We sat down with Byrne Hobart, author of The Diff, to discuss how he turns fleeting news stories into timeless pieces of writing. Below are a few edited excerpts from the full interview, which you can listen to on your favorite podcast app here.
What’s the story behind the name of your newsletter, The Diff?
The Diff is named after the Unix utility "diff,” which takes two files and extracts a list of all the ways they're different. In the case of my newsletter, I take my view on a topic and the consensus view and then extract the cases where the two are radically different.
You write about the news, but your writing feels like something I could pick up in a year and it'd still be helpful. What's going on there?
If you care about getting things right, then you really shouldn't be in the breaking news business. The initial version of a story is more likely to be wrong.
When I write about the news, I try to ask, “why is this happening now? Why are people reacting to it the way they are? What happens next as a consequence?” That stuff is a lot more enduring.
I find that I end up mostly writing about inflection points and mental models.
Inflection points are basically anytime something was one way for all of history and then it started going in some different direction.
Mental models are also powerful. I often try to find patterns in one industry that apply to another. I often find myself saying, "this company looks like it's unrelated to this other company, but they're actually the same business."
I think you're less likely to put your foot in your mouth if you take an approach like this instead of trying to break the news or give quick reactions.
How do you identify inflection points that are worth writing about?
Part of the way I write The Diff is to imagine if I were retired and one of my goals was to maximize the returns on my life savings over an extremely long period of time so that my grandchildren could live comfortably.
There are a lot of things I'd have to totally ignore, like day-to-day politics and the news. They're really not going to make a big difference in the hundred-year return on a portfolio.
But there will be trends where if you catch them ten years early or a generation early, then you make a lot more money than you otherwise would have. The Rockefellers, for example, were good at catching trends quite early. They made a lot of their money in the 19th century, but they were also very early into venture capital. They are no longer in the business of selling the world's most cost-effective replacement for whale lamp oil.
What are some other ways to take a piece of news and turn it into something insightful?
One thing you can do is look at confusing behaviors by people in organizations that you respect and try to come up with the smartest reason they could be doing what seems like a dumb thing to do.
For example, if you were at SoftBank and you were in charge of doing the last WeWork deal, what was your plausible case for getting a good return on that investment? That's going to be way more interesting than the really obvious point that WeWork was losing a ton of money.
Given that you’ve never worked at most of the companies you write about, how do you gauge if you've written something insightful?
If you are writing a profile of a company, one thing you can do is write it from the assumption that you want the CEO to read it and find it the most thoughtful piece of coverage that their business has ever gotten.
I don't know if the CEO of Palantir read my writeup on them, but I got a lot of responses from people who worked there and thought the general coverage of Palantir was making a lot of easy assumptions that weren't actually justified. Writing something more straightforward and not super negative was refreshing to them.
So if you write about business, pick a company and write an analysis that you think you’d find thoughtful if you worked at or ran that company.
That's great advice and I imagine there's some tension between writing an analysis of a company from the outside and being somebody on the inside. Is that a tension you think about?
You can drift off in all sorts of crazy directions if you are a pure theorist. And if you're purely practical, and you never try to figure out the theory of what you're doing, then you can also get lost in totally different rabbit holes.
So as I’ve gotten older I've found there's always a balance to be sought between having actual business experiences and writing commentary.
Speaking of inflection points, let's end on a big one. There is a lot of excitement today around independent writers being able to build a business around their writing like you have. Who do you think will be successful in this new age of publishing?
A few different types of publications. First, there is a long tail of media that you wouldn't have a lot of exposure to day-to-day, but that can be very lucrative for the people who do it well.
Trade magazines are one. They tell you everything you actually need to know to make decisions in an industry. The companies that sell them can charge vast amounts of money because everyone who reads them has to read them and almost no one who reads them is spending their own money on them. That's a good combination for having strong pricing power.
There's another category of creators where the Substack model is closer to tipping or an NPR pledge drive. Someone creates content that makes your day a little bit better and you can support them for the cost of a cup of coffee.
On top of the existing models that have worked for a long time, I think with any new medium or any new way of thinking about an existing medium, there will also be ideas that we just haven't thought of yet that will be powerful.
- Seek inflection points and patterns.
- To identify important trends, think on a longer time horizon.
- Seek the smartest explanations for confusing behavior.
- To write something the resonates, imagine the specific person you'd want to enjoy the piece.
- To make your writing useful, seek a healthy balance between theory and practice.
- The future of niche media is bright.