Comparing the two big newsletter industries with Matt McGarry

Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
John Newtson (00:02):
All right, hey everyone, I'm excited today
because we're going to betalking about newsletters, but
not newsletters like we think ofthem.
I've got Matt McGarry here, whois your third employee at the
Hustle.

Matt McGarry (00:14):
A little bit later I came on also about 2020.
So maybe we had a team of 20 atthat time on to the hustle, um.

so we're gonna be talking about the newsletter
boom that's happened outside offinpub um, and how that has um,
how's it grown?
How it's gone from the world ofthe morning brews to
influencers now using and otherentrepreneurs kind of launching
their own newsletters.
And matt's kind of at thecenter of this these days.
He's got a newsletter andpodcast for that world about how

(00:45):
to kind of build a newslettersubscriber base.
He's got an agency helpingpeople who get to a certain size
actually go out and acquire.
He managed all the acquisition,I think, and learned customer
acquisition or e-letteracquisition for the hustle.
So, matt, thanks for being here, thanks for having me, thanks
for having me.
So, for people who maybe aren'tas familiar with, like that

(01:09):
newsletter world, how would youdescribe kind of the newsletter
boom from the direction that youare coming to it from, in the
newsletter businesses that areout there, versus kind of what
we have here in the financialpublishing world?

Yeah, there's a lot of similarities, but usually
a little bit of a differentbusiness model.
It's not direct to consumer,they're not selling their own
products.
Usually we call thesenewsletter-first media companies
.
Usually the most popular oneeverybody knows of is Morning
Brew, which is north of $100million in revenue and had a big
acquisition or had a big salein 2020.

(01:44):
I worked at the Hustle, whichis a newsletter that started
around the same time.
We sold HubSpot for about $27million in 2020.
And then there's other ones,like the Skim, which has north
of 10 million subscribers.
It's focused on a femaleaudience.
And there's other ones likeWell Before, like the Daily
Candy.
They kind of pioneered themodel, um, but in, of course,

(02:06):
after, after the success ofmorning brew, the hustle, the
skin, many others have popped uptoo, um, like, like the milk
road, which is another one thatI worked at.
So that's kind of um some ofthe players, but the business
model just works a little bitdifferently.
Usually these are um dailyeditorial newsletters and
usually there's there's brand ordirect response ads within them

(02:27):
that they're selling tothird-party advertisers okay.

So so the, the newsletter itself is they're
generally not faced by apersonality, right.
They're um, like, yes, sothere's not a personality, um,
they have a, uh, a topicstrategy or or you know, that is
usually like.
Morning Brew is a little bitlike just a general news site,
but some of the other ones weremore like kind of niche,

(02:51):
specific right, in terms of likethey'd have a more defined
audience.

It started broad.
You know, the skin was kind ofbusiness news and personal
development news for women.
Morning Brew is business newsfor young professionals.
The Hustle focused more on liketech and startup news, a little
bit more of like a SiliconValley angle, an Austin angle,
than Morning Brew, which is morelike a New York perspective.
So those started broad.

(03:15):
But now we're seeing a lot moresuccess with the niches like
Milkroid, which is all aboutcrypto.
Lots of AI newsletters havepopped up and grown to 500,000
or a million subscribers reallyquickly, just focusing on how to
use AI in your professionalcareer, stuff like that and many
other initiatives.

So I mean those are big numbers in terms of
subscriber bases, right, likewhen you're talking about
acquiring names in that model.
Could you kind of walk through,just so everyone understands,
understands here the acquisitionkind of math, how that works
and then how?
I mean also, are these fundedbusinesses?
Are they generally raising VCin order to be able to cash flow

(03:58):
that acquisition in thebeginning?
Because if without a productlike kind of the chicken before
the egg problem, you need anaudience to sell to advertisers
and advertisers to fund themodel, so how's that working?

Yeah, so the big three we talked about in the
beginning Morning Brew, etcetera those raised a small
amount of money.
I think they all raisedapproximately a million dollars
back in 2015, 2016.
But the ones that have kind ofpopped up since 2020 and onward.
It's much less common to raisemoney.
Bootstrapping has really becomemore popular and also really

(04:30):
the best path for this type ofbusiness model, and it is
bootstrappable.
A lot of these audiences can bebuilt and have been built
organically, first throughsocial media growth on Twitter,
linkedin, whatever it might be,converting that social following
to a newsletter subscriber,building that up to a decent
size, like a list of 10,000,50,000, even more, and then

(04:52):
using that revenue fromsponsorships to invest back into
paid growth to scale tohundreds of thousands of
subscribers or more.
So there's a mix of both, andthere's also a lot who have just
raised a small amount of moneybut wouldn't call themselves
venture backed.

Okay, that's not, that's not like wildly different
than than our space, cause Imean, like the like.
You know, I use the morningbrew.
I think if one uses morningbrew it's kind of like the oh,
this is what this space is.
On that side we use the Mot,that brand, and the motley fool
is, I think, the one of thebiggest advertisers in the
morning brew.
But they also raised I thinkthey raised 100 million um back

(05:28):
in the 90s, um originally, um,whereas almost everyone else was
bootstrapped.
So it's a very similar kind ofum sounding growth in the
industry.
Then, um, what I want to getwhen you're advertising well,
let me step and sit back thesocial piece versus the um paid

(05:50):
acquisition piece.
When you say that they'restarting with like social
audiences first, like what, like, what does that look like?
I mean, did the hustle startthat way?
I mean, did?
Did milk road, you said, startthat way, like yeah, I can give
a few examples.
How are they building out alarge social audience?
First they're grinding that outand then converting that into a

(06:11):
newsletter model.

Yeah, everybody's a little bit different and so
back when the hustle was gettingstarted, social wasn't as big.
So they wrote a lot of viralblog posts, they got shared a
lot, they got subscribers.

(06:33):
That way, the Morning Brewreally had like a student, like
college student referral programand ambassador program where
they got their first 100K thatway or close to that.
But now it's more about like abig catalyst for the growth of a
lot of these newsletters wasTwitter threads from 2020 to
2023.
There's this massive reach onTwitter through threads and so
people like Sahil Bloom he nowhas a newsletter of north of
600,000 people.
He's kind of I would call him acontent creator, but he got his

(06:55):
first 100,000 or more justthrough Twitter threads.
Cody Sanchez is another one whoI've worked with.
She's a newsletter north of600,000 people now, too, a lot
of growth through Twitter andalso through other platforms.
Now she's become big on YouTube, so they kind of follow the
content creator route butinstead of being a YouTuber like
a tick tocker, usually it'smore education based content in
the platforms they're posting on, usually start with Twitter and

(07:18):
LinkedIn and expand from there.
They're, but it's a mix, right?
So the milk road I was thefirst employee there and we
started with paid ads from dayone and we spent a lot on

(07:38):
Facebook ads and TikTok andTwitter ads and we acquired a
lot of 500 or 600,000subscribers.
They did a combination of both.
They blew up on twitter.

Everybody wanted to hear about what was going on
in ai and they also ran paid adsright, right, so okay, and when
you do the paid ads, likewhat's the math going to look
like on that?
Like how are they figuring outtheir math on that?
Because you know, obviously thesubscription we're looking at,
roi based on, based on initialsale and follow-on sales.
Obviously, this is sponsorshiprevenue.

(08:07):
So how do you figure out thingslike what you can pay for a
lead and a reader?

Yeah, it's unique to the space, so it works
something like this.
These are going to be a littlebit rough numbers.
So we do this for clients.
Our average CPA cost per emailsubscriber for a client is $2.
But it can vary so muchdepending on the niche of the
newsletter and the audience.
We have some clients andnewsletters that we know that
have hit $1 CPAs consistently atscale and then some who are

(08:34):
more comfortable with like $3 or$4 because they have a higher
LTV for that subscriber.
But let's just say we used $2on average.
So you're going out on Meta.
Meta is the best platform, butTwitter and TikTok have been
secondary platforms for a lot ofthese folks.
So paying $2 per subscriber.
A lot of people are using a toollike Sparkloop Upscribe or
Beehive Boost to haveco-registration in their signup

(08:56):
process and so they'll earn asmall amount of money during the
signup process.
They might earn 50 cents all theway up to $1.50 per subscriber
in earnings from thatco-registration from Sparkloop
or Beehive Sparkloop's the mostpopular and so that lowers the
cost on day one to a netacquisition cost of 50 cents or

(09:17):
$1 per subscriber Sometimes more, sometimes less, but these are
just general numbers, sometimesless, but these are just general
numbers and then over a periodof three to six months they'll
make that revenue back andhopefully more through the
sponsorships that they'reselling, usually like a payback
period.
A really good payback period forthis would be like three months
, but you know, six months andlonger is more common for the

(09:40):
more established newsletters,like a morning brew for the
hustle.
When we worked at the hustle or, excuse me, when I worked at
the hustle we used a lot of meds, meta ads and through the
lifetime of that business theyacquired well over a million
subscribers just through metaads, any Facebook ads, just just
that platform alone.
And if we look at um you knowI've been lucky to talk to a lot

(10:01):
of people these biggernewsletters 1440, morning Brood
of the Hustle, meta is alwaystheir number one acquisition
channel for their entire emailaudience.

Okay, Okay, it's such an interesting thing to me
because I think like there's somany parallels.
But one of the things that'sthat I've been talking to the
Finp, to all you guys in Finpabout is kind of the
mainstreaming of financialpublishing and that, like the
retail investor is becoming muchmore prevalent and there's more
people and there's more likethere's this boom in content
creation.
But what's fascinating to meabout like the, the hustle and

(10:33):
the milk roads and the morningbrews is that it's taken the
newsletter content model andthat in and of itself is also
kind of mainstreaming and that'sbecoming very well known across
all kinds of sectors.
The types of advertisers thatyou guys are getting are
different than people who are inour space.
I mean, Notley Fool may be overthere, but there's a wide

(10:56):
variety of advertisers, right?

There is, and there's still within some, a
couple of main industries.
So, like financial publishingis big.
So the Notley Fool was like atop three advertiser, morning
Brew probably in the hustle too,and other newsletters.
They kind of incubated andfunded a newsletter called the
Daily Upside which now has northof a million subscribers and
they're probably still a hugesponsor there.
I don't know if the other Agoracompanies are like market-wise

(11:21):
sponsor these newsletters asmuch.
I haven't seen that as much.
But um, some other financialpublishers can be big.
Obviously financial tools likebrokers or apps like a robin
hood, those are huge sponsors ofthis robin hood.
Um recently acquired anewsletter called charter which
had about 400 000 subscribers,also in like the business and
and finance news category.
Um, and then a lot of big onesare like what I would call like

(11:44):
personal or consumer software.
It's like personal financesoftware, credit, karma,
productivity software.
Anything that's like personalsass is huge um and it's
basically yeah p2c sass, not asmany d2c brands selling a
physical product or merchandiseor you know, athletic greens,
that's.
That's more like the podcastspace, but like the financial

(12:07):
products and the consumer sassproducts are really popular and
that's just for prosumer or b2cnewsletters.
When you get into b2bnewsletters and b2b media, of
course there's a whole bunch ofb2b advertisers that play in
those niches right yeah, b2b isa different animal in a lot of
ways, but there's a similarmodel.

There's a very large B2B newsletter world at
this point.

Yeah, it might even be a lot more interesting
and lucrative than the B2C andthe prosumer, which are the ones
we've been talking about so far.

Yeah, yeah, I think B2B is, you know, um and
FemPub we're all B2C Um but Idefinitely think that the B2B
space is one of the mostinteresting spaces out there in
digital marketing and in um, thenewsletter stuff and just the
from some of our offlineconversations, some of the
things you showed me on thatside I think we're really,

(12:56):
really interested in um muchbigger companies there, because
B2B is different price pointsand if you have a large B2B
audience, you have a much moresubstantial business right.

Yeah, if you look at Industry, dive sold for $525
million, I think in 2020 or 2021, that's one of the biggest
acquisitions in media ever.
And they're a B2B publishingcompany with about 30 brands,
and newsletters and emails are abig focus for them.
It's basically web and emailare where their audience is and,
of course, of course, axios.

(13:25):
A lot of people wouldn'tconsider them b2b, but they
really are.
Um, they had a huge acquisition.
It's around the similar numbersI don't remember the number off
the top of my head um, and thatindustry dive.

I mean, you said 500 million, that's like 200
million more than investors.
Business daily sold right andthey had an enormous amount.
They're getting, I think, 20million uniques a month in
traffic and I don't know whattheir list sizes were, but like
so it's a very substantialbusiness there.
Um, and speaking ofacquisitions, um, do you have
any idea what the multiples arein in this space in terms of

(13:59):
exits lately?

there's I'm not an expert on this, and there's
been a big variety too, andthere's also not total
transparency, as you know, withall these right.
So I think you can go I don't,I don't know the numbers off the
top of my head, but you can goback and kind of figure out what
they were for the hustle,morning brewed industry, dive,
um, and now they're a little bitlower the hustles.

I mean, if you can say it like do you know roughly
where the revenue fell on that?

I'm forgetting now because it's been so long, but
is eight figures in revenue.
They actually had a lowmultiple in my opinion.
I think could have been a lotbigger acquisition.
I think it was.
The founder was kind of amusician where he wanted to get
out of the business.
He was ready for the next thing.
Morning brew had a bettermultiple than the hustle In the

(14:45):
hustle had.
You know a lot of things thatmorningbird didn't have they had
recurring revenue through asubscription.
So um the morning before Iforget, was it 70 75, I think,
um, I think it was 75, and now,a couple years later, they're
doing they've said they've donemore than 100 million revenue,
annual revenue, um, and, ofcourse, like there have been
economic challenges, especiallythat started in 2023, that have

(15:07):
made these multiples go lower.
And some people like, I thinkmorning brew has slowed in
growth, um, because the wholeadvertising economy is slow too,
um, so there's there's thosechanges as well yeah, we're very
familiar with the uh 2023slowdown as an industry.

It definitely hit here.
I I'd say second half of 2022and first half of 2023 were some
of the hardest in the industryin 10 years.
You're also out there teachingpeople how to build newsletters

(15:44):
in this model who are kind ofcompletely unfamiliar with this.
How's that space looking to you?
How do you do you see like thea lot of interest and a lot of
growth happening in terms ofpeople looking at like?
We saw Substack obviously as aplatform providing the beehive
coming in and making it reallyeasy for somebody to do the kind
of technical stuff to get anewsletter going, and that's

(16:05):
really fueled the boom.
Do you see there's a lot ofexcitement and a lot of interest
in building both free and paidnewsletters?

Yeah, there's a lot more.
I think it really started in2023.
It first started in 2020 withSubstack, and some of those
acquisitions kind of triggeredit.
Substack and BF have made it alot easier.
Convertkit is great too.
Really, those three platformshave driven this wave and, along
with acquisitions and peopleseeing success out there, and
then finally, people like me andSampar and other people

(16:34):
actually talking about how thesethings work, and you and many
others too.
Those are just a couple ofexamples, but that has helped.
Yeah, it's just.
You know, I've done emailmarketing newsletters for a long
time and it's just, it's wayeasier now to spin something up
and to start publishing.
And I think people are startingto also see the value of the
email audience.

(16:54):
I mean your audience, and youknow this.
You've known this forever.
Like building an email list isso important and it's an
audience that you own.
But that simple concept hasbecome more widely known and
popular in the past year or sowith a lot of other people.
So that's kind of the wave I'veridden a little bit and I've
been a promoter of right, so Ihave like a small newsletter and

(17:16):
podcast that promotes that.
The audience size isn't hugethere.
We have about like 16,000newsletter subscribers and
thousands of podcast downloadsper episode.
But on the back of that I'vebeen able to build a service
business agency.
It's been more successful andput a big positive, positive
impact on my life for sure.

Yeah, no, that's great.
I think that's like you know.
We're like, we're over here invery small kind of.
It's a big revenue niche but asmall number of companies, and
so we have we have kind of a aninsular view.
And it's interesting to mebecause on almost every other
marketing strategy, um, I wouldsay that finpub tends to lag,

(17:57):
like internet marketing worldand digital marketing world,
because, um, for a bunch ofreasons, um, and it's not a bad
thing we tend to focus on likefundamentals and then things.
You know, we were buying mediamaybe more aggressively than
everyone else for a longerperiod of time, but it's funny
that the newsletter boom isreally taking off in 2023 from

(18:20):
our perspective.
Now, just because I mean, whenwe think of newsletters, we're
thinking like you know, youmight argue, argue, did this
start in the 40s or the 50s?
With off because it was offline.
It was an offline business, umin direct mail and, like um been
doing internet e-letters.
Uh, this is the one thing thatyou could say.
I think you were probablystarted.

(18:40):
Um was the e-letter back in theearly 2000s because it was like
, hey, we just take the printnewsletters and put them online
and now you can turn it into anacquisition source, and so, um,
it's interesting to me, justbecause we've been doing this
forever, but now, to see, um,such an amount of excitement and
energy happening in otherspaces with the model, at a time

(19:03):
when, like, finance is alsokind of mainstreaming it, just
it creates a really interestingset of opportunities.
Because one of the things thatwe've had as a industry is that
when you go to talk to otherpeople like they don't
understand what we do, right,they don't understand
newsletters, um, and like thesubscription side, and and so

(19:24):
now it's much more like it's atransformation that's happened,
in my view, that people canactually see you say, oh, we
have a newsletter business, andthey have, at least, if they
don't have the model, the samemodel in mind.
They have a concept of what itis in a way that they didn't
before, and it doesn't seem likea big deal.

(19:44):
But when you're having businessconversations, it actually is
kind of a big deal, um, becausenow it's like there's less
education that has to happen.
It's more about like, well, ourmodel's different.
Well, how's it different?

oh, it's subscription, you know, um, and
so I do think there's probablygonna be a lot of um,
cross-pollination, um, yeah, andI think there should have been
already, and I'm kind of BecauseI kind of first I'm not an
expert on FinPub, but I kind offirst started researching it
back in 2017 and was fascinatedby this business model and the

(20:20):
morning brew type business modelat the same time, I kind of got
into exploring both thoseworlds at the same time.
I kind of got into, um,exploring both those worlds at
the same time and there hasn'tbeen as much overlap outside of
you know, kind of buying ads.
Um, yeah, then I would.
I would expect, you know, Ithink one of the failures of
newsletters like morning brew,the hustle um, the hustle
started doing this before theygot acquired, but they never

(20:41):
really developed their ownproducts to sell and they never
really had much revenue fromselling their own products,
going direct to theirsubscribers and selling
something.
A lot of people at Morning Brewthought they should basically
start their version of theMotley Fool and I think that
would have been a huge success,but it never got off the ground,
because you kind of build abusiness around one model and
it's really hard to transitionand add different revenue
streams after you're already big.

(21:02):
It's really hard to transitionand add different revenue
streams after you're already big, yeah, and it's like one of the
.

There's like limitations of our model that
are also strengths, right, like,in order to make our models
work, you need much moreaggressive promotional copy, and
one of the largest, I would say, limiting factors is the amount
of capable copywriters who canwrite that copy, because it

(21:30):
makes a massive difference andwe can't even get enough from
them, and so it's one of thosethings where the Motley Fool has
a less aggressive approach tocopy, because they also have a
media business too, but the restof the, the industry has, like,
I mean, you look at thesepromos and they're, if you print
them out, it's 50 pages long,60 pages long yeah, and that's

(21:55):
something you know morning brewis never going to be able to do.

But because they have this massive audience and
they built up a lot of trustwith that audience, they don't
need to do it in quite the sameway.
They can get away withsomething more like what the
Motley Fool does and they'llhave their unique spin on it.
In the hustle we tried this alittle bit.
We had a product called Trendswhich was more kind of in the
business opportunity space, andwe had not a great conversion

(22:19):
rate, but over a two-year periodwe had 15,000-plus members at
$300 a year and that was growingreally rapidly before it got
acquired.
And then it got shut down byHubSpot, which was a big
disappointment.
So it's definitely possible.

Yeah, no, that's very cool.
So adding the, yeah, that'sinteresting.
So I think of this as, like,the media, the media business,
right, the info, the niche mediabusiness is becoming more and
more varied and we see a lot ofthat out there, um, from video

(22:55):
and written newsletters.
Uh, like you know, I worked atreal vision for a while, which
had some good hope, and then itkind of fell apart in a lot of
ways.
You've got really coolbusinesses like the information
out there, um, that are mixingright, like they're mixing
strategies, right.
So you have a core subscriptionfor the, basically the news

(23:15):
site, the niche news site, andthen they'll add events, other
products and things like that.
And I've seen that where, like,we're seeing this mix of
product lines across a nichemedia business and that works
when you have a niche audience.
Do you see any of that kind ofstuff happening too?
Do you see, like, groups addingevents and things like that to
their, to their media mix?

yeah, I think niche is really the future of
newsletters and um really mediain general, and it just unlocks
these additional revenue streams.
Like you can't really do abroad event, um, it's.
It's, you know the hustle hadone, but it was more.
The newsletters are moregeneral and the event was
focused on founders andentrepreneurs, so it wasn't a
broad event.

(23:56):
But, yeah, I think it makessense to not that.
Diversification is always good,because if you have one business
model that's just absolutelycrushing it, you don't need to
diversify.
But you know, advertising isnot perfect.
Perfect, and so the ones thatI'm seeing are that are
succeeding is where they have umsponsorship in the new, in the
newsletter, maybe othersponsorship products.
They might have a subscriptionor an information product.

(24:19):
That's, that's a one-off offer.
We'll have an annual event,maybe more events, um, and
that's just to start.
Those are like three and Ithink the ones that are
struggling, the media companiesthat are struggling right now,
whether their newsletters or not, are the ones that just have
one revenue stream, um, which isusually advertising.
That's the one where mostpeople are struggling.
Um, the only place where I seekind of one revenue category

(24:42):
working well is like B2Bsponsorships, because there's so
many different types of adproducts you can sell.
You can sell sponsorship in thenewsletter podcast.
You can sell sponsored webinars, sponsored um podcast
interviews.
Yeah, branded content all kindsof stuff yeah, branded content,
deep dives, advertorials, sothat's like it's really more
than one revenue stream, butit's one category and so that
works great for b2b.
That's never going to be a b2cthing, um, but that's that's

(25:06):
kind of one example.

That's a little bit different than what we're
talking about yeah, yeah, but Ithink I mean b2b, like I mean,
audience selection determinesyour price points in a lot of
ways, or the price ranges, andso that's one of the nice things
about the b2b newsletters isthat the price points are
fundamentally higher and so, um,because you're dealing with a
business trying to generatebusiness, and so they can spend

(25:27):
more money, and that makes it avery, very attractive space, um,
and so, what kind, what kind ofgroups are you working with now
as an agency?
Um, to help grow their, theirnewsletters?

or what kind of couple.
I can name off a few just togive some good examples.
So charter, the one that gotacquired by red robot hood,
we've worked with for a longtime.
We work with a lot ofnewsletter focused creators like
sahil bloom.
I mentioned cody sanchez.
They've opened a client.
Um james clear, the author, is aclient.
He's growing his newsletter toover three million subscribers
and he's sold like last year hisbook was the best-selling book

(26:02):
out of all the books on amazonand a lot of that is through
email.
Like he wouldn't be able to dothat without his two million
subscribers than 3 million now,right.
So, um, that's kind of the someexamples of the creator space.
And then we work with a lot inB2B.
Like we started working withwork week recently, um a couple
other B2B in different nicheshealthcare, entrepreneurship,

(26:22):
fitness, tons of differentcategories in B2B.
That's probably one our besttypes of clients we can work
with and um, all those are kindof newsletter first, media
companies or creators and we'vestarted to dabble in helping a
little bit more people in likefinpub, um, so really just one
or two um financial gurus orpublications right now that are

(26:43):
clients.
So it runs the gambit, butthat's a little bit of what it
looks like.
Okay, and the like it runs thegambit, but that's a little bit
of what it looks like.

Okay and the like.
It's interesting.
So, like the influencers,adding in authors and people.
Like you know, we've known thisfor a while and it's cool to
see other spaces looking at,like, well, if I have a paid
subscription product, thatchanges the math of everything
that I'm doing with my media andit becomes a really valuable

(27:09):
distribution source, everythingthat I'm doing with my media,
and it becomes a really valuabledistribution source, and, and
so to see it kind of explodeoutside of finance, even though
it is very like finance adjacentin a lot of these cases, um, I
don't know, I think I think ithas a lot of, just a lot of.
For me, I'm like this.
Just another like thing put inthe back of my head is this
trend is happening.
Um, it's changing the waypeople relate to their media.

(27:31):
It gives, uh, it changes theeconomics of your acquisition,
for sure, because you canacquire differently or spend
more on acquisition, um, butstill, I'm still shocked at how
big these publishers are growingwith just a sponsored model
before that, um, but you havegroups like sorry, I'm rambling

(27:52):
a little bit here, but it's more.
I'm thinking this through as wetalk because, um, how are you
like?
What are some of the, theparallels and differences and
what are the most strikingthings that you see between,
kind of what we're doing overhere, what's happening over
there and where do you see, like, whether it's opportunities or
things that maybe we're notthinking about as a publishing

(28:13):
business?

um, that's pure subscription, um yeah, I think,
and I'm still learning here, soI'm definitely a beginner when
it comes to finna.
That's why I'm trying to learnmore from you and I've kind of
devoured the resources out there, but, honestly, there's not
much outside of going andtalking to people and I I got to
go to more events.
Do that Go to your event?
So I'm working on that too.
So I think and again, this isnot a totally informed opinion,

(28:37):
so I'm just going to I'll justsay my opinion I think there's a
lot of reliance on almost totalreliance on paid acquisition
sometimes and there's not maybean organic growth channel.
What do you think that's?
Do you say it's accurate?

I think that's a hundred percent accurate.
And actually I was talking with, um, uh, one of the CROs, that
one of the market wise groups,the other day.
We were having coffee and hewas saying that, um, what he
would really love is to start tounderstand how, um, social
growth, building a socialaudience, looks and then

(29:11):
converting that to a paidnewsletter, because it isn't an
area that has traditionally beensomething that we've been good
at or really put a lot of effortinto, and the people who have
put a lot of effort into itdidn't really seem to get it
right, because they're againtaking an existing model and
trying to shoehorn it in to youknow.
So, even our whole messagingmodel, the editorial teams,

(29:32):
everything is designed for avery specific type of business
and it's not necessarilydesigned from social.

Yeah, but I it can be a great top of funnel for
these businesses, I think andyou got to look to the, the
creators to truly learn here.
So the creator that I mentionedon this call there's many more,
there's like zane khan is a one.
There's so many examples youcan point to, whether it's like
finance creators or variousdifferent categories.
I just haven't seen the sametype of focused effort on social

(30:03):
from financial publications,and one of the challenges is,
literally every one to threeyears, social growth is going to
change dramatically.
We talked about Twitter threadsbeing huge 2020 to 2023.
The reach on Twitter has beenshot recently with the algorithm
changes there, so that may notbe a great platform for these
publishers.
What is popular now is shortform video, so TikTok, reels,

(30:27):
shorts, etc.
That is the place to be andthat's where you're going to get
the most reach for the effortthat you put in.
And those have challenges too,because you have to be on video.
I don't know if the gurus orcreators or people at those
brands can do that, but it wouldbe worth doing if they want to
have an organic growth channeland, I think, if they're able to

(30:49):
drive these social followersand views to a free newsletter
and then that free newslettercan convert them to paid, which
is one thing pinpubs are greatat, is conversion essentially
right, but I feel like theydon't have.
A lot of them are missing thattop of funnels.
So that's easier said than done, but that's just one of the
many tactics they could do.

(31:13):
And this is another thing that'smore up to debate is like I
don't see as many really goodeditorial newsletters from the
industry.
I don't see.
Not that I think Morning Brewis the best content in the world
, but there's just it's a lot ofit's more like 80% sales, 20%
editorial, whereas some of theseother newsletters might be 90%

(31:33):
editorial value-add content andthen 10% sales.
Or they segment the list a lotmore and only send aggressive
sales promotions to subscriberswho are really engaged.
It might be a different cultureor it might be just.
The aggressive strategy worksway better.
It's up for debate.

Well, I think it's a mix of things in that, um,
there is actually like a prettyrobust so I mean everyone's
sending out daily newsletters,content, and if you have a large
publishing business, it mightbe sending out 20 different
newsletters from a contentstandpoint, and then there's
different ones for free, there'sexclusive newsletters for the
paid ones, and then you have 30products.

(32:11):
All those people are getting anewsletter just because their
customers maybe.
So there's a ton of content toothat's behind the paywalls and
the free side.
The other part of that is thatthere has been a proliferation
of, I'd say, sweeps email sweepsacross newsletters, and so you

(32:32):
opt into one place and one ofthe media buyers in the space
was telling me this the othermonth.
He's like yeah, I opted in overthis one place and with a new
email address, just to see howmany different emails, and he's
like within two days I had 100.
So there's this explosion ofkind of aggressive marketing
that's happened, um, which iskind of a?

(32:53):
Um, I don't know.
It's like the snake eating itstail because, uh, now the
attention is getting splinteredeven more, which means you got
to hit them even more often toget that attention, and so it's
like it's.
It could be a slippery slope,and it's it, I think, as an
industry that we are strugglingwith across the board.

Yeah, I feel like what these newsletter-first
media companies have been greatat is that they're great at
building habit products.
There's literally millions ofpeople who open and read Morning
Brew every single day and theylove that brand.
They consider it part of theirroutine.
Same thing with the Hustle,even before HubSpot.
I think that the content was alot better.

(33:37):
It's hard to continue to bigcorporation, but there's many
other newsletters that reallyhave built a strong habit and an
amazing brand affinity.
Um, they never had a product tosell, so I don't know if it
would have worked or not if theydid that, but I I think there's
some value in doing somethinglike that If these companies can
build just one brand that hasgreat editorial.
It doesn't have to be longeditorial content, but short

(33:57):
editorial content every weekday.
There's something there.
It's hard to get into exactprescriptions on what people
should do, but that's workedwell for all these newsletters
and every single one of themtalks consistently about
building habits with theirreaders and that other

(34:17):
publications may not have thatsame philosophy yeah, I've never
actually thought about that.

We, that's not.
That's not a.
It's not a um conceptual modelthat we use in finpub, but it's
an interesting one, right.
But the idea that you haveyou're trying to build a habit,
um, because it is like there'svery like adjustable short form
content you can kind of scrollthrough.
You're not making a bigcommitment to a story, um, we
have, there's definitely room toexplore that, I think, um more.

(34:45):
So anyone who's listening,who's tried it, I'd love to hear
from you yeah, and I think it'snot rocket science.

If you go read axios um, read morning brew,
read the hustle there's a coupleother really good ones, um, you
can see what this looks like,um, and I think there's a way to
marry the two, two models, insome way yeah, that's
interesting.

Axios has that kind of bullet centric, like um
content model, which is reallyinteresting because it's just
real fast, consume like almostlike little headlines and pieces
of information you need to know, and they'll have a story and
they'll just hit like five, six,seven bullets on that story um
yeah, they call it smart brevityand I wish they would kind of
share more about theirphilosophy and framework behind

(35:29):
how they do that.

But it's really good and it's so simple.
But they built a surprisinglyhuge media company around smart
brevity.
I mean there's more than justthe content, right.
They've been able to sell theselike corporate advocacy and
like lobbying ads to largeFortune 1000 companies and
that's kind of their businessmodel large Fortune 1000

(35:51):
companies and that's kind oftheir business model.
But through the smart brevitycontent they've built an
audience of policymakers andexecutives and CEOs that's one
of the biggest in the world.
So there's something there.
And I think Axios now has abunch of different newsletters.
They have local newsletters andstuff like that too.
But there's a lot otherpublishers can learn from that.

(36:12):
And I think one thing a lot ofpeople miss is just that your
relationship in someone's inboxis so intimate and it's very
easy to ruin that relationshipvery quickly with even mediocre
content.
So I think the bar of contentin the inbox is really high.

(36:32):
Bar of content in the inbox isreally high and I imagine if you
were to look at some of theopen rates between a
newsletter-first media companyand some who are more focused on
marketing.
They're going to be drasticallydifferent.
There's a company called 1440,which has 3.5 million
subscribers.
Now they're eight figures, veryprofitable, and at that number
of subscribers they'reconsistently hitting 55% 60% of
Uber rates every single day,five to six days a week.

(36:54):
And that's because it's allcontent-focused and the only ads
you're getting are small nativeads within the newsletter.
They could monetize thataudience more if other ways
right, but that's just whatthey're able to do with that
type of content.

Yeah, no, that's very interesting.
I mean larger companies,company business space in
particular probably moreinterested in this in the sense
that they need to like they,they spend so much external
media so they can, they canbuild something themselves that
that kind of functions that wayand keeps that attention.
Then it becomes a very usefulthing.
And I think that, um, it's aninteresting kind of axis of
attention.

(37:27):
You talk about these two models, right, because you're talking
about getting everybody gettinga very large list of people who
have kind of axis of attention.
You talk about these two models, right, because you're talking
about getting everybody, gettinga very large list of people who
have kind of habitual opening.
What is essentially like thenature of the relationship is
very interesting, right.
I'm focused on kind ofconsuming my news this morning

(37:48):
in this way.
It's part of my routine.
And then on the other axis, wehave like we're trying to go
deep engagement with apersonality, because people are
buying from a person and so youwant to get this guy's view on
this trend.
So it's not just like, hey, aiinvesting is a thing, but I want
to know what does Porter haveto say about this?

Is it always personality-driven these
publications?
Because I don't know if this isa deep issue yes.
Is it?

like 100% of the time, I'd say 80% of the time,
90% of the time.
On the trader education sidethere's a little bit different,
but it's very, verypersonality-driven, because
you're trying to build arelationship, because it's not
about getting the $'s, not aboutgetting the you know 50 to $300
price point, right, it's, youhave that product and then

(38:36):
you're going to have three tofive, 2000, $3,000 price points,
um, you're going to have um inthe larger groups, like you
might have a 20,000, $30,000, um, uh, private group, and so the
personality that they areengaging with is a huge part of
it, because it's that person'sworldview, right, it's their

(39:02):
worldview, their perspective onthings.
It's not just their trackrecord, right.
Track record is not like oh hey, you were a successful investor
, it's, you were a successfulinvestor.
It's you're a successfulinvestor in a way of looking at
the world that I understand andI and I appreciate and want to
be a part of and so having that,like there are on the trading

(39:23):
side, you'll see more groupsthat have a little bit less
personality forward kind ofcontent.
But newsletters traditionallyhave been fringe content, fringe
ideas, niche ideas, not as muchniche audience, niche ideas,
like things that you can't getfrom the Wall Street Journal

(39:46):
things that you can't get fromyour broker, and because of that
they're fringe.
So wait, why should I listen toyou?
You know that part is a hugepart of it.

In that personality model totally makes
sense for what you're doingthere and also the model of
marketing more makes sensebecause the way these media
companies make money is byhaving the best subscriber
retention and getting someone toopen a newsletter three times a
week for three years, and sothat's very different than
trying to sell someone productin the first 90 days.

(40:17):
So I mean I'm giving thisprescriptions, but it kind of
the business models explainthemselves and why we're we're
marketing the way that we do orwhy we're sending emails in the
way that we do, and it's just adifferent thing.
I'm sure there's some companythat could balance the two, but
then they would have to be lessaggressive with the promotion.

They have a different division.
I mean they're different.
Yeah, you know that's.
I think that's.
That's actually a veryinteresting area of exploration
is the revenue models you knoware great until they're not and

(40:55):
everyone can have a you know, abad year or two.
And in those hard times whatI've noticed is the people who
do have kind of multiple revenuemodels tend to be the most
secure because, okay, like mylist, for like I've kind of been
crushed on my subscription sideright now because of the market
and where everything is, butthe ad revenue over here is
still pretty good.
And then also there's a there'sa benefit to having two

(41:23):
different acquisition modelsthat both work and can feed off
each other, because that's goingto lower their price, the cost
of both.
So you have to be a certainsize to be able to do that.
But I think there's probablysome interesting opportunities
there for folks.

Yeah, that's what I see working well and I'm more
operating.
Finance in general is just socompetitive, so I'm more
operating with these kind ofniche newsletters.
That's what I see is growingreally quickly and I'm helping a
lot of more entrepreneurs withthese kind of niche newsletters.
That's what I see is growingreally quickly and I'm helping a
lot of more entrepreneurs atthe start of their journey or in
the middle of their journey.
But the same lessons apply tothese as well.

Yeah, yeah, no, I think, like, I think it's like I
love the things that I've seenfrom you so far, and I think
there's a lot of fundamentals inthere, too, that people can
need to be reminded of,sometimes as well.

Uh, I I gotta ask you a couple of questions.
Um, is that?
Yeah, I'd love to hear a littlebit more about um, like what is
on the back end of theseproducts, cause I think that's
what so many people miss.
Um, they see the front endoffer, or maybe even that they
don't even see it because theydon't bother to watch the whole
video or read the whole salespage.
Right, right, so they see thatfront-end offer for 79 bucks or

(42:38):
99 bucks, but that's not themoney maker, right?

no, that's essentially so.
That's essentially to subsidizeyour media and acquisition
costs while identifying acustomer, right, like that's why
it's there's who going to put,who's somebody that will put
money out, and how can Isubsidize my media to get them.
And then, once you have thosepeople you're going to try and
go to, you want to keep, youwant to use that product as that
, like that product becomes yourretention tool.

(43:04):
You want that to be the thingthat they love and keeps them in
, not so much your front-endfree e-letter, and then from
there you're going to have asuite of back-end products that
are there's a few different waysto break this down, depending
on what part of the industryyou're in, right.
So if you are a trader,educator, right, and you're very

(43:26):
guru-centric like use my method, a very guru centric, like use
my method your front endproducts are going to be more um
.
Or your, your ascension ladderis going to follow a path of
proximity to the guru, right.
So the lower price product islike here's some how-to stuff.
Next product is kind of likehere's how, here's why don't I

(43:47):
help you do that, like here's mytrades, things like that.
And then there's high-endcoaching, right.
So it's like kind of moreintimate, personal not directly
personal, but like feeling likeyou're getting closer to the
guru.
That's one model.
Another model is based on riskright.
So all right, this is myworldview.

(44:09):
I'm going to invest in bluechip stocks in my low-end
product right.
So all right, this is myworldview.
I'm going to invest in bluechip stocks in my low-end
product right, because that'sthe lowest risk, the most stable
way to play this.
But there are also you can usethe same kind of worldview and
approach to the markets and playhigher risk small cap stocks,
that they might be higher risk,but there's also higher rewards
when it works.
It works better when it'shigher risk or options or

(44:33):
something like that and so youcan go based on risk, and so
there's a few different waysthat you can kind of add that in
, and so the products might lookfrom a deliverable standpoint.

The format might look very similar, but either
the frequency of the trade orthe proximity of the guru or
something is going to be alittle bit different right in
there could you share an exampleof what the second or third
product in the funnel like, whata price point for that might be
and what the deliverables mightbe for something like that?

Yeah, so I mean it's going to be.
Let's say, if you had a, youcould have a backend newsletter
that is $1,500 to $3,000.
You have an upsell for either atwo-year subscription or a
lifetime subscription in thecart usually, and then the
product will be some combinationof trade alerts where it's like

(45:29):
a buy sell kind of strategy,with editorial about those
trades in the markets.
That's one, and then on the thecoaching side, you might get up
to like a five thousand dollarproduct that has more of a.
Here's a set of courses ormodules, training modules, and
then we'll do a live webinar forthe group every month with the

(45:51):
guru, and so there's somevariations on that and,
depending on this tradingstrategy, some trading
strategies might be veryfrequent and so they'll have
much faster kind of trades andalerts.
But they're all just variationson those things, right, there's
a trade alert component withmarket analysis that will have

(46:12):
varying amounts of frequency,and then on the trader education
side it's, you know, morein-depth training.

Yeah, so would you say front front end is 50 to
100, the middle's 1500 to 3k.
I'm sure this varies a lot.

And then yeah, there's variability.
I'd say like, the front ends godown to like 49 to up to 299
that I've seen um, and then inthe middle there, uh, you know
you're going to go to usually athousand annual is usually the
lowest.
That I'm you know, but most ofit's like at this point probably

(46:50):
twenty five hundred dollars, um, you see, that very commonly is
as an annual um, and then, uh,the easiest upsell is like a two
year where you get the secondyear at half price or something.
Um, you get a high take rate onon that in the cart as well.
Um, then you have you have somegroups that also sell events,

(47:10):
um, or, like you know, stansburyhas their atlas club, which I
think is 32 000, and thenthere's a to join and then
there's an annual um maintenancefee after that.

And that's one of the things this industry is
really good at is increasing LTVand increasing average order
value, and I think a lot ofpeople don't realize that, and
so it's cool to hear you kind ofwalk through that.
Do you think this, and it hasbeen, do you think this kind of
model can be duplicated?

(47:45):
Things outside of investing ortrading Right?
Yes, have you seen goodexamples?

of that.
I haven't seen a ton ofexamples, but you did see it.
I mean this started, I mean inBizOp it should have been is the
easiest way right?
The core thing about aninvesting audience and an
entrepreneurial audience is thatyou have a large enough
universe to scale of people whowill spend a high amount of high

(48:12):
dollar in the thousands ofdollars.
And so if you're, if you'remarketing like to a group of
people who can't spend andjustify spending a few thousand
dollars on a product, then thatmodel doesn't really get that
attractive, right?
Um, the health space is harderbecause of that than the

(48:33):
newsletter space, and so eventhough there are health
newsletters, none of them are asbig or substantial as the um
investing ones.
So in any type of biz openvironment, any type of B2B
environment, this model worksphenomenally well, I think.

And I see a lot of people doing it poorly in biz
op and B2B and professionaldevelopment.
We'll have, you know, onecourse that is at a weird price
two, 50 or something or $300, orit's way underpriced.
There's no backend.
Yeah, so that's when you comeon our podcast later and I just

(49:11):
love to hear about how we canuse this model for, or learn
more about this model so otherpeople can use it Um and also
the.
It's not just the pricing umladder, it's it's the marketing
strategy and the psychologybehind it.
Obviously there's more to it Um, but I think a lot of people
are missing that.
At Trends we had this At theHustle.
We had this product calledTrends 300 bucks a year, 15,000
members and it really struggledbecause there was no back end.

(49:35):
It was just that kind of noman's land pricing 300 bucks a
year.
I was kind of telling themlet's make this product a little
bit less, lower the price andthen have a back end for for
2000.
That was actually the plan umand of course got acquired.
The back end got shut down, butit would have been a lot bigger
.
I think it would have been oneof the bigger biz op products if
that didn't happen um, I thinkbiz op.

I've been saying this for years and it's just a
question of like.
Which direction do I ever wantto go, and is it but like?
the the biz op space is ripe forstuff here.
Um, there's a lot of stuff likewhen you look at offers, um,
there's benefits to having likethe subscription thing.
It's just that like how you,it's not even just biz op,

(50:22):
actually, actually I would say.
I would say that there'sactually a huge opportunity with
beyond BizOp into, just like Isaid, b2b businesses,
entrepreneurs, founders.
There is, you just have to findthe subject matters.
That requires informationconsumption and you can build
multiple products with right,because that's kind of the thing

(50:44):
.

Investing is fundamentally information
dependent and not all niches areinformation dependent, and so
yeah, but there's a lot outthere that do and that's kind of
the business model I'm building.
I started this agency.
I have a cohort-based coursenow and when we brought in, we
did the first course and broughtin about 120k for like a small

(51:08):
limited cohort and I'm hoping todo, you know, cohorts every
quarter and then next week I'mlaunching kind of the, the
coaching program, the membership, which is an upsell to that,
which is going to be 5k per year.
So I'm learning your ways andtrying trying to apply that, but
I'm still in the very earlystages.

Yeah, yeah, no, that's very cool.
That's very cool.
I think that there's a lot ofoverlap and a lot of play back
and forth.
It's one of the things thatI've thought about for the
publishing space, especiallysome of the mid-range companies
and smaller ones that do theyalso take advertising.
There's a whole other world ofadvertisers that could come in

(51:44):
that are not there, that are notinvestor relations kind of
public hose, which is a wholenother area, but like there are
other people who want to get infront of this audience.
Um and uh.
I think that that is one of thethings that interests me the
most is hey, there's otheradvertisers that might be
interested in the space that arenot currently coming into the

(52:08):
space, and so for us, addingthat other revenue stream just
another pocket of revenue tocome in to help bolster profits,
basically on existing mediaseems like a really good thing.

That might be the biggest low-hanging fruit for
this and for some people to takeaway.
I think, somesponsor-intelligent tools people
can look at.
There's who Sponsors stuff.
There's a company calledopenratesco where it just shows
who's sponsoring newsletters.
They focus on about the 300largest newsletter-first media
companies.
You can identify who's the top100 sponsors in morning brew or

(52:44):
the hustle or something that'ssomeone relevant to your
publication and you can startreaching out to them or
developing um a relationshipthere or something a sponsorship
to sell them um.

because, like I said, it's a goldmine of
information yeah ratesco, yousaid yeah, open ratesco and who
sponsors stuff.

There are two different ones.
They're kind of competitorswho's, I think, which one one is
best for you.
They can become kind ofexpensive, but if you can close,
you know, you know six figuresand sponsorships from these, it
will be worth the investment.
And you can do this manually,of course, but those are data
products that save you time.
Yeah, so that makes a ton ofsense, because if it's mostly

(53:27):
investor relationship orinvestor relation ads, that's
just one category in a whole bigworld of people who want to
sponsor newsletters.

Yeah, yeah, and there's there's conflicts on our
side with um investor relationstuff, right like there's.
Not everybody is thrilled withit, um, because it kind of goes
against the ethos of anewsletter that's stock picking,
right, is we're saying thatthese things that we have, our
analysis is really great andthese are the stocks that we
want.
And, oh, here's an ad from acompany that we would never
recommend, and so it's a problemfor some people to do that and

(53:55):
so, but having that otherrevenue is really attractive for
sure, and so awesome.
This is really cool.
Man, I really appreciate youcoming on here and and kind of
talking through and sharing um,looking forward to having more
conversations.
Uh and uh, we I'm probably goingto be doing in June, a small
little event, private thing, ondifferent acquisition models,

(54:20):
specifically Um, and so weshould talk about that
separately, um position modelspecifically, and so we should
talk about that separately.
We're going to have one of ourgroups, alta, you know from
market wise, is going to beprobably hosting and talking
about their model, and we'rebringing people from other
spaces to talk about theirmodels, so I'd love to have you
there for that.
Let me do that.

That'd be awesome.
Yeah, I really appreciate yougiving me an education here in
your YouTube videos.
It's super helpful, so I'll bein touch.

Awesome, thanks, man.
All right, thank you.
Oh wait, wait before we go.
Yeah, where can people reachout to you?
Where can we connect with you?

Oh yeah, yeah, the best way is my website
newsletter, which isnewsletteroperatorcom, and I
have very actionable stuff onthe strategies and tactics that
we talked about, and then I havea podcast, which is the same
name.
If you search newsletteroperator on YouTube or your
podcast app, you'll find that.

Yeah, and I'll put those underneath here for
everybody and send it outbecause, yeah, check it out,
it's really good stuff.
I've been reading it andlistening and you had Matt
Paulson from market beat onthere Fantastic, it's great
interview, great conversation.
Yeah so.

All Episodes

Episode Transcript

Popular Podcasts

Are You A Charlotte?

On Purpose with Jay Shetty

Dateline NBC

.css-15opob5{left:0;position:absolute;top:0.8rem;} All Episodes

.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}Comparing the two big newsletter industries with Matt McGarry

Episode Transcript

Popular Podcasts

.css-r6mb8g{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:1;overflow:hidden;}Are You A Charlotte?

On Purpose with Jay Shetty

Dateline NBC

All Episodes

Comparing the two big newsletter industries with Matt McGarry

Are You A Charlotte?