How to Make $50K a Month With a Newsletter with Michael Houck

how long does it take to turn a newsletter into a thriving business well Michael Houck went from zero dollars to fifty thousand dollars a month in just five months if you are ambitious with the newsletter and you have a goal for it to be a big Revenue driver for you and build a business around it then I would say think big and find the right information sources to learn that side of the business route just try to learn the way that founders of startups think rather than the way that creators are typically taught to think Michael is a startup founder and former VC turned full-time newsletter Creator he's very quickly grown his email list to almost 60 000 subscribers and in this episode of crazies and air he shares how you can treat your newsletter like a business yeah I actually have a bit of a contrary intake on this so I see a lot of creators and newsletter operators and people who are in this space building their business to have like the best margin that they can have right away the most cash flow that they can they can keep um right away 90 margins great it's a great business but for me coming from startup mentality I want to have a zero percent margin for as long as as I possibly can afford to interesting because if I do that then I can reinvest a lot more into growth and I can grow a lot faster so I see a lot of other people making you know creating their newsletters and trying to grow their social media audience and whatever it might be and it takes them a long time um because they're they're bringing as much off the table as they can and you know not everyone can be at zero percent margin you gotta feed yourself and all that good stuff but as low as you can in my opinion is the best for as long as you can because then you can just grow faster so I've been full time on this for a little under five months now I was you know doing it as a side project before then but in those you know four or five months or so I've grown from about 10K followers or 10K subscribers to 60k and we're on Pace to be at a million dollar run rate for the business before the end of the year wow that's insane so how do you feel what do you think made you attract that size audience in such a short period of time I mean my Niche is is startup Founders Venture Capital business building all that and that's a niche that you know is very valuable for sure but there's a lot of noise in it from people who haven't actually gone out and done it right so I think that the credibility that I bring based on what I built in the past and my ability to see kind of both sides of the equation as a former VC and a startup founder um has really resonated with a lot of people um and obviously the content has to be good too what do you think makes good content that has helped you to stand out in such a crowded Niche yeah I mean I try to just be very to the point um startup Founders and people who are building businesses don't have a lot of time to get the flowery words and the the pretty pros and all that stuff they just want the facts the Tactical advice that they can actually go and Implement in their business and that's how I talk anyway so it works for me will actually change five months full time what what do you think you did differently from those five months to before so I mean I started the newsletter as a side project for my last business it was to build up my personal brand to therefore make us more attractive to customers right right I was putting out one of these articles one of these deep Dives every week um but had no Ambitions beyond that with it I wasn't you know trying to invest a ton of money into growth that was more of like somewhere to point people when they're interested in you know becoming customers part of our business so when I left the business earlier this year I basically just decided to take growth more seriously and treat it as a real business that could grow to be pretty big I had done some analysis and I talked to you know a bunch of people like Lenny richardski saw hillblum good friends of mine and kind of learned what the the potential scope of this business was um which allowed me to to make the decision to go all in and also come up with a growth strategy that would actually let us achieve that pretty quickly so for me it was really just like a mental shift of like hey I'm going all in on this and so therefore I'm going to spend more time attention and money on ways to grow it and what was that gross strategy so like how much did you invest in things like ads or you know did you put more time into organic growth or was it everything like how did you go about it yeah I mean I think it's important to you know some people say you want to focus on one channel and just like own that channel and be the best of that channel I think that works for a lot of people for me I have a very short attention span and so I try to do a little bit of everything and then double down on what's working later right run a ton of experiments and then iterate and double down on what's working so you know I have a sizable audience on Twitter or X I guess now and uh LinkedIn um it's like over 90k between the two platforms I think uh somewhere around there I was able to do a lot of like content marketing on there and get a lot of my first couple thousand subscribers just from you know putting a CTA at the end of my threads on X or you know in the in the comments to my Carousel posts on LinkedIn but after we got to a certain point I want to say 10K or so I started to run lead magnets where I was like you know comment and you'll get this resource but you'll also be subscribed to the newsletter those added a ton of subscribers in a short period of time we added like almost 15K subscribers in a couple weeks doing a few of those those are lower quality subscribers so like it's a you know an open rate in the probably high 30s rather than 50 plus so some of them have churned out but it let us get off the ground really quickly and get get things moving I also invested a bunch into at that point into spark Loop and into um like paid ads on social too so Facebook Instagram and also Twitter actually Twitter's ad platform has got a lot better uh in the past like six months or so at least we're making it easy to get good space at a good CPM and so yeah that those those have been the bigger growth that I was kind of later on but in the early days it was uh yeah it was content marketing and then also newsletter swaps so I knew a bunch of people who had similar size newsletters were all trying to grow at the same time we just would run like in place of running an ad we would swap each other's piping up each those newsletters so that worked out pretty well too and you said that you you know like liked to run experiments see what was working and then Double Down was there anything that surprised you either you know it was more successful than you thought it would be or you know it's a really popular growth hack that didn't work well for you at all yeah I mean on the first part the lead magnets were were surprising I you know they're super cringe right let's just be honest about that one when you post something on Twitter and you're like comment like one word Below in all DMT like but when you're trying to get something off the ground you like have to be Shameless you have to lean into being cringe and so um that worked a lot better than I thought it would I thought maybe I get a couple hundred subscribers a week from it but we did like five or six of them we got almost 15K so crazy I think that was just like the right lead magnets for my audience really it really resonated as far as something we did that didn't work as well as I thought it took me a while to get paid ads right honestly once we started running them I'm not you know I'm not a growth marketer I'm not a demand generator person that's not my background and so I was getting CPAs for ads in like the 350 range which is just untenable but then I started working with uh Matt McGarry who runs grow letter great you know Ad Agency he previously uh did a lot of growth for the hustle and milk Road and kind of notice the ins and outs of newsletter growth you know dirty secret of the newsletter industry is that all the big newsletters get 90 of their subscribers from Paid ads it's funny because I just had a chat with him just before you oh no way yeah great um but he's been a huge help he's brought our CPA down by more than like half crazy so what was the changes that he made that you you know that you think were most effective well his creative was better I'm you know I'm not a designer so my ads were pretty ugly and then also he just understands how to how to Target really effectively so I like taken some advice from him and that's you know I tried to implement it but when he uh when he brought in it was it was much more effective let's talk about your lead magnets like what do you think made them so effective at bringing in new subscribers yeah I added like images that were blurred out which I think like drove fomo and like proved it was real but two was like kind of annoying so like you just wanted to comment to like see what it was you know yeah uh so he did that and then also I required both comments and retweets in order for people to get sent the resource which you know is just like exponentially better than like saying just like this or just comment on this to get the resource so we were able to drive you know hundreds of thousands of Impressions on X for each one and you know convert a good amount of subscribers from it and then let's talk about how you've managed to turn this into a business because you went from making nothing to fifty thousand dollars a month in five months which is just crazy like how is that possible what did you do yeah I think actually from the time that I sent that to you we've actually increased it um we're at uh I just checked this morning actually we're at 66k in the last 30. um so yeah it's been crazy you know I needed to survive right I needed to make money to get this business off the ground and justify it and bring in great people like Matt to help me out so yeah I'm a hustler I always look for different opportunities wherever I can find them um I think for our case you know we get the majority of Revenue today comes from sponsorships so we have a couple options we have like a featured placement at the top of the ad people can you know get like top billing we have a secondary ad in our Tuesday send uh that's in like the middle of the newsletter and then a new thing we've been doing recently is selling like sponsored deep Dives but they don't they're not like structured like ads for example I'll sit down and do an interview with the founder of a company and get their story get their background uh try to understand like unique points and unique learnings that can be taken from their journey and then I'll write um you know like a 1500 ish word Deep dive on it and use that as one of our Saturday emails but it comes off super organically because it's about the lesson it's not like Hey try this cool product you know so we're seeing great response from that uh we just launched it a couple weeks ago we've already sold three of them uh first one actually comes out this week which I'm pretty excited about so yeah so those have been great and then you know with running a business like this where I'm a startup founder and um I'm writing to Startup Founders they want to get my expertise so there's like a very limited amount of time that I reserve for Consulting uh every month as well that drives a little bit of Revenue a few months ago two months ago we launched a subscription plan a paid plan for the newsletter and people pay 15 a month or 150 a year they get access to extra content uh community of Founders I run a bunch of Fireside Chats people people keep telling me that they're getting too much value from it I should charge more but you know I I want to 10x the value at the at the prices at first so um those three streams where the majority of their revenue comes from today um but then I actually just launched a few weeks ago a product called megaphone that is a marketplace where you can basically pay a subscription and then pay individual creators in the marketplace to amplify your posts on social media I mean there's like very legit creators like it's not like a random Anonymous meme accounts hours in the various places of the world that might not be your target audience these are like people you probably already follow that I know personally that's gone crazy we have we're up to a 6K mrr in just a couple weeks on that and so that's uh that's going to be our biggest Revenue stream by the end of the year crazy so how did you kind of like because all very quickly like the space of a couple of them so did you just start everything at the same time you know was it like I'm gonna do sponsorships first see how that goes then I mean you know like how did this all work yeah I mean sponsorships were the I thought the lowest hanging fruit because I could have started the paid plan right away but if I would have done that a bunch of my time would have gotten sucked into the community right away and I would have been doing it for like no 15 a month not a lot to like uh you know build a business around so if I wanted to grow quickly I had to get cash flow in right away so that's why I went to sponsorships first and I knew that the founder Niche very valuable to advertisers to sponsors so uh we were able to charge a decent DPM right away after that I expanded to two issues a week from the original just Saturday deep Dives uh so I doubled my ad revenue from that at that point I felt like we'd enough cash flow coming in where I was comfortable spending time with the community so decided to launch that and then the idea for megaphone just kind of happened by accident like I I texted a couple friends one day and I was like Hey would this be interesting to you and every single one of them was like can I pay for this today crazy that's amazing and how do you know how to price everything like you know sponsorships deep Dives you know like have you gone about even the membership like some people have said that you're charging too little like how did you know what prices are yeah I mean each one is kind of different on the I mean I worked in in pricing at Uber one of one of my teams um for a while was the uh the driver and eater pricing on ubereats at the marketplace so I've been doing pricing for a long time for the sponsorships it's really just based on like how many people are actually reading the newsletter and like what the niche is right so for me founder Niche pretty valuable and we had you know ex-subscribers I was able to say okay at this CPM um this is what the price would be but we've iterated over time you know we've we've tried uh various price points as the oh do we get more uh conversion from potential sponsors we're talking to at different price points and how do we weigh that against uh the results that we're delivering so we want repeat sponsors that's the number one name of the game we actually got two people uh confirmed this morning is repeating which is awesome yeah so it's really just like are we getting the results we want and those results are our sponsors getting the results so that we get them to come back time and time again and our ad sales process is much simpler um so kind of more of an art than a science there when it comes to the community you know the way you structure any like newsletter business subscription is you have a front-end offer and you have a back-end offer so the front-end offer is like your low price point just like get access to the newsletter and maybe some extra stuff this is something that people can make an impulse purchase um or just join because they see one piece of content that looks interesting to them they want to see where it goes I launched that first um some people say to launch that second but I launched it first so I can talk about why but then you also have your back end offer and this is like your high price point like annual pricing only you know like a thousand dollars or more a year and maybe for that you get like a subscription to courses masterminds one-on-one time with with the founder so that's something I'm thinking about right now maybe I'll launch that later this year we'll see but yeah for me the front end offer was more appealing to start with because I wanted to create like a center of gravity around the newsletter where people were actually spending time meeting other Founders interacting with each other and building up the the brand around it and I thought that would be the more effective way to do that how did you decide what that offering would be for like a membership or a community like you know what how much you're going to offer for that price point I mean I just want to I'm just offering as much as I can I'm just layering as much on top as I can until people are just like blown away right like my goal is to get if you want to subscribe for the newsletter cool 15 a month should be nothing because the newsletter content has to be so good so I'm always working to improve the content and on the other side I'm like what can I throw in here that will really resonate with people that will make the community side and the perk side also independently worth 15 because you don't want to make it combine fifteen dollars you want to make each part independently with 15 because that's how people make decisions based on what they actually want out of it right um so for me you know it's only two months old the community so I'm still trying new things right we're launching an expert Network for people who can help you with various tasks about you know growing your startup or building your pitch deck or whatever it might be we're launching that later this month we've launched fundraising Support Services we've launched a weekly casual chat you know Fireside Chats every couple weeks I'm just testing stuff out right now to see what resonates with them and once we figure out what that is we'll Double Down On It and what about sponsorships how do you find sponsors for your news essay yeah so we have we get sponsors in three ways um the first one is through our agency partners so we work with a couple great agencies uh at Austra madrev uh both are both are fantastic and they send us some percentage of our sponsors and initiate those relationships we do a ton of outbound and inbound though because on the inbound side you know my personal brand is you know decently out there on social media so people find us that way also our audience is business owners and some of those business owners want to emphasize or want to advertise to other business owners so it becomes a good opportunity for them to just naturally use the newsletter for something other than reading it uh so we get a lot of inbound from there and then on the outbound side we actually will look at what uh what brands and what what partners are sponsoring other newsletters in our similar Niche we'll track that I think we track like 70 or 80 newsletters every week now wow and then we reach out we find the contacts for them and we reach out to uh to a bunch of them when we have open inventory wow it seems like you have a lot going on like you've got a lot of content that you're creating a lot of revenue streams you're adding plus you're like tracking things and looking at analytics like how are you managing all of it um I work a lot the honest answer um you know I I just focus on the highest leverage things that I can do right I have a I have a VA who helps me out a lot I have a part-time Ops guy who helps me out with Partnerships um in particular and some other stuff but the actual content creation you know experiments pricing growing stuff out growing stuff in various parts of the business that's all me and honestly I just do it by you know being a heat-seeking missile towards whatever your biggest problem or highest leverage opportunity is yeah and I want to talk about your recent acquisition of another newsletter so daily dose of startups why did you decide to acquire that newsletter yeah so that was an experiment I think that we're going to end up seeing a rise in m a in the newsletter space probably next year uh reason for that is because you know there's only so much ad budget for newsletters to go around and I think tools like beehive and convertkit and even like spark Looper are inspiring people to create newsletters more and more and more and so we're seeing a huge rush of new newsletters in the space I do think that more Brands will want to advertise in newsletters as a result and I do think other brands will increase their budgets in newsletters as a result but I think that the pace of newsletters will outpace the growth in available budget and so what that's going to do is probably create a bubble and my estimation is that bubble will happen or that bubble will start to pop next year at some point and so I plan to be in a position where I can acquire some of these other newsletters at relatively affordable attractive prices and so I want to test that out and so the way I test that out was daily dose of startups was just a small newsletter 2100 subscribers it wasn't very active the guy who was running it had a bunch of other newsletter products that he was running too so this one had kind of Fallen by the wayside a little bit but had a good subscriber list it was very specifically in the same Niche that I'm already operating in and so what I wanted to see was hey if I buy this can I get it at a price that's attractive and B I roll those subscribers into my existing email list and have them like not miss too much of a beat and get value out of the content that I'm putting out so we did that we got it at a price that I think made sense on both sides uh deal closed in like 55 minutes um and then he sent out an email letting them know what was happening and then I sent one out saying hey you're gonna get your first email from me like this week or tomorrow whatever it was and I shut down the other newsletter I imported the list into my beehive page and we're now I want to say like two months maybe a little less than two months out from that and uh the unsubscribe rates are way better than I thought they would be and the engagement rates are way harder than I thought they would be I was expecting like you know 30 unsubscribed or something like that but it's only been like six percent unsubscribed I think we have under 100 people who've unsubscribed maybe even lower than that so it's been really attractive um and so I think that that proves to me that there is the ability to do this even if you know I just rolled the newsletter into my own which isn't probably what I would do next year I'd probably keep them as standard newsletters and just hire writers to keep them running in most cases so it just gave me more optionality for when that happens next year next year interesting why did you decide that then that you probably would like keep those newsletters as they are rather than immersion like what what from that experiment did you get to make you decide that I mean is it gonna be an ad hoc decision Case by case decision for sure but like I guess what I'm what I'm trying to say is that next year I think you know they'll be attractive newsletter opportunities and other verticals than just startups right so maybe there's one in you know Finance or maybe there's one in I don't know politics or or marketing or whatever else I'm just gonna optimize what the most attractive opportunity is um and so it might not make any sense to roll them into house newsletter and it might make sense for Hawks newsletter to kind of become a holding company for for media assets right interesting um what you seem to be very good at you know the business side of new classes which I guess makes sense given your startup background so like what advice would you give to newsletter creators who are very good at the creative side but aren't necessarily good at monetization and the business side yeah I mean I would say to seek out the best content to learn it um you know first of all not everybody is creating a newsletter so that they can build the biggest business ever right like we should just get that out in the in the open air right some people are just writing a newsletter because they want to write a newsletter and they have people who want to hear from them and maybe they'll monetize it but it's not their primary revenue stream I think that's great I think more people should do that too but if you are like ambitious with the newsletter and you have a goal for it to be a big Revenue driver for you and build a business around it then I would say think big and and find the right information sources to to learn that side of the business route like Matt Matt McGarry does a great job breaking shutdown in his newsletter uh I think it's called newsletter operator and then um also on his Twitter he posts so much information for free so he's a great resource there but yeah I would say treat your newsletter like a startup and think about it you know read Paul Graham essays read y combinator content uh just try to learn the the way that Founders startups think uh rather than the way that like creators are typically tough to think important is things I mean the startup world you talk a lot about product Market fit so how relevant is that to the newsletter industry if you want to build a business yeah I mean it's entirely uh relevant right you're you need to you need to lead with your credibility you need to make people think that hey I actually want to read this topic from this person right it's not enough to just say to just write about an interesting topic and think people are going to care about it you need to write about an interesting topic and make the content great because they trust you as the writer um to do it so I think that just happens with the track record over time uh you know when I started my newsletter I didn't know what the heck I was doing I was experimenting with different sections and different ways for to engage with my readers and most of them failed um but once I found my groove once I went full time on it that was a different story so I would just say um to you know to lean into that as much as possible yeah what's your mindset for growth now and you know what's next for you as a new center creator yeah I mean let's let's pour the gasoline on you know I love it I just influenced my my spark Loop budget from 10K to 20K a month oh wow I'm running a bunch of paid ads as well I'm writing Twitter threads three times a week LinkedIn posts five times a week um I'm all in I want this the email list my original goal was to get the email list of 50K by the end of the year uh when I went full time in like q1 uh now I'm already hit 50k so I have reset the goal to 100K but it's trending towards hitting that in November so maybe I need to think bigger I I love that you're investing so much into it but what advice would you give to someone who maybe doesn't have that kind of budget you know to start investing into ads and Spark Loop like what is the best way for them to you know be as driven and growth orientated as you but you know with what resources they have yeah for sure I mean you only reach that scale once you get to a certain point right yeah in the early days you know lean into content marketing lean into swaps with other people whether that's recommendations after they subscribe to your newsletter or whether it's like in place of ads you know get your audience comfortable with seeing quote unquote ads but just show them other newsletters and therefore you know have those reciprocate by showing you um that drove a lot of our growth early on so I I would say follow that formula as much as possible um but yeah leaning into content marketing is a great way to get started um and you know that worked for us so I would recommend that other thing would be you know monetize as soon as possible I think a lot of people wait to monetize either because they are worried about introducing ads or because they just aren't prioritizing it and they're prioritizing the content which is fine but you know bringing in Revenue gives leverage to your business to invest more so I would say you know use tools like passion fruit to set up a sponsorship offering even if it's only a little bit of money even if it's only just getting started and you know you can't work with every sponsor in the world yet I would say monetize as soon as possible yeah I love that advice I've already asked you you know what's something you've taken as a startup founder that you've applied to being a Creator but now I'm going to ask you what's something that surprised you or you know something you've learned entering the Creator world that you know has helped you grow hmm it's a good question I I think that honestly the thing that surprised me the most is how similar it is to being a startup founder honestly it's you know I've approached it pretty much the same way but I didn't think I was going to do that when I started um but just treating it more like a business has been um has been usually beneficial in a short period of time for us so I would I would recommend that another thing though is just that like you know when you're a startup founder you're in the weeds you have like crazy crisis meetings all the time you know your product is breaking whatever it might be your users are complaining whatever happens and you have to just be super available for all these calls all these teams syncs sometimes and things like that being a Creator I really like it because if I don't want to have meetings I don't have to right I literally own schedule 100 and if I want to go to the park at 3 8 3 P.M in the afternoon I can do that yeah no I like that okay so I'm gonna end with a quick fly around now so I'm gonna ask you five questions that I ask every Grace that comes on air starting with and you've kind of already answered this what's your favorite thing about about being a greater um yeah probably just the probably just the freedom of getting to um you know run my own uh business or Creator business or whatever it is uh exactly how I want to uh owning 100 of it and uh just setting up setting up my life exactly as I want to yeah also I would add on to that too because my Niche is startup Founders it really lets me keep on like The Cutting Edge the bleeding edge of where technology and businesses in the world is going um so that energizes me keeps me super passionate every day and I love that and what's something that gives you the most inspiration for what you create my readers um you know I ask all my readers all the time you know what topics am I not covering what problems are you having right now I think the best content comes authentically like that and so I try to spend as much time talking to my to my readers as possible to to get that oh I love that and what's one tool that helps you the most as a Creator I mean there's a lot I I use a lot of different tools my community couldn't exist without Circle my newsletter wouldn't be half as good as it is without beehive I wouldn't have made as much money as quickly without passion fruit so you know triumvirate there is uh is powering a lot of stuff for me I love that and what's something that helps you with your creator work-life balance my wife I'm not good at work life balance on my own I work all the time so having uh having someone to to make me remember to enjoy the rest of life is uh is good and what's one piece of advice that you'd give to other creators treat your you know Creator business like a business right think about how to grow it invest as much as you can without putting yourself at risk um yeah just treat it like a business amazing thank you so much Michael I feel like this is such a great conversation I feel like especially for people who feel like they can't turn it into a business I think this is the conversation that will really help them change their mind especially how quickly you manage to do it so thank you so much for coming on air yeah thanks so much for having me this was uh this was a lot of fun you can find Michael on Twitter LinkedIn and his newsletter and if you are a Creator and one of your revenue streams is sponsorships check out passion fruit we help you to streamline your entire workflow I'll see you in the next one

Channel: Creators on Air by Passionfroot

Views: 16,378

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Id: TVBA7_mEllg

Length: 28min 25sec (1705 seconds)

Published: Wed Aug 30 2023