Owned Commerce; Joe Rogan Got Ripped Off; Building Online Courses #39

Suthen's newsletter on the future of work, building businesses and financial independence

Happy Monday!

This week’s newsletter focuses on the future of online content and it’s relationship with commerce.

My podcast with Will Mannon gives us a unique perspective on creating online courses. Check it out on Spotify or this direct link here.

🛒 Owned Commerce

By now, a lot of us have experienced the dramatic rise of Shopify, the de-facto engine behind independent e-commerce.

They've made it a habit of shipping something every day - a feat that is quite astounding given today's working conditions. 

Ten years ago, we underestimated the size of the developer market. Companies such as Github went from niche communities to massive companies. 

Today, I believe we're just starting to appreciate the size of the DTC market. The key shift behind this is the idea of 'owned commerce.' This was a term coined in a post by David Perell.

Historically, there were massive barriers to entry when it came to selling consumer products. Most of us didn't have million-dollar advertising budgets, factories to manufacture goods or connections to source cheap products. 

Plummeting logistics, manufacturing, and advertising costs have sparked a storm of digitally native brands. With the internet's unlimited shelf space, monopolizing brick and mortar shelves is no longer a defensible strategy.

Enabled by low startup costs and targeted digital marketing on Google and Facebook, hundreds of thousands of small internet-native brands are springing to life. They have low overload, elegant design, and hyper-efficient customer acquisition strategies.

However, with low barriers to entry, comes a shit tonne of competition. The main benefactor has been intermediaries like Google, Facebook and even Stripe who sold the 'picks and shovels' to the independent gold diggers. 

Recently, people have started to realize that the way to combat this is by creating an individual brand and their own audience. Hence the term 'owned commerce.'

In this respect, media companies could be at an advantage. They theoretically have years of experience in building an audience. 

David correctly points out that only a certain type of company/audience will make the transition to owned commerce. 

There are two types of companies that have built audiences: 

Need companies are the email newsletters you subscribe to, the creators you talk about with friends, the podcasts you listen to weekly, and the writers who’ve blown your mind so many times that you'll never miss a word again. They have extremely loyal audiences. Many have direct relationships with them. Readers become followers and followers become customers, brand evangelists, and voluntary product advisors.

Feed companies are the opposite. They're undifferentiated. They try to be everything to everyone. But in reality, there's nothing to no-one. Most feed-discovered content is interchangeable. To be sure, there are exceptions, such as Casey Neistat and Kylie Jenner.

When we think about content, our minds jump to feed companies and they're the ones who pump poor content into abyss hoping that it will create 'brand awareness.' It's easy to do and you can often copy/paraphrase other content.

It takes a patient, long-term approach to build a need company. However, the benefits can be massive. 

A company that does an amazing job of this is Netflix. Here's the formula that they followed: 

  1. Create a brand people love 

  2. Gain early revenue traction by selling other companies products

  3. Collect data on user behavior

  4. Create owned products based on data insights 

  5. Sell those products to your existing audience 

  6. Iterate and improve those products.

Translated to Netflix's history: 

  1. Built a user experience that made it easy to watch tv shows and movies 

  2. Licensed great content from companies like Disney

  3. Collect data on user behavior

  4. Created their own TV shows and movies 

  5. Featured their content on the home page of Netflix (the place with the highest exposure to subscribers)

(6) Iterate and improved their content

The publishers of today are the commerce companies of tomorrow. Publishers with organic reach can launch and test products without paid media. Intimate customer touch-points remove the need for focus groups. 

With shopping experiences that are native and true to the brands DNA, they can scale fast, with relatively low investment.

If we take every publisher (whether it’s writing, Instagram, TikTok or YouTube) and add them to the addressable market of DTC commerce, the value of Shopify becomes apparent. 

COVID-19 simply accelerated the shift where the supply of DTC brands and % of purchases have gone up. 

🎙 Joe Rogan Got Ripped Off

For those who haven't heard, Joe Rogan signed an exclusive deal with Spotify. The deal is supposedly worth between $100-200M - an enormous sum for someone who's just seen as a podcaster. 

Andrew Wilkinson, the co-founder of Supercast (a subscription platform for podcasts) and Tiny Seed (an investment company in internet businesses), makes the case as to why Joe Rogan got ripped off

In a nutshell, Andrew believes that if Joe Rogan built his own business and created a subscription version of his podcast he would have created way more value. 

Here's a summary of his case: 

To go into detail: 

Lost Control Over His Audience

As an influencer, your audience is your currency. As long as you have access/ownership over your audience, you can move between platforms and try out different forms of content. 

Spotify Gets Rogan's Recurring Revenue 

Rogan could have kept selling ads in addition to offering an ad-free stream as well as bonus episodes/extended content/video stream for paying subscribers only. At just a 5% conversion rate, this is worth over $33mm [1] in annual recurring revenue. That might not sound like a ton compared to a deal valued at $100mm+/year, but when you add it to his advertising revenue, it gets him close to $100mm, fully independent of Spotify. Most importantly Rogan would have been building value and recurring revenue in his own business.

Adding Friction for Subscribers

Spotify will eventually gate his content to paid Spotify subscribers in some way (extra episodes, video, ad-free, etc). The ultimate loser in this scenario is Joe Rogan. 

Now let's tie this back to my section earlier on Owned Commerce. Spotify is in the early stages of selling other people's content. Eventually, they'll have so much data that they can become their podcast/music studio - creating content that they know people will like. 

👩‍🎓 Building Online Courses

Platforms like Teachable have made it easier to create online courses. With schools around the world being shut down, we’ve essentially forced ourselves to learn online.

As with anything else on the internet, there’s a lot of poor courses and a few great ones.

Here’s some great advice on building an online course.

Being a great teacher is just one part of creating an online course. You need to be apt at business, education, entertainment and marketing.


Will Mannon manages a couple of courses that I’ve taken including Building a Second Brain and Write of Passage.

We were in the same cohort for Write of Passage making this a special episode for both of us. Since then, he went on to join the Forte Labs team full-time and I helped create the Write of Passage Fellowship.

The goal of this podcast is to really go deep on the challenges/opportunities behind running an online course and where we see it going in the future. 

Online Courses Today 

  • We see self-paced courses on a number of different platforms. What really sets some apart from others? 

  • What have students wanted to see in an online course?

  • Are online courses right for me? 

Challenges / Opportunities 

  • As a consumer, what should I be looking for in an online course? 

  • As a business, what are the types of companies or individuals who should be looking into creating online courses? 

  • Community forums can be hit or miss. As a user, how do you make the most out of private communities? On the flip side, as a facilitator, how do you get people engaged? 

Running an Online Course 

  • What type of time commitment are we talking about to build and then run the course? 

  • What has surprised you the most? (especially going from being a student to instructor) 

If you’re interested in creating an online course or taking one, I’d check this podcast out here.

Thanks again for reading this week’s newsletter. If you can just comment on what you think is interesting, what you find confusing, and what you think is boring or irrelevant, that would be really helpful.

Until next week,