← Content Is Profit
Loading summary
Transcript63 lines
- [00:00]
Luis
Hey, and welcome back to Continuous profit. This is Luis, half of the bees res and I'm welcoming you to this incredible start of 2025 in the 10 episode series on where we go all the way from frameworks to how to monetize your content in a very specific way. Even how to outrank Google or how to land your dream sponsors. So I think these 10 episodes are going to really help you. If you haven't listened to any of the other ones, go back and they start on January 3rd all the way to January 12th. So super excited to share these with. Enjoy. Hey, I'm Louise.
- [00:36]
Randy
I'm Louise.
- [00:37]
Luis
And you're listening to the Content is Profit podcast.
- [00:45]
Randy
Today we're talking all about newsletters. How to start them, grow them, monetize them. We're gonna dive deep and today we got the guy. The guy that has been literally diving deep into all this and analyzing them and creating content around them.
- [01:01]
Luis
So like legit, millions of dollars y.
- [01:04]
Randy
Like eight figure newsletter.
- [01:05]
Luis
Yes.
- [01:06]
Ethan Bruce
Okay.
- [01:06]
Randy
Today's guest is someone that has dedicated the last years of his life to newsletters. He has been talking to experts across the industry, getting answers about the business models, financial numbers, growth strategies, pricing, and more.
- [01:20]
Luis
Not to mention that he just completed a brilliant piece on how to $10 million newsletters actually work. And he wants to insights with you.
- [01:30]
Randy
Can't wait. Please welcome the one and only newly crowned by the B Bros King of newsletters, Ethan Bruce.
- [01:42]
Ethan Bruce
What's going on, guys?
- [01:44]
Randy
What's up, Ethan?
- [01:45]
Ethan Bruce
That was amazing, man. I'm sitting behind the scenes watching this intro asking myself how in the world am I ever going to live up to half of this?
- [01:52]
Randy
But thank you.
- [01:53]
Luis
With all the, the, the golden boulders you're about to drop on here. You know, you said earlier you're like, oh, your studio is amazing, but yeah, it's going to be destroyed after all those boulder line on here, man. Thank you so much. We're so excited. When we received that message that you want to talk about newsletters with us, we're like, yes, let's do it.
- [02:10]
Ethan Bruce
Absolutely, man. I'm, I'm stoked to be here. I'm stoked to be here, Ethan.
- [02:14]
Randy
I just regret one thing. I'm regretting one thing right now and it is the fact that we didn't ship you a crown before this episode. So right when we say, you know, you're like, what is this crown for? And then when we finish the intro, you just put it on and walk in like, yes, I am the king of newsletters.
- [02:29]
Ethan Bruce
I've Got one in the other room. Should I just go grab it?
- [02:34]
Randy
If you want to. You know, it's going to make for good content.
- [02:37]
Ethan Bruce
I'll put my Wednesday crown on.
- [02:41]
Luis
Ethan. Super stoked, obviously. So for those that might not be familiar with you, you know, can you share a little bit like the, the two minute version of like, who Ethan is, like who you work for, what projects are you involved in? And I think that's going to give us a good starting line on to tackle this topic.
- [02:56]
Ethan Bruce
Yeah, sure. So I am a writer. My most. My job is writing about businesses and entrepreneurship. I write for a newsletter called Trends, which is the paid newsletter. You guys called this out last week, so appreciate that. It's. The paid newsletter belongs to a company called the Hustle, which is another huge newsletter business. Yeah, we write about business and entrepreneurship specifically. My team writes about emerging opportunities where people are spending more money, how you can build certain businesses in like, exciting niches that you maybe haven't heard about. And that's what I spend most of my time doing. And then a couple of years ago as a company, we sort of noticed that, like you said, newsletters are becoming more and more popular. More people kind of want to understand how this industry works. It's something that we knew a fair amount about. Hustle's been around for seven years now. Yeah. And so we decided to go out and write the comprehensive guide to the industry. And so ever since then, I've been interviewing not only people on our team, sort of like deconstructing how our company works, but also, you know, just like super early operators everywhere. From Morning brew to like Buzzfeed, AppSumo, all these different newsletters you've heard of, really just trying to break down how the industry works. So I, I think in a nutshell, that's about it. I'm a newsletter writer deep in this space and have like a minor obsession with how newsletter businesses actually work.
- [04:23]
Luis
It's like your head about to explode with all, like all the knowledge that you have from, from the years of experience and all these things. Like, is that why you guys are urged to share all the secrets?
- [04:33]
Ethan Bruce
Yeah, it's that and the weight of the crown. So those two things head about to explode now. It's, you know what it really is? It's, I mean, it's a blast. So we're about to put out this big publication. Can I tell you the real story behind how this started? So, yeah, absolutely. You guys mentioned on your show the other week, HubSpot bought the Hustle a little over A year ago, but before that we were operating as like a completely independent business. And so we had to make all of our money through the newsletter. So we had this one daily email that went out. We made a bunch of money through that that was making like several million dollars a year in ad revenue. And then we had the paid product, which was Trends, which is another several million dollars a year. And, you know, it costs money to run these businesses. We had to kind of figure out what the next thing was going to be that we were going to build. And when I say that we decided to write the guide to the newsletter industry, we originally launched that as a paid product. It was going to be like 2,500 bucks. That would be our first really expensive paid product. And so we put like, you know, hundreds of hours into interviewing for this, writing custom illustrations. We built an entire custom web reader around the entire thing. There was going to be a whole social experience behind it. And then literally a week or two before it launches, we get the notice that HubSpot's acquiring us. And HubSpot is like a multi billion dollar company and they were really excited about certain parts of what we had built, but they didn't necessarily need the couple hundred thousand dollars that we had sold of this product. So it kind of got put on a shelf and now we're going to be giving it away for free. So we've literally written this entire guide that is really designed to be like, sold as like a really expensive thing. And at this point we were just tired of looking at it on the shelf. So we're like, we need to get this out the door and how can we do that? We're going to do it for free. So the reason that I, I mean, the reason I love doing this is because when you really dig into this space, you see people like you guys and all kinds of other creators who are using newsletters to like tell their story and build the. Build the business that they want. Yeah, that's. Yeah, that's what I like being part of. So that's why I do it.
- [06:42]
Randy
That is so cool. And I, you know, I definitely see the value on all that work and I'm 100% certain that a lot of people would pay. But the fact that you guys are giving it away for free, I think it's incredible. I'm curious though, do you think giving it away. I believe a lot in charging for stuff just because it's that commitment and probably people that are more willing to take action once they get their hands on it. But at the same time, I see the value of, like, okay, it's free, and then you reach more people. These people are talking about newsletters, maybe directing traffic to you guys. Is there a sort of play strategy behind that that you guys are decided on? Why? To give it away for free?
- [07:21]
Ethan Bruce
Yeah. Great questions. This is something I wonder about myself. Like, is the. Is the perceived value still there if it's free? And I think, I mean, here's our goal. And I don't want to over hype the guide here. That's not what we're here to talk about. We're here to dig in and actually, like, give away. I want to give away the best parts of it today on this show. But when the actual guide comes out, the goal is for it to be, like, so overwhelmingly valuable that it just becomes the thing people talk about when they talk about this industry. Like, sort of the way people talk about, like, Netflix's, you know, employee deck or something like that.
- [07:54]
Luis
Yeah.
- [07:54]
Ethan Bruce
There's certain pieces of this entrepreneurship equation, like certain documents or books that have kind of taken on a cult following of their own because they're so useful. And I think our goal is for this to be that even if it's not for sale, we want people to, like, just really dig in and use it. So we'll see. I mean, it remains to be seen, but absolutely. People listening to this can be kind of people. At the end of the day, the people are the judge.
- [08:17]
Randy
So, yeah, I think it's going to be a good play on positioning. You know, definitely position you guys as the go to knowledge broker for newsletters. And then everybody's gonna have a question. Just gonna go to you guys.
- [08:32]
Luis
Yeah. So I've been going through your Twitter thread, which, by the way, we're gonna link it right below, and it's so good, and there's so many questions there. But before we go into, like, the nitty gritty and the meat and the really juicy stuff, I'm very interested. Right. Like, we talk a lot about content teams and fractional teams, Right. We provide a type of fractional team for video content. Right. So I'm very interested in those initial days of you guys. Right. Because we might have some listeners that either they're building their own teams internally, right. They're trying to figure out their content framework, they're trying to monetize that content. Right. For us, is known that our show is our platform. Right. Whether that's an audience side of things that come to us or whether that's the guest that we Connect with and develop that relationship. Right. That's the way that we monetize this type of content. But I'm very interested initially when you guys started, you know, the newsletters, how was that process of starting it from zero? What was the decision? We're like, okay, we need to, we need to monetize this. How, how many ways? Like, if you can give us a quick background on that, like, and then we can dive in, into, into the goal of the guide.
- [09:36]
Ethan Bruce
Totally, yeah, great question. So, interestingly enough, the Hustle actually started as an event company. It was founded by Sam Parr, who's, you know, pretty big force to be reckoned with on Twitter and elsewhere. And at the time, but at the time he wasn't really known. He didn't have much of an audience at all. He just kind of been in entrepreneurial circles. And so he, you know, was living in San Francisco and he wanted to build up his network and also build a business. And so the idea for the Hustle was sort of the, the merger of those two things. The business side was like selling tickets to this event where he was going to get a whole bunch of entrepreneurs to come and talk about entrepreneurship. And then obviously as for the person who was organizing that entire thing, it helps to build his network as well. So the Hustle actually ran as a, an event business for the first one or two years that it was around. There wasn't really a newsletter there. And this, I mean, you know, this, like I said, it was six or seven years ago. So this was really before newsletters had come on the scene and been like a popular business model. A lot of people weren't doing it. And so they ran this event company. The event company was quite profitable. And then at some point, just. I actually don't know exactly why he pivoted, but I think it was probably something to do with diversifying income because, you know, after you host several events, you have all these email addresses and there's an opportunity there to continue to build the audience, continue to build not only a pipeline for the events, but also to potentially monetize that email offering. And so at some point they started creating some more and more regular content schedule. And the Hustle morphed into like a primarily newsletter driven company.
- [11:17]
Randy
Interesting.
- [11:18]
Ethan Bruce
And yeah, you see this a lot, actually. It's interesting. Companies like Morning Brew also kind of started with, with that goal in mind. They didn't necessarily start with the idea of monetizing out of the gate. And it was several years into building that company that they actually, you Know, raised money, hired writers instead of using volunteers and actually decided to make a go of it as a business.
- [11:39]
Randy
Yeah.
- [11:39]
Ethan Bruce
So, yeah, a lot of these companies that you hear people talk about these days, they started somewhere else and pivoted into newsletters. And then interestingly, like they figured out how to make the industry work. And now more and more people are seeing, oh, this is a totally viable business and that's why you're seeing kind of rush in.
- [11:54]
Randy
Interesting. You know, I'm curious, do you see that transition from event based business to the newsletter based business? You said they already had this database, right? There's a bunch of emails and then the transition. Was that an advantage at the time of starting? Because obviously there's a lot of people that are going to start from scratch, from zero. Right? Zero people. And probably the person that starts it is going to be the researcher, is going to be the writer. Or like you said, they might have some people that, you know, want to give their time to write on the newsletter, which I'm very curious on learning how you guys go about doing that. I think it's a pretty, pretty good probably starting strategy for those that are looking, you know, to build a newsletter. But I'm curious, was that an advantage having that number? And do you, do you remember what was the amount of, you know, potential emails at the beginning that you guys had to kickstart that newsletter?
- [12:46]
Ethan Bruce
Great question. Yeah, I'm going to say it yes and no in terms of whether or not it's an advantage. So when you start a newsletter business, if you already have pre existing emails, that'll always be some kind of an advantage. But the reality is, and we can talk about this more as we get into growth, I think the reason that the Hustle ended up being successful as a newsletter business is actually because Sam and his early team were very, were quite good at getting attention. And so it wasn't necessarily about the first emails that they had on the list. It was that they were able to actually continue growing that list at a pretty rapid clip. And like I said, we can get into this deeper when we start talking more and more about growth. But for them early on, the biggest thing that they leaned on was viral content. And so they would is what like Sam calls showmanship. They would select articles specifically because they knew they were going to be controversial or that they would have like a high likelihood of traveling around the web. They did a really, really good job of that early on and that kind of established them in the space. I think one other thing that was like A early advantage for them. And I didn't join the team until 2020, so somewhere between, like, three and five years into the. Into the game form. But when I look back at what they did really well early on, it was that ability to, like, create content that people talk about. And I don't know, I'll think about some other things as. As we go through it, but there's a couple other things that they did really well. We can. We can chat about as we go.
- [14:16]
Randy
Yeah, absolutely. I remember. I don't know if this. This was actually the Hustle or the Morning Brew, but I remember signing up to one of those, and they had at the bottom of every email, kind of like a progress bar on how many people you refer, and then you would qualify for surprises. I remember one time they were, like, giving away, like, a MacBooks Pro and stuff. I was like, heck, yeah, this is awesome. I'm gonna send it to all my friends. Right? So I'm guessing again, we can dive into those strategies when we get to the growth side of things.
- [14:44]
Luis
Yeah, sorry, my last question here, right. Like, it's. It's on the team side. And then that decision I'm monetizing, right? Like, how. How did you guys make money initially? Right? Because I think that's, like, the first hurdle that a lot of people trying to figure out. Is it. Okay, you hear all these statements. Like, you can make $1 off of each subscriber that you have in your list, for example. That's like one of the standards. And then people are like, oh, sweet. Okay, well, what do I do? Do I sell them things? Do they go to my website and do that? Do I sell sponsorships? Like, what is it? Right? And people starting up. The trend that we've seen is, especially with podcasting, they tend to go to the sponsorship side and then they go into the audience loop. And initially that can be very challenging. Right? We have to do a bunch of stuff to get there. So what was that? How do you guys started the monetization aspect of the Hustle? And then. Yeah, how. How has that evolved?
- [15:39]
Ethan Bruce
That's a perfect question. And I'll get into. We'll go super deep on it in just a second. But you reminded me of two other things that I think just relate to the. To the last question in terms of, like, was that list an advantage to them? So I'll say. I'll say, I think these are really important. So the list was an advantage or. Sorry, having the event company was an advantage in that it created cash flow that allowed the email business to, to get going.
- [16:03]
Randy
Right.
- [16:04]
Ethan Bruce
And I think this is one thing that a lot of creators overlook. We talk about this on my podcast all the time where there's sort of like, there's, there's a, there, there are three steps to making the business work. As a creator, you first, you need cash flow. That's absolutely number one. So we always tell people, we're like, don't quit your job. If you want to go and start building a media company, do it on the side at first. Or you have to find some way to keep the cash coming because it takes time to build the trust that like an audience needs to really monetize it. Well, after you have some kind of cash flow, whether that's through a job or a service company that you run or something that's, you know, easy to cash flow, then you start building your audience. And then eventually it's products on the back side of that, that, that, that you monetize. So for the Hustle, having that event company early on definitely offered cash flow, which, which, which was definitely an advantage when it comes to building a media company. But it's not necessarily the only way to start. I mean, Morning Brewing raised money from investors, you know, when they, when they decided to kind of make a full time go of it. So there's other ways to get that early cash flow. The other thing that I think was an advantage to them too, and I, I alluded to this and then I halfway forgot it while we were talking, is they picked like a topic in voice that wasn't really well represented in the market. So if you look at what the Hustle does today, it's kind of common to see, you know, business newsletters that are sort of like, you know, they use memes and, and GIFs and they're kind of like your best friend. That was very rare back then. Back then it was like Forbes, Business Insider, you know, like all these kind of stodgy magazines. And so Sam started out early on, he said, you know, we are going to be like your best friend that just texts you what the news is. And I think people who are looking to get into this, one of the most important things you can do early on is take a look at whatever your area of expertise is or your sphere of influence and just ask yourself, like, what do I wish was here? What's missing? Yeah, because if you, you're not going to Out Morning Brew. Morning Brew, you're not going to out Milk Road. Milk Road. So crypto news, business news, finance news. There's still plenty of opportunity there, but you can't beat these mega players at their own game. You got to bring a different game to the table.
- [18:14]
Luis
Yeah.
- [18:14]
Ethan Bruce
And so we can get into that as well. But you asked a more specific question, which is about how do you actually monetize early on? And this is actually the right question to start with because a lot of people will ask about not just the Hustle, but like all kinds of newsletters. They'll say something like, well, how big does your audience have to be? Or like, what kind of technology do I need? How can I grow faster? Those kinds of questions. Here's what I found in two years of talking to players at some of the most successful media companies in the world. The size of your audience matters less than knowing how to monetize these businesses. If you know how to monetize these businesses, you know how the business model works. You can make lots of money on a small audience. Like, and I know you guys talked about this last week, but I know somebody who does six figures on a newsletter with a thousand subscribers. I know somebody who does $5 million or $2 million on a newsletter with 5,000 subscribers. I know people who do 10 to $20 million. And like a team of three people run that newsletter. And it's in a niche you'd probably never think of, which is farming. Like, they write about soybean futures and yeah, nuts. So there's. So the. The topic doesn't matter as much. The size of your audience doesn't matter as much as knowing how to monetize. Those things still matter. But really knowing the business model is the most important part. So to answer your question about how they monetize. Well, let me go a little bit more broad. The Hustle specifically sold ads early on, right. And that was easy for them to do because they had grown a pretty large audience. And we can get into the specifics of how they did that in a second. But at the high level, there's basically three ways to monetize a newsletter company. You have free products which are monetized via ads or affiliate deals. You have low price subscriptions, and you have high price subscriptions. And the low price subscriptions are typically called front end products, and the high price subscriptions are called back end products. And so the way these businesses really work when you break them down is you have your free audience, which is always going to be your biggest audience, lowest barrier to entry, free audience. You can monetize that on ads and affiliate deals, and then you use it to sell Memberships to your front end products, and then your front end sells memberships to your backend products. And the reality is you can, you can mix and match those a lot. So some companies only have one, some have all three. But when you know how that business model works, it takes a lot of the mystery out of it and you have like a much better chance of being successful at this.
- [20:54]
Randy
Yeah, absolutely. Idan, I just want to backtrack here a little bit. I think you just share about what would be the perfect ad for your newsletter guide. You got to put a print in there that just says size doesn't matter, and then very small at the bottom. You know, when building your newsletter, you know, whatever, you know, just something like that, I think it will call people attention. Just random thought, you know.
- [21:20]
Ethan Bruce
That's perfect. Yeah, it's all about how you use it.
- [21:23]
Randy
There we go.
- [21:24]
Luis
Yeah. Yeah. That's the voice. That's the voice of content sponsor Fonzie. Come on.
- [21:27]
Randy
I know. So sorry. Just on, on that backtrack, I do want to use. Reminded me you mentioned something that I consider what, what we call here a golden boulder. A lot of people talk about, you know, the topics niching down all these things, but you mentioned the voice, and that is so key. I think people don't really understand how valuable it is to have a voice that relates to other people. And we talk about the three piece of differentiation in here. We've mentioned a few times, you know, product processes and personality. And personality is that voice that you're talking about infusing a personality into a newsletter that makes it exciting to read. I get drawn personally to the hustle type of newsletters. Newsletters that are not very formal, if you want to put it that way. Right. I mean, I have the milk road too. Is all like 90% jokes, but you're still learning, you know, and it's absolutely amazing. I love the stuff. So I wanted, I just wanted to bring this to people's attention so they're thinking, okay, well am I infusing my personality to whether that is your newsletter or whatever type of content that you're making? Because I think that is actually something that is going to give you an edge and it has actually been something that gave us an advantage when it comes to content is profit. Because people are like, man, you guys are so high energy. Right? This is not what I was expecting from a podcast. And we're like, yeah, we love, we love a Red Bull, know, But I.
- [22:57]
Ethan Bruce
Think it's definitely sushi sprints.
- [23:00]
Randy
Yeah, $5 sushi sprints. Right. But definitely it's an underlooked, I don't know, an underlooked asset maybe, that people don't really take into consideration that much.
- [23:10]
Ethan Bruce
Definitely. It's one of the most important things. So when we broke the business down, we kind of broke it down into this model that we call, like the newsletter engine. And it sort of operates like a real engine. It basically turns attention into money, you know, and the idea is basically you have like, these growth funnels that filter attention down into your monetization strategies. But underneath all of that is what we call the product level. And the reason it's at the very bottom is because it is the foundation of everything. And when you're talking about product, you're talking about a few things. Yeah, you're talking about growth or, sorry, technology. But really what makes up the product is like, the things that make the experience of your newsletter or whatever media company you're building unique. So that's your voice, your editorial strategy, the way you build community inside of your company. And by the way, one other thing I'll say just related to this concept of the business model mattering more than the topic or the size of the audience, the model is universal. So we're talking about newsletters here, but once you know how this works, you'll actually see it being played out in multiple places. So like TikTok creators, Instagram creators, basically anybody who is turning attention into money is going to be doing it through, through this machine. And if they're using this model, they're going to be maximizing their, like, their profits and their revenue. But a lot of people are just kind of like groping around in the dark trying to figure out how this works. And so hopefully what we can do here is just break it down, make it a little bit more approachable for people.
- [24:49]
Luis
Yeah, I love it. I would love to dive into that. Before we do that, I want to mention, through our journey, publishing, that has been one of the bigger discoveries. Right. There's always that shiny object syndrome of this method, this tactic, this thing. And at the end of the day, at the bottom of it all, those are just different names for the same thing. Because as we started executing, for example, and for us, our framework is a publishing pyramid. We have a few ones, like the minimum viable content, how we started, but at the end of the day, it's very similar to whatever platforms that you're using. And I love the fact that we're breaking down the newsletters because I see the similarities. I'm going through that model in my head with a podcast and it's that thing. So on our side you mentioned initially cashflow. Well, for us it's a service, right? So like just like the whole was the events industry for us it was a service that we needed the cash because we have no investors, right? And we needed to eat initially. So we're like, how do we do this? Well, we need cash in the bank now. Okay, let's set a service. And that's how really everything started a few years back. Now that we're in the face of building that audience, being part of the hospital podcast network and the support and the years of experience, now we're starting to experiment on the product side of things, right? So there is a backside, right? And now that's the new phase that we've been experiencing over the last like three to four months is that product face where you're like listening to the audience, listening to what they, what they need. We took on new projects to see like what the feedback is on new things, right? On these new calls to develop those products. So I see it very clearly and I love it because same thing, you see it, you, you're like, you turn this lens that you put in your, in your, in your, like next to your eye, right? And you look at these individual creators and you look at this like for example, calling an Samir for the published press, right? They have an amazing business model and they have an awesome episode the other day where they broke down kind of like the revenue and a lot, they're known for a lot of YouTube and they're like, the YouTube ad revenue is just about 10% of like the total thing that they do with their platforms, with their newsletter, with the things, right? But the end of the day it's the same framework. So I say this because there's a lot of people that might be listening today or watching that might be like, oh, that's cool, but let me keep looking. No, don't keep looking. Just keep listening to this episode because it's all the same, right? And we're gonna continue to give the all the steps to this.
- [26:58]
Ethan Bruce
Yeah, no, that's a great way of putting it too. And you're absolutely right. I mean basically all of these creator focused media, really what I talk about is like media brands, right? Are you building a media brand? And increasingly the answer for that is going to be yes. Because even if you have say software as a service, right? More and more of these software companies are building media departments related to them because it's, it's it's actually less expensive to hire writers who or or YouTubers or people who create great content than it is to just keep putting ads out because that content performs over the long term. But you got to know how the media business works, so that's what we're going to get into here.
- [27:38]
Randy
All right, let's dive in fast. Is like, tell me, tell me everything. Okay. Hey guys, Hope you enjoyed today's episode, part two of the newsletter series with Ethan Brooks. How epic was he?
- [27:50]
Luis
Ah, so good. So epic.
- [27:52]
Randy
Yeah, it was absolutely amazing. He dropped a lot of golden boulders and this conversation was so long and so juicy that we had to cut it into multiple parts. So make sure you stay tuned for part three of the newsletter series.
- [28:05]
Luis
That's right. You gotta come back. There's so much more.
- [28:08]
Randy
All right, on the next one, we're going to cover a little bit more of the growth strategies that he has researched on how these big newsletters can make it to seven or even eight figures. All right, see you there.
- [28:19]
Luis
Thank you so much for tuning to Content Profit Podcast. Go ahead and follow the show in your favorite platforms and on social media.
- [28:24]
Randy
At Biz Bros. Co, that is Randy Ethan here help you move one step closer towards your goal and building an awesome newsletter. Please don't forget to share this episode and and leave a five star review. See ya.
- [28:36]
Luis
Bye, guys.