The Newsletter Revolution

“A good business is like a strong castle with a deep moat around it. I want sharks in the moat. I want it untouchable”

–Warren Buffett

Newsletters have become big business this decade. Once thought of as alternative industry and or geographic information sources newsletters have grown up and now cover a diverse spectrum of topics from national news to hyper niche topics. What is driving this new interest in newsletters? Attention. The attention of a specific audience.

Publishers know if they can capture an audiences attention they’ve unlocked the attention code. And what’s this code? Let me explain it to you like you’re a five year old; find sandbox, play nice with the other kids, and make new friends. If you are nice to your audience and they like you their attention can be monetized in the form of subscription sales, advertising, and other financial incentives. Playing nice has its benefits.

After 30+ years starting and operating five (5) b2b professional service businesses I am transitioning into the media industry. As is my style when learning something new I have immersed myself into the subject matter studying its infrastructure, writing styles, monetization mechanics, and making connections. Recently, while doing this research ran across an opportunity to build a newsletter in public.

While easdropping at the internet water cooler (X) overheard a conversation that truly sounded like a challenge. A person was looking for someone to partner with to build a newsletter in public and is willing to fund the entire process. Since I’m in the midst of building something similar thought I’d throw my hat into the fray to see if there is a meshing of interests.

Regardless of the outcome with the OP this will be the first of many build posts to come (posts will transition to my presently idle blog so feel free to subscribe here telles.io).

After sending a DM to the OP in response to the post I received a reply they wanted more specific information. What’s my experience buying ads? I assume online, some, but for the record have plenty buying ad space in print? How would I grow the newsletter? and in what niche would I choose to start a newsletter? Good. Solid. Questions. I’ll answer these below. Plus will add other important considerations to help others looking to journey into starting a newsletter; it takes a village.

Let’s start with the reason an audience would even consider reading a newsletter. The writing. The newsletter must be crafted in a clear and concise voice on topic. Poorly drafted copy, muddled reasoning, and shaky grammar? That’s a surefire way to send your audience packing before the opening credits roll. On the other hand, If like Mr Buffet, you want to build moats with sharks surrounding your newsletter then let them show their gnarly teeth through the writing.

Writing in and of itself isn’t a moat. There a many places good writers congregate online e.g., Reddit, LinkedIn, X, Quora (was a top writer for years early in the life of that app). Though through the first half of this decade, maybe the one before it too, we’ve seen blogs and now newsletters capture and hold the attention of readers. Here though is the correlation to why writing is important to the moat. The audience when converted into subscribers can turn into a financial moat providing it is cared for carefully and correctly (shark №1).

When an audience is nurtured by entertaining, interesting, and informative content they will be sticky. Where do you find the glue gun to make them sticky? Engagement. The next phase in organic audience growth is to create a space where the audience can engage. This can come in the form of comment sections on the website, a slack or discord channel, in a facebook group, on X, through YouTube, and through other promotion work on social media like Instagram, LinkedIn, and TikTok. Using these channels will reinforce the connection, helping to apply the glue, and this then supports shark №1.

When stickiness and engagement are aided by a structured ad strategy to add subscribers the newsletter will grow consistently. This growth will come at a cost but given the metrics for newsletters the more users found at a lower CAC than the ARR per subscriber the more profitable the newsletter will be for its publisher. This then becomes (shark №2).

I will add that there is potential in the newsletter business model to also have a third revenue source (more too but topics for another day) through paid subscriptions where special paid subscriber content lives, or allows for the subscriber to opt out of ads (shark №3).

I have some experience writing newsletters in the old format for snail mail marketing. And can say it was fairly successful. My company consisted of four divisions with roughly 75 people who to some degree depended on those newsletters bringing in new business.

My sales team helped with content input but the writing was purely mine. And my bookkeeper demanded new sales every month (she is unfortunately married to me) so we could could keep the company lights on.

The big question then is what kind of newsletter will allow us to grow our moat and provide the opportunity to have multiple sharks protecting our financial castle? To answer these questions lets take a brief look at the newspaper industry.

The newspaper industry was a very profitable business for centuries. The power in newspapers was they had the attention of an audience and then converted that attention into multiple sources of revenue. For simplicity, we will call these sources paid subscribers and advertising sales. This is by and large not representative of the current newspaper industry. The industry as a whole is in various forms of collapse. But in looking back can a similar approach to publishing news online create a multiple moat modern era newsletter?

I believe with the right structure it can.

Now here’s where this post is going hazy. I will talk about the methodology of finding a niche, but not spell it out specifically, and then will provide an overview of the secret sauce without providing the recipe.

As you may have deciphered the goal in monetizing a newsletter is to create one that has multiple streams of protected revenue; the moat. The key then is to find a niche that allows for more than one to have a successful newsletter. Below is a rough simple guide of newsletter monetization methods.

Newsletters that provide high value to their audience are going to be more successful at charging a premium for access to content otherwise hidden behind a paywall. Dr Julie Gardner’s business psychology newsletter is a good example. High value to high income individuals. Other newsletters can charge for a subscription as mentioned earlier. While others will have to rely exclusively on advertising revenue from sponsors or advertisers wanting to reach the audience of the newsletter.

When exploring niche topics, the key is to identify one that enables the publisher to effectively monetize the newsletter by aligning with the interests of its target audience. Is the audience consumer based? Will the content provide subscription based value? What advertisers will want to have access to the audience? How will they pay for this access CPM or CPC?

After answering some of the questions above, a prospective publisher can evaluate different monetization methods, making it easier for a niche topic to emerge more naturally. If still baffled as to what niche to approach default to personal skills, professional knowledge, or a passion. There is no wrong way to find a niche.

Now as for the proposed newsletter to start with the OP mentioned earlier? The newsletter I have in mind will have concurrent engagement with b2c and b2b audiences using the same content. The newsletter will monetize through four separate revenue channels.

And before ending I need to address the question of ad buying. I have some but limited online ad buying experience. If this is a deal killer better that its know now. Pretty confident can get up to speed fairly quickly on the ad buy element. So the question then is will I want to proceed with a partnership with random guy? A stranger from the internet, or he with me?

Yeah, its likely. I’ve met random guys on X, and after a convo or meetup they’ve referred me to institutional capital partners, who then became my partners. Have also partnered with people direclty through similair conversations. I’m comfortable with the process if all is symbiotic between the partners. So then Mr random, should we talk?

Hope this information is helpful to readers looking to start a newsletter. If you found this information useful please subscribe telles.io for more articles to come on newsletters

PS. I’ll keep ya’ll posted on how things develop with Mr. random.