Stratechery (with Ben Thompson)

Summary Notes


In this episode of Acquired, hosts Ben Gilbert and David Rosenthal are joined by Ben Thompson, founder of Stratechery, to discuss the evolution and impact of his influential tech and business newsletter. On the cusp of Stratechery's ten-year anniversary, Thompson reflects on how his platform, initially seen as a long shot, has become a thought leader in the tech industry, with high-profile interviews and the development of the seminal aggregation theory. Despite the pressure of maintaining subscriber satisfaction and the challenges of a changing industry, Thompson continues to innovate, expanding into podcasts with "Dithering" and "Sharp Tech," and building software like Passport to enhance content distribution. The conversation also delves into Thompson's views on Meta, TSMC, and Amazon, offering strategic insights into these tech giants. With a commitment to independence and a subscription model that prioritizes depth over breadth, Thompson exemplifies the potential of Internet-enabled niche businesses to thrive outside traditional corporate structures.

Summary Notes

Market Sentiment and Jerome Powell

  • Discussion about the market's positive response on a particular day.
  • Speaker A expresses a wishful thinking for Jerome Powell to have a more relaxed approach reminiscent of 2021.
  • Speaker B acknowledges the damage done previously but appreciates the good times.

"Ooh, market's got a nice bump today. You had a good feeling about Jerome?" "Yes. I get these vibes from him, you." "Know, I want Jerome to wake up on his 2021 side of the bed one day, just be like, you know what? Times were good back then." "We caused cataclysmic damage that needed to get unwound at some point. But while it was up, it was all good."

The quotes discuss the speakers' perception of the market's performance and their desire for a return to a more favorable economic period under Jerome Powell's policy decisions. The speakers also acknowledge the negative consequences of past economic policies.

FOMC Meeting and Jerome Powell's Approach

  • Speculation on taking a break from the usual Federal Open Market Committee (FOMC) meeting routine.
  • Speaker A humorously suggests posting a carefree story on social media.

"Do I really need to keep bringing down the hamrail?" "Let's take this FOMC meeting off." "I'm going to post a story worry on Instagram just on a beach with a drink."

The quotes reflect a light-hearted conversation about the FOMC meeting, with Speaker A suggesting a more relaxed approach and joking about posting on social media as if on vacation.

Introduction to Acquired Podcast Season Eleven, Episode Eight

  • Speaker B introduces the podcast and his professional background.
  • Speaker A introduces himself as an angel investor.
  • The hosts announce the episode's focus on the history and strategy of Stratechery and their guest, Ben Thompson.

"Welcome to season eleven, episode eight of Acquired, the podcast about great technology companies and the stories and playbooks behind them. I'm Ben Gilbert, and I am the co-founder and managing director of Seattle based Pioneer Square Labs and our venture fund, PSL Ventures." "And I'm David Rosenthal, and I am angel investor, based in San Francisco."

The quotes introduce the podcast episode, the hosts' professional backgrounds, and the episode's focus on Stratechery and Ben Thompson.

Ben Thompson's Impact and Influence

  • Ben Thompson's Stratechery is described as highly influential in the technology industry.
  • Ben Thompson's interviews with prominent industry leaders are highlighted.
  • His contribution to the subscription newsletter business model and aggregation theory is acknowledged.

"Regardless of what your business model is, regardless even almost, of what your content is, I don't think there's any creator, certainly not any business creator out there today who doesn't directly or indirectly look to Ben and say, you inspired me. You paved the way for what I do."

The quote emphasizes Ben Thompson's significant influence on content creators and business strategists, highlighting his pioneering role in the industry.

Pilot as a Sponsor and Accounting Services for Startups

  • Speaker B introduces Pilot as a sponsor, emphasizing its accounting services for startups.
  • Pilot's growth and backing by notable investors are mentioned.
  • The importance of outsourcing non-core activities like accounting is discussed.

"Our next sponsor for this episode is one of our favorite companies and longtime acquired partner pilot for startups and growth companies of all kinds. Pilot is the one team for all of your company's accounting, tax and bookkeeping needs, and in fact now is the largest startup focused accounting firm in the US."

This quote serves as an endorsement for Pilot, highlighting its role as a comprehensive provider of accounting services for startups and its status as a leading firm in the industry.

Ben Thompson's Interview and Audience Requests

  • Speaker B welcomes Ben Thompson to the podcast.
  • The hosts discuss the audience's anticipation for Ben Thompson's appearance.
  • A personal anecdote about the hosts' friendship and early discussions about Ben Thompson's work is shared.

"Ben Thompson, welcome to acquired." "It's great to have you with us. We've done surveys over the years of our audience, and we say, what is the number one topic that you'd want to see us cover or person we should have on the show? And your name comes up many, many times."

The quotes welcome Ben Thompson to the podcast and indicate the high audience demand for his insights, reflecting his popularity and influence among listeners.

Discussion on Content Creation and Online Businesses

  • Ben Thompson discusses the importance of consistency in content creation.
  • The challenges of microtransactions for content creators are analyzed.
  • Ben Thompson emphasizes the value of providing consistent content to subscribers.

"I think it's a very distinct skill and capability to come up with interesting things consistently. And the sooner you can demonstrate that to someone, the sooner they are going to take advantage of whatever means you have to follow or to subscribe or whatever it might be, because it's not just a promise of consistency, but it's evidence of that."

This quote stresses the importance of consistently producing interesting content as a key skill for online creators, highlighting the need to demonstrate this ability to attract and retain subscribers.

Ben Thompson's Background and Career Path

  • Ben Thompson shares his experience at Microsoft and Apple University.
  • The impact of company culture on decision-making and business strategy is discussed.
  • Ben Thompson's journey from teaching in Taiwan to starting Stratechery is recounted.

"I had started tons of blogs through the years. I, in some respects, felt I had missed out because I'm the same age as folks like Ezra Klein and Matthew Glaciers. And I was writer for a school newspaper and I started a blog. I'm like, man, if I had sort of kept with it, I could be doing what they do."

The quote provides insight into Ben Thompson's background and the motivations behind his eventual creation of Stratechery, as well as his reflections on the paths taken by contemporaries in the industry.

John Gruber's Influence and the Infeed Advertisement Model

  • John Gruber is known for his website Daring Fireball, which has a distinct format mixing links to other content, long-form articles, and sponsored posts.
  • The sponsored posts in Gruber's feed appear like any other post in an RSS reader, seamlessly integrating advertisements into the content stream.
  • Gruber's model capitalizes on a specific audience likely to use RSS feeds and directly visit his website, a behavior particularly common among Apple enthusiasts.

"When Ben says that he invented the infeed advertisement, you go to Daringfireball."

The quote indicates that Ben Thompson acknowledges John Gruber's pioneering work with infeed advertisements, suggesting that Gruber's approach was influential and perhaps a model for others.

Niche Markets and Advertising in the Tech Industry

  • Niche markets, while smaller, can be particularly effective for both subscriptions and advertising models.
  • Gruber's success with Daring Fireball was partly due to the right timing with Apple's growth and the App Store boom, which was beneficial for featuring apps in his sponsored content.

"I think the more niche you are, interestingly enough, that does pay off subscriptions, it can also work well for advertising."

Ben Thompson explains that being niche can be advantageous for generating revenue through subscriptions and advertising, as seen with John Gruber's Daring Fireball.

The Evolution of Subscription Models for Content

  • Subscription models in industries like finance can be extremely expensive, catering to a corporate audience with high willingness to pay.
  • Ben Thompson's Strategy innovated by offering subscriptions at scale for a lower price, targeting individuals and leveraging self-serve platforms.
  • The lack of subscription tools at the time required creators to hack together solutions using available services like WordPress and Stripe.

"What I do think strategy innovated was sort of subscriptions at scale, where you're charging a low price relative to $25,000 or $10,000 and you're doing on a self serve basis."

This quote highlights Ben Thompson's contribution to making subscription models more accessible by charging lower prices and allowing customers to sign up easily online, broadening the potential audience for such services.

Building a Recognizable and Distinct Brand

  • Ben Thompson emphasizes the importance of a distinct and memorable brand, which he attempted to create with unique site design and content.
  • The visual and memorable aspects of a site can help readers recall and return to it, which is crucial for building a following.
  • Despite some challenges with the name "Stratechery," its uniqueness has contributed to the brand's memorability.

"And that's sort of the key thing that I think you want to accomplish."

Ben Thompson is stressing the importance of creating a brand and site that readers will remember and want to return to, which is a key goal for content creators.

The Impact of Social Media on Content Distribution

  • Social media platforms are a double-edged sword for content creators, offering both challenges and opportunities.
  • For those with new business models, social media can serve as an effective marketing tool, amplifying content reach without additional costs.
  • Sharing content on social media can enhance the sharer's reputation, leading to increased visibility and traffic for the content creator.

"What it does do is give all my readers a platform to tell other people, wow, this site's really great."

Ben Thompson describes how social media empowers readers to advocate for content they enjoy, which in turn can attract more readers and subscribers.

The Role of Email in Content Distribution

  • Email remains a key distribution channel for content, offering a direct line to readers without the interference of algorithms.
  • Substack's rise has popularized the email newsletter model, but Ben Thompson believes that email should be one of many tactics in a broader strategy.
  • The goal is to make content as accessible as possible, whether through email, podcasts, SMS, or RSS feeds.

"Email is a tactic, it's not a strategy."

Ben Thompson clarifies that while email is an important tool for reaching audiences, it should not be the sole focus of a content distribution strategy. Instead, it should be part of a multifaceted approach to reach readers where they are most comfortable.

Tokenization in Subscription Models

  • Discusses the use of tokenized links in Shitekri emails to allow access to a second article, which creates a "second article sensation" for non-subscribers.
  • Highlights the advantage of subscription models in serving customers and providing a good user experience.
  • Explains that tokenized links are a method to entice non-subscribers by offering limited access to content.

"So one of the things we do there is every link to myself in a Shitekri email is tokenized, and that token goes one link deep. So even if the email is forwarded to you, you can go read old stuff."

The quote explains the functionality of tokenized links in Shitekri emails, which allow recipients to access additional content even if they are not the original subscriber.

Feedback Mechanisms and Writer Engagement

  • Discusses the importance of feedback for writers and the negative impact of not having access to performance metrics like click numbers.
  • Points out that in the absence of direct feedback, writers may turn to social media platforms like Twitter for affirmation.
  • Notes the skewed representation of audience feedback on Twitter due to a small, vocal minority.

"And if you don't even get access to your quick numbers, where do you go? You go to Twitter. Like, what are people saying about me?"

The quote emphasizes the need for writers to have access to performance metrics to avoid relying on potentially biased feedback from social media.

Subscriber Numbers as a Feedback Mechanism

  • Highlights the use of subscriber numbers as a feedback mechanism for content creators.
  • Subscriber growth is seen as an indicator of the silent majority's appreciation, contrasting with the vocal minority on social media.
  • Subscription models provide a direct feedback loop through financial support, even from those who do not actively engage in other ways.

"And meanwhile, I have a feedback mechanism, which is my subscriber number, which is going up, which means I know there's a huge number of people that like and appreciate and are sharing, and it's all dark matter."

The quote illustrates how increasing subscriber numbers serve as a form of positive feedback, validating the creator's work even without direct communication from subscribers.

Niche Appeal and Subscriber Retention

  • Discusses the niche nature of subscriptions and the challenge of not pandering to the audience.
  • Describes the advantage of having a large enough audience to not be significantly affected by individual subscription cancellations.
  • Explains the proactive approach to refunding and dismissing overly rude or disrespectful subscribers.

"Now, there is a downside where subscriptions are niche, right? And I do think you tend people will, if they dislike you, they can stop paying."

The quote addresses the potential downside of subscription models, acknowledging that niche content may lead to cancellations if subscribers become dissatisfied.

Advertising and Sponsorship

  • The podcast introduces Statsig as a new sponsor, highlighting the CEO's background and the company's services.
  • Statsig is described as a feature management and experimentation platform that aids product teams in shipping features and measuring their impact on business metrics.
  • The discussion includes the benefits of Statsig for AI feature rollouts and the integration with different data warehouses.

"Our sponsor for this episode is a brand new one for us, Statsig."

The quote marks the transition to discussing the episode's sponsor, providing context for the following discussion about Statsig's services and relevance to the podcast's audience.

Subscriber Growth and Price Strategy

  • Reflects on the growth curve of subscribers over time, noting periods of acceleration and tapering.
  • The speaker shares their experience with raising prices and the resulting shift in subscriber behavior towards annual subscriptions.
  • Emphasizes the desire to explore the market's size rather than maximizing revenue prematurely.

"Over the last couple of years, it has tapered off."

The quote acknowledges the change in subscriber growth rate, indicating a natural leveling off after a period of growth.

Podcasting as Part of the Subscription Bundle

  • Discusses the decision to include podcasts like dithering and Sharptech as part of the Shitekri subscription, adding value to the subscription.
  • The speaker contemplates the risks of content dilution and increased churn due to overwhelming subscribers with repetitive or excessive content.
  • Describes the goal of pioneering the paid podcast model and the challenges in marketing and promoting podcasts.

"I did face a decision this year, which is growth is somewhat leveled off. Do I raise prices and just sort of be happy with the base that I have?"

The quote captures the speaker's strategic decision-making process regarding subscription pricing and content offerings, considering the implications for subscriber growth and satisfaction.

Aggregation Theory and Canonical Work

  • The speaker discusses the concept of aggregation theory and its relevance as a modern analytical framework.
  • Contemplates the idea of writing a book on aggregation theory but recognizes the challenges and risks associated with creating a static work.
  • Reflects on the timing and opportunity to have written a book on the subject, as well as the potential for being wrong in a rapidly changing industry.

"I do think irrigation theory should be a book."

The quote expresses the speaker's belief that aggregation theory merits a comprehensive, canonical book, despite not having written one yet.

(Note: The transcript provided was incomplete, and the study notes cover the content available up to the cutoff point.)

Fear Factor in Social Media

  • The transient nature of the internet and social media is discussed, emphasizing the idea that content should be temporary.
  • The permanence of tweets is identified as a mistake for Twitter, suggesting that disappearing tweets would have been better.
  • The archive of past tweets can induce fear and ruin, detracting from the real-time experience of Twitter.

"Twitter should have had disappearing tweets from day one. It should have always been a just in the moment sort of social network."

This quote highlights the opinion that Twitter's design should have focused on the ephemeral nature of social interactions, which would have prevented the issues that come with a permanent record of tweets.

Aggregation Theory and Iterative Communication

  • The concept of aggregation theory is discussed, with emphasis on its evolution over time rather than being a static concept.
  • The difficulty of explaining aggregation theory to others is noted, as it requires understanding an evolving set of ideas.
  • Continuous revision and communication of ideas are seen as beneficial for understanding complex theories.

"I think you're both right. There should be a set and stone treaties. Honestly, there's just a matter of priority."

This quote suggests that while having a definitive document on aggregation theory would be useful, other priorities and the dynamic nature of the internet make it challenging to create such a document.

The Power of Branding and Timing in Writing

  • The importance of branding and timing in writing and communication is discussed.
  • Articles written before the term "aggregation theory" was coined received less attention despite their relevance.
  • Understanding the right time to discuss certain ideas is crucial for effective communication.

"I wrote articles that were basically aggregation theory well before I wrote aggregation theory, but giving it a term and coining it is what made it stick."

This quote emphasizes the significance of branding in making ideas memorable and understandable to a broader audience.

Crusoe's Clean Compute Cloud

  • Crusoe is introduced as a clean compute cloud provider for AI workloads, partnering with Nvidia.
  • The environmental benefits of Crusoe's data centers, which use stranded energy, are highlighted.
  • Crusoe's business model and performance advantages over traditional cloud providers are discussed.

"Crusoe's data centers are nothing but racks and racks of a crusoe's cloud is purpose built for AI and run on wasted, stranded or clean energy."

The quote explains how Crusoe's data centers utilize energy that would otherwise be wasted, providing an environmentally friendly and cost-effective solution for AI workloads.

Strategic Advice for Meta (Facebook)

  • The speaker discusses Meta's response to Apple's privacy changes and suggests that these challenges might ultimately enhance Meta's advertising moat.
  • The idea of acquiring Shopify to close the loop on e-commerce and advertising is proposed.
  • The metaverse strategy is criticized, with the suggestion that innovation does not come from large expenditures in big companies.

"I would acquire Shopify and I would take the FTC and justice Department to court when they sue to stop it."

This quote represents a bold strategic move to strengthen Meta's position in e-commerce, anticipating legal challenges but suggesting the outcome would be worth the effort.

Strategic Advice for TSMC

  • The speaker acknowledges the complexity of TSMC's situation and broadly agrees with its current strategy.
  • The geopolitical risks associated with TSMC's location in Taiwan are discussed.
  • The speaker suggests doubling down on Taiwan and investing in advanced packaging technologies.

"TSMC is Taiwan, and that's going to always be the biggest risk. And I'm not sure there's really much they can do about that."

This quote highlights the inextricable link between TSMC and its geopolitical context, suggesting that the company has limited options to mitigate those risks.

Strategic Advice for Amazon

  • Amazon's transition from a growth-focused startup mindset to embracing profitability and maturity is discussed.
  • The speaker suggests that Amazon should acknowledge its stage in the corporate lifecycle and adapt accordingly.
  • The speaker also addresses the challenges faced by AWS, including competition from Microsoft and the need to support a wide range of features.

"You can't be a startup forever. And it's bad too."

This quote reflects on the need for companies like Amazon to evolve and accept their maturity instead of attempting to maintain a startup mentality indefinitely.

The Role of Access and Interviews in Strategy

  • The speaker discusses the evolution of their access to influential people in tech and how it affects their work.
  • Interviews with CEOs and other industry leaders are seen as valuable, providing different perspectives.
  • The speaker emphasizes the importance of maintaining independence and credibility in analysis, even with increased access to high-profile individuals.

"The reality is I probably have the best access of anyone in tech. I can literally contact basically anyone and get access to them."

This quote acknowledges the speaker's privileged position in terms of access to industry leaders, which has grown over time and influences the content and insights they can provide.

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