Blogging and human capital

Over the last month or two, there’s been a lot of discussion amongst FP bloggers on the topic of monetisation: finding ways to make some kind of return on the time they invest into building and maintaining their blogs. This is a topic I’ve previously blogged about, but lately I’ve been wondering if we all aren’t missing an important (and obvious) benefit. So today, I thought I’d introduce the idea of human capital and how it relates to our blogging hobby.

Blogging about FPs confers quite a few benefits on bloggers, which help to offset the costs we incur (both money and time). I think Brad Dowdy is right when he talks about community being the single biggest benefit: it really is wonderful to share our passion and excitement with others who have the same experience. But this benefit is hardly unique to bloggers — virtually everyone who participates in the community, blog or none, enjoys it. (Arguably, this is really the raison d’etre for the community.)

But bloggers also experience some more unique benefits, particularly in access and regular interaction with the sorts of people that you might not otherwise get much time to talk to. When I was a mere redditor, I sent a message to /u/MrsGouletPens — the charming Rachel Goulet — mentioning that I was an economist and would be happy to help out if they ever had any econ-type questions or challenges. I received an awfully polite rejection from her — as you’d probably expect for an internet rando like me! But since having the blog, people know me and they’re a lot more likely to engage. That’s my personal experience but I know it’s true of many other bloggers too. 

Many bloggers also enjoy access to products that they might not otherwise be able to experience: products loaned or given to them by retailers, brands, and viewers, and even the occasional gifts. Those opportunities certainly aren’t available to your typical redditor or Twitterer. (For the record: I’ve had approaches but declined them. Not for any moral reasons, I just don’t really do product reviews.) 

On top of that, some bloggers seek direct financial support from sponsors or readers, and recent discussions have focussed on the usefulness of Patreon for building a revenue stream. My view is that this is a poor format for bloggers and unlikely to yield much of a return (somewhat borne out by the Patreon numbers). 

But I think there is something missing from the discussion, and that is consideration of the long-term benefits from blogging. Regularly blogging over a period of months or years forces the blogger to develop certain skills, knowledge, and judgement that are really quite valuable, and it’s surprising that this doesn’t get more attention.

These benefits fall under the heading of human capital, the part of economics that studies why some people are more productive than others. Sometimes it’s due to education and training, sometimes due to experience, sometimes it’s due to work ethic or an innate ability to solve problems. Regardless of what it is, a more productive employee is more valuable to an organisation and will be better compensated. 

Conceptually, the decision to go to college or a trade school is an investment in our human capital. We improve our skills and knowledge, making us more productive employees and more valuable on the labour market. And like any investment, we need to weigh up the costs (tuition, textbooks, missed earnings) and the benefits (higher salary, reduced likelihood of unemployment). 

Historically, most employees looking to develop their human capital have had fairly limited choices. On-the-job experience is low-cost but yields a small return for the time invested. Going to an adult education program has a slightly higher cost and only yields a slightly higher return. Going to a trade school, college, or grad school has a much higher return but it’s also much more costly. For most people, none of these options are terribly appealing. 

But things are a little bit different in the digital age, our choices are not as limited. We can now enrol in online courses through Coursera and Udacity, we can learn through podcasts like Econtalk or the Partially Examined Life, and we can learn by doing. We are able to learn the skills and demonstrate competency simultaneously. 

It’s this last technique, learning by doing, that relates to blogging. Blogging is distinct from other social media as it demands the blogger develop skills in communication, marketing, and strategy. Communication is  the ability to develop a message that makes sense to readers, whether it’s something as simple as explaining why you love your new pen or something more nuanced and complicated. Regardless, it requires an underlying skill: the ability to think deeply about something, to understand your feelings, and to articulate them so others can understand as well. These skills are not particularly common in the business world, so they are highly valued. 

Of course, it’s not just about communicating with your audience but also communicating with brands, retailers, and other bloggers: building relationships and sharing knowledge, sometimes also negotiating with firms who are supporting the blog in some way. The more we do this, the more we understand how to conduct ourselves in a professional manner and understand the rhythms and nuance of these conversations. 

Second is marketing. Most bloggers realise that they have a brand, whether it is built around their own identity (like Pete Denison) or around a branded identity (like the Pelikan’s Perch), and that the success of the blog — using whichever metric you prefer — means building that brand. You want people to be aware of the brand, to respect it, and you want to develop a feedback mechanism: a way to learn what people think of you, which then informs your work. This often involves managing a range of social media: blog comments, Twitter, Instagram, sometimes also accounts on reddit or FPN. This kind of management is another skill with obvious value in the commercial realm. 

Finally, and perhaps the most scarce of these skills in our community, is strategy. Building a successful blog is often a very deliberate process, which involves having goals and thinking through the pros and cons of different options, trying to figure out which choice will bring you closest to your goal. Learning to think this way — to develop clear goals, identifying developing ways of achieving them, and weighing up alternatives — is a hugely valuable skill. It is a skill expected of anyone in a management role, but one of the hardest to develop.

There’s a pretty broad spectrum when it comes to strategy and FP blogs. There are those who obviously aren’t too fussed about it and just want to have fun (e.g. the ever-changing Too Many Inks), those who are deliberately trying to build something and are in the process of developing those skills (On Fountain Pens), and those who have obviously honed their strategic skills over time and now put a lot of energy into strategy (The Pen Addict).

Bloggers develop these three core skills and develop their human capital, which therefore makes them more valuable on the job market — even if the job doesn’t have anything to do with FPs or social media. This means that we have an alternative way to monetise the blog: not through hitting up brands, retailers, or readers for money, but by developing valuable skills and using them to earn pay rises at our day jobs. 

To do this successfully, bloggers need to focus on two things: they need to intentionally develop these skills and they need to ensure that managers and employers are aware that the individual possesses these skills. Let’s explore each of these. 

Intentional skill development is vital. When you are blogging, you can  take it seriously or just sit back and enjoy it. The latter path is easy, it doesn’t really require that much effort: you just publish as you please, write whatever is on your mind, for whoever cares to read it. There’s nothing wrong with that approach, but it’s not going to develop your skills in the same way as it would if you were blogging with the intention of getting better at what you do. 

When you blog intentionally, you need to identify the areas in which you feel you could improve and explore ways to achieve that. Some of us are poor communicators and need practice, need to experiment with different approaches to writing, and develop the techniques which are effective. We need to look at what others are doing and to learn from their approach. And it’s the same thing with the other skills, if we aren’t great at marketing or strategy, we need to experiment and benchmark and deliberately work to develop those skills. Nobody casually became a professional athlete or musician, only playing when the mood struck; it requires discipline and dedication. 

As bloggers develop their human capital, they also need to communicate it so managers can see they are becoming more valuable as employees. I haven’t done much research in this area, but I know quite a few bloggers prefer keeping their pen life separate from their work life. I can understand this, not many of my colleagues are aware of this blog, and our community has more than its share of people who are somewhat introverted. They feel safe sharing their passion with others who are enthusiastic but might feel a bit apprehensive about sharing it with people outside the community: people who might not understand. 

I completely understand feeling that way, but hiding valuable skills from an employer is not unlike hiding that you have a masters degree or that you went to a top school. It’s probably holding you back, and you might want to consider if you really feel that the secrecy is worth missing out on a higher salary. Even if it’s only a 1 or 2% increase, that’s going to pay for a couple of nice pens each year.

So it’s possible for a blogger to monetise in this way, as long as they are developing their skills and being recognised by their employer for doing so. I suspect this is much more lucrative than sponsorships: average annual income in the US in 2013 was around $45,000. If you develop skills in blogging and earn a 1% pay rise, that’s worth $450/yr — and it’s a permanent increase. On the other hand, a Patreon sponsorship might land you $20/mo ($240/yr). It’s not a permanent increase and you’ll need to keep working at the blog and ensuring that you are delivering quality content to an audience which is willing to pay for it. 

A sponsorship from a retailer is more valuable than Patreon, but I still think a pay rise is an optimal strategy. A decent sponsorship might pay $50/mo ($600/yr): more lucrative than a pay rise but it has the same problems as Patreon. You need to keep delivering content and maintain your audience if you want that money to keep coming in. You also need to navigate the relationship with a sponsor (or sponsors) to ensure that they are satisfied with the return on their investment. Compared with a pay rise from your job, a sponsorship is a lot more work and less secure.  

Finally, I want to argue that human capital development is probably not consistent with sponsorship: that is to say, you can’t really develop these skills if your main focus is trying to attract sponsors. Partly, this is a function of time: we only have a limited amount of time and energy to put into things, and you really need to choose a focus. 

It’s also because your incentives change. Instead of skill development or personal enjoyment, your focus will change (even in some small way) towards satisfying whoever is sponsoring the blog. Sponsors like consistency. Readers like to know that you’ll be putting out a standard, predictable form of content and retailers like to know you’ll attract a regular audience. The incentive to experiment, to be creative and play around with different styles or form, is much diminished — and so too is the ability to develop those skills. It’s no coincidence that SBRE Brown  and Gourmet Pens enjoy a large number of sponsors and are really quite rigid in their work. (Which is not necessarily a bad thing from their perspective.)

I think that sponsors put bloggers into a position where we are more focussed on the short term: what can I get now, what do I have to do now to to maintain it. Building human capital takes time, practice, and experimentation — it’s not a short term thing, but it can be more rewarding, more lucrative, and more long-lasting. 

So to wrap up, I think that blogging can lead to a large and permanent return, as we develop skills that are valuable in the workplace. But to get this return, we need to focus on intentionally developing those skills and ensuring we are recognised for them. Finally, I think that focussing on sponsorships can lead bloggers to focus on the short term: earning a small amount of money now rather than developing skills for a larger payoff down the track. I hope this has been an interesting discussion and I’m really keen to hear what other bloggers think about this.