What's Next for The Diff

I've got good news and bad news...

Effective 11:59pm Eastern time on June 5th, I’ll be raising the price of The Diff from $15 to $20 per month, and from $150 to $220 per year. Diff subscribers love case studies (the click-through rate is always highest for emails about a specific company), so I thought I’d walk through how I think about pricing.

I don’t like magic tricks, but I love Penn & Teller. Their angle: it’s not magic. They’ll walk you through how some popular tricks work. Part of the fun is being fooled, of course, but a big part is being in on the joke.

Teller—who does know how to talk, incidentally—says “Sometimes magic is just someone spending more time on something than anyone else might reasonably expect.”

That part of their act is still an act. The “explanation” they give is a way to do the trick, but it’s its own level of misdirection.

I really enjoy this sort of thing. It’s a fun kind of sales: first, they let you in on a secret. Then, they remind you that there are more secrets they’re not going to share.

In that vein, here are a couple secrets of my own:

  1. The Diff is a passion project. 70% of the work is what I’d already do for free, and the other 30% is pretty fun.

  2. It’s underpriced.

  3. It’s a business. It’s also a particular kind of business I know and write a lot about: a monopoly with fairly stable fixed costs and high incremental margins. In a way, it would be hypocritical not to push price and see what happens.

The Reviews are In…

The other day, I got a funny piece of reader feedback on a story I’d posted a while ago: “it paid for my subscription.” This was surprising to me, because the story in question wasn’t a stock tip (I don’t do tips; I just disclose positions when it’s relevant—and I didn’t have one in that particular asset). The story wasn’t even about a specific asset. It just turned out that, for this specific reader, the data point I highlighted was the missing piece of a trade.

That’s not the only example: one startup rebuilt their user interface around a rant I posted. (For 90% of software, the user interface is based on putting rectangles in the screen and filling them with text. Anything that adds cool visual effects and delays my rectangles by a perceptible amount is an abomination.) I didn’t mean for that piece to be advice; I just thought it was funny.

What I’ve started to realize is that The Diff is a batteries-not-included newsletter. The target audience is curious, contrarian people who want to understand how the world is changing and act accordingly.

Here’s some of the feedback I’ve gotten directly from paying subscribers:

  • “insightful, original and multidisciplinary”

  • “Another great piece, so many brilliant insights.”

  • “I loved this write-up.”

  • “I really enjoyed reading this one. Thanks a lot!”

  • “You were spot on…”

  • “I lol’d”

And here’s what else people are saying:

And from Alex Danco:

But the best kind of feedback is the kind I can’t share. Like “Who told you that’s what we decided at the last board meeting?” Or “Your writeup of [my company] was great. We’re having new employees read it on their first day here.”

In two weeks, I’m putting your money where my mouth is: the price of a full subscription to The Diff is rising to $20/month or $220/year. Subscribe today and you can lock in the current price of $15/month (25% below the next sticker price) or $150/year (32% off).

Why Raise Prices?

You either charge more because you have to or because you can. I’m lucky to be in a position where I can. When I decided to launch a paid newsletter, I put together a little operating model: free subscribers were X, monthly growth was Y, and in the long term Z% of them would pay. As it turns out, the only part of this model I got right was the starting subscriber number. Everything else has gone better than expected.

But that means readers have higher expectations.

As it turns out, if you have paying readers, one of the things they pay for is a follow-up. I wrote a piece a few weeks ago about some economic issues in Italy, so now I keep tabs on Italian bond issues and budgetary negotiations. I wrote up a bull case on cloud computing, and now part of my day job is paying attention to the latest in the GPU and SSD space. Writing one post on the “Adpocalypse” thesis led to reading fifteen 10-Ks from ad companies, and a blow-by-blow account of how the thesis played out (it pretty much didn’t).

I originally planned to make the paid newsletter go out Monday, Wednesday, and Friday. But I decided that, early on, I should just publish daily Monday through Friday, to give my first subscribers a little extra.

I think I skipped one Thursday, one time (I was in the middle of moving to a new apartment).

As a result, I’m in the odd position where I don’t have a “real job,” just a bunch of projects, but I’m putting in longer hours than I did when I worked at a hedge fund. (My evening schedule is set by the need to finish the newsletter, which usually happens some time between midnight at 2am. My morning schedule is set by my 11-month-old, who likes to wake up at… 5:30.)

I’d like to keep the newsletter sustainable, keep it growing, and have a decent budget for research and editing. More subscription revenue means more time I can spend keeping tabs on news and diving deep into new trends.

My goal is twofold:

  1. Make sure The Diff is a better deal at $220/year in June than it was at $150/year in March.

  2. Write the one newsletter you definitely make sure to read.

That’s ambitious, but it’s doable. I’ve been thrilled with the feedback I’ve gotten—both the sort that shows up in emails and tweets and the kind that winds up in my Stripe dashboard.

The weekly free emails will remain weekly, and will remain free—and I hope you sign up for the full version of The Diff. For the next two weeks, the price is $15/month (25% off the new pricing) or $150/year (32% off).