which was,syou know,suh, China newsletter that,sthe guy who, who founded it, whose name I’m blanking out right now was an angel investor in sub stack.
And they kind of built it for him. those things have, have existed, but what sub stack has done, I would say. Pretty much about as well as I would say they could have done last year was get people to leave their cushy, highly paid jobs at the Vox media is of the world to start sub stacked newsletters.
And we’ll see what that looks like in a year or two. We’ll see what the churn looks like. You know, I’ve heard secondhand that they’re kind of giving,shealthy advances to those folks and kind of guaranteeing them some revenue. I don’t know what that looks like in a couple of years, how much those people like that job in two years, I still love mine two years in.
It’s the best job I’ve ever had. I want to be doing this, you know, for many, many more years. but we’ll see. I don’t know. It’s certainly not for everyone.
Nathan: [00:54:06]
Yeah, that makes sense. So, I imagine running the new consumer for awhile, you have,sa good number of friends who come to you. And at various times ask like, should I start a paid newsletter? What advice do you have for me? And what do you tell them? Is it a path they should take? And if so, what, what are a few of the things that you’re like, okay, you got to get this part right.
Dan: [00:54:26]
I mean, if you like controlling everything about your life and your time, it’s great. If you love the idea of having. Influence over the way that your content, you know, not only the, what’s, what you write, but how it’s presented and how people engage with it. you have that ability in a way that you would never have working at a traditional journalism outlet.
swhat I would say is you better be ready to do customer service all the time. You are, you know, asking people to update their credit card number in the backend politely you are. You know, dealing with people who want a deal or, you know, some custom version of the subscription all the time, you were trying to upsell people to team memberships and that kind of stuff.
If you, if you enjoy that. And I actually really do, you know, I worked in retail in college. I love kind of that customer service and sales elements of it. I wouldn’t want that to be the whole job. And that’s why I never kind of worked in the business side of media, but I love having to me like the, the.
The fact that my job has a little bit of sales and a little bit of customer service and a little bit of product and a little bit of design and a little bit of tech and a lot of editorial and some marketing and all that kind of stuff. Like to me, that’s super fascinating. And you have to do all of those things and you have to do them pretty well to succeed.
sso far I’ve done them well enough,sand hope to get better at all of those things. If you don’t want that though, then don’t touch it. Like it’s not for you. And yeah. Sub stack is kind of trying to. Automate or at least take over some of those functions, but it is your responsibility over time. So if you don’t want to do that, then, then stay away from it.
You can, I advise everybody to start a free newsletter and keep your friends and followers up, you know, up to date on what you’re working on. I think everybody should have that, whether they work in media or any field,sthere’s no reason not to. And it can only be helpful for your career. And especially if you work in publishing or media or journalism, but you know, that that is an entirely different thing than sending twice or three times a week, or even for,syou know, a high quality professional thing,sto people who are paying you.
Nathan: [00:56:48]
Yeah that makes a lot of sensesas we start to wrap up, we got a bunch of questions on Twitter and I’d love to run through some of those and a little rapid
Dan: [00:56:55]
Yeah
Nathan: [00:56:56]
They’re not necessarily all about newsletters, but,sJohn’s asking as a fellow Angeleno, who also lived in New York before, we’d love to hear your thoughts on West coast versus East coast media.
What’s different, you know, what, what have you noticed.
Dan: [00:57:11]
I mean, it’s kind of,sit’s kind of a hard time to answer that question because I feel like I don’t live anywhere right now. Cause I basically just live in my house.
sthere’s there’s no media scene happening anywhere at the moment.
Nathan: [00:57:27]
That makes sense.
Dan: [00:57:29]
what I, what I, you know, my wife and I moved here this last summer for mostly personal reasons.
Like we just like it here. We had spent a lot of time out here. I think the startup and entrepreneurship scene in Los Angeles. Has a ton of potential. I think it’s very interesting. you know, the fact that Hollywood is here with, with such great creative talent and intellectual property and, you know, knowledge about distribution and marketing and sales, and most importantly, like making content that people love emotionally and,syou know, invest so much of their time and spirit in.
I think it’s something that. You know, we can learn from, I, you know, and then the New York media world is so dominated by decades of legacy, print and broadcast, and now online media. but I think COVID is, you know, it’s, it’s not fair to compare anything right now. Everything is kind of, I think we’re figuring out a new reality over the next few years.
I think there’s great potential in LA. I love that the ringer was started here. I love it. There are some really interesting publications being started here. I think, you know, some of the world’s next great media companies could be built in LA, but, you know, they could also be built anywhere.
Nathan: [00:58:48]
Right. Yeah, that makes sense. Okay. Matt’s asking what weird thing about consumers. Did you learn spending a lot of time in Paris and Tokyo
Dan: [00:58:55]
Hi, Matt. thanks for the question. yeah, I, I travel a ton before this,sbefore COVID, I hope to travel a ton afterwards. we did live in Paris for a few months, two years ago. I try to get to Japan once or twice a year. You know, I think for me, it’s just kind of being able to have the privilege of just observing how people in, in different places and cultures do things.
syou know, my, my background is writing about technology and I try to think of technology less as an industry and more as. What I call a layer on life. So seeing how people in Japan adopted, you know, card-based,sSuica payments way before we had Apple pay or even contactless payments here in the U. or,syou know, I love going to London and seeing all the, the design and packaging design that on consumer products there that is, feels just much more vibrant than a lot of the.
Big consumer packaged good brands had been doing in the US for a long time. I loved living in Paris and kind of getting to experience the old school way of, you know, buying essentially groceries, you know, every single day for that night’s dinner. but also, you know, seeing, seeing some sort of models that did not really exist in the US yet.
So Travel just helps broaden perspective. I would say. I think travel is, is great for that for. Not just my line of work, but, but really everyone just getting to kind of see how things are done in different places. sometimes in ways that are super unique to that place. And then sometimes in ways that they could grow and scale around the world,
Nathan: [01:00:42]
Nice. Okay. Last question. Donna veers asking, what would you do differently if you had to start over? I assume that means start over with like the paid newsletter.
Dan: [01:00:53]
life or the publication.
Nathan: [01:00:54]
you’re like, well in middle school, I would have no, I, I, I think he means with the publication. [01:01:00]
Dan: [01:01:00]
zero things where I’m like, man, you really screwed that up. you know, I was lucky on day one to have enough people sign up that I knew it would be my job for the next several months. And then I was lucky in year one, that enough people signed up that it became my job, you know? Indefinitely. I don’t want to say permanently because what’s what is permanence?
sso there’s nothing where I’m like, man, you really screwed that up. I think there, you know, one thing I, I wonder about is for example, and maybe you have the data to help me figure this out is like, should I be sending out newsletters on a predictable schedule every single week right now? I. Follow a kind of follow my productivity.
I send out a newsletter when it’s done. And then,sor I usually schedule it for the next morning because people don’t need to know what time I finish it, but,sat nighttime, but, [01:02:00]syou know, would I be, would it matter materially if, if I were sending out newsletters, every, let’s say Tuesday, Thursday and Saturday morning, or is it okay with the fact that I send it out?
Kind of on a, on a, I don’t want to say haphazard basis, but it’s, it’s not as,sas predictable, you know, Are newsletters the kind of things where people want to compartmentalize a certain time of the day or of the week to enjoy them and read them or are they happy to get it? When news breaks, which is kind of the model that I had had been following with most of my career, which is if there’s news, you better get it out there immediately because someone else is going to, if you don’t.
So that’s one of the things that I think, I think about a lot. you know, I, I think my kind of happy medium is like, try to be predictable, but don’t like, let it rule your life. but I don’t know. I’m curious what you see.
Nathan: [01:02:53]
I think all things being equal, the predictability is better than not. And so not only day of the week, but also when we’ve talked about this on some other episodes, getting to a precise time of like 10:00 AM Eastern, every Tuesday, someone can look for that,sthat article to show up. and you’ll be right there in the, in your inbox.
That said it’s important to ask. What’s the point of this newsletter right? Are you, are you as the author there to serve the newsletter or is the newsletter there to serve you? And so I think the point that you made of like, look, this is my creative schedule. This is when I’m inspired to write. And yes, I’m always going to meet the promise, I’ve made to the audience of two posts a week, or, you know, whatever that is.
I’m going to hold up my end of the bargain, but it might not be worth it for me. to ha feel the additional pressure to hit an exact time for the somewhat marginal gains of,sthe predictability from the audience side. So all things being equal,san exact time every week, I think would help engagement, but I don’t know that the trade-offs are worth it.
Dan: [01:04:02]
So that’s something I’m going to figure out, but yeah, I mean, other than that, like the only other big thing would be, not, you know, you only launch once. This is the advice I give to people. You only launch once. So really make as big a deal out of the launches you can. And even when I launched, like one-off things like the consumer trends report, a launch date is, is launch day and you better put all the effort into that, that you can,sSo that, you know, like I was very pleased with my launch, but the question is like, could it have been 10 times bigger if I did this other thing or that other thing who knows?
I don’t know. There’s no way to go back and figure that out, but it kind of is something I think about as I’m launching new components or new new things. And then the other big question is like, should I have launched with a free tier and what I have captured a hundred thousand emails in the first week.
I have no idea. I don’t know. I know that a hundred. I think it was over a hundred thousand people visited the site. So I wasn’t going to get all of those people, but probably more of them than. So you know, then simply the people who signed up for paid, but you know, in this, in this world, you can only think going forward.
I try not to dwell on the past of, of kind of how I did things and just try to get better all the time. Do interesting things, keep it fresh, be interesting every day forever. And so you know, and the biggest, the biggest takeaway is I love this model. I think it’s great. It’s not great for everyone. It’s great for me.
I’m gonna stick with it. And I hope people come along with me for it.
Nathan: [01:05:37]
Sounds good. Well, where should people go to follow along and hear your story and support your work.
Dan: [01:05:45]
So The New Consumer is newconsumer.com and also, @newconsumer on Twitter and Instagram. My personal accounts are all @fromedome since III world in 1995. So you can find me on all this on social media as @fromedome. And @pointsparty, if you want to, someday in the future, read for free about credit card and travel points.
Nathan: [01:06:13]
Sounds good. Well, thanks for joining me.
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