New York Times' Sneaky $100M Side Business

All right, so we are going to talk about New York Times sneaky $100 million side business. You can probably guess what it is. Do you know what it is?

Affiliate marketing links.

Exactly. All right, so the New York Times, I think they do, do you remember how much revenue they did in 2023? I think it was over a billion. I think it's over a billion, $1.1 billion approximately. A lot of those, and Neil's searching it right now, but most of it comes from their digital subscriptions, which is something they pivoted from like, About a decade ago.

So their 2023 numbers aren't fully released yet, but if you add up the three quarters that have taken place so far in the year, it is they actually do well over a billion dollars. It is 553. So in three quarters, they generated 1.728 billion dollars. So chances are they're at 2.2, 2.3, 2.4. I don't know if the last quarter is a good quarter for them. Actually, I could tell.

Yeah.

December of 2022 was one of their best quarters. So they were doing $660 million back then. September of this year was 9% higher. So if you say the same thing for December of last year, you're roughly looking at $719 million in revenue for December.

It's a lot. And this is coming at a time where, you know, Warren Buffett divested from all the newsletter investments that they had because newsletters used to be a business that just crushed it. This is pre-Facebook, pre-social media.

You mean newspapers?

Sorry. Yeah, newspapers. Thank you. Newspapers got crushed, right? But New York Times was like the top, top, right? And now they've pivoted to digital subscriptions. But what most people don't know is that years ago they bought a company called Wirecutter for about $30 million. And Wirecutter is an affiliate site where they talk about best hamper or best like blanket, all this type of stuff, right? And they'll get like a cut, like, you know, 5%, 10%, 15% from Amazon if someone buys from their link because they're referring to all these websites, right? And Wirecutter, when they bought it, And this video I was actually watching from Ahrefs, so shout out to Ahrefs, the SEO tool. They were getting about 1 million visitors a month. Then after the New York Times acquired them, they started adding way more content. Now the visitors Wirecutter gets per month is about 8 million or so. So they're making a lot more from that investment. That $30 million they paid, it's probably doing close to 9 figures now.

Well, they also have way better authority and more content and they can just crank out—

Way bigger staff too.

Yes. It was a— I think it was a great acquisition. And funny enough, speaking about companies that are doing sneaky marketing things, you know, CNBC wrote an article on Stanley Cups. Did you see that one?

No.

What's that? How Stanley Cups grew from— a 110-year-old company grew from $73 million a year in sales to $700 million.

Stanley Cup, the NHL?

Stanley Cups, like the drinking cup, the tumbler.

Huh?

Like a mug, you know, like when you drink like— Oh, okay.

Got it, got it, got it.

Like what you're holding right now. But Stanley has a brand, Google it.

Got it.

And do you know how they ended up generating that much more revenue? 110-year-old company, they went from $73 million to $750 million in the last few years.

No, what happened?

So what ended up happening is typically Stanley ended up targeting men who were working in construction or job sites and needed to hydrate and they would just drink from their cups and they would be like, cool, good to go. What ended up happening was, you know, a while ago, a few years ago, there was, in 2019, there was a woman's blog, and it talked about Stanley and it went viral several times. And what they ended up doing is they're like, holy crap, this woman's blog, which has an audience targeted towards women, you know, they really like our product. So they embraced it. They took the products, they changed the color scheme, made them more colorful. They leveraged pastels. All of a sudden, and then they took influencer marketing, pushed out the product, and it was so successful. They sold out multiple times. They created a waiting list. And fast forward to this year, roughly $750 million in sales.

So, they started moving into different categories and started just changing it up a little bit.

Same product.

Yeah.

All they did is instead of targeting men, they started targeting women.

Yeah. Yeah. I think it's category expansion that allowed them to 10x, right?

Not category expansion. They just kept the same. It's like—

You're reskinning it, right? But it's not category expansion.

No, they're targeting a new audience.

Yeah.

That's all they did.

Audience expansion. That's a better word.

Audience expansion. Yeah, yeah, yeah. So you look at it, it took them 110 years to figure this out. And most people were like, yeah, this is great. Good for them. And they're like, you know, moral of the story is you could have the right product or right service, but you could just be targeting the wrong audience. And my whole comment to it was, this is a big mistake. If I owned the company, I would have been pissed because the management couldn't figure out over 110 years that they're targeting the wrong audience to their product. If they just did some consumer research, they could have figured this out way earlier. But then again, if I owned the company and it's 110 years, I would have been dead anyways.

Well, true. Touché. But actually, so we were talking on the phone about this earlier this week. And one of the key things is like, as much as people have talked about going out there, hiring a CEO and getting out of the day-to-day and working above the business, what we talked about was like, at the end of the day, if you want to grow to the maximum potential, you have to be involved. Because no matter— like, you can't outsource your dream to somebody else, right? And even if you do, you think someone's going to save you. It's like, no, they aren't because they don't have the context that you have. They don't have the experience that you have. That being said, you should still hire people that have experience. But the ones that have to drive it probably is the founder at the end of the day, or whoever has the most like incentive.

I think it also depends on corporate size, right? Like if you're really large, like a Microsoft or a Google or Apple, yes, having founders involved and having a visionary like Steve Jobs or Elon. Yes, I think does wonders for a business. But when you have the resources and you're a trillion-dollar company or multibillion-dollar company, You can hire a lot of amazing talent out there. There's a lot of people who aren't great at founding a company and taking it from $0 to $10 million or $1 to $100 million, but there's a lot of amazing people that know how to take a company from $100 million to $1 billion or $1 billion to $2 billion. If you look at Stanley and what they did, they did grow, but the new CEO figured that out and embraced it. The past executives were just a bad fit.

Yep. You know, so this is one thing we talked about, right? Like, absolutely, you got to hire the best people because you can't do it as one person, right? But it's really a combination of the people that you hire, the A-players that you hire, plus you as a founder, if you're involved, right? Because here's, here's an example. When Steve Jobs came back into Apple when it was a shit show, right? I think he cut like 3,000 people. He cut a bunch of product lines. And then each and every week he would get involved with the marketing agencies, spend 3 hours with them, right? He's involved in design, involved in everything, and he's really just setting the tone. And sometimes, like, let's use Elon as an example. He's working on so many different things, right? He's involved with product. He's walking the floor and all that. I think there's a— I think it's what I'm really getting at here is like, we've really glorified this hiring a CEO. It's like, no, like hire the CEO, but don't just abdicate everything to them is the point.

But I think it works in different cases. And there's cases for both. Like if you look at Microsoft during the early days with Gates and Ballmer, The stock wasn't moving. Satya came in and the company's boomed.

You mean Gates first, then Ballmer, and then Satya.

Yes, but when Ballmer was there, Gates was still there helping out. He was there for a long time.

For a while, and then it was just Ballmer.

Yeah. But then you look at Satya, he's done an amazing job growing the market cap from a stock perspective. Forget the business performance. If you just look at market cap, he's made people like Ballmer extremely wealthy. If you look at Steve Ballmer and his net worth, it's actually very similar to Gates. The difference between Ballmer and Gates is I get Gates donated to Alton money.

Yeah.

But still, the big difference is Ballmer didn't sell his Microsoft stock. He's held on to it. And if you look at his net worth, it's $110 billion. If you look at Gates's net worth on— where is it? Forbes. Gates. Forbes. I'm actually Googling it. $110 Gates is 118. So if you actually just double it, you're at 136. The way Ballmer made his money is he just held on to the Microsoft stock and Satya just has made a killing.

That's another lesson in investing. Sometimes if you believe in what you got, you just hold on to it for decades and you're good to go. But here's the thing, right? Like when you look at Satya, amazing. Like what he's done with Microsoft, incredible, right? When you look at Sundar from Google, the Google CEO, right?

He's done an amazing job too.

And then if you look at Nobody really talks about Amazon right now, but I still think Amazon's an amazing business. Now let's compare it to— let's look at what Elon's doing. Let's look at what Jensen Huang is doing with Nvidia. Their founder, CEO is very involved, right? So I think let's just talk in generalities for people. I think for the most part, if you have a smaller business, don't try to get out of it sooner. And like, there are different like examples, obviously, that we're talking about.

I agree with you. For a smaller business, I think Founder involvement and founder vision is really important. For a business that is at scale, sometimes the founders don't know how to adapt.

Agreed.

And it could be good for them to transition out. Not all cases, but some cases. And some founders, like Jobs, was really good at early stage as well as later stage. But like, for example, with me, I'm good at early stage. I'm not great at running a business later stage. I don't have that skillset. Also, with people like Elon, he's been able to do quite a bit of things successfully at the same time. He's done SpaceX successfully, Tesla. X is yet to be seen, although I'm not counting it out.

PayPal?

PayPal had a lot of people involved. And at one point he was removed from CEO and then deal takeover.

Yeah, so Tesla, really Tesla, SpaceX, and you can even argue Starlink is a business by itself.

It's still SpaceX, right? But if you, because then you're just getting into different divisions.

Yeah, yeah, yeah, yeah.

But if you look at SpaceX, Tesla have done both extremely well. Boring company. If you look at what they've done in Vegas, no one cares to use it.

They shut that down.

They shut it down? I didn't know that. Yeah, I tried it one time and I'm like, what's the point of this? And then never again. I used to live in Vegas and that's why I tried it out. I do think Elon has a lot on his plate. I still would never bet against him. I don't have the brain capacity or the brainpower that he has or anywhere near it.

Well, I also don't think we have the work ethic either. Like, 120 hours a week. I don't think we can do it.

I can't do 120, and I think I have a stronger work ethic than most people because I can easily do 60 to 80 hours every single week and never have any energy issues.

It's like normal.

Yeah, yeah, it's normal, but I cannot do 120 hours or whatever he's doing on a daily basis.

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