Two Years on Substack
Another Year Passes for Investment Talk
I hope you all had a great holiday season with your families, and that the new year is just as pleasant. As I write this memo in the early hours of the morning with a cup of coffee, I am back in my apartment after spending the holiday season with my family. I just found out that I am going to be an uncle for the first time, so there has been a lot to celebrate this year.
It has now been ~20 months since I started Investment Talk (the story of which can be found in previous posts) and ~9 months since I left my old career behind to pursue writing full time. This year, Investment Talk’s total readership more than doubled, churn declined, and an active community has formed outside of Substack in the Investment Talk Discord.
I wanted to spend this morning outlining some of the wins of 2021, sharing a little on the progress of Investment Talk, and some other things I have been mulling over. Today’s memo will focus on four key areas: (1) Celebrating Small Wins; (2) Substack Pro; (3) Feedback and Metrics and; (4) Maintaining the Voice. Concluding with some choice words for the year ahead.
I would like to give thanks to Alex Morris for taking the time to read over the initial draft of this memo and share his feedback. The honesty in the way he challenged some of my points allowed me to refine my 2022 goals, particularly with respect to verbosity; forcing me to think bigger (well, in this case, think smaller).
Celebrating Small Wins
Starting with the overwhelming positives, I wanted to highlight some of the small wins for 2021. From incubating an active Discord server to growing the library of content and readers, 2021 has been a great year for the newsletter as far as top-of-funnel is concerned.
Readership: Over 3,590 new readers have joined Investment Talk this year (+108%) and the total number now stands at 6,900 readers. I would like to say a huge thank you to everyone who has shared the newsletter, provided feedback and interacted with me in some way over the last year. I think that by the end of 2022, we can possibly approach 10,000 total readers.
Below is a summary of all traffic to the Substack since inception, with some notable outlier periods in April and August.
Discord/Community: After opening the Discord server on the back of a reader’s suggestion earlier this year there are now 150+ members in the chat, with a strong number becoming daily frequenters. Uptake was slow at first, and there is still a minority of subscribers who utilise the channel but this has become my favourite aspect of Investment Talk, and I implore all subscribers to try it out. I have reinvested a minor amount back into the channel so far (bots, premium features) but in 2022, I want to explore new ways to make the Discord even better. A big thank you to everyone in that community (you know who you are).
Connections: Writing Investment Talk and being present on Twitter has afforded me some incredible opportunities, and has allowed me to meet hundreds of interesting investors, and make more meaningful connections with a handful of those people. Some of whom have been instrumental in improving my writing, my investment process, and my journey with Investment Talk (writing can be an isolated sport at times). For fear of missing someone out, these people will know who they are. A huge thank you to each of you.
Life: I can’t overstate how grateful I am for the opportunities that have come my way this year. This year I left my full-time job behind to write Investment Talk full-time. A few months later, I also began to work with Commonstock, a social investing start-up. My role there is largely based in Community where I get to work with creators alongside an excellent founder-led team. I think it’s important to celebrate things of this nature, and I hope it doesn’t sound conceited. Although I now work more hours than before, I enjoy that work 10x more and feel more connected to my work. This is what matters most to me.
A personal highlight for me was being featured on the Saxo Market Call in November after Peter Garnry kindly offered me the chance to discuss Investment Talk as well as my investment process and some companies. Having listened to the Saxo Market Call for a number of years, it was humbling.
There is no doubt I have been lucky in how this all panned out. Without the Substack Pro deal that I was granted in early 2021, I would not have been able to leave my old job behind (Discussed in “One Year of Writing on Substack”). The deal mitigated the reliance I had on a full-time job and allowed me to take a crack at writing full-time for one year. I say this, because (a) I always want to be transparent to readers and (b) I know there are aspiring writers who are reading this and wish to follow a similar path.
But let me share two quotes about luck with you:
“Luck is what happens when preparation meets opportunity.”
“I am a great believer in luck, and I find the harder I work, the more I have of it."
I was able to benefit from luck because I was in a position to grasp the opportunity. When starting Investment Talk, I had no idea where it would lead or when/if it would leave to something bigger. I just had an underlying hope that it someday would materialise into something. Behind the scenes, this involved workdays that sometimes stretched from 7 AM until 9 PM as I juggled work and writing. Today, despite leaving my old career behind, the same remains to be true. It’s not as easy as some of the outliers might make it appear to be. It’s hard work and sometimes that comes with frustration too. As always, my door is open to people trying to pursue a similar path.
As the Substack Pro deal is set to expire sometime in April, nothing really changes for me or Investment Talk. It does allow for some more ‘freedom’ with respect to the cadence of the newsletter, but otherwise, it’s business as usual.
Some Feedback and Metrics
I won’t spend a huge amount of time on metrics but wanted to hone in on some specifics and how I plan to improve them in 2022. The top-funnel appears to be healthy but paid subscriber growth has been heavily impeded by churn. It would appear that Investment Talk has somewhat of a ‘leaky bucket’ problem. Whilst the top-line for new subscribers grew 108% YoY, the paid subscriber base grew by a more modest 38%. To boil my thoughts down into one sentence I would say that;
The top funnel is healthy, churn is too high, the value proposition of the newsletter is still a tad hazy, and my time management for certain areas of the newsletter could be stronger. Let’s start with churn.
Churn: Stripe defines churn as “the portion of your subscriptions that were cancelled during a rolling 30-day period. Out of all active subscriptions at the start of the period and any new subscriptions in the period, your churn rate is the percentage that churn during the period.”
Abdullah (Mostly Borrowed Ideas) once told me that in this business there are three certainties; death, taxes and subscriber churn. Speaking with some other writers whom I respect, the typical churn rates for this type of content tends to oscillate between the 2% to 5% range on a monthly basis. My churn is, comparatively, a great deal higher and I think that churn will serve as the crux for this segment’s discussion because a lot of the changes I intend to make are all made with the overarching goal of reducing that cadence of outgoing subscribers. Across the 8 months of 2020, Investment Talk averaged a monthly churn of 13.4%. The following year, that churn declined 360bps to 9.8%.
Whilst declining churn is always great, the final figure remains to be objectively high. Admittedly, 2021 has been a year of flux in that I have tinkered with different memo lengths, structures, cadences, content segments, and so forth. The data appears to suggest that my gradual shift towards more concise memos is working to some extent, with churn declining QoQ throughout the year.
As a side note, the newsletter is still young and the base is still being formed. The churn in the early years may be a reflection of this reality to some extent. I still think there is a lot of work to be done, however. Additionally, I write with the acknowledgement that the quality factor might be too weak for some, I am not ignorant to that, so take it as implied. Today, I still believe that it takes too long for a new subscriber to ascertain what the value proposition of the newsletter might be.
Take two people I admire greatly as an example; Adbullah and Alex (The Science of Hitting). With Abdullah, you get one excellent, well researched, write-up each month. With Alex you get multiple write-ups each month, sometimes on companies he owns, sometimes not. Both are different, but it feels (to me, at least) that in both cases I am outsourcing an analyst.
For Investment Talk, it’s less obvious what a reader might expect to get, or what the typical cadence of those offerings is. Thus, in 2022, I need to do a better job of letting readers know what to expect from day one. Ideally, I want the core value proposition to be the company spotlights (one new company write-up each month), and the secondary proposition to be my own research on the companies I own. Then lastly, the sprinkling of more ‘blog-like’ content I share.
Some of the other recurring pieces of feedback that I have received over the year from existing and parting subscribers, might go some way as to explain the churn. In one sentence, the common feedback from churning subscribers is that (a) they don’t have enough time to read it; (b) the memos are too long; (c) ideas are not actionable enough and; (d) there are not enough new ideas.
I think that all of these points can be addressed through a shift in how the newsletter is run, and how the content is structured. In the past, I spent a disproportionate amount of timing writing 15-18 quarterly memos, each 20+ pages in length, about the companies I own. This often came at the expense of draining time from the company spotlight segment, where I cover new ideas.
I want to press down on the fact (and hammer it into my own brain) that a 15,000-word write-up is not better than a 3,000-word write-up. Volume is no substitute for substance. In fact, the data is telling me that readers agree with this. What you feel compelled to give as a writer does not always marry with what a subscriber wishes to receive.
In Q4 I began to alter the way I share quarterly memos; ensuring they are more concise, but still possessing the ‘need-to-knows’ (See the above table for details on how I intend to structure each segment in 2022). Thus, giving me more time to work on the other higher-value-add areas of Investment Talk, and making the consumption less arduous for the reader. In turn, this should help alleviate points (a) through (d).
When I think about what I enjoy as a reader, I too would struggle to keep up with my own work. Let’s bring back Alex and Abdullah for a moment.
MBI Deep Dives: Abdullah’s write-ups are considerably longer (anywhere from 20-35 pages), but the cadence is one per month. As such, I have time to read each one before the next edition. The length is therefore palatable because the cadence is less frequent.
The Science of Hitting: Alex’s write-ups are more frequent (typically ~3 on a bi-weekly basis) but the length is much shorter. Each memo is packed full of insight. I know before reading that it will only take 5-8 minutes to read, and I will leave with a newfound understanding of a business. As such, the cadence is palatable because the length is less strenuous without sacrificing quality.
When I reflect on my own work, I don’t give the reader any rest bite through balancing either of these two variables (length and cadence). I hit them over the head with both, and it’s too much. Going forward, I plan to adjust the length variable, allowing the cadence to become more palatable, and the quality to increase through the additional time I can expend on each memo.
There are a lot of wonderful choices in this space and people can only read so many memos each month. My goal for 2022 is to ensure that, for some, my own publication becomes a must-have on that list.
Maintaining the Voice
Typically, with stress or anxieties, I follow the practice of allowing these thoughts to occupy my mind for a set period of time. It might be that I feel overwhelmed one day. In this case, I sit down, tell myself I will allow these negative thoughts and fears to flourish in my mind for 5-10 minutes. As I sit and endure this process, I allow each anxiety to rear its head and occupy my mind. Following that 5-10 minute period, I will then let it go. I find this lets those thoughts breathe and the fears then dissolve soon after.
However, there are still times when I stay awake longer than necessary, fretting about how I can improve this newsletter. This is not healthy, but it goes to show how deeply I care about providing good value to readers.
Throughout 2021, I still found myself asking; “What is Investment Talk?”. When people ask me, I struggle to come up with a conclusive, succinct, response. “Well, it’s a bit of equity research, it's also kind of like a blog, and there is a community element to it”. I don’t think this is a publication that lends itself to institutions. Investment Talk is certainly more so targeted to the retail investor or those who are a tad more seasoned but managing their own money, and particularly those who wish to join a genuine community.
When I look up at peers I see their value proposition so clearly. The term; “It does what it says on the tin” certainly applies here. In comparison, I view my own publication as a bit more of a Rubix Cube. To someone who has never seen a Rubix Cube before, it might look a little perplexing, a tad ‘busy’, or confusing.
As noted, the plan for 2022 is to cement my own value proposition so that it is clearer to readers. But one thing that will remain consistent, is ensuring my own voice continues to be woven throughout the fibres of Investment Talk. In various mediums (Zoom, Spaces, Twitter), Liberty has helped me realise how important this is. He once said:
“One of the things I have written at the top of the Notion file where I keep NL notes is "Write with your own voice". And 'your own voice' will be different for everyone, it doesn't mean to be all whacky and unserious -- for some people it may be the other way around. But I think success is if regular readers could recognize that something is by you even if they just saw the text without a byline. If you sound like everybody, you sound like nobody ¯\_(ツ)_/¯”
This is the north star I will be following into the new year.
If anything, this year has cemented my desire to continue writing Investment Talk for years to come. Whilst there are a number of wild success stories in this space, mine is a lot more modest. Substack, for me, pays the rent and my bills, but it’s not quite in a position for me to live comfortably on that income alone. It’s approaching the stage where it matches my salary at the job I left to pursue writing full-time.
Most of you will know that I also work with the team at Commonstock. For a brief 2-month period, I had only one role after leaving my previous job. However, when Commonstock came knocking, being so accommodating with my workload, I could not refuse. The team is excellent, the product excites me, and the culture and what they want to build resonates with me. Thankfully, this allows me to literally split my day up between both forms of work. My mornings (7AM to 3PM) are spent fully absorbed in Investment Talk, whilst my evenings (3PM to 8PM) are spent working with my colleagues on the other side of the world.
To think, 2-years ago, that I would have achieved this stage with Investment Talk, whilst also migrating into a role at Commonstock would have been unthinkable. I still define myself as a ‘full-time’ writer because the hours I spend on this publication equates to a full-time position. I am someone who works better with more structure, more engagement, and I am perfectly happy with my current position balancing my time between both pursuits.
If you have made it this far, thanks for reading. I will leave you all with my new (and only) sticky note that I have now attached to my desk. I am sure it will come in handy when attempting to abide by the goal that I have set for myself this year.
This will be the last memo I sent out in 2021, so when the time comes, I wish each of you a happy new year. See you in 2022.
Author of Investment Talk