The Exchanges

Q And Passport is the technology infrastructure you've built to enable other people to build Stratechery-like experiences if they're whitelisted by you. How's that work?

A No, it's just my stuff for now. I mean, obviously we would love to make it broadly available, but it's not all finished yet and there's customer support issues and things that would entail that, but something that I would like to do. But one of the things we did with that is I linked to myself a lot, which people make fun of and deservedly so, because it's kind of a running joke between me and my readers. But a way I think about strategy is it's a live thing. It's an ongoing sort of journal of my attempt to understand the world, understand technology. And sometimes I was right about something and it's always fun to point back and say I was right. Sometimes I was wrong. It's like, why was I wrong? What mistakes did I make? Sometimes there's a trend and it's like, well, this happened back then and this happened here. And then again, I think about it as being sort of a live thing. And so linking back to myself is a way to do that. It's also a great way to trigger that second article sensation where you read an article and then there's a link right there and you go read another article. Well, that was also really good. And then there's X, Y, Z. So one of the things that I want to do with passport was How can I really leverage email forwarding to accomplish this, especially when I'm linking to paid articles? So like one of the things we do there is every link to myself in a strategy…

AI assessment note: “No, it's just my stuff for now... every link to myself in a strategy email is tokenized”

Q You didn't give her access to the analytics?

A No, of course not. And I'm like, no, we're not canceling our trip. Things are going great. And so we flew to Paris, ran the credit cards all back up again, of course. And in Paris, I remember I would wake up every morning at four AM, sit in the bathroom and write a daily update. And then my wife would wake up and we sort of like go out for the day and that ended up being true. It just sort of kept increasing. I mentioned there was two big step changes. The Gruber one being the first one in November, I actually ended up reaching a thousand, which is my one year goal. So I hit my one year goal much earlier than I expected. You know, one year, a hundred dollars a year, a 100,000 dollar run rate.

AI assessment note: “No, of course not.”

Q What made you think that? To my mind, at least, there is a very viable and robust alternative history where Stratechery is an advertising business model.

A Well, I think that I would have to have started much earlier. And I think Gruber's model is the right one where I think it's actually underrated that I think he actually kind of invented native advertising because you read every piece of content that he writes. And one of them just happens to basically be an ad and it's the same format, same content as what's there. And I would bet that the rate of consumption to encountering it for his ads are like higher than almost anything else out there. And obviously Facebook does that at scale. And it's all automated, self-serve, and you scroll through, and there's different pieces of content you're interested in, and some of them are ads.

AI assessment note: “Well, I think that I would have to have started much earlier.”

Q All right, second one, rather than going with another big American tech company, I want to go with one that's an acquired fan favorite and one that's very close to home for you, TSMC. Any change to what TSMC is doing now if you became CEO tomorrow?

A Not really. It's a very complicated situation, to say the least, for lots of reasons, not just political but technological. I think probably doing what they're doing. Broadly, it makes sense. Yeah, I don't know. I've heard a ton about them and where they are, and You could talk about maybe some of the pricing stuff. They were pretty slow to raise prices, even in the face of shortages. They've been much more aggressive about that over the last little bit, which seems reasonable to me. It is opening the door for when and if a competitor comes along to undercut them in that regard. I think they're probably blessed by the weakness of their competition, but the long-term risk is obviously number one, just the geopolitical risk. The reality is, is TSMC A core to their model, essential to the model of being so flexible, being so adaptive of incorporating new equipment of accommodating hundreds and hundreds or thousands of customers is all their engineering's in one place. And that. Place is Taiwan and that has geopolitical risk. And from TSMC's perspective, I think that's just a reality. You can't really hedge against that. And so. If anything, yes, they're building these fabs in the US, I think, largely for political reasons. And sure, do that if, you know, the Taiwanese government feels that's what needs to be done to keep the US on board, keep the US happy, build a couple in Japan,…

AI assessment note: “Not really. It's a very complicated situation... Broadly, it makes sense.”

Q Yeah, you're a primary source now. What's going on?

A Well, that was a challenge, right? Because I started out, I had no access. I didn't know anyone. And in some respects, I miss those days. I still remember the first time I had a company very angry at me and calling me in and it was Twitter actually. Cause I had teased out of their results that their direct response program was failing. This was like years ago and they got super mad in my next update. I'm like, well, it's possible this, and I kind of like walked it back a little bit and the next quarter came out and they're like, yeah, we're going to need to, I don't know if they took a write down, but it was a big thing. And they said like, it's not working out. And I was totally right. And I was so mad that I kind of walked it back a little bit, but I'm glad it happened because When I started out, no one cared. No one paid any attention. Now people care and sort of paid attention. And so I'm glad I was right on that one because it sort of gave me courage going forward. But one that's interesting about feedback from companies is everyone like from COO down or VP down, they always push back and they're like, no, you got this wrong. You understand XYZ. I never get pushed back from CEOs, even when I'm wrong. And what I've come to realize is CEOs are surrounded by people telling them what they want to hear. That's their incentives, right? The reason why the VP is attacking me is be…

AI assessment note: “Because I started out, I had no access. I didn't know anyone.”

Q I think about that element a lot. I also think about every piece of content you create as a churn opportunity. David and I regularly look at each other mid episode and we're like, okay, is this of acquired quality or is it actually net negative for us to release this episode because we've now reduced the average quality of a thing that someone comes to expect from us?

A Yeah. I mean, well, thanks for putting the pressure on me, uh, right up there. I better make sure this is interesting, but it's interesting because I would push back against that a little bit. And this is why the consistency part is important. I mean, there's an ongoing discussion. I think there's that new social network post news or something. And I just saw a thing on Twitter. I'd actually fall through, but they want to do micro payments for articles, which I think are terrible. And there's a tendency in a lot of things to get overly indexed on the consumer, which kind of sounds wrong. Like, why wouldn't you want to give the consumer exactly what they want? But just to take the most obvious example, if a creator is not making money, well, the consumer may get what they want, which is free content, but they're not going to get it for very long. There is a short term perspective versus a long term perspective, which well, no, by charging for this, I can do this over the long run. But from a microtransaction perspective, I think one of the issues is To create the piece of content is very time consuming. And then obviously you get the free distribution on the back ends. You have zero marginal cost on the back end. But the problem is you have a timing mismatch with microtransactions between when the payments made and when the investment is made. And so you want to put a lot of tim…

AI assessment note: “I would push back against that a little bit. And this is why the consistency”