“Good work is what drives signups”

The TPF Q&A with The New Consumer’s Dan Frommer

Dan Frommer stays ahead of media trends. He was Business Insider’s second employee—“There, I did a bit of everything: Reporting (5,700 posts)”—before serving as technology editor of Quartz and editor in chief of Recode. In 2019, he went out on his own, launching The New Consumer, a newsletter dedicated to spending money and consumer trends. It’s great. You should subscribe. 

Given Dan’s propensity to see the future, we called him up to talk about working for himself, the usefulness of AI, partnering with a VC fund, being a two-newsletter family (his wife Lauren Sherman writes the exceptional Line Sheet), and using sushi lunches as a pricing metric. 

Dan Frommer.

Three Point Four Media: How has New Consumer changed since you started? How has what you pictured changed?

Dan Frommer: When I started, I had almost accidentally moved to Paris. My wife's job sent us there for three months in the beginning of 2019. I decided I would do the New Consumer for at least those three months. Basically the first day enough people joined as paying members that it became my job.The vision has always been trying to figure out how consumers are spending their time and their money through the lens of two things. The first is gathering as much data about consumer spending and sentiment, and putting together trend forecasting. That has grown. If one thing has changed dramatically since when I started, it's that I'm now in the business of data. 

The other lens is always looking at innovative brands that seem to have figured something out about what people want. If you look at the homepage, the brands that I chose to reflect that concept of the new consumer were Amazon, Instagram, Warby Parker, Sweetgreen, and Gimlet. All of those except one still exist, so that's pretty good. Amazon, Instagram, Warby Parker, and Sweetgreen have grown so much since then. They are essential to the lives of their customers. They figured something out. 

There are also things that have grown from essentially nothing to become huge consumer successes. TikTok Shop keeps getting bigger and more essential to people who spend a lot of time on TikTok.

You started Consumer Trends reports. Why?

In 2020 I started working with a venture fund in New York called Coefficient Capital. We were huge fans of the internet stock analyst turned VC Mary Meeker. She would put out these essential 200- or 300-slide decks once a year on internet trends. The minute they came out, everyone dropped what they were doing and started reading the Mary Meeker deck. We wanted to do something in that vein but focused on the consumer.

We've now done 14 Consumer Trends reports, and it's become the biggest thing I do. People love them. They are an easy-to-read, but in-depth view of what's going on with the consumer through a bunch of different topics. We try to make a research product that is, dare I say, fun to read. People can flip through in a few minutes and learn something. I can also go and present at conferences or to companies or venture capital summits. That’s the biggest new thing that I did not anticipate having as part of my business. 

I do a little consulting as well: deep dive tear downs with brands or helping investors try to find investment targets. Things like that are interesting and fun for me. They use the skills I've built in 20 years as a journalist, but also the bizarre brain I’ve developed in 30 some years on the internet and really studying the consumer now for most of my life.

Are your signups pretty steady? Do you see a bump when you release a report?  

The reports definitely help. This is going to be music to the ears of every publicist out there, but coverage helps too. Getting other journalists to link to you, going on podcasts and speaking, and just being out there really helps. But the best and the most rewarding part is that good work is what drives signups. If I'm publishing great stuff reliably, then business is good and I'm happy. When I'm not, it’s the opposite.

Distribution, as I say, wins championships. I launched an experiment earlier this year where I'm mirroring my site on Substack. The thinking there was that I don't see Substack as a publishing platform so much as a social network. It’s a place where people are reading in-depth text articles. If I can use Substack the way that we used to use Twitter or we still use LinkedIn to reach readers who wouldn’t have found me otherwise, it’s a worthwhile investment. 

I have 500-plus free subscribers for minimal effort, and I’m not even playing the game the way Substack wants you to by doing video and live chat. I’d like to try those at some point, and we’ll see what happens there. I'll probably continue trying this experiment for a year and see if it's worth it. I'm trying to figure out how it fits into the tool set of an indie publisher right now.

Substack’s investors and founders would like to hear you say that it's more of a social network than a publishing platform.

Totally. I'm slightly trolling when I say that, but it’s kind of true, too. I still love Twitter and Instagram, but people are using the Substack app. I see it in my metrics. I would be really reluctant to make it my main website because there's not enough control. Ultimately, Substack’s long-term goals are not aligned with mine. But I think it’s a good test.

You charge $20 a month or $200 a year. How did you decide on that price point? It’s higher than many newsletters, but I always think people should be charging more. 

Pricing is tricky. It’s very hard to test. You can't dramatically raise the price very quickly, and it looks bad if you dramatically lower the price. When I started, there were a bunch of publications charging $100 a year that I could tell could charge more and wished they were charging more. The way I thought about it was that if you were a reader of mine and worked in one of the industries I covered, you might take me out to a sushi lunch and spend $200.

I figured, let's price this around a good sushi lunch in New York and see how we do. People certainly have no trouble expensing sushi lunches in New York, so hopefully that will apply to newsletter subscriptions. I kept the price the same because I think it works pretty well. 

What I'm thinking about now is a much higher price tier now that I have five years of proprietary data and research. The archives are something I'm not doing much with right now. How I can build a combination of information and access to me, and perhaps to each other, that would justify a higher price tag for people. I still see large research firms charging $5,000 for one PDF. There's certainly a value to what I'm doing that could justify a much higher price tag, but I’m still figuring out the right product mixes. People are a little too quick to sell their time as part of a bundle. Your time doesn't scale. 

In the Brxnd keynote, you mentioned using Claude to format some charts. How do you use AI in your day to day?

That was six months ago, and it's changed a lot. I use it every day. I want to understand how it works, what it's good for and what it's not, and there's no better way than to give it real world stuff to do. Also, I found it very helpful for a number of different things. As a one person business operator, sometimes it’s helpful to walk through a thought process or strategy with someone. Ideally that would be a peer or mentor, but ChatGPT and Claude are both very good, too. 

I write a long survey three times a year now, and ChatGPT was very helpful with thinking through how to keep different parts of the survey consistent in terms of how I was asking questions or how I was providing responses. I’ve also used it for thinking about the higher price tier: What are reasonable offerings at different price points? It can search through hundreds of other products out there and summarize their value propositions. 

It's still wrong a lot of the time, and I don't ever fully rely on it to do my work for me. But it has become a useful and interesting partner in the work that I do.

You are a two-newsletter family. Lauren's newsletter is amazing, and makes me incredibly tired. She’s constantly running all over the world reporting. Do you two talk about this new world of media? 

We met at work 20 years ago, and we started dating a couple years later. It’s been such a blessing to have each other as peers. At various points, we've worked for bigger companies or smaller companies, and helped each other navigate our careers. It’s also little things — I used to copy edit all of her work before she submitted it, and she is my number one go-to for ‘is this story interesting?’ 

I'm in awe of both the volume and the quality of the work she's been able to do. Puck is a really exciting company and model. I’m a big fan, and I hope it works. It’s been cool to watch it grow.

Bigger picture, how sustainable is the newsletter boomlet? There are a lot of big names launching newsletters now, some of their own volition and some that feel forced because they lost their traditional media job and newsletters are sexy right now. I don’t know how long that latter category is going to last. It’s not like a podcast where you can show up and talk.

It's really hard, and it's a lot of work. Running a successful newsletter is different and requires more skills than simply filing 700 word articles to an editor at a publication. A lot of the elements of what have fueled the newsletter boom will continue indefinitely: things like a closer relationship between individual writer and reader, and the ability to transact directly. 

But a lot of people will start newsletters and burn out quickly. While some people may get support from friends in the early days, ultimately the sweet spot is getting professionals to purchase subscriptions that they can expense. Anyone who has a job should be expensing a bunch of newsletters and media. Your boss will be grateful that you are learning and getting smarter and better at your job. 

There are a few existential questions about newsletters. Will Apple and Google, which are the main gatekeepers of email software, start to apply some algorithm or gating function that makes it harder for newsletters to be read? Do AI summaries neuter the voice and uniqueness of individual writers to a point where the joy of reading news disappears? Do people still know how to read because everything is dictated to them? 

For the foreseeable future, there's still a lot of room left. You see a lot of talented people going into this field and succeeding. I think the job grows to be a little more multimedia. There’s certainly an audio/visual component that I think a lot of the best people are taking advantage of. I try to do speaking events because it really suits my work well. It can be a nice income stream for a day or two of work, and it builds close, direct connections with readers and executives. The job is more than just writing a newsletter, but I would bet on that more than I would bet on mid- to big-media.