In 2013, Eric Newcomer had to conduct one of the most difficult phone calls of his adult life. He had recently received a job offer from the Philadelphia Inquirer, and even though the role would have been a major step up in his burgeoning journalism career, he had to tell the newspaper he wouldn’t be taking the position.

Not long before that phone call, a Wall Street Journal tech reporter named Jessica Lessin had quit her job with the ambition of launching a bootstrapped publication focused on the tech industry. Both she and Newcomer had attended Harvard University — though she graduated several years before him — and they were put in touch via their alumni connections. Newcomer didn’t have any experience in reporting on the tech world, but Lessin was on the lookout for a “hungry young reporter,” as he put it, and she invited him to join as the first employee of this new venture.

By that point, he had already received the Philadelphia Inquirer offer and was understandably torn. Lessin’s venture was a big gamble and could easily fail, but at the same time he wasn’t blind to the turmoil inflicted on local newspapers, which by that point were already experiencing extensive contraction and retrenchment.

Ultimately, he decided to take the job with Lessin. “It just seemed like the most exciting option,” he told me. Both his grandfathers had owned small businesses, and he figures that a strain of entrepreneurship runs in his family. Not only would he be working for a startup, but he’d be covering an industry that was regularly spinning up new companies with multi-billion-dollar valuations. The opportunity just seemed much bigger.

So in mid-2013 Newcomer moved to California and started writing for the outlet that Lessin eventually named The Information. While he’ll never know what would have happened if he’d taken the Inquirer job, it’s clear he made the right choice. After nearly eight years of tech reporting for traditional publications, he struck off on his own in 2020 to launch Newcomer, an eponymous newsletter that covers the startup and venture capital world.

Today, his company is on track to generate $2 million in annual revenue, with the largest chunk of that money coming from a bi-annual conference called the Cerebral Valley AI Summit. Not only has he brought on someone to lead his business operations, but he’s also slowly expanding his reporting and production staff so he can cover the startup scene even more extensively.

In a recent interview, Newcomer walked me through his decision to leave traditional media, how he built his subscription business, and why live events presented an even bigger revenue opportunity for him.

Let’s jump into my findings.

Learning the startups beat

Newcomer caught the journalism bug at an early age. In elementary school, he rotated in as an anchor for the morning newscast, and he later became the editor of his high school newspaper. At Harvard, he wrote for the Crimson and interned at places like the Macon Telegraph, the Sun Sentinel, and the Tampa Bay Times. After graduating in 2012, he landed a summer fellowship at The New York Times, where he covered local news.

He always assumed he’d end up reporting on politics, hence why he landed his first full-time job at the Washington Examiner, which at the time was a free newspaper handed out to commuters as they descended into the Washington, DC metro. That business became pretty much obsolete, however, once WMATA extended cell phone data signals underground. The Examiner ended up laying off much of its staff — including Newcomer — and pivoted to operating as the right-leaning, digital-only outlet it still is today. That layoff kicked off the series of events that led to Newcomer getting his job at The Information.

This role was radically different from anything he’d done before. Not only did he have to learn a new beat, but The Information was also founded on a then-novel idea that an audience would pay for a high-priced news product that served them information they couldn’t get anywhere else. At the time, most publications were completely free and ad-supported, but from the very beginning The Information locked all of its content behind a hard paywall that cost $400 to bypass.

In a 2021 interview, Lessin told me that this business model forced her and her staff to focus solely on delivering high-impact, exclusive journalism. “Big stories will pull in a lot of subscribers, and in addition to pulling them in directly, we'd see very elevated subscriber growth in the weeks following big stories as well,” she said. “Sometimes it's the actual piece, but sometimes that piece has this sort of halo effect, if you will, and people are finding us through different channels after that.” This focus on quality over quantity meant that, at least in the beginning, The Information was only publishing a handful of articles a day while free tech sites like TechCrunch and VentureBeat were pumping out dozens.

Newcomer struggled to meet these standards in his early months. “It was a hard first job as a reporter — like ‘go write these great novel feature stories.’ So it was definitely a trial by fire.” The staff was tiny then, so he had to cover a very broad range of topics within tech. But he learned a lot, and he credits Lessin with opening his eyes to the idea that journalism could be extremely lucrative if it remained hyper focused on serving an affluent audience. “Jessica was so savvy about identifying the subscription business model early on when there were so many haters. Everybody else in media is so cynical and pessimistic.”

The Information’s lean staffing required Newcomer to be extremely versatile in his coverage, but in 2014 he saw a job opening at Bloomberg for a startup beat reporter and applied for it. By narrowing his focus, he was able to develop deep relationships within Silicon Valley, and this allowed him to report on the kind of explosive stories that turns one into a name brand journalist. In 2018, for instance, he and Brad Stone told the definitive account of how Travis Kalanick got pushed out of Uber, and he regularly broke news of major deals and acquisitions within the startup space.

Newcomer spent nearly six years at Bloomberg and still considers it to be one of the best media businesses ever created. After all, the news organization basically serves as a moat for the Bloomberg Terminal, a $23,000 annual subscription that’s essential to any business that intersects with the financial world. “It's just amazing,” he said. “It's a tax on the entire financial system predicated on media and information.”

But near the end of his tenure he began to bristle at the company’s stodgy requirements on news reporting. At the time, he was a great admirer of Ben Smith’s media column at The New York Times, which blended reported scoops with “voicey” analysis and opinion. “And I thought Bloomberg had such a boring writing style where it was super worried about inserting opinion.” Newcomer wrote a tech newsletter for the outlet and was regularly receiving notes back from editors telling him that he needed to tone down his opinion and lean more towards “analysis,” which Newcomer interpreted as “just safe opinions that you can get away with in the Bloomberg world.” He hated that he couldn’t just insert his personality into his own writing.

Also, after years of writing about startups, Newcomer had caught the entrepreneurial bug. By 2020, we were well into the Substack era, and he’d grown fascinated with the idea that you could forge a direct relationship with an audience and use inexpensive tools to monetize that relationship. While he didn’t have a huge audience on social media — he estimates he had around 19,000 Twitter followers while still at Bloomberg — he was confident his sources could feed him the kind of big stories that attract a readership. So in late 2020 he quit his job and launched his newsletter on Substack.

Growing a paid subscriber base

Without Bloomberg’s massive marketing reach, Newcomer knew that his only hope of scaling a monetizable audience was through breaking big stories. Major CEOs like Dara Khosrowshahi at Uber and Tony Xu at DoorDash granted him early interviews, and in January 2021 he published a deeply reported, insidery look at the VC firm Andreessen Horowitz that got widely shared around Silicon Valley and put his newsletter on the map.

Of course, those types of stories take a long time to report out, and so Newcomer had to develop a cadence that allowed him to pump out shorter pieces of analysis while he was working on the bigger features. He developed a penchant for pulling data together into charts that spotlighted an overlooked trend and were easy to share on social media. He described his approach to publishing content as “chaotic.” “I think part of what people like is that they never know what they're going to get,” he said. “Sometimes I drop these stories that I've been reporting for a while … and sometimes I’ll just sprinkle small scoops into the middle of a random story. And I feel like the variety is part of the fun.”

Newcomer started out charging $150 a year and eventually raised the price to $200. I asked him how he converts free readers into paid subscribers, but he didn’t seem to have a grand theory for what should go in front of or behind a paywall. Often his best reporting remains completely free to read, and then the paywall doesn’t kick in until you get much deeper into the newsletter.

For instance, a Newcomer article published on November 15th reports that the vast majority of VC firms are focusing on early-stage investing and steering clear of late-stage seed rounds. The entire piece is 600 words, includes two charts, and is completely free to read. It’s not until the end of the article that one encounters a paywall, and it’s not really explained what’s behind that paywall. I clicked through several recent Newcomer articles and encountered a similar dynamic.

In some cases, the paywall kicks in right away. For instance, a piece titled “Scoop: Space VCs Raising a New Fund as Interest in Space Deals Ticks Up” only really provides the headline and a few intro sentences before you have to pay up. “I find that the best subscriber [conversion] moments are when I have an awesome story,” Newcomer explained. His business philosophy is simple: if he keeps publishing exclusive information that no other outlet has, readers who benefit from that information will eventually take out their credit cards and subscribe.

And that strategy has paid off. By February 2021, just a few months after he launched the newsletter, he reached 1,000 paid subscribers. When I spoke to Newcomer in October, he had over 2,500 subscribers, which puts him at an annual run rate of between $400,000 and $500,000.

But here’s the real kicker: subscriptions aren’t even his biggest revenue source.

An accidental events business

Once Newcomer managed to replace his Bloomberg salary, he began to think through how he could expand his business from a solo operation to a full-fledged media company. He put a call out for a chief-of-staff position and hired a guy named Riley Konsella, who at the time was just a few years out of college.

Newcomer initially hired Konsella to help him grow the subscription side of the business, but he quickly realized that the bigger growth opportunity was in sponsorships. By that point, the newsletter was read by all the major players in the startups and investing world, and there were plenty of enterprise software companies that would pay premium rates to reach this demographic.

But while Newcomer was open to accepting sponsorships, he didn’t want to start plastering the newsletter with low-quality ads. He and Konsella were extremely selective in choosing brand partners, and they limited each newsletter or podcast episode to one sponsor. Often, they would focus on selling an ongoing, multi-month package to a single sponsor. I asked Newcomer how much he typically charges for an ad. “I've sold a package of six podcast ads for like $100,000.”

But Newcomer’s biggest sponsorship opportunity came pretty much by accident. In 2023, he had plans to fly to San Francisco for his own bachelor party and wanted an excuse to write it off as a business expense. “I thought to myself, what's some business we can do while I'm in San Francisco? And my friends who run this company, Volley — their employees work from home on Thursdays. Their offices are in Hayes Valley, which has been nicknamed ‘Cerebral Valley’ because it’s sort of an AI hub.” Newcomer asked his friends if he could host the event at their offices and they agreed. “And basically I texted people, and within like 30 or 40 minutes, I had a top partner at Benchmark, a partner at Kleiner Perkins, and the CEO of Stability AI on board to speak.”

Newcomer announced the first Cerebral Valley AI Summit in his newsletter and provided a link to where readers could buy tickets. Samsung and Oracle came on as sponsors, and it was pretty much immediately profitable. “It was a lot of fun and had this sort of chaotic energy,” he said. The event took all of six weeks to plan between the initial idea and the execution.

The one-day summit quickly turned into a biannual event that Newcomer hosts in both New York and San Francisco. “We're really trying to attract people who are hard at work. So we're not like making you fly out to some event where we're going to trap you.” The format is pretty basic and involves a journalist — sometimes Newcomer, but he also invites other tech reporters to moderate — interviewing either an AI executive or an entire panel. In 2023, for instance, the independent tech journalist Casey Newton interviewed Open Philanthropy’s director of AI strategy.

While most of these sessions end up on YouTube, you have to apply to attend in person. “The whole value of the conference really is based on the quality of the people who are there,” Newcomer explained. “So we're doing a lot of gatekeeping. The event is really first and foremost for AI startup founders and then for investors … We really want it to be sort of a deal-making, networking place, and so audience quality is just as important as the speaker quality.”

Not all attendees are treated the same either. Newcomer charges $1,600 to VCs and $150 to founders. “We really want founders there and we give them a much better deal,” he said. Not only do the VCs have more money to burn, but the founders are what attract the big ticket sponsors who want to reach them. “We're competing against events that investment firms put on where everything's free. I’ve been to investor conferences where they pay for your hotels, you know? So it's nice to be able to make money off an event when you're competing against free events.”

Now that Newcomer has more than a six-week window to plan the summit, he and Konsella have been really able to ramp up the sponsorship interest, to the point where they’re now selling large packages that incorporate the event, newsletter, and podcast. “Our top sponsors are getting placement in the backdrop of the event, mentioned in all the videos, they’re very visible at the event. HP and Oracle have been very consistent top sponsors for us. We co-host the VIP dinners, usually with a venture firm. In the past, that's been Greylock. For this most recent one, it's going to be Kleiner Perkins.”

Now that the Cerebral Valley AI Summit has become a major part of his business, Newcomer is on track to generate $2 million this year, with at least 75% of that revenue coming from events. This success is allowing him to reinvest in growing his company; he already employs a junior reporter to write articles and host on-stage interviews, and he recently hired a producer to improve the production quality of his podcast. “I think I could cover startups and venture capital pretty comprehensively with a team of eight great reporters,” he said. He thinks he can double his revenue next year and hopes to eventually put on four annual anchor events, including a recently launched Fintech summit.

Given that Newcomer cut his teeth at a huge institution like Bloomberg, I asked him whether more independent outlets like his could flourish in the current media ecosystem. “My big media take at the moment is that creators and journalists are on an obvious collision course,” he said. Right now, old school journalists turn their noses up at the Creator Economy and dismiss its content as entertainment or at least derivative of what’s produced by the mainstream media. “I think there will always be outlets like The New York Times that have built awesome reputations and they exist as institutions. But I think a lot of media will be in this sort of messy middle of creators and independent journalists. And right now, the creators are much more focused on building their businesses and winning, whereas a lot of journalists are reluctant to get in the sort of muck of understanding how the business of journalism works and what they would need to do to do it profitably.” Those who want to survive in this new internet economy, he believes, “are going to have to figure out how to build a sustainable business.”

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