Welcome! I'm Simon Owens and this is my media industry newsletter. If you've received it, then you either subscribed or someone forwarded it to you. If you fit into the latter camp and want to subscribe, then you can click on this handy little button:

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When should a creator throw in the towel?

Last week, a newsletter writer named Anna Codrea-Rado likely shocked many of her subscribers when she sent out an email titled “Pivot to goodbye.” Here’s how it began:

After five brilliant years of sending Friday emails, this newsletter has reached the end of its road. This is my last post; I won’t be sending any more, neither paid nor free.

There are lots of reasons for this difficult decision, but they can be summed up quite simply: it's just not working. Most pressingly, the maths doesn’t add up anymore. The number of paying subscribers isn’t high enough to make this one-woman newsletter business sustainable anymore. I also realised recently that I’m spending more of my creative energy coming up with ways to fix that problem than I am on the actual writing part. It’s time to put my energy into something new.

It’s unclear how much revenue Codrea-Rado was generating from the newsletter, but in the goodbye letter she explains that she founded it in 2017 and grew it to 16,000 free subscribers. “At one point, it was my most reliable source of (good!) income,” she wrote.

I learned about the Codrea-Rado piece from Elle Griffin, a Substack writer who posted about it to a private forum I belong to. It seemed to trigger Griffin’s own anxieties about whether she was building a sustainable business. “I would love for my newsletter to become my full-time job or even a part-time job!” she wrote. “But at my current rate, it will take me about five years to get there, and I don’t know if I could sustainably keep up this pace for five years!” She described Corea-Rado’s decision to quit as “an all too plausible future for my newsletter.”

I think this is an anxiety that plagues a lot of people who are trying to build their careers as creators. Read any trend piece about the Creator Economy and you’ll invariably come across a paragraph noting that most of the revenue flows toward just 2% of creators. Many of these articles also tout a supposed lack of a “creator middle class.” It’s easy to come away from these pieces convinced that building a sustainable media business is a pipe dream that’s only achieved by an infinitesimally small number of lucky creators who happened to be at the right place at the right time.

I don’t really believe that to be the case, and I’ve done basic math in the past to show that there are likely hundreds of thousands of creators making a full-time living from their work. But at the same time, I recognize not everyone who strives to build a career in this industry will succeed at that goal. Creator economics can be pretty grueling, and talent also plays an important factor. So how does a creator assess whether they’re on a trajectory for success, especially when early growth seems so slow? Or put another way, how do you know when it’s time to throw in the towel and move on to something else?

Part of the challenge has to do with framing. Too many people compare being a creator to working a traditional job, and so that results in unrealistic expectations. Most traditional jobs start paying you a full-time salary right away, and that kind of rapid success is rarely possible in the creator world. That’s why the vast majority of YouTube channels, podcasts, and newsletters peter out after just a few months; their proprietors gave up after they didn’t experience immediate success.  

Instead, a creator is basically a one-person startup or small business. I like to give the analogy of starting a restaurant. The aspiring restaurateur has lots of startup costs. They have to lease the building, pay for renovations, hire a staff, and buy supplies. This is why it can take years to achieve profitability, even if the restaurant starts generating steady business from day one.

Creator businesses also have plenty of startup costs, but they’re structured differently. The upfront costs are actually pretty low; most creator platforms are free to use, and the physical equipment you need to own is pretty minimal. Most writers require little more than a laptop and a phone, and even video creators can buy a decent camera for relatively little money. 

Instead, most of the creator startup costs are associated with time and living expenses. You need time to build up an audience and monetize it. And unless you have access to a trust fund or some other large windfall, then you need to cover your basic living expenses. A few years ago, I calculated my average monthly living expenses at $3,000. This accounted for rent, food, utilities, and health insurance (it’s probably north of that now). 

Calculating startup costs for a creator business requires some basic math: your monthly living expenses multiplied by the amount of time you’re giving yourself to build a sustainable career. So if I gave myself four years to decide whether my business is a success, then that requires $144,000 in startup costs.

Of course, I’m oversimplifying a bit and not accounting for all the possible variables. Most creators won’t jump into the field full-time right away, and they subsidize their work with side gigs. Others work in industries adjacent to the Creator Economy, thereby allowing them to build audiences on someone else’s dime. Before Matt Yglesias joined Substack, he spent 10+ years writing for outlets like Think Progress, Slate, and Vox. He built his audience on those platforms and then moved it to Substack.

But still, I think what I outlined above is a good framework for setting goals and measuring success for a media business. The longer the financial runway you have, the greater chance you have for success. And I also believe that you shouldn’t even begin to assess your success or failure until you near the end of that runway. Business growth is not always linear, and you won’t always be able to extrapolate where you’ll be in Year Three when you’re still in Year One. 

For example, in February 2022 I was feeling pretty pessimistic about the financial trajectory of this newsletter, but here we are just a few months later and I’ve roughly doubled my monthly revenue. I simply needed a little extra time to experiment and see what worked. I couldn’t have predicted that outcome in advance. Sometimes, we’re on the verge of success and don’t even realize it; it’s only in hindsight that we realize we were making progress all along.

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Quick hits

The New Yorker revisits Kevin Kelly's "1,000 true fans" theory and examines whether the "creator middle class" that Kelly envisioned is materializing. [New Yorker]

A mini-rant from me about how publishers are ignoring basic design errors that will alienate their readers. [Twitter]

More evidence that brands are getting fed up with opaque adtech: "An influencer agency called The Motherhood saw influencer rates rise by 44% from 2020 to 2021 and 45% from 2021 to 2022 thus far, on average, according to an internal analysis." [Marketing Brew]

The incoming executive editor says The New York Times has put together a team to think more holistically about talent management, especially in regard to allowing journalists to take on outside projects like newsletters, books, and podcasts. [Vanity Fair]

Apple confirms what many already suspected: "while ratings, reviews, and shares help indicate a podcast’s newness, popularity, and quality, they are not factored into Search results." [Apple]

ICYMI: How a VC investor grew her newsletter to over 100,000 subscribers

Codie Sanchez finds interesting ways to make money and then reverse engineers them for her audience.

I just opened up some more advertising inventory

I’m extremely fortunate that I’ve been able to sell out sponsorships all the way into August. It’s always advantageous for a potential advertiser to book their ads far in advance, since they get locked into the current-day price but get to benefit from my larger audience in the future. If you’re at all interested, check out my sponsorships page over here, and then also check out my updated Google Doc of sponsorship availability over here.