022: Lenny Rachitsky - The Dark Side of Paid Newsletters Nobody Talks About

01/18/21 • 58 min

Lenny Rachitsky sold his company to Airbnb years ago and he spent a bunch of time there as a product manager, working on growth.

Now Lenny’s full-time job is his simply-titled “Lenny’s Newsletter”, where he shares everything he’s learned about building products and teams. With over 3,200 paying subscribers, Lenny’s Newsletter brings him a larger income than he had at his tech job!

In this fun interview, Lenny shares his journey—how he went from wanting to found another startup to being a one-man newsletter business, and the lessons he’s learned along the way.

You’ll learn the “value-add” for a paid newsletter that’s been a great success for Lenny, and how he’s avoiding the trap of workaholism as he builds his business.

Lenny also shares how he never runs out of topics, and how he stays interested and curious so he can enjoy running his newsletter for years to come.

Plus, as popular as paid newsletters are, they come with some important downsides! Lenny reports from the trenches on what they are and how to deal with them.

Links & Resources

Lenny Rachitsky’s Links

Episode Transcript

Lenny: [00:00:00]
I find there’s any time not spent creating high quality content is not time well spent over the long run. It’s all about just valuable content. You know, if you provide value to people, they’re going to want it and they’re going to subscribe and follow and pay.

Nathan: [00:00:18]
Today’s interview is with Lenny Rachitsky. Lenny’s company was acquired by Airbnb more than seven years ago. He spent a bunch of time at Airbnb as a product manager, working on growth, where he became fascinated with things like, how do you manage a team? How do you grow a company? What are the product management best practices?

All of these things after leaving Airbnb, he started a newsletter just called Lenny’s Newsletter, and it now has over 3,200 paying subscribers. he’s now earning more from his newsletter than he was at his tech job. Quite a bit more actually. And we get into so many things, but how to keep writing newsletter really fun, how to grow and scale your audience using guest posts to get those first subscribers so much good stuff.

Let’s dive in. Lenny. Thanks for joining me today. Thanks for having me. So you actually kicked off our call and kind of a fun spot. So I want to start the interview there. And that was, you just said, so did you read the New Yorker article, you know, and, the New Yorker just did another article about newsletters.

Why don’t you give us a high level? Cause it kind of takes us into the state of newsletters, you know, on the web right now.

Lenny: [00:01:28]
Oh, so I find, I generally try to avoid pontificating on the state of media and newsletters, because I feel like that’s not my depth. There’s a lot of newsletter writers that like come from media, I’ve thought about, you know, this whole space of newsletters for a long time.

And it’s fun to think about it and talk about, and, and tweet about sometimes. But yeah, I don’t have the most thorough opinions of the whole industry, but. What I find is when people do this kind of like overview of what’s happening, it’s always this interesting combination of like, Oh, here’s all the good elements.

People can write whatever they want. And they have freedom. They’re running their own business and creating their own kind of life. And then there’s like, Oh, but all these dangers, what are they, what’s going to happen? They need health insurance. And how do we moderate all these folks? And who’s going to win.

And how do you, how do you not create this? Just like 1% that does well. And so, so the post is kind of essentially going through a bunch of stories of all those things happening. And I think the conclusion as always, as it’s complicated and there’s good and bad end, we’ll see where it all goes.

Nathan: [00:02:32]
Yeah.

It’s been fascinating to watch how the landscape has changed over the last, you know, seven or eight years since I’ve been working in this space. But you know, particularly the last say 18 months as Substack has gained a ton of tracti...

Lenny Rachitsky sold his company to Airbnb years ago and he spent a bunch of time there as a product manager, working on growth.

In this fun interview, Lenny shares his journey—how he went from wanting to found another startup to being a one-man newsletter business, and the lessons he’s learned along the way.

You’ll learn the “value-add” for a paid newsletter that’s been a great success for Lenny, and how he’s avoiding the trap of workaholism as he builds his business.

Lenny also shares how he never runs out of topics, and how he stays interested and curious so he can enjoy running his newsletter for years to come.

Plus, as popular as paid newsletters are, they come with some important downsides! Lenny reports from the trenches on what they are and how to deal with them.

Links & Resources

Lenny Rachitsky’s Links

Episode Transcript

Why don’t you give us a high level? Cause it kind of takes us into the state of newsletters, you know, on the web right now.

Nathan: [00:02:32]
Yeah.

Previous Episode

021: Byrne Hobart - Build Recurring Revenue With Your Newsletter

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.

Links & Resources

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...

Next Episode

023: Tiago Forte - Building a Second Brain & Lessons From a $1M/yr Newsletter

Tiago Forte is one of the world’s foremost experts on productivity. He runs Forte Labs, an education company that helps knowledge workers use technology to become more productive.

He earns over $1,000,000 per year by using his 40,000-subscriber newsletter to sell his online masterclass, Build a Second Brain.

In this interview, Tiago shares newsletter essentials, including:

How to get your first 10 newsletter subscribers.
The best time to send your newsletter.
How many subscribers you need to launch a course.

Tiago addresses fears about sharing too much in your newsletters, explaining how we live in an age where people want to follow real humans with real problems that aren’t afraid to be vulnerable.

Listen in to find out why Tiago, despite having a successful newsletter and online course, is still traditionally publishing a book about building a second brain.

Stick around to the end of the show to hear Tiago talk about how he’s using the revenue he earns online to help his family build businesses offline.

Links & Resources

Tiago Forte’s Links

Newsletter: Forte Labs
Blog: Blog - Forte Labs
Twitter: @fortelabs

Episode Transcript

Tiago: [00:00:00]
In the short term, picking one theme and just hammering on that theme week after week after week after week, I’m sure is good for the early days.

People know what you’re writing about. They know what to expect, they know what problem you’re going to solve. But I really think that’s short-sighted because in the long term they’re going to not have that problem anymore, or they’re going to develop more sophisticated problems or they’re just going to move their attention to some other part of their lives.

And if you are this one-dimensional caricature of a person, you pretend you’re this person who thinks about SEO 24/7—which none of us are—they’re going to move on from you.

Nathan: [00:00:41]
In this episode, I talked to Tiago Forte about building an online course, growing his newsletter and so much more. There is a lot of great stuff in there. One: he’s earning over a million dollars a year off of his newsletter. He’s got 40,000 subscribers. We get into monetization, book launches, course launches, cohort based courses, so much stuff.

And then actually, if you stick around to the end, we dive into, actually tiny houses and container homes and taking online revenue and bringing it offline, which I think is one of my favorite things. I’ve always seen me talk about that some on Twitter, but I haven’t talked about it a lot on the podcast or anything like that.

So I love the idea of doing that, of getting family involved and really using it to teach business lessons to kids. So it’s a longer episode, but I think you’re going to love it.

Let’s dive in.

Tiago. Welcome to the show.

Tiago: [00:01:32]
Thanks, Nathan, really, really excited to be here.

Nathan: [00:01:34]
So you’ve done a crazy amount of stuff for the email,sover the last few years. And I think a lot of people look to you for successful strategies and all of that.sone thing that you did before we started recording this is you asked on Twitter,syou know, what should we talk about? You know,swhat your audience would like to hear.

And one thing that that would be a fun place to start, w we’ll get into how to grow the audience and, and monetization and so much other stuff. I just love to hear it starting from zero. What are the first three things that you would do to grow your audience? So, you know, you’re giving advice to someone who’s has nothing going.

All they know is I was told I should have an email newsletter and growing at I growing audiences. The thing I want to do this year,

Tiago: [00:02:19]
Yeah. Okay. Let’s see. Three top things. I think first one is manually add people.sin the early days, I don’t know if you want stories behind these, but if I had coffee with someone, last thing I asked, can I add you to my email list?

If I met them on the subway, can I tell you it was one name and email address at a time? Because I knew there wasn’t much traffic to my website. People weren’t going to sign up just because I was really religious about getting people on there.

...