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#40 Ben Thompson: Thriving in a Digital World

Sep 5, 2018 1h 41m 50 insights
Today’s guest is Stratechery author and founder Ben Thompson. If you’re an investor in Silicon Valley, work at a tech start-up, or just love to geek out on technology and business analysis, odds are good that Stratechery is on your short list of must-read blogs. What started as a side project, quickly ballooned into one of the most influential tech blogs on the web. The New York Times called Stratechery, “one of the most interesting sources of analysis on any subject.” I agree. In this interview, Ben and I cover a lot of ground. Here are a few of the things we discuss: Learn once and for all how to pronounce Stratechery. :) How Ben’s business model was developed and how he massaged it over the years to become what it is today The one metric Ben looks at each day to gauge the health of his business How Ben deals with people who rip off his work and pass it off as their own Ben’s thoughts on pricing, free trials, content and other important aspects of online membership sites How Ben structures his day to churn out such incredible content so consistently How Ben handles being wrong on his site, and his process for screening his work for confirmation bias How the internet has changed the traditional view of supply and demand, and what companies should do about it What Ben would teach an MBA class about internet strategy (if you do any business online, you need to hear this) What it would take for a start-up to overtake Google or Apple, and the vulnerabilities that all companies share, no matter how big or profitable The new era of technology and how companies like Netflix, Airbnb, and Amazon are doing it right (and what you can do in your own business to take full advantage) This is one of the most jam-packed interviews I’ve done on the Knowledge Project. Ben’s answers are so thoughtful and informative that you’re going to want to have a notebook handy.   Go Premium: Members get early access, ad-free episodes, hand-edited transcripts, searchable transcripts, member-only episodes, and more. Sign up at: https://fs.blog/membership/   Every Sunday our newsletter shares timeless insights and ideas that you can use at work and home. Add it to your inbox: https://fs.blog/newsletter/   Follow Shane on Twitter at: https://twitter.com/ShaneAParrish
Actionable Insights

1. Consistently Question Assumptions

Learn to consistently and repeatedly start with new assumptions, especially when analyzing industries impacted by the internet, to understand how fundamental changes alter business dynamics.

2. Develop a Worldview Mental Model

Combat writer’s block and improve analysis by developing a strong mental model or worldview through which you filter new information, making it easier to form opinions and identify relevant topics.

3. Guard Against Confirmation Bias

Actively guard against confirmation bias by consistently challenging your assumptions and double-checking information, even when it seems to fit your existing worldview, to ensure accuracy.

4. Align All Business Strategies

Ensure your business model, editorial content, customer acquisition, and go-to-market strategies are all aligned and working in concert. This holistic approach is critical for success in a highly competitive internet-driven world.

5. Anticipate Paradigm Shifts

Recognize that dominant companies are tied to current paradigms and often fail to adapt to new ones due to ingrained business models and mindsets. Anticipate and prepare for shifts that fundamentally alter competitive landscapes.

6. Focus on Future, Not Past Battles

Avoid fighting battles already decided by paradigm shifts; instead, focus efforts on building new structures, training for future challenges, and creating conditions for future industries.

7. Master the Details for Credibility

Get every detail right in your analysis and communication, as imprecision can undermine your credibility and prevent your audience from hearing your core message.

8. Prioritize Passion Over Pure Wealth

While aiming for financial stability, prioritize spending your days thinking and writing about subjects you are passionate about, viewing it as a tremendous privilege that offers fulfillment beyond mere wealth accumulation.

9. Align Career with Obsessions

Consider pursuing a career in areas you naturally obsess over and spend your free time researching, as this alignment can lead to fulfilling and successful paths.

10. Recognize Strengths as Weaknesses

Understand that your greatest strengths are often correlated with corresponding weaknesses. Aim to find a career or role where your strengths are rewarded and your weaknesses can be minimized.

11. Learn from Being Wrong

View instances of being wrong as opportunities to modify and expand your mental models and worldview, using them as a spur for deeper analysis and better articulation of your understanding.

12. Admit When You Are Wrong

Cultivate a strong commitment to admitting when you are wrong, as this is the fastest way to correct your understanding and ultimately be right, fostering trust and credibility.

13. Explain Your Mistakes

When admitting an error, explain your thought process and what led to the mistake (e.g., confirmation bias) to provide transparency and deepen understanding for yourself and your audience.

14. Recognize Timing is Critical

Understand that even if your structural analysis is correct, being wrong on the timing of an event or trend is still being wrong, so factor timing carefully into your predictions.

15. Build Trust Through Accuracy

Build long-term trust and reputation by consistently admitting when you are wrong and diligently investing time to get the details right in your analysis.

16. Gain Clarity from External Perspective

Position yourself as an outsider looking in on an industry or topic, as this detachment can provide greater clarity and skepticism, preventing the biases that come with immersion.

17. Seek Original News Sources

When consuming information, start from first principles by reviewing headlines (e.g., Techmeme) and then delve into original news sources as much as possible to form your own opinions.

18. Use Opinion as a “Knife Sharper”

Read opinion and analysis pieces not to adopt their views, but to use them as a “knife sharper” that prompts you to critically think through and refine your own perspective on a topic.

19. Balance Value Creation and Capture

Strive to find the optimal balance between the value you create and the value you capture. Ensure you earn a sustainable living without over-capturing or under-capturing.

20. Reduce Barriers for Internet Businesses

Advocate for and support policies that dramatically reduce barriers for individuals to build new types of internet-enabled businesses, as these “lifestyle businesses” are crucial for future job creation and economic growth.

21. Advocate for Future Small Businesses

When considering policy, advocate for maintaining conditions that enable future small businesses and new internet-native industries to get off the ground, preventing regulations from inadvertently stifling innovation.

22. Advocate Universal Healthcare for Innovation

Support policies like universal healthcare to alleviate personal financial burdens related to health, enabling individuals to take risks and innovate in creating new jobs and industries.

23. Embrace the Barbell Strategy

In the internet economy, recognize the “barbell effect” where returns favor either the biggest or the smallest players; avoid being stuck in the vulnerable middle.

24. Control Experience, Leverage Others’ Infrastructure

Aim to control the user experience and customer relationship, then leverage that power to compel other entities to bear the costs of expensive, low-return infrastructure build-out.

25. Tailor Ads to User Mental State

Tailor advertising strategies to the user’s mental state: use platforms like Google for focused users actively seeking something, and platforms like Facebook/Instagram for users in a “waste time” state, who are more open to discovering new products.

26. Prioritize Ad Platform Integration

When choosing advertising platforms, consider the “investment/effort” alongside the “return.” Leveraging platforms where you already have integrated tools and experience can outweigh marginal reach advantages of a new platform.

27. Disrupt with Massively Better Solutions

When attempting to disrupt entrenched, convenient systems like credit cards, your alternative must be massively better in multiple directions, not just marginally improved, to overcome user inertia.

28. Beware Regulations Entrenching Incumbents

Be aware that well-intentioned regulations, such as data privacy laws, can paradoxically entrench dominant players by disproportionately increasing barriers for smaller competitors.

29. Seek Fair Play on Dominant Platforms

In a future dominated by massive platforms, prioritize seeking stability and a fair playing field on top of these platforms, rather than solely focusing on platform-level competition, to foster innovation in the “undergrowth.”

30. Offer Free Tier, Upsell More

For subscription content, offer a consistent free tier to attract an audience, then provide a paid option for “more” content, fostering a positive feeling of wanting to pay for additional value.

31. Attract Eager Subscribers

Avoid aggressively pushing paywalls; instead, allow eager users to discover the paid content naturally, as these are the individuals most likely to become dedicated subscribers.

32. Measure Demand for More Content

To gauge readiness for a paid offering, track engagement on days you don’t post. Visitors actively seeking new content demonstrate a strong demand for more, indicating potential subscribers.

33. Prioritize Subscriber Happiness

In a subscription model, prioritize making existing subscribers happy, as this reduces churn, ensures consistent revenue, and drives organic growth through word-of-mouth referrals.

34. Leverage Zero-Friction Referrals

For online businesses, leverage the internet’s zero-friction referral capabilities (social media, email) by focusing on subscriber happiness, as this can drive organic growth without traditional marketing.

35. Avoid Free Trials for Habit Building

Consider foregoing free trials for content-heavy subscriptions, relying on a free tier to demonstrate value and leveraging the sunk cost fallacy to encourage paying subscribers to form a reading habit.

36. Offer Accessible Monthly Entry

Offer a monthly subscription option as an accessible entry point, even if many initially cancel auto-renew, as a significant portion may later convert to annual plans once they experience the value.

37. Recognize Vast Niche Market Potential

Understand that the internet enables vast niche markets. Even if you’re successful, there’s always significant room to grow because many potential customers simply haven’t discovered your specialized content or product yet.

38. Delegate Administrative Tasks Early

Delegate administrative tasks to an assistant and schedule them early in the day, especially if time zone differences necessitate it, to clear the way for more focused work later.

39. Review Headlines for Daily Ideas

Start your day by reviewing previous day’s headlines to generate an outline of potential topics, allowing ideas to percolate throughout the day.

40. Plan Content by Responsiveness

Plan weekly, in-depth content several days or weeks in advance, while daily updates should be more responsive to recent events, maintaining a list of evergreen topics for quieter news days.

41. Insight 41

Use impending deadlines to trigger focused writing periods, leveraging the pressure to “buckle down” and complete tasks within a set timeframe.

42. Organize Notes for Searchability

Maintain an outline (e.g., using Workflowy) where you constantly add links to interesting stories with brief notes, relying heavily on search functions to retrieve information as needed.

43. Focus on Subscriber Growth

For established subscription models, focus primarily on the daily growth of your subscriber base, as keeping existing subscribers happy and growing the list indicates overall health and success.

44. Accept Content Replication

As a content creator, accept that your ideas and content will be replicated or rephrased by others; it’s a natural consequence of publishing online.

45. Acknowledge Context in Success

While hard work is important, acknowledge that success is significantly influenced by context and environmental factors (e.g., “right place, right time”), rather than solely attributing it to individual effort.

46. Choose Clear, Pronounceable Names

When naming a product or business, avoid names that are unclear how to pronounce or spell, as this creates hurdles in building a brand.

47. Maintain an Intellectual Journal

Use a platform or personal space as an intellectual journal to understand the world and how it works, starting from a specific lens (e.g., technology) but allowing it to expand to broader interests.

48. Strategic Use of Education

Approach higher education (like an MBA) as a strategic, shortest route to legitimacy in a desired job market, rather than an end-all-be-all, to potentially gain more benefit from the experience.

49. Dominate Traditional Distribution Channels

For established brands, double down on traditional distribution channels (e.g., B2B selling to restaurants, schools) where scale and existing assets provide a significant advantage, especially as consumer markets become more challenging online.

50. Find a Unique Analytical Lens

Differentiate yourself by analyzing topics from a unique perspective, such as focusing on business models and strategic implications rather than just products, to fill a market void.