We invited the authors of the anonymous newsletter Petition to share their insights during our 2021 Substack On! Conference. Petition provides analysis, commentary and curated links about financial markets, distressed investing, restructuring, and bankruptcy.
This transcript has been lightly edited for readability. You can also watch Petition’s talk in the video below.
Make your writing feel accessible. The authors behind Petition educated readers about highly technical legal and financial stories by writing them in a simpler, more entertaining way. They included GIFs, emojis, and a snarky and irreverent voice to stay true to themselves and keep readers engaged.
Be intentional about timing. If you don’t send posts when people will open it, they won’t read it. Petition’s writers understood that their readers are busy professionals who wouldn’t have time to read the newsletter during the work week, so they sent their newsletter out on Sunday mornings.
Ask your readers for help. It’s okay to reach out to subscribers and ask them to personally spread the word, especially if they’re from audiences or groups that you want to reach. Everyone has to sell, so try to get comfortable promoting your newsletter.
Pivot quickly. With an independent newsletter, you can be nimble and test different things to see what works. Once you see a successful strategy, dial in on it.
Don’t shortchange yourself. If you don’t value your time and effort, why would anyone else? Recognize the effort you’re putting into your newsletter and the value you deliver, then set your price accordingly.
Ignore the critics. You can be successful even if you don’t have a pre-existing fan base. Petition started anonymously and still managed to grow to tens of thousands of readers. If you have a good idea, can add value, have expertise that others might benefit from, and are disciplined, your readers will find you.
Why newsletter critics are wrong
It's like clockwork. We've all seen this play out already a zillion times. Here's the scene:
A well-known writer makes a highly public split from their former publisher and boom, simultaneously announces a new subscription newsletter product. Then the Twitterati emerge, naysaying like naysayers do. Some common refrains include:"The newsletter subscription model will only work for those who have done well in a traditional media model," or "You'll only succeed if you have a preexisting baked-in following," and "Everyone is suddenly going to come down with mass subscription fatigue."
Don't believe us? Do a search on Twitter for Substack and famous, and you'll see all kinds of commentary like this.
These people will have you believe that you can only do well if you have say, tens of thousands of Twitter followers, or you have Vox Media on your resume, or you worked with Edward Snowden, or you overuse the phrase, "Vampire squid." We say, screw that. We are the counterargument. How?
We never worked in traditional media. We didn't have a preexisting, baked-in following. We basically had no Twitter presence, and here's the kicker: we're anonymous. That's right. It's pretty hard to “leverage a reputation” when nobody knows who the bloody hell you are.
Those of you who are like us and don't have celebrity or a following to fall back on, listen up. If you have a good idea, if you can add value, if you have expertise you can share that others might benefit from, and you're disciplined, tell all those naysayers to back off. They're just mad because nobody will pay to read their exhaustingly negative hot takes.
If you can add value, if you have expertise you can share that others might benefit from, and you're disciplined, tell all those naysayers to back off.
But what if you're your own biggest critic? What if you have a mini devil on your shoulder talking you out of every entrepreneurial idea you've ever had? We'll repeat: if you have a good idea, if you can add value, if you have expertise that you can share that others might benefit from, and you are disciplined, and yet you still have doubts, well, then tell yourself to back off, and get newslettering.
The idea behind our newsletter
What was our idea? Our value proposition and our expertise, and then how did we grow our newsletter? Let us tell you a bit about Petition.
Petition is an anonymously written, twice weekly, snarky and irreverent newsletter that covers distressed investing, bankruptcy, and restructuring. Sexy, right?
To add some flash to that and expand our coverage universe, we decided that we wanted to focus on disruption from the vantage point of the disrupted. While Clayton Christensen, rest in peace, or Ben Thompson might cringe from the way we abuse the word disruption, the basic crux was that we wanted to highlight how today's innovations may lead to tomorrow's bankruptcies. We wanted to underscore that while celebrating the revolutionizing of industry XYZ, we're all, as a society, neglecting those on the backend of that revolution.
Make no mistake about it, the restructuring industry itself is a pretty niche space, a subset of corporate law and finance, but its reach is wide. And while it might not sound sexy, it actually kind of is.
Think about the coverage universe from just the past year. In the utility sector, you've got PG&E. Global warming and widespread wildfire sank the overindebted utility into bankruptcy, requiring a wholesale reassessment of the way electrical distribution will work in the nation's largest economic state.
The retail apocalypse: Pier 1, True Religion, J.Crew, Neiman Marcus, JCPenney, John Varvatos, AllSaints, GNC, Brooks Brothers, Lucky Brand Dungarees, Ascena Retail Group, Lord & Taylor, Men's Wearhouse, Century 21, Guitar Center, Francesca's.
Restaurants: Chuck E. Cheese, California Pizza Kitchen, the largest franchisee of Wendy's and Pizza Hut, Ruby Tuesday, Friendly's. Healthy eating trends, expanded food selection, and food delivery battered lesser quality restaurant chains, particularly in the casual dining segment.
These are all the companies you've heard of. Then there are the ones you haven't, like VIP Cinema Holdings, Inc. In mid-February, before COVID reared its ugly head, the manufacturer of luxury seats for movie theaters filed for bankruptcy. Why? In its Chapter 11 filing, it cited the cascading effect of the continued proliferation of online streaming services and alternative viewing experiences, leading to declining movie attendance and a poor outlook sentiment for the overall US movie theater industry. This put significant pressure on AMC Theatres, a key customer, which stopped expanding and renovating existing locations.
You see where we're going with this? In some way, whether you notice it or not, all of these bankruptcies and restructurings touch you. These are your gyms, your restaurants, your retail spots, your malls. You may know one of the hundreds of thousands of miners, servers, cashiers, or journalists who have lost their jobs because of all this.
When speaking to restructuring professionals about these mounting trends, we were dismayed with what we were hearing. It was clear that a lot of awfully high price professionals were advising clients on the basis of what is, not what is coming. On the investment side, it was clear that analysts and portfolio managers were underwriting investments on the basis of what is, not what is coming. This was mind-boggling to us. That's a disservice to clients.
How we started a Substack
So we started writing about these issues. We set up a Squarespace site, a MailChimp account. We set up a Twitter account and a LinkedIn account. We joined some restructuring groups on LinkedIn. We literally started from nothing, and we just wrote, and we posted articles and slowly but surely, people started finding us and even better, they started forwarding us. Remember, we were anonymous. We didn't even have the benefit of seeding our content within our own network.
We literally started from nothing, and we just wrote, and we posted articles and slowly but surely, people started finding us and even better, they started forwarding us.
Roughly 18 months later in late 2017, we stumbled upon a Nieman Lab article about Substack, so we reached out to Hamish [one of Substack’s founders] – anonymously, of course. He initially thought we were a bunch of jokers. An anonymous publication about restructuring? We're pretty sure Hamish had no clue what restructuring even was, and we could tell he wasn't exactly feeling the cloak and dagger vibe. At that point, we had 1,792 subscribers and we were just shy of 200 Twitter followers. We still had no Facebook page – we still don't have a Facebook page.
In other words, we were no Heather Cox Richardson, or Casey Newton, or Glenn Greenwald, but we knew we were offering something of value and 18 months in, we were getting pretty tired of giving that value away for free. After all, isn't that one of the biggest reasons why media companies have failed over the years? Ultimately, Hamish agreed to let us into their private beta.
Let's talk about the restructuring research and media space for a minute. The industry is covered by some news outlets, but not especially well. Bloomberg and The Wall Street Journal probably have the best coverage out of the mainstream media. No disrespect to those media stalwarts, but generally speaking, their coverage suffers from three main problems.
One, the articles are written by journalists whose reporting is extremely dependent upon outside expertise and judgment. That makes it easy for savvy sources to layer in their interests. The content producers are not investors or lawyers [themselves]. Two, reporters switch beats every few years. Just when a talented journalist really gets to know the industry, the players, and the motivations, they cycle out. And three, they're limited by word counts. You can't do a deep dive with word counts.
In short, the incumbents were vulnerable from the flanks, and then there are a bunch of business-to-business research services that firms pay for, and individuals don't have access to. They tend to be very dry, extremely technical. They don't editorialize or take a stance, and they are very, very expensive. If you, a non-industry interested party, wanted to know how the Toys“R”Us bankruptcy affected you, you were basically out of luck, and even if you did have access to those resources, they're so boring that they'd put you to sleep before you even got the answer you were looking for.
Let's be clear. It helps that at least 90% of the time we actually know what we're talking about. After all, we were the first to predict that Toys“R”Us was going to liquidate. While the Twitterverse was losing its mind in outrage, we very quickly concluded that a bankruptcy judge would in fact, approve Hertz's nonsensical and predatory public equity raise on the basis of something called the business judgment rule. Sounds fake, it's not. We've highlighted a large number of companies that could, and eventually did file for bankruptcy, long in advance of the actual catalyst.
We saw that [our] subject matter was largely treated in a highly technical fashion. We wondered, what would happen if we made it more accessible?
You see where we're going with all this? We picked an underserved niche area where we could offer some very broad based expertise, and then we went to market business-to-consumer, rather than business-to-business, in an effort to democratize this information. We also saw that this subject matter was largely treated in a highly technical fashion. We wondered, what would happen if we made it more accessible? If we could keep our readers informed by producing both educational and entertaining content, could we take this technical content and boil it down into simpler terms? Would people respond to legal and financial stories littered with F-bombs, gifs, and emojis? Would a natural tone, snarky and irreverent in the spirit of The Hustle or The Skimm, work for a sophisticated audience of MBAs and JDs? We now have our answer.
How we grew our newsletter
We're not going to lie to you, discovery and growth are going to be a challenge for anybody, whether you're well-known or unknown. So what do you do? There's no one size fits all, so we'll just tell you what's worked for us.
First, as trite as it actually sounds, the best discovery and growth mechanism is your content, plain and simple. Produce good content, hypertarget it to the right audience and eventually, people will find you.
As trite as it actually sounds, the best discovery and growth mechanism is your content, plain and simple.
It also helps to know your audience. One question we wrangled with early on was, given the crazy volume of hours our target audience puts in at work, how do we make sure these people open and read us? We guessed that sending out the newsletter on Sunday morning would be highly effective. It's the one day that professionals have a bit more control over their schedule. They could read us over coffee, or on the West Coast, before they even roll out of bed.
Did it work? Hell yes. Our Sunday open rates are off the charts. If you don't send your content when people will open it, they won't read it. If they don't read it, they won't champion it, pure and simple.
Our content is irreverent and audacious. Our overall growth approach is consistent with our content. We're not shy about reaching out to our readership and seeking their help. By way of illustration, once we see that a law partner at a target firm signs up and engages with our content, we reach out and ask them to help us get their colleagues on board.
More times than not, people were willing to spread the gospel. When students reach out, we ask them whether there are finance message boards or Slack channels at school that they can post us to, and help get the word out.
We use FOMO to our benefit. We like telling firms they're a notable absentee from our member ranks. If we get one firm on board as a group subscriber, we'll turn to their competitor and drill home how they're now at a competitive disadvantage. You get the idea. You don't get, if you don't ask. If you don't sell, you won't grow. To simply say that the content alone will be enough, is somewhat misleading. That's the start of it.
So let us be 100% clear about the sales aspect of all this:
First, get over it. Everyone has to sell. We're pretty sure that the President-elect of the United States had to spend the last year or so gallivanting around the United States to sell himself to the point of 300 plus electoral votes and 80 million individual votes.
Everyone has to sell. If you can't handle that, you might want to reconsider newslettering. That, more than the fact that you aren't famous, ought to be your biggest hangup. We're not going to sugar coat it. One advantage you have over us, you're not anonymous, so you have no excuse not to pound the pavement. Trust us, even Casey Newton, Matt Yglesias, and Matt Taibbi are going to have to do some sales if they want to maximize their revenue potential.
How we decided on pricing
The beauty of being an independent publisher is that you can be nimble and test different things to see what works – so pivot quickly. Once we started getting a lot of group subscriber inquiries, we doubled our efforts there to help juice subscriber numbers and revenue, and we priced accordingly.
Pricing is hard. We're not going to sugar coat that. It took us a while to figure it out. We initially priced ourselves too cheaply. Why? We were afraid. We feared people wouldn't pay, especially after getting our content for free for so long.
We initially priced ourselves too cheaply. Why? We were afraid people wouldn't pay. We were wrong, and we shortchanged ourselves.
We were wrong, and we shortchanged ourselves. Once we realized people would pay, we just kept raising our price until we reached what seemed like equilibrium. We didn't have the benefit of being able to survey readers about price points. Again, anonymity – you don't have that crutch. Do some research, and if in doubt, err on the side of too much, rather than too little. Some might disagree with us on this point, but that is our view. It still pains us a lot to see those early birds getting our sweat equity way below market value.
Learn to say no. Do not cheapen your offering with hefty discounts. Over the holidays, we noticed a few Substackers offering 33 to 50% off promos. Don't do that. If you don't value your own time and effort, why would anybody else?
Always think about your offering through the lens of business. Focus on revenue. Don't be afraid to be a bit coercive to get free subscribers over the fence. Do content previews only. Cut off a content block in the middle of a sentence saying, "You need to be a paying subscriber to continue reading on," if you have to. Take a break from free editions for a month. Do a multi-part series spread out over free and paid editions so that free subscribers only get bits and pieces, rather than the full picture. If they're not paying, you don't owe them anything.
Do marketing emails to your unpaid list. Boot people off who were oversharing paywalled content. If you're fully embracing the subscription model, the total number of subscribers is vanity. What matters is paid subscribers.
So where has all this gotten us? Our subscriber list is now in the double digit thousands, multiple times larger than when we first spoke to Hamish. We've converted around 20% of our readers to paid, we now have over 6,000 Twitter followers. We accomplished all this, despite lacking the profile the naysayers said was required to succeed.
Who knows? Maybe we're just the one exception to the rule, but we highly doubt it. So anytime someone says you need to be pre-established and have a baked-in audience, just think about Petition, the anonymous newsletter that started from scratch. Brush them off and get newslettering.