Podcast Summary
The Fundrise Innovation Fund and the Importance of Mega Trends in Venture Capital: Success in venture capital lies in identifying and understanding mega trends rather than picking individual winners. Stratechery, shaped by tech industry powerhouse Ben Thompson, offers valuable insights and inspiration for modern business creators.
The Fundrise Innovation Fund is like a Vanguard fund for private technology markets and focuses on increasing transparency and access to bring benefit of beta. Bringing alpha by picking winners is not important but writing the mega trends is important for Venture Capital to survive. The industry will age and the stories that were once true will no longer be true. Ben Thompson, a powerhouse in the technology industry, has played an important role in inspiring many business creators today. Stratechery, built on Ben's website, today shapes the thoughts and conversations of the entire technology industry. The podcast episode of Acquired explains the history and strategy of Stratechery.
The Importance of Consistency in Online Content Creation: Creating consistent, quality content is crucial for building a sustainable online business. Building a back catalog of content can establish credibility and excitement, while microtransactions can create timing mismatches. Always keep a long-term perspective in mind.
Consistency is key in online businesses. Demonstrating your ability to consistently create interesting content is more important than just creating one really good post or podcast. Every piece of content you create is a churn opportunity, and reducing the average quality of a thing someone expects from you can be damaging. While it's important to give consumers what they want, creators must also consider the long-term perspective and sustainability of their business. Microtransactions for articles can be time-consuming and create a timing mismatch between payment and investment. Building a back catalog of content can establish credibility and excitement for new episodes or content, and can be useful in launching a new business.
Subscription Pricing, Consistency, and Strategic Decisions for Online Content Creation.: A successful online content creation strategy requires a focus on annual subscriptions, a promise of regular and high-quality content, and a business model that strategically balances technology with financial results.
Subscription pricing and consistency are key to online content production. Knowing what you are selling, such as a promise of regular and high-quality content, is more important than just selling individual articles or episodes. Annual subscriptions provide stability for both the content producer and the customer. For businesses producing content, focusing on the intersection of strategy and technology can fill a gap in the market. The strategy that goes into products and the business models behind them drive financial results. The question of why companies make certain decisions is more important than just identifying a bad decision. Consistency and quality are important to content producers, but a high volume of content is also necessary to keep up with demand.
Understanding Organizational Capabilities and Weaknesses for Successful Strategy: Companies must deeply analyze and understand their organizational capabilities and weaknesses to create winning strategies. This requires collaboration among many individuals and access to both factual data and informed analysis.
Understanding the issues, organizational capabilities, weaknesses and strengths is important for companies to adopt a successful strategy. Analysis and opinion play a crucial role in explaining why something happened and what should happen while journalism is simply about uncovering facts. Culture comes from doing and not just saying, and it is hard to define it in words. Companies are not run by a single entity making decisions, but thousands of people with different opinions and takes. Therefore, understanding the shared understanding of what a company is and is not capable of is important to understand why companies do what they do. Access to data is necessary to make decisions based on data, but it is inherently backward looking.
The Role of Culture in Navigating Change in Business: Building a strong culture is important for a company's success, but it's crucial to also be open to change and explore new opportunities. Trusting your instincts and staying committed can lead to breakthrough moments.
Culture is a powerful force in keeping a company moving in the right direction without the need for extensive processes, but it can also be dangerous when change is necessary. Opportunities can be limited by a lack of awareness, and the importance of exploring different paths should not be underestimated. Daily content creation and hitting points can be successful, but it requires commitment and perseverance. The emotional moment of realizing a venture could work can be a turning point, and it's important to trust your instincts and follow your passions.
The Power of Highly Differentiated Content: Offering highly unique and niche content, charging a subscription fee, and focusing on scalability are vital for building a profitable tech analysis site in an era of centralized advertising on big platforms like Google and Facebook.
Ben Thompson believed that an advertising-based model like the one used by popular blogger John Gruber was not a viable option for his tech analysis site, Stratechery. Instead, given the rise of Google and Facebook and the centralization of advertising on those platforms, he chose to offer highly differentiated content and charge a subscription fee. Though he explored sponsored posts and found them too much of a hassle, he realized that a niche audience and the right content can pay off in subscriptions. The rise of Stripe and tools like it made it easier to offer subscriptions, and Ben Thompson learned early on that scalability was key in building a profitable site.
Stratechery and the Subscription Model that Works: A successful subscription model is one that offers more value to customers than they pay for, is easy to self-serve, and utilizes social media for free marketing.
Stratechery innovated the subscriptions at scale, charging a low price relative to $25k or $10k, and on a self-serve basis. The company hacked WordPress subscription tools and Stripe to glue them, which was later eased by Memberful. Andrew Sullivan pioneered the subscription-based model, earning a million dollars in revenue, but burned out due to the constant posting needs. The paywall was super loose and felt like taking stuff away from customers. Stratechery went for the subscription model's opposite where subscribers get more, and started focusing on publishing twice a week for more exciting purchases. Social media is a godsend for publishers with new business models and low-cost structures, as they can get free marketing and a platform to showcase their content.
Tips for Creating a Memorable Brand on the Internet: A memorable name and unique visuals are crucial in building a brand that sticks with readers. Engage with others in your industry and pay attention to details like grammar and typography to maintain a professional image.
To build a memorable brand on the internet, it's important to have unique and visually distinct elements, as well as a memorable name that is easy to pronounce and spell. Creating content that sticks in the minds of readers and triggers their memory after they've left your site is also crucial for building a following and achieving network effects. While building a brand from scratch can have many rough edges, engaging with others in your industry and sharing your work can lead to unexpected opportunities for growth and visibility. However, it's also important to take care with the details, such as grammar and typography, to maintain a professional image and earn the respect of your peers.
How Pursuing a Passion for Writing Led to Job Offers and Valuable Insights: Pursuing your passions can lead to unexpected opportunities and insights. Networking, self-belief, and persistence are key to success when pursuing your dreams.
A single post by an influential blogger led to a triple increase in the author's Twitter followers and a significant increase in the number of subscribers to his website. This led to job offers from major companies, but the author chose to continue pursuing his dream of building Stratechery. Despite finding a job at Automattic, the author struggled with guilt as he felt that he was devoting most of his time and energy to Stratechery, which was not his primary job. Nevertheless, his work at Automattic helped him gain valuable insights that he could apply to his own business later on. The experience highlights the importance of networking, self-belief, and persistence when pursuing one's dreams.
Overcoming Obstacles to Build a Successful Business: Starting your own business can be challenging, but it's important to be flexible and willing to make changes when encountering obstacles. Perseverance and hard work can lead to success, even when facing doubts and financial pressure.
Starting your own business can be stressful and challenging, especially when faced with unexpected problems. Ben Thompson left his high-paying job to start Stratechery, but initially struggled with technical issues and a confusing product. He had to tear everything out and start over while facing financial pressure and doubts from others in the industry. However, he persevered and gradually gained more subscribers and traction. It's important to be flexible and willing to make changes when encountering obstacles. Even if others doubt your idea, if you believe in it and work hard, success is possible. Sometimes, the key to success is not to give up and to keep striving towards your goals.
Strategies for Business Growth and Adaptation: Simplify business models, alleviate potential customer fears by making payment processes easy and secure, differentiate and maintain consistency, and stay adaptable to evolving trends and patterns to ensure business success.
When starting a business, it's important to have a clear business model and simplify it as much as possible. Exponential growth is limited by word-of-mouth and networks getting exhausted. Psychological factors like fear of losing money can affect subscriber growth. Making it easy to pay and ensuring security can alleviate these fears. Differentiation and consistency are key strategies for growth and using multiple channels to reach audiences can be effective. An accidental email hack can sometimes lead to unintended positive outcomes like the growth of email as a publishing platform. Overall, a business needs to evolve and adapt to changing times and usage patterns to maintain its relevance and success.
How Subscriptions provide Valuable Feedback and Revenue for Writers: Subscriptions offer writers direct and valuable feedback from paying customers, leading to customer loyalty and recurring revenue. With accessible pricing and technology infrastructure, writers can prioritize their subscribers' satisfaction over pandering to a larger audience.
Subscriptions provide a valuable feedback mechanism for writers, as subscribers will give feedback through their actions, such as continuing to pay for content. This feedback is independent of click numbers or engagement on social media, and it allows writers to focus on serving the paying customers rather than pandering to the larger audience. Additionally, the recurring revenue from subscriptions is powerful and can lead to customer loyalty. Despite the potential for niche audiences and churn, accessible price points and large subscriber numbers allow writers like Ben Thompson to prioritize the paying customers and their happiness. Passport, Ben's technology infrastructure, enables email forwarding and tokenization of links, giving subscribers the opportunity to access old content and creating a seamless reading experience.
Expanding Your Impact in the Internet Market with Gradual Price Increase and Exploring Market Edges: When building a business in the internet market, explore the edges and gradually increase prices to avoid limiting subscriber growth. Meanwhile, outsourcing financial services with Pilot.com can improve time and resources for growing companies.
Ben Thompson's success with Stratechery shows that markets on the internet are much larger than people think, and it's important to explore the edges of that market to have a larger impact. Raising prices too soon can limit subscriber growth, and it's better to gradually increase prices to outweigh churn. Despite tapering growth over the years, Stratechery's market is still larger than what Ben initially expected, with tens of thousands of paying subscribers and millions of free readers. Pilot.com is an excellent solution for startups and growing companies looking to outsource finance and accounting services to experts and technology, reducing headaches, and improving leverage on time and resources.
The Challenges of Building a Successful Paid Podcast: Building a successful paid podcast can be challenging as it is difficult to promote and share. Offering podcasts as part of a subscription can be a better option to increase value and attachment for listeners.
Podcasts are a great product for subscription as people get attached to a particular host and it becomes a part of their routine. However, it's unclear how to build a podcast, particularly a paid one, as it's really hard to get people to start listening. Unlike writing, podcasts are difficult to share on social media, which is a limiting factor for growth. Instead, podcasts tend to succeed with writers because writing is a good marketing medium and their readers will try their podcasts because they already like them as a writer. Offering podcasts as part of a subscription such as adding Dithering to Stratechery can be a better option than selling it separately and it can make the subscription worth more.
Effective Churn Management and Cross-Promotions Key to Subscription Business Success: To keep customers loyal, subscription businesses must prioritize effective churn management and valuable cross-promotions. Experimentation and focusing on creating quality content over short-term profits can lead to success, as demonstrated by Stratechery's alternative business model.
Subscription businesses require effective churn management and creating valuable cross-promotions to increase customer loyalty. Ben Thompson of Stratechery aims to decrease churn by offering Sharp China, a podcast collaboration with Bill Bishop, which appeals to a different but overlapping audience. While this additional cost may not lead to immediate revenue maximization, Thompson prioritizes experimenting and having fun with his business model over short-term optimization. His choice to remain a solo business and not seek venture capital aligns with his passion for creating valuable content and having a lifestyle business. The success of Stratechery and other similar businesses demonstrates the potential for alternative business models that rely on talent over corporations, enabled by the internet.
Exploiting Niche Markets through the Internet: By using tools like Facebook advertising and technology to simplify access, anyone can build a profitable business in a niche market. Being a big fish in a small pond is key to thriving in the winner-take-all economy of the internet.
The internet creates economic opportunities and winner-take-all effects in specific markets, rewarding those who find their own pond and become the biggest fish in it. Niche businesses can thrive with Facebook advertising as a valuable advertising tool. Ben Thompson's business model for newsletters is successful, but the mechanics of growing and marketing podcasts still need to be figured out. Sharp China and Sharp Tech are experimenting with offering more clips and snippets on their free feeds. Technology can simplify the process of accessing podcasts and other content, making it easier for users to consume and engage.
Overcoming Challenges in Sharing Podcast Content and Creating New Business Models: Thompson explores the revenue potential of a subscription-based model versus writing a canonical work but acknowledges logistical and fear factors that prohibit him. He understands the short-lived nature of his edge in shaping industry knowledge.
Ben Thompson discusses the challenges of sharing podcast content naturally and his passion for creating new business models for both big companies and individuals. He also talks about the revenue generated from his subscription-based model versus writing a book. While he acknowledges that canonical works, such as a book about Aggregation Theory, would be valuable, logistical and fear factors prevent him from doing it. The nature of the internet, which he finds to be transient rather than permanent, is also a factor. Thompson's work has influenced and shaped current industry knowledge, but he understands that his edge is usually measured in months or a few years at best.
Twitter's Original Concept and the Power of Aggregation Theory: Twitter's original concept of in-the-moment updates was a better product, but the fear-inducing archive of tweets ruins its façade. Aggregation Theory highlights the power of giving a term to brand a concept. Writing about current events attracts and helps the audience to understand. Tiny's Internet-based company is built on acquiring premier internet businesses.
Twitter's original concept of being just an in-the-moment social network was a better product. The archive of tweets induces fear and ruins the facade of the platform. The concept of Aggregation Theory was coined by Ben Thompson, which is the power of giving a term and branding it. Sometimes a writer can be too early in writing and communicating issues. Writing about current events works better for attracting the audience and making them understand. Tiny is an Internet-based company that has built and acquired a collection of the world's premier internet businesses.
Tiny Offers an Alternative Solution for Stranded Venture-backed Companies: Tiny provides an off-ramp for profitable businesses that can no longer raise funding, allowing founders to regain control and continue growing without the pressure of a quick exit. Contact hi@tiny.com to explore this option. Additionally, Ben Thompson suggests that Meta focus on acquiring Shopify to boost their ecommerce and advertising capabilities, instead of investing heavily in the metaverse.
Tiny is offering an off-ramp for venture-backed companies that are stranded assets in the technology industry and unable to raise further funding. Tiny can take over these profitable businesses and help founders take control back and continue growing their life's work with the right capital structure. This removes the pressure on the business to get to an exit, and Tiny is happy to own these businesses in perpetuity, providing an alternative solution for companies that would not make sense for a venture capital firm. Founders and VCs can contact hi@tiny.com to explore this option. Additionally, Ben Thompson suggests that Meta should acquire Shopify to close the loop on ecommerce and advertising, and focus less on the metaverse, which he believes is a bad idea.
Challenges and Strategies for Facebook, TSMC, and Amazon's Success.: To succeed in the changing market, Facebook needs to rebrand itself and sell headsets, TSMC must take risks and invest in Japan, while Amazon needs to prioritize innovation and profitability.
Facebook needs to sell headsets at scale to succeed in the metaverse, but their branding as a social network works against this. TSMC faces geopolitical risks in Taiwan, but must continue to invest there to maintain their adaptable model. The China risk and limitations of Moore's Law pose additional challenges. Amazon must focus on becoming profitable in day two, which requires organizational and market changes. If CEO, Ben Thompson would double down on Facebook and consolidate Meta, acquire Shopify, and fight in court. He advises TSMC to accept the geopolitical risk of Taiwan, invest in trailing edge fabs and consider fabs in Japan. As for Amazon, it too must focus on profitability and innovation to succeed.
The Importance of Embracing the Present for Individuals and Companies: Embrace your current life stage and focus on core competencies to avoid overinvestment and loss of control. AWS's wide range of features creates a moat and Microsoft's focused platform builds trust. Lock-in and talent retention are valuable for long-term enterprise success.
Living in the present and embracing your life stage is important for individuals and companies alike. Companies cannot remain startups forever and must focus on their core competencies to avoid overinvestment and loss of control. AWS benefits from offering a wide range of features, which creates a moat that keeps customers locked in. Companies like Microsoft succeed in the market by providing a known platform for customers to move over and build a foundation of trust. AWS doesn't deprecate features as it creates lock-in for customers and helps in building long-term enterprise value. Microsoft's geographical location saved them, as their talent did not leave to work for other companies, unlike in Silicon Valley.
Ben Thompson's Transparent Subscription Model and CEO Interview Insights: Ben Thompson's subscription model provides transparent analysis and exclusive access to CEO interviews where he ensures full transparency and not just parroting what CEOs say. According to Thompson, analysts and individuals in different spaces provide better interviews, and he believes the Metaverse is probably a bad idea.
The easiest way to opt into the Stratechery universe is by subscribing for $12 a month or $120 a year which unlocks access to Stratechery, the update and interviews with CEOs, analysts and founders. Ben Thompson believes in personal analysis and transparency in his interviews, ensuring full transparency with his subscribers and not just parroting what the CEO says. Over time, he has gained access to basically anyone in his space and has interviewed numerous renowned CEOs and founders. He believes that CEOs are surrounded by people telling them what they want to hear while analysts and other individuals in different spaces provide better interviews. He is of the opinion that the Metaverse is probably a bad idea.
Ben Thompson's Approach to Balancing Relationships and Integrity in Tech Writing: Prioritizing audience credibility and long-term relationships over personal benefits can lead to a successful and authentic tech writing career. Continuous evolution and quality content are essential for maintaining integrity.
Ben Thompson prioritizes the credibility and interests of his audience over his personal relationship with tech giants like Mark Zuckerberg. He believes that building a reputation takes years and sometimes, one has to make withdrawals. Despite having access to anyone in tech, he doesn't compromise the authenticity of his product and incentives, which is to have as many subscribers for as long as possible. He also acknowledges that he can't stay the same forever and must evolve with time. In conclusion, Ben's focus is on serving his audience with quality content and maintaining his integrity, rather than getting personal benefits from his high-profile interviews or relationships.
