Member Practical: Perell’s Step Function

Welcome to Practical No. 1, the first in a 2PM Member series of features on individual people and what they can teach industrialists about building in the new digital economy. Sometimes, the hardest part of the journey is navigating from Zero to One. Here, we will cover how they accomplished it. Practical will become a part of The Study, the leading resource for operator insights.

Here, David Perell answers the questions: How do you start with nothing? How do you build an audience without fame? And how do you remain focused on growth over the longer term? This first edition is unlocked for all readers. Subsequent editions will remain members-only.

At the concurrency of media, commerce, and education sits 26-year-old David Perell.

Depending on the state of the world and the availability of air travel, you will find him at a European coffee house, an historical site in Mexico City, a Manhattan hotel lobby with a pen and pad, or the suburban Austin home that he leases with several friends. David is an essayist, he is a teacher, but most importantly, he is a learner. Watching him synthesize new ideas from previous experiences is a testament to his insatiable curiosity.

When he asked to interview me in early autumn of 2018, Perell was somewhat of an unknown. He had 600 followers on Twitter and his podcasts downloads were in the hundreds.

When I sat down for the interview several months later in December 2018, Perell had hit roughly 10,500 Twitter followers. By the time it released to the public in February of 2019, Perell had surpassed an audience of 16,000. His podcast was still niche but highly influential. By then, he’d interviewed almost 100 guests including Seth Godin, Ryan Holiday, Erika Nardini, Tyler Cowen, and Jason Fried. None of these individuals are household names, but they are titans of their crafts who have earned mindshare in their perspective industries.

Today, Perell is sitting comfortably at 130,000 Twitter followers. Perell’s story isn’t one of personal branding, however. His weekly email is sent to nearly 40,000 people. Each generates organic sales. And his essays garner tens of thousands of views and co-signs from industry titans who would have ignored him just two years ago. His commerce product is a reflection of this three years of audience growth. His writing course Write of Passage now hosts around 250 students twice per year. This next cohort of writers will pay $4,000 for Perell’s services. In the process of finding his path after two failed stints of employment over just 19 months, Perell engineered a step function in audience growth. He accomplished what brand developers dream of.

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In 2015, I was having dinner with a friend in New York.She realized I was in a bad mood, but I couldn’t explain why. Then she said: “I think it’s because you haven’t created anything today.”She was right. Since then, I’ve published something online almost every single day.

The key to Perell’s story is that he has been quietly and consistently creating for years on his way up. He wasn’t an unknown when I met him, just unknown to me. Through his smart commentary, he’d already begun to over-index on the conversations that very few of the well-connected could earn. He was meeting people that he should have never had the opportunity to meet.

Linear commerce strategies (found in The Study) aren’t limited to celebrities and personal brands. Perell’s step function-like growth – the result of days, weeks, and months of consistent work – is a testament to this. When I recorded 2PM‘s podcast with him in November of 2019, I explained by way of introduction:

Perell has identified an arbitrage opportunity for brands, retailers, and individuals in content production. According to the writer, speaker, and teacher: “the internet is overwhelmed by content consumers and short on producers.” To change the calculus for you or your company, Perell suggests shifting the strategy: produce content. And produce it prolifically.

For early-stage retailers, brands, or independent media companies, Perell’s wise words should be law. Through his prolific content creation schedule, his penchant for research, and his ability to share the messages of others in a way that helps them to identify value in him, he’s effectively teaching a course for free.

For those of us who aren’t beneficiaries of reality television like Kylie Jenner or (to a much lesser extent) Glossier’s Emily Weiss, how do you leverage a commerce operation without an existing audience? If you’re not Ryan Reynolds, how do you effectively market to an audience? Here are three practical ideas shared by the writer, thinker, and teacher.

According to Perell, “The world underestimates the power of writing, because even though the written word isn’t the best way to reach the masses, the smartest people tend to be avid readers.” With so many brands pursuing video and podcast content, arbitrage opportunity is available to the retailers who devote resources to writing. Consider that many of the brightest brands of today are actually publishers: Barstool Sports, Hodinkee, Goop, Morning Brew, and The Hustle are but a few. Even across product categories, this insight is practical. To accomplish the organic step function in audience growth, Perell cites a key differentiator.

The internet rewards consistency. B+ content with A+ consistency is often a winning formula.

That being said, Perell takes extra care when publishing his most heralded assets, his long-form essays. David is known for two in particular: Peter Thiel’s Religion and What the Hell is Going On. He works to achieve the depth of WaitButWhy with the clarity of Paul Graham’s essays. At 15,000 words each, his creative work counters the conventional wisdom that attention spans are diminishing. In fact, he bet the opposite. David tells me that both took more than 100 hours to write.

To further his craft, he works with a professional writing coach on a weekly basis. Together, they’ve quantified every aspect of his writing style from reading level to the average number of words in his sentences. He studies writing like Billy Beane studied free agents in baseball.

Perell is a known purveyor of a practice called “deep generalism”. The trend toward industry specialization has opened the door to opportunities for generalists. His broad education and varied experiences greatly influences his work.

When you’re at the frontier of an industry, you have to take inspiration from other industries. For me, that’s been YouTubers who have consistently been 5-10 years ahead of the marketing world.

Like Perell suggests, focusing on one industry can prevent growth at scale. By taking inspiration from other industries, you can fill logic gaps and exploit arbitrage opportunities that industry peers have yet to realize. He adds that when you identify a great idea, devote countless resources to seeing it to maturity. Brands can achieve outsized success by doubling down on one excellent idea rather than diversifying a strategy to the point of exhaustion. As Berkshire Hathaway’s Charlie Munger said: “Take a simple idea and take it seriously.”

The final practical takeaway is one that many business types would disagree with. According to Perell:

You should take Twitter extremely seriously if you work in finance, commerce, or technology. It’s the social center of all three industries.

Twitter has become the professional amplification grounds that LinkedIn wished it was. Rather than trading introductions on executive titles and resumes, the short-form text platform has become known for its exchange of ideas. There is a new crop of industry executives including Matthew Kobach (formerly of the NYSE), Jack Appleby (Twitch), and Amanda Goetz (formerly of The Knot) who execute strategies akin to Perell’s. In the case of Goetz, the growth of her audience has opened doors to her building her first startup, a brand for working moms.

Linear commerce is rarely expressed in terms like this. With respect to the US economy, we’ve been accustomed to the idea that we either begin with large audiences or we never gain one at all. Observing Perell’s prolific work and his surgical process of audience development contradicts this notion. It is possible – but it never comes easily.

Every brand owner is passionate about the products that they sell. By becoming equally passionate about telling stories, brands build strategies around content creation. When you begin creating, it will seem as though nothing is happening. That’s the foundational development. This is where Perell was when he first approached me in fall of 2018. All of the good things were happening beneath the surface. The growth that follows will look like a step function: quick bursts of interest that carry forward. The root to this behavior is the consistency of the work and the passion upon which its pursued. This strategy is available to anyone willing to see it through. It is the antidote many of the growth concerns plaguing digital-first businesses today.

Practical No. 1 by: Web Smith | Art: Alex Remy | Editor: Hilary Milnes | About 2PM

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