An open letter to creators. By now, there are hundreds, if not thousands, of viable membership-based newsletters. And that’s a great thing – an unequivocal advantage for creators and consumers alike. Of those thousands, a number of them serve as sources of original ideas, news, and analyses that are incredibly valuable to professional ecosystems. It’s the synthesis of these ideas that has the greatest potential impact. If education is priceless, we are entering a new era of value creation. Imagine an Enlightenment-era coffeehouse.
There are newsletters run by operators who publish original ideas. There are meaningful letters that curate the ideas of of others. Some of them report on the news and others categorize and comment on industry developments. Often, reports that have been written by one person are refined by others. And frequently enough, mainstream outlets like The Wall Street Journal or CNBC will pick up on original concepts and make them their own. Like a coffee shop, this is a valuable form of information synthesis.
John Dowell is a professor at Michigan State University. Over his nearly 40-year career, he’s taught English, Sociology, and Anthropology. His course on the introduction of synthesis explains:
A synthesis is a written discussion that draws on one or more sources. It follows that your ability to write synthesis depends on your ability to infer relationships among sources – essays, articles, fiction, and also non-written sources, such as lectures, interviews, observations. This process is nothing new for you, since you infer relationships all the time – say, between something you’ve read in the newspaper and something you’ve seen for yourself, or between the teaching styles of your favorite and least favorite instructors.
In the Age of Enlightenment (1715-1789), a European could gain entry into a coffeehouse by buying a drink. But the drink was just the price of admission, the conversation was the attraction. It wasn’t solely the conversations on matters of sociology, economics, and law that drove the age forward. Sometimes, patrons would overhear concepts that would fill gaps in their own thinking. Other conversations would solidify pivotal ideas, directly or indirectly.
It was a coffeehouse conversation that I had in November of 2015 that struck me as one of the most important professional discussions that I’ve had. The discussion was on the mechanics of community and the need for tools that could maximize serendipity. On an idle day in late 2015, I began planning the launch of what I then called 2PM Links. I paid for a service called Goodbits and launched the landing page for the site. After a week or so of pushing the idea of 2PM on Twitter, I confirmed that the first letter would publish to twelve whole readers. I’d go on to publish five days per week for 180 business days straight.
On paper: 2PM Links would be one part original concepts and one part data and narrative synthesis, a curation of developments that would tell a story. The emails themselves would allow for 1:1 dialogue. The most engaged readers would write in explaining how they recognized microtrends and larger movements. Others would explain methods for synthesizing each letter for maximum effect. On occasion, I’d read an email from an early subscriber explaining how a cluster of articles over several weeks helped them to plan their company’s next steps. For nearly two years, those letters would help sustain the motivation to maintain operational consistency.
Reach vs. Depth
To build something that was designed to grow slowly, I maintained paying roles at established companies. However, at the time that I started the publication, I was between media jobs. Having managed or led eCommerce at two digital media publishers, I learned a tremendous amount from two vastly different styles of conversion-based (read: affiliate) publishing.
Company A built a hyper-targeted funnel, honing in on a specific (affluent) consumer. There, direct traffic was high and SEO was a secondary funnel. Brand was most important. This company would rely on it. Company B built a system that would rely upon SEO and topic interest, not the clout of the platform itself. For B, reader loyalty was secondary to SEO discovery. Visitors clicked through to read about a topic that they stumbled upon. If A was a funnel, it would be short and wide. Trust was built over time. For A, the readership would be driven by loyalty to the platform. Meanwhile, the B funnel captured new people by optimizing articles for topical keywords. Its funnel would be longer with a number of entry points throughout. Those entry points would also serve as exit opportunities. Churn was higher.
- Company A: smaller audience, higher loyalty, higher conversion rate. 1.8 million to 2.2 million MAU. Product segment: modern luxury.
- Company B: lower loyalty, lower conversion rate, larger audience. 6-7 million MAU. Product segment: accessible luxury down to daily deals.
A and B continue to operate successful media brands with disparate objectives. As they say, there’s more than one way to skin the proverbial cat.
To prove out the long term viability of the newsletter, I allotted 180 letters to figure things out. As things progressed, 2PM took on more and more characteristics of Company A. After reaching number 180, this identity influenced the next steps. Once I reached Letter No. 180, there would be three options:
- move forward and publish No. 181
- shutter the letter
- replatform and build a company
The choice was option number three. In my seven pages of scribbled plans, I agreed that I’d emphasize depth over reach. I’d maintain an emphasis on the “A” version of media. To do so, I emphasized a paid subscriber model. And then a data / advisory model. And later, an executive community. These initiatives would allow me to reinvest revenues into improved services, design, content development, and greater overall access.
From Audience to Community
Over a matter of two weeks between December 2017 and January 2018, I replatformed from Goodbits to Mailchimp, designing around a Memberful integration. I invested in branding and design. I coded much of v1 of the site in my free time. And later I’d import some 240 editions of 2PM to the WordPress site, one by one. In March of 2018, after two months of testing, 2PM’s first membership launched to the Monday Letter’s subscribers.
In this way, 2PM’s system became somewhat of a funnel. Around 10% of all subscribers become Executive Members. And, upon invitation, a percentage of Executive Members opt in for direct communication with like-minded executives across a number of digital industries.
2PM’s community of Executive Members, Polymathic was inspired by two separate thoughts.
- The forum is designed to help talented executives develop new core competencies by: (a) identifying blind spots and (b) learning from leaders who’ve mastered those pursuits.
- When I arrived at the latest Code Commerce, I recall four great conversations within my first hour at the venue. These conversations were with Jason Del Rey, Alex Taussig, Marc Lore, and Jen Rubio.
To attend Recode’s two-day event, tickets range from $2,000 to $4,000. Pricing serves a valuable function, in this respect. There, everyone that you talk to is likely to leave a valuable impression. The events tend to attract high level operators. Between the keynote speeches at these key events, few conversations are wasted and most every extracurricular interaction adds professional value. As such, the event isn’t the only product. The community of attendees provide an additional value. The Polymathic Forum is designed to resemble digital hallways of top conferences like Sundance, PopTech, Google’s Solve for X, or FOO Camp. As the numbers grow, so does the strength of the venue.
From hosting 15-25 Executive Members at our monthly roundtables to building out 2PM’s Polymathic, the shift from audience to community has provided serendipity in ways that were previously unimaginable. Subscription revenue becomes the key variable here. Paid memberships provide a level of opportunity that advertising-driven platforms cannot. For a practical example, consider the difference between fast food restaurants and four star establishments.
There are generally two types of restaurants. One chain advertises “billions served”. This emphasizes the company’s KPIs: reach, volume, and satisfaction by the masses. But what if you aren’t trying to reach the masses? The second type of restaurant stands on the quality of the food and service in addition to the inviting atmosphere for conversation. In the latter environment, serendipity is more likely to be found. It’s emblematic of a shift from prioritizing audience (reach) to prioritizing community (depth).
Andy McIllwain, a senior marketing manager for GoDaddy, had an interesting thought on the growth of the newsletter industry and the shift from audience to community. In a short series of tweets, he explains:
The 2010s were about radically open social media platforms – a gigantic, unmanageable mess. The next ten years? The pendulum swings back to niche communities of interest and purpose.
McIllwain goes on:
Community revenue models: Direct sponsorship, tiered membership fees, affiliate commissions, and paid experiences (events, retreats). Brands need to get in on this. It’s the flip from audience to community.
Though membership-driven newsletters existed prior to Substack, the concept of paywalled community was popularized as the A16Z-backed platform’s popularity has grown. Like a table at your favorite dining establishment, the food is only a portion of the attraction in these environments, when executed appropriately. The other is the ambiance and the environment. For 2PM, the idea of community is taken one step further. Executive Membership unlocks legitimate opportunities for serendipity. Ten times per year, we invite our paying members to a complimentary dinner in one of the major markets (New York, Los Angeles, Chicago, Austin, and Boston).
In this way: gated, media-driven communities have become the antidote to the noise of digital commonplaces. You’ll see this in publications like: Trapital, Petition, Off The Chain, Stratechery, and Thing Testing. In each instance, each media founder works tirelessly to provide value for their paying members. A membership is a vote for the future in addition to the present. There is more room for businesses like these. And these projects often begin with simple strategies around original ideas. The hope is that more newsletters launch and more communities form around. We should encourage involvement and competition. This is how ideas take shape. The ecosystem, as a whole, is the coffeehouse of today. This isn’t just the future of media, it’s emblematic of a greater shift as humanity adopts digital-first culture as its own.
Read the No. 343 letter here.
Report by Web Smith | Edited by Carolyn Penner | About 2PM