So Long, and Thanks for All the Fish
What is happening with 42/ & why we didn't sell it.
When I announced we were shutting down 42/, two parties offered to buy this newsletter, valuing it at roughly $18K—$20K. (The sale was not proposed as all cash.) So, why did I not sell? It’s tough to build trust with an audience, and it’s even harder to keep it. We plan to reboot the newsletter in a few months.
I've been writing online since the dial-up internet and WordPress days. Initially, this newsletter began as OverDraft on a tool called TinyLetter, predating Substack, Beehive, ConvertKit, and the rise of “creators.” The overdraft fees in my bank inspired the name. Starting with my dad as the sole reader, who responded to every issue, the audience grew to include 20–30 close friends and family members.
I’ve been a media nerd for a long time. Overdraft was not meant to be a “business” but an outlet for my thoughts and writing on business, culture, and politics. When I started the agency business, though, the itch to start a media business never quite went away. In 2013/2014, I started a publication (now defunct) called K.W. Startups, which profiled various early-stage companies in the Kitchener/Waterloo area. My “unique” angle then was access to the early-stage ecosystem. In 2018, I moved from TinLetter to Substack, and in 2021, I met
and . We plotted to build a media business with this newsletter.My initial vision was to analyze earnings and analyst reports for public B2B companies to understand how they spent on S&M; the first company we picked was Atlassian. We dug into their history and tried to get quotes from early employees. We were going to build a proper publication, and we needed to act like journalists. But we hit a brick wall. No one responded (naturally, as we did not have a brand or any relationships), so instead, we (Seb) wrote about Atlassian and its network of partners (at a time when P.L.G. was a hot potato), and Alejandra did the fantastic illustrations (later minted as NFTs).
We “officially” wrote our last essay in October 2023 and announced the shutdown on LinkedIn and Twitter. We received two offers to buy the newsletter. Still, I have not sold it, closed the newsletter, or made any announcements because I think we are rebooting it (more below)
I am incredibly proud of what we built with 42/. It went from a single product (a monthly newsletter) to multiple products (a video series, 42Mini, and the main essays); we finally monetized it via sponsors, but we could have invested more time and effort to generate a decent amount of revenue to cover our costs.
But a newsletter and an agency are starkly different businesses. I focused on the agency (the core business), resulting in the newsletter business never living up to its potential. We learned a lot in the process, though, as described below:
Marketers like tactical advice and playbooks more than first-principles thinking. We tried to solve that with 42Mini—500-ish words of tactical write-ups. We leaned too far into first-principles thinking.
Substack recommendations (mostly from Emily Kramer) were a significant growth driver, followed by Twitter and Facebook ads. Contrary to popular belief, subscribers acquired via paid acquisition were highly engaged, and the average open rate stayed relatively consistent. Our average cost/subscriber on Twitter/Facebook hovered at around $8.
Little of the traffic and brand awareness translated to the agency business, which was by design. We never highlighted our agency work here, which I now believe was a mistake.
Half the readers associated 42/ with 42 Agency by default, and the other half had no idea the agency existed.
Media/services/software are very different businesses. Media businesses are monetized via eyeballs, so truly scaling 42/ as a business would require launching multiple products (weekly newsletters, podcasts, video, event series, etc.) to increase the surface area and subscribers, selling to sponsors, or building a paywall around the content and diversifying into other B2B topics (e.g., sales, C.S.) and hiring writers for them. I still believe there is a vast whitespace here. FirstRound Review was a massive inspiration, as was The Information. Unbiased B2B content (not from vendors’ content marketing departments) represents an opportunity.
I can’t run two businesses at once. I have a hard enough time running one. Attention, time, and energy are limited. I would instead grow the agency business to X revenue profit[.8] than have two mediocre ventures. Building a brand around the company was equally challenging. I am very fortunate to have worked in the industry for 10+ years and have some social audience, and both 42 Agency and 42/ have a micro brand in the market. I struggled to grow both brands. Our public-facing content always fell under the 42/ brand, meaning the 42 Agency brand sometimes took a back seat.
Hiring writers is different from hiring marketers. Hiring marketers who are also excellent writers is even more challenging. Most content sucks because it’s not written by people who practice the craft. At 42/, we tried to feature content written by people who knew the craft. This made it more challenging because (1)they are busy, (2) they don’t always like to write, and (3) it required convincing them to collaborate with us. But we did feature some incredible people, and a huge part of that was Sebastian interviewing them about the topic for 30–40 minutes and doing multiple rounds of revision to get it right.
Our subscribers on 42/ were B2B marketing leaders, but we struggled to channel that into the agency business. Partially, it was a conscious decision to create a Chinese wall, but we had all this content that we could not monetize with our services.
Funding 42/ was a labor of love, and the agency produced healthy cashflow that funded 42/ (a.k.a. part of Alejandra’s time and 80% of Sebastian’s). Still, when the market took a nosedive, we struggled to maintain the brand investment (42/) without having a clear payoff. The shifting market conditions also meant the agency business was not as profitable or growing aggressively, so I had to take a more active role to right the ship.
Monetizing content isn’t straightforward. Sponsorships helped, but selling sponsorships was another sales process I had to run parallel to the agency’s. The two are worlds apart. I was fortunate to draw interest from a casual tweet or two (which is how we signed RevenueHero), but to grow, I would need to invest more time into selling sponsors, which meant time away from the agency.
So, what’s next?
We did not sell the newsletter/subscriber list because we wanted to rebuild what we had here, but we did it differently. We recently started making B2B videos on YouTube (please subscribe!).
The new 42Slash will align more with 42 Agency's goals and business. Instead of heavily leaning into guest authors and sponsors, 42Slash will be our agency's ‘brand’ marketing and content. You might notice some subtle identity changes that need to be made to align it with the agency.
We will be writing about our learnings, playbooks, and stories here. While we are still open to guest authors, the content will be less first principle-oriented and more B2B Marketing playbooks and ideas.
Finally, I want to offer a huge thanks to all of you for reading, collaborating, subscribing, sharing, and giving us feedback on 42/. We’re starting a new chapter, and I am excited to see where it goes.
So long, and thanks for all the fish.
Happy me!