Podcast Summary: "The Step-by-Step Playbook We Used to Build a $100M+ Newsletter Business"
Podcast Information
- Title: My First Million
- Host/Author: HubSpot Media
- Guests: Alex Lieberman and Austin Rief (Co-founders of Morning Brew)
- Release Date: April 4, 2025
In this episode of My First Million, host Sam Parr engages in an in-depth conversation with Alex Lieberman and Austin Rief, the co-founders of Morning Brew, a highly successful newsletter business. They delve into the journey of building their startups from inception to multimillion-dollar enterprises, sharing valuable insights, strategies, and lessons learned along the way.
1. Founders’ Background and Early Beginnings (00:00 - 06:25)
Alex Lieberman and Austin Rief recount their initial steps into the media space while still in college. Alex began by creating a PDF newsletter called Market Corner, aimed at making business news more accessible and enjoyable for finance students. Austin became one of his first readers, setting the foundation for their future collaboration.
Notable Quote:
Austin Rief: “I think the big opportunity in the media space… I feel like I can rule the world. I know I could be what I want to.” [00:00]
2. Launching The Hustle and Early Growth (06:25 - 15:54)
In 2016, Sam Parr launches The Hustle, initially generating around $400,000 in revenue from events. Concurrently, Alex and Austin focus on growing their newsletter, Morning Brew, leveraging organic growth strategies and early advertising efforts. They discuss the importance of financial discipline and the advantages of staying lean during the initial phases.
Notable Quote:
Sam Parr: “If you think you can get more done in a shorter period of time… it worked, and it made us a bunch of money.” [07:35]
3. Scaling Up and Team Building (15:54 - 27:00)
By 2017 and 2018, both Morning Brew and The Hustle experience significant growth. Morning Brew scales to 500,000 subscribers with $5.1 million in revenue, while The Hustle reaches 500,000 subscribers with $1.8 million in advertising revenue. They emphasize the critical role of hiring talented individuals like Neil Freyman, who helped elevate Morning Brew’s content quality.
Notable Quote:
Alex Lieberman: “People have to feel like douchebags for hating me because there's no way to hate me.” [00:26]
4. Maturation and Strategic Pivots (27:00 - 43:42)
In 2019, both businesses continue to mature. Morning Brew explores different monetization strategies and considers vertical integration to enhance profitability. They discuss the implementation of the Entrepreneur’s Operating System (EOS) framework from the book Traction, which significantly transforms their business operations and leadership dynamics.
Notable Quote:
Alex Lieberman: “The cost of the legal fees to do this deal would be more than what I would pay for you guys.” [12:13]
5. Navigating the COVID-19 Crisis and Business Sale (43:42 - 56:20)
The onset of COVID-19 in early 2020 poses unprecedented challenges. Both Morning Brew and The Hustle face significant revenue drops as sponsorships are canceled. They swiftly pivot by launching education products and other revenue streams to sustain their businesses. This period culminates in the sale of their companies, with Morning Brew being acquired by Axel Springer for a substantial sum.
Notable Quote:
Sam Parr: “This was the year that I learned what the word force majeure meant.” [45:59]
6. Reflections on the Newsletter Industry and Future Opportunities (56:20 - 72:39)
Post-sale, Alex and Austin reflect on the evolving landscape of the newsletter industry. They highlight the increased competition and reduced subscriber value due to market saturation. Offering advice to aspiring newsletter founders, they stress the importance of exceptional content and niche focus. Additionally, they explore future opportunities in alternative investments and specialized media sectors.
Notable Quotes:
Austin Rief: “The value of a subscriber is significantly less than it was when we started because there are so many newsletters out there.” [58:31]
Sam Parr: “If you're going to build something, go super hard on content, make money via advertising… and then if you do make money in other ways, you will almost always want to make money in ways that fit within your company's core competency.” [60:03]
Key Insights and Lessons Learned
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Organic Growth is Fundamental: Building a loyal subscriber base through quality content lays a strong foundation before scaling through paid acquisition.
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Financial Discipline: Maintaining lean operations and judiciously managing funds are crucial in the early stages to ensure sustainability.
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Hiring Talent: Bringing on board the right people who align with the company’s vision and can execute effectively is vital for growth.
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Adaptability: Being able to pivot and explore new revenue streams in response to unforeseen challenges (like COVID-19) can save and even propel a business forward.
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Maintaining Content Quality: In a saturated market, exceptional content is non-negotiable. It’s the key differentiator that retains and attracts subscribers.
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Niche Focus: Targeting specific niches allows for higher engagement and better monetization opportunities, avoiding the pitfalls of broad, unfocused content.
Advice for Aspiring Founders
- Prioritize Content: Ensure that your content is top-notch before considering monetization strategies.
- Stay Lean: Avoid unnecessary expenses, especially in the early stages. Only raise funds that are essential for growth.
- Be Niche-Specific: Focus on a well-defined niche to maximize engagement and monetization potential.
- Implement Operational Frameworks: Utilize systems like EOS to streamline operations and enhance leadership effectiveness.
- Adapt and Pivot: Remain flexible to adapt to market changes and explore new revenue streams as needed.
Conclusion
Alex Lieberman and Austin Rief's journey from college projects to leading multimillion-dollar newsletter businesses offers a blueprint for aspiring entrepreneurs in the media and newsletter space. Their emphasis on quality, financial prudence, and strategic adaptability underscores the essential elements required to build and sustain a successful media business in a competitive landscape.
End of Summary