Sam Parr founded The Hustle, a top-flight newsletter that he grew to almost 2,000,000 subscribers… and just sold to HubSpot! Tune in to hear the whole story of how Sam grew a successful newsletter to seven figures per month in revenue, and the roller coaster ride of selling his small business.
Despite his success with a paid newsletter, Sam has lots to share about what people are doing wrong when they launch a Substack. Plus, he gives Nathan ideas and tactics for growing a new, local newsletter that focuses on Boise.
In this wide-ranging conversation, you’ll also hear about the art of writing quickly, whether writing your newsletter is something you can (or should) delegate, and whether running a solo newsletter is even the right business for you in the first place.
Links & Resources
- HubSpot – Inbound Marketing, Sales, and Service Software
- Product Hunt – The best new products in tech.
- DailyCandy – Sweet Sorrow
- Thrillist – Find the Best and Most Under-Appreciated Places to Eat, Drink and Travel
- Fool.com: Stock Investing Advice – Stock Research
- James Clear
- Glossier – Skincare & Beauty Products Inspired by Real Life
Sam Parr’s Links
- Subscribe to The Hustle Daily
- Trends by the Hustle – Your next business idea, delivered weekly
- Twitter: @theSamParr
I think they’re making the wrong mistakes. The first example is pricing. Most people charge way too little, but if you actually want to make a living at this and provide value, you’ve got to charge more money. How are you gonna make a living if you’re charging $4 a month? That’s really, really hard.
So charge way more. People tend to like that stuff more. If they paid money for it, they usually appreciate it.
In today’s episode, I talked to Sam Parr from The Hustle. Now Sam and I have been friends for a long time. And he’s got some pretty wild news in that, HubSpot just acquired The Hustle. There’s a lot of crazy things that went on with that, but, we dive into the story there. How long due diligence took everything else.
It’s a long ranging free-form conversation. But we hit another things like, my new local newsletter that I’m starting. He has some growth ideas and tactics that he shares there. We get into what he thinks people are doing wrong when they’re launching Substacks, which is pretty wild since he has crazy revenue.
I think, you know, there are over a million dollars a month in sponsor revenue and getting pretty close to that in paid memberships revenue for The Hustle. And we get into growing the newsletter to almost 2 million subscribers. There’s so much good stuff. I’ll warn you. It’s a very rambling conversation, but we have a great time.
So I hope you enjoy it.
Sam, thanks for joining me.
What’s up, man?
So you would have been friends for a long time. It was hung out in a lot of different circles. You’re wildly popular on the internet today, not today, over the last couple of months, a couple of weeks.
Not as popular, popular as you.
Exactly. I don’t know, but you just sold The Hustle and we were talking right before we hit record and you’re like, dude, just hit record so that we can have the whole conversation for everybody. On the first question I was asking is how long did it take from when, when HubSpot reached out to the deal actually closing,
About 90 days. Well also, had you ever sold this business before?
I have not, I can’t say what business I acquired, but this week I acquired a company. it just closed.
Was it a big deal?
It was a medium deal.
Okay. That’s great. Well, we,
If you bucket deals into small, medium and large, it was a medium deal. So.
Well we, We, like, I didn’t know. I mean, I had been part of a company selling before as a shareholder and like a investor, an advisor, a very, very close advisor, but I still didn’t know. I didn’t know like what closing meant. I didn’t know what signing meant. I didn’t know. I didn’t know anything. And so I didn’t, I didn’t know what a LOI was.
I didn’t know. I mean, I had heard the words, but I didn’t really know like what that implied. And they reached out to me around September or October. They cold emailed me and we had been recruited or, you know, buyers have talked to us for a long time. And like the first couple of times I took them really seriously.
And I was like, Oh my God, like, I’m going to dress up nice and fly out to their office. And I’m going to show them all this school stuff. And then after awhile I was like, I just didn’t take it seriously. And I just said, I would send them like, I would like write up like a one pager and I would like tell them all the reasons basically why they shouldn’t bias where, I mean, I was like, look, we’re really good at this.
We are horrible at this. the reason why you should buy us as this, the reason why you should not bias as this, if you are, the, the, the expectations for pricing is around this. If you want to talk, call me and like, it was a pretty straightforward thing. And, they liked that. And most people don’t, most people don’t like that.
And so they emailed me and then we, we, the deal was announced, like the last day of January and they emailed me in October.
So I feel like that’s pretty quick.
Is it? It certainly doesn’t feel quick.
You mentioned on, on your podcast, that due diligence was. I think hell was the phrase.
It is so bad. It’s so bad for a bunch of reasons. But first of all, I sold to a public company.
I’ve never sold a company for $300 million, but I have a feeling selling for 300 or 500 or actually have been the same amount of work as for what we sold, which was less than 300 million. it’s a ton of work.
And the difference between my small company, it was that I didn’t have a team of like, I don’t ha I had like one woman named ed who works on accounting and finance. And then I had outsourced a lawyer, you know, like an outside law firm. I had an outside tax firm. And then I had me and I had to do a lot of this in private.
You can’t really tell employees. And it was very, very hard. They basically, I had an Excel spreadsheet that had like eight tabs. One was like real estate. So you like your office leases and things like that. Another one was like it. So like your computer setups and all that. And then another one was like, Like rev, P and L like FP, a what’s it called financial planning and forecasting and, and, and your profit and loss forever.
And then another one was like the Daily email. Another one was trends. And then there was like three more. And each of those tabs. Literally had 150 questions on it, like a PO like, so it was like post revenue every single year since starting posts like aging account receivables every year for the last five years.
And I’m like, I don’t even know what aging accounts receivable means. and it felt like that for like everything. And I’m not, I’m not bullshitting you. I probably gave them, I probably gave them 700 things. maybe 500. It was just really hard. I mean, you’ve been through it, but it’s just, and the thing is, is that I think founders and CEOs are a little bit different.
Like I didn’t talk to the founder of HubSpot too much during the deal, but I did sometimes, and I ha and he was like, He would make jokes, but I have a feeling they weren’t entire Joe, they were, he was kind of being serious. It’s kind of not, but he, you know, he, the folks were doing a lot of the work and he was, have we closed yet?
I’m like, no, man, we’re not going to close for another three weeks. He was like, man, they should hurry it up. Like he would make, he would like tease, like he’s ready to do it. But like, you know, the, the people doing the work, they, they, they need a button, everything up really tightly. And maybe you and me, if I bought a company and you just did buy a company, you’d probably probably be a lot more lax because you’re like, We’ll worry about the details later.
You know what I mean?
Well, that’s how I was. We got to, so in our acquisition, when we started the conversation in September, and then by like late November, there was actually a thing like seriously talking and then just before Christmas, We got an LOI signed and I thought like, great. Now it’s just like verify that everything is correct and accurate, you know, we’ll, we’ll take like two or three weeks to do that.
And then our attorneys were like, no, no, that’s not how this works. And I mean, we, it still took us only. It was like 50 days to.
That’s crazy. That’s still so long, right?
I was like, I thought we should do it in 30.
Yeah. When someone talks about, like they said, like, All right. They’re like, all right, we have, this LOI and then we’re going to close before 90 days. And I’m like, I don’t even know how I’m gonna want to sell in 90 days. I don’t even know if I’m going to like, you know what I mean, 90 days that’s a whole, is that a quarter?
Yep. That’s a quarter of a
Like, I don’t even know what mood I’m going to be in. Like let alone, I don’t even know if I want to do this in 90 days. How am I going to sign up? You know what I mean? So it is pretty crazy.
So I’m curious, like on the announcement side of things, one thing that I saw, I saw two conflicting things, right? Axios reporting, a purchase price of 27 million or whatever. And you saying like, that’s one I’m not ever saying with the purchase prices and two that’s not it. so I’m curious how, how did that price get out and your take on it?
I don’t know how it got out. I didn’t talk to anyone. I’ve never taught. I’ve never talked to anyone about the price. The only one I’ve ever talked to is probably my wife. How it got out. I don’t know. I’m not going to confirm or deny it, but I’ll tell you this. Brian, I told HubSpot I’m like, I don’t want to reveal the price.
I told them that. And Brian, the CEO got wind of it and he goes, why, why? He goes, he goes, because Brian was cool. He was like, have you ever talked to him in Dharmesh?
I know Dharmesh from years ago, like at business of software and all that, but I’ve never met Brian before.
They’re cool. Like they’re, they’re I bet they’re billionaires rich guys, but they’re still like, down to earth. Cool folks. And he was like, Hey, he’s always been like, Hey, just like, if someone gets in your way or someone keeps you guys from, like doing what you want to do, please let me know. Like, he’s really cool and great.
And he was like, Hey, I noticed you didn’t reveal the price. Did our people tell you not to do that? Because you can, if you want. And I go, no, it was me. And he was like, well, why? And I was like, Brian, don’t you think it’s weird that I can Google your salary? You know? Like I just saw that you sold, sold $3 million worth of shares.
I saw that you did this, this, and this it’s all public. And he goes, yeah, I think that’s weird. And I don’t like it and it makes me uncomfortable. And I was like, yeah, that’s why I didn’t want to do it. It’s kind of like a weird thing. I don’t think it’s important,
But a lot of people like gave me a hard time because on my podcast, I’m the guy who asks all of these important money questions, but, I always am respectful.
If someone says they don’t want to talk about it. And in this case, I didn’t really want to talk about it, but I’ll say this, that when it came to business, I read a bunch of books about like life philosophies, and I could tell you about the books or whatever, but my goal was to make enough money by about 35 that I can live a incredibly lavish life and still leave a huge sum to my children.
And this deal allowed me to do that. and the reason why I did that was the way that I set my business up early on, I raised a little bit of angel money and I don’t entirely regret doing that because it’s hard to say if this would have happened without that. But I do regret doing that because I wish I never would, like, I don’t ever want to sell anything ever again, you know, I want to own stuff forever, but that would have been against like my duty, if I promise someone something like I have to.
I got to do it. So the reason why we just decided to sell was it L it got people return and it allowed me to achieve a personal goal.
Yeah, that makes sense. I mean, on the selling a company, that’s something that I think about, like we have opportunities to sell ConvertKit and I. You know, always have the same answer of like, no, we’re never in a cell. but I have a little bit of a problem in, I want to figure out how, like, I, I have issued equity to the team.
And so I spent a lot of time thinking about like either a company buy back program, for anyone who wants to sell or like some version of like angel list or, like Carta has their car to X, you know, or something like that, where the team can sell shares without selling the whole company.
And I actually based a lot of my philosophy off of your blog. So you, on your, on ConvertKit values, it was like, independently reach a hundred million in revenue. I think.
Is that right?
And then you’ve also said that you were not going to give any equity. And then about a year ago, your opinion changed and you gave equity.
And you’re like, my opinion changed because even though we’re not going to sell, it makes these people feel like they’re part of this and I want them to feel that way, so I’m going to do it. and so I agree with that, but I don’t entirely like the solution that you came to, I think is still not optimal.
I S I think it’s the best of the worst. and because you still need them to sign off on some stuff every once in a while now, I don’t know exactly how you set it up, but if someone’s an equity holder, they, even if they’re a tiny equity holder, they can still have a little say
Yeah. So in this case we have options for everyone. And so, you know, they they’re holding options rather than direct equity. so, you know, they have things like information rights, but they don’t have to sign off, on a deal. Now I know other people who are like, Would never get, even give information rights, you know?
Cause they’ve had someone who’s like a VP get to a VP level and then switch. And now they’re having to send out like, there, you know, like quarterly reports to all their shareholders and one of their shareholders now VP at a competitor, you know, and that
Yeah. And it’s weird, right?
But I’m okay. I totally agree with your premise though, of like, I want people to share in the success.
I want them to be bought in. If someone works really hard and provides a lot of value to the company, I want them to have a cut of it. I actually, you have a profit sharing thing that I try to do at my company, but it didn’t work because we didn’t, I didn’t set the business up the right way.
So like I’ve actually built or I wanted to build a lot of my stuff off of the things that you’ve done. But, the way, just the way that I structured everything early on, I, it, it’s pretty much very impossible, almost impossible to like reverse it, to do some of the things that are probably more optimal.
But I, I think that like, I wouldn’t want to sell for a long time or ever, but like I got sick and. July or September or something. I got Lyme disease and it wasn’t quite like deathly, but it was like really bad. My face was paralyzed and I couldn’t move my face and I was struggling to talk. And I was like, it would be nice to be wealthy enough that an emergency, like this wouldn’t ruin me.
And, and it also made me reflect that like maybe business isn’t the most important thing. And so that’s one of the reasons why I did the deal, but I, I don’t know how you feel, but I mean, you’re one of like the people I look up to in business, but, I think that most days you don’t ever want to sell, there is a few times where you’re like fucking them out.
Yup. Oh, for sure. But most days, like, I don’t know how you feel on having the platform and the reach side of things. But when you get to the point that you’ve got, you know, hundreds of thousands of people paying attention to what you’re doing and the case of The Hustle, you know, millions of people, it just takes, I remember what it was like before that and how much work it was to get attention for something.
And so a lot of what I have is not wanting to give that up of like, when I have something new come out, like you can launch it. You can. You know, get traction really quickly because you have that whole platform. So that’s where it’s like, I would, I don’t think I’d be excited about starting over, even if it was the pool of money.
Yeah, I think that’s it. Like I just sold, like we have close to 2000 or 2 million subscribers.
Is that that’s how big the guy I had, I had 1.5 million. So you’re you’re even to of course numbers keep getting bigger, but.
Yeah. I mean, we’re adding a lot of people. It’s not quite 2 million, but it’s pretty close. And then we also had tens of thousands of paying subscribers.
Sam: [00:14:59] so yeah, it was big. and like our open rate, like the other day we had 900,000 people open. so like it’s, it’s pretty big.
But, and to start what we started, like, when I say back then I’m referring to like literally four years ago, but it’s way harder now.
It is way harder now.
What, what do you think is different now?
There was less competition. I, when I told this, I like made a list of like heroes or like people I looked up to. And business. And I emailed them and I there’s, a lot of them are media executives or media CEOs. And I told this one guy who, if I told you his name, you would know it I’ll tell you after.
But he was like, this business will never make more than $2 million a year. And I was like, why not? He’s like the email. He’s like, that’s stupid. Who makes an email? Like you guys need to do video or,
Something trendy in now.
Yeah. He was like, how are you gonna get traffic to your site? I’m like, you don’t get it, man.
Like, You’re on your phone, like who cares if that four inches of white screen is on Sefaria in the mail app? Why does it matter? And in fact, it actually matters for email because I already can do the math that this person, if they only unsubscribe every, at a 5% rate throughout the course of a month, I know what my churn is.
I know what my LTV is. I know how to win, then what I can spend to acquire a customer. Like I’ve just like, you can’t do that on your website. And they’re like, yeah, but like, people don’t want email and now that’s totally changed. You know, you have sub stack, which is awesome. ConvertKit you guys started?
That would be easy. I started a year before us.
We were 2013, but we didn’t get any real traction until 2015.
We started around the same time, like, so you guys are big now. We’re big now. And then there’s like the morning brew there’s um, sub stack has made it quite popular. I mean, everyone has an email now and it wasn’t like that just three or four years ago.
we can get into how I feel, but I’m curious how you feel of it. Being the first, like starting an email newsletter when everyone’s like, it’ll never make money. It can never be a real business, you know, or something like that. And then you’re trying to convince people of that. And now like the wave has come or the wave is here and everyone’s like, I’m starting a newsletter.
No. I like, I don’t feel hate like, Jay, I’m not jaded, so I’m not like, Oh, I’m sorry, an email. And I’m like, Oh dude, that was, but every once in a while, someone’s like community and newsletter is like the new media company of 2021. And I’m like dog. That was the media company of 2014. Like we started then.
Okay. And like, if like the beta company of 2021 is something that you aren’t talking about. Probably because it seems stupid right now, and it’s not going to seem stupid in five years, but that said, I do like, what’s the, what’s the biggest difference in email over the past 20 years? Is it like the promo tag on Gmail or the promo inbox?
Like it’s pretty stagnant, right? It hasn’t changed significantly. Like there’s superhuman and other things like it, but it’s relatively been like. N zero change or close to no change. I have a feeling that’s going to remain the case over the next 10 years. Maybe like some, some small changes will happen, but I still think it’s a pretty safe bet to rely on email.
And so if someone says they’re launching it, I say, yeah, I think that’s smart. I would say, don’t copy us. Or like, if you do copy us, like, yeah, you might be successful, but like try something a little bit different. That seems silly now. And then it might be cooler in a couple of years.
Does it annoy you since you have a paid publication called Trends? That there’s another free publication called Trends, but it
Oh yeah. I emailed that guy and I was like, Hey man, like
Was like, we’re, I think we’re going to make this big and I don’t want to disrespect you, but do you want to change your name? we, I was like, we did start first and we are bigger. Like we’re going to, I think we’re going to make this thing big.
And he wasn’t having it, but that’s okay. No, I don’t annoy me
I’m curious for more of those things, you said it’s harder now cause of the competition.
And to acquire customers. So we spend money on advertising to acquire customers
What are you spending now too? Like to acquire a subscriber?
It ranges. I mean, we have all these new sources that we never even knew about, but like on Facebook I remember on Facebook four years ago, it was like a dollar now it’s like three,
Or four, maybe, maybe four, but we use all these other sources and we can get them for way cheaper.
But like, we built those, like, that’s that those source, although finding new sources is that’s kind of like people think of you have good content. You’re going to make it. It’s acquiring users is it’s like, is as important as the content
So like, what are some of those other sources that, that are working now?
So we do a lot of this thing called co-reg. So let’s say that, and we work with like literally a hundred websites. So let’s say that you, you go to a website to, to apply for a tech job. Or yeah, to apply for a tech job, you apply for a job to work at Facebook. And then after you sign up for Facebook and submit your resume, it says awesome.
By the way, while you’re waiting, do you want to sign up for The Hustle as well? Just click here. We already have your email, just click here and you’ll get that your first free daily email. so we do things like that all the time. another thing is if you look at product hunt, so product hunt has the same thing as well.
Product hunt has your email and you’ll see The Hustle or trends on there listed as a product. And it’ll be like, do you want a free daily email? Just click this button right here. And boom, you’re you’ll have it. So sources like that, we call them. co-reg co-registration so someone who’s already registered for product hunt.
They just click a button and then they’re automatically registered for us at The Hustle. Now that stuff is not nearly as turning, like click and play or whatever as Facebook, you actually need to build out some stuff in order to make that possible.
So is that something that you’re getting you’re paying per lead on that, like, you know, a
Yeah, but you can actually do it a little bit differently. You could pay, pay per lead, or if you’re, if you’re, if you’re spending a fair bit of money, like tens of thousands or hundreds of thousands of dollars a month, you could tell them I’m only going to pay you if this subscriber is a power user, so I’ll pay you a dollar, but only if they open the email.
At a 75% open rate for the first 10 days.
So you’re guaranteeing success, not, not long-term, but at least, you know, midterm and not like a bunch of bots signups or whatever else.
Exactly. Yeah. Yeah. And that that’s quite effective. I think that stuff has always air has existed for years, but it took us a long time to like, learn how to do all that. when we’ve launched. Like there was companies doing what we have been doing. Right. There’s the Daily candy. There was Thrillist, there was Motley fool.
And there probably was literally hundreds more that I don’t even know that they exist. So I don’t want to act like we invented this, but in a sense, we did kind of invent it because I didn’t know how anyone did it. And there certainly weren’t enough to show us the way. So I’m sure that when I say we invented, we came to probably the same conclusion that many others did, but we had to learn all this on our own.
Like there was no one to teach us and. We’re now probably one of the, like, it’s us, the skim and morning brew. We’re probably the biggest. And so like, we can learn from each other, but there really wasn’t that many people teaching you how to do any of this stuff.
Yeah, that’s interesting. What do you think about. Like people running these largest newsletters that are, publications versus someone like James clear who are you know, running a million subscriber email list as an individual, like what what’s different on growing one versus the other of the tactics that you try.
Not that different. I mean, there it, doesn’t James Clear use you guys like, he. W H he has like a four-person operation or it’s like a small operation, right?
Yeah, I think it’s just him and I think two employees,
Not that different. I mean, there is one big difference, which is like, your life sucks. If you’re like, I used to, when we started, I was the writer,
And I was the growth marketer and I was the admin and I did the accounting, which wasn’t good. And I booked the office space and I recruited people.
And when you’re doing that for a Daily email, it’s sucks. It is really hard. It’s hard, hard, hard, hard, hard. and so it’s, you know, in order to create an asset, that’s sellable people have to be interchangeable, right? Because you don’t want to, like, if you’re going to buy, like, can James Clear ever sell James Clear maybe, but it would be really hard.
Yeah, it’d be kind of weird.
Yeah, it would be weird. I mean, like James Altucher just sold it and, but he eventually had to like hire people. So it’s, it can be hard. It’s hard to sell something that’s just based off of one person and it’s hard work. It’s really hard work.
Is that something like I’ve gotten this feeling of when you were traveling around and everything that you’ve done? Pretty good job. At least of being one step removed from the day-to-day operations of the
Yeah. So before, right before we sold, I hired us. Like I, I had, I sent an offer to a guy to become the CEO of the company.
And then I got the offer and I was like, Hey man. I got the software. I have to take it. So I had to rescind my offer to him and he was cool about it. And we’re still great friends and we’re gonna work together somehow.
But yeah, I’m the type of guy who I like to start stuff and then hand it off.
But then, I mean, at that point you’re still four or five years into The Hustle before you hired for that role. Right.
Yeah. But I should have hired from that role earlier on, but I always hired people. Who were like pretty good at what they did. And I was always hands-off, like I would be in every meeting I would participate, but like our sales team, like I had, I sold the first $150,000 worth of advertising. And then once I hired someone, I literally had never sold again and I completely stayed away.
And I just said, all right, guys, let’s agree to some revenue targets. And they go, all right, cool. here’s what we think we can do if you can get us to grow this much. And I go, all right, cool. See you go do it. And then I will go to the grow team and I would say, Hey, we’ve got to grow this amount in order to hit these targets.
And they would say, all right, we can do it. See you. And then if, and if either of those teams, didn’t hit targets or were struggling, they was say, Hey, we’re, It’s not looking good. We need your help. And I would just drop in and see what I could do to help see if I can make an introduction to some person.
See if I could come up with some creative ideas, see if I could use my personal brand to like, promote something, things like that. and then whenever we wanted to launch something new, I would always, I would lock myself in a room and do it almost by myself. Like when we, so trends, trends was almost going to be like, we were on track to have like close to an eight figure subscription business.
The first $50,000 in pre-sales I got from Gumroad, I got ungovernable on my own and I would literally call the customers and ask them, why did you buy this?
And so I did all the early product stuff, and then once we show that it might be a little work, we had people at our company who are significantly more talented and skilled at running it.
So that that’s it. It’s interesting of like, Start something. So it’s like the tip of the spear. And then as soon as possible, hire someone to run it and then just basically like understand their goals and otherwise leave him alone unless they need help.
Yeah, I think that like you, how many people work there at 50?
Yeah. So you guys have been a fair bit bigger than us, but we, I think that, most people, most humans, not my company, but human being suck at starting stuff. Right? Like it’s really hard to give someone a blank piece of paper and tell them, create magic, create something cool. It’s really, really hard for a lot of people, but you know, you, you, I I’ve been reading your work for.
Almost 10 years or eight years now, whenever you launch authority, like guys like you and me, I don’t know if it’s something you’re born with or if it’s a skill that you just get my muscle, you’re just kids get used to flexing, but. Like, let’s just focus on our strengths and most people are not that. And it’s not to say one’s better or worse.
In fact, they’re both important because without either you don’t create anything meaningful, but if most people are not good at this, and if you have one person who is, then it’s just like go all in on that and focus on creating new stuff. And that’s kinda like what we did. because someone like me who would try to run something on a day-to-day basis, not only would I be bad at it, I could ruin it. If a company gets add, it can be, it can be ruined.
Right. That’s interesting. I’m noticing. Like, I’m good at starting things, but I’m not great at handing them off. And so I’m like following your playbook. Exactly. Except I’m staying involved, which is a pretty key difference in the playbook. And so that’s the transition that I’m making right now.
Well, you’re a perfectionist. I mean, I’ve known you for a while. Like you’re, you’re a craftsman. Like from your Airbnbs to, like I could tell, like from your background of this, of this, zoom call, like you’re a craftsmen. And I think that being a craftsman is, is a blessing and a curse. It’s a curse, or it’s a blessing in that.
Like everything Nathan Barry makes is like pretty awesome. And I want to be, I want to see everything he does. It’s a curse because it’s like an exhausting, it’s like an exhausting place to be in because you probably don’t let too much slide.
Yeah, so, I mean, now I’m trying the approach of like, instead of hiring people and training them up, I’m like hiring people who have done it all before. And so. we just hired like the, director of design from mozzarella on Firefox to run, to be our VP of product. And we just hired a senior exec from MailChimp to be our VP of engineering and like just filling in roles in that way with people who really know what they’re doing, we’ll see how well it works out.
But I think so far it’ll be good.
So someone taught me that same thing. And so when we hired people, you know, you can’t afford anyone at first, so you can only afford someone who’s willing to work for 40 grand a year. And that 40 grand a year a person is probably pretty smart or high energy or, or real, but really inexperienced. Or some combination of all those, you know what I mean?
Like you, so you can like, you have to pick like, you’re smart, but you’re unskilled or, you know, you have to pick like, like two of the three and then it’s like a blessing once you get big enough.
You grab the skill, but you don’t have driver.
Right. And so you’ve got to like pick a choose, like who can, you can hire for $45,000 a year. And then, once you get big enough, Andrew Wilkinson, who I’m sure, you know,
Taught, he was like, man, Because I was like, Hey, I’m thinking about hiring the CEO.
And I showed him this role. And he was like, but this person has never done it before I go. Yeah. But like, they built this other company. That’s like, it’s a software company and that’s kind of cool. And like, they’re really smart. He goes, no, no, no, no, no, dude just go find someone who’s already done this before.
And I was like, why? And I wanted to get like cute and creative. I’m like, Oh, you know, he could apply this. He goes, no, just get someone who’s done it all of this before. It’s way easier. Like if you’re gonna get a mechanic, do you want a mechanic? Who’s like, Been a good electrician before? Or do you just want someone who’s a really good mechanic, like just get a good mechanic, like someone who already knows what they’re doing.
And I did. I agree with you, that’s the way to go,
Yeah, that makes sense.
But like, you want to get cute, right? Like you want to get cute and like find unique ways of going about it, but maybe that’s not necessary.
Well, I always want to think that all the rules and best practices don’t apply to me, you know, like I can figure out some way around it or like, I’ll train this person up in some way. And I like to give everyone lots of chances, which has resulted in some amazing people that work on the team. but then it’s also hard when you get to this level, especially for like manager and executive roles where it’s just like, Now I’m fully in that higher people who’ve done it before camp.
Yeah, it’s just way less headache.
Okay. So I’m curious, there’s on the writing side, was that a hard thing to hand off or was writing something easier? Cause I think a lot of newsletter creators, you know, they start writing everything themselves, and they have this really close attachment to it. And then that’s the biggest hamster wheel.
It was a little bit, so if anyone ever wrote anything and they may put my name on it, I would say I have to approve it. You can’t send that out because sometimes people would write like, like a re-engagement email. So if someone’s quit and they would write an email from my name, because it would get a higher open rate just because when you have a name on it and I got really mad, I was like, you guys.
I’m so thankful you took initiative, but if this is my name, You’ve got to tell me about it. How would you like it? If I said, Hey, you know, I’m just making, I’m just making this up. This isn’t true. Hey Steph. by the way, I just told all these people, you just said this you cool. so I was like, so that was a challenge setting boundaries, but, handing it off.
It was yes and no, because like, I’m not saying this is the reality, but I felt I was the best. So, I felt my perspective is about,
yeah, and it’s, it’s actually not true. Like we’ve actually hired people that are way better than me, but I, so I thought I was the best, but I didn’t like it. It’s really hard.
Writing is hard. It’s a hard work. Like when you’re writing your book, like you want to kill yourself while you’re doing it, but afterwards you’re like, yeah, this is awesome. It’s finished. It’s exact, it’s still, but imagine doing that every day.
Writing is one of those things that I feel like only I could ever write in my voice or in the style that I like or something like that. And then I’ve worked with some really good editors and they take some of that. Right. And then add a whole bunch to it. And it still sounds exactly like me and I’m like, Oh, Okay.
So when a professional comes in, it’s a different game.
I can write like you, I know how you write. I like it. You and I can, we can Write somewhat similarly. but I think I could write, like you I’ve read, I’ve read it so much of your work that, do you know, what do you know what copy work is?
No, I don’t.
So it’s when you, they used to teach us in the school years ago and then something changed in how they thought people learned and they quit doing it. But basically a great way to learn how to write is you take other works. And you just copy them word for word. It’s kind of like what you learn, how to play an instrument.
You know, you don’t like write your song right away. You typically play jingle bells and then you figure out how to play. Like some song you like, and then you like learn how to play. Like, you know, you copy like green day and then you copy foo fighters. And then after you doing that for five years, then you like, Write your first rock song.
So that’s how I learned how to write is I copy other people’s work and I would copy your work I would copy. A lot of people’s work, any author that I, I thought, like had a really sharp tone of voice. I would copy it out by hand. So I’ve copied some of your stuff. And so like, if you do that a little bit, you can, you can learn how to write just like them.
That’s fascinating because I would do that with design, where I remember when I was first living in design, you know, you didn’t have any clients or things like that. And so I’d just be looking for something to design because you didn’t want to just follow the tutorial. You needed more than that. And so I’d find a website that I loved and I would just go recreate the whole thing in Photoshop.
It’s it’s it’s I think it’s the most effective way to learn. Like, do you realize how, when we do your kids play any instruments or they’re too young?
I’m just trying to get them started. I actually took up playing piano, 80 days ago to try to inspire my kids, to play the piano and
Like he had no interest in playing the piano and then like about 45 days of me practicing every single day, he like is hanging out in the other piano and then he’s doing it.
Do you know how to play anything.
I can play. but he, he got me back by playing baby shark on the piano and I was
That’s awesome. So like, you learn how to play the piano in 80 days. That’s pretty remarkable. Right? And you maybe aren’t great, but at least you could play something.
And it’s the same with writing. So I think you can take someone who’s bad at writing and make them a little bit better or a lot better in a very short amount of time by doing this.
That’s interesting. So basically find. Five 10 writers that you really enjoy reading. You love their style, or even maybe their style is completely different and you want it to use it to stretch your own ability.
Yeah. Yeah. So for example, do we have anything up here that I’ve done copy work with? So, I don’t think I have anything. So like, what’s the guy’s name? Who wrote the book? Thompson. What’s the, what’s the guy’s name? Who’s like the, a drug addict writer, um, who wrote like, um, why can’t I think of it, the guy who wrote about the hell’s angels and going to Vegas and do drugs,
Hunter S Thompson.
Okay. So his writing is like kind of interesting, and I don’t really want to write like him, but I want to learn what makes his writing special. So I would just write that novel out or, J D Salinger, wrote Catcher in the Rye kind of like kitty kind of a kid’s book. so very simple language, but pretty interesting storytelling.
So I learned how to, I would have copy of that book and then I would learn how to, I really wanted to learn how to be a good copywriter, a good sales person. So I would take old advertisements, long-form advertisements, and I would copy them word-for-word And so I start learning like, all right, wow.
This here’s how you sell. Here’s how you storytell. Here’s how you use simple language to describe complex topics. or let’s say you want to learn how to write comedy, so you can just literally write out a script from a movie, Judd Apatow. Does this all the time, or he said he did. He, what’s the guy’s name?
The Jewish, director from, New York who wrote, who wrote penny, uh, frickin, Andy, what’s the guy’s name. He ended up dating a stepdaughter.
Oh, I, I don’t, I don’t know. Apparently I’m bad with names.
What’s the kind of same, it’s the same. Everyone’s gonna be like, be scrap. Everyone’s gonna be screaming this, but he’s like, anyway, Annie hall, the guy who did Annie hall, what’s his name?
It’s going to kill me. Woody Allen.
Woody Allen. There we go.
What do you out? The guy who, so Judd Apatow wanted to be like Andy, like Woody Allen. And so he just got a bunch of Woody Allen scripts and you just wrote them out word-for-word or he also wanted to be good at writing sketch comedy. So he took Saturday night, live skits and wrote them out word-for-word It’s a very, very, very effective way to learn how to write,
Yeah. And would you re type them or are you actually writing them long form by hand?
Keep them right here. So I have like, I don’t have them here right now. I have, Big old stack of notebooks. And I wrote them up by hand and I still do this
Do you think that that helps, you know, you pick out patterns and all of that versus typing?
Yeah. I mean, obviously you do, if you’re Day, if you’re putting the time to do it,
No, I think handwriting was better because you could, you hand write slower than you type. You can type a lot faster than you could hand write. So it’s a forcing factor to keep you slow. you know what I mean? And so it’s like maybe now that you’ve learned how to play simple music, I don’t know if you have gotten to this level, but you’ll be listening to the radio and you’re like, Oh wow, there was a chord change or, Oh wow.
He’s using like the, the ACD chord structure. I don’t know anything about music. I’m making this up, but you know what I mean? Like maybe you like start because you’ll have figured out the texture, you start seeing that out in the wild. And you’re like, Oh, I just unpacked it. That’s how they made this unpopular.
They did this thing, you know what I mean? And so you could do that with good writing. And now if you learn how to write well, you’re like, Ooh, you see how they, their opening line, like, cut straight to the story as opposed to doing this, this and this, or they’ve described this or the rhythm of their sentences has changed dramatically.
And they did that to make you feel X, Y, and Z, or this person’s writing at a fourth grade. Reading level, but they are describing like what, what it’s like to be floating around in space in the universe and wondering what’s men’s ma what’s man’s purpose and office like a complex topic, but they’re writing, using syllable words that don’t have more than three syllables.
And anyway, it starts when you start seeing that, I think it’s pretty cool.
Well, one example that I can think of is. I would write a lot from my own experience for the most part. But then you get to a point where you’re trying to pull in examples, you know, of like, here’s how this creator, you know, grew their audience or build a business with these other things. And I would always share examples.
Like I could only do a few examples per piece because if I wanted to talk about someone else, it took me like three paragraphs to introduce who they were, talk about them and like make my point with their story. And then I’d read Ryan holiday and he would in a single sentence. Like he has his points and then he would introduce someone you like make a point and move on in one sentence.
And it like, as readers, just as engaging as what I was, or like communicated just as much as what I was saying in three paragraphs. And so I remember, it was obstacle is the way it was his book where I would like go back and be like, wait, what, how did you communicate that much so quickly? And that was one that I started copying his style on directly.
Yeah. And it’s, you could learn that really quickly by just finding the segments that he did that and literally writing it out by hand. And if you do it like 10, 20, 30 times, it can become a learned behavior relatively easily. VR, because writing can be like everyone. A lot, many people think they’re bad at writing and it’s like a pretty.
Like you don’t need to think that much in order to get good at it if you use this tactic.
Yeah, that’s interesting. Are there other areas of your life or business that you apply that tactic?
Yeah. I mean, like, I think that, like the goal is basically to remove a lot of emotion and a lot of like decision fatigue out of learning a skill set. So like, if you want to get good at something like you try not to, the goal is ultimately to just copy what has worked in the past. So you can actually get good at the exercise versus thinking about what exercise you should do.
And I do that with writing and then I also do it with extra, like literally working out. So like, if I want to get, if I go, if I want to run fast, I like to train to be a sprinter. I was a sprinter in college and I still like to do the training. I always hire a coach and I say, make a plan for me. And so all I think about is showing up to the track and getting the work done as opposed to deciding like what I need to do.
I do that with weightlifting. I like, I have a personal chef, which sounds bougie, but it’s not that expensive. and so like, if I want to lose weight, I’m just like, alright, I need to eat 1800 calories a day. Just do it so I can grab it and eat it. So I like to do whenever I have a goal, I like to remove as much.
I like to put blinders on. And, and so I kinda, I, I, it’s a little bit of a similar process as copy work.
Yeah, that makes sense. yeah, cause I think on so many of these things, it’s, it’s just about doing the work consistently. Like I, or I was talking about talking to my brother-in-law about weightlifting the other day and just how. You can kind of, it’s not that you can do whatever, but you kind of just need to pick a religion and stick with it rather than like debating the pros and cons of, you know, every different method.
Do are you trying to get strong?
I w I would like to, I haven’t been to the gym.
Can I brag really quick,
I saw on Facebook, can I break for you?
Dude? That I was working to do that for a few months. I finally hit it. So I hit the 1100 about the 1100 pound club. And do you want to know something crazy? I mean, I’ve been exercising for a long time, so, I don’t know if you have or have not, but it’s definitely an unfair advantage if you’d been doing it for a long time, but I filed the five by five plan.
You know what that is?
It was the best I got. I got so strong, so fast. All it is is five sets with five reps of bench, squat and deadlift. That’s pretty much all it is. You could do a few other things, but that’s basically it. And you do it three days a week and it takes about 45 minutes and it seems fairly stupid and repetitive.
And it made me very strong. I highly recommend that.
Yeah. And so for anyone who doesn’t know that the thousand pound club is, would be the, the milestone that most people are trying to hit. Those three weights or those three lifts adding up to a thousand pounds.
Yeah. The next goal, I don’t think I’m going to do it because I don’t think you need to have big muscles to like, like my goal is to live to 120 and just be able to be healthy. You don’t need to have big muscles to do that, but I think the next goal is going to be 300, 400, 500. So it’s a 300 pound bench, which I did the other day.
So I don’t need to improve that a 400 pound squat, which I can do almost. And then a 500 pound deadlift, which I can’t do. And so three, so how much would that be? That’d be 1200 pounds. so that’s like the next thing. And I think you can do that just by doing five by five. It’s like an, an incredible routine that whoever made it up, it’s very effective.
Yeah. Mark. B, everyone listening to this is going to be like, you guys don’t know the names of a single person, but that’s okay.
What’s a guy named Mark Texas. Is that his name?
Now it’s, I think Starting Strength is the book and anyway, it’s not important. That’s what everyone has to do before.
Yeah, sorry. We’re like I said, like, you know, that director, so, and I, Can I ask you,
What do you think is going to change about email?
That’s a good question. Well, the fact that I don’t have to tell people that it’s a good idea to do email anymore. Like, that’s, what’s nice about what has changed because, you know, three, four or five years ago people were like, yeah, that’s great. But like isn’t email dead or something. And now everyone’s like, email is the greatest thing.
And so that’s fun.
Can I give you an analogy to use for that?
So here’s what I tell people. I go email is like your pirate ship. And every new subscriber is a little bit of wind in your sails.
I like that.
You can steal that one when you’re trying to explain why email is important, but sorry, go ahead.
We’ll be off, you know, marauding on the seas. What I think is going to change is I think that one of these email, whether it’s a Hey or superhuman or one of those we’ll, get enough traction that they could actually change how we interact with email.
I think we’re still quite a ways off from it, and I don’t necessarily think it’s going to be any of those, like those that do it.
I used to think it would be Gmail. but now I’m not convinced that like, it’s not going to be Gmail. the ship has sailed on that. Like if they were going to do it, they would do it with their inbox product and they didn’t. so that’s the first thing.
Wait, can we talk more about that? So like, so to anyone who doesn’t entirely understand what he’s talking about, basically like Gmail Day never has never evolves.
You New, you can’t. They they’ve evolved a little bit. They, what’s that called accelerated mobile pages. So amp amp, you can, they have amp and email, but no one uses it, but it is pretty nifty, but no one uses it.
But basically like in your email, you should be able to buy stuff or you should be able to, like, you should be able to see a video or you should be able to swipe, or I don’t know what else,
Well, so a bunch of that is coming. Like we’re building video in email right now and it’ll. just have fallbacks, it works on most Apple devices, or it works on all Apple devices and a lot of other ones, and we’re just building it where it has all the fallbacks, so that, on like the crappiest version of outlook, it would just be the like click the image or click the animated GIF is what it’ll be and it opens.
But then on, you know, your iPhone or Apple mail or, even in some cases, Gmail, it’ll play the video in line.
How, so when I say video in line, we’ve always just used GIFs. I thought it would have been cool to like put in a GIF, like part one, and then make the user hit, refresh to see part two.
That can work. so basically HTML5 video is a lot more supportive than people think it’s just no, one’s willing to do the work for all the fallbacks. and, and so it’s not actually, like I dove into researching it. actually there’s a company called tailored mail. that said they had it and I was like, that’s nonsense.
A lot of people have said they have it.
Yeah. And I dove in and realized like, Oh, it’s actually like, you can’t get it perfect. But you can get it pretty close. and, and there’s a whole bunch of work to it, but I think a lot of that will get better.
If that exists. I think that will change. That might change storytelling because if you’re like the New York times, you don’t need a website ever. And you could tell story in someone’s email or like, You can send live alerts about a breaking news story and like have a live video in someone’s email. And I think that’s like really, really, really quite revolutionary.
Like I’m not even being sarcastic like or hyperbolic, like that’s legitimately it will change how someone receives information.
That’s fascinating. I didn’t think about like a live video. Because obviously, if you can do video that you can do live video. but I didn’t think about the implications of that.
Well think about it. Most people’s emails are static, right? They send at the same time every day. That’s not how it should be. News doesn’t happen at the same time every day. So if you’re following, if you have a, you, you bought a local publication, right.
I’m building one. Yeah.
Like if you are in Boise and it’s like, there’s a shooter in Boise. Like they got to tell people right away. Or if like the election results for the mayor of Boise, like it’s coming down to the last minute. We’re actually here now where, you know what I mean? Like that’s pretty phenomenal, I think. And they should like have that in real time.
Not at 8:00 AM every morning.
And they’ll, you know, use email to push things out. One thing that I think is really interesting is using. server generated images to change the content in an email. Write
That’s what I was describing yet.
Yeah. So like, countdown timers are the most common example. We’re about to roll that out natively and ConvertKit, but what’s actually cooler is when you’re doing things like, like shipping status or something like that, and it keeps changing in the email.
Cause that’s just an image that they’re generating off the server. I just wish you could do it in an accessible way.
I think that that’s exciting. Like, I mean, it seems kind of nerdy when you’d like to talk about it like this, but I’m like, no, I like the implications actually can be pretty big. Like if it could be, because what ConvertKit and other people are doing, like you’re building the Legos and then maybe like someone like me who likes to put Legos together, like you’re giving me these new parts and I’m hopefully going to turn it into some amazing art that you didn’t even know that you were intending to use it for.
And that’s cool.
I mean, there’s other things like, I don’t think this is in any other platform, but for the longest time, if you sent out an email and you click the link and it’s broken, then you hit reply and you’re like, did you just email the million people with a broken link? and one thing that we realized is that link hits our servers.
And so we can actually let you edit the link after the email has been sent. And so I don’t think any other tool is out of that yet, but when you like obsess over these problems enough, then you can
But you want to know something funny that, that tactic of emailing the wrong link and then emailing them again to let people know that you’ve fixed. It always gets more
Oh, it does. Okay. You should tell everyone about your black Friday.
Okay. So I’ve done this twice. Most people don’t know I did this twice. I actually did this in 2014. When we first started, when we only had about 40,000 subscribers. So back then in 14, what I did or 15 or no, when we launched, we launched at 16. So I didn’t tell him 16. I’ll tell you what I did black Friday, and I’ll tell you what I did now.
And, or back then. So back then I, we accidentally sent, like, it was, the day was Thursday morning. We accidentally sent the previous Wednesday’s email on Thursday. And so people got like the same one over and then we immediately sent a reply. And it was a screenshot of my Slack, where it was me slacking to our writers saying like, you really screwed up, you know this.
Right. And then being like, Oh my God, I can’t believe I did that. It’s like, and she’s saying like, well, what do I do? And I’m saying, you better fix this or you’re out of here. And she was being like, well, you gotta give me some suggestions. I go, yeah. I don’t know, just take a screenshot of this and put it in the email.
And if it gets a lot of opens your to keep your job, if it doesn’t you’re out of here and we just screenshot of that and put it in the email and it got the highest open rate and a lot, some people didn’t get the joke and they got mad at me, but I was whatever. but the other day we made like $800,000 in one day.
And what we did was, This, this is like what I’m saying. Like you, you ConvertKit creates the Lego pieces and it’s fun for us to manipulate it to great, cool stuff. We, made an email, which is actually really hard to make an email look like a Gmail email. it’s like not intuitive and you’ve got to like, kind of do weird stuff, but we made an email look like a Gmail email.
And we made it look exactly like I was having a conversation with the team and I sent them an email. It said art, everyone are big black Friday sale. It’s totally ready. Can you guys please make sure all the links work? um, this is going to go live and it’s actually like our biggest discount ever. I’m kind of think that we’re giving too big of a discount, but, whatever, I guess we’ll see what happens.
Just let me know if it works and then we’ll and we’ll hit send tomorrow morning. And then they reply. And so that email, it was sent to a million plus people or something like that. And we made it look like it was, it was an accident. You know, I accidentally sent it to our whole list as opposed to our company.
And we got so much traction so much, there was tens of thousands of people on the website buying. And I got literally 10,000 emails and we send it from Sam at The Hustle up my personal email. I got so many subscribers people saying, including my friends like Nathan, or, Andrew Wilkinson, like smart techie, entrepreneurial friends being like, they called me and they go.
Yeah, they go, dude, you just sent this out to your whole list. This was not meant for, this was you were not meaning to send this to me. And my reply was like, Oh no, really? And, it just crushed it. Yeah. It was like the biggest sales day ever. I think we, I think we stole that idea by the way, I’ll give credit.
I think it was Chubbies who I stole it or Brooklyn and we stole it from someone, but it was really effective.
Yeah, that’s amazing. I just love the idea that someone receiving that email would think that, like there’s another email address of like entire email@example.com or whatever they’ve you send to that? It. Like, I love that someone thinks that’s a mistake that could actually,
The people at HubSpot emailed me. This was during our due diligence. And they’re like, Hey, like they called me or texted me. They’re like, I don’t think this is meant to go to everyone. And I was like, Oh my God. I know it was a joke. It was a hit, it was a huge hit. It was great.
That’s amazing. I’d love to talk just for a few minutes about monetization and, and, any of that since you have this split between sponsored revenue and, and the paid revenue and all that, maybe share some of the numbers behind trends, at least at the highest level that you can. And then, I’m curious why, why you keep those two models?
So when, We were, we were probably going to do 20 million in revenue in 2021,
Independently. but now things changed, you know, we’re owned by a $20 billion software company and they’re less interested in our revenue and more interested in the revenue we can create for them as a New, you know, cause their hotspot only has like 100,000 customers and they do a billion in sales.
So they’re like, yeah, we don’t really care about 20 million in revenue. That’s cool. And all, but can you help us drive like 5% more customer base? Because that’s like a huge jump for us. but, and I just made all those numbers up by the way, except for the a hundred thousand that’s public, but don’t, now that we’re owned by a public company, I gotta be careful what I say.
You know, I’m not saying the customer base is going to jump by 5% or they even want it to, I’m just making that up for argument’s sake. so when we started the business, the goal was to build up this massive email list and build trust, and then create profits early on with advertising and then use those profits to build stuff, for the audience.
And I think you actually had that wonderful blog post called like the billion dollar blog.
Yeah. Yeah, exactly.
Is that what it’s called?
Yeah, it is.
And you were like, there’s a lot of companies that started as a blog. And then they launched other things. So for example, ConvertKit was kind of like this off of Nathan barry.com. Then there was, um, what’s the makeup company in New York.
Gloss into the gloss,
Into the gloss, turned into Glossier. And there was like, you had like five or 10 examples and that’s before I saw your blog post, that’s what we wanted to do. And we were just using the advertising early on to bootstrap, and then we launched trends and because I was researching which products we should make, and I was doing a ton of research and I would send it to my friends and they were like, dude, this is sick.
Can you actually research this other thing for me? And, we were like, Oh, maybe this is the product like as research. and then we built a Facebook group for it. And they were all talking to each other about other stuff they were researching. And I was like, Oh wow, this is cool community and research.
That’s the product. so the idea was not to be an advertising driven company. It was just be an advertising driven company early on, and then launch trends. I mean, we didn’t know it was going to be trends. We were going to launch something. and it was actually pretty hard to pull that off, but we did a pretty good job.
I think we would have built it to a hundred million dollar a year business. If we, if we just waited a few more years or maybe five or 10 more years, but like it’s a pretty proven track record. If you can pull this off and subscription revenues. Awesome. It is really, really, really cool. It is awesome.
I used to look at ConvertKit’s, bare metrics numbers all the time to see what your monthly churn was. To try to beat it. And in reality, it’s like, you don’t even compare the two, you know, Content and software, like it’s two totally different things. But I would like, I was just like, Oh, what’s a good churn.
Let’s look at ConvertKit. um, but anyway, it was awesome. it gave us a lot of freedom because when you have, what, what do you rely solely on advertising? You can’t say certain stuff and I didn’t want us to be in that position. you know, you. If you say something inappropriate or you say something that not everyone agrees with, they can, they can pull their ad and that’s cool.
That’s the Write. but it just stinks that that will hurt you if you’re, if you’re reporting on something and I didn’t want that to be the case. So we pivoted, and it was pretty successful. It was really hard, but very successful. Oh, you asked me to say numbers, trends had, has over 15,000 subscribers.
How many of those were from a Black Friday in particular?
I don’t remember exactly. But that day or that like campaign drove, like he got her thousands of, probably 3000 customers.
Yeah. Because 3000 times 300 is nine. Yeah. We, we drove up. Yeah, we drove about $800,000 in sales that day. So whatever that divided by, I think it was 200. It was the price, whatever that divided by 200 is how many we got
So what’s like, what’s the breakdown between, sponsorship revenue and, you know, the trends revenue as the like percentage of the company.
By the time we sold advertising was about, was over, as it was over, it was over a million a month in sales.
And Trends was going to be close to eight figures this year. but we counted our revenue a little bit odd. Like when you guys do annual billing, how do you count? What do you call that? Just deferred revenue.
Yeah, well, we were on an accrual basis and so we divided by 12 and, and then, uh, crew, a portion of it every month.
So I hate that because I’m like I have the money in the bank and I could spend this money now. So we would call it net cash receipts because I, so anyway, like we want it to have like cash in the bank, like 20 to 22 million in 2021.
I think advertising could have been about 14, 15.
So, so is the majority is still at, is advertising, but trends is a kick-ass business.
Yeah. Cause the renewal rates so freaking high. Yeah. Like our renewal rates really high. And I think we’re, we undercharged Write we’re not going to raise the price anymore, but the reason why I’m not sure what 21 would have been is because we had tested raising, like tripling the price and conversion rates were the same.
What do you think about like everyone going with paid newsletters now? You know, so it’s all created and say you’re at 25,000 subscribers or 20,000 subscribers.
I think they’re making the wrong mistakes. I think there’s the Substack is cool, but I think it’s helping people make bad mistakes. I’ll give a few examples. The first, the first example is pricing. Most people charge way too little. if you’re creating a B2C thing, then I understand why you would want to charge like $5 a month.
But if you actually want to make a living at this and provide value, you’ve got to charge more money. Like, most traders typically are bad at this. They think that certain information should be free, but it’s like, man, how are you gonna make a living? If you, if you’re charging $4 a month, like that’s really, really hard.
So like charge way more. So I think people need to charge a lot more money. particularly, yeah. Or I would say, yeah, more yeah, 50 bucks a month. Sure. Like I would say like the difference between a person buying 99 a year and two 99 a year. I bet you, those rates would be the same and you just made three X more money.
And then the difference between two 99 and four 99 also probably isn’t like that big. So I think you should charge more in not only is charging more good for you as a creator because you get more money and you can put more of into the business, but also people tend to like that stuff more. If they paid money for it, they usually appreciate it more.
You know, it’s like if you worked really hard to buy a car, versus if the car was given to you, you’re going to treat one of those differently than the other. So I think people tend to treat higher end stuff nicer. So I think you should charge now. I don’t think this isn’t like blanket advice for everyone, but I think a lot of people could use that.
The second thing is I would actually do annual billing only, not monthly billing. so if you could pull off doing annual only put it as like, you know, 20. Five bucks a month, but charge it as two 99 a year. because once you, yeah, I just think that’s the better move and you actually would probably have a far more educated opinion on this, but from Content that’s what I’ve seen.
Well, the, I mean, I agree with that because we’ve seen Content on membership sites or sorry, turn on membership sites or Content businesses. Being quite a bit higher than software in general, especially when people are implementing it poorly. And so then what happens is, you know, you’re just playing this churn game.
And especially when you have high churn on a $9, $15 a month products, it’s really
And so I exactly what you’re saying of going for a year upfront now, it’s interesting. A lot of people go like buy a year for a discount and you’re saying like, just don’t even offer a monthly price.
Yeah. Oh, well, if you’re going to awfully offer a monthly price, make it like crazy expensive. So it puts an acre. So it makes the annual a no-brainer.
So like 50 bucks a month and, or $250 a year. So it’s like double or
Yeah, only pretty much. The whole goal though, is to get annual
And we have never done monthly. And the reason why is I went and talked to the information I talked to the athletic, I talked to the New York times. I talked to the Motley fool. I talked to like all of these companies and, and. Pretty much across the board.
They were like, we only drive people to animal. And I was like, all right, well, I’m not even going to have a monthly, we’re just gonna get rid of it entirely. like why, why even do that then let’s just cut. Cut that. the third thing I would say is. Have a long form sales page as your homepage. A lot of people will think that they’re the New York times and that they can just make their homepage or the page that they drive all the traffic to make it like a, like give a lot, give away a lot of stuff for free and just hope someone will convert, that, that will work if you’re the New York times and everyone knows to trust you and to get to know you and they know exactly what they’re getting themselves into.
I think if you’re like not them, then you should probably have a pretty hardcore. like sales page and I don’t mind, my opinion is not to do freemium. Do you have to pay money to get it? you could do like a one, like we do a $1 trial, which is interesting. but, I would say like, make your homepage a sales page.
Like if you go to convert or sub sub sub stack pages, it’s just like a one-liner that. Like doesn’t sell the product. So I think you need like a sales page kind of like your book authority. Like you had a sales page.
Well, what I was trying to do. With authority was take the best that I could learn from direct response copywriting, and then bring in design from the startup world and try to merge those two things. Cause like the design startup world, they would be like, no, here’s the buy button. You don’t need any convincing.
And the direct response world would be like, it doesn’t have to look pretty, but it’s going to be 10 pages long convincing you everything about it. And I was like, can we just, can we just combine these two things?
That’s exactly what I do. I totally agree with that premise. I, 100% agree with you and that’s exactly what I do. And, I completely agree with that. and then maybe the last thing is what I would make it, what I would make, tell you to do. If you want to grow a paid newsletter is, on the sales page.
What should be your homepage? I would make it. So you have to enter your email to see the next, the checkout page, because what’s the average conversion rate, like 3%, but you can collect probably 10 or 12% of those people’s email and pretty much a hundred percent of the people who gave you their email that were already going to buy.
Aren’t going to continue to buy, but now you’ve just created a huge lead list. So you can email them all the time and provide a ton of free value and like sell them on your ideas and your product. And White’s good. And then you get increased your sales significantly.
Yeah, that’s good. And then, I mean, that’s where you have automated emails, right there going from the free into paid that’s super straightforward.
Yeah. So those are some tips I would do to be paid. Also, if you want to be a paid, like have a paid newsletter. Go out and find the scammy stuff you can find. And you they’ll probably be doing a whole lot better than like the people on sub stack. And don’t be scammy. Don’t be, I mean, be ethical, provide value, but try to understand why these scammy people are winning.
So for example, there’s a company called the Gora. You know what a Gora is.
I do. Yeah.
So not everything they do is scammy, but they cause they, they own like 30 companies, but some of the stuff is, and they’ve been sold. They’ve been sued for selling like a diabetes cure, which is like a book which like, is like horrible that’s you should go to prison for doing that.
Right. and they’ve been sued for it, but they make about a billion dollars a year selling newsletters. And so you have to ask yourself like, okay, even if you don’t agree with the ethics, which I don’t let’s let’s figure out what they’re doing. That’s really good. And maybe apply that to a good product with a high integrity team.
And so that’s what I think you should do. I don’t think you should copy people on sub stack because only a few of them are doing that pretty well. I think you should copy companies like, like Motley, fool. No one talks about Motley fool right now. I bet you, they make half a billion dollars in sales a year, or I’m a Gora or James Altucher everyone.
James is my buddy. Everyone makes fun of James because he had these scammy looking, ads. I bet that makes like 60 million bucks a year. And I’m not again saying like, go against your ethics or anything like that, but just ask yourself why do some of these people succeed significantly better than these other people who we talk about all the time and try to combine, interesting tactics?
Yeah, I love it. Well, Sam, I should probably let you get back to, an evening and you know, all of that. You’ve had a busy couple of weeks, a couple months, really? So.
Yeah, I’m, I’m happy. It’s over though. I’m happy. I get to hang out with you. Are you, what are you going to do with your Boise publication?
I’m going to, well, I kinda want to grow a newsletter again. and so I just said it earlier in this call, I didn’t want to start something from scratch and here I am starting something from scratch.
How much did you invest to start it?
I’m setting aside 25 grand.
Yeah. Should I set aside more? I dunno.
I mean, if you can get it done with 25 grand dude. Yeah. That’s bad ass. I would’ve thought it would’ve been like a quarter of a million, at least. Are you getting someone full-time on staff?
I’m starting with someone. I hired someone on contract, to start, so she’s working on it. Part-time I have like relatively small aspirations for it initially. and I want to get that traction.
Dude that’s bad app launched this. This is like the, this is like the most baller thing you’ve done. This is cool.
One idea that I have, I have no idea if this would work. and so I’m curious for your take on it. I looked at my own newsletter list, right? So for my blog, I’ve got, I don’t know, 27,000 subscribers or something. And like four or 500 are in Boise, which is makes sense. Cause I’ve lived here and grown up here forever, all of that.
But I’m curious if we went to friends who have, you know, like 50,000 subscribers or a hundred thousand subscribers and you like did the location search. And it was like they had 800 and Boise or 300. I’m curious if like them emailing and being like, Hey, my buddy, Nathan is starting a newsletter in Boise.
That is you’re in Boise. I thought you might like it. One. I have no idea what the conversion rates are. And two, I have no idea if anyone would agree to it, like to actually send it out, but I was thinking about it and I’m like, that would be a really quick way to grow.
Aye. So we wouldn’t agree to it because it’s a lot of work. It’s a lot of work to attract those 800 people, but I think many others would, and I think it would work. You want to know how I would grow? It is I would write a new article every three days and that would make it like. You know, you’re from Boise, if.dot, dot, and then have like a listicle of like, or, or here’s another thing I would do is I would, I would say the eight stereotypes of Boise and I would have an infographic that like might like, do you have like a Boise neighborhood?
That’s like the frat or like the Boise area. That’s like, the hips are one. So, so I actually did this tactic. I had an, I had an iPhone app, years ago, a roommate matching app and we launched in Boston Manhattan. Chicago and four or five other places. And all, I, I had never been to Boston and the way that we launched it was we put the stereotypical roommates of Boston.
And when we had us, if you Google, Google my name and like info, you might find it. But we made these infographics. And each there was a cartoon of like the woman who was like the hit in the hip certain area. And I’m like typical roommate of the mission in Boston, shops at blank. while drinking a coffee from X, can be seen walking her pug dog, that with a sweater she got from whatever.
And, and the whole point of the thing was to two things. One name has many local vendors from that neighborhood. Cause I knew they would share
Make fun of in a nice way that neighborhood. Cause I knew everyone in that neighborhood would share. And with their friends, like, Oh my God, this is so us or whatever.
And I think if you did like, like things like that, that would actually probably grow faster than if you,
Did like the partnership side or anything like that? Yeah, that, that’s interesting. I’m, I’m super curious how it’s all going to go. So, I mean, I started hiring a writer and, You know, we’ll get the initial subscribers and the biggest thing, right. We’ll be getting an editorial calendar and getting everything going, but then I’m curious how, how it will go.
I think my goal is to get to 10,000 subscribers by the end of this year for a side hustle. So we’ll see from there.
Well, that’s good, man. Congratulations.
Thanks. Okay. where should people go to, to follow what you’re up to? What do you, what do you want to address? Yeah.
Twitter does @theSamParr. I am there a lot. Don’t email me. Don’t text me. Don’t I won’t reply, but if you talk to me on Twitter, I’ll probably reply. TheHustle.co is our newsletter and then Trends.co is the trends thing we talked about.
Sounds good. Well, it’s always good to hang out and, I’ll catch you later.