Earlier this year, I wrote about Ben Thompson — who writes about technology and strategy at a blog called Stratechery — and his decision to launch a membership-based paywall for his one-man operation. At the time, I wondered whether someone without the kind of national following that Daring Fireball’s John Gruber or The Daily Dish’s Andrew Sullivan have would be able to make such a plan work. As it turns out, the answer to that question is yes.
In a follow-up interviews, Thompson told me that while there were some touch-and-go moments in the early days of his plan, the subscription part of his model has worked out far better than he ever hoped it would. Membership signups and the associated revenue have “vastly exceeded my expectations,” he said.
The Taiwan-based blogger, who previously worked as a product manager for companies like Apple and Microsoft, said that he was hoping to get about 500 members to sign up in the first year, and his most ambitious dream was that he might get a thousand — a goal that was based on veteran technology writer Kevin Kelly’s advice about needing only “a thousand true fans” to survive as an independent artist.
“My realistic goal was 500 in the first year, and my sort of crazy goal was to get a thousand — and I did that in the first six months. I’ve actually gone quite a bit past that now.”
Note: This was originally published at Gigaom, where I was a senior writer from 2010 to 2015. The site still exists, but the archive has been taken down.
Those members are paying $10 a month or $100 a year for access to what Thompson calls the Daily Update, which is a collection of several posts with his take on or analysis of topical events — such as singer Taylor Swift removing her songs from Spotify and the implications for the music industry, or the future of the Uber car service. Members can access the content online, or via email, or through a private RSS feed.
What having a thousand true fans means is that Thompson is now bringing over $100,000 from membership-based subscriptions, just for writing his thoughts on his blog (he also does some consulting on the side and Stratechery also has a podcast). Although he used to have sponsored posts, he said they didn’t work because they were generally low quality and they made up too large a proportion of the content, since he only posts one free item and several daily update items per day.
In any case, Thompson echoed something that Andrew Sullivan has also told me about his model at the Daily Dish, which is that he prefers to keep the relationship between himself and his readers as pure as possible — to feel as though he is working directly for them, and pleasing them is all that matters.
“I really like what it does for my incentives — my pay comes from my readers, so my job is to just deliver a kick-ass daily update every day and to write great stuff for the blog. What I like about it is it’s very clear: it feels like people value what I have to say, so what you’re getting if you subscribe is more of what I have to say.”
Since I wrote that initial post, Thompson says he has simplified the model even further, to the point where there is only one level — the $10 a month/$100 a year level. In the beginning, he had three levels of support, including one that gave readers things like a T-shirt, as well as a higher level that cost $30 a month or $300 a year, and included private meetups and the ability to email Thompson directly and get advice or analysis. Those have been dropped.
The structure now is much simpler (those who had paid $300 were given the option of either a refund or a credit, or to donate the excess to Thompson — about 20 percent chose the latter, he said). But the blogger notes that without those initial members paying $300 for a year, he wouldn’t have had the money in the bank with which to continue, or the confidence that he would be able to survive. “They were like my VC investors in a way,” he said. “I couldn’t have done it without them.”
Thompson said that while he is still making less than he did as a product manager at a tech company, he is making more than enough to live on, since his costs are so low. And that’s one reason he wanted to talk about his success, he said — because it might encourage someone else to try it, and because it might help counter some of the prevailing narrative in the media world about how the internet is going to be the death of newspapers and therefore of serious writing or journalism.
“It’s striking to me how many people in the media only see the internet as a bogeyman, and completely fail to see the potential that it enables — what I’m doing would be totally impossible without the internet. Yes, the world is going to look totally different than it did during the glory years of newspapers, but we have only scratched the surface of what’s possible.”
Things have turned out differently in a few respects — originally planned to monetize in a variety of ways: memberships/subscriptions at different levels, sponsored posts, speaking/consulting and advertising on the podcast… of those, the sponsors went okay, ended up lowering my price pretty quickly, full about two-thirds of the time, a little more disappointing — speaking thing, wasn’t really counting on that to provide much, being based in Taiwan, it’s hard… daily update membership has vastly exceeded my expectations — had a one-day, one-week, one-month and one-year goal, fell short of the first three, not by much; realistic goal was 500 in the first year, crazy goal was a thousand and did that in the first six months — have actually gone quite a bit past that… one day goal was 50, was at about 45; one month was 200 and I was at 180 or something, so close but there were some nervous moments… those were “I’m going to be okay” goals, I expected that I would get the most in the first month, but it just kept growing — I think in June I figured I was going to be okay, and every month since then has been larger than the one before… probably around 1,100 now… reason why I’m interested in telling this story is to show whether a little-known blogger can make this work, and the answer is yes… consulting part has worked out quite well, done a few in-depth ones that have really been worth it… pretty quickly I cancelled the T-shirts and stuff, has actually been a huge logistical nightmare, lost a bunch of the data due to a screw-up on my part, then a mis-print on the T-shirts, still in the middle of resolving it… I’ll never do that again; just too much trouble… probably me not being confident enough in my content, that’s why people are signing up, not the T-shirt; so cut the commenting only level… also some confusion, people signing up for the commenting and wondering why they weren’t getting the daily update… super grateful for the folks who signed up at the $300 level, think it was a way for them to just support me, did a bunch of meetups and they were fun… the message board aspect was pretty good, active on a daily basis, but once I got to that point where I could forego that income it was worth it to give it up… it’s very simple, just sign up for one thing, plus want to have the message board community be really vibrant and connected to what’s going on, so wanted a more solid base… it’s been up for about a week, the one that’s open to everyone who subscribes, and there’s been lots of interaction… felt like you weren’t getting enough for giving more, and that bugged me, plus I’d rather have a broader base of people… rather have 2,000 and if I lose 20 it’s no big deal, rather than having 500 members or whatever, don’t want to feel the pressure if I say something they don’t like and they leave… what I like about it now is it’s very clear: it feels like people value what I have to say, so what you’re getting if you subscribe is more of what I have to say… aware of that at the time (the complexity), but because I was starting this from scratch, with no outside investment, all those people who gave me $300 off the bat were the ones who allowed me to keep going… if that came at the price of maybe slower growth in the beginning, within the first couple of months I had a solid financial foundation, where I could feel comfortable knowing I had banked X amount of money and would be okay for a while… those all-access members, the ones who paid $300, were like my VC investors, they allowed me to get where I am today — I’ve heard from quite a few, couple people said they wanted to pay more, most said they just wanted me to get it off the ground, gave them the option of a refund or a credit, or they could donate it, some said just keep it — I could definitely live on that (1200), average US salary is $50,000 a year, and am doing some consulting etc., but I would be surprised and disappointed if it slowed dramatically… think one of the easiest mistakes with online content is to underestimate the size of a potential audience, even with a niche like I have, see John Gruber has 4 to 5 million uniques a month, to me that’s an addressable market… thing I’ve always been focused on is 1) important to keep traffic to the site going, and that’s continued to grow; I also look at Twitter: when I started the blog I had 400, when I launched subscriptions I had 8500 and now I have 17,000… the cool thing about being online is all these tools that can hurt a newspaper can also work to your advantage, because the information spreads so easily that can devalue it, but the word can get out very quickly — the old allegory of one grain of rice on first square of a chessboard, two on the second, three on the third, the last square is all the rice in the world… as long as I keep writing things people are interested in, and people keep telling their friends about it, the growth is potentially unlimited… I pay for hosting, and a mail program, and credit-card fees… hope to get to the point where I can get some support, site is a little clunky at times, definitely improvements that could be made… I started this business by looking at the cost side of things, the best thing about being on the internet is your marginal costs are effectively zero, so as long as you keep that in line then should be fine… don’t have free trials, post something now and then showing what a daily update is like; I want someone who signs up to be so pleased with it, there’s more friction than maybe there needs to be, but hopefully that deepens the commitment once they do sign up — in one sense working harder than I ever have, average daily update is usually 1,800 words; obviously there is some churn, but well under 10 percent, closer to 5 percent, far outpaced by new signups… that’s the power of a single-person enterprise as opposed to a corporate brand — some of this crowdfunding stuff where you invest in an idea is nice, but I think it’s better if people can invest in a person… zero chance of a social-media passthrough; value of the content is inversely proportional to how easy it is to access it, if anything I’ve made it harder to get to than I might have otherwise… I ended the sponsorships, even though it worked okay, giving up a few thousand dollars a month, I’m a fan of native ads, but don’t think they were a good fit with my site, I don’t post that frequently, so they made up a much larger share of my content… I also really like what it does for my incentives — my pay comes from my readers, so my job is to just deliver a kick-ass daily update every day and to write great stuff for the blog, pieces that I think deserve to be widely read or whatever… I’m pretty excited about making it explicit that I’m totally reader supported, I want that to be super clear… if everything I put in the daily update went on the site I think I could be well over a million uniques a month, but I wouldn’t have been able to finance the startup of the site — whenever I feel bummed out that only 1,000 people are reading it, I remind myself that when I started I was glad if 10 people were on my site at the same time… my idea originally was that the exclusive content would be links, but I think what my readers value is longer, more thoughtful pieces, that’s the stuff that only I can provide — daily update is usually two or three pieces, maybe a couple 800 words and one 200 words, my take on something and what it means, why I think it’s important, Stratechery pieces are 1500 to 2,000 words… that piece was articulating my view on the potential of the internet for writers and for journalists (post about the internet and journalism) so I’ve put my money where my mouth is, I bet my career that what I wrote there was correct, and at least so far it’s paid off… not just anyone can do it, you have to be able to earn an audience, but anyone who is capable of earning an audience can do it — have to be able to write something compelling that people want more of… not comparing myself to him, but found the whole Bill Simmons thing ridiculous, there’s a whole presumption that he can only be popular and only make money if he stays with ESPN; I started out with 9,000 followers and I am making quite a comfortable living six months later… to say he can’t make a similar amount of money elsewhere is absurd… wanted people to know that I’m okay, but also striking to me how many people in the media only see the internet as a bogeyman, completely fail to see the potential that it enables — what I’m doing would be totally impossible without the internet, there’s no scenario where I would be able to do anything even close to what I’m doing… left journalism because I didn’t want to put in my 30 years before I could get a column somewhere — yes the world is going to look totally different than it did during the glory years of newspapers, but we have only scratched the surface of what’s possible, and if what I’ve been able to do to date can be inspiration and encouragement to someone, then that’s worth it to me… I don’t want people to think I’m getting filthy rich or anything, still making less than I did as a product manager for a tech company, but I’m doing okay… I would bet most people who read your article thought I didn’t have a chance, but it turns out that I did and I wanted people to know that… I’m still a relatively unknown blogger, but I’ve been able to make a living by serving that market… not even two years old yet… it’s easy to say oh that’s okay for Gruber or that’s okay for Andrew Sullivan, but you don’t have to be in some kind of powerful position — this is the sunny side of the internet… easy to focus on what’s wrong, but not being intellectually honest unless you talk about all the good that the internet has made possible as well…