The Leverage August Investor Update
Something has gone sideways at this publication
Author’s Note: Founder’s Tier members of The Leverage get access to my monthly investor updates. In each letter, I write about this company's performance, what types of startups investors are telling me they want to fund, and what I’m seeing around the corner in tech markets. I’m dropping a free preview of it below. Building this business is the hardest professional thing I’ve ever done. I don’t say this in a performative, woe-is-me way. More that you should know that I’m putting this level of effort in because I so deeply believe in its mission. Enjoy.
To my readers,
The mission of The Leverage is to bring truth, beauty, and rigor to tech market coverage. This is a ludicrously ambitious mandate for one dude to have. The practical reality of this lofty ideal is that I have spent the last four months sitting in a corner of my bedroom, reading every book within reasonable reach of my subject matter, talking to countless founders, investors, and tech workers, and typing and re-typing like a mad man. Days will start around 5am and don’t stop until 10 or so at night. I take Saturdays off to spend with my wife and child, but the rest of the time, I am working as much as I possibly can.
Why am I making these sacrifices? Because if I don't, then no one else will. The world’s default is decay and rot. It takes superhuman effort to wrench something special out of the muck of life. I desperately desire the world to be richer and warmer. Thus it is my role to, in a very small, one-email-at-a-time sorta way, make the world more beautiful and truthful.
The first two months were positive. Deals flowed, news readers came by the thousands, and I was in the writing zone. Now? Things are much harder. Growth has slowed down and the extra juice that the launch provided has run out. This is the point where the real hard work of building a company begins.
Running a startup is a process. You pay for experiments with blood and bone and capital to try to gain secrets about how the world works. For four months, I have paid that price, and now I want to share what I’ve learned, what’s gone wrong, and what I’m going to do to fix it.
The good.
I continue to get sponsors who pay for ads in my newsletters, including Mercury, Notion, Lex, with upcoming campaigns from Composer Trade and Framer. These are all wonderful companies whose products I delight in and I’m grateful for them betting on me. If you are interested in joining them, send me an email at team@gettheleverage.com
We hit #75 on the Substack leaderboard for technology newsletters! This is an incredibly competitive space with lots of people who have a head start ahead of me. So I’m very proud of this achievement.
I (mostly) achieved my goal of publishing two times a week. Initially I planned on only releasing 1 deep dive a week, so a 2x increase in product volume is a hard-earned achievement.
My open rate remains above 50%.
I hired a wonderful video editor for the podcast and have recorded the first three episodes. It’s set to launch in September. (More details on it in a sec). The Leverage team is powerful, warm, and thoughtful. Thank you all!
Most importantly, the podcast will be personally meaningful. I think of startups and business as culturally acceptable vehicles by which to change the world. So too with this podcast. I’ll spend lots of time talking about technology, business strategy, and tradeoffs that companies have to make. Grounding all those will be deeper, more human truths—the doubt, the hopes, and the ethical dilemmas that come from building the future. I’ve learned so much from recording these episodes and have already changed because of it.
Lessons paid in blood.
Ethos beats ego. One of my first episodes will be with Bryce Roberts, the founder of the VC fund Indie. After six years of effort, his first iteration of Indie withered and died in 2021 . He told me that he still believed in his thesis, that a new generation of startups wouldn’t be interested in continually raising more capital from VCs. We talked about his failure, and came to the conclusion that ego overtook ethos. Perhaps the first iteration of Indie didn’t work because Bryce got too focused on the details, not enough on the purpose of trying to build it. He has corrected his mistake, chosen ethos, and Indie is alive again with a new fund that Bryce is currently deploying.
The sentiment of ethos over ego really pierced me. I think the largest mistake I’ve made over the last two months has been overcorrecting on being right, often at the expense of beauty and truth. The difference between those is slight, but it matters. You have to focus on the why before the how—always. I thought that if I simply was right more often than my competitors, my newsletter would grow. This was completely wrong. I have been more right lately! And it hasn’t made a lick of difference! When building a business, your desire for growth can mess with your soul. That’s your ego speaking. Don’t let it beat your ethos.Bills wait for no growth curve. To build the product I wanted, I needed teammates and time. This company has taken no outside capital and all of the cash comes from me carefully saving for three years. To keep that up, I took on some ghost writing projects that paid well. I wanted to increase my ambition and do more with my allotted time. It did slow me down! But it also allowed me to launch the pod which felt important. Consulting work will continue to pay the bills until I can get this to the point where The Leverage is fully self-sustaining. If you need help writing something that will make your brand a trusted voice, email me. I have a window open for one more client.
My business is my life, my life is my business. I lost nearly all of July to illness. I had the flu, food poisoning, and sleep deprivation. Add in my kid getting constantly sick and I was running on fumes. Nothing at the company works without me, so I’ve learned to prioritize healthier habits to make sure I’m available for the long haul. Creator companies only work if the figurehead has a deep reserve of creative energy to draw from. I didn’t protect that enough these last two months.
The bad (and things I’m still figuring out)
Growth has become anemic, and some of it is under my control. Something about social media, in particular X, is a net-negative source of energy in my life. When I am healthy/not overwhelmed—like I was during the first two months of the launch—I can still force myself to post frequently enough to drive top-of-funnel traffic. These last two months dried up and so did growth. Hopefully, the podcast adds shortform video that I can post, but this remains an area of serious concern.
Paid conversion remains baffling low. A newsletter at my price point and open rate should be in the 2-4% conversion range based on my conversations with other media operators. Mine is still below 1%. This is something I am learning just takes time. My price point is high that people are only going to convert if they are really convinced it is worth it. The number of people who believe it is worth it is steadily going up! But still not fast enough.
The changes I’m going to make
The podcast is the big bet for the next few months. It neatly refuels my creative cup, gives me more material to post on social media, and offers additional space to advertisers. Ultimately, I view it as a way of drawing you into the intellectual world of The Leverage. There is lots that goes on behind the scenes to make my work spooky accurate—in these conversations you’ll watch me dig out truths in real time.
I basically have stopped watching TV. It is such a time-consuming thing that I simply don’t have time for it anymore. Any pure enjoyment media time is devoted to books or film. Everything else is off on creative-juice-per-hour ratios.
And honestly, that’s it. My sense is that I am now in the grind stage of this business. I need to execute on my vision (a tall order) but I have faith that it’ll work. Beauty and truth matter in our world, and I’m single-handedly committed to making sure they exist in the world of business. Capitalism can be beautiful!
In Substack Notes, I asked readers what questions they had and thought this was an excellent one. Jessi Hempel asked, “What are you maximizing for: revenue or attention or impact? What tradeoffs will you make as you center one over the other?” The answer is impact. Attention and revenue are downstream of impacting the culture (at least that’s what I’m betting).
OK, now back to business as usual. For the members on my founders tier I’ll share some screenshots from Stripe of the Leverage’s financial performance, and talk about what trends are likely to matter in the tech market. You can upgrade to join them here.