My first proper content job was at a tiny family-owned B2B publisher that made shipbuilding magazines. It was a baptism by saltwater.
Most of the company’s livelihood relied on an unpredictable stream of ad sales. Every month I’d find out if I’d be mostly editing paid-for advertorial or scrambling to fill distressingly-blank pages.
Somehow, all this uncertainty was built into the business model. The owner had the whole operation running off the smell of a briny rag.
It was so streamlined that, even in the leaner months, I’d wager he still netted a profit of a few thousand dollars. Add the haymaking months on top and you’re looking at hundreds of thousands generated each year, none of which had to be reinvested back into the business.
What the boss did with that profit was, from what I could see, the real purpose of the whole operation: he bought up real estate and retail shares of companies active in the maritime sector (synergy!).
Rinse and repeat this strategy over several decades—and factor in that the business was once larger and earned even more revenue—and that’s millions of media-derived dollars going into financial assets that could independently grow and compound in value.
I’m taking this stroll down memory lane because similar trends are intersecting on the internet. Like my boss of yesteryear, online content is being used by individuals as a springboard into gaining other kinds of capital which, in time, will be the basis of most of their wealth.
The net result is a blurring of the lines between content producer and capitalist, at a time when factions within both camps are bitterly, ideologically polarised against each other.
Today I’m going to look at the strange bedfellows of content and capital in the current climate. I’ll look at content makers who’ve made the jump to becoming hip venture capitalists, the people doing the exact same thing but in reverse (y tho), and what all this might mean in the grand scheme of things (spoiler alert: not much, we are all but walking dust).
Anchors away!
From publishing to portfolio
Once you know where to look, it’s easy to find the people adapting my old boss’s media model for the Internet Age. They congregate online, discussing their careers and investments on Twitter, in newsletters, blogs, Medium posts and podcasts.
My non-exhaustive list includes:
- David Perell: Announced seed investments in two hype-generating startups, presumably funded by the profits of his popular online writing course.
- Josh Constine: Made the jump from being a longtime TechCrunch writer and editor to venture capital in 2020, joining SignalFire as an investor and head content guy.
- Om Malik: Founded the tech blog GigaOm then switched to venture capital at True Ventures in 2008 (just in time for the GFC, nice).
- Sam Parr: The founder of The Hustle and Trends.co content businesses said on Twitter he invests several times a year in startups.
- Soraya Darabi: Entered New York’s post-GFC media scene just as social media companies were bringing publishers onto their platforms. After helping the New York Times get set up on Twitter and Facebook, she got involved in startups and started a venture capital fund.
- Tim Ferriss: I can’t outdo Byrne Hobart’s description of Ferriss’s content-to-capital career arc: “[Ferriss] turned his famous status as a master of high-leverage hacks into the opportunity to make a pre-seed investment in Uber. After writing several books about using One Weird Trick to get the life you want, he’s now a very wealthy investor whose main hobby is chatting with famous people.“
- Tucker Max: Started a blog about drinking and debauchery, turned that notoriety into several bestselling books in the mid-2000s, went on to angel invest in a bunch of stuff, then founded a book writing-as-a-service business.
- Tim Urban: The Wait But Why blogger is also a co-founder of the holding company G64 Ventures, which buys up digital businesses. It’s unclear if any of the revenue from the Wait But Why online store goes towards G64, but it would be weird if it didn’t.
From portfolio to publishing
You’d think a writer-turned-investor, having mostly escaped the content grind, would let out a huge sigh of relief, pour gasoline on their greasy Microsoft ergonomic keyboard, set it ablaze, then fling it over a rainbow.
But that’s not really the case. The content-capital journey moves in both directions. A bunch of investor-types still like to dip their toes into the world of content creation—or are doubling down and making it their full-time focus. Just recently for example, VC firm Andressen Horowitz announced an in-house media operation.
Other names on this (also not-exhaustive) list include:
Takeaways
1. Many more content makers could go full-capitalist
Thanks to paid newsletter platforms like Substack and Ghost (which I use for this site!), writers can monetise their writing and keep 85-90% of revenue. And thanks to the 80-20 rule, a small group of these writers will build huge audiences and earn huge yearly incomes—rivalling what my maritime publishing boss was pulling in without any of the overheads of legacy print media.
You can see the beginning of this trend on Substack’s paid writer leaderboard, which lists the top 25 earners along with ballpark figures for how much they earn every month. Already, that’s dozens of writers earning five or six figures (or more) annually.
Assuming this pattern continues and more writers build successful paid publications, there could be a coming wave of cashed-up content creators looking to funnel their funds into other assets.
2. Content, capitalism and a narcissism of small differences
I only touched on this, but I think an accelerant that fuelled the Great Journalism vs. Venture Capital Flamewar of 2020 (other than some pretty awful trolling) was each profession’s over-indexing on their differences while overlooking their similarities.
What similarities? Well, both industries like to set and control narratives. Both rely on new technology to create value and growth. Both naturally organise around influential individuals with strong personal brands. Both love to claim they’re on noble missions like holding the powerful to account, inventing the future, or challenging the establishment. Both think they’re underdogs, and that the other is far more powerful and a bully. And they’re both all up on each other’s Twitter.
It’s Rene Girard’s Mimetic Theory in action, except without the religious overtones or endorsement from Peter Thiel. I guess that also explains why, despite the tribalism, the pathways between each profession are so well-trodden.
3. Content producer-to-capitalist should be the new career goal
The arrival of the internet signalled the end of the days where one could start as an Editorial Assistant, then work their way up to Head of Content through nothing but merit, moxie, and resisting all temptation to become a class traitor and pivot into PR.
In its place is a brave new world where one can start out at a venture-backed media outlet with an unproven business model (Vice, Vox, BuzzFeed), build a voice and audience, then launching a one-person operation and taking that audience with them. Or even attempt it from scratch without the glorified internship. It’s a proven strategy!
Counterpoints
“There’s a hell of a lot of white men listed here.”
I know 😥. Hopefully this new era will provide ways for other groups to cash out from content as the market grows. I wonder if there’s also an adjacent opportunity for influencers and creators who are successfully monetising their content on platforms like Instagram and OnlyFans.
“So everyone who makes a decent living from writing has to become a capitalist? That’s lame.”
Nobody has to do anything! This is a path some content makers have chosen. You could hire your own staff to build out your operation. You could join the Effective Altruism movement and donate most of your earnings. You could start a new foundation or not-for-profit. You could replicate Tim Carmody’s unlocking the commons idea, or Tim O’Reilly’s ‘create more value than you capture’ ethos1. The ball’s entirely in your court, and that’s the whole point. I’ll admit though, ‘capitalist’ is a super loaded term and probably isn’t the best choice. Equity owner?
1 This paragraph is brought to you by a bunch of guys named Tim.
“Wait, doesn’t anyone with a huge income do this already—celebrities, athletes, etc?”
The savvy ones, yes. Look at LeBron James, Kobe Bryant (RIP), Jay-Z, Ashton Kutcher, and so on. From a certain vantage point, they’re all content creators who’ve discovered a way to monetise their content consistently and invest wisely.
Connections
A brief history of other old-school content-to-capital pioneers:
- Richard Branson: Before starting a music label, an airline, a chain of record stores, a railway operator, a gym franchise, another airline, another airline, and a space tourism company, Richard Branson launched a magazine.
- Rupert Murdoch: After inheriting one Adelaide-based newspaper, famed Australian welfare queen Rupert Murdoch built an empire that included film and TV studios, cable broadcasters, an airline, MySpace and a failed $100 million investment in Theranos.
- Masayoshi Son: After launching Softbank as a software distributor, Masa Son spent much of the 1980s and 1990s acquiring magazine publishers and events companies. This laid the foundation for his takeover of Vodafone Japan and his incredible investments in Yahoo! Japan and Alibaba.
- Warren Buffett: For a while he just really liked local newspapers with little competition.
Byrne Hobart saw a lot of this coming in 2018
Hat tip to Byrne Hobart:
Some kinds of media jobs have exit strategies: an astonishing number of tech bloggers turn into venture capitalists. The skills here happen to overlap: a good startup is also a good story, so someone with a nose for one has a nose for both. (This is also why venture capitalists are the best tech bloggers. That door revolves 360 degrees.) So, tech bloggers can become venture capitalists. But what do politics and entertainment bloggers become? Mostly alcoholics.