How To Grow A Newsletter Business (From Scratch)
Summary
TLDRIn this video, the creator shares the journey of growing their newsletter, 'Profit Snack,' which targets online business owners, from its inception eight months ago to generating $17,396 in revenue. The discussion covers four growth phases, including organic marketing, influencer partnerships, and paid ads, as well as a rebrand that cost $30,000. Financial insights reveal a total spend of $140,000 with a current revenue stream, emphasizing the importance of engagement over subscriber count. The creator also offers advice for newsletter owners and their commitment to quality content and advertiser results.
Takeaways
- 📈 The newsletter 'Profit Snack' has generated $17,396 in revenue in the last 30 days and has been built over eight months.
- 🛠️ The creator took a 3-4 month break from YouTube to focus on team development and e-commerce business growth.
- 🔄 The newsletter underwent a rebrand from 'Synthetic Mind' to 'Profit Snack', focusing on online business owners rather than AI-specific content.
- 🚀 Four stages of growth were identified: organic guerrilla marketing, organic traction, automated influencer partnerships, and paid ads.
- 💰 High initial growth costs amounted to $140,000, with team expenses accounting for $25,000 of that.
- 🔄 A significant number of unengaged subscribers were removed, reducing the list to 65,000 engaged subscribers.
- 📉 The rebrand led to unsubscribes and negative feedback, but also a more passionate and engaged audience.
- 💡 The business model is based on selling ad space at a 35 CPM rate, tied to open rates, not just subscriber numbers.
- 📊 Currently, the business does not require additional cash injection and is self-sustaining with a break-even point reached.
- 👥 The team has been streamlined, reducing monthly team expenses to $5,000, focusing on efficiency and quality.
- ♻️ The creator emphasizes the importance of organic growth, advertiser results, and audience engagement for long-term success.
Q & A
What was the revenue generated by the newsletter in the last 30 days?
-The newsletter generated $17,396 in revenue in the last 30 days.
How long has the creator been building the newsletter?
-The creator has been building the newsletter for about eight months.
What is the primary target audience for the newsletter?
-The primary target audience for the newsletter is online business owners.
What was the original focus of the newsletter before the rebrand?
-The original focus of the newsletter was on artificial intelligence with an emphasis on its business applications and the companies funding it.
What is the name of the newsletter after the rebrand?
-After the rebrand, the newsletter is called 'Profit Snack'.
What was the first growth phase of the newsletter referred to as?
-The first growth phase was referred to as 'Organic Gorilla Marketing'.
What platform was used to automate the influencer outreach process during the third growth phase?
-The platform used to automate the influencer outreach process was called 'Spark Loop'.
What is the current open rate for the newsletter subscriptions not from Spark Loop?
-The current open rate for the newsletter subscriptions not from Spark Loop is between 45% to 48%.
What is the average cost per subscriber acquired through Twitter ads currently?
-The average cost per subscriber acquired through Twitter ads is about $1.30 to $1.50.
What was the total amount spent on the newsletter's growth?
-The total amount spent on the newsletter's growth was $105,000.
What is the current team expense per month after trimming back the team?
-The current team expense per month is about $5,000 after trimming back the team.
What is the repeat advertiser rate for the newsletter?
-The repeat advertiser rate for the newsletter is around 30 to 35 percent, with a goal to increase it to 70 percent.
What is the payback period for subscribers acquired for two dollars on average?
-The payback period for subscribers acquired for two dollars on average is about five to six months.
What is the newsletter's approach to selling ad space?
-The newsletter sells ad space based on a 35 CPM, which is tied to open rates rather than the number of subscribers.
What is the estimated annual revenue if the growth spending stops?
-If the growth spending stops, the estimated annual revenue would be about $140,000 to $150,000.
What is the main reason for the name switch and rebrand of the newsletter?
-The main reason for the name switch and rebrand was to shift focus away from AI as the central theme and to create a more passionate and engaged audience.
Outlines
📈 Growth and Rebranding of Profit Snack Newsletter
The speaker discusses the impressive growth of their newsletter, 'Profit Snack', which has generated $17,396 in revenue over the last 30 days. Initially called 'Synthetic Mind', the newsletter was focused on AI in business but has since rebranded to cater to a broader audience of online business owners. The speaker outlines the four stages of growth the newsletter experienced, including organic marketing tactics, leveraging social media and influencer partnerships, and a significant investment in the Spark Loop platform. They also mention a name switch and rebranding that cost around $30,000 but was essential for aligning the newsletter's focus with their vision. The speaker took a break from YouTube to focus on their team and e-commerce company, emphasizing transparency and inviting viewers to subscribe to the newsletter for valuable insights tailored to their interests.
🔍 Analyzing Traffic Sources and Engagement Metrics
The speaker delves into the analysis of different traffic sources for the newsletter, emphasizing the importance of engagement metrics such as open and click-through rates. They discuss the shift from using Spark Loop for subscriber acquisition due to its low engagement levels, to focusing on paid ads on Twitter, which have proven to be more cost-effective and yield higher engagement. The speaker also mentions the removal of approximately 30,000 unengaged subscribers to maintain a high-quality, responsive audience. They highlight the challenges faced during the rebranding process, including unsubscribes and the need to refine the audience, but also note the positive reception from those who appreciate the new direction.
💰 Financial Insights and Team Dynamics
The speaker provides a detailed financial breakdown of the newsletter's operations, including the total expenses of $140,000, with a significant portion allocated to team expenses and growth strategies. They discuss the shift from aggressive growth tactics to a more sustainable approach, focusing on the quality of subscribers over quantity. The speaker also touches on the team's evolution, from a larger team with various roles to a more streamlined and cost-effective structure. They highlight the importance of advertiser satisfaction and the strategy of selling ad space based on engaged metrics, which has resulted in a 35% repeat advertiser rate and a healthy payback period for subscriber acquisition costs.
🚀 Future Outlook and Advice for Aspiring Newsletter Owners
The speaker shares their vision for the newsletter's future, emphasizing the long-term approach to building a community of engaged subscribers and delivering value to advertisers. They discuss the decision to focus on quality over quantity and the importance of aligning the newsletter's content with the interests of its audience. The speaker offers advice for those looking to start a newsletter, stressing the importance of understanding costs, prioritizing organic growth, and ensuring advertiser satisfaction. They conclude by inviting viewers to subscribe to the newsletter for a wealth of information on online businesses, marketing strategies, and entrepreneurial insights.
Mindmap
Keywords
💡Newsletter
💡Revenue
💡Organic Growth
💡Micro-Influencers
💡Engagement
💡Rebrand
💡Paid Ads
💡CPM (Cost Per Mille)
💡Subscriber Churn
💡UTM Links
💡ROI (Return on Investment)
Highlights
The newsletter 'Profit Snack' has generated $17,396 in revenue in the last 30 days, showcasing significant growth.
The transition from 'Synthetic Mind' to 'Profit Snack' involved a rebrand that cost $30,000.
The four stages of growth for the newsletter include organic guerrilla marketing, organic traction, automation of influencer outreach, and paid ads.
Early growth strategies involved aggressive posting on Reddit and Twitter, attracting the first 300-500 subscribers.
Utilizing micro-influencers in the AI space for partnerships resulted in a steady subscriber increase.
Spark Loop was used for influencer outreach, initially spending over $60,000 but later optimizing for better engagement.
The decision to focus on Twitter ads for subscriber growth due to higher engagement rates compared to Spark Loop.
The importance of removing unengaged subscribers to maintain a high-quality, responsive audience.
The rebrand to 'Profit Snack' aimed to shift focus from AI to a broader business perspective, sparking more passionate feedback.
Financials reveal a total spend of $140,000, with a current revenue of over $50,000, indicating a path towards profitability.
The team has been streamlined to reduce expenses, currently sitting at $5,000 per month.
A focus on advertiser results and quality content production, with a minimum of 20 hours of work put into each newsletter.
The business model is based on a 35 CPM tied to open rates, providing a better pitch for advertisers.
The goal is not to sell the business but to build a scalable, engaged community of online business owners.
Advice for newsletter owners includes understanding growth costs, focusing on organic growth, and ensuring advertiser results.
The long-term vision for 'Profit Snack' is to create a consistent, scalable business that can't be easily disrupted.
Transcripts
in the last 30 days my newsletter did 17
396 dollars in Revenue I've been
building it for about eight months and a
few months back I did a video explaining
how I had grown my newsletter up to that
point and I did everything except share
what the newsletter was and today that's
going to change as promised so I'll
leave the newsletter as the top Link in
the description it would mean a lot if
you subscribed it is built for online
business owners so it's perfect if
you're watching this video you will love
the newsletter but out of transparency I
want you to see it now today we've got a
couple great things to hit on and I have
my notes here we're gonna hit on these
five core things the four stages of
growth that this newsletter went through
our name switch and the Rebrand which
basically burned thirty thousand dollars
the team the financials and then advice
for newsletter owners of any kind so I
have not been on YouTube here in the
last three to four months it's my first
time ever taking a break for more than a
week in the last six years so I spent
the last quarter just working with our
team both in this company and my
e-commerce company we've been doing
really well just focusing on there so I
stepped away from YouTube now my
newsletter is called profit snack it was
formerly known as synthetic mind and it
started out as a newsletter built around
artificial intelligence with a focus on
business talking about not only how to
use AI in businesses but also the
business side of AI all the companies
funding it the new startups like because
that's what interests me I have a
co-founder on this company a good friend
of mine Jonathan we've both built
multiple multi-million dollar companies
and we love business all of our friends
are pretty much in some format business
people investors entrepreneurs those are
just the conversations the the way
people think in that industry I love it
I feed off of it and naturally that's
just who my circle is filled with so
building a community of people that are
focused on that has been a dream of mine
for a long time and that's exactly why
I'm here on YouTube so I got a lot of
stuff to go through here the four phases
of growth we have gone through number
one was organic Gorilla Marketing
tactics super aggressive this is how we
got the first three to five hundred
people early on dozens of posts spamming
on all the different Reddit board
towards posting a bunch of tweets trying
to just grab attention any way we could
and that costed us zero dollars a lot of
effort High Sweat Equity but there was
no money being spent originally right at
the beginning now the second phase was
organic traction this started spending a
little bit of money but here's what I
mean I did multiple videos on how to use
AI on this channel I didn't say it was
my newsletter but I mentioned our
newsletter and so we got a couple
thousand people from that we were also
posting a lot on Tick Tock starting to
grow some Twitter stuff that was
bringing in five to ten people a day and
I reached out to about a hundred micro
influencers who were doing anything in
the AI business space and because micro
influencers don't have a lot of
followers 500 to 10 000 I'm getting
responses from pretty much all of them
and so we partnered with about 15 people
and told them hey some of these people
were referring us people for free which
was crazy but I did offer a one dollar
per subscriber deal and about 10 people
took us up on that so we'd get about you
know a thousand subscribers a month at
most from that for the first couple
months so all of this started trickling
in our early subscribers and at this
point we're three months in we're
growing by 100 to 150 a day we're not
spending a ton of money all is really
well we're building the base getting
good feedback and so now we want to
start scaling which brings us into the
third phase of growth this is where I
was able to automate the process of
reaching out to all these influencers
and getting other people to promote us
for a fee there's a platform called
spark Loop and if you watched the last
newsletter update video you would know
that we were spending a lot of money on
there that budget got absolutely axed
and chopped and it's currently been zero
for a while and I'm gonna explain
exactly why and show you how you can
actually use it effectively and we are
going to again but there's a lot of
stuff here we ramped up and spent over
60 000 on the platform very quickly and
to this day in total we spent about
seventy thousand dollars with spark Loop
now as of recently we have not spent
much on spark Loop what we did is we
went into the partner program RAM and we
were able to edit our settings to filter
each person who is allowed to promote us
you see there's pending partner
applications so we would go here and
only accept referrals that we would pay
for from people that were approved
audiences because what was happening is
we were getting a lot of unengaged
subscribers and you can set filters here
under the engagement screening where you
only pay for people that opened at least
four emails or you know subscribers must
take at least three unique click actions
you can set up whatever parameters you
want so we weren't paying for all of our
subscribers but we noticed on average
that the overall audience from spark
Loop which has been a good bit of people
this is just in the last 30 days we
slowed it down are not the most engaged
a 37 open rate and a 1.55 click-through
rate we currently have about a 45 to a
48 open rate through the subs we're
getting now not on spark Loop and our
click-through rate on that is about 3.5
so these people are significantly worse
and really the open rate rate is is one
metric but the click-through rate is the
primary one we're looking at you know we
can get people that are 2.5 times better
and more engaged and that is the stuff
that drives results and when advertisers
are paying you money you need to be able
to get them results that's what matters
so we just took a look at this traffic
source and it didn't really make sense
these people weren't engaging our list
was continuing to grow but our clicks
were staying the same and that brings me
to the fourth phase of growth that we've
been going through now which is paid ads
I want to quickly say I didn't add this
as a line item but we've also spent
about fifteen to twenty thousand dollars
in other newsletters and that's been a
really effective source of growth just a
lot of active work communicating and
it's Hit or Miss but we found a few that
are good those people are super engaged
but we pay about three dollars a
subscriber for them so we have that as
some of our growth but not a primary the
final one that I want to mention the
fourth stage of growth is Twitter I have
two UTM links so this number is a little
more like 2500 but uh continuing to grow
and right here we kicked off another UTM
link so it is still growing but here has
been the number members from Twitter we
did pause for like two days there when
we did the transition with the name
because the link was broken and stuff so
if you go down here and take a look the
open rate 43 percent and the
click-through rate 3.5 so significantly
more engaged people of course that's
because the intentionality is higher now
here's the big thing on spark Lube just
like how beehive has like a power boost
thing or whatever people are getting the
pop-up after they subscribe to
newsletter with a recommendation for
others okay and people are getting paid
to do that and so spark Loop has two
features a growth side and a making
money side which is called upscribe so
we actually get paid money to refer
people to other newsletters when they
subscribe to ours there's a pop up there
and the whole thing is when we're
growing through spark Loop those people
don't go back through our spark Loops we
can't make money off them which is fine
but it's still a cost so we are bringing
in on average about a dollar Thirty to a
dollar fifty per subscriber that we get
through Twitter ads so I'm paying about
three dollars on a bad day for these
Subs so we're out of pocket about dollar
fifty I'm just going to say two dollars
absolute maximum for a much higher
quality more engaged person and that's a
number we're very comfortable with now I
want to point out before we did the
Rebrand and the switch from synthetic
mind to profit snack the ads were geared
towards AI talking about hey if you want
to learn AI like subscribe here that's a
Hot Topic right AI is new AI is sexy and
we would get subs for about a dollar on
Twitter and going into the business
niche in general now of course that is
more expensive so that's why we're
seeing 250 to three dollars some days a
little bit over three dollars sometimes
up to four so it is definitely more
expensive I'm still working like this
morning I launched another like 15 split
tests on different creatives and
audiences so still trying to work on
that but another thing I wanted to
mention on the Rebrand side of things is
we lost a lot of subscribers going
through that process and actually before
I dive into that we have removed
probably about 30 000 subscribers from
our list because they don't meet our
engagement criteria and they're not
actively opening and clicking and being
involved we don't want them on our list
we because the subscriber number is just
showboating like somebody has a million
subscribers that doesn't actually mean
anything if people are not engaged and
they're not opening and clicking on
Advertiser stuff and taking action you
don't have a business and so that's the
core metric that matters and So
currently as I'm filming this we have
about 65 000 people on the list we've
probably hit 90 95 you know and we've
removed a lot of people and so going
through the transition especially we
were getting you know three four five
hundred unsubscribes per email in the
beginning and that's slowly fading off
we knew that would happen but it's just
been an interesting thing so let me dive
into some of the details on this growth
stuff and then we're going to get into
the financials the team and kind of
where we're going from here so number
one on the organic guerrilla marketing
super high effort and like I would
definitely recommend building an
audience and being able to grow
organically it's great but I would
definitely do early partnering just like
what we did micro influencers have been
super beneficial and if you can get any
sort of traffic Source yourself you know
go viral on Tick Tock you know I
definitely do Twitter like do that to
get some subs is really beneficial spark
Loop which is the third one very lazy
way to grow it's hit or miss the reason
it didn't work as well for us as we were
just paying a lot of money for the subs
had we been doing the same thing but
paying a dollar or a dollar fifty right
at the beginning we're paying 350. but
most of our subs we paid about 254.
um you know we still make money on it
it's just a much longer payback period
and we'll get into the financials in a
second so at our Peak we were hitting
about 2 000 new followers a day most of
that through spark Loop so we decided to
stop that again because the list was
growing but the engagement really wasn't
the clicks and so that was the big
problem it was a huge red flag and then
the fourth one me being in charge of
marketing when spark Loop then stopped
and our growth plummeted I'm in charge
of marketing so I had to go back to the
drawing board and that's where I tried
to figure out paid ads ran Facebook for
a little bit wasn't working too well and
then got fired up on Twitter set up an
ad account there took a week or two of
testing and hit the ground running we
were getting 100 to 200 Subs a day with
the AI stuff and then had to again Swap
and shut that down and then now go into
the business which is doing less I'm not
really scaling it aggressively and the
cost is higher but we're growing like 50
Subs a day right now there and I do plan
on ramping that up to about 200. we're
okay spending the money on that now to
talk about our Rebrand which I love by
the way go go subscribe to the
newsletter if you're not already it's
the perfect place for online business
owners and stuff we have nothing to sell
there the newsletter's free we just we
have advertisers in there and that's it
um it's really interesting because I
love the new site I love all this stuff
we gave away two thousand dollars of
profit snack t-shirts for free didn't
even charge shipping and you know did
that to our most engaged people who
clicked the link first before they sold
out we tried to make it really cool and
I want to point out here we did a
transition because we weren't interested
in AI particularly AI shouldn't be the
center it was a thing it was a just like
any marketing platform can be a thing
any style of selling it shouldn't be a
core I think that's a mistake and we saw
about a hundred literally a hundred
other newsletters popping up in the AI
space now we were like the third biggest
for a while and we were growing two
thousand day we could have ramped that
up to four we could be one of the
biggest right now we could have 200 000
Subs all day long guaranteed in the AI
space we'd be like the third or fourth
biggest and build that into business
it's just not interesting and the goal
here with John and myself was not to
build a business to to you know make
half a million dollars or sell it for a
million that's not the goal like what
I'm explaining to you here is not the
most efficient way to build a newsletter
to make money that was not our objective
we will make money on it but we're
taking a long approach with really
building the audience and the
relationship there so a lot of the
little things that you're hearing us do
they don't make sense to most people
that's because their goal is different
right so a couple of things here with
the name switch is we definitely lost a
lot of subscribers we got a lot of
negative feedback when we did that
transition but it's okay like we want
people divided with the AI stuff
nobody's really interacting with us it
was kind of like people are indifferent
like like we don't really care about
other content it's good bad but it's
it's all right like we weren't getting
the feedback we wanted you know as we
were growing we tripled our list size
but the amount of polls and feedback we
got which is a section at the bottom
remain the same and again just like the
clicks that's a huge red flag so we
wanted people to lean in man the
feedback we've gotten since we changed a
lot of people saying screw you man but a
ton of people are like this is the best
thing ever and that's what we wanted
because we didn't have either of those
before so we wanted people to really
have a passion towards it now to talk
about the financials this is the hot
part we have spent a hundred and forty
thousand dollars in total stick with me
here 25 of that has been in team
expenses which includes sales commission
we've spent a hundred and five thousand
in growth okay and about 70 that was
spark Loop and we spent about 10 grand
in operational software buying leads for
advertisers now currently we've done a
little over 50 000 in Revenue give or
take last month was 17. so we're on the
right track I know minimum we can do 10
12 15 000 a month so that's where we're
at like last month we sold 90 of our ad
space which was great finally starting
to hit stride with the sales process
currently I our overhead is much less
than it has been for the last five
months in the previous video I talked
about spending crazy money that was the
the point we were at mostly off growth
for a very short window of time I'll
talk about our team and how we've
trimmed them back recently but we're no
longer needing to add cash to the
business right now which is great
because me and Jonathan have fronted a
lot of money for this business we sell
our ad space based on a 35 CPM which is
tied to our open rates not subscribers
like most people so it's been a much
better pitch for advertisers it's a
higher CPM than other people charge but
it's off actual engaged metrics so we
can do a video more specifics currently
just so you know on the business side of
things we have a payback period of about
five to six months on average right now
for any subs we acquire for two dollars
and on average we're probably a little
bit under that because of organic and
other stuff so that's really nice that's
a conservative rate we're fine with that
most businesses would be thrilled to
spend money and they'd make that back
within six months that's insane so this
business right now if we were to stop
spending money on growth we could bring
in about 140 to 150 000 a year which is
about what we've spent okay so for a
business that could be run with just the
two Founders like we could easily handle
it ourselves we don't need a team we do
have a team that's a business that if we
just kind of stopped the growth and that
means we'd grow very slowly and just did
that for a year we could go sell this
thing for half a million all day long
that would happen easily and that
doesn't interest Us in the slightest
like not one iota and so we're in a good
place we spent a lot on growth but we
have a good base and so we went
ballistic with the growth and lost a
chunk for sure due to the transition and
we've trimmed a lot of people off the
list but it's still a good position for
us to be in so the team side of things
we had six team members in a VA at one
point which was a lot of people running
really cool meetings every week doing a
lot of stuff you know designers for the
Rebrand and really leaning into the
content so there's been a writer two
additional people helped me with product
development and ideas underneath it and
for the company itself and then two
sales people actually at one point
um and then a virtual assistant and so
these people like we're not cheap
employees on a lot of that so we had a
bloated team a lot of expenses we've
been training trimming that back right
now our team expenses are about five
thousand dollars a month because we
trimmed it so significantly so the
business itself is running nice and
smooth but at a good point we have a
base asset of our list with over 65 000
engaged people the the advertisers we're
working with we have like a 30 plus
percent maybe a 35 repeat Advertiser
rate we want to get that to 70. we want
to double that number because if you can
just advertise with the same 510 people
and they just pay you for one or two
spots a month it makes life so much
easier and that's what the big
newsletters do so we've had a couple big
companies billion dollar companies
working with us that consistently
promote once or twice a month and that's
been amazing because their results are
good and so a lot of newsletters
especially in the AI space are not
actually getting people results and the
problem is they're focusing on sales and
it's this wheel just like any business
it's like if people aren't coming back
you're just turning the wheel of sales
and eventually it runs dry or your lead
source is screwed up or it's too
expensive it's also annoying it's a lot
of effort it's ridiculous and so
you know it's just one of those things
to think about um and that that pretty
much covers all my notes on here here's
something I have to say for anybody who
wants to start a newsletter go for it
understand your cost me and my friend
Jonathan mapped this out from day one
before we had one subscriber and we knew
we'd spend about a hundred and forty
thousand exactly to get to break even
and that is exactly what happened okay
we're not I mean we we've both built
multiple businesses so I'm not going to
let a comment on a previous YouTube
video be like oh we're doing the wrong
things that's what a lot of people said
we're not even optimizing for cash in
this business and so don't do exactly
what we did if your goal is different
definitely spend money on growth find a
way to offset it definitely grow
organically that's the best biggest hack
you can ever do and they're the most
engaged subscribers and on top of that
get your advertiser's results if you can
do that now just kind of scam people on
the sales side and actually like get
quality people and produce quality
content like each newsletter we we put
out minimum 20 hours of work that goes
into that with two people that handle
that full-time and so it's like a lot of
research a lot of effort and a lot of
fun so you gotta love what you're doing
because the results are not going to be
quick this is definitely the like most
unprofitable and slowest building
business I've ever built and I knew that
going into it and it's also one of the
most scalable and that's what I really
like about it it's a very consistent
scalable business I've built e-commerce
companies that have crushed a million
dollars in a month before the problem is
Facebook can randomly take your ad
account out for no reason and they have
and so with email it can't really be
disrupted and you're building a
community of engaged people and bringing
them value and again it can't be
disrupted that's what I like about it so
that's what I have for you today
subscribe to my newsletter it'd mean a
lot to me but I know you'll enjoy it if
you like this video because we talk
about online businesses marketing hacks
you know building companies investing
online courses we just we break down
everything we interview note people we
do a lot of fun stuff we do the stuff
that interests us as business owners so
if that's something that interests you
go ahead and subscribe it's free free
and it will always be free I hope you
enjoyed this video it'd mean a lot to me
if you just left a like on the video
that's it maybe say hello down in the
comments it'd mean a lot to me and uh
with that being said I hope you crush it
with the newsletter or whatever online
business you're doing this stuff is just
so much fun
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