The secret of the Roush effect

When Gerald Roush died in late May, he left behind the Ferrari Market Letter. This newsletter, which he started and ran, had nearly 5,000 subscribers, paying him $130 a year for a subscription. Do the math! It's a good living–even without a fancy website.

The newsletter, it appears, was not just lucrative, it was a bargain. It chronicled the pricing, whereabouts and details of just about every Ferrari ever made. If you were a buyer or a seller, you subscribed. If you wanted to run an ad, you were required to include the car's VIN, which added to Roush's voluminous database.

The Roush effect involves extraordinary domain knowledge, a market small enough to understand and diligently earning the role of data middleman. The players in the market want there to be one clearinghouse, one authority who can connect the data, see the trends and publish the conventional wisdom.

It might be a newsletter, a conference or an online database. The tactics don't matter, but the role is indispensable. If you need examples to persuade you to try this, they won't be hard to find. One of my favorites is my friend Michael's role in the book industry. He's bigger and more important than the famous (but failing) trade journal.

Just about every tribe needs a Gerald Roush. And in many markets, they can afford to pay someone like him very handsomely.