Farnam Street’s 2018 Annual Letter to Readers

Most public companies issue an annual letter to shareholders. These letters present an opportunity for the people entrusted to run the company to communicate with the people who own the company, the shareholders. In 2015, I started a similar tradition at Farnam Street. (2016 and 2017 letters are also available.)

Stewards of companies have a legal duty to do what’s in the best interest of shareholders. I feel a similar obligation to you. You trust me with something far more valuable than money: time.

For all of us, time is finite. Reading Farnam Street or listening to The Knowledge Project means you’re not doing something else. My job is to make sure your investment is getting an above-average return.


The Psychology of Email Lists

Our newsletter mailing list has grown to roughly 185,000 subscribers, compared to 155,000 at this time last year.

The map and the territory tell very different stories. To understand the difference, we need to understand email lists a bit better.

Email lists are the best way to reach people directly. With email, there are few barriers between the content creator and the reader. Getting into someone’s inbox is like getting into their bed: it requires an invite.

The world is full of companies that want you to sign up to their email list. These actors use pop-ups, free downloads, and other tricks to bribe you for your email. While they do this for numerous reasons, few actually concern you, the reader. They just want to sell you something.

For individuals, big email lists typically mean big egos or bigger paychecks.

Bigger egos—in the sense that the size of the mailing list is a metric by which people keep score. Sometimes this is unspoken; other times it’s fairly overt. Some comparison is natural, but there is a lot of appearance over substance going on. No one wants to be the little piggy in the straw house.

Bigger paychecks—in the sense that people use lists as a proxy for value. I’ve encountered this firsthand in 2018, while negotiating our book deals (more below). Everyone wanted to know our list size, but few wanted to know the open rate. If the list size is the map, the open rate is the territory.

The industry considers a 20% open rate to be good, for an email list of over 100,000 addresses. I think that’s terrible. It means about 20–25% of people actually open your emails, when you account for the plethora of adblockers and image loaders it means actual open rates are slightly higher than reported rates.

Our open rate used to be 35%—and now it’s about 45%. The difference is telling. A list of 150,000 with a 25% open rate reaches an effective audience of about 37.5k people per email. An open rate of 45% changes that to 67.5k per email. Clearly, not all lists are the same.

At FS, we’re not after the biggest list, just the best. We offer a one-click unsubscribe. And if it looks like you haven’t opened an email from us in a while, we will send you a few emails to see if you want to stay on the list. If you don’t engage, we’ll proactively remove you. If you miss us, you can always sign up later—and if you don’t notice, well, you’re breaking my heart.


We’re on our third or fourth iteration of domain names now.

We started with 68131 (the zip code for Berkshire Hathaway), then moved to farnamstreetblog.com and now fs.blog. While we started out as a blog or scratchpad, today we’re so much more than a blog. We’re moving our branding toward FS. Why did we move away from Farnam Street blog to fs.blog? In short, it was easier to type, available to us, and our friends at Automattic made it simple for us to switch.

We changed hosting companies this year. Our new hosts, Pressable, sped up the site. Most importantly, they freed me up to write, instead of spending hours a month on webhosting. If you’re looking for a webhost, they are the most competent and proactive we’ve come across.

Our relative ranking among websites continues to improve. Last year we were ranked among the 40,000 most popular sites in the world—out of hundreds of millions. As I write this we have moved into the top 33,000. And in the US, out of an estimated 200 million active websites, we rank in the top 11,000. That’s the top .006%, for those of us who are counting.

I hope to further refine the reading experience on the website in 2019, become a bit more brand-consistent, and better position FS to create something that outlives me.


I received a curious call from a reporter from the New York Times earlier this year, asking, “Why does everyone on Wall Street keep talking about you?” He found my “I don’t know” rather unsatisfying, and kept probing. The result was this profile on me. While we stayed on the most-emailed list for two full days—an eternity in the news world—the best thing about the story was that my mom doesn’t think I’m unemployed anymore.

My hometown paper also featured me in this article. Lest I get a big head, my mom pointed out that I couldn’t get ahead of “cat stops traffic” and “man walks slowly across street” to make the most-viewed stories of the day.


In 2018, we offered two public Re:Think Workshops, on Innovation and Decisionmaking. We continue to limit attendance at these events to ensure a good experience for everyone. We sold out the 2019 version of Re:Think Decisionmaking in one day. Join the waiting list so you don’t miss out on future dates!

While the feedback we get is positive beyond belief, we’ll be doing a major revamp of the content in 2019 to be released in 2020.

Our two smaller events are exceptional, but they’re not for everyone. We also require that you apply to attend these events because we need to ensure we have the right mix of people.

The first, Think Weekend, is a dinner series. We meet for a Thursday–Sunday period in a warm location during winter. The days are free time, and we have an interesting series of dinner conversations.

The second is Re:Think Europe. Here we have 10 people show up for what’s been called “the most unique experience I’ve ever had.” It’s an intense period in close quarters with ten people that start out as strangers but wind up best friends. People walk away mentally stimulated and exhausted, while making tangible progress on problems they have.

The Knowledge Project #ListenAndLearn

The Knowledge Project moved away from being “the most irregular podcast in the world” to presenting a new episode about every other week—about 25 episodes this year. Our 2018 guest list included FBI hostage negotiator Chris Voss, learning expert Barbara Oakley, Stripe CEO Patrick Collison, obstacle course super champ Amelia Boone, poker pro Annie Duke, Shopify CEO Tobi Lütke, and the CEO of the JP Morgan, Amazon, and Berkshire Hathaway healthcare initiative, Atul Gawande, to name a few. (You can find the full list here.) The lineup for 2019 looks just as good.

As I write this we stand at 47 published episodes with over 4.8 million downloads. You should know that we’re not bound to bi-weekly episodes. Our only commitment is quality, so we don’t pre-commit to frequency or duration. Some of the shows will be 15 minutes and others will be four hours. We rarely edit conversations, unless it’s requested or we feel it’s important to protect the guest. To put things in perspective, only two or three instances come to mind. My assumption is that if I’m still interested in the conversation, you are too.

I know what you’re thinking: can you sit and talk for four hours with one person, with no interruptions? Yes! Our guests are exceptional people, and I’m a fanatic when it comes to listening and learning.

The Knowledge Project isn’t bound to have me as a host. In the future, we will explore having other hosts.

We guided TKP’s branding on a sharp turn for the better this year, and will continue in 2019. We invested a lot of money in these improvements—they don’t increase revenue for us but do make for a much better product and experience for you.

We’re likely to move away from sponsors to a listener-supported model in the near future. While we’ve had some great sponsors, like Metalab, I increasingly find that sponsors want things from me—really from you—that just don’t align with my principles.

Speaking of which, let’s talk about some of that stuff. I take your trust in FS and in me very seriously.

  • I am not paid by any company for any opinion or article posted on FS or in any public forum, including podcasts and Twitter. I receive free products all the time in the mail (over 200 in 2018!). If I use them and like them, I try to tell people about them—no affiliate links. If you’re wondering what this looks like in practice, I think I mentioned two things this year: Atoms and Bellroy. I wear the Atoms every day in the office, and Bellroy has been my wallet forever. It’s the same one I buy for my friends.
  • Farnam Street participates in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising commissions by linking to Amazon. Simply put, if you click on my Amazon.com links and buy anything, I earn a small commission, yet you don’t pay any extra.
  • Sponsors of our newsletter and website are not allowed to run any code that might track your internet presence. We tell them nothing about you except in broad strokes. Website sponsors operate on a percentage-of-traffic basis and do not compensate us based on page views. This reduces our incentive to increase page views and write crappy content.
  • We do not have a Facebook tracking pixel, so we’re not enabling companies to “target our audience.”
  • We don’t give out your email address to any third parties.
  • If you’re interested in sponsoring the newsletter, podcast, or website, feel free to reach out to us at [email protected] or directly to me at [email protected]


A few years ago, we started offering courses to help people with skills that make them more adaptable. We were more concerned with outcomes than income. To that end, I purchased most of the most popular online courses and took a look at how they worked, what they were selling, and how they went about improving outcomes.

Unfortunately, we didn’t learn a ton from these courses. Most university courses are theory-based, which is great but not practical. Most of the online courses offered by entrepreneurs are edu-tainment around selling stuff—like online courses. This didn’t deter us. We took a different approach, working through iterations until we hit on something that finally worked: one-on-one interaction.

If you did the homework in The Art of Focus last year, which was a daily email to me, we responded and problem-solved with you every step of the way. Most of the time it was me responding. While this wasn’t efficient or scalable, it was certainly effective. These weren’t group calls but one-on-one interaction. That was just one of the lessons that we learned about how to increase the odds people actually made changes that stuck.

Now that we know what works and what doesn’t, we can tackle a few more ambitious ideas around courses.

In our history, we’ve offered three online courses, a productivity webinar, The Art of Focus, and The Art of Reading. We’ve stopped selling two out of three of these, and will stop selling The Art of Reading in January 2019. (The Art of Focus will be available as part of the Learning Community in January, and the productivity webinar is already available to members.)

Here’s a sneak peek: we’ve  been working on a mega-course on learning for over a year. It has taken a long time to cover not only the theory behind how we learn and how your brain processes information, but how to put it into practice. The wait will be worth it! We’ll use what we learned in the previous courses to increase the odds of success for participants.

I’ve tested the concepts with a few people I’m close to, and the response I’ve gotten is nothing short of amazing. Here’s a representative sample from my testing: “Shane, no one has ever taught me how to learn. In under an hour, you changed everything from the types of questions I ask other people to dramatically increasing my ability to quickly learn…nothing will be the same again.” That’s unsolicited feedback, three months after our conversation, from a person who wanted to test the course for me and paid for it on spec. No videos, just one hour with me in a restaurant over dinner.

The Learning Community

Rest assured, we have no aspirations of running the biggest membership community on the planet, just the best. The Learning Community isn’t for everyone. Our growing Learning Community continues to collect remarkable people and includes entrepreneurs, Fortune 50 CEOs, professional coaches, athletes, GMs from all the major leagues (NFL, NBA, NHL, and MLB), students, teachers, Nobel Laureates, and bestselling authors.

The learning community isn’t about more content but better content. Not only is it a way to support what you love (FS), join our virtual reading group, get transcripts to all of our podcasts, and so much more—it’s a way to join and interact with a group of people like you, who want to get better and smarter without the shortcuts, a group that offers everything from reading recommendations to smart parenting advice. Some of my favorite moments this year, has been when someone posted questions about a book to the community forum and the author, an LC member, responded.

Importantly, if you read the website for free, it’s funded by the Learning Community. While there are some exclusives and some bonus FS content for LC members, the majority of FS content will always be free. If you find value in Farnam Street, we hope you’ll consider joining the Learning Community, or gift it to the ones you love.


Last year I wrote this:

“As many of you know, we’re huge fans of mental models. The problem is that when I set out to read about mental models years ago, there wasn’t a good source of information in one place. Where could I find timeless ideas to help me learn, think, and decide?

Farnam Street has filled that void for many, but we’ve been inundated with requests to write a book about mental models. The first volume, internally dubbed Thinking Tools, will be released soon. Rather than being a version of the website, it’s a fresh start at intelligently preparing ourselves for the world. Whether readers are high school students or newly retired seniors, this well-designed book will hopefully have a place on their shelves for generations.”

I have to eat those words. And I have some other confessions to make.

Writing a book and publishing a book are two very different things. The writing was done and fully edited in May. However, then we had to learn how to actually publish a book. That’s where the time and effort really come into play. There are a lot of publishing decisions around books—everything from typeface and layout to paper and design. You have to decide on the style, not just for one book but for the planned series of 5. Then you have to decide where to print, how to sell them (it’s not as easy as sending them to Amazon), how many to print, whether you want electronic copies, audio, and a host of other things.

Let’s talk a little about the series of books that we’re publishing under Farnam Street: The Great Mental Models.

The first physical book was designed from the beginning to be a beautiful reference book. In a world of disposable books, I didn’t want this to be a book you bought and threw away. I wanted to be the last book on your bookshelf.

Just because we’re self-publishing doesn’t mean we can’t have a world-class team. Our creative director for the project, Morgwn Rimel, came by way of setting up the School of Life. We love working with Flok Design, an international design firm based in Germany. Illustrator Marcia Mihotich is insightful—we love her style. We also had a great editor, Néna Rawdah, and proofreader Karina Palmitesta.

While we self-published to maintain control over the content, thanks to the team above it will look and feel better than most traditionally published books in every way. If you’re curious as to what it looks like on the inside, you can see here and here.

There is some bad news, if you’re eager to get your hands on a physical copy. We’re only printing 3000 physical copies.

The reaction from my agent was telling.

“Shane, so let me understand this right, if you had demand for another 1k books you wouldn’t print more?”

“Not unless something changes.”

“So you don’t want to make more money.”

“Not off the physical book.”

[Two minutes of silence.]

“I’ve never heard that before.”

I don’t have an easily explainable answer to why only 3k hardcovers, so I won’t even try to explain it. Learning Community members will know about the physical copies first and get first dibs.

Why will I be able to get an audio copy before eBook copies?

Long story short: Audible came to us and said they wanted to partner with us, and offered us a lot of distribution and promotion. Helping more people with critical thinking outweighs having the physical and print books out sooner. We’re excited to work with Stacy Creamer and the team at audible.

I am hesitant to sell the print and electronic rights, because I think holding them gives us flexibility in the future. I want all the content to eventually be free, because that helps our mission of equalizing opportunity: the people who can’t afford books arguably need access to thinking tools more than the people that can. And we want to experiment with things that would have been really hard to do with a traditional publisher.

The FS brand carried the day at every meeting we had with people interested in the audio rights. There wasn’t a person we talked to who wasn’t familiar with FS, and in every room where it was pitched, people said, “I love that website.” That helps.

In short, the mental models books are coming. The first draft of the second book is almost done. The books will come out as soon as I can get them to you without sacrificing quality or distribution. As soon as we know more I’ll let you know.

A Trade Book

I signed a book deal with Penguin Portfolio for a trade book and am beyond excited to be working with the team there, especially Niki Papadopoulos. I’ve wanted to work with Niki ever since she came to one of our events four years ago. While this contract was for one book, I have four high-quality and unrelated book ideas in the queue.

Stay tuned.

Team Farnam

Perceptive readers know there is more to Farnam Street than just me. While I might be the face of FS for now, the site you are reading is increasingly about a team of people.

The team includes Rhiannon, who is a full-time staff writer and my right hand, working with me on the mental models books. Devon is our jack of all trades, doing most of our copy for courses, marketing emails, and podcast production. Bri is my part-time assistant.

Next year, two more will join the fray: one person in January to help us research, and another person in October to lead the team to the next level. I wasn’t looking for people, but the opportunity arose to hire two amazing humans, so I pounced.


I want to thank our website sponsors Royce Funds, Tulco., and Greenhaven Road Capital. I’d also like to thank our podcast sponsors Metalab, HeathIQ, and Inktel. If you’re interested in sponsoring us, send me an email at [email protected]

A Better Way to Sell Your Business

If you’ve built a profitable business with a reputation for fanatical customer service, I’m interested in becoming your partner.

Through Syrus Partners, a company we started to mirror Berkshire Hathaway on a micro scale, we made several investments last year. They included Mealime and Paragon Intelligence—where my background comes in handy.

We’re looking to partner with companies that have a reputation for honest and fair dealings, consistent earnings, good returns on capital, and straightforward business models. As an investment partner, we’re not interested in flipping the business, taking control, or leveraging it up. We bring permanent capital, simple and fair deals that can close in 4–8 weeks, and a reputation for letting you do your thing. We’re always available to help with anything—our team consists of people with world-class experience in marketing, branding, sales, and technology, not to mention an extensive Rolodex. Simply put, we offer as much or as little help as you want. We want you to keep doing what you’re doing.

We’re not VC, so please no pitches for business ideas. If you’ like to explore selling all or part of your business to a trustworthy and long-term partner, send an email to [email protected] with all relevant details.

Thank you.

We continue to put one foot in front of another and reinvest the proceeds from the Learning Community to create the best content we can.

Next year we’ll get back to more variety of content. There will be a mix of deep dives on topics as well as explorations. In short, back to our roots. We lost a bit of focus on that in 2018, which is entirely on me.

There is much good to come from FS in the new year. I look forward to continuing to learn with you. Thank you for reading and supporting us.