This Week in Startups - E1016: Substack CEO & Co-Founder Chris Best empowers writers via his email newsletter platform, shares insights on driving change in the attention economy, raising $15M from a16z, providing value to retain talent & more

Episode Date: January 7, 2020

1:00 Jason intros Chris Best 3:24 What happened to Kik? (Chris' first startup) What did he learn from it? 5:03 What is it about email newsletters that attracted Chris? 9:41 Chris explains the AI alignment problem and how it relates to content consumption 13:58 What bad behaviors have Google & Facebook's ad algorithms created? How is Chris working to fix them? 18:09 Gamification's impact on startups 23:02 What types of writers are best suited for Substack? 29:25 How did Chris secure a $15M Series A from a16z with only 3 FTEs? Plus explaining the benefits of being "default-alive" 34:33 Are we approaching a flipping of the attention economy? 43:20 How does Substack make money? 49:46 Benefits of writer collaboration & cross-promotion 50:57 How the Deadspin situation relates to Substack 56:01 Most interesting newsletter content so far? 58:19 Dealing with offensive speech & explicit content 1:05:32 When will major publications start losing writers to Substack? 1:10:00 Plans to add audio or video? 1:11:34 What are the top-performing newsletters and what are the price ranges? 1:17:29 Ad-model vs. Paid-model at Inside & Substack 1:30:16 Chris explains the Substack fellowship 1:32:23 Thoughts on "hustle culture"

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slash twist. Hey everybody, welcome back. It's 2020, and I'm ready to rock and roll. It's Jason Calacanis. Your boy is in the building with Nick on the ones in the twos today. Sir Charles still on vacation. I don't know where he is, but wow, I guess he earned it. Everybody knows the media is completely screwed. Everything is shutting down because Google and Facebook have a duopoly on advertising. Anybody trying to sell ads in the world is screwed if they're going up against two companies that have billions of users data. You just can't compete. And you see that with BuzzFeed growing low single digits. Still a big number, 300 million. Congratulations to the team over there. But it's not growing. Why is it not growing? My thesis would be advertising has been won by Facebook and Google. Nobody else

gets to play. In fact, the numbers show that in a recent year 90% of the gains, not 90% of the total, but of the gains went to those two players in the duopoly. You just, can't compete. I know this. But little pockets have emerged. One of them podcasting, which I started dabbling with 12 years ago, and my friend Dave Weiner, created it, and I was back in the blogging day. That seems to be resilient and not owned by the duopoly. They'll try. And then, my favorite email, some of you know, I started something launched ticker a decade ago. I started a Silicon Island daily 20 years ago and I have Inside.com. And I've been obsessing over email. And lo and behold, Chris Best came onto the scene in 2017 and started something called Substack.

And I was like, well, that is brilliant. It's similar to what I'm doing at Inside, except I own and operate the newsletters. You created a platform. Welcome to the program, Chris Best. Yeah, it's great. I saw you doing Substack and I got really excited. I was like, this is a great idea. My friend Phil Kaplan from EFT Company in Web 1.0, how old?

You was 30 years old? Yeah, what am I? 32. Okay, so a little before your time, Web 1.1.0, this guy named Phil Kaplan, who did F'd company. All right. It was like a blog about the companies that were collapsing in the other company. Then he did something called Tiny Letter, sold it to MailChimp. His idea was like, just if you want to do a paid newsletter, here it is. Tiny Letter was awesome.

It was awesome, but it didn't really, I guess he sold it real quick. I think he sold it for a million bucks to MailChimp, and he was done. But you started Substack, I guess in 2017-ish. Yeah, late 2017. I know before that you were working at that kick. Yep. You work there, but you weren't the founder. I was a co-founder.

Oh, you were a co-founder? I was the technical. What happened to kick the messaging service? It shut down? It's still around? It's been, currently it's been sold to somebody that's put ads in it, unfortunately. Wait, somebody put ads in a messenger product? Um.

Like, they'll be putting ads in WhatsApp. A bit like that. I, it was, I left the company at the start of 2017 after being there kind of seven years. or something like that. What did you learn from that experience? I learned a lot of, I learned a lot of great things about how not to run a company.

Yeah, that's what I'm getting at. Not that we did it badly, but just like you, oh man, the whole. We call them lessons. Lessons. Chris. Crazy thing. I think the thing that's stuck in my brain

that became kind of like the kernel of substack is just the, when you create a network that people are using to talk to each other, the power that you have to shape what comes of those relationships is like both less than you'd expect and more than you'd expect. It's like less than you'd expect because people are people and there's human nature and there's

just like certain things are going to happen and there's nothing you can you can't sort of fundamentally change how people, who people are and what they want to talk about. But more than you'd expect because there's little details, the way that you let people, like just the shape of the interactions can massively change how those things express themselves. Talk about context is the word, right? Like the context in which we say that you and I are on a podcast looking at each other in the eye right now. It's different than if we were on the phone, different if we were on kick messenger talking to each other. Exactly. Context matters. Context matters. So what is the context

of email that was so alluring to you? So there's a bunch of things about email that are great. And part of it is that there's already this existing tradition of people writing email newsletters, like tiny letter was a great example. It was like a thing that people were doing. We didn't invent this. This was like, you know, one of the first things people did. One of the first things people did with internet. It's one of like people have been doing. literal newsletters like before email, like people would just mail newsletters to people. Like this was a thing. Well, in fact, the inspiration of my career was Esther Dyson, who was a famous New York

angel investor and she had a publication, released 1.0. And was it released 2.0? She was 1.0. Anyway, she would write a newsletter. It's $1,000 a year. You got $10 a year. And it was amazing. Yeah.

Yeah. So this is, you know, partly there's this long, venerable tradition. But right now in like the current media landscape, I think the. big advantage of it is like it's the last place where you can have a direct channel with your audience that's not controlled by one of the major like one of those Google Facebook, Twitter people. And there's, you know, yeah, Gmail can do a lot with their filter or whatever, but they're trying. It's literally Google is trying to F with newsletters by creating the promotions tab. Think about how sinister that is. They're like, we don't understand, we don't own this channel.

Let's try to exert our power by creating tabs. That's what they did, right? Yeah, it's interesting. And it's cool to be, I'm sure you have this inside in the sort of other end of the email spectrum where the biggest support complaints we get are not, you know, why are you sending me this annoying spammy email? It's like, I didn't get my email today. Where is it? I need to read it.

We're like, okay, Google put it in over here. This is how you get it back. This is, anyway. It's so dumb. Like, if Google really was acting in good faith in this situation, they would have a little button next to a newsletter that says, always inbox. Always inbox.

Why isn't Google, there's a message to Google. Stop playing games. This is why you're going to go in front of Congress, Sundar. Clip this, Nick. Sundar. I know you see my tweets once in a while. Stop messing with newsletters on Gmail. Do better.

There's a reason why people hate big tech. It's because you're screwing with the little guys and gals. And non-binary and everybody in between. Stop it. Okay. All right. So here's the answer to your question. What's interesting about newsletters?

So we had this like golden age of blogging. Where everyone had blogs. Everyone, you have your website. You have this weird profusion of like weird awesome. wonderful stuff. Big problems. There wasn't really great ways to make money from. No one ever really figured that out.

But more importantly, now, we've just transitioned to mobile. And it used to be like you would go and surf the web, and now you don't go and surf the web, right? You go on your phone, you've got an array of icons that you go to. And if the content that someone is trying to get to you isn't in one of those icons, you're kind of screwed. And if you're an individual content creator, it doesn't really make sense to, like, make an app.

Like, that's kind of crazy. and if you're trying to compete on Twitter, you're trying to compete on Facebook, you're trying to compete in YouTube, you're competing in this playing field with somebody else's rules whose interest is not your interest. Right, so they'll redo the algorithm.

They'll read you the algorithm. And the whole company's screwed, and you gotta lay everybody off. And you just, and like not only does it screw the creators, but it screws the users too, because the users, you know, users may feel like they have a relationship with you.

They're like, I'm wanting to opt in. It's the same as the Gmail thing. I want to get this email, like, don't kind of get in the way. Oh, it's speaking of Google, uh, YouTube, used to, if people subscribe to your channel, you were guaranteed to get their content. All these YouTubers work up at some point. They're like, wait a second.

My users are not getting my stuff. And YouTube's like, yeah, I'm not sure about that. I guess it's the algorithm. And it's like, you wrote the algorithm. And they're like, yeah, no, I don't know. The algorithm somewhere in the building, we actually haven't found it yet. Yeah. It's on the campus.

The algorithm. It's like, really? You literally have the smartest people on the planet. And nobody knows where the algorithm is. It's like, it's somewhere on the campus. Somebody on the campus made the algorithm. I think you'll find them. However, it's totally believable that we live in a world where, like,

no one person at Google can account for what the hell the algorithm is doing. That is true. It's so complex now. It's like, the algorithm is kind of like our boss. And we're just like, all right, algorithm. Here's what, like, we'll bring you what you need. You know what the crazy thing about these algorithms is, too, is you train them on a data set. Right.

If the data set has bias in it, you have now trained it to be racist or biased. Right. So if you trained it on a data set of, you know, Caucasian people, then Asian people all look at FaceTime and they can open each other's phones, which is exactly what happened with FaceTime. It didn't work for Asian people because they didn't have enough Asian people in the dataset apparently. Yeah. That's a pernicious problem and it like, you can screw things up.

I'd say even more fundamental is like, what about when it works? Yeah. Right. What are you training? What is the goal of the algorithm? It's basically the same as like the AI alignment problem, right? The goal of the... What is the AI alignment problem?

The AI alignment problem is, okay, so if you can create a super smart AI or algorithm or machine or something that's going to go do something, how do you tell it what to do in a good way? And I'm not the expert to talk about this, but people talk about like the paperclip maximizer, right? If you create a super intelligent AI and say, go build some paper clips for me, if it's sort of goal function is not even, it says, all right, I'm going to get paper clips at the cost of everything, well, maybe it's going to like build super efficient paperclip factories, but then it's going to decide, you know, if we just killed all these humans over here and

use their cars to make paper clips, we could make more paper clips. And you end up with like, that consumes the whole universe and spits out paperclips. And it's, it may be super intelligent and that it's super effective. Yeah. But it's misaligned because we've told it to do something stupid. Yeah. It's like, we tell us to eradicate cancer. It's like, okay, where's the cancer? It's like, it's in humans. It's like, great. And so it turns out that to fix that as actually a non-trivial it's something that people think about a lot in the context of AI. In the context of Google, it's really simple. It's like they're, you know, it's a line to make them money, right?

They make money by monetizing people's attention. They want to maximize how much of that attention they grab. And so they go and tell the algorithm, get as much attention as possible. And so it's not a bug. It's not mistrained or it somehow was on the wrong biased thing. It's when it's maximizing attention. It's functioning as design. That's what it's supposed to do.

And that's what the company will always need it to do, because that is who they are. The problem is that when you maximize for attention, you get lots of bad emergent behaviors. When we get back from this quick break, I want you to tell me what those bad emergent behaviors are and how email and email newsletters, the paid ones, especially on Stubstack,

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And thanks for helping out. We appreciate it. Okay, let's get back to this amazing podcast. All right, it's 2020. Welcome back, everybody. We're going to kick some ass this year. Chris Best is on the pod. He's the CEO and co-founder of Sub-Stack, S-U-B-S-T-A-C.

What does Substack mean? What does Substack mean? What was the point of that name? It's like a stack for you. your subscriptions. You know, you can have a stack of newspapers. It's good name. Writers can make fat stacks.

Got it. So when we left, we were talking about just the huge dumpster fire that media is today. It's a recap. All the money goes to the duopoly. The algorithm screw the creators. But there's an open source product that nobody owns called email or protocol. Protocol would be the best way to say it. And boy, it is so resilient to people trying to stop it, even though they try.

What are the emergent bad behaviors that have come out of the duopoly? And then how to substack and email newsletters solve that? Yeah, well, I think if you are maximizing just for engagement, which again is what these companies do because that's how they make money, you end up looking for what just what presses people's buttons in like the cheapest and most algorithmically detectable. way possible. Right. So if you can make somebody like mad or you can have something that's like, you know, titillating or clickbaity or sort of like appeal is sort of like tantalizes somebody into clicking,

those are the things that tend to win. And so this is why you see a lot of like clickbait and cheap outrage and like dumb takes that are as divisive as possible, delivered as quickly as possible. Because that's how you win on these networks, because that's, That's how the algorithm has evolved to make you win on the network because that's how you drive the most engagement and sell the most ads. So at Facebook, they win by time on site. Right. You win by creating stuff people click on and comment on and share because it increases time on site.

Exactly. The things that people tend to share are things that outrage them or allow them to gain status with their tribe by being outraged, which is called virtue signaling. Right. And so your entire feed becomes people pissed off at everything and you start to think the world is terrible in the face of the world actually objectively being better than it ever has been. And you might say, well, what's the real problem here? You know, the algorithm is just showing you what you want, right? The reason that it shows you that virtue signaling thing or that outrage or that headline is because you go and click it. Like it knows that that's in some way it's not doing something bad.

It's just giving you what you want. Yeah. But the problem is that if you took a step back and thought about what you. wanted in your life as your media consumption diet. Like this is not what you would pick. And to me, the analogy is like if you have a giant bowl of candy in front of you while you're sitting here and you like eat one of the candies.

Oh yes. It's compelling. Yeah. Right? It's not true to say that you don't want the candy and you eat another. You eat another. It's like scrolling through your Twitter feed. Right.

I'm going to get one last scroll in while I'm sitting on the toilet, whatever. It is compelling, but it's compelling in like the wrong way. And if you take a step back and you said, how am I going to arrange my diet? It wouldn't be like, well, I'm just going to carry it. a bowl of candy around with me and eat it whenever I feel like. But that's exactly how people use social media. Exactly. And so the way that email changes that and newsletters and paid newsletters changes that

is by switching the context under which you make the decision. Instead of carrying around the bowl of candy and podcasts are like this too, by the way, you sit back and you say, you make sort of this higher friction, more thoughtful decision that's like, who do I trust? What content do I want to have in my life that's going to like make my overall view of the world better or more accurate or more, like it's just, I'm sort of making a decision as the long view of myself. You're going to eat the salad. You're going to eat the salad. I'm going to go for the five mile run. You're going to go for the five mile run. I'm going to subscribe to this

podcast that I think is trustworthy, where I'm going to read this newsletter that I think is, you know, the right kind of content. Especially if I ask you to pay, you're going to think about the decision. Sure. It's not going to be something you do in the spur of the moment because there's like one cool cool little headliner. Yeah. I mean, if you're going to go run five miles, you better have good shoes and write socks and you're not going to just do it willy-nilly like you might do like a handful of Eminems. Yeah. So at the end of the day, I think email, newsletters and podcasts and especially paid content like

this is allowing people to reclaim control of their own attention, which has been kind of like voluntarily stolen from them by these algorithmic feeds that they've become addicted to. Yeah. Gamification was a really interesting emergent trend in startups. And I remember 15 years ago, people talking about. it from the game space and then apps really kind of locked that in. I mean, the like button, which was based upon Kevin Rose's dig button, the vote up button,

if remember that. I ever put that on. Zuckerberg stole that from Kevin Rose. And that really gave people something like a mechanic, like, ooh, I got another vote up. And it felt so good to get a vote up. They'd ask your friends, vote me up. And then they were just like, you know what? Zuckerberg's like, let me just be super cynical.

Like. You need likes. you know why? Because you're unlikable. But if you got some likes, you might turn around for you, Chris. Just if you got a couple of likes a day. And then you ever post something

and get no likes? That's a weird feeling. Yep. I mean, if you get a visceral, weird thing like, is something broken? No likes? And I realized I had put my phone on airplane mode. This is a while ago.

I put my phone on airplane mode and I looked at my Instagram and I was like, no likes? Wow. I thought that was a winner. And I was like, oh, I have airplane mode on. That's good. That's a relief.

It was like, you know, Chris, when you're shooting up heroin, it was like, I forgot to put the heroin in the needle. And I'm like, I shot my arm. Where's the rush? Right. And it really is that addicting to people. But email isn't addicting like that. Is it? A little bit.

It's got a little bit of like, I have to complete it, right? Whatever that completion harvesting thing, it's got that harvesting mechanism from like Farmville. You get your email, you got to open it. You feel like you got to process it. That like is doing work. That is a little bit of a game mechanic. Well, and listen, the goal shouldn't be throw out all the game mechanics, right? The goal of your media diet shouldn't be like, we make you eat crappy, uncooked vegetables you don't like because it's healthy.

The goal should be like, here's how we can make something that both taste good and is something that you would actually choose to do if you took a step back and thought about it. avocado toast. Sorry? It's like avocado toast. It's like avocado toast or something. It's, you know, you're, you want something where you treat the users fundamentally as someone that you're trying to thoughtfully serve and that they should sort of be in on the game that you're creating.

They're like, oh yeah, I see how this is like superficially compelling to me and I see why it's rewarding. But also, I think that by playing this game, I'm making my life fundamentally better in some way. And the difference with social media is that people are starting to become disenchanted by that second part. People know they're addicted to Twitter. and they're starting to think maybe I'd be better off if I wasn't. You know what it's like?

It's like in the 80s, they decided that smoke, they kind of, the collective consciousness said smoking is bad for you. In the 70s, people were still like, great. But when I turned like 10 years old in 1980, and I remember the year when they said, no more smoking in bars. And it was coming up and it was freaking people out. And then they did it.

And it was so great to go into a bar. and not have smoke. Yeah. Well, also when you got home, you didn't stink like everybody would come home and put their jackets on the back deck and then throw their stuff in the laundry room. Do you remember smoking on airplanes? This is something that's hard for me to even wrap my head around. I remember it like once or twice.

Wow. And then I remember for a decade in the 80s, there being in the seat rest and ashtray. Like, imagine getting on an airplane and there was an ashtray in every seat. So not only was smoking permitted. But it was accommodated with ashtrays in every single seat. And it was bizarre because they did have smoking sections. So it was the back of the plane. The last eight roads were smoking.

As if that makes any difference. Yeah. It's crazy. But you're right. It is the pendulum now. And I believe that podcasting, which is in year 12 now, is becoming so popular because, you know, you and I getting into like a Twitter discussion, it's interesting or whatever. but what's going to be most interesting about this conversation, I can tell you, is minutes 45 to 60,

or 40 to 50. Somewhere in there, we're going to get loose, we're going to, like, get honest, and we're going to really share some stuff. And it's just so much better than Twitter. I'm deleting Twitter off my phone this year I decided. I did that once. See, I already deleted the Twitter app,

and then I just eventually one day I signed into Mobile Safari because I wanted to check something. And now I just go to Safari on my phone and read Twitter, like a complete junkie. Yeah, yeah. I'm embarrassed to admit it. Yeah, you know, it's like, you're like, yeah, no, no, I don't eat meat anymore. And then you're just like at 2 o'clock in the morning, grabbing in and out burger.

Nobody's looking. That is exactly how I live my life right now. That's really degenerate, Chris. I'm ashamed to have admitted at that. So you've been doing it for two years. Yep. And what have you learned in these two years about which writers this is for? Because I know Casey, it's Casey, right, from Vox?

and who else is on it? Mike Isaac's got one. A lot of people I know have them. A lot of VCs now are doing them, which is annoying to me that all these VCs all of a sudden are like taking my content creation playbook. Every VC started a podcast this year.

I'm like, really, Mike Mables? Like, I mean, you're 11. Mike Mabel's like, you know what? Mike emails me. He's like, hey, Jason, can I pick your brain about podcasts? I'm like, you could watch the first thousand episodes. I was like, get a great game. and have good microphones.

Yeah. You're done. It really is like those two things. Yeah. It's a venerated tradition. You know, AVC back in the day is like a long run. Well, Fred and I were the first two bloggers.

Yeah. Doing it. I think Paul Graham, like his original essays. Yeah, he was an essayist. That was true. It was me and Paul and Fred and Bradfeld. Because we had started the blogging company back then, Weblogs Inc.

And Gawker had started. And people were like, yeah, you could write. And actually this goes back to Dave Wenner as well. We're going to get Dave on the pod. Nick, 100% Lockdown Dave Weiner, the creator of RSS podcasting

and blogging. Guy gets no credit. He's a New Yorker. He kind of like, I think sometimes his opinion is very sharp like mine, but he's smarter than me

and like, you know Dave Weiner? No. It's just amazing. Like Dave Weiner created RSS, which created Twitter. Yep. And he created enclosures in RSS,

which created the podcast movement. And you're a 32-year-old family. You don't know who he is. We've got to fix this. What riders work well? on the platform. And by well, I mean, make money. Yeah.

So the writers that work well are people who have some perspective, have some voice or point of view, right? Their personalities or they have some, I think of them as like non-fundable, right? The writers that work really well on Substack are not like, I'm going to write a podcast about, or I'm going to write a newsletter about tech and this spin on it. And like, everyone that wants that is going to find my,

because it's a good version of that. It's like they're interesting people. They have some point of view. They have some audience that has been reading them for a while and kind of feels like the audience has grown to know them. And therefore when they say, hey, you know, pay me five bucks a month for this thing. People don't say, oh, you're just doing news about Bitcoin. I could get that anywhere.

They say, of course I'll pay for that. You're one of the most valuable people that's been shaping my worldview that I've been following. We think of them kind of very fondly as like outsider nerds. people that are sort of have some strong point of view or take and something to say, but that aren't just sort of part of like the mainstream everything that everyone's talking about. That's interesting. So they're kind of mavericks in a way. A little bit.

Quixotic. Part of it's right now you have to be a maverick to decide I'm going to go write an email newsletter and charge money for it and make a ton of money. Now you got this up to what, a couple of hundred people and then in Tries and Horowitz put $10 million in? 15, yeah. 15. How many newsletters did you have when they put in $15 million?

Yeah, there's a couple thousand active. A couple thousand active. A couple of thousand actors, couple hundred that are charging that kind of scale. So if a couple hundred are charging, the conversion rate is typically like 5% or something, or 1 to 5% free to pay. So if you look at the conversion rate for readers,

it's about, if once you go paid, it's about 10%. So if you have a loyal audience of people that are reading your newsletter and you say, hey, I'm going to charge for it. come with me. We see people that fit that mold that have that audience that cares, about 10% of them pay. Okay. So this, before we're going to go to a quick commercial break, what I want to find out is, what was the thesis of Andreessen Horowitz to put $15 million into an email company

in whatever, 2018, whenever they did it in 2019? What was the pitch that sold them on writing that check because most people would think this is a crazy bet when we get back on this week of starters? You want to turn your idea into a business? You want to turn it into a website. It's time to get to work. It's 2020, people. You need to think about publishing that beautiful blog or maybe some content,

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And on behalf of the founders who listen and come on the show, I do appreciate that. Okay, let's get back to this episode. All right, we're back on this weekend startups. It's 2020. And I'm going to tell you right now, it's going to be the best year ever for the podcast. I'm having everybody on. And Substack, I was always just fascinated by, as I said earlier, Chris, great job. I saw the $15 million come in from Andres and Horowitz. And those are, you know, they're kind of big bet kind of players there. Why did they make that $15 million series A big bet? Because people have long said media sucks as an investment. You're kind of a platform. it's a platform based on media. And these subscription businesses, when you take a take, a percentage of what people are taking, people say, pretty hard to do.

Patreon's been kind of a disaster taking 5% or whatever they take, 10%. Yeah, they've been upping it as they do. And people hate them for it and it creates a riot every time they do. So what was your pitch to Andreessen Horowitz? And did they tell you 15 million? They just made you an offer? Did you ask for 15 million? I'm curious.

It was a quick negotiation. By the way, at this point, the company is me and my two co-founders in my living room. Okay, so it's three people. It's three people. We're working out in my living room. My dog's hanging out with us there. We're building the company. We were actually not planning to raise money yet.

We were sort of, you know, we did YC. We had raised a seed round. We were like, you know, building the company to be financially sustainable. We're like, listen, we've got a plan. We know what we've got to hit. We're like, you know, don't need to raise money, but if we do, we'll do that later once we do X, Y, Z. Here's sort of where we're going. And we just got talking to Andrew Chen because we'd been trying to recruit him previously

because he's got a big... No. As a customer, right? Who worked for Uber, Andrew? Yeah, he worked for Uber, but he had this awesome. He has an awesome, like, newsletter that he's like spun up into a cool business thing. I got a funny Andrew Chen story. I'll tell you later.

All right. I'll tell you after. I'll tell you after the next commercial break. Anyway, we started talking to them. Basically, I didn't really, we didn't really pitch them. We just told them what we were up to because we didn't have anything prepared because we weren't trying to raise money. And I'm trying to think, what did we actually tell them? You nagged them.

You're like, yeah, no, we don't need money. That's always the power move. Yeah, I mean. You're like, we're three dudes in an apartment. Don't need money. It would be ridiculous to invest in us at this, at this jump. No, it was, I think it was. What did you raise two million?

Yeah, we raised a couple, like, 2.2 after O.C. Oh, that's nice. Yeah, it was feeling pretty good. We've only had a three-person team. You've basically set yourself up at like a 30 or 40K a month burn. Right. You were basically default on it. Default alive.

Default alive, as Paul Graham would say. Yeah, exactly. Which I love. It's like, your startup is either, yeah, when you hit profit, when you hit break even, your default alive. That's exactly what we did, by the way. We raised that C round. We're like, all right, we're going to be default alive and then no matter what happens, we're going to be golden. So far, it's, it's paying off.

I got a lot of founders I've invested in who I've been trying to get them to like understand default alive better than yeah yeah well it's a good it's a good because it puts you in this position where you're like if i never raise money again this company's going to work or it's like it's going to survive and it's going to get a shot to like do the thing that we're saying the concept of default alive just so we explain it is you have you're not burning cash anymore therefore you're at break even the way that i think of default alive is if your revenue growth continues at the pace that it's been going at. Yes. And you keep your expenses sort of constant or growing at only the rate that you have to increase them. Which happens first? Do you become profitable or do you die?

Right. If the thing that happens first is you die, you're default dead. You have to raise money in order to survive. It's a house on fire problem for your company. If you do this projection, you become profitable before you die, then you're good. You don't have to raise money. You can just keep doing what you're doing. And the only reason to raise money then is because you want to be more aggressive with your expenses because you want to go and go faster and tackle this bigger. Yeah. Bigger thing. So you go to Andrew,

Andrew Chen reaches, you reach out to Andrew Chad to do a newsletter. Right. And then he says, hey, why don't you come in and we'll have a talk? Yeah, we sort of, I mean,

because we'd reach out with him, you know, before that. And we just like, an angel. No, like, like,

as just, we were trying to, like, months ago, before he'd started at Andreessen, and we were trying to get him to, like, just bring his newsletter to substack.

Got it. Because we're like, your newsletter is really good. this is cool. You're doing a thing. Why pay MailChimp or why pay? Exactly. This is our early pitch, right?

A lot of people were like, I'm on MailChimp. It's got all these features I don't need. It costs me a bunch of money to send. Yeah, I'm paying 50 or 100 bucks a month. Which doesn't seem like a lot, but if you're a freelance writer and you're paying $1,000, it's a thousand dollars too much because you're not monetizing it. Right. And to send this thing to people that love it and want to get it.

We got to go to you and be like, how about you get a simpler tool? You pay nothing and you charge money and make a bunch of money if you want. want to. And they're like, oh, that's a pretty, that's a pretty compelling. If you're a VC, not so much. A thousand bucks a month. Okay, that's, you know, part of the cost of thing. What's the... So back to the 15, like, it seems like a very, it's a very large series A. They're buying 20, 30% of the company, so it would value the company at, if it was 20%, 5 times 15, you know, it's a big number. Seventy-million dollar valuation, 50 million minimum. Like, there's a lot of, that's a big valuation for a three-person company.

The way that I think about this is... It's impressive. Well, thank you. The way that I think about it. about this shift, I don't know if this is compelling to other people, but it's like, I think we're approaching like a flipping of the attention economy where it used to be like before the internet, before smartphones especially, it used to be the case that like you had surplus attention and you had to like find things to entertain yourself. You had like, yeah, people would

voluntarily watch baseball. People would go and like, like literally baseball was created as America's pastime. Right. Those games are like four hours long. Even the word past time, like the idea that you need something to pass the time. Right. That's a thing that can exist is like completely obsolete now. But that used to be how it works. And then we had sort of the first generation of internet and now smartphone, especially companies that are these attention monsters that have said, we can fill up every possible moment of your waking attention is full now.

Right. We're just competing to grab it. We're making the most addictive thing. You're going to spend it wantonly because you're coming from a framework where you used to have to find things to fill the time. Now most people have zero time to pass. It's like every time I'm like walking between a thing, I'll check my phone, I'll check this, I'll look at this. We've completely a hundred percent gobbled up everybody's attention. And now now that's happened, all of the most addictive properties have kind of done that first land grab.

But now people are in this position where you're like, wait a minute, the last scarce resource I have is my attention. Now that I've spent it all, there's no more. I only have so much time in this life to live. And the only way that I can get better is to spend my attention more wisely and to take back control of how I spend that attention. Even by the way, if it means spending money to spend it on something better. Like literally people are paying money for com.com to not pay attention to the other things on their phone. Yes. Like the newest feature, the most notable feature of the iOS operating system is the scream time monitor, I would say, in the last year or two.

Right. And it's like a dramatic way to put it is like basically these addictive, you know, attention monster companies like gobbled up your entire life while you weren't noticing. And you wake up one day and you're like, oh shit, my whole life is gone. Yeah. How do I get it back? Right. And once you have that framework, the question of like, this is this is a big question we got earlier on. People like, are people actually going to spend money on good quality content on the internet? Like, come on. Yeah. That seems ridiculous. And when you have that. And when you have that. framework you're like, well, of course they will. Obviously they will. But it wouldn't have been obvious in the first generation of the internet where everyone's like, listen, information wants to be free. We don't really, we're not really baking any kind of payments into the first web standards. We're kind of in this weird, you know, world where everything's going to be free the first time around. And I think we're just like the pendulum swinging and people like, hey, if I can spend money and like get some of my attention back and spend it more wisely and spend it in a way that's going to make my life better is obviously worth doing that. Yeah, the thing with the information is free quote that people really got wrong was they were talking about gatekeepers, keeping you from information so that rich, powerful people or people in the ivory towers would have the information and it would give them an edge.

They weren't talking about writers working for free or stealing DVDs. It's like freeze and freedom versus free as in beer. Yes, exactly. Free as in freedom, not free as in beer. And it really is like when you think about this maybe three paradigm shifts, people were just. like let's put studies on the internet, like, you know, about cancer. Let's put MIT's courses on the internet. Let's put Freedom of Information Act on the internet. Then it became, well, let's just eat up all your time with garbage and whatever clickbait.

And now people are saying, you know what? Yeah, I do want to pay. And this is one thing that founders don't understand. About back to that word context, also known as like, you know, it's a sibling timing. when you release a startup, what system, ecosystem, thought system, framework, are you releasing into?

And releasing a subscription product in 2017, 18, and 19, when the iPhone exists with instant subscriptions and people, a large group of people have never had a cable subscription or are getting rid of their cable subscription, it's a whole different world. And they're used to paying for things,

the idea that you're going to pay for Netflix, and pay for Spotify and pay for all your services is like no longer like a silly science fiction idea. It's like, of course people are going to pay for this stuff. Also, people become super savvy. They're like, I know that I believe that a growing number of people look at Fox, CNN, etc., or New York Times and say they have some agenda. Right. And it's ad-based and it's not good for me.

I should pay to get something of quality. And you look when Trump got elected, the New York. New York Times, like, enough with the advertising, just go subscription. And now they're profitable again, I think. Yeah, and the share of their revenue that is subscription is to skyrocketed. And I think it's well over half now. So what about subscription burnout? Is that going to be a thing? I think that, you know, overblown.

Like the idea that I've got so many subscriptions that by adding one more subscription, people ask me this like, yeah, I'll subscribe to one newsletter on Substack. Will I subscribe to four maybe? Will I subscribe to eight? Probably not. Like, it's this burnout. It's going to be this real problem. And I'm like, listen, if the number one problem we're facing is, I'm not going to go from my seventh to my eighth subscription.

Like, we're good. First of all, like, let's let's get to the world where we have that problem first. Yeah, absolutely. That sounds awesome. And you just build a bundle. Exactly. And I think we'll be in a, you know, we'll be in a position where we can start to rationalize that. One of the advantages of being one platform that has all the stuff on it is that you can like start to bundle stuff, start to bundle payments.

The thing that matters to us in doing that is that it happened kind of bottom up rather than top down. We don't believe in kind of coming in and being like, we're going to be like Netflix for writing or something like this. we want it to be like the creators are in control, the writers are in control, they can kind of opt into stuff as it makes sense for them, you know, informant, like that direct relationship between the reader and writer is the thing that makes it special, right? The thing that, a lot of what the readers are paying for is like, I feel like I can trust this writer. I feel like I can trust Jason. Right. So I'm going to subscribe and like, you're not going to screw me because it's a person who I know that I've gotten to know from listening to you and reading

you and all this stuff. And that's kind of like. like the magical fundamental building blog. All right. When we get back, I want to know how you plan on making money. Right. And then how do you keep, how do you plan on keeping the elite writers, the elite talent, when what we've seen in podcasting is elite people like Sam Harris leave Patreon and then... Go and build their own mobile app because that's easy to do.

Yeah, I know I helped to build it. It took two years. But he basically just told everybody Patreon over, everybody come to our site. And there are services now that let you pop up a subscription service, customer RSS, etc., on people's website. How do you survive if you lose the top people? And then how do you make money today? How do you make money tomorrow when we get back on this weekend start? Are you self-employed?

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T-A-X-F-Y-L-E dot com slash twist and welcome to the This Week at Sarbbs family. Okay, let's get back to this amazing episode. All right, how do you make money? Right now we take a cut of subscription revenues. 10%? 10%. So it's free to come, free to publish.

you can send as many emails you want. It doesn't cost you anything. Once you start charging, we take a cut. Our interests are sort of aligned with yours. And you have to pay the, you pay the 2 or 3% for the credit card? Does that go on top? That goes on top. Got it.

So you get a clean 10% Vig. The 10% is a third of what Apple takes. It's similar to what Patreon takes? Yeah, they've got tiers now, but it's in the same ballpark. Now, 10% means nothing if you're making $500 a month. It's 50 bucks. Who cares? But then you get to making 10K a month.

Yep. And it's $1,000. And 1,000 times 12 is $12,000. And then $12,000, you think, I could probably set this up on my own website and I don't need substack. Have you had that happen yet? And what's your pitch to those riders of here's why we're worth $12,000 a year to do this? Yeah.

We haven't had... How do you think about that? Because I think that's where the profit comes in. Totally. We haven't yet had anybody leave because they're making too much money. Got it. No, that question is because they're paying you too much that they roll their own. Right. But this is the same thing, right? Like the only way that we make a lot of money off of them is if they're making so much money. Has anybody hit $10,000 a month? Oh, yeah. Okay. So you have dozens of people or people?

There's a good number of people that are making enough where the fees are substantial. Like, I certainly don't want to, I don't want to underplay that that's, you know, when you're making hundreds of thousands of year, 10% of that starts to be like a real thing. Would you just cap it at some point? Because like, somebody like, everybody looks at, such Stratetrary, Ben Thompson's, which makes, I think he's got, what's the whisper number, 20,000, 30,000 paid? I have no. That's what I heard. I heard he's making $2,000 or $3 million now a year. That would not surprise me.

So if he's making $3 million a year, he's not giving you $300,000, he could hire two developers. Well, three developers. Why would you do that? He might or might not, right? It kind of depends. One of the things that's really, we looked at Ben and Stratory when we were starting the company. We talked to him, in fact.

Yeah, everybody. And we were like, part of the theory of substack was like, why is everyone just not doing what Ben's doing, right? Like there's already a tool to host your website. There's already a tool to send your email. There's already a tool to take your payment. There's already a tool to like do all these things. You can start your own business.

You can bring this all together. You can create this product. And it turns out that not everyone wants or has any inclination or has any comparative advantage in doing all of that stuff. And we talked to a bunch of people who had done it kind of like copying, or not copying Ben, but in that same model, inspired by Ben,

doing all that stuff. And they were all like, you know, I thought I was going to spend five or 10% of my time screwing around with the tech stack. It turns out it's 60. Yeah.

And if I could spend like more of my time doing the thing that I'm actually supposed to be doing here, which is like doing the writing, doing the research, doing the reporting, whatever it is, that would mean a lot to me. And so when you frame it that way

and you're like, how much of the two ways that are good to frame it is like, how much of your time are you going to save and how much is that worth early on? And then later on, how much more money can substack make you than you would have made if you didn't have substack? This is like, why do you raise money?

Right. Why do you sell some of the company in order to get some money? The answer is because you believe that the whole is now so much more valuable that even the share that you have is worth more. Yeah, and in this case, it's 90%. So you're giving away 10%.

It's not even like VC where you wind up give away half your company to VCs. We're talking about 10% here. So that does make sense. And the answer is, you know, what if people are super successful? part of it is like if they're super successful in substack, part of the reason they're successful is because the platform is working for them.

Right? They've got a thing that's working. And to some extent, their time would be better invested doubling down on that than it would be like going and figuring out how to do their own email templates or whatever. Yeah. But you could ask, okay, at some point, is there going to be some other startup that comes and just says, well, we're going to do the same thing, but we're just going to undercut your price. Or yeah, we'll build it into WordPress, build it into WordPress, whatever. And my answer is like, you know, we've got flexibility. We could always change the pricing for like, one day if someone's making $10 million a month, do we still charge them 10%? I don't

know. Maybe just cap it at $250. Maybe you cap it. The other answer to me is like, I want to make sure that we're providing them that much value. You're going to add additional features. It's not like your feature set is done. You're going to keep working. And I look at like what Shopify does with Shopify plus is a great example. It's like Shopify

has this amazing, everybody can be an entrepreneur now. And then they had people that's like, oh, crap, some of those people started their business and now they're doing $100 million a year. Are they going to stay on Shopify? And they just said, yeah, they will if we just make a great thing that grows with them. Yeah, I mean, I think if you give

such an amazing amount of value and you have goodwill, the chances of people leaving are low. If the whole thing's working, especially, I think the number one thing, especially if we're bringing people audience and subscribers, like marginal subscribers. If there are people that are finding out about and learning, like

falling in love and subscribing to your thing that otherwise wouldn't have, that's worth a lot. Who owns the user? Like if I start a newsletter, do you have the rights to market to my email list? Do you get to do any of the, do they have a substack account? So I'm sharing it with you now. We have the email in our system, but you own the user. You have the email list.

You can export it any time. I don't think we'd. Like, do you send an email? Like, if I had Jason's list on there, would you send an email of like, hey, you enjoy Jason's list? Here's some other ones and promote other people. We don't do that currently. We can send like logging emails and opt-out emails and stuff like this.

But we do- And people might click on the logo, they might go to the home page, they might see other stuff. Yeah, I mean, I do think over time, it's really important to us that you as a writer own that relationship with the thing. And so, you know, if you bring your list to substack and then we like spam them, you just wouldn't come. That would be bad behavior. This was the YouTube thing that was a little dicey in the beginning, which was, I don't want to, they would put, all of a sudden, they'd put five videos next to your video and it would be a competitor. And people freaked out. And they're like, okay, you can opt out of similar champions.

on your, like, on your panel. So like if I was in a death match with this week in tech, which I'm not, I mean, we're friends, but it's a different show. But I could not promote them. They could not promote me. But if you not, if you click to not have the promoted people, then you don't get to be in it. So it basically turned out like, yeah, if you're going to go into the ecosystem, you get the whole benefit of it.

Yeah. And I think that that's the right thing. There's a right way to do that stuff in a wrong way to do it. And the right way to do it is in a way that's actually like on the same page as the creative. This is something that a lot of people ask us for. They're like, hey, I wish I could promote some other newsletters and get promoted. Like, one of the hard things about newsletters, like the hard thing about podcasts is it's hard to get discovered. And people remember fondly, like the old days of like blog roles, right? Where everyone sort of like made friends with each

other. And I think if we do that in the right way where it's like, hey, we're not sort of like have some algorithm that's going to like essentially stick ads in your, in your thing in the middle of your relationship. But if I give you tools where you're like, part of what people show up as they trust you. If you recommend something else, that's actually valuable to them as well. We give you the tools to do that. Like,

making that work in a way that's actually opt in and good is like a major area of... So I could check off like, hey, you know, me and Mike Isaac, C-I-D-I. Right.

I'll put Mike Isaac on the bottom on my page or my newsletter. He puts me in the bottom of his. Or maybe if you've got a paid, if you've got a paid newsletter, you can say, hey, Mike, you can link to my story, and all of your people

are going to get in for free. They don't need the paywall. Oh, okay. That's good. That's like on, they call that a co-lab. The millennials are calling that a co-lab, aren't you? There you go.

It's a little co-lab in there. Well, this is what I tweeted when these dipshit kids from Deadspin, you know these idiots who like, they're like literally spending all this time on Twitter complaining about their evil overlords. And I'm like, you guys have a killer brand. You have an audience. Stop being scared little wet noodles. and go start a substack newsletter

and charge $5 and get $1,000 to pay you. And now you have $60,000 and then make it 2,000 people and they have 120 and that's what they're getting paid working for these overlords. And like, I think they get to 10 to 25K a month. Did you talk to any of these dipsheet kids

at a debt spin who complain incessantly about their entitlement? I think it would be really cool if they started a substack. I think they could make it work. Or somebody on your team. I think my co-founder, Hamish, is kind of like the writer whisperer. Right.

So he whispered to them. I imagine. But we're snowflakes. We don't want to take any responsibility for our lives. You know, I'm joking. I think that's a little bit. It's probably a little harsh. It's a little harsh.

Part of this is like right now to do something like this, you're kind of, you're being a writer, but you're also a little bit being an entrepreneur. Yeah. You're kind of taking a leap. You're kind of doing something that. You're not getting paid for. You're not getting paid for to start. And it's sort of unclear.

fear. This is the biggest thing I think subsection can help with. It's like, it's not clear that this is a thing right? Like, yeah, okay, Ben Thompson's doing this thing and other people are doing this thing, but it's not like, there's not like a well-trodden path of like, this is how you do this thing. And like, some people relish that. Some people love to like, go out and like, I'm going to go be the first person and to do this crazy thing and maybe it's going to fail. And that's like, you know, some people live for that. I don't think it's not going to be everybody.

I was going to say, it's all fear. I'll tell you what these dead spin riders are scared about. They're scared because their content's actually not that good, and it's not good enough to pay for. So they're scared that if they do this, that nobody will pay them, and then they'll be unmasks as the frauds and the imposter syndrome, which is likely not the case. But in their fragile snowflake minds, these deadspin riders are so scared that their poor pros and their lack of insights and ability gives them this imposter syndrome that makes him think, I don't want to be an entrepreneur. I want

for Bernie Sanders. He had free college and screw it. It's like, why would you want to work for the overlords who are censoring you in their mind? It's like, if you work for somebody, they're not censoring you. They're setting the business standards. Anyway, it's just infuriating. And then they all start, like, piling on me on Twitter as if I care.

There you go. The Twitter algorithm is picking your biggest fight. I feel like I kind of got to stick up for the writers a bit. Like... A deadspin? I just kind of, I think there is, this is something I've learned doing this company. Yeah. Is that people who are, there's like a, people that think in the way that writers think is like different than how like you or I see the world sometimes. And sometimes that feels to us like it's like, you're being crazy. Like, why aren't you more self promotional or why don't you just do this entrepreneurial thing or why don't, like this seems so obvious.

Like you should just do it. And I've come to realize by like having the privilege of interacting with all these people is like there's value in the perspective that they bring to. and there are things that they see and the way they look at the world that brings something extra. And so part of my job at Substack is like get them from where they are to doing this thing in a way that makes sense to them.

Yeah, and here is Elizabeth Spires getting into my feed, who I tried to hire, by the way, from Gawker. I got Peter Rojas from Gizmodo back in the Weblogs Inc Day to do Engadget. I tried to get Elizabeth to leave Gawker. And she replied to me, oh, it's not 2002.

People who are not wealthy can't work for free while they do a full-time job reporting. And not everyone wants to be an entrepreneur. And the cost of running a publication that does real reporting is not zero. And I'm like, just get a solace day job and write two to three posts a night. Like, that's how you get rich.

Work two jobs, sacrifice, and own all the shares. What Deadspin does isn't blogging in the way you define it. You can't do your reporting at night. You can't be, it's like everybody's got every excuse of why something can't be done. You're feeding the Twitter beast, man. Intentionally.

I'm doing it intentionally. And this is my dunk. the reason why I'm the greatest angel investor all time is because instead of coming up with all the valid reasons something can't be done, like you were doing here, I focus on how it might actually work against all odds. You must unlearn what you have learned.

You got to use Baby Yoda. There is no trying. He's a clone. Baby Yoda's a clone. It's coming out. He's definitely a clone of Yoda. This is how they reintroduce Yoda to the whole ecosystem, and then they redo these things. So let me ask you about

what content has emerged because you're building a platform. So you're letting a thousand flowers bloom, just like blogger.com or movable type did, or Squarespace or WordPress. What wacky... Tumblr. What wacky stuff has emerged?

What wacky stuff? Or interesting or things you didn't expect. I think one thing that's been... Promote some newsletters. Very surprising to me is the like diversity of content types. Right. Like one thing we wondered early on was like, okay, you know, Ben Thompson can do this because he's got a tech audience.

Those people have money. They're willing to pay for stuff. They can put on the corporate card. Yeah, $100 for a VC is like, ha-ha. Yeah, like maybe every- I spent more on coffee today. Maybe every substack is going to end up being some cool business news thing. And that, although those things exist, that has not been the case at all.

Like, there's this weird and wild profusion of subject matter. Hit me. I'm trying to think. There's one that I subscribed for this called FlowState, that someone just makes a mix of music to work to every day. I love that. It's just like, here's your, like, music that you can listen to. Clem Leak, C-L-E-M-L-E-K.

Do a fact-check on that, Nick. Clem-Leak is some dope brain food, and there is a there is a playlist on Spotify called Brain Food. That's where I found Clem-Leak, Rlek. And it's really good to jam to. Like, you know, when you want that, like, and then I listen to the... You just want to put headphones on, sit down. I listen to the Vespers.

edition of the Blade Runner soundtrack, which is Vangelis doing it. V-E-S-P-E-R, if you want to know, like, the inside tip. So you should make a newsletter about this stuff. That's true, I should. You had one on drug running. Did you have like a drug?

Yeah, so. Somebody was like chronicling, like, how to be a better drug dealer? Matt Taivi wrote a novel, a fictional novel based on, loosely based on this friend that he had, that he'd known for a long time, that one day came to him and said,

I'm a very successful drug dealer that's never been caught and here's my story. Wow. And he just, I want to read that story. He basically wrote a serialized novel that he published through Substack. And once he'd publish people subscribed,

it was like back in the day with Dickens, you're like getting the weekly episode of what's going on. And once he'd done publishing it, he published it as a book and like, it's going off and being a book now. And he just started his next book. And now he's publishing about like the crazy Russia conspiracy theory stuff that he's uniquely

has insight to see. I like that guy's writing. How would you handle a speech that you personally don't agree with? Let's say, I'm going to guess your liberal or libertarian

or on the Democratic side. Personally? Moderate? I'm an enigma. You're an enigma. Okay, fine. Info Wars. Right.

Ben Shapiro, whatever. like alt-righty kind of people allowed not allowed have they tried to start i think this is something we're sort of actively thinking about and soul searching about now have they signed up have you had people like that sign up and then you didn't approve them because you have to get approved right or you can just start something no you can just start it and right now we've kind of been skating by with like we really haven't had that much bad stuff this is one of the weird things about this like having run like a messenger that was used by u.s teens you get a lot you see all the weird

dark corners of everything. And substacks so far has just because of the way that it's shaped, hasn't the context, like the context, the context, you know, like people, one thing people tell us all the time is like, when I post something on Twitter, the replies I get are horrible. And when people reply to my newsletter, it's like a completely different, it's like people write me these thoughtful things. They're not performing for anybody. There's no incentive to like be a maniac. And so there are just far fewer maniacs. And I'd say in general, the one of the, one of the that I am excited to do the company is to like have a wide variety of very diverse things on there. Right? Substac is not a monolith. There's not like it's not like, you know, there's an overall editorial standard that says this is the kind of thing you should expect to see.

Really people own their own the relationship between the creator. Like if I subscribe to your newsletter and then you're offending me, there's like an easy solution to that. It's like unsubscribe. Change the channel. So I think in general our plan is to be like sort of very. permissive and allow a wide range of things. Does that mean that we're sort of like, you know, you still get into these interesting side questions when you follow that rabbit hole all the way down. And those things are not necessarily easy.

And, you know, we don't want to be sort of gab or some. What if somebody did like an adult newsletter? Because that was something that really grew Tumblr and Reddit. Reddit and Tumblr, at Tumblr, they took all the porn down explicit. Yeah.

Reddit, I'm not sure. Were they, I read it did shut down the alt-right, like misogynistic crazy stuff. Yeah. Well, this is, This is an example of something that's really interesting where we don't necessarily have sort of like a, you know, I don't think that porn is morally wrong or anything like that. And it's definitely not, you know, it's people's free speech. They can do what they want. And 99% of people are consuming it. So then the question becomes, do you want your brand associated with it? Yeah. However, I don't want to be, I want to be the platform for like great writing. I don't necessarily. And if we start to become the porn platform, right? Now all of a sudden, that's a different thing. What if it was great erotic writing, would you be opposed? I wouldn't actually. I think there's actually there's actually, there's actually,

some stuff that borders on that now that's kind of cool. The other thing that's interesting through all this. Isn't that Patreon's big thing? Isn't Patreon got a ton of adult stuff? I don't see it. There's a lot. Do you have to like turn it on? They deliberately, they're smart about this. They have it, but they don't make it. They don't throw it in your face when you get there. Oh, so that's like, everybody's like, oh my God, porn on Tumblr. It's like, I've never seen porn on Tumblr. Like, oh, you have to go to the settings and turn this off. I was like, oh, it's like Google Save Search. Like, if you spend the time to flip the switch,

you're going to see it. Yeah, which is actually a really reasonable way to approach it, right? It's kind of the same thing as like, you know, people deride people that ask for like trigger warnings, but really it's just putting you in control of what kind of stuff you're seeing as you voyage through this. The other thing that's interesting for us, and I'm sure has been interesting for page you on, although I have no inside knowledge about it, is you bump into stuff with the credit card companies. For adult stuff. For adult stuff and for other, like there's things where, you know, we use Stripe who are amazing, but Stripe is a platform that has certain rules that are,

partly because they're beholden to the credit card pressures that they have to work with. And they don't want to do a nonsense. Why take the whole ship down because somebody does something? Now, to their credit, to their credit, the strike people push really hard. They're like, we want to basically allow as much stuff as possible, but we are limited in some ways. And so there's some things that you're just not going to be able to do. And so that's like part of the like reality that we have to navigate as well. We don't want to, we can't do anything that's going to get us kicked off stripe.

The one I was had, I was interviewing somebody from Vice for a job at Inside. and they told me they had done the taking LSD at the Westminster Dog Show. Did you know about this? I think it went viral. Yeah. It's a great premise. I was like, okay, you got me on the premise, Mary Pranksters, but how

I could still with like, these are like somebody who was like managing editor type level, editor or whatever. And I was like, how do, does one navigate sending a writer to cover something knowingly on an illegal substance that could be dangerous and like, oh, it's a freelancer

and I went to age and it was just like, I guess it was the early days of Vice when they were just like, yeah, it sounds dangerous, do it. You know, I think that that was like literally their philosophy, but, you know,

if somebody goes and does something like that and it's not presented as farceical, oh, here it is. Westminster Dog Show on Acid. Like, how does Vice have a brand that has somebody literally drop a tab of acid on their disgusting tongue with a bad perm. And is that a perm or is that naturally curly hair? That looks like it's been, is that an actual perm?

I've never seen this before. I'm going to chime in and say this is not responsible psychedelic use. Yeah, because you could be putting people in harm's way. Like maybe those people didn't, it's funny, but, well, I don't know if it's funny, but it's, it's, a funny premise, but you're putting people in harm's way, perhaps. I don't know if LSD is like, yeah, at the Westminster Dog Show, at least they didn't approve at the Westminster Dog Show on Methamphetamine. So I do give them credit for mixing that idea. I believe that. Although, I mean, this is one of the things we do on Substack is we take the editors, you know, people's bosses out of

the equation at some extent. We've had a lot of writers tell us one of the things I really value is that I can do the work that I think matters. And there's no one that can come in and sort of tell me, you know, tell me that I can't do that. Or the donors nicks the story or the ad people don't like it. Like the only person that can fire you is your readers effectively. Hopefully they use that mostly for good and not too often to go to a dog show on acid. But it is this very powerful force that you unleash.

Yeah, it was the same power in blogging. What was very interesting about blogging, You had people like Elizabeth Spears or O'Mallick or Kevin Rose or Dave Weiner or Pete Rojas, who they were better without an editor. Think about that. The editors were actually holding people back from writing their best work because of their own hangups or, you know, the box they were working in. That was the magic of blogging, really. And then I wonder at what point do you. you think this becomes so viable that Vox, BuzzFeed, New York Times, Wall Street Journal

lose writers to this. Because I'm watching all these Vox writers and BuzzFeed writers start stuff on your platform. Have any of those publications said Ixnay on the newsletters on the side thing? We've had some pushback on that. Really? What's interesting. Because it's been a longstanding. It's been a longstanding thing that every reporter is allowed to have their Twitter account.

Sure. Right. So we're kind of like, well, by analogy, they should be a lot. allowed to have their own newsletter account too. And they're like, well, that kind of makes sense, I guess. It would be, you know, but the interest, but there are a couple of publications that have said you can't charge for it because, you know, if you're making money here, you've got this conflict, da-da-da.

This was interestingly one of the things that Andresen like clued into during the substack investment. He's like, you guys are going to do to the legacy media publications what VCs did to big companies, which is go and find the people who are actually the ones creating all the value, but are being underpaid for it, and pull them out and give them the value. It's so true. And I do think that that's something

that we have the opportunity to do. Yeah, I think it's interesting. When I first heard about your thing, I was like, oh, that's an interesting thing. Let's go poach some of those riders. Like I told my insight to him, I was like, yeah, just go look on substack. It's got to be a good rider.

Let's go steal them. And I looked at it and I was like, you know what? It's not going to work because these people are doing this. Somebody had said to me, we should poach a couple of their top riders. And I was like,

let me take a look. So I signed up for a bunch of stuff. And I was like, you don't understand. These are people who don't want to work for anybody. Right. And ideally, if we're doing our jobs, right, they're making as much money as they possibly could be from their current audience. And I could come over the top and pay them a guarantee or double it.

And that still wouldn't be appealing to them, which is exactly what happened in podcasts. And you know how many times this show has been asked to be on part of networks? And I'm like, do you really want this bull in your China shop? You do not. The reason I'm doing this is so I don't answer to somebody. And this show makes seven figures. Like, I don't need to be on your network.

Guarantee me double of what I'm making now, and I still won't go. Right. Your independence matters to you. And part of it, part of... Like literally, if you doubled what I'm making right now and made me go on whatever podcasting network, I'd be like, no effing way. And I'll tell you what, if you did, you'd lose a chunk of your most valuable audience who part of what they value is that you are independent. Yeah. I mean, I've been so many people I've tried to roll up, like Joe Roe.

and me, Sam Harris, all these people, I say to them the same thing every time. I'm like, listen, that's super charming. You raised $100 million. Because it's this company that raised $100 million

is doing like the HBO of Pockets, which I wrote like an essay about this four years ago. I was like somebody is going to try to do this. What's the name of that company? I forget it. Which one? Was it Luminary?

Luminary. Thank you. Thank you, Master Nick. Luminary raised like $100 million. I'm like, you dipshits are only, sorry, I don't mean to call them. I don't know them. Here's what's going to happen.

The only people who are going to do a luminary podcast are going to fall into three categories. One, you're going to get Bill Simmons or Vox or whoever to do a one-off with you to take a big chunk of your money and then it's going to fail. Two, you're going to get some celebrities like Lena Dunham or whoever who are bad at podcasting and they're going to do it just to get a paycheck from you and quit.

and then you get people who are not good and they're going to stick with you forever and never build an audience if they do build an audience you're going to get the hell out of there and own it. So it's destined to fail. Do you think I'm right about Luminary is destined to fail?

This model of like trying to control the podcasters. Yeah, I'd cheer for them but I do think they are. They're fail. It's so obvious. You got to give the creators the equity, right? You got to make the people that are creating the value like own that value. That's the thing that because

like you say, right? Like somebody's going to come in and say, I'll give you some money, but like, give us your upside. You're like, no, this is my thing. And I think it's true for great writers. I think something, you know, this is another thing that I think is will be true of substack is we're starting focused on readers and writers. But I think the core of the model, the thing that is true about it that makes it work,

would be true for audio podcasting content as well, would be true for video content. You know, I look not. Which you can add with just a button. Right. Down the line, I look at like the long, like there's so many people. on YouTube. Which would you add first? Audio or video? That's a great question. We actually have added a basic podcasting feature

because we've had a bunch of writers who are like starting a podcast and so we're like, okay, don't go somewhere else. We have a podcasting feature. You can do it alongside your newsletter. You can send it to the same subscribers. That's been really good. But we're still like that's not like a focus one of our main sort of focus areas. Maybe it's interesting too because it's like I love Wistia. We use Wistia internally which is like a private YouTube, which you don't have all the clutter of YouTube.

and it's got like much better features you control the experience like if you had a or you did a partnership with Wistia and you just embedded videos and then you have to log in to see them bingo you're done like I'm thinking about that for this week

and startups we have a thousand episodes I was thinking taking the first thousand episodes and just putting behind a paywall yeah why not and I think there's a long there's a bunch of people that are on YouTube that are like massively under monetize right now and are basically getting screwed by it

they built up an audience but now the algorithm is not even letting them have that audience because you don't even get the things you publish Facebook did the same thing You pay to get people to like your brand page. Oh, and now pay again so that you can reach all those people that like the first time. I told that to Cheryl and to suck to their faces. I was like, I don't trust you guys because I spent like $10,000 building up the inside the Mahalo piano page.

And now you're making me pay a second time. I was like, I just don't trust you guys to do content. Why don't you sell ads against our stuff and split it with us like YouTube does? And they're like, we're going to do that at some point. And they never did. So these platforms come. They want to take your independence, give you some money and take away the thing that is ultimately the thing you're trying to It's Magus Farm.

And when we say, hey, look, we're going to take 10% of the subscription revenue, but you get to keep all that. People say that's a great deal. Who are the top three newsletters in terms of like size or revenue? I'm going to bring up my list, which you can see on substack.com. Oh, is that public? What is it? Substack.com slash what? Winners?

There's a paid publications button. So Bill Bishop, who writes a newsletter about China, which is awesome. Oh, I know that. Yeah, yeah. He's amazing. Jud Legum, who writes popular information. Sort of like a progressive politics. He's been doing a lot of like anti-Facebook, anti-Trump campaign exposing.

Oh, here we go. Yeah, we go. Number one, cynicism by Bill Bishop. Sinicism. Thousands of subscribers at 15 a month. So he's making 30, 40, 50,000 a month probably, since you're saying thousands. Thousands of subscribers at $6 a month by Jed Legum. Independent Accountability Journalism.

The browser, tens of thousands of subscribers, $5. Off the chain. Oh, Anthony. He's charging $30 a month? Yeah, he just. He just raised it. It used to be 10. He told everyone it's going up to 30,

and it's been a pretty good growth trick, actually. So you start low, and then you pop it, and then people have to unsubscribe, or they have to confirm they want to keep going. No, well, so the way we do it is if you pop the price, people get grandfather. So people that are paying the old price, now they sit there and they say,

if I cancel, I'm losing my genius original price. Like, I'm going to keep it. Oh, so genius. What do you think is the upper, bound of a newsletter, the average price, and the minimum. So we set, on subject, when we started, we set the minimum to be five bucks a month. How did you come on with that? We were like, come on, that's a good amount of money.

We're like, that's what people pay for a hipster coffee. Yeah, part of it's like, look, if you can't bring this much value, like you're not part of our initial customer base. We want people that incredibly charged at. This is why I think micro payments will never work is it's like every time you pay for something, there's like a some fraction of the cost is how much money it is. and some fraction is like how much of a pain in the acid is to decide to pay. And as the amount of money goes down, this stays the same.

And so if you're charging 50 cents for something, it's like all of the cost is just... They call it a cognitive load. Cognitive load, exactly. So five bucks a month is like, it's a meaningful amount of money. You should make something that's worth that much. We had a lot of people that had no idea what to charge. And so we were just telling them like, look, charge at least five bucks. And then it worked.

And they were like, oh, shit, I would have charged 50 cents if you let me. And we're like... Yeah, good job. Right now, the highest one we have on the platform is charging seven grand a year. really yeah wow that's for the how to be a great drug dealer by bat tybee no that one is I don't know if I should I don't know if I should show that one or not it's unlisted from the no of course you gotta show it we're gonna find out putting the show notes at some point what is it um well just tell me generally if you're not comfortable it's somebody it's it's one of there's a

couple of people that are like this that somebody that's an insider in an industry that has a unique perspective that people that are in that industry are like must have for their job So like hedge fundy kind of stuff. Hedge fundy. Yeah. Like there's one petition you saw as an anonymous group of professionals from the bankruptcy and restructuring industry. Oh my love.

Very snarky, very good. I love it. How do you get access to that $7,000 one? Woo. Pay $7,000. $7,000. Easy. Do people have the ability to set you have to pay by year?

Yeah. Or does everything have to be monthly and yearly? I was curious about that. By default, we offer monthly and yearly. We've done a couple experiments with yearly. we will offer that at some point. Usually is waiting. Like that's what I saw at Com and Fitbit

is that the reason those subscription services work really well is if people pay a lower price for the year, it takes off again, back to cognitive load. You're like, $60 a year for Com or $70 a year, whatever, for $100 a year for

FitBod or Steezy or the other subscription services I've invested in. It's like people don't have to think about it, but every year and if they use it three times in a year, They're like, that was worth it. It's worth it. It's cognitive load.

It's cash flow and it's like credit card churn. But a lot of people churn, not because they didn't want it anymore, but it's because like your credit card updated and you were too lazy to go and renew it. Somebody told me if you take out, I think it was Raul from Superhuman, which we were the first investors in or amongst the first. He said to me, do you use it, superhuman? I can get you invite. No, I went through the whole thing and then they had their like fancy onboarding process

that they're so lauded for. And I was like, no, I'm not doing it. I can't get on the onboarding. They, back to self-selecting, like, with your $5 minimum. He's like, well, you're not serious enough about it. Therefore, they successfully fired me as a customer before. They fired you. They pre-fired you.

Exactly. It's like, I was thinking about hiring you. Yeah. But I'm going to go ahead instead of hiring you and fire you during the interview. Yeah. That's my way to reduce churn. That's the best time to do it. You're not going to have a lot of churn in your company if you fire people during their interview.

It's going to pre-firing. What's hard about this business? What are you really struggle with? I'm curious. I'll tell you what I struggle with. Then I'll tell you my hand to chance later. Yeah, there's been a lot of fun.

I mean, at the start, just like sending email is shockingly hard. Like sending email reliably and like formatting it well across every, just as like a technical problem. It's like way more of a pain in the ass than you naively expect. Sort of like back in the day when you had to support like IE5 and we finally live in a world where you don't have to like worry about old internet explore browsers.

Email, it's still very much like that. It's still. So brutal. Outlook and whatever. That's been interesting. It is brutal to just deal with all these different email clients. I'm struggling with that at inside myself.

Like, I just want to, like, do, like, really good-looking emails. Yeah. It's just like, oh, this doesn't work on. Send you a picture of what it looks like in there. I'll look. You're like, oh, God. What I'm thinking about is whatever the 10% or 20% are, sending them a note that says, click here to get text only.

Because on launch ticker, I have a text-only version. And I was like, yeah, just make it text-only. That works. Yeah. The thing I'm struggling with that inside over the break. I don't know how familiar you are with it. I've been following it from afar. Okay.

We've got 50 newsletters. We're currently publishing like 30 of them. Just trying like inside.com slash city.inside.com. And it's like selling ad sponsorships. Yeah. And so, you know, we very quickly got over a million dollars in ad sponsorships. But I'm like looking at what you guys are doing. We've experimented with PISA.

and I'm like every month I start from zero again at advertising right because you got to sell all the and we've done experiments with like inside VC and we have hundreds of paid and I'm like I think I should just go paid as the primary because it builds on top of each other but what I really like about the paid is it is a filter for the writers we have writers who probably are not in of the stature or insight yet in their career, that people would be willing to pay for their newsletter. We have many people who they would. So like inside VC, inside podcasting, inside streaming. A lot of the newsletters we have inside VR and AR, like we have really great writers who people would pay for.

And then we have others who like could get there and then we probably have had maybe not anymore, ones who can't. But I'm just thinking on a sustainability basis, all you have to, because it only cost $100 to produce a newsletter, right? three hours, three hours for an average writer at 35 bucks an hour. Are you giving them a cut of all this money they're bringing you? No, I just pay them. Because there's more writers who just want to get paid and get health care benefits than who want to do the entrepreneurial thing. And then you abuse them on Twitter. And then I abuse those people on Twitter, yes.

By the way, that makes me feel, you talked about poaching substack writers. That makes me feel like we could poach your best writers. You probably, well, maybe. I mean, they would have to want to take, let me just think it through here. You know, if they're getting paid $25,000 a year to do a newsletter, let's say about $100 per newsletter, you know, and they're doing it like a third of the time, it equals 75K a year.

So if they wanted to work full-time, they could make that working at a publication. That would be like you could go work at the athletic or Vox for 75K year. That's probably a medium writer. To go to Substack, they would need to get at $100 per newsletter or $50 a newsletter more likely. They would have to get to, whatever, 500 subscribers. That would take two years, a year or two, probably.

Depends. I mean, some people do it a lot faster than that. Yeah. So it could a year or two, so you could potentially. I mean, the good news is the writers are likely not, we have a glut of writers right now because back to like the system we're both working in. Yeah, the internet smashed the business model for all of written culture. And now there's 100,000 qualified writers out there who are looking at. for work and they want to work from home.

And then I thought there would be more who want to be free to like have halftime or one third jobs. Now with all these layoffs, it turns out I was wrong. There's many more who want full-time jobs. So I'm moving to full-time and having people write two or three. Because there's just so many writers

out there who if you offer a 60, we pay $60,000, $65,000, $65,000 something in that range with benefits with days off. So that there's so many writers out there who just want that. and I think there's going to be five viable newsletters in every

vertical. So there'll be an inside VR and then you'll have two VR newsletters. Like there's Hot Pod, the podcasting one. Yeah. Are they, do they insurers? No, no. They do their own. So do you have a podcasting one? You must have five. I don't know if we have. We have weird niches

where somebody will do like a Bitcoin one and then we'll get 20 awesome Bitcoin ones. Right. I don't know if anyone's broken. So anyway, with podcasting, we have like this amazing podcasting one and I looked at Hot Pod and then maybe buying some other ones. and they all had two or three thousand, but because we have a half million subscribers across the network, we can start a newsletter at 5,000.

And cross-remote. And cross-per day one. So I'm just betting on having 250 in the top 250 categories. And then people would say inside means, high-quality, insider information on each topic. But I don't want to do the Matt Taibi. I don't want the thousand flowers blooming on my platform. The renegades.

No, because... Send us. Send us the renegades, the weirdos. People want to do something too niche. Niche, like crazy things. I would do inside documentaries, but I wouldn't do inside, you know. Insect taxidermy documentary.

Or insects or taxidermy. Like it's probably not enough to sustain. I would like to have 250 or 500 newsletters that could do, let's say a million dollars a year in revenue eventually, which is, you know, whatever, 10 to 20,000 a week. And you're thinking, should I keep selling ads or should I start charging money for these, basically? I've run both experiments.

And the subscription experiment, we stopped very quickly because we immediately hit $50,000 a month in advertising. So I was like, well, what's the point of like doing that? Let's just see how far we can take advertising. But I'm just personally not enjoying advertising. Like selling ads constantly and starting from zero every month. That's the annoying part about it. And the thing is when the economy slips up, your business is going to be super resilient. Right.

Where the ads, it's to be like in the dot-com buds, wherever it was buying ads with their VC money. or just, yeah, just in a general market, advertising is the first thing to go. Because they're like, do I lay off these three people or do I lay off one and then stop my, you know, they start with, they stop advertising on outdoor advertising, TV, they go back all the way to Google ads and SEO ads, you know, of the better bet. I think there's a subtler thing too, which is the kind of content you make when you want to have an ad business is just different than the kind of content you make when you want to sell, stuff to people. Yeah, it is. And we've tried to be very serious and do really high quality content, but I agree because paying is the ultimate litmus test for the quality. So I think like we can get to seven, eight, nine quality. You know, seven to ten. But anybody on your platform who's trying to do a paid thing, they have to be at eight, nine or ten. They can't exist at six or seven

or else it just doesn't work. And they have to be, I think of it is they have to be ten for somebody. There's to be a thousand people out there that are like, no, this is the one thing I need in my life. Like, I need, like, Christian feminist sermons that are awesome. And, like, that's the one thing I never knew I needed, but now I must have. San Francisco is for guns. San Francisco, San Francisco, San Franciscans who love guns. There you go. There's got to be a few of them out there, right?

Eight. I was just shooting with them down at Cody Point yesterday. I'm joking. I'm joking. I'm not joking. the, the sporting clays place? No, I like sporting clays, though. There's a really cool sporting clays place up in Napa that we've used a couple of times.

But I've been looking for a gun rage on the peninsula. There's one in Coyote Point that they're redoing down below by the airport, so I'm going to go check that out. You should start this. I don't shoot enough to make it interesting. I'm just, like, you know, trained by the CIA. True story. I got trained by like a former CIA guy. All right.

That's awesome. He shut it back down in L.A. I had like a mini security concern for five minutes. And I just got, my friend of a friend who's got security concerns was like, yeah, go to this guy. And it's like literally a former CIA, like Green Beret or whatever. And he shut down the shooting range and trained me by putting the targets at all different lengths

and having the targets move. And then we are moving up and down. the shooting range. It's pretty dope to learn how to do that tactical stuff. I just, I can have like 17 snowflakes email me. You know, guns are bad. Don't take this, Glenn's hard to put it on your thing. Yeah, no, I, Andrew, this, the whole,

andresen Harowitz is like a weird firm to me. Like, they're like a media company that monetizes by VC, is their sort of semi-true joke. It is, yeah, though they totally took the playbook and they're like, Everybody here has to write a book. And I'm like, guys, until Mark and Drescent and Ben are sitting in your chair, nobody from Andreessen Horowitz is going on the podcast, number one, because Mark and Ben haven't been on. And then I emailed Andrew a company, and I introduced him to him.

And Andrew's like, oh, Jason, I would prefer that you, this is my, like, nerd voice. I would prefer that you double opt in me. And I was just like, I don't do that, Andrew. Like, you know, listen, like, you're asking Chris Paul how to pass you the ball. Like, if I pass you the effing ball, just take the ball and take the goddamn meeting, Andrew Chan. I'm not getting involved, man. Can you imagine, like, you're on the team with Ray Jean Rondo or Chris Paul? You follow basketball?

Not at all. Yeah, you're looking at me. Thank you for telling me which sport we're talking about right now. We're talking about basketball. Speaking of nerd voices. There's a thing called a point card. They bring the ball off the court. That's what I do.

I'm an angel of a visitor. Bring the ball off the court. If I pass you the ball. Don't give me a hard time about passing you the ball, Andrew Chen. Seriously, dude. It's the last time I sent Andrew Chen a company. Well, they're just weird at Andrews & Hartz. I find it's like a very weird firm.

David Ulovich is there. I like David. He's a good friend of mine. I like Chris Dixon. He's been on the pod. He's pretty smart. But like I invited Ben to come on the podcast and he's got a new book. And Ben said no, right, Nick?

Where Ben's people said no? It's like, Ben Horace is too busy to come on the podcast. And he's been on every single podcast in the last two years. Maybe it's you. Oh, it's 100% me. They don't like me at Andreessen Horowitz. I don't know. It's just bizarre.

I don't know what to tell you. It's just, they're weird. Or maybe I'm weird. I mean, you know, whatever. But I'm like a thousand episodes in. Come on the podcast, Mark or Ben. And then I'll have the rest of the people on. But like, I invite them on.

They're like, oh, yeah, no. We would love to have this person on. I'm like, what is this bait and switch? And then their PR person wants to talk to me. And I was like, you know what? I've invited Mark and Ben to keynote every conference that I've ever done. They've never come. And they've never come on the podcast.

How are they as investors? How's Andrew on your board? Good? They've been great. A plus? Yep. No complaints. All right.

So they're probably great. They are great at what they do. Whatever. It's probably me. I'll tell them to up their podcast game. No, they have a great podcast. I mean, they do a good job on their podcast. I mean, it's kind of boring.

But maybe they just don't have a real conversation like, had today. Like, I thought you were very good guest. Like, you're, like, very honest about the business and, like, how to figure it out. Like, I think you're going to be very successful because you have that, like, you know it's going to work, but you seem like humble enough to know, like, well, we'll figure that out. Like, it's, it is an experiment. Like, we're all experimenting at this email thing. I kind of feel like you have the two sides of your mind at the same time where you both firmly believe and know that it's going to work in exactly how. And on the other side, you're like, this is never going to fucking work. Here's all the things. going to go wrong. Yeah. And you have to like, successful founders like keep both of those sharp all the time. Yeah. Two different lists.

Yeah. Yeah. Well, I always tell us to angel investors. They're like, well, here's all the reasons why this is not going to work. It's the same Andrew Chen voice. Here's all the reasons. It's never going to work. And I have like the list of reasons we're like, okay, Microsoft is going to do it.

Google's going to do it. Apple's going to do it. They can't hire people. People won't. I mean, it's like, it's the same list for everybody. and what Bill Gurley says at Benchmark, who's been on the podcast, he just says, like, well, what could go right? Yep. There's what could go wrong, but what could go right?

I mean, and for you, like, this, you know, China podcast with thousands of people making, like, all this money, like, that's what could go right. Yep. That times a million. That's it. Yeah. And I will say, you know, Andrew Sinarowitz, to their credit, are high conviction series A investors in my experience. That came across my desk, you know, came across my feet and I'm like, $15 million series A. Like, that's in front.

$15.15. Yeah, no, it's a big Series A. Totally. I mean, back in my day, 15 years ago, Series A was two or three million. Now that's the seed. A $15 million series A for a three-person company. That's a big, bold bet. I give them credit for that.

It's a visionary bet, I think. I mean, it gives you the ability to build this business. business for a long time. Oh, you know, I was going to ask you about, you gave, like, three people or four people, some type of sponsorship or grants? Oh, the fellowship. Fellowship. Tell me about that. That's a very cool. This is a prototype program, which one of the amazing employees you enabled to hire after having all this money, Fiona, ran this program where we basically had some writers that were already talking to and brought them in for this inaugural program, gave them a bunch of resorts. like flew them into San Francisco and like had some people that were experts in various things like do some workshops to help them. They had like professional headshots taken, a bunch of like good resources and stuff that we provided. But I think most importantly was just like getting a chance to

kind of like be together and meet and like feel each other's energy and like know that this is like a thing that they're sort of in it together. And those people like there's a bunch of them on that top list now. They're like crushing it. And it's a very exciting. I think that for it's sort of of like, we're thinking of it almost as like a mini like mini like mini YC type thing or a mini sort of batch program that we could run to sort of like help kickstart this sort of magical thing that's happening. Yeah. So you just underwrite them 10, 20K a year or something to, you know. I mean, we're still sort of experimenting with what the financial model is. Figuring out the right financial model that we could use to jumpstart people is another really interesting problem to me.

But yeah, well, if they're charging 10 bucks a month, if you say we'll be the first 100 subscribers and we'll give you. a thousand a month. It's like, yeah. Okay. Exactly. We'll fill in the first thousand. I mean, it makes it easy. All right, listen, Chris, great job on the pod. Yeah, thank you. Great job on the company. Congratulations. Appreciate it. And it's just great because, like,

we now have yourself, Morning Brew is doing real good. Yep. The skim, I heard, is for sale. Interesting. Yeah, interesting. We're doing stuff in email. Who else is, is there anybody else doing something interesting in email? I only know of those four.

Morning Brew Schim, you guys, us. Who else is doing email as, a business like that's their focus anybody else not sure hustle yeah the hustle the hustle the hustle and hustle con which is kind of a bummer because now there's this anti-hustle culture

what do you think about that hustling like how many hours a week you are candidly can't I don't know probably like 50 or 60 yeah see that's what I just did a tweet about this I was like most founders today millennials founders are doing 60 hours a week and their team members are doing 40 or 50 your average team member probably does 40 to 50 hours a week you think

they probably do the same that we do mostly 50 or 60 but nobody's doing 80 hours a week you're not in the office every Saturday or every Saturday and Sunday not in not in the normal course there's been periods in the company's history where that we've we've done that but it's not a not like we're not at like defcon five all the time I think that this is the interesting insight like everybody's like oh my God hustle culture I'm like I don't see it anymore 10 years ago 15 years ago

people had a sense of urgency and they had very little money and you had a very small subset of people I think... I think part of that answer is like... Culture has changed. When you're a young founder, you don't know what the hell you're doing

and you can kind of partly make up for that by just like... Sure, hours. Never leaving the... Like, we did this at kick. There was a period where we like didn't go home for four weeks. And it was because we were like scaling up this service

that got a million users... Yeah, it was 10 years ago. We got a million users in 10 days. We had no idea what to do. I was literally like, in Google, like, how to scale a server? And the only answer was just like, don't go home until it's done. And like today, I could do that in way fewer hours.

You're like Amazon? Go ahead and scale. Thank you. Yeah, exactly. No, I just, the, I think it's a generational thing combined with people's companies are fully funded so they don't have to have everybody doing five jobs. At a startup, it used to be everybody did five jobs now as everybody does two. or 1.5.

But you know Zuckerberg used to lock the campus down and do a lockdown for 30 days? Everybody had to come to work for 30 days in a row to hit some crazy goal. Yeah, that seems ridiculous. Yeah, they got the biggest company in the world, right? It's like one of the biggest companies in the world, right? It's ridiculous, but that was kind of how they got there.

It's a very weird, what do you think of that, like, sort of hustle, anti-hustle debate on Twitter? Are you following this nonsense? I've seen it. This is the exact... It's like every six months it goes down. This is the reason that I... This is where they hate and my love

relationship with Twitter comes from. It's one of these things where it's like, look, obviously there's some nuance here. Obviously, there's a time to work hard and it's important, but you shouldn't be a robot that only works for your whole life because then you're wasting your human potential. And yet we find ways to like have the dumbest possible argument about it where everyone's either like, come on, like everybody that's ever successful had to work 80 hours a week until they broke their back. And then other people are like, no, like no one should ever stay past five o'clock because

you're being mean to them and it's just, I don't know, the quality of the debate feels bad to me. It's always the people who have arrived, like Alexis O'Hannan has arrived. And D.Hassett, who was on the podcast. And that was where this debate started was he was on the pod. We had this debate. And it's like every year or every six months, I can pack up. He's already made it. And then they want to tell people who are on the way up, don't hustle because I didn't have to.

And it's like, did Alexis and David, not? not have to hustle. I think they actually hustled. And then they're looking back on it saying, I wish I could recapture some of that time. And they're not wrong. And maybe they could have. There's a core of truth there, though, which is if you pick something to work on that you actually give a shit about, you don't think of it as like, oh, I'm working all this time. You're like excited. You're like, this is, I'm working on this thing that I care about and this is great. And for better or for worse, part of being a founder is you are blurring those lines between what is my personal life and what is my professional life? It's not like, I have this job that I go to and then I go

home. It's like these things get blurred. You put yourself into the thing that you're doing. That is the best case scenario that it's one thing, that you're doing your life's work. LeBron James is, or whoever is probably doing whatever 78 hours a week training and playing basketball. They're not complaining about it. Or, you know, Jay Z and his prime might have been, or Eminem might have been writing rap songs 12 hours a day. And nobody derides them. There's a good lesson to take from that and a bad lesson to take. The bad lesson to take is, oh, they work eight hours. So if I just go and work 80 hours doing whatever dumb thing I'm doing, that's what's going to get me there.

Yeah. And that's like you're reversing cause. You're reversing cause and effect. Yeah. Right. Pick something that you care enough about that you want to work that much. And that's like, that's the high order. I know.

Yeah. That, I mean, it's like when you comes to the podcast, people are like, you did 130. We did 130 episodes. That's amazing. It's like, oh my God. I'm like, this conversation to me that you will. and I had today, it's going to fuel me for two or three days. It's going my mind's going and thinking. I come out of this. I'm inspired. I'm like, that guy's cool. He's figuring it out. I feel more

excited. So for me, like, doing the podcast is like for another person doing a five-mile run. They come out of it with all those endomorphins flying or whatever. Like, for me, this is like an endomorphine producing event. I feel excited and want to take on the world. Anyway, great. Listen, keep doing it. Great guest. Thanks. Congratulations to Andrew Chan and Andreessen Horowitz.

Thanks to the Andreessen Horowitz guys for boycotting my podcast. I didn't know you had beef. It's not beef. I just think

they don't like me. Mark andresen doesn't like me. Sounds like beef. Ben Horowitz doesn't like me. I think that like they're weird.

Being a weird is not a bad thing. I think they're weird. Like they exclude me from everything. I have friends over there. I invite them to come

on the pod. I'm very kind bad, a very nice sabah, very humble about, hey, I loved having the pod this year. And it's like every year. And then they made me like go to their PR people and talk to them. And I went to lunch with one of their PR people. And I'm like, I don't do this for anybody. But you're making me go to lunch with your PR person. And then I think that's going to get you on the show because every, all the fans want Ben Horowitz to come on the show or Mark to come on the show and have a conversation. You make me go to your PR people and it's a bait and switch. And the PR person is like, yeah, we want this person on the show,

this person on the show and this person. I'm like, the fans want Ben. And he's, you make me, and this person. Give me Ben, give me Mark, and then I'll give you one of those other people, who's an up-incumber. That seems fair, right? I'll horse trade. I'll horse trade. I'll bring your newest person. I'll bring an associate on. If you put Ben in the seat, you put Mark in the seat. I don't know. Who's finding PR over there? You guys are overthinking it.

Anyway, congratulations, Andrew Chen. This is a winning investment. I think you're going to figure it out. And it's good to know you. Yeah, let's trade some notes once in a while. Appreciate it. All right, man. We'll see you all next time on the shooting service. Bye-bye.