Today, I wrote about the remarkable success of Lenny Rachitsky as a harbinger of change coming to B2B media. Also, some addendums to my newsletter hustlers piece.
Newsletter hustlers (con’t)
I got a bunch of feedback on Tuesday’s newsletter about newsletter hustlers. Interestingly, some objected to being thought of as hustlers and others offended that their hustler status was in question. A few clarifications/amplifications:
I screwed up a couple things. For some reason, despite doing a podcast with him, I misidentified 6am City COO Ryan Heafy as his partner Ryan Johnson. Sorry. Also, the Neuron newsletter founder isn’t a teenager; he has graduated from college.
A couple people wrote in about how male and white the newsletter hustler crowd is. I tend to skip over the demographics of these areas. It’s just not an area I have much to add rather than the business dynamics.
I’m not critical of Substackers. Many are building great businesses on Substack, others who use it as a side hustle and still others who just use it like social media. Lenny Rachitsky and others have shown that Substack is a great business platform, even if the typical internet power laws exist.
My viewpoint is biased by my background. I come from journalism. That means I’m always going to be biased to people who build a business around content rather than the reverse. But I’m also self-aware enough to know there are lots of ways to do things. I’m doing a podcast for next week with Adam Ryan, CEO of Workweek, who comes from a different point of view.
There is a newsletter bubble, but there is a YouTube bubble, a podcast bubble and lots of bubbles. The beauty of the newsletter world is that it is an open protocol – maybe the successor to the open web? – that now has dead simple tools and platforms. That elimination of friction means a flood of newsletters. In the long run, this always washes out. Most will not stick with the habit and consistency required to build publications.
For more feedback, send me an email by hitting reply or emailing [email protected].
The Lenny effect
This week, Lenny Rachitsky achieved a remarkable achievement: He crossed 1 million subscribers to his newsletter. Lenny, who has first name status in the Substack world, is noteworthy because he built a juggernaut not in politics or general business strategy but by focusing on product management.
He’s gone well beyond newsletters with a popular podcast that he says makes more money than his newsletter, a recruiting service and jobs board, and a one-day summit. His subscription now includes a product bundle with discounted access to various tools. He’s also an angel investor. There is no institutional publication that carries his level of influence in this area.
And he’s done this with no full-time employees, relying instead on contractors and fractional help, an approach that’s become more popular as individuals look to build businesses without building typical companies.
Lenny’s success is a warning to B2B media companies that have breathed a sign of relief that the “extinction event” visited on the consumer side of media has not reached them. B2B has long been insulated from the challenges of B2C. Distribution isn’t typically as reliant on search and social; business models aren’t built around ads; and B2B sectors typically have far less competition.
The rise of the creator economy and alternative media has been a consumer media phenomenon, yet the same forces driving it apply to business media. There will be Lennys (Lennies?) of other sectors who follow a similar playbook. A few things stand out with Lenny’s success:
He focused on the right field. Much of B2B is focused on specific job titles. This is something I discussed with Industry Dive founder Sean Griffey. You need to know who you are writing for. Morning Brew created a composite character of the person who was the Brew reader. Product management has exploded as a field, and as Tim Huelskamp told me the other day, the total addressable market for many media niches is larger than it might seem. Lenny has attracted an audience far beyond just those who have product in their job titles. We all like to think of ourselves as Product People.
He has expertise. Lenny is part of a wave of practitioner media. Typical trade publications are staffed by young reporters. Lenny was a product manager at Airbnb. I don’t know if he was a famous product person, but I don't think that’s as relevant. Expertise needs to be married with both writing ability and the drive to consistently show up. Lenny wrote about how the secret to his growth was simply creating valuable content consistently. No crazy growth hack or negative CAC strategy with Facebook ads.
He has the right personality. The shift from institutions to individuals puts a premium on relatability. Lenny presents as a genuinely pleasant, upbeat person. He’s not picking fights on X. Yet his writing isn’t of the dear diary variety. He writes for Notion People with a clear, concise format that doesn’t get in the way. Most importantly, he’s passionate about the subject. That comes through in all he does.
He’s managed to scale himself. The hardest part of these businesses is how reliant they are on one person. This is a quality issue. Consistency is everything in this business, yet it is very hard to be consistently good twice a week. I’ve expressed surprise at daily newsletter writers not because doing 1,000 words a day is hard (it’s not) but because it’s nearly impossible to maintain quality. Lenny’s expansion into podcasting (even with research, easier than writing) and adding guest posts.
He focused on the practical. He’s shown that it is possible to build a very robust business and large audience in business niches. Lenny has shown there is an audience for more practical content that helps people in their careers. Many of his newsletters are guides or how-to content, with the inevitable mix of life coach content that is a feature of most models these days.
Lenny’s success will lead to many Lennys in other B2B areas just as Ben Thompson has spawned many imitators. The business model he’s built is remarkable yet extreme. Most Lennys will add an operational partner. Either way, the leverage of these far leaner models should concern old-fashioned B2B companies, not just legacy trade magazines but digital natives of the last era.
B2B is about influence. And the market has shown time and again the influence of individuals often exceeds that of institutions. The leverage of brand legacy will only get you so far. (Lenny’s newsletter is the default suggested by Substack. He’s won on substance.) His expertise as a practitioner is hard to match for B2B media staffed by journalists. Recapping the news has declining value while connecting the dots with in-depth, practical content has risen in value.
A looming issue for B2B is that these models are more efficient. That will inevitably put pressure on the price B2B media companies can charge for similar products and services. Individuals do not carry the same infrastructure costs as institutional companies, and they are increasingly able to deliver superior results. What’s more, many B2B media companies are sales driven rather than content driven. This is why many have the editorial side reporting to sales, even if it’s in the guise of a “publisher.” What’s more, Lenny has built a real community while many B2B publishers confuse community for “events.” You can have events without a community, and you can have a community without events.
That kind of structure inevitably leads to inferior products that prioritize the needs of sponsors over the audience. The travails of consumer media have shown how that is a recipe for disaster when the floodgates open to new competitors with greater expertise and connection with an audience.
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