🎧🍌 Eric Newcomer on How to Pitch a Reporter, Scaling to 80k Newsletter Subscribers
Why leaks drive subscriber growth, a framework for pitching stories to reporters, differences between a reporter scooping and announcing a funding round, and why he started hosting conferences
Eric Newcomer was the first employee at The Information, and later spent six years covering startups and venture capital at Bloomberg. He left in 2020 to start Newcomer, and the latest episode of The Peel takes us inside how he’s scaled it to 80,000 subscribers.
If you don’t have time to listen or read the transcript below, my biggest takeaways:
Eric’s biggest growth secret: leaks. Sharing fundraising decks from Tiger and Coatue, plus SBF’s email to investors the day FTX collapsed, have been of his most successful stories.
When pitching a reporter on covering a story, it should really start months or even years before you pitch it. Similar to everything else, journalism is a relationship-driven business. Eric suggests treating reporters the same way. As a founder, this is something you can leverage investors for.
There are big differences between a reporter scooping a story and giving them an exclusive announcement. Know what you’re getting out of each scenario. And don’t overlook the value of owning your own distribution channels to tell your story.
Newcomer crossed $1m in revenue in 2023, which was counterintuitively led by its events business. Newcomer’s first event, Cerebral Valley, spurred Databrick’s $1.3B acquisition of Mosaic ML. Its inaugural Newcomer Banking Summit is this upcoming Thursday, March 14th. I’m personally expecting nothing less than another 10-figure acquisition.
I believe the Newcomer Banking Summit is sold out, but you might be able to sneak in here.
Timestamps to jump in:
02:48 The current state of media
05:59 Anchoring his 4th grade newscast
07:21 Becoming the 1st employee at The Information
09:34 How reporters get stories
21:12 The moment he quit Bloomberg to start Newcomer
26:02 Why he writes for VC insiders
32:19 VC top fund survey
34:01 Founders Choice VC leaderboard
35:50 Why leaked documents grow his newsletter the fastest
39:47 When Eric knew Newcomer was going to work
43:31 How events become Newcomers most profitable business
51:57 Why Eric invested in Substack
57:13 Why its harder to cover tech’s downturn than boom times
59:10 How to pitch a story to a reporter
1:02:59 Why the internet incentivizes negative media coverage
1:06:06 Advice for starting a media company
1:10:33 Why media works so well to sell adjacent products
1:12:55 The Newcomer Banking Summit
1:13:57 The $1.3B acquisition that happened at his first AI conference
1:20:05 New products Eric’s thinking about
Find Eric on Twitter and LinkedIn
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← here!Email Eric at newcomer@newcomer.co
Transcript
Find transcripts of all prior episodes here.
Turner Novak:
Eric, how's it going? Thanks for coming on the show.
Eric Newcomer:
Great. Thanks for having me. Super excited.
Turner Novak:
So exciting first topic I thought we could dig into, can you take us inside what is going on in media right now? On the one side you have a pretty successful small but growing scaling team, profitable from what I've seen, and on the other side there's all these legacy media publications laying people off. It's kind of been a trend for the last decade or more. What is happening right now in media?
Eric Newcomer:
Yeah, I mean it's a disaster outside of the New York Times, which is still not a great business, but it's slowly a growing one.
Turner Novak:
Oh, it's not great. Why do you say it's not great?
Eric Newcomer:
I think New York Times is a good business, but you just compare it to tech stocks or anything, it's not like the stock is roaring. I'm a journalist so I don't buy individual stocks, I buy ETFs, so I play a little stock simulator game. And so the New York Times is my only media company in it and I think it's of 6% or something since I started, whereas going big on Facebook was the right bet. So it's all about what you compare it to, but for media, The New York Times is doing very well.
Obviously Buzzfeed basically shut down their news business. Insider laid off a bunch of people and is sort of pivoting away from hardcore subscriptions. TechCrunch laid off a small number of people and pivoted away from hardcore subscriptions. So there's a moment in media right now that's turning its back on subscriptions after a narrative that subscriptions are what's going to save us. So I think it's particularly disheartening for the media industry and reporters just that it feels like the economy is doing better, things are rebounding, but somehow media didn't get the memo and it's getting worse in that industry and I feel very fortunate that that's not the situation at Newcomer, and we can sort of interrogate I guess how much Newcomer is or isn't representative of what can happen in media.
Turner Novak:
Yeah, well you're kind of in this niche of just covering venture capital, which is the noise that it generates is a lot in the scale of how much people think they care about it in terms of what it is. It's a pretty small group of people. It's not that big of an industry, at the end of the day.
Eric Newcomer:
Thank God I don't cover the oil industry, right? I mean the beauty of covering startups and venture capital is that it's simultaneously a business, so there's money, people pay for it, people can expense subscriptions, but it's culturally relevant, it matters to the future of the world. People care about it in a way beyond just dollars and cents. So even though I'm a publication that's very rooted in helping people to get an information edge to make money, it's still a fun topic to read about that when I get a great piece of commentary, Slate wants to commission... it just feels like, I mean it's obviously just a topic of great societal interests and that makes it much more satisfying to write about and fun. So it's the synergy of being a great business and culturally relevant that I think makes it a great beat for me in the topic area for Newcomer.
Turner Novak:
So you actually have been almost on this reporter journalistic path for a long time. When did it start initially?
Eric Newcomer:
Yeah, so my parents divorced, I moved to Macon, Georgia, and one of the things that really gave me a sense of comfort in my new elementary school in fourth grade was that I became an anchor on the elementary school newscast. I got to interview the superintendent. We had this gruff TV anchor who advised us, so that really sold me on journalism.
Turner Novak:
And you were in fourth grade, right? Interviewing the superintendent of the district?
Eric Newcomer:
Yeah, exactly. It might've been like fifth, I don't know, but I started in fourth grade. I forget which grade of elementary school,
Turner Novak:
It's one of those third or fourth check in Uber type of thing, like fourth or fifth grade.
Eric Newcomer:
I feel like I was one of the last people to come up this sort of traditional work your way up the regional newspaper internship game. I was at The Macon Telegraph two summers. I went to The Sun Sentinel one summer, The Tampa Bay Times one summer, and then I got to The New York Times right after I graduated from college and I briefly worked covering DC City Hall. I had no express interest in tech up until I got laid off. The newspaper I was working for was shutting down and Jessica Lessin at The Information was sort of scrambling through I think the Harvard Crimson Alumni Network and I'd been reaching out to a bunch of people and so she offered me this job when the company hadn't even been incorporated and she hadn't even named it The Information yet. I joined instead of going to The Philadelphia Inquirer and I worked out of her apartment in Dolores Park in the beginning. So I was the first employee at The Information and that's sort of how I stumbled into tech reporting.
Turner Novak:
So why did she hire you if you had no background in tech? Don't you need sources and all that stuff?
Eric Newcomer:
Amir Efrati was this very experienced reporter at the journal that she knew was going to join, and so I think it was an interesting experiment to see, oh, can you get somebody super junior sort of up to speed? I mean, at once, I think the answer is sort of no, but I also think it was a great crash course. I did stories that I'm proud of, I broke Amazon buying Twitch, I did real stories and I think it was valuable to them, but it was definitely a brutal way to learn because The Information wants novel reporting, whereas so much of even in The New York Times or Bloomberg where I went after The Information, a good percentage of your stories are thing happened, do a great story on known thing. Whereas, to its credit, so much of what The Information wants is true novel reporting and so that's extra hard.
Turner Novak:
And they're sort of breaking relevant news and it's not so much of, I don't want to say names of any publications, but it's just like someone else broke the story, copy, paste.
Eric Newcomer:
Right, they get ripped off a lot and then the tone changes. Well, Insider is the classic where they'll run an Information story and it's just like, yeah.
Turner Novak:
Are there behind the scenes or these media companies just hate each other because they're just stealing each other's stuff or?
Eric Newcomer:
Yeah, well there's a lot of... I mean The Information gets mad at The Wall Street Journal. Jessica came from the Journal, Amir came from the Journal, Martin Pierce, their main editor, came from the Journal and so there's clearly, you can see it on Twitter, I'm not speaking out of school here where there's some sniping about credit and who was on what story first and which stories mattered. So yeah, the media, including myself, we're self-absorbed and very interested in the sort of who got what scoop, for good and bad.
Turner Novak:
Yeah, well I think there's that one meme where it's like the tweet is I was working on the story for a year and then this guy just tweeted it out or something, if you know that tweet I'm talking about.
Eric Newcomer:
Exactly. Totally. Totally. Yeah.
Turner Novak:
So I'm just curious then, I wanted to get into this. I am not a reporter. I really don't know how this world works, I mean, I guess as much as you can as an outsider. How do you get a scoop? How do you build sources? What's a general framework for a founder or a VC or anyone just thinking about how do I help a reporter? How do I understand their perspective and what they're going through?
Eric Newcomer:
I mean some of it's relationships. I mean I think that's why, and we'll get into this, I've been successful beyond just traditional reporting that you are building if you're a good reporter, real relationships of trust that are based on sort of long-term thinking. And so that's, to me, the best way to get consistent information, it's like you meet people on an early story, you see them in a dinner and you stay in touch. And then there's trust when there's really something juicy or that would get them in trouble to share. I mean the advice I always give reporters, the best way to get a tip is to ask somebody who didn't sign the NDA or didn't promise anybody to keep it secret. It's sort of somebody who was supposed to keep it secret told other people who are sort of in their world, it feels less egregious to tell. And then once it's out to that sort of outer periphery, they actually don't have much of a duty to protect the company anyway.
And then they tell. You and then you go to the people who really know and say, "I already know it's already locked. Am I an idiot?" And then you feel pretty good and you get a couple more sources and I feel like that's a repeatable pattern. And part of what I'm doing is saying these companies are not great at keeping... they don't do enough work to keep secrets necessarily. They let a bunch of VCs look at their documents. There's a whole sort of industry of people buying secondaries. They're sort of pseudo public in some cases where they're sharing a lot of information with this group of insiders. And I'm saying, okay, let's make that circle a little bigger if you're going to be so reckless with how you hold information and expand it out. I feel like it's much rarer, though not never, where it's just a board just cavalierly giving stuff up versus you told all your employees, you did a big secondary. It's when these circles get big, that information gets to the public.
Turner Novak:
So then how do you decide what is a worthy enough story? When you talk about the secondary still happened, I'm just making up a company maybe that people know of ByteDance or something, big deck, secondary sale, ByteDance owns TikTok, super relevant. How do you decide, okay, this is worth reporting on this secondary sale that happened? Is there a certain trade-off to not newsworthy versus being newsworthy and whether it's for you or just the industry at large?
Eric Newcomer:
I love a story that sort of has lots of exclusive tidbits that I throw in. My dream Newcomer story sort of surprises you that three quarters down I had some scoop that I'm not really hyping up and so you need to be sort of dialed in to pay attention to those tidbits. So I would say to some degree it's like if I can find a theme that pulls together a bunch of smaller stories, maybe one secondary wouldn't be the headline but it would be lower in the story somewhere on a theme.
Turner Novak:
Okay. So when you talk about almost burying the lead deep in deep an article, do you have any examples of articles you've written? Maybe we'll link to them in the show notes too so people can check them out. What's a good example?
Eric Newcomer:
On that sort of example, several years ago I did consumer's dead, but investors want it back anyway, it was leading into 2021, it might've been 2020 where it's just like, okay, we're doing consumer even though there isn't a platform shift necessarily.
Turner Novak:
We need to raise money. Or we already did, we need to deploy the fund.
Eric Newcomer:
So I think I had Jeremy Levine and Sarah Tavel had done some undisclosed tutoring company. Its I had some of their early stage deals. I mean part of the fun for me is that it can be scooping seed in Series A company is exciting because readers really want to know, what are the partners at Benchmark, Sequoia, Andreessen doing in Series A rounds. Whereas the New York Times scooping a Series A is a little small. I mean I broke the seed and Series A of BeReal, which I did as a sort of BeReal headline. But that was super fun. I like to sort of call, this company, I wish it'd done better because it would be better for me to be... I wrote the Series A of Flexport, which did better but BeReal definitely was a hot company that I was like, "This is coming." And I feel like I wrote about it six months before they really maybe got the traction that got them the broader coverage.
Turner Novak:
Yeah, I remember that because I invested in the seed round. So I mean the context, for you and everyone listening, so we signed the docs for the seed round, but we hadn't actually wired the money yet when I think you had announced the Series A or something, the scoop.
Eric Newcomer:
Not an approved scoop. Yeah, I mean the company did not announce it. I scooped it. Yeah,
Turner Novak:
Just remember being like, what happens? Do I still get to invest? I haven't sent the money yet.
Eric Newcomer:
But you did, right? Did it change anything?
Turner Novak:
Yeah, no, we did. We did still invest. I was like, it was a very large different in valuation from when I invested, so it changed the math quite a bit if I had to do the Series A or if I didn't get to invest at all. Yeah, I remember we were thinking, how did he get that? We were all like, what happened here? I think I have a guess, but I'm not going to say it on the podcast. Maybe I'll ask you afterwards. I think I have some context clues, but anyways. So that's a dream story for you then is pretty big, relevant. I remember it was like Accel, DST and a16z that co-led.
Eric Newcomer:
Yeah, people are competing for it. I love the top firms are gunning for this startup.
Turner Novak:
If I'm remembering that story specifically, it was a16z had flown to Paris to meet him, but I think one of the other funds or both the other funds only met on Zoom or something and they won the deal because they actually went and saw the founder versus just taking it from their ski lodge or whatever. It gives people an idea of how those things happen.
Eric Newcomer:
This is super in the weeds, but just given a lot of founders listen to this, I'd say you should think about if you're announcing your Series A with me and if I'm scooping your Series A as very different story types, right? Because if I'm scooping the Series A, I'll do whatever I want. I might throw in any other company, it's my stuff. I got it, you're not helping me. Maybe you can... Sometimes people try to be like, "Oh, we'll really help you in three months." And I'm like, no way. Maybe you could on backgrounds sort of help me and you'll get... I mean I am on, those types of stories, if you help me, I'll be definitely willing to write a more fulsome description of what you do. And sometimes there are these weird technical startups where it's like, I'd love to make more of what the investors see in you. You could jump on board and give me that. And savvy comms people get that, that even if they don't like the scoop, it's a marketing moment.
I would also say about those stories where they're scoops, you normally get two bites at the apple. You normally get my scoop and then Forbes will still do the announcement. Alex Conrad is not necessarily saying... It's new to announce it, so reporters are usually willing to cover it both times. The problem is you scare a bunch of investors who haven't wired their money and everything's not... I's aren't dotted, T's aren't crossed, et cetera.
The other type of story, which I'm doing more now, which is a classic TechCrunch sort of story where it's like we're announcing the Series A with you. That I'm much more... Sometimes my standards for that are honestly higher because it needs to be totally exclusive, but I'm also giving you more central treatment. I'm less likely to mix that another story. I'm more mindful of the fact that... I wouldn't do it unless I felt like, oh, this is worth paying attention to and I'm going to give it the attention that it deserves. And so my mentality on those is a little different to me. They're totally different types of stories.
Turner Novak:
Yeah. Do you think of certain stories in the sense of this is going to drive subscriber growth free, this is going to drive paid conversions, which is obviously a little bit more helpful, or is it just like this is relationship building?
Eric Newcomer:
Well, my conversion strategy has honestly become almost entirely paywall driven. So I can just sort of set the paywall higher or lower depending on a bunch of factors.
Turner Novak:
Do you mean on the page, how high you place it?
Eric Newcomer:
How much is free and how much you have to pay to read? So it's like if you're announcing with me, you came to me, maybe I set the paywall lower because I'm like, okay, you want to come because I'm going to deliver my 80,000 free readers, not my 2000 plus paid readers. So more of it will be free. Versus if it's scoop, it's like I did the work, I got it's mine. Maybe I pay wall after a paragraph or two paragraphs where I'm just basically marketing the story to the free list. But then the paywall is very aggressive and most of the content is for paid readers. And then if it's a cultural piece, I've done sort of columns about Sam Altman and Chamath. I was sort of warning about them in different contexts. And those I made free just because it's like, oh, I want to... It's more of a talker, it's less for the money, whereas stuff that's very financial, I'm much more likely to pay wall super tightly.
Turner Novak:
And some, it's probably brand building too where it's just like, hey, I was the person that made you first start thinking about this, so then... It's an important topic and you change the tone of how the entire industry thought processed a certain topic. I think the one that I thought was funny headline was the Chamath, The Scam in the Arena.
Eric Newcomer:
Scary story to send, but it's like, dude, it's so true, just, I had to send it. The whole premise of that story was like I didn't shit on him when the SPACs failed, it was sort of buyer beware, but then when he was... it was like a year later he was on Twitter just dunking on people for not doing their own work on it. It's just like, well, yeah, your reputation is tanked by screwing over a bunch of people. Anyway, yeah, I stand by that story, but certainly the All-In people have been a little cold to me. Chamath literally one way recommended my newsletter on All-In, and I mean, yeah. But Silicon Valley... I think one thing that frustrates me about All-In is the extent to which they don't acknowledge... Silicon Valley is all about these relationships, a lot of their opinions are shaped by obviously rooting for Elon Musk, but their relationships and investments and I feel like they can sometimes obscure that for their broader audience.
Turner Novak:
They've done a very good job positioning themselves as insiders, and I'll ask college kids what podcast you listen to and they're like, I love All-In.
Eric Newcomer:
I like it sometimes. I mean when David Sacks isn't talking about politics.
Turner Novak:
Yeah, like I said, I think they've done a good job of the goals they're trying to achieve. I think they've done a good job of reaching the goals that they want. So congrats to them, people love it. So I'm curious then when you decided I'm going to start this Newcomer thing, I'm going to quit my job at Bloomberg, I'm going to start a Substack. That was probably kind of a crazy thing back in, I think it was October of 2020 was when you announced it.
Eric Newcomer:
Literally the day I was going to quit, I had my call with my editor and I didn't quit and my now wife was like, "You've got to do it. Do it. Pull the bandaid off."
Turner Novak:
So you were going into the call like, I'm going to quit, but then you didn't?
Eric Newcomer:
Yeah, I mean it was our morning and there was some like, oh, which editor should I tell first? Should I tell my top boss or? So there was a little, but I definitely sort of thought I was going to tell him, "I'm quitting." Anyway, so I quit. I had to call to everybody, it's the pandemic so you're like, "Hey, I'm out, blah blah, blah."
Turner Novak:
You can't go office to office. It's literally the Zoom. Yeah.
Eric Newcomer:
And Bloomberg is a bank, and then they're like, "You're out of here," once you're done. So there's definitely, I should rapidly tell people this is happening. I mean it was sort of a combination of things. One, I love my time at Bloomberg. I was there almost six years, but it's a very sort of serious news, no opinion sort of place, especially when I was there. Ben Smith had this great comment at the New York Times about media at the time, and I wanted much more of that style where he is like got scoops, but he's got voice and you're sort of mixing it together and you're sort of directly saying what you think and there's no game of what's this reporter trying to lead me to here. So part of it was sort of journalistic style and what I wanted there and more control over my stories.
And then the other was just, I covered startups for many years and finally I saw Substack coming up and it's like, oh, here's a trend. While I'm not going to invest, it's at least a trend, that that means something to me. I should get on it early. And I think that was a smart move. I think being early, being able to say I'm quitting during the pandemic, I'm risking it all certainly was appealing to readers and helped me get some early support.
Turner Novak:
So then it seems like you're framing maybe today, and maybe it was the same back then, but it was writing for the experts.
Eric Newcomer:
A key premise is I don't want to have to explain who Mark Andreessen and Bill Gurley is. It's stupid to read this sort of, I'm a VC and you're reminding me, you're like, who it is. It's just like no, the whole premise is that who these people are, why they matter. And so we're getting into the what's going on in Sequoia without the New York Times sort of sweepy sentence of like, "Oh, it applies to all VC and it's a symbol of..." It's like, no, we care because it's happening in Sequoia and Sequoia matters and there's no more... I mean, sometimes I try to zoom out, but it's just like I'm perfectly happy to write a story about one of the big firms just because it's important to know what's going on.
Turner Novak:
Yeah, I mean a lot of cases it's like a16z writes a blog post about a new category they're investing in and half the industry is now investing in that category also.
Eric Newcomer:
Well, American Dynamism. Yeah.
Turner Novak:
Or Web3, I mean the return of consumer, literally, I mean-
Eric Newcomer:
AI, they were late. They've gotten way too much credit for... They really leaned in on brand, but they were not early to the AI race.
Turner Novak:
I don't think so. And actually from what I've heard, friends at a16z, they're like, "Yeah, don't send me anything. It's not an AI company. It's not getting through IC. We're not investing in anything that's not AI."
Eric Newcomer:
Well, Like David Cahn at Coatue did a ton of AI investments and then went to Sequoia. I feel like he's been super early. I mean there are lots, but yeah, I don't think Andreessen was early on that. I mean they were so Web3 and in some ways crypto and AI had somewhat different philosophies and I think they sort of had to get their head around embracing AI.
Turner Novak:
I mean, on crypto, they definitely did a good job of... The biggest winner. Owned a lot of it. I know their first crypto fund did pretty well, so props. And so I'm curious when you were thinking about, I'm going to quit my job and start a new thing, who did you look up to for inspiration? How did you make the decision?
Eric Newcomer:
Bill Gurley was the first venture capitalist I told, so that was fun.
Turner Novak:
Why'd you tell him first?
Eric Newcomer:
I'd known him a lot from the Uber days. I covered a lot of the Uber saga. I thought it'd be interesting to get his perspective. And he was very generous, when I put up the paywall, he gave me an interview.
Turner Novak:
Yep, I was going to ask about that. He was the first one after the paywall. That's a good, juicy... I'm sure you got a couple hundred paid subs from that.
Eric Newcomer:
Well, I mean he was so generous in that he said, "What would be most useful?" I was like, "Are you willing to do the paywall?" And he was like, "Whatever's most helpful." And then he gave a really great endorsement and that was a super nice, and Dara at Uber gave me an interview super early.
Turner Novak:
And this was probably because going back you had spent a long time covering Uber, so you probably just got to know them. In terms of building relationships, it's like I'm sure you scooped stuff Bill didn't like or you talked to him and you guys got to know each other. So the thing with Dara, it's probably he had to get to know you and you had to get to know him anyway, so.
Eric Newcomer:
Right. I mean obviously the skill of the beat at Bloomberg was playing, being like, oh, I've got the Travis side sources, I've got the company side sources, I've got the investor antagonist side sources and being like, I got information from them, wheeling and sort of dealing on that whole thing. I mean, I broke the video of Travis arguing with the driver. I broke, well, a lot of financially stuff like DiDi buying Uber's China business. I think I broke, not Travis resigning, but Travis taking a leave. But Brad Stone and I, who's now the boss at Businessweek, did a magazine cover story about Travis after, and that was super, super negative on Travis. So I think I sort lost Travis world after that. But before that they were more factual.
Turner Novak:
So how do you make that decision as a reporter to, I don't want to say cut someone off, but you probably knew this probably won't be received that well. What kind of things do you weigh of how to make a hard decision like that?
Eric Newcomer:
I mean, at the end of the day, I feel like I'm doing it to be honest, and part of what makes me a good reporter is the personality disposition. The things I get most agitated are the things that it feels like I can't say. So more recently when all of Twitter was like, team Sam Altman, Sam Altman is God and the OpenAI board members are idiots and Kara Swisher is beating the drum on Twitter. It felt so unanimous that I was just like, this is insane. Let's take a beat. Look at the history and everything.
And I was very measured, but it was just, I feel like sometimes when it's just the thing you can't say is just personality wise, I want to touch the plate. So that's always appealing. I mean there's obviously some sense of like, oh man, what's this going to do for my sources if I... you want to be fair? I mean one thing I always observe is just as soon as... like when Trump lost the presidential election or as soon as somebody loses power, the reporters all sort of all of a sudden shift there. It becomes much less favorable to the person who loses power. So clearly an impulse of reporting is towards power, and so you have to balance that.
But there are a lot of factors, but at the end of the day, I'm trying to just report the thing that I think is most honest based on talking to a lot of people and I have much more flexibility now of just saying it directly rather than these weird... I think what's so much of tech people hate about media is these weird... There was just a story about Garry Tan and a sort of tech money influencing San Francisco and it's like if it were a straightforward story about where the money's coming from, great, that's journalism. But the tone was so negative and billionaires and just ominous that you can tell where the reporters stand and then they act like it's just reporting.
Turner Novak:
Yeah, it's like he's just trying to have people not do drugs in the street anymore. You're attacking him for that. Come on.
Eric Newcomer:
I agree with him, but I just think even if I didn't, it would be much more sincere for the reporters to be like, "We don't support this. Here's some facts." But I feel like laundering their opinion through this sort of style is really frustrating to people.
Turner Novak:
Interesting. So then do you try to avoid that? It seems like you're kind of facts but opinion, but it's not like... I don't even know how to describe it. How would you describe it to people?
Eric Newcomer:
I'm fundamentally driven by reporting. The opinion pieces I like best are when I'm sort of just taking what smart people tell me, and that's a great take and I could be ahead of the ball by being like, I should call, this is going to happen. So it's driven. I don't have, for the most part, these super strong screeds that I'm trying to get laundered into the world, but it's more like what's going to happen and factual. So I see it as driven by that.
But then I just try to be direct about what I think. I wrote about Sequoia's Political Paradox is my first story, literally when I launched and it was about that Doug Leone ran the firm, is this Fox News watching Republican, yet so much of their business is made in China and Republicans were turning against China and obviously than everybody else did, and then the firm broke up. But I had a line in there that was just like, I find supporting Trump terrible or whatever. I just feel like it's better to be like, where's this person coming from? And I think my readers know that ultimately, if I got a good scoop on something that was maybe harmful to my ideological interests, I would still write it.
Turner Novak:
So there's almost some intellectual honesty to it, but you're still like, hey, I'm disclosing my bias. I hate this candidate or presidential whatever. I disagree, but here's the facts that I know. So that was the very first article. I think I remember... So I scrolled through every single article. I have not read all of them over the years just because no one has a 100% open ray on emails, but I do remember that was your very first one. Was that strategic that you picked that first?
Eric Newcomer:
Well, it's strategic in its lack of strategy, which is like, yeah, people are beholden... well, people are beholden to Sequoia. It's like that's the power. If you're going to do a newsletter that's sort of in the industry, accumulating power, you do sort of something favorable to Sequoia. And I think I've said in the newsletter, again, this is where I'll express my opinion, I think they're the best firm, they're certainly the most well-respected, but that I was willing to come out of the gate and go at sort of the king I think showed that this is going to be a sort of fiercely independent newsletter, still aimed at people in the industry.
Turner Novak:
That's fair. I mean that showed up too when you think about how highly people think of certain firms, there was that opinion survey thing.
Eric Newcomer:
I published a survey of limited partner surveyed venture capitalists on who they thought the top firms were and Sequoia was number one. I think Founders Fund may have been number two. USV was up there, Benchmark was up there. Yeah.
Turner Novak:
Elad Gil I think was pretty high. I think it was Nat Friedman. So the interesting thing with that was I think it was the day or two before you published, I was getting dinner with a couple people and it came up and we all went around and was like, without knowing the answers, we answered the question. And it was really interesting to compare the results of what people picked. We spent a lot of time dissecting the questions strategically. I think my emerging funds were adjacent Footwork and Sam Altman's fund. Those were my three. But the thing is how do you consider someone an emerging manager versus is footwork not emerging? Nikhil has a couple companies that are going to IPO, you know could, so anyways, it was an interesting stories,
Eric Newcomer:
But that was before the story.
Turner Novak:
I think it was a night or two before you published it.
Eric Newcomer:
I mean that was part of what I was saying in the story, which is this thing is being talked about. It's on the one hand sort of a random survey, but it's just like, man, everybody is pinging me about this and that's sort of where I can do stuff that traditional media can't, where it's like, yeah, and I started the story off being like, this is not the end all be all ranking of VCs, but it just, it's a cocktail party sort of conversation.
Turner Novak:
I'm sure if you publish that or took that survey a year prior or whenever crypto was a thing, it would've been all the crypto funds that were at the top. So the other one that was super interesting that you published was it was like the Founder's Choice Leaderboard. I did pretty well on that one, so I was happy about that one. But yeah, that was interesting because the ELO ranking where it's like you pair up the two investors on the cap table based on public crunch based data and the founders picked which firm they would like, Banana Capital or Sequoia. So it's like if I got picked above Sequoia, I'm like-
Eric Newcomer:
You'd shoot up the rankings. Yeah.
Turner Novak:
One's interesting when it's thinking what if actually care about versus what are VCs.
Eric Newcomer:
The first two, I wasn't, didn't conduct the survey, I published it exclusively, but we're sort of taking it over, working with the guys who do it. So we'll do another one, but extremely busy at the moment. So I'm like maybe in the fall. I get a lot of pings from marketing people at VC firms being like, are you doing that? Do I...
Turner Novak:
Yeah, there were some interesting flips from the first version of the survey to the second.
Eric Newcomer:
I know Andreessen went way up, Koslow went way up. Yeah.
Turner Novak:
Good comms people, good marketing people there.
Eric Newcomer:
Certainly I'm open that I think obviously if you can figure out which founders like you and make sure those founders vote in the survey, you will do better.
Turner Novak:
Yeah, I got to do that. When you run it, I'm just going to ping everyone.
Eric Newcomer:
Yeah, I will write an email saying, "I am doing the survey again. Please submit your votes."
Turner Novak:
Is that a good growth driver when think of subs?
Eric Newcomer:
I mean I think that one's a little more free. I mean the VC survey I paywalled the results.
Turner Novak:
Genius, how many did that drive? You probably made like 50,000 bucks just from people trying to see the results.
Eric Newcomer:
I think it was probably like 10,000 bucks. If I assume that half the people churn and it was a hundred something, maybe it was 140 or something.
Turner Novak:
What types of stories typically do the best? I think it's anything leaked, I think we-
Eric Newcomer:
People love to see documents. As much as I and other reporters fashion ourselves writers, people love primary sources. My most viral story at Bloomberg was the video of Travis arguing. My best story is that Newcomer have been like, here are Coatue's fundraising documents, here are Tiger's fundraising documents. The email Sam Bankman-Fried sent to investors while FTX is crumbling. I think those are the top three.
I'm always proud when sort of a more written sort of scoopy one gets... There's some in the top 10 I think. One of the stories I'm proudest of that is not those three, the Tiger, FTX and Coatue, was I did this list of a bunch of scoops of software unicorns that had raised at a billion dollar valuation or more with less than $10 million in ARR. So it was like peak bubble behavior. And I think I published the story at literally the top of the public market. So to me that was sort of the top of the private markets and many of those companies will never meet that valuation again and it was like some of them had zero revenue and raising a billion dollar valuation. So I think that one did well, but it wasn't like people want... To the extent... If you want to help Newcomer.
Turner Novak:
Leak some slide deck. My next fund, I'll just send you the deck.
Eric Newcomer:
Exactly. Well I do think we can get more into that. Insider has a strategy of publishing startup decks that the startups give them. I do think, to some degree, people want... There are all these VCs that are resentful that their reputation is worse than their returns. And I'm like, that's very solvable. Just start sharing your returns. You know what I mean?
Turner Novak:
Yeah. There's just weird dynamic where, I don't know how true this is, but I've always thought this, it's like the better your website is, the worse your returns probably are. I don't know how true that is. I'm afraid... I haven't updated my website in three years. It's just a bunch of text. It's like a crappy square space template. I've been afraid to make my website better. Just like what does this say about me? Am I compensating?
Eric Newcomer:
Some of these VC websites are insane. It is like you've overdesigned it to the point it is less user-friendly.
Turner Novak:
Well I'm starting to think about should I just redesign it to optimize for converting to my newsletter and listening to my podcast? Follow me on Twitter. I don't even care what companies I invested in. How will I do? I think there's interesting... I've actually heard some VCs will put tracking links on the portfolio page of their website and tell their portfolio, I sent you 50 clicks whatever this week or month. It's kind of interesting. I don't know. Is that the big value add you want to be providing?
Eric Newcomer:
It doesn't seem like a lot of traffic. It would have to be way more than 50.
Turner Novak:
Probably like the a16z, Sequoias of the world. You probably got tens of thousands of clicks per day.
Eric Newcomer:
Andreessen is driving real attention and is a media company in some ways. I mean bigger than me certainly.
Turner Novak:
So then talking about media company, how or when did you decide to throw up the paywall? I think you had at least 10,000 subs, like free subs, right?
Eric Newcomer:
I think so. I forget honestly. I knew that I was going to put up a paywall and that it would be a subscription strategy. I basically launched with no paywall very openly, but you could pay, but I gave a huge discount if you paid upfront. And then when I put up the paywall, I started off at $150 a year, but it was discounted to $.99 for the first year and I've since moved it to $200 a year. So I have sort of a blend of people paying $150 and $215 a month or $199, or sorry, $19 a month. Yeah.
Turner Novak:
So then was there a moment where you knew that this whole thing was going to work, where you're just like, oh my god, this is a business, I can do this indefinitely?
Eric Newcomer:
Yeah. I mean putting up the paywall, it felt solid., like I was going to be fine. But even at launch I felt like I got a lot of attention, engagement. I feel like on that side, I'm just very fortunate. I never felt this sort of like it's never going to work. In some ways I think the second year of the newsletter was the hardest, even though I knew financially I was on good footing, just because the first year you come out and you have all these ideas that your editor wouldn't let you write and you really know why you're doing it and your friends are so engaged and everybody's willing to help you for free. And then your second year it's like you've got a business, you're doing well. And then it's much more like, oh my god, I've got to do it all again. I mean that's the challenge with media over tech. It's like you've got to keep coming up with hits.
Then the third year, I mean I hired a chief of staff and now I have a reporter, so now it's becoming more of a company. So that takes some of the pressure off me. I'm still super busy. I feel like the problem when it was just me is I'd have a week where I had tons of meetings. It's like by any objective measure, I've been super productive, but it didn't translate into a great post and it's sort of like, what have... So then I'd be really upset that I didn't have a good post. Whereas now with a reporter, we're going to have a great post every week and then when I can write, I'll write and when I can, I won't and it won't be a crisis. And obviously I'm super involved in what's going into that newsletter and editing and all that.
Turner Novak:
It's just you're doing less of the blocking and tackling, more higher strategic priorities. It's a business. You're the CEO, right? You're running a media company?
Eric Newcomer:
Yeah. I never really say CEO. I mean it's the classic early stage company where you're just founder or whatever, writer. I mean, we haven't talked about this really yet, but events are the business today. So I'm spending a lot of time on events. It's like getting speakers, working with sponsors, just trying to make the events come together. That is a huge part of where I see the growth opportunity. So that is the top priority for the business.
Turner Novak:
So why events? What makes them so good for the Newcomer business?
Eric Newcomer:
I think one thing I didn't quite see when I launched the Substack was that people really wanted a sense of community and connection in the pandemic. There was a pandemic thing going on, which is digital ways of connecting were super valuable because they really couldn't connect in person. So that was a great tailwind for the newsletter. And I think now people are totally back to normal, but they've sort of moved all over the place also. And so I think there's more value than ever in in-person events. So I think there's some just sort of a shift in mood there.
I mean, I really enjoy the events they feel, it feels like I get to use my sort of sourcing relationship muscle, but use it in a way that's much more direct to the business and get speakers there, invite people, have VIP dinner. I like that whole thing. I mean, and that's Kara Swisher's model of journalism, have a huge event, get scoops, build a media brand to sort of support the events. I'm not inventing the wheel here.
Turner Novak:
And you make money on the events too, right? It's not just they drive subscriber growth?
Eric Newcomer:
Oh no, no, no. Yeah, the events are in no way to drive subscribers. They're to make money for themselves. I mean, I hate to say this, but it's the truth. You can just tell that people feel good about paying for tickets, sponsoring events, they know what they're getting. I think people just undervalue media and resent paying for subscriptions, even though I think it makes sense. It's a lot of work to produce the newsletter. Now I'm doing events, which people are always like, "That's a hard business." I'm like, media is a very hard business to continue to come up with novel, valuable stuff. But people resent having to subscribe and so I think it's nice being in a business where you feel like people are eager to... they understand why they're partying with their money for something.
Turner Novak:
So you have an easier time getting people to sponsor the events than the newsletter or?
Eric Newcomer:
Yeah, yeah. I think sponsors events more, they get to see the people, even though it's like the scale is smaller than the newsletter. And we sometimes bundle newsletter ads and stuff, so we have an advantage there that we can sort of combine them. So yeah, sponsorships are easier, definitely. But I also think for an event I'll charge a VC $1,600, or this banking one is $100, whereas there's just a limit on what I would reasonably... Some people do run these business publications where they have even more expensive paywalls, but then you're really being read by a small number of people and it's like I do want to be read.
Turner Novak:
And sometimes even you send this email to 80,000... or how big is the free list right now?
Eric Newcomer:
The free list is like 80,000.
Turner Novak:
80,000. Okay. So I speak at the event, only a couple hundred people are there, but I get emailed to 80,000 people. "Hey, CEO of Databricks, OpenAI, and then Turner, I'm up with them. That's huge. Who would not want that? To have people think of you in that way?
Eric Newcomer:
You have the machine to make sure the events are covered and cool and that it's a thing. I mean I also have great relationships with media. Like CNBC was on hand at the second Cerebral Valley. So they're also getting covered. But yeah, they work really well together and so that's great.
Turner Novak:
So basically the business is... Are you comfortable breaking down percentage of revenue or?
Eric Newcomer:
Axios wrote a story that I gave them the information on the record that we had crossed a million dollars in revenue last year, in 2023. And I mean my paid subscribers are like $400,000 of that. So events are more at least 600. So we have some newsletter sponsorships I guess. But yeah.
Turner Novak:
And then I think, I don't know if you still actually have this, I just remember seeing it, you had a Discord group of some kind. Is that still a thing?
Eric Newcomer:
Casey Newton, at Platformer, who's doing very well and run... it's his brainchild. We did it, I forget soon after launching the Substack, because he... I literally called him because he had this newsletter in The Verge being like, "Hey, I'm going to quit and do a Substack." And Casey's like, "Yeah, I'm about to announce a Substack." And he had a huge New York Times profile a couple days later. And we're very supportive. He covers social media and I cover the business of startups and venture capital, so there's not much competition. We both recommend each other's newsletters and everything.
So him, me and some other people did this Discord group. I'd say my part of it has been a failure. I don't know, I didn't like it that much. I don't know, I just felt the problem for me is it just the community, first of all, was a little negative on tech, which I'm more positive. And then it didn't attract VCs, it wasn't like a dealsy sort of thing. It was more interested in the tech commentary. So to some degree I felt like the things that people were talking about weren't really leading me to the best types of posts and what my typical reader wanted.
Turner Novak:
It seems like Casey covers more big tech and you cover small tech, startup. So it's just different audiences almost.
Eric Newcomer:
I mean mine's culturally relevant, but I do first and foremost want to cover the money and then these sort of people that are known to the valley and important to them. I have much less sort of ambition for it to be the big conversation about Facebook. The Facebook beat is a little bit more... he has a New York Times podcast, it's a little more broad. Whereas I'm very open and direct that I'm trying to fully saturate Silicon Valley startups and venture capital, but not really interested in trying to get anybody outside of that because that's sort of a distraction.
Turner Novak:
Do you find it kind of ironic that you live in New York and you're covering San Francisco?
Eric Newcomer:
I'm very transparent. My Twitter says Crown Heights. I feel like people are constantly shocked. I'm like, this is not a secret. I lived in San Francisco for six years. I still think San Francisco is the center of the tech universe. I believe in San Francisco. My now wife was at the time working for The New Yorker, so as New York a publication as you could have. And her family lives in New York. And so I moved for love. And I mean honestly, the beauty of New York is that everybody comes through. It is not presumptuous to say, "Hey, when will you be here? Let's get a meeting." So you can get more European VCs, you get the San Francisco people. So I feel like it works. But I obviously go to San Francisco a lot and have events there. San Francisco is great because you stumble into a restaurant and you find sources and tech people and so it's very efficient, but then it becomes like, oh my God, my whole life is tech. I don't know. What do you think about this?
Turner Novak:
Well, I live in Ann Arbor, Michigan, so it's-
Eric Newcomer:
You're like, you can do this anywhere. Yeah.
Turner Novak:
I mean I'm in an even worse spot. Why would I pick Ann Arbor? Well, it's the same thing, it's family stuff.
Eric Newcomer:
Do you go to San Francisco a lot? Or what's your San Francisco versus New York? Do you come to New York ever for deals?
Turner Novak:
Yeah, it's probably about the same.
Eric Newcomer:
Oh, really?
Turner Novak:
Yeah, I would say LA, San Francisco and New York. Those are probably the three places I go the most. I probably do a trip every couple of weeks, try to do three to five days. It kind of depends on kid stuff, my wife's schedule. It can kind of be challenging sometimes. It's hard to do last minute trips sometimes, which I do them sometimes.And my wife is like, "Why did you do this to me with the kids?" Based on some other external things going on.
Eric Newcomer:
To win deals usually or to close it, to get in a deal?
Turner Novak:
It really just depends. My strategy is generally not heat seeking into the hottest round. So I usually don't have to jump on a flight that day and go meet a founder. But I usually do try to meet them after I invest. And sometimes it'll be like, "Hey, I'm going to be in New York in two weeks. Do you want to just get dinner when I'm there?" And so usually since I'm usually doing preseason seed and it's, like I said, I'm not doing a ton of AI investing. I've done a little bit, but no one's interested in the stuff that I'm investing in, so.
Eric Newcomer:
That's good. Yeah. So less diva ish founder behavior?
Turner Novak:
Yeah, I don't know. And I try to move fast with the founders, but it's also like I'm going to make a decision. I've tried to be really transparent on here's what I'm thinking about, but, "Hey, next week I'll be in LA." Or I can do trip I've done before. It's like, "You know what? I can probably get out there next week. We can just get breakfast or get coffee or something or dinner or whatever while I'm there." And then I usually think of them pretty strategically where if I'm in San Francisco, I usually try to record an in-person podcast or two.
Eric Newcomer:
Really establish that you're in San Francisco. Yeah, I guess I do that too, like, "I'm on the ground in San Francisco. Here's what's going on."
Turner Novak:
I just try to make them really efficient and I don't get anything done while I'm there. No work. It's all just like, okay, eight meetings this day. You're exhausted at the end because it was like got up early, you get back to your hotel at 11 o'clock and it's like, man, I have so much I have to do before I go to bed. But yeah, you try to fit it all in.
So I have a question. You invested in Substack. You mentioned there was this whole thing about Substack is this new trend. You can finally participate on, it's a tool for you, you can invest. But then I think you ended up investing when Substack did this. And can you just kind of take us inside why you invested and what you like about Substack?
Eric Newcomer:
I invested through basically crowdfunding, it was Wefunder, it was $5000. I mean I said this to my... I'm very supportive of Substack. I would not have quit my job without Substack. They did not offer me any... I didn't take money from them and I didn't have the Pro deal, if people remember that. But they were supportive. They gave me advice and they've been supportive. They helped pay for a podcast producer, editor at one point and so I have a good relationship with them. And so it felt like an opportunity to throw my sort of support behind them and just...
So it's not a financial investment, it's much more... Given that they take 10% of my subscription revenue, like $5,000 wasn't some... it's not the biggest financial calculus relative to that. Sort of good PR for them is good for me. The Substack app and stuff is somewhere I get subscribers. So I guess this is all a caveat on, it was not a bet on where their valuation was and whether I'd make money on it. I am throwing my support, getting a little more aligned with a platform that has been very supportive of me that I wouldn't be doing what I'm doing without and give them a little bit of PR. It's a small PR support that I can give them.
Turner Novak:
Yeah. Well I remember you had a really interesting line, and I'm probably not quoting you exactly, but it was something along the lines of, "Substack will just come up with a new feature that just helps my business. It's pretty awesome. I don't have to do anything and Substack grows my company for me. That's pretty cool."
Eric Newcomer:
Yeah, I mean that's the dream. They have a product team hard at work and then they come up with something. I had no idea and it's like great. Yeah. I mean the biggest feature has been Substack Recommendations where it's helped my free list a lot. Pragmatic engineer, everybody should check that newsletter out as well, especially if you're into engineering stuff. I mean, I think he's the number one tech newsletter, so he's driven a ton of free subs to me from recommending. Yeah, so that's been super helpful. I mean, I do think Substack needs to pick it up a little bit, I am a little... I mean they lost Casey at Platformer. Yeah. Are you an investor in Substack?
Turner Novak:
No. I really like the product. I think a lot of stuff they're doing is smart. The valuation is just super high.
Eric Newcomer:
Yeah, super high. I mean, Ghost and Beehiiv are clearly gunning for them.
Turner Novak:
I also did not invest in Beehiiv. That was probably just a bonehead decision. I met Tyler the first two rounds. I'll go on the record saying I'm probably an idiot for that one.
Eric Newcomer:
It seems like they're doing well as a business. Yeah, I mean, Substack recently got in this whole drama about Nazis on their platform.
Turner Novak:
That was a huge deal. I kind of remember that.
Eric Newcomer:
Back to the original conversation about opinion and everything. Obviously I like free speech, but I believe in moderated platforms. If I were running a company... To me, I say this to Substack all the time. What I like about Substack is the informed debate. And I feel like they can lean a little bit too hard into platform for anything. I think they still even let accounts get monetization and I'm like, wow, you're building tools for really questionable accounts to make money. I mean, they say there just aren't that many of them and they don't make that much money. I mean it's annoying on principle and that I don't really agree with them, but it's also just annoying that I feel like that sort of right wing free speech sort of thing is still a big part of their public identity and I wish they could get a little bit more... continue to grow and continue to get a good narrative going about what they're doing.
Turner Novak:
Yeah, it's really interesting because I think Substack is pretty big outside of tech. If you just go into sports and just fashion, culture, those kinds of things, there are some... well, even just general politics, more of down the fairway politics, I guess we'll say, it's massive there too. Tech is a pretty small percentage of the readership, I'm pretty sure, from my conversations with them.
Eric Newcomer:
Yeah, I think politics is a big part of it. I think the number one Substack is still Helen Cox Richardson, the professor who writes about history. I think she's a Democrat type. I don't know. I don't follow it, but.
Turner Novak:
Yeah, I'm not the most into the politics discourse. I don't know what's going on most of the time. Well, so talking about not knowing what's going on or in the weeds, what do you think are some of the biggest kind of covered or under-discussed stories in tech right now? Maybe it's stuff you've written about, but.
Eric Newcomer:
No, I mean, think the thing I struggle to write the most about is just the downturn part. I hosted Cerebral Valley, the AI part. I clearly leaned in to the AI boom, but I'm generally pretty, not negative... I mean, I just try to be honest and push back on hype. I certainly push back on some of the crypto hype. And I just feel like there was this AI boom, but software was in real trouble and a lot of tech was struggling, and I think it's just much harder to cover the downturn. There are deal stories when you're doing well, there just aren't stories when you're struggling. It was hard to separate the layoffs. Good companies and bad companies did layoffs. So I feel like it's been hard to cover the sort of correction in Silicon Valley. We've done a lot of charts. I think that sort of helped.
Turner Novak:
Because that's objective. It's less opinion. It's just like, hey, objectively these numbers are going down.
Eric Newcomer:
Right. Yeah, I mean I think a big storyline that we've talked about is just at the end of 2022, I think people hoped that it was a reversion to the mean, where we'd go back to the pre-pandemic level of enthusiasm. But then 2023 was worse in terms of funding. And I think that was hard. And given my strategy overall is to cover Sequoia, Benchmark doing deals, there's less to write about them just not doing deals. So to me, that's just been under covered because it's hard to turn into a story. It's like you can do the data. Yeah.
Turner Novak:
I think you had one where it was just showing the pullback. I think it was differences in number of investments made between '22 and '23 or something like that. I remember that was a big story.
Eric Newcomer:
Yeah, we've been doing more charts because it's hard to cover with anecdote.
Turner Novak:
So I know we kind of touched on this a little bit earlier, but I wanted to make sure we give a good framework for people that are trying to, not just you, but just pitch their story to a journalist. I don't know if there's a good going from zero to one or landing a scoop, but how should I do it? Like me, I'm trying to pitch you like, "Hey, I've got this story I think you should cover," what do you want to hear from me, or anyone when we're pitching you on something?
Eric Newcomer:
It is a relationship business. I feel like number one is you want to be on somebody's radar before you're coming to them with a story.
Turner Novak:
So I shouldn't say like, "Hey, I got this company. They want to announce their round next week?"
Eric Newcomer:
Well, I have the relationship with you. I mean, so one thing you can do is rely on your VC's relationships with a reporter to try to get it. Or if you get a very savvy comms person, maybe their relationships with a reporter. But otherwise you try to meet them or you just want to be on their radar so that when it happens, it's like, oh yeah, that company is executing on what I've heard. I mean, it's similar to according investors where, it's like it's good to be on their radar and then you outperform what they expect. Especially covering Series A, there's a lot of discernment in what's going on.
Turner Novak:
Yeah, I mean, there's a lot of zero revenue companies that raise a Series A that might never be a business. It's just hard to know what's actually real.
Eric Newcomer:
I mean, core to the strategy is that you have this piece of news, usually a funding round, that's exclusive and you bring it to one person, you say, "If you're willing to cover this, we'll give you the story exclusively." I feel like there are a lot of people who are early stage that still want to blast it out to a lot of people, and then you get nothing. And so I think leveraging the sense that this is going to run exclusively with you is key to the strategy early on. I mean, I do think more and more people are self-publishing, and I think it's super valuable to have good writing about what you're doing and explaining it. I do think Andreessen Horowitz is good at writing posts about why they're investing in a company, and often those are better resources for the companies than themselves. You should definitely, I feel like founders need to be good about articulating what's exciting technologically about their companies. So even though I'm pro reporter and pro announcing things in media, I think clearly we are in a moment where companies are doing more direct themselves.
Turner Novak:
The hostility of some of it. Some of this stuff is very anti-media, we need to go around
Eric Newcomer:
Yeah, like Balaji. I feel like it's calmed down. I mean, the crypto people were super aggressive. I mean, Andreessen tried to build Future, which was meant to be a real media publication, and failed. So I think they have been somewhat humbled in that, but they still mostly communicate themselves. I think some of the hostility has calmed down. I think it's interesting. I mean, the Founders Fund guys have somewhat been hostile to media, though also know to cooperate with it. I mean, Mike Solana has this pirate wires Substack that he's trying to turn into a media company.
Turner Novak:
It seems like, yeah, from the outside, going from zero to whatever they're at now, it's worked to a certain extent. I don't know exact numbers, but people care about it. That's important.
Eric Newcomer:
I mean, my position has always been godspeed. I feel like if tech people have... If you do the thing and then you understand what readers want, what stories work and why people write stories the way they do, you start to understand and it's like this... It's funny to me that the VC lens is usually I'll look at the economic incentives of somebody and then understand what they're doing. And then I feel like on media, there's a lot of anger at the reporters when the normal lens would be as sort of a business model type decision.
I don't know. That's sort of a hazy thing these reporters do in some ways. I think the challenge of reporting is that they've operated from the mindset of the monopoly days of media. Media had a monopoly, so they had all this money. So we had this wonderful priesthood media where it was like, this is what journalism ethics look like, and we operate outside of the business side. And in fact, if the business side is trying to meddle, that's a problem. It's unlike most businesses where obviously your product is very aligned with the business. And so yes, there was this big set of media that was operating sort of uneconomically.
Turner Novak:
Yeah, and that's changed because the internet just kind of changed the way people get information. So instead of getting it from the New York Times or the Wall Street Journal, it's like a founder just blasted it on Twitter or LinkedIn, the algorithm picks it up.
Eric Newcomer:
Well, but that also made the media more negative because then if all the positive stories are coming directly from the companies, the only differentiated stories are sort of the negative ones. And so then the media is even more negative because you're not announcing positive stuff with the media. So then they become more and more negative.
Turner Novak:
It's kind of challenging too, for me, I know how hard it is to start a company. It's super hard, and the way to get through it is just praise the things that go well. Constantly things are breaking and not going well, so it's like, oh man, we raise the money, or we hit a milestone, signed a new customer, a new product launch. It's exciting to celebrate those things. You don't want to come out and be like, hey, our revenue drop this year, or a bunch of our customers are turning or we're having this turmoil in the business. It can almost feel like, especially if you've kind of been inside some of them, when people are amplifying those things can be really, really frustrating.
Eric Newcomer:
I am tech, largely. Tech people are building businesses that are meant to make people's lives easier. They're selling people products that people want. And reporters can sometimes... I feel like my biggest criticism of media is that stories aren't rooted in what's the best alternative. Or it's like if you're tearing something down, what is the positive view of the world that you subscribe to? And I think there's just been too much tech bros and just hostility without the burden of saying, this is what I'm trying to build. I suspect some of what they're trying to build is a more socialist sort of world, which I think if they had to articulate, many people would oppose. And so there's this sort of hostility without an articulated worldview, and that definitely frustrates me with the media.
Turner Novak:
So I guess maybe a good way to start wrapping up winding on the conversation. If someone, just say, I was coming to you like, I want to start my own media company. How would you tell someone to approach it? What are some things that surprised you?
Eric Newcomer:
Well, yeah, I literally had this conversation with a reporter who was thinking about it the other day. I'm surprised more people don't try. I mean, the number one thing is like any business, which is know who your customer is. You know what I mean? You have to have a sense of a customer that you're going after, and I think that's challenging, especially for reporters. It's like, okay, you're building a publication about is it for business people trying to make money? Is it for the consumer? I think having a sense of who your customers are going to be is key. And then, I mean, I just believe in great stories. At the end of the day, the product is the writing, and so having information people want or writing style people believe in is super valuable, but there's so many different ways to make them work. I am very fortunate in writing about a very profitable... or not profitable. An industry with a lot of money-
Turner Novak:
The management fees. The management companies are profitable.
Eric Newcomer:
So I would never want to be seen as being in this position of I've figured it out and why can't everybody do what I do? It's like I cover the easiest thing to cover so of course I feel like I've figured it out. Ryan Broderick has this great Substack called Garbage Day. And he sort of outline, I think he saw three different reasons that people subscribe. Some of it is this parasocial relationship where people are very tied in with a writer or a Twitter personality, and then they subscribe. There's clearly more my world where it's for information. So I do think there are very different reasons newsletters work in different relationships with the reader.
Turner Novak:
Wow. He has got quite the headlines. I just pulled up his Substack. Putin should have gone on "Hot Ones."
Eric Newcomer:
He is great, honestly, he is very, yeah, he, he's good.
Turner Novak:
Elmo's big week. And then MrBeast Screwed Up Elon's Pyramid Scheme. I mean, I kind of want to click on those and read why-
Eric Newcomer:
He at BuzzFeed so he has that sense like, we got to get him excited about this.
Turner Novak:
So that's almost probably a consumer that he's... or it seems like, actually maybe there's a bit... So it's probably like if you're B2B focused, you can probably get by with the subscription, but if you're more of a consumer business, you're probably going to have more of an ad-based model. Is that fair to say?
Eric Newcomer:
It's good to have multiple revenue streams. I mean, I want to have more sponsors. It's just sponsoring, like I said earlier, it's easier to sell sponsorships to the events.
Turner Novak:
Just generally, I've had a couple, I don't know, people with media driven businesses, so where it's like a prior guest was Craig Fuller. He has this company called FreightWaves. It's reporting and media on the logistics business, but his business is kind of Bloomberg where he sells data software.
Eric Newcomer:
I know. I want to get into that over time. FreightWaves is a great... I feel like that comes up a lot in niche businesses that are doing well.
Turner Novak:
And another really interesting one, it's a company called Epic Gardening. He's the biggest gardening media company on the internet, like blog, YouTube. He's the biggest account on TikTok, Facebook. And initially it was sponsorships, that kind of stuff, revenue share on YouTube, a couple hundred K in revenue, got up to I think just around a million, I think if I'm remembering our conversation. And then he started selling his own products, and then he actually acquired a seed distributor, a wholesaling seed company that just sells the seeds to gardening centers.
Eric Newcomer:
I've been reluctant to say this, but I say it sort of in private. To some degree, it's like building a media business, you realize you have a great content marketing business without a product to sell. And that is in some ways, the events. It's like, okay, you can convene people, you have attention, you have relationships, but you're not selling them a great product. Media is like I've been saying, sort of not necessarily the best product. And so then you see businesses get attention, which actually lots of real businesses, traditional or whatever other kinds of businesses struggle to do. And then they need to find a much better way to monetize attention besides just advertising and subscription revenue. And so like you're saying, yeah, sell other things adjacent to what you're writing about.
Turner Novak:
Yeah, I'm thinking about your business, it's like, okay, the Substack, a lot of people subscribe for free, decent chunk. What is that? Maybe 4% are paid and pay you 200 a year. And then your conferences, I think you threw out ticket prices a lot higher than the paid subscription. But at the end of the day, the subscribers in the newsletter are your marketing for the events. And your CAC, you're making money, you have a profitable media business that then ties into the events. So it's like your CAC is negative, your customer acquisition costs, you're making money from your thing that you're using to sell the actual product. So when you really dig down into, initially you might start this media business, it's purely media. As you keep working yourself down the funnel, the media side is almost not even the main business. It is, but it's not at the same time.
Eric Newcomer:
It's core to your reputation, your relevance, but it's not necessarily the best way to monetize. And I'm totally focused on startup and venture capital. I feel like some people, you build a media thing and you're like, oh, I'm going to build a broader media thing, and that's how I'm going to monetize. I'm like, I'm staying in startups and venture capital, and maybe I have other business lines besides the ones I have today.
Turner Novak:
Yeah, I mean, you already have the trust of your audience. It's like, "Hey, we're building this new... We started an event. You should come to the event." And you're able to attract good speakers to the event because of the trust that you built up. And I think that's why I went. I was like, oh, seems pretty interesting. This is probably going to be a pretty good event to go to. I want to go. I'm bummed that I can't make it this year. I just have another commitment in Michigan.
Eric Newcomer:
Well, this is the banking one. I'll do another Cerebral Valley in the second half of the year.
Turner Novak:
Well, I wanted to go to the banking one. The banking one, I think it's coming out a week... it's a week after this episode.
Eric Newcomer:
Yeah, March 14th. So if people hear this and are scrambling to get tickets, I don't know. I feel like there's always an ebb and flow of, in the beginning, you want to lock in tickets just for peace of mind. And then I always underestimate how much people are like their friends are going. And so then they're scrambling to try and. It's invite only, but you can email me at... email actually Newcomer@Newcomer.co, you'll get a couple of us. You desperately need to go to a banking event.
Turner Novak:
Yeah. So what is this thing? It's the Newcomer Banking Summit, is that what it's called?
Eric Newcomer:
Yeah, it's the Newcomer Banking Summit. Sorry, I'm not a good enough pitch man here. I thank you. I mean, I do think we'll be mostly sold out by the time this airs, but the idea is it's looking back at the one-year anniversary of the Silicon Valley Bank crisis. So we're good at putting together these lean events in the moment. Not something necessarily the Wall Street Journal is going to spin up. So it's like a third looking at back at the SVB crisis, a third, the state of commercial technology banking today, and a third future finance and FinTech. We've got the SVB president speaking. We've got the CEO of Mercury speaking. We've got top tech bankers at HSBC and JP. Morgan and Stifel. Yeah, we have a Jackie Reses of Lead Bank who's super big in the fin... I didn't realize how big of a banking celebrity she was until we announced that, but she's also sort of an top Square executive, Block executive.
So yeah, I think it's, like I've sort of been hammering, it's for insiders, it's for the bankers and startup founders, people who want to do deals with these... The thing we're proudest about with Cerebral Valley is, and I say this all the time, but-
Turner Novak:
There's some deals that got done there, right?
Eric Newcomer:
At the beginning of the first cerebral valley. I threw down the gauntlet. I said, "We need a $100 million deal to happen here." And I'd underestimated what would happen because Ali Ghodsi, the CEO Databricks, met Naveen Rao, MosaicML, at our speaker dinner.
Turner Novak:
Wow. Yeah. They acquired them.
Eric Newcomer:
Yes, for $1.3 billion. And Ali has talked about this in Fortune. He came back to the second conference and talked about it. So I'm very appreciative to them on how open they've been. That sort of kicked off this conversation. But yeah, that's what we want. We want billion dollar deals to happen out of these events, and it's super exciting. And I like playing that sort of connector role while having events that feel like, oh, you were there when, this very newsy, newsy but about the actual business and focused on how people are building things. So it's super satisfying.
Turner Novak:
And then you kind of take the recordings too, and you put them online. That's even more just, yeah.
Eric Newcomer:
I write about it in the newsletter. So you're getting the sort of insider thing, but then the subscribers get sort of access to everything that happened.
Turner Novak:
Okay, cool. Yeah. I know we've probably got to wind down in a minute here, but curious, what can you share about future of Newcomer? Anything we should be looking out for?
Eric Newcomer:
Yeah, I mean, I think just the event strategy is going to be where are there an event that many venture firms would have a partner dedicated to this? I've teased maybe a gaming event, so sort of a consumer venture conference where it's the sponsors, the readers are sort of consistently interested, but then the actual attendees are like, okay, you wanted sort of a FinTech one. You wanted an AI one. You wanted a gaming one. So it's the same feel, but then we're going after different people, so we're not asking the same people to come to event after event. And it's got that same vibe where it's hopefully 50% startup founders, which people want to meet and good ones, and then a quarter investors, and then some corporates. And then it sort of depends on the industry.
So I think I'm hiring an events person, so please, definitely Newcomer@Newcomer.co if you're interested in that. I'm sort of going back and forth whether we want a junior, hungry person or somebody who's really experienced. So very open to that role if we find the right person. And then I think longer term, I'm interested in how do you get private market sort of analysts reports, there are crypto businesses and others that have had a lot of success.
Turner Novak:
Yeah. What could you do there? I'm just trying to think of what's not being done and what are you set up for? I mean, you can maybe do private interviews or something with insiders. Is that-
Eric Newcomer:
Yeah, people... I mean, aren't you with Turpentine? I think he's super... Erik.
Turner Novak:
Erik's super into that.
Eric Newcomer:
Like the Tegus sort of strategy. I'm a little more skeptical that the cutting room floor of my notes is that good. I honestly think so much of the value is like, oh my God, I have this disaster of an interview. How do I make it gripping to the reader? And if you just hand people transcripts, you're asking way too much of them. So I think people want the narrative, even if they think they want some random tidbit that's buried in the story.
But I do think Databricks, Stripe, I think trying to get into this pre-IPO, like what's going on with those companies could be super... I mean, the dream would obviously to be create some sort of pre analyst call type thing, or they're trying to show information before they go public. The challenge is just there's all this public disclosure in the public markets that you don't have in the private markets. So I love what Contrary is doing, but I do think they're limited in some ways by just like you don't have the numbers. And so I haven't solved that problem, but I think coming up with some type of analyst report on the big unicorns could be interesting.
Turner Novak:
You just kind of take the full life cycle. Somebody raises their first round, you cover that. Or those are the people subscribed, and then just throughout the next 10 years, you're almost still "monetizing" the relationship. I mean, it's a relationship. It's not just extracting value, but for your business.
Eric Newcomer:
And it's good for them too, it's symbiotic. You're like, oh, I believe in this company. That's why I'm writing about it. And then so you know them when, but I haven't totally solved the problem on what they look like.
Turner Novak:
In interviews. It seems like that's an interesting place that you've kind of hit on the niche. I don't know how well those do, but then also the leaks. When you talk about your competitive set, people doing similar things, no one's really leaking in a quality way or scooping things in a quality way. I mean, maybe you'd lean more into that. I don't know.
Eric Newcomer:
Yeah, I mean, I do think we'll hire more reporters over time and continue to focus on exclusive financial information. I mean, there are all these secondary markets things that. Weakness to me PitchBook is it's incentivized to have a very long tail and to focus on all these firms and have data, but then the data quality isn't necessarily 100%. Whereas I think our strategy is newsroom has been great coverage of Sequoia, Andreessen, Benchmark, and a belief that there's a lot of attention on those firms. And so if we did a data strategy, it would have a similar philosophy where it's like people really want to know a lot of information about top unicorns and top venture firms, and less the breadth necessarily of data.
Turner Novak:
Yeah. I mean, another interesting one, which benefits me, is leaning into the emerging category of it is you can get whatever you want about Sequoia, but you want to learn this new venture fund that they just raised their first fund, or they're really obscure. How do you find out about them?
Eric Newcomer:
I mean, part of what I try to do is say who's cool among a very nerdy set. It's like, yeah, which emerging managers have the juice and are getting the deals before they have the returns? It's sort of because there's so much... the numbers in venture lag, who's connected. And so yeah, I think what we do with emerging managers is try to find the people that have the right LPs and have that sense that they're going to get the companies to get attention.
Turner Novak:
Yeah, that's fair. Awesome. Well, this was a really cool conversation. Thanks for opening up the curtain on how Newcomer works. This was a lot of fun.
Eric Newcomer:
Yeah, thanks for having me. This was a blast.
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Thanks for having me on. Really enjoyed it.