Check your Pulse #45

the future of newsletters ✍🏽

Hi, I’m Sari Azout and this is the the 45th edition of Check your Pulse, a tech and startups newsletter designed to make you feel human. I try to make this one of the best emails you get each week. If you’ve been sent this email and you’re not a subscriber, you can join by clicking on this big button below.

Happy Friday, friends.

Not a single day goes by without someone in my Twitter or personal network announcing the launch of a newsletter on Substack.

Earlier this week, Lenny shared his experience running a paid newsletter, which got me thinking about the future of newsletters, and in particular, paid ones.

Relative to creative professions like music and the arts, journalists earn far less (~$5-10 per word), or a few thousand dollars a week, and as traditional media struggles, writers are looking for financially viable ways to do what they love.

The argument for creating niche newsletters that monetize on subscriptions makes sense then, at least on the surface.

But there are a few things worth considering:

First, do we want to live in a world where people pay for content?

I’m not sure. For one, it presumes the most valuable things should be closed, when the beauty of the web is that that zero marginal cost of production means the most valuable things should reach whomever they are relevant to. 

We’ve all benefited from the last generation of tech operators and investors making their content accessible. The people that should be reading Divinations are those that have the potential to build great companies, but may not afford a subscription, not the VCs.

Referring to subscription media, David Perell said:

Subscription publications will reinforce their readers’ perspectives because most people only pay for information they agree with. Thus, an increase in subscription-supported media won’t just fragment information sources. It will fragment society. 

There’s an uncomfortable truth here. The left and the right don’t need different pictures of the world, they need different perspectives of the same picture.  

Are we really trading quantity for quality? 

Few people can get away with starting a newsletter that is only paid. So unless you have a big following, you’ll need a free tier to build an audience. That means you’ll need to produce lots of content.

And having to write several posts a week may lead to the same trap of old media, which was once described by a reporter as, “My job is to type faster than I can think.” 

Creators want, should, and need to monetize. But given the option, my bet is they would want to make their content freely accessible to everyone and monetize in other ways. There are a few companies betting on tipping culture as a viable alternative, like Buy Me a Coffee. Other newsletters, like Dense Discovery monetize via highly relevant and brand-aligned Classified Ads and sponsors. 

There are other models that strike a balance between monetization and accessibility. One example that comes to mind is Tim Carmody’s newsletter where he included a smart feature: If he got to a certain number of paid subscribers, the newsletter was unlocked for all readers. He called it unlocking the commons.  There’s something here — maybe past a certain point, contributions are welcome, but not required.

Bottom line is: I’m not sure that a Free vs. Premium subscription is the right choice for most writers.

In conditions of abundance, information loses its value.

A few months ago, the average conversion rate from free to paid on Substack sat at around 10%. In his tweet, Lenny shared that his was closest to 3-4%. My guess is this is what it’s starting to look like for many publishers. And it makes sense. With infinite supply,  less people convert to paid. 

This aligns with my experience. I love Polina Marinova’s The Profile. She is immensely talented and her newsletter is a joy to read. But I can barely get through the links in the free version, so I don’t really need the premium version with “more content”. I also love The Diff, but I’m perfectly happy receiving one email per week so the premium option doesn’t make sense for me. 

Paradoxically, I pay for Dan Frommer’s New Consumer. It’s once a week, and takes me about five minutes to get through. Relative to long, dense, newsletters with link dumps I’ll never be able to get through, with Dan’s newsletter, I get a sense of completion, and I like that.


Substack is at an interesting crossroads. They need to decide whether they arm the rebels or build an aggregator for consumers. 

Shopify vs. Amazon. 

Shopify chose creators, and Amazon chose consumers. The latter commoditized creators but gave consumers a great experience, while the former honored the creators but generated more friction in the consumer experience.

Platform

Essentially, this implies creating more tools for writers, and competing with the likes of Podia and Circle. For writers with an existing audience, like Ben Thompson, there is no incentive to switch to Substack and give up 10%. But if Substack introduced event management, infrastructure for merch, courses, one-off purchases, self-serve ad/sponsor bookings (unlikely given their anti-ads stance), design customization, and network features, the value calculus might change. 

By adding more features, Substack could enable writers to make their content freely accessible and monetize something else.

For example, Femstreet’s weekly newsletter is free. But if you want direct access to the community, you have to pay the monthly fee. Right now, a lot of this is happening outside of Substack. 

The philosophical underpinning here is - is writing a means to an end or the end in itself? 

It’s a fascinating question. 

Jarod Dicker wrote an excellent post this week where he argued the media companies of tomorrow will look like the record labels of today:

By pairing brand reputation with the ability to execute on a creator’s behalf the ability to help build audience, scale a business, administrative operations and benefits such as legal and medical, the next wave of media will be incentivized to have a heavy financial and philosophical interest in the individuals. And so will the talent."

If Substack chooses the platform path, they will have to decide if they will operate as a record label (which implies being very selective about the talent they let into the platform, effectively becoming a modern media brand) or whether they offer the tools to let anyone build.

Aggregator

At first it seems ridiculous that people would switch attention from Facebook/Twitter and pay for it.

But as Adam Keesling wrote:

 If Substack can get a enough writers and subscribers on their platform, it starts to look like a high-quality, ad-free version of Facebook Groups or Reddit. The real power comes when a platform combines these communities. While some of us are a part of one-off communities now, if they were all integrated in the same interface, it could become our default online third space.

With an increasing number of newsletter subscriptions, a single feed with posts from each of my subscriptions is beginning to look like a much better experience than email.

In addition, there are a lot of things I want to be connected to but don’t need a constant connection to.

Today, Substack pushes things as they’re published. But with an increasing supply of high-quality content, Substack is uniquely positioned to improve the content consumption experience and solve for the “what should I read now.” 

Substack was built on the foundation that people don’t subscribe to content, they subscribe to voices they trust. In contrast, at Medium, it almost doesn’t matter who the writer is as long as the post is good.

The challenge for Substack, then, is to build an aggregator that improves the discovery and consumption experience for readers, while still honoring writers and staying true to their purpose.

It would be a shame though, if in the process of empowering writers, they didn’t improve the experience for the overwhelmed consumer. If not for me, do it for my husband and children — who are truly paying the price of my newsletter FOMSI (fear of missing something important).

Platforms vs. aggregators, paid newsletters, and the future of media. It’s such an interesting topic. I’d love to hear your thoughts in the comments.

🔮

Sari

More than half of $100,000-or-higher revenue Zoom customers began with a single employee’s free trial. Bottoms up Saas, y’all 🙌🏽

Archie Williams was wrongly incarcerated for 37 years and he just auditioned for America’s Got Talent. His performance will bring you to tears. 😢

The Canadian government sent out these guidelines for WFH. Talk about good leadership 👇🏾💯

This piece on being a working mother with schools closed made me feel seen. But during just the last three hours of my “work time” this morning, my girls came in eight different times to ask me a question or show off a tiny accomplishment. They are adorable; I am proud of their coloring and delighted by their hugs. But each of those interruptions shattered my concentration, setting me back far more than the handful of minutes they stayed before their dad came in to scoop them up. I started work on this newsletter days ago. I am now trying to finish it with a tiny person hanging on me, begging me to pretend we are both kittens. 👶🏽

This cafe in Japan is using stuffed animals to enforce social distancing 🐷👇🏾

Revisiting this post, because it was so good: For the love of God, please tell me what your company does.🤷🏽‍♀️

But trying to reconcile that with the fact that sometimes, mysterious copy works -> MyMind had me at “a new extension for your mind” 🔮

Other startups on my radar: Foundation (stock exchange for culture), Projector (a more tasteful version of Canva), and Rise Gardens (indoor gardening system for consumers). 🚀

Another excellent post by Julian Lehr on What Shopify and Amazon can learn from Mimetic Theory, the second post on his commerce series. You can read part one here. 🛍️


I'm donating all classified ad revenue to families hurt by the pandemic. Click here to book a classified ad - you’re supporting a worthy cause while being seen by an audience of over 5,000 high-quality subscribers.

🧼Touch yourself tenderly. Lower your stress levels. Keep it simple. Lauren’s All Purpose Salve.

🌈 ByLilla is the world’s first hair tie that doubles as jewelry. Rebel against the black elastic. 

🚀Dream Ventures - connecting founders to capital & strategic partnerships - $200 for 1 hr Zoom call (fundraise strategy). Email annie@dreamventures.co

🎵SoStereo helps brands & ad agencies gets real music by real artists, fast. Don’t let music be an afterthought, unlock the power of music for your brand marketing.

If you’re wondering who’s behind this newsletter:

My name is Sari Azout. I am a design-thinker, strategist, and early stage startup investor at Level Ventures and Rokk3r. My mission is to bring more humanity and creativity to technology and business.

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