021: Byrne Hobart - Build Recurring Revenue With Your Newsletter

Jan 11, 2021

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Byrne Hobart is a chartered financial analyst who loves writing about the intersection between finance and technology. He writes The Diff, one of Silicon Valley’s most popular newsletters. In this episode, we dive into how Byrne launched his newsletter, how much he’s earning, and how he publishes five times a week!

You’ll learn why Byrne isn’t worried about pirates getting their hands on paid newsletters, and why you should worry about selling hard enough, instead.

Byrne talks about how to build recurring revenue, and writing for different types of readers. He also points out an important factor that affects the churn rate of your newsletter!

Byrne shares further insights on using free social media to lead people to the channels you monetize, and why he competes for readers’ highest-value time, instead of appealing to the lowest common denominator.

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Byrne Hobart’s Links

Episode Transcript

Byrne: [00:00:00]
I wasn’t really thinking of the paid newsletter as this is going to be the main thing I do. you look at tech companies, they often have multiple lines of revenue, one thing they do is 95% of revenue. And the next thing they do is 2% of revenue, and when companies get more mature, it’s sometimes spreads out a little bit, but early on you find one thing that works really well. And that’s what you focus on.

Nathan: [00:00:25]
Today’s interview is with Byrne Hobart who writes The Diff. Now Byrne is a chartered financial analyst who loves writing about the intersection between finance and technology. What’s really interesting about his writing is that he’s read by basically the who’s who of Silicon Valley. So it’s not just, you know, a larger email list that we’re talking about today, but really we’re talking about writing the kind of quality content that, You know, billionaires are reading that.

Like I first heard about him from Patrick Collison at Stripe. So this is the kind of thing that a lot of really important, really interesting people are paying attention to.

So in this episode, we’re going to dive into how he launched his paid newsletter, how much he earns. He publishes five days a week.

These are long form detailed con detailed articles that Bern is posting basically five days a week, which is, is a crazy consistency. So his writing process, what inspires them and so much more what’s that then.

Byrne Welcome to the show.

Byrne: [00:01:23]
Great to be here.

Nathan: [00:01:25]
So I’ve been following your newsletter for awhile and I’d love if you just gave a quick intro from your side what you write about and why you find it interesting.

Byrne: [00:01:35]
Yeah, sure. So the idea is that I like reading history and I found that if you read We contemporary coverage of things that are happening at any given time you do get a lot of the details and then you get a lot of stuff that ends up being totally irrelevant And a lot of really interesting developments just are below the surface or they they matter in retrospect but no one really understood them at the time And so what I’m always trying to do which is a really high bar to reach is to write Right things today from a perspective that will still make sense it’d be relevant in the distant future So it’s basically trying to spot the important technology trends trying to spot what mattered what people thought mattered didn’t matter how those perceptions changed how how perception and reality have interacted and the way to do that is one to talk about financial markets because financial markets are Aggregating knowledge preferences expectations et cetera from everyone around the world And then the other thing to do is talk about technology particularly technology companies And the nice one of the nice things about those companies is that they have to be somewhat open because they’re all constrained by their ability to hire people And one way to hire people if if you’re trying to compete with Facebook and Google and Amazon and Microsoft and they can all offer a really generous comp package The way to hire people is to to give them some expectation that this company is going to be totally transformative and amazing So even if the base pay is not quite what you get at Facebook it’s still worth doing either to make an impact on the world or to cash in some stock options So a lot of companies have this incentive to actually tell their story in a way that that doesn’t happen as much in in other fields But at the same time companies have an incentive to hide their story Because if the story is we’re doing X but we’re actually going to kill Google And here’s how you don’t want Google to know that So there’s there’s always this corporate stress He doesn’t where you have to be really appealing and inspiring but you can’t tell the whole truth because it’s too dangerous So I try to parse that

Nathan: [00:03:42]
yeah, I think that’s fascinating. And I’m spacing on who talks about this a lot is a book that I read fairly recently, but about how, Now, this is going to bother me of who I never, what book it’s from, if you’ll know it, but how the closer like a startup is going to talk about how they can create a monopoly and they can have all the success.

And then the closer they are to actually creating a monopoly, in and succeeding the less they’re like, Oh no, no, no. It’s not a monopoly at all. No. W like, look at all this competition. We have, everybody has a competitor.

Byrne: [00:04:14]
One has that, they have this, this like nber line of. Here’s like everyone, if you’re, if you’re an airline, you’re like, here’s why we’re really special. Here’s why everyone loves Delta. And the United is like, no, here’s why everyone wants United. And then, if you’re Google, you’re like, well, we’re one advertising company among many.

And our customers could go to all sorts of different media, but really Google has a, basically a monopoly on search and search is an incredibly lucrative business, but yeah, they, they can’t quite talk about that. And there are, there are other companies that have these little monopolies, like sometimes, If you, if you look at the, some of the large us companies that had large research labs in the thirties, forties, fifties, in some cases it seems like part of the point of those labs was to give them somewhere.

Somewhere, they could dp their excess profits so that they just didn’t look that profitable. So if you’re at and T you...