Dear Friend, Subscriber, and Category Pirate,
On January 27th, 2021, we published our first Category Pirates newsletter.
Us three pirates had been working on a book together for almost two years. But after several drafts and many rewrites, it became clear we weren’t really writing one long book—we were writing dozens of mini-books. And we felt, instead of trying to cram all the information together into one big dense stack of paper, our readers would be better off consuming these ideas, frameworks, and new ways of thinking about category design piece by piece, week by week, digitally.
All three of us have written conventional books and read many books ourselves.
But we realized that we Pirates should drink our own rum and follow our own treasure map.
For example, the book category has a lot of good components. We each have books we love. We have books that have transformed our careers and lives. And we owe a tremendous debt of gratitude to those books. But the book category also has a lot of bad components. Too many books are one great idea spread out across 200-300 pages that leave the reader feeling like they were continually “Rick-Rolled” after that one great chapter. We wish these books came with a preface written by the editor of the book under truth serum that said, “Psst...we love this idea, but just read pages 33-70 and you’ll get the gist. You can skip the rest.”
The book category also has a lot of ugly components. The book publishing business model today takes as much risk as a venture capital firm but with much less upside. Like startups, the vast majority of books will “fail,” while even the most financially successful books & authors in the world (the J.K. Rowlings and James Pattersons) achieve a fraction of high-flying unicorns.
This broken risk/reward model causes publishers to hunt for books to acquire and publish in a more mercenary fashion. Most of the questions they have are “How are you going to help us sell enough of these books to cover the risk of our first printing?” as opposed to “How will this book change the world for the better?” And book retailers seem like a noble business, until you realize how little risk they take on the authors and publishers by returning unsold books and getting full refunds. The entire industry is so busy playing hot potato with the risks that come with book publishing that too many have lost the mission of transforming lives through the written word.
From our perspective, the legacy category of “big book publishing” is dying.
So, we abandoned our long-form book project and started a Substack weekly newsletter instead. (Will we still write long-form books? Of course. A few will even be for sale before the end of the year! But we are a digital-first, 100% independent, publishing company.)
Less than a year later, Category Pirates has become one of the Top 10 paid business newsletters on the platform.
Here’s why now is the perfect time to start your own (free or paid) business newsletter:
There are a handful of tailwinds accelerating the newsletter category.
1. Direct To Creator: Substack is one of many platforms working hard to give creators the tools they need to build (and monetize) their audiences directly. Other platforms like Gumroad, Patreon, OnlyFans, etc., have been working to support Direct To Creator relationships for a while now (Gumroad was founded in 2011, Patreon in 2013, and OnlyFans in 2016), with Substack being the most recent to enter the fast-moving macro category of Direct To Creator platforms. As these capabilities become more prevalent, it’s safe to assume that having a direct relationship with your audience will soon become a bare-minimum expectation for creators & business owners (opposed to purely leveraging rented audiences on social platforms). Further, as Direct To Creator expands, more and more consumers will come to expect this direct relationship with their trusted sources. Like all new category designs, it will shift from being viewed as an innovation to a must have over time.
2. Bottoms-Up Iteration Models: The internet has made it very easy to gather data on what people are most interested in, what questions they have, and what they find most valuable. One of the frameworks Pirate Cole shares with other writers in his digital writing program, Ship 30 for 30, is how to test and validate ideas before choosing which ones to invest in. For example, instead of committing to writing a long-form book, create a course, or launch a product day one, it’s much better to start small, leverage rapid-fire feedback loops, gather reader/audience data, and iterate as you go. Newsletters, as well as other digital writing social platforms (Twitter, Medium, Quora, etc.) can be great ways to learn who your Superconsumers are and where you can provide them with the most value. Which means, by the time you decide to write a book, create a course, or launch your own product/service/business, you should already know whether you’re building/writing the right thing. This is the new way to create products and launch businesses, and anyone not making use of these rapid-fire feedback loops is going to get left in the dust.
3. Paywalls: Substack was founded in 2017. Their mission was to give writers the ability to charge their audiences directly for access to their content—and as a result, created the “paid newsletter” category. Even just a few years ago, launching a paid newsletter was extremely difficult. And if you wanted one, you had to Duct tape a handful of different tools together and figure out how to make it work on your own (and the same was true for almost any kind of paywall). But from 2017 and through the pandemic in 2020, paywalls have become significantly more popular, more accepted, and more accessible. Creators of every kind can easily paywall their content today—whether it’s writing via Substack, or videos via OnlyFans. And as digital privacy becomes more important, and the unintended consequences of social media advertising become more prevalent (as seen with Facebook), the tailwind behind paywalled content is only going to accelerate.
4. Demand For Analog “Stuff” Is Going Down: While physical book sales are holding strong (and still generate ~75% of the revenue in the book publishing industry), ebook sales are continuing to climb. We have written in the past about Native Analogs vs Native Digitals and how, as Millennials and Gen-Zers get older, demand for Analog “stuff” is likely to go down (fast). And as Pirates, we like making decisions that bet on the future being DIFFERENT and allow us to capitalize on that DIFFERENT future when it arrives. If Analog products are facing heavy headwinds, and there are strong tailwinds behind Digital products, then now is the best time to start investing in building digital value, with digital-first audiences, who love consuming and sharing your digital products.
Whether you are a business owner, a creator, a company executive, or a writer, don’t be confused: newsletters, as a category, might be “saturated,” but valuable newsletters known for a specific niche will never be.
We want to share with you how, in less than a year, we built Category Pirates into a Top 1% (paid) business newsletter, so that you can leverage the above tailwinds and do the same.