The Knowledge Project #40 Ben Thompson Thriving in a Digital World
|David Senra||Jan 7, 2019|
Why did you choose the name Stratechery? I was poor. In debt. The domain was available. It returned 0 google results. The twitter handle was available. I was inspired by Asymco. A name that is unclear to announce and spell is a bad idea. If I could do it over again I’d probably name it something different.
What Stratechery is to Ben: I view Stratechery as my personal intellectual journal of trying to understand the world and how it works.
All I do in my free time is read about and obsess over technology: My wife said why don’t you go work in technology? That’s a good idea. I should go do that.
How to find opportunities in a crowded market: There were a lot of sites writing about technology. But all of them were writing about it from a product lens. My starting point was different. I did the reverse. I started with how does a company’s business model influence the type of products it creates, or the way it thinks about them, or how the company makes decisions.
How did you come up with the business model for Stratechery? I wanted the model to be pay for more. I will deliver this product [one free weekly article] consistently for free. Then if you want more then you can pay for 3 daily update emails. I wanted the feeling of paying to be a positive feeling.
I don’t look at metrics at all: When I send the email I see how many people are receiving the update. As long as that number is larger than it was the day before then I figure everything is going fine. That is the beautiful thing about the subscription model. All you have to do is keep your existing subscribers happy. Everything else will take care of itself.
The internet is a huge benefit if you have this type of business model: The friction for my subscribers to tell other people to try it out is zero. They can post to social media, they can email other people, etc...
The process behind writing a daily update: I form my opinions directly from the core content. Then I do extensive amounts of research. I end the day with about 150 browser tabs open. When I write about stuff it is really important to me that I get everything right. Down to the details.
What are the implications as technology continues to become ubiquitous in our lives? We are switching from a world where power was gained by controlling supply, to a new world where power is gained by controlling demand.
If I were to guest lecture an Internet MBA program: My goal would be to teach that you need to consistently and repeatedly start with new assumptions. Ask what is the controlling assumption in this industry and what happens if that controlling assumption completely changes?
The internet has a barbell effect: There are returns to the biggest [companies] and returns to the smallest [companies]. If you are stuck in the middle it is a very dangerous place to be.
Why are there so many mergers/acquisitions? Because the internet fundamentally changed the assumptions undergirding their business. The broader trend is that the world in which these companies grew up in - the world they were built to operate in - that world is shrinking. The obvious way to deal with that is to merge. We don’t have time to compete with each other. We have to deal with fundamental secular impacts on our business.
We need to dramatically reduce the barriers for people to build new kinds of businesses, uniquely enabled by the Internet: Those are where the jobs of the future are going to come from.
What is something you learned from running Stratechery for 5 years that you didn’t know before? The speed with which you can grow and word of mouth can spread is mind-blowing. Publishers hate social media because they don’t have the right business model. For me it is amazing and it is free. The second thing is how large the market is on the internet. There is still room to grow. I have customers out there and the issue is not convincing them to pay. It is that they just don’t know who I am yet. That’s a great place to be.