Iterative Business Models

Solving the puzzle of creating a sustainable online business

Dear Readers,

In April 2022, I decided to offer a paid subscription option. Over three hundred readers eventually opted to pay for a subscription before I decided to end the paid option in January 2023. All paid subscribers received a pro-rated refund.

I am grateful to everyone who subscribed for their vote of confidence. However, the business model that I created did not work out. This was entirely my fault for failing to understand my readership well enough to come up with a viable economic model.

It seems that I am not alone when it comes to solving the puzzle of creating a sustainable online business based on original content. Many writers on Substack and elsewhere have experimented, adapted, and iterated their business models in recent years. A small number have achieved great success. It’s an interesting puzzle to think about and try to solve. There’s no shame in learning and adapting.

The centerpiece of my paid offering was a monthly in-depth company profile. I published twelve profiles between May 2022 and January 2023. While I hope that these profiles provided good value, each required between 100 to 200 hours to prepare. I did not anticipate that this project would become all-consuming, but that’s what ended up happening and it was unsustainable.

Information might want to be free but no one has unlimited time. I recently decided that it makes sense to resume paid subscriptions. However, I will no longer write a monthly company profile. The price point required to research and prepare that type of content would exclude too many readers. Creating profiles that I am proud of would inevitably again become an unsustainable and all-consuming endeavor.

For the new business model, I will write articles on investing concepts, personal finance, book reviews, philosophy, and more. I will also continue to write about Berkshire Hathaway.

These articles will be similar to the type of content I have written in the past. Since most articles are free, readers can look at older content before deciding whether to pay for a subscription. All articles since 2020 appear in the Substack archive and over a thousand articles published since 2009 appear on The Rational Walk website.

I anticipate writing approximately four articles per month, but at certain times I will write more often. For example, I wrote more frequently in March than in April due to the regional banking crisis which prompted many ideas for articles. The upcoming Berkshire Hathaway annual meeting will be an opportunity to write more frequently.

I have decided to set a price of $10/month which is on par (or slightly below) business-focused publications on Substack that do not provide “deep dive” reports on companies. I do not know if this is an “optimal” revenue maximizing price from a demand curve perspective, but it is a price that I am comfortable charging for the content I expect to provide and it does not seem prohibitively expensive.

Approximately a third of articles will remain free for all readers and two-thirds will be paywalled following a free introduction.

I will typically make articles related to personal finance free in order to reach the largest possible audience. Most other articles, including almost all articles on Berkshire Hathaway, will be paywalled after an introduction. I may eventually make certain paywalled articles free several months after initial publication.

As I wrote recently, I have started using Substack’s Notes feature as a replacement for Twitter. I plan to continue “micro-blogging” and providing interesting links on Notes which is a free feature of Substack.

Thanks for reading!

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