Bootstrapped Founder #85: Platform Risk and the Three Kinds of Audiences

Dear founder,

I have just published my second book, The Embedded Entrepreneur.

It's a book about getting things right from the start: find your perfect future audience, embed yourself in their communities, discover their critical problems, and build a following around your business-building journey.

I wrote an actionable and pragmatic book, full of examples and exercises that make this important initial decision easier.

The book is available in print, as an eBook, and as a PDF.

Since you're reading this in my newsletter — and I am so incredibly fortunate to call you a subscriber — I would like to extend a little gift to you: if you purchase The Embedded Entrepreneur on Gumroad, you can use the discount code penpal to get 20% off the list price. Amazon doesn't support discounts, sorry for that!

I launched the book on Twitter earlier this week. If you like, please head over to my launch tweet and like, retweet, or quote tweet it. It makes a big difference and might just turn this one into another best-seller!

Thanks so much!

And now back to the regular programming!

If you prefer listening over reading, you can listen to this episode of The Bootstrapped Founder on my podcast.

Imagine waking up one morning only to find your Twitter account suspended. If you're trying to build an audience on Twitter, this is your worst nightmare.

And it's an entirely possible scenario. It happened to Jack Butcher just a few weeks ago: Twitter suspended all of his brand accounts, including @visualizevalue and @value, the visual and written-word outlets for Jack's business education brand. Twitter doesn't like overlapping use cases when you're running multiple accounts, so they just suspended them all.

This is scary, particularly if you consider how Jack has over 120.000 followers and @visualizevalue has over 170.000. It turns out that there is no safety in numbers. If Twitter doesn't like what you're doing, you're going to have a problem.

The story has a — mostly — happy ending. Jack got to restore most of his accounts, leaving the @value account suspended. That's 33.000 followers lost forever, because Twitter didn't like that the content between two accounts was too similar.

I think this is a good time to talk about platform risk and how it affects our audience-building efforts.

Alex Lieberman, CEO of Morning Brew, shared a very insightful concept related to this particular entrepreneurial risk: the Audience Funnel. There are three tiers to this funnel: rented audiences, owned audiences, and monetized audiences.

When you build an audience on Twitter, you're creating a rented audience. The relationships you build might feel like they are yours, but Twitter effectively owns them. If you lose access to your account or Twitter decides to remove it, your audience is gone. You won't be able to recover it without significant work, essentially rebuilding your audience. Since Twitter is so huge, you can reach a lot of people and build relationships quickly. But they will always be one administrative action away from evaporating. No matter if you build an audience on LinkedIn, Facebook, Instagram, or Twitter, your audience will always be borrowed.

Contrast this with owned audiences. They are opt-in audiences, where people allow you to contact them directly without the intermediary of a large platform. Think of an email list or a Telegram group: any audience where you are not reliant on a platform to communicate. You can transfer your email list to another email service provider, and you can take the phone numbers of your users to form another group using another tool. This kind of audience is much more committed to you than a rented one: the opt-in process made this a conscious choice, and handing over your personal email is a much bigger deal than following someone on Twitter.

Owned audiences are built on free content, such as free newsletters or podcasts. Purchases are encouraged through advertisements, but members aren’t required to make purchases to be part of the audience. That changes once you build a monetized audience. This is the audience with the highest intent and commitments, as they are paying to be part of that group. A membership community or a paid newsletter audience fits this profile. You won't be able to start out with such an audience; it is the potential consequence of having built rented and owned audiences before.

Personally, I have both a rented and an owned audience. On Twitter, I have built a large following of people who like what I do. Some of them have signed up for my free newsletter or have given me their email address as part of a book purchase. I don't want to force anyone to convert from borrowed to owned. Still, I talk about my newsletter and invite people to join it under every blog post that I write. This content flywheel keeps attracting people to my newsletter, where I keep them updated about my books and other income-creating means.

I believe that all audience-building efforts should start at the rented audience level. When you start, you need to have reach and discoverability. At a later point, you can try to extract those audience members into owned and monetized audiences, but a substantial rented audience is in itself a valuable asset: word-of-mouth marketing and community feedback will be essential to your business success.

In the end, it matters less what kind of audience you have and more how much impact you have on their lives. The value you create is why people follow you. The more someone benefits from your work, the more they're likely to reciprocate, which in turn allows you to make a living.

Just consider that any platform you build an audience on is a liability. Understand that the best way to connect with people is to have a direct channel into their inbox. Build a flywheel that connects your rented, owned, and monetized audience into a resilient system. A system like that will allow you to build a meaningful and sustainable business, no matter what happens.

Thank you for reading this week's edition of The Bootstrapped Founder.

If you like what I wrote about, please forward the newsletter to anyone you think would enjoy it too.

You can find my book Zero to Sold at zerotosold.com and The Embedded Entrepreneur at embeddedentrepreneur.com.

If you want to help me share my thoughts and ideas with the world, please share this episode of the newsletter on Twitter or wherever you like, or reach out on Twitter at @arvidkahl.

See you next week!

Warm Regards from Berlin,

Arvid