How The Dispatch reached 35,000 paying subscribers in three years

Transcript of full conversation:

(Audio was transcribed using an automated service. Please excuse mistakes and typos.)

Steve Hayes 1:46
We are a media company based in Washington, DC, covering politics, policy and culture. From a center-right. perspective. And when we say center, right, we mean sort of philosophically center, right, not from a partisan perspective. And one of our criticisms of the media, in the US anyway, is that it’s become a partisan media, Republicans versus Democrats. And we try to live outside of that existence, we put facts first we focus on reporting, our opinion and analysis, places facts at the center of everything they do. So this is not we are not a hot take factory, if you want opinions, that will just get you outraged about the next thing. We’re not the place to go. And we’re pretty upfront with our members that that’s the case, we don’t want them to come to us seeking those things or to seek seeking to just nod their head along with the content we provide. So we’ve been around for three years. We launched I would say with, you know, humble ambitions, humble objectives. And we’ve, we’ve had a good three year run.

Jack Marshall 2:55
Where do you stand currently? You say on your site that you have tens of thousands of paid subscribers at this point. Where does that sit currently, and give us a sense of how big the team is and the breakdown between editorial and other functions.

Steve Hayes 3:15
Well, I’ll start with your last question, because it will probably soon be soon be obvious that we don’t have a big business side right now. And we’re not terribly sophisticated on the kinds of things that we’re going to be discussing. I’ve agreed to join you, in part to expose my own ignorance and naivete on these questions. We, we have upwards of 30 people on staff, we’re in the market for five new positions that we’re trying to fill by the end of the year. And we’ve got pretty big growth plans on the staff side for 2023. As well, that’s a lot bigger than we had imagined. And when I say that we started with with with humble, more humble ambitions. We launched at a time and we raised money at a time when digital native businesses were all the buzz and a lot of them ended up over capitalized and having to shed staff and they were making promises that they probably couldn’t keep up. I’m thinking here of places like Mike and vice and Buzzfeed and Vox. We know that we’re going to change the way that people take in content and we’re able to raise 10s, or even hundreds of millions of dollars. That wasn’t us. We wanted to be small. We told our investors in our original pitch that we will grow slowly and methodically, we decided that we weren’t going to take any venture capital money because we didn’t want to create the incentives on the business side to take shortcuts on the editorial side. And launched with putting the editorial integrity of the product at the heart of everything that that we do, and we’ve kept it that way. As a result of that we we had sort of modest projections for what we were going to do. Our first post op went up October 8 2019. And it’s a What are we doing? Post, you know, we internally we call it our manifesto, but it’s basically a, you know, a short explanation. This is why we exist. This is what we’re doing. And are you one projection, I think the projection, we turned on our paywall five months later, so February of 2020. And our projection for the end of 2020 was something like 4000 paying members. And we ended up having, you know, three times that or something. And when we’re on a path to that kind of steady, steady growth, we’re now we’re north of 35,000 paying members a little bit more than three years in, which is, you know, certainly many more than our most rosiest objections would have had it. And we’ve got a total list north of 200,000.

Jack Marshall 5:51
So is it safe to assume that the majority of those 30 staffers are on the editorial side?

Steve Hayes 5:56
Yes. Okay. Everybody, really, I mean, we hired I can, I can tell you specifically, we have a, we now have a CEO, we didn’t have one for the first three years. It’s part of the reason my hair is as gray as it is. And I have bags under my eyes, we have Director of Talent and operations. We have someone doing community management for us. And that’s pretty much it on the on the business side on the editorial side is, you know, a wide range of of editors, reporters, writers, analysts, podcasters, you name it.

Jack Marshall 6:28
So you mentioned raising money, was it difficult at that point, I’m guessing this was 2019, to sort of go out to investors with the idea of a subscription first publication, because, you know, you mentioned sort of the, the mics and Buzz feeds of the world. And I think they were predicated on we’re going to be for everybody, it’s a range scale play. But you know, around that time, I think, you know, the athletic was just getting started, there’s other sites like the information. So what was sort of the reception is he was out there sort of trying to raise money,

Steve Hayes 6:55
you know, again, probably many of your listeners will be more sophisticated about the timeline than I am on this, but we leaned heavily into subscriptions and memberships for exactly that reason, the turn was, was either happening or had just happened or depending on how you calculate it was about to happen. And, you know, part of it has to do with the the most recent experiences that that I had had, and that my co founder, Jonah Goldberg, had Goldberg had had Jonah was a top editor at National Review magazine, in the United States, you know, flagship magazine of the conservative movement, Jonah was well known, syndicated columnist, we both had contracts with Fox News at the time, I had come from serving as editor in chief of the Weekly Standard for a couple of years, I’d been at the magazine for almost 20. And I had had run it for those last two. And, you know, particularly in my case, one of the things that that I had experienced during that time was an owner and an ownership team that wanted to move the magazine, which was you know, a sort of a serious sober minded magazine with lots of analysis, lots of reporting, in a more click Beatty direction, they they wanted us to double or triple the number of articles that we put out on any given day. And the articles didn’t have to be particularly insightful. It could be a junior staffer, reading something in the Washington Post, getting really angry about it, slapping, you know, an outrage headline on it, and then putting it up on the the website with the hope that it would get a link on the Drudge Report or something like that. And we could bonsais or they could monetize that volume. I wanted nothing to do with that. Yeah, in fact, I had told them at the beginning, before I took the job that I wanted nothing to do that one of the reasons that that we had the conflicts we ended up having was because I had told them in advance. This is not the way we want to operate at the Weekly Standard. And they basically insisted for two years that this was what we had to do. So they ended up shutting shutting the magazine down when we wouldn’t turn it into a clickbait farm. There were some philosophical differences over over Donald Trump as well. So we lead as a result, we took that experience. And Jonah’s and sort of leaned heavily into to subscriptions and memberships and read a revenue from the outset and said, We want to create this, this foundation of read revenue that will allow us to run the company the way that we want to run it on the editorial side. The bet was that we could get enough people to pay, you know, in our case, 10 bucks a month or 100 bucks a year, we had a founding lifetime membership, that we’re probably going to phase out pretty soon here since three years on a $1,500. And we made this bet that we would be able to generate enough revenue that way to sustain and grow the business and work.

Jack Marshall 9:47
So where do you stand currently from a business model standpoint is advertising and sort of sponsorship revenue a piece of the pie at this point? I know you have podcasts for example, that do include advertising. So it makes complete sense what you were saying sort of philosophically and even just sort of standing up the business to launch with subscriptions first. But do you sort of foresee advertising and sponsorships being a bigger piece of the pie going forward? Or how are you thinking about that?

Steve Hayes 10:13
I would say that we could it’s a very, very small piece of the pie right now, as you point out, we have ads on our on our podcasts, and we don’t have any, any intention of changing that. We don’t have ads in our in our newsletters or sponsorships in our newsletters. Right now, you know, sort of interesting backstory, we had intended to launch with what we call what we were calling tasteful sponsorships. So people could sponsor a newsletter or newsletters for for a week or two weeks or a month, or what have you. And they would basically just be banners, they would be billboards, you know, people come and see the dimension of whatever company or trade association or whomever in the context of our newsletter, but we were not going to build an ad tech at all. Again, I’m probably not using all the sophisticated, blank business side language on these are people will be shuttering in horror that I’m helping to guide this company, know so little about this stuff. But as we were building, we had sort of a chance discussion with the founders of substack, the newsletter platform, they, I had gone to them, in effect, to say, Hey, I know you’re building a newsletter platform. We want to launch with newsletters and podcasts as our two main editorial products. Can you talk to us about what you’ve learned in building this newsletter platform, not thinking that we would end up on the platform because they were really focused on individual content creators, and we had a series of discussions, they eventually came to us and said, Hey, we’re thinking about working with companies down the road, if you’re willing to be our guinea pig, in how we would build and grow with companies will build everything for you. So we had this handshake agreement, where they built us our whole web presence. So we were in the process of hiring CTOs. And hiring developers at the time, we just put a halt to all that they built us out. And, and we ended up launching on substack, where we’ve been for for three years, we just left to actually last last week, but had a great run with them a great experience with them. One of the things that they had said to us was that they didn’t want us to have ads and sponsorships when we launched. They’re a big, big part of their kind of core belief. And they said, you know, hear us out, we’re gonna make a case to you that you can survive and grow on reader revenue alone. And they talked us through they’re very persuasive. I thought they made a very good case. And they were, you know, sort of pushing on an open door. We that’s where we wanted to focus our attention. So we ended up doing that for three years. That’s a long answer your question, I would say, now, we’re open to experimenting and we’re well aware of how much revenue are we leaving on the table? We get it, we know what our competitors are getting by including ads and sponsorships in their newsletters. And with our the number of newsletters we have we attend now. And the reach that we have. And in particular the people that that read our stuff, we know that we’re leaving a lot of revenue on the table. And we’re open to experimenting, we don’t ever want to get to the point. I mean, everybody talks about user experience and prioritizing user experience. You know, we’ve been saying that from the beginning, we mean it. We don’t want to serve our users, you know, the annoying pop ups, or auto plays or any other kind of cheapo things that people have used. In some cases, with great success to monetize, we’re just not interested in being in that business.

Jack Marshall 13:38
I’m not saying this will be you guys. But it’s amazing how many publishers say that and then two years later, you know, they’re rolling out programmatic? Or, you know, there’s, there’s a video play. But

Steve Hayes 13:47
yeah, you know, it’s funny. So we’ve been pretty transparent about this. And we’ve, we’ve, we’ve leaned into it. So we’ve told our people like you’re not going to see this from us. Yeah. So that if they were to see it from us, it would be even more uncomfortable. Just to keep yourself honest. Yeah. I mean, we’ve done this, we’ve done this in a number of different ways. We sort of helped set the expectations so that if we ever go back on them, it’d be all the more embarrassing. We did a live q&a with our members. Last night, and one of the questions we got was what if you’re doing this thing in a year what you know, you that means you’re succeeding? And if you’re doing this thing in a year, that means you’re failing? Fill in the blanks? And my answer was, if you see us doing these kinds of, you know, either outrage headlines or crazy auto play ads and things of that nature, it means that we’re failing, it means that we’re not keeping our promises to you all.

Jack Marshall 14:38
As you said, you guys launched on substack with F for three years. Earlier this month. I think it said last week, you know, you move to a new WordPress site. You’re using member for now to power subscriptions. So what was sort of the impetus for that switch?

Steve Hayes 14:53
Yeah, as I say we’d had a great relationship with with substack we still have a great relationship with substack. I’m still in In contact with their founders, I’m gonna continue talking to them about things that we’re learning and things that they’re learning as, as they continue to grow, I think they’re great, I think they built a great product, I’d say over the course of the growth, you know, when when we first met with their founders, it was literally their three founders were the only employees at their company, and our three founders were the only employees at our company. And, you know, in the three years that we were working with them, they really took off. I mean, they hit they had a smash product. And I think as, as they grew, they saw more and more the opportunity to turn substack into or to, to develop substack into a kind of a destination of its own. Yeah, so of a platform, I guess, exactly. And at the outset, you know, we certainly felt like it was more of, you know, just building the architecture where other people could come and build their thing, and then grow their their thing there. And, you know, Jonah Goldberg, my, my co founder, said, it got to the point where we would, you know, they launched an app, and we were sort of one page in the substack app. And it’s just not how we imagined ourselves. I mean, we’re growing, we’ve, we’ve, we’re now in sort of newly ambitious, and, and, you know, we think we’ve got room to grow on our own.

Jack Marshall 16:18
Okay, so you mentioned sort of the no ads philosophy being part of the equation there, you know, I think substack has been quite dogmatic over that stance, for better or worse. But what was some of the other upsides of sort of moving to the WordPress member for technology stack, you know, has a greater flexibility? I’m guessing, potentially, the revenue cap might have been a factor? How did you kind of decide on on that sort of stack, so to speak?

Steve Hayes 16:40
Yeah, the revenue, the revenue piece is, is better, for sure, the greater flexibility was, was, I would say, a big part of it, you know, the, the, the deal that we had with substack was that they would build stuff for us, you know, we’d give him a big list of things that we needed to grow and to present our, our content, in better and more imaginative ways to our members. And to our free listeners, you know, as we pushed for, we call them free listeners as we push for, for conversions. And they would do that, and in some cases, they would, you know, they were great. They were fast, they would build things. In some cases, that ended up being sort of workarounds from the way that substack was building its own business. And in other cases, they would build things that they would make available to everybody else on substack. That was the plan. That was that was how it was supposed to work from the beginning. You know, at a certain point, when everybody’s website kind of looks like your website, and you’re you’re building this thing, that’s, you know, we wanted to be more flexible with how we were going to do that, I’d say, we wanted to place a heavier emphasis on getting the what we’re putting on the website, more eyeballs, I’ve already I think, made clear that we’re not doing that so that we can monetize that. But that’s the top of our funnel. Yeah, sort of one of the ways that we can, you know, we can, we can pick the metaphor, but one of the ways that we think what we’re doing is, is a little bit different, or started out at least as a little bit different as from the beginning pre launch days, you know, when we were pitching this to investors in in early 2019. We saw the, the newsletters as the paid product, not the free thing to drive people to the website, which would be the paid product, which was much more common with places like the New Yorker and the Atlantic and the New York Times, we saw the newsletters as the paid saying, and we saw the website as a way to post you know, lots of other good reporting and work in a way that we hoped to get it out in front of people, they’d see it, learn they wanted more from the dispatch and sign up. That was harder, I think working in, in the confines of, of substack. We want to make sure that we get as those things as many eyeballs as possible. We think this is a step to that to that goal.

Jack Marshall 18:59
So from sort of a subscription features standpoint, what are the key drivers at this point for, I guess conversion and retention. So obviously, access to your journalism is the key draw. But it’s interesting, for example, that non subscribers can read comments, but you have to be a paid subscriber to get involved and participate. You also offer sort of subscriber events and some other perks. So are those features sort of a core part of the dispatch offering and subscriber experience at this point? Or is it sort of a relatively small portion of your subscriber base that sort of gravitate towards those features beyond just the journalism itself?

Steve Hayes 20:32
Yeah, that’s a good question. I would say, in a certain sense, we don’t have a complete answer on that right now, in part because on the building an online community, that was another area where we felt like moving away from substack would give us greater freedom to really build out a destination for people to come and spend time online built, sort of building on the early success that we had in sub second in sub stacks, commenting features. were, you know, they’re basically standard comments, underneath an article, you’d go there and have a conversation. And there would be many conversations that grew out of the sort of main conversation. And we had lots of engagement on those, I mean, we’d have 1200 1500 comments on on individual articles. And again, just from, from our members, we think also, the nature of those conversations, was something that was unique kind of from the get go. And again, this goes back to how we, we pitched ourselves. And I think the kind of people that are attracted to membership at the dispatch, we’ve made very clear that we, we don’t want to, you know, capitalize on this outrage culture that we don’t, we want to be a solution to the problem of the anger and polarization in the country, rather than feeding into it and hoping to monetize it. And we’ve made that very clear to our members. So the discussions that you see in our community are sort of stunningly normal and civil. And it’s not uncommon to see an exchange of information where somebody says, you know, I disagree with you for the following five reasons. And here’s an article that I read, that makes this case better and the person to respond, not by saying, You’re horrible, and you know, you want to ruin the country, but by saying, I read that, and you’ve changed my mind, which is just, it just doesn’t happen very often. And yeah, you know, we’re not naive about this. I remember having a conversation on a podcast about this two years ago, and being very excited, that this, that we had this sort of unique thing, and having the guy was hosting me say, you know, just wait, it’s not, it’s not gonna last, and it’s lasted. And again, I don’t want to be naive about it, this is a fraught time, these are these are difficult subjects that that people are discussing sometimes. But we want to create with these next steps, a place where people can come and really, and really take advantage of that. And what we have found is that that’s been very powerful in the limited exposure that we’ve had to This Just In the comments on substack. In the, the, the, you know, dabbling, that we’ve done in in in person events, is that that turns out to be an even more powerful reason for people to join the community than we had anticipated. Because there are so many people, I think, in this in this moment in the United States, politically, who look at Washington, and they say, I don’t have any idea what’s going on there. And I am not a part of that tribe. And I’m not a part of this tribe. I want to understand it, but I’m not, I’m not a bomb thrower. And I’m not looking to be pissed off all the time. Like, who can help me just have a conversation to get it. And as I say, I mean, we’ve seen that reflected in, in the community that we’ve we’ve built online, want to grow that pretty substantially in the next six months. But you know, we just didn’t have an in person event in Nashville where, you know, we thought, again, we thought we’d have a couple dozen people come out and have a few beers with me and David French, one of our writers, and we end up having, I think, nearly 200 people who come and they’re excited to, of course, meet David, who’s sort of a superstar writer. But they’re really excited to meet one another. Yeah. Because they’re having these conversations like, oh, wait, you’ve lost friends over this craziness at the moment. And I think there’s, you know, there’s an opportunity to build on that from a business perspective, not just a sort of a Gazi. This is good for America perspective, which I’m a sucker for. It can be both, right? Exactly.

Jack Marshall 24:28
A lot of publishers talk about community especially I feel like over the past few years as they’ve grown newsletter, audiences, and I think you see a lot of people using those words sort of interchangeably, you’re saying community but what you really mean is email list. But for you guys at launch, you know, was that community piece sort of a key totally part of the thesis or it’s something that you’ve sort of stumbled across?

Steve Hayes 24:48
It’s more powerful than we thought no, look, when we took our we took So Jonah and I, I mean, we’re so we’re so clueless when we did this with this investor deck. We didn’t neither one of us knew how to do a PowerPoint. So we had Have somebody else actually, like make the PowerPoint. And then we didn’t know how to screen share. So we would do these costs. And we would say to people, we don’t want to waste your time with with the PowerPoint, you know, we’ve hope you’ve had a chance to look for it. But we’re not going to, you know, make you walk through the PowerPoint, you know, ask us any questions that you have. But in reality, that was mostly because we didn’t know how to screenshare and didn’t know how to do this stuff. And we’re launching this digital digital native company. Well, in that first presentation, in our first deck, it’s maybe 15 minutes, we had three sort of pillars, sort of core of the company, newsletters, podcasts, community, so we met community, from the beginning. And for us, you know, this may be will sound hokey community is not a means to an end, it’s not community is the path to revenue. Community is the end in itself. Like we think it’s important. Of course, we want to generate revenue from it, we would like to generate revenue from a lot of what we’re doing, it’s important to us as a business to keep this thing a growing concern. But, but But it matters that we’re giving people this place to have those conversations and to hash this stuff out. And as I say, I mean, it’s, it’s, you know, we get these, we get these emails, we try to answer every single member email, I’m sure we don’t, I’m sure we don’t do them all, but we try to get close. And you know, a lot of them will write and tell us this, like, Thank you for providing this place that says, you know, I thought I was going sane. And I realized, now I’m not going sane, because I’m talking to all these other people who have this sort of the same sense. And, as I say, we understood that that was important and powerful sort of on its own. But, you know, talking to people in person about this, kind of really drove that home and the stories I talked to one guy that’s Nashville event who you know, whose dad has gone sort of all in for, for Trump is a huge Fox News viewer and sort of Fox News and beyond and has gotten into kind of fringe conspiracy sides maybe dabbled with Q anon. And this, this guy says I’m more or less a centrist, probably lean a little bit to the right. A suffer for a couple of years, we couldn’t talk about politics, and we really weren’t talking much at all, as a father and son. And he got him a gift subscription to dispatch and now they talk about what they read in the morning dispatch. And you know, that’s a unique case. I’m not saying hey, we’re here solving all the world’s problems. But, you know, he was totally sincere. And I would say even somewhat emotional as he, as he told me that story. And that’s a powerful, powerful, powerful thing.

Jack Marshall 27:31
Talk me through your paywall approach and conversion funnels. So essentially, you operate a hard paywall where no content will correct me if I’m wrong here, but no content is available on the site by default. But readers can unlock a portion of content by creating a free account. So at that point, are you prompting users to subscribe after they reach a certain consumption limit or meter limit? Or are you sort of delineating certain portions of content and carving those off for subscribers only? Is it both? You know, what’s the approach there? And why did you settle on that?

Steve Hayes 28:03
There’s a theme here. Our very unsophisticated approach to this has been, how does this feel? Okay, let’s do that. And it hasn’t really been been more sophisticated than that from the outset. And it was, you know, lien sort of in favor of making more things, particularly as we were growing at the time available to the public free to the public. So we kept some of our newsletters free, we’ve encouraged people to forward them and wanted to give people a taste of what they could get if they ended up joining us. We’ve still got some newsletters that are free for everybody. Jonah Goldberg has written this G file, column slash newsletter for 20 plus years, every Friday. It’s, it has this like unbelievable cult following. And it’s a growing cult following. And we said from the beginning, that’s going to be free to everybody forever. As I mentioned, David French is Sunday, French press newsletter on religion, politics and culture has been free. We use that sort of as a top of the funnel function as well. We encourage people to share it and distribute it and start conversations based on it. But if you want another Jonah, G file, you got to pay for that. If you want more, David, you got to pay for that if you want. Got a newsletter, really good newsletter that covers Capitol Hill that is gated. We’ve got one that covers for the economy and trade that is gated national security and technology. Those are our gated, and we’ll open them up from time to time if we’ve got something that we think will get, you know, get a lot of eyeballs or generate a lot of interest or if you’ve got news. We’ve got a real good political newsletter called the sweep that’s written by a woman who’s at ABC News political contributor who has actually worked in presidential campaigns. She’s smart and sharp, but where reporters contribute reporting to that And it’s again written more for a general audience, even though they bring the sort of sophistication and understanding of people have lived in this insider world, we our view is sort of make this inside out and make it accessible to other people. That’s mostly gated, but we’ve been opening it up more as we get closer to the election so people can can see what we have to offer on that. That’s been our approach from the beginning. We are one of them. Again, one of the reasons that we’re we’re on this new stack is because we want to do a better job of using data to inform those decisions. And there are certain things that we wanted to see. And we wanted to understand that we think we’ll be able to have better access to now out on our own, and we want to use those to to help make decisions on exactly how we’re calibrating the paywall.

Jack Marshall 30:50
From an audience development and sort of discovery standpoint, do you have a sense of what the key drivers are for you guys? Currently, you know, how do you get people into that funnel? How do you reach new readers? Is it social? Is it search? Is it people forwarding newsletters to the to the family? Or, you know, what’s kind of moving the needle for you guys, though,

Steve Hayes 31:09
yes, social drives a lot of it, which is an interesting dilemma for a company like ours, who’s, you know, pretty hostile to social in a bunch of ways. You know, we have a number of of writers and editors with pretty big Twitter presence, presences, there’s a lot of the political discussion or debate that takes place on Twitter. And, and that’s been helpful as we’ve sort of brought people in to try to convert them I’d say Twitter more than you know, certainly more than than Facebook or Instagram or Snapchat or any of these others. That’s been a key to it. There’s a there’s a pretty significant word of mouth and pass around share that drives our our signups, you know, again, going to this, we’ve been surprised at the power of that, and maybe we shouldn’t be but people who who find what we’re doing. And, and like it, you know that we do a lot of explanatory journalism, we try to provide people with actual understanding rather than, you know, winning arguments or taking shots. And, you know, I don’t want to make it sound like we, we think we’re so much greater than everybody else. But we think it’s a differentiator for us that people are getting that from us. And one of the most gratifying things about these first three years has been, we can see a pretty direct causal relationship between doing really good substantive, fact based explanatory pieces, and a bump in people who are coming to us as free listeners and conversions. Direct. I mean, I could point we did one on, there was a time when President Trump ordered a strike on Qasem Soleimani, who was the head of the Iranian Revolutionary Guard Corps. It happened at 11 o’clock at night. We had a full morning dispatch, which is sort of our flagship newsletter, ready to go. We tore it all up. We wrote through the night and did this big explainer. Here’s what happened overnight, here’s who this guy was, here’s how it’s important. Here’s how it’s likely to play out. Very dispassionate. I mean, we liked that he was gone, but pretty, pretty dispassionate, laid it out. And we saw just an incredibly make we kept it free. That’s usually we usually have a gated version of that we kept it all free. And it was an immediate, I mean, you could see it in the numbers. And, again, I don’t want to sound hokey. But, you know, we’re just really encouraged by that, you know, you do good work. You’re you’re you’re not playing into polarization. And like that’s actually driving new signups and conversions, and we’re making money on really good journalism. Like, I don’t know, sort of like, why why you get into this game? Yeah. And

Jack Marshall 33:59
it’s also like why overcomplicated? You know, you don’t need data scientists to figure out that good journalism in, you see a bump on, right on the outputs. Right. That’s encouraging as well. So just to touch quickly on, you know, one thing a lot of our readers and listeners asked me about all the time is pricing, which is, it’s difficult. So you guys currently offered two subscription tiers, which is nice and simple, you know, $10 a month, or I guess it’s $100 a year, which works out to eight $8.33 A month when billed annually. So how did you decide to go with monthly and annual terms? And how did you settle on those price points? And did you set those price points three years ago? And how are you thinking about them today?

Steve Hayes 34:40
Well, we settled on on those price points after very deep dive analytical approach to this. No, it was a total and complete guess. Okay. I mean,

Jack Marshall 34:52
it’s a nice round number. Yeah, it was,

Steve Hayes 34:55
I mean, there was some purpose with the round number and all I’ll explain that. And again, I can, I can anticipate people will pull their hair out. We looked around at what people were charging on substack. You know, there were some niche newsletters, Bill bishops newsletter on China was charging, I think quite a bit more providing sort of detailed analysis of what was happening in China for a more insider audience. There were other individual content creators who were, you know, in the 678 dollar a month range. And we looked at that, and then looked at the the universe of newspaper subscriptions, magazine subscriptions, we looked at places like The New Yorker, the Atlantic, and a couple of people that we had talked to, at journalism conferences I had attended, you know, basically gave us the advice, take what you think is your top subscription number, both on the monthly and the annual and they just bump it up? Yeah, you’ll do better you can get more Yeah. So with that very sophisticated analysis, we settled, we settled on 10 and 100. We didn’t do this thing, lifetime founding members, in part because we really wanted a cash infusion early. And we thought we would get two or three dozen people that would give us a nice little bump. And we raised 6 million bucks in our in our fundraise, but we wanted this to sort of give us momentum to start. And so we set that at $1,500, again, after extensive analytical research, sophisticated number crunching, and we ended up I don’t know, we ended up getting 350 of those in the first couple months, which was a huge, I mean, that was huge. It’s like hard to overstate how important that was. Yeah, that was totally a mission driven. Pitch. Like, if you think that something like this should exist, and you want us to succeed, this is a way to make that, to make that make good on that and help us out. And they did. And it’s been phenomenal. I will say just on the on the the the nice round numbers thing. And this is, again, I’m just going to be totally transparent and candid, and, and, and reveal my lack of sophistication. One of the things that we set out to do or that we wanted to do from the beginning was show people that we wanted to be honest, on the business side, the same way that we were being honest. On the editorial side, yes, you had to walk the walk, we deliberately did $10 and not 999 or $100. And not 9999. It’s a small thing, I don’t think it’s probably most people don’t didn’t even think about it. But our view was, we think we’re worth 100 bucks. That’s what you should, should pay us. We’ve done in three years, we’ve done virtually no discounting. We’ve had some conversations with really smart subscription economists, people are a lot more sophisticated about this, than we are who’ve said, you all are crazy, like, you’ve got to be doing this, this is insane. And, and they make a very, very compelling argument with data and with numbers. We’re open to we’re open to doing that. I will say just as a, as a news consumer, I hate the idea that I have to go. If I want the best subscription rate to the New York Times, The Washington Post that I have to go click around or I have to chat with somebody. Yeah, like, I hate it. Like I would much rather just say to people, no, like, this is the thing. This is what you’re paying for. I get that that’s a, you know, an unsophisticated, maybe antiquated mechanistic way of thinking about it, that has I love the appeal of that from a, you know, from a marketing standpoint, telling people like, Hey, this is how this I would do business. We’re straightforward. Not there aren’t tricks, you don’t have to try to figure us out to get the best price. But I understand why that could be self defeating. And I’m not, you know, I’m not stupid. We want the company to continue to exist in to grow.

Jack Marshall 38:59
Yeah, it’s tough. I mean, I feel like for better or worse, at this point, the market has been trained to expect those discounts in you know, those Labor Day sales or wherever they are. So I don’t know, I can see both sides. I think it is sort of a strong differentiator to put a stake in the ground and say, No, you know, we’re not going to play those games. But, you know, the flip side is it might be might be costing you some volume on the on the conversion.

Steve Hayes 39:20
Exactly. And we can’t, you know, we can’t decide, you know, people who, who are the ones who who make changes in the market are the ones who say, Yeah, forget it. Like, I don’t care what the market says, here’s like, trade, I’m gonna do it this way. You know, I’m just not sure we have confidence to do that. Because it’s, it’s a it’s a, it’s a largely based on gut feeling.

Jack Marshall 39:42
So along those lines, do you think it’s going to be difficult to move beyond that? $10 a month, $100 year price point because again, I feel like the market has sort of been trained that you know, that’s what a substack costs are, you know, that’s what publication subscription costs. And I just wonder if you see some gaming services are bumping up their pricing pretty rapidly at this point. And publishers just haven’t done the same thing. So I just wonder, you know what that’s going to look like over the next few years? And if they’re going to be able to kind of inch pricing up or just kind of stuck at that price

Steve Hayes 40:11
point? It’s a great question. We’ve thought about it a lot. This is an area where we’ve done a fair amount of research, and we’ve done we think we know our audience pretty well. Excuse me, we know what we know what they like, we know why they come. We know why they return, we know why they don’t turn. And we know that many, many, many of them are willing to pay us more for what they get from us. All right. So we have looked at tiered pricing, in a way that’s more than these three levels that we we currently have, we’re probably going to end our lifetime founding memberships now that were three years old. But we have you know, and this, this would make sense, as we build out the community presence on this new site, we’ve had lots of feedback that, that people would like, you know, a friend of the dispatch, membership tier at, say, $300, where they’re contributing more, they’re getting more they can, you know, they can catch if people are really, really into what we’re doing. They can, you know, make sure that we succeed and also gain more from their association with us their membership. And, you know, as we we’ve done this audience research, we’ve been, we’ve been really struck by the number of people who say, you know, when you ask the value question, is this a good value? Is this a great value? Is this just what it should cost? Is this too expensive? The numbers are overwhelming, that it’s a great value. And we have people who come to us and say, we are willing to pay more, we’d like to pay more. Yeah. So we’ll look at that very carefully. You know, I, my concern is how do you, we like to think that we’re giving all of our members a lot of access and a lot of, you know, opportunity to be part of this community and, and to build that. And obviously, you you, you take risks on making some people feel, you know, we create these exclusive tears, you take risks and making people feel left out. So we’re trying to navigate that now we’re looking at it pretty carefully. And, you know, I expect we’ll, we’ll make some decisions on that here in the coming months.

Jack Marshall 42:22
So how have conversions and retention held up for you so far this year? I mean, we hear from a lot of publishers that converting new subscribers has been more challenging in light of economic conditions. Arguably, there’s an element of sort of broad subscription fatigue. And then of course, you know, there’s some data to suggest that people are just kind of engaging with with news and political and cultural commentary a little bit less. So I’m just curious, you know, are you seeing that? Or are you still in the mode, you think where your growth is kind of outpacing any of those headwinds? Or how have you seen that?

Steve Hayes 42:54
I’m knocking on wood? So answer this question. We haven’t seen it. Okay. In any metric. You know, we don’t put a ton of emphasis on on unique visitors and pageviews and, and the volume metrics other than as a guide to help us understand what the top of the funnel looks like. Those numbers are way up. Our social engagement is way up our, our our paid memberships are way up our free list, Signups are way up, our conversions are way up. It’s, we tell ourselves a story that that we’re, you know, we see all the we see all these articles. I mean, there’s, if you do a Google search for, you know, news engagement drop off, you can get an article from just about any day. Yeah. And we see him and we’re well aware of them. I guess our our take on, what we’re seeing is that people really are sick of the polarization and the anger and the people just don’t want to live pissed off all the time. And that’s what so many people, particularly people who spend a lot of time covering our politics, that’s what they’re given as a product is, is outrage and anger. And that’s a crappy product. We’re trying to say, Hey, this is this is different, what we’re providing you is different, we understand there gonna be people who don’t want that. Fair enough, go somewhere else. But if you do want this, this is what this is what we’re in the business to provide in. You know, again, we aren’t counting on on continued success by any means we’re scrappy, and we’re working hard, and we like to think that, that we’ll continue to be gritty about it, but but we’re pretty pleased with what we’ve seen particularly, you know, the early growth you can you can chalk up to you know, this is new, this is novel. People knew who some of some of us were because a TV so we had this audience all sorts of reasons to to explain that beyond sort of these core products are really good. And I think we’re just beyond that now. Like Yeah, seeing this news engagement, this isn’t gonna work. If the core products aren’t really good, people are gonna pay for him. And people are paying for him and more and more people every day are paying for him. So we’re we’re pretty encouraged.

Jack Marshall 45:11
What’s the biggest challenge you currently face in growing your subscription business? Do you think?

Steve Hayes 45:18
I apologize in advance that this will sound like the interviewer in answer to the interview question, you know, what’s your biggest flaw? And it’s annoying, but managing the growth is managing our growth is is, is our biggest challenge at the time. We didn’t expect we get 30 plus, people, we’ll probably have 40 plus by the New Year, that that is a process and and you know, sort of recalibrating work responsibilities and assignments and how we operate on a day to day basis takes real care and an effort probably in a way that that our our ad hoc management style for three years, wasn’t well suited to do so. So growing that and keeping people keep the people excited about their work will be the biggest challenge, I think.

Jack Marshall 46:00
So what’s a myth about subscription models or businesses or a piece of conventional wisdom that you know, to be false or disagree with?

Steve Hayes 46:08
There is there is a corner of the conventional wisdom on subscriptions that believes that this subscription economy is fleeting. And I don’t believe that I don’t believe the subscription economy is going anywhere. I think it’ll ebb and flow. Certainly subscription fatigue, as you mentioned earlier, is a factor is something we think about is something we’re taking steps to avoid. But for people who think that particularly in you know, in the media business that that we’re going to go back to monetizing scale and volume in the way that prevailed over the better part of a decade. I think that’s, I think that’s crazy. I don’t think it’s gonna happen.

Jack Marshall 46:55
So limited scale, do you just think it’s not possible to monetize, you know, the type of journalism that you guys are doing purely through advertising and sponsorship?

Steve Hayes 47:05
I don’t and I don’t think it’s possible to do it, in part because of the bad editorial incentives that are inevitable. They’re inescapable, you can’t Yeah, the market tells you you need more anger, you’ve produced more anger, because that’s how you make your money. We don’t want to do it.

Jack Marshall 47:22
Yeah. Fair enough. Okay. And finally, what’s one subscriptions related prediction for the next 12 months? If we were sitting here in a year, what’s one thing that you think might have changed significantly for subscription based publishers?

Steve Hayes 47:35
I mean, we’ve been we’ve been hearing about subscription fatigue, we’ve been talking about subscription fatigue for a long time. I think, you know, certainly you’re starting to see it. In the, in the streaming world, I think we’re seeing manifestations of what that looks like going from the theoretical to the to the real. And I think we’ll see more of it in the textual publishing space where people are saying, you know, holy cow, I’ve got 30 of these or 20 of these. And it’s a small slice of the overall universe of news consumers. Yeah. But I think people will look to consolidate their, their subscriptions. And, you know, we think we’re well positioned there. Because we’re already providing this bundle. We’ve got 10 Plus newsletters that you’re getting for our one, our one price. So we are already a bundle that I think we’ll see. Other places do I wouldn’t be surprised, for instance, to see substack and they’ve got this recommendation program that they’ve started that is pretty successful. You know, how long until they are looking at actual bundles? If this is not based on any insider information? I don’t know that Yeah, but it would be next logical next step to to fight what I think will be a text based publishing, subscription fatigue.

Jack Marshall 48:56
Steve, thanks so much for your time. We’ll leave it there. I really appreciate it.

Steve Hayes 48:59
Yeah, thank you. This has been a fun conversation.