Should email sub growth be your core marketing strategy than paid marketing should be your main channel. Especially sponsorships of newsletters that have “geometric similarity” (similar shapes).
Expect to pay $1-$5 per sub.
By far, the most efficient way to grow a following. When calculating time invested CAC, social media becomes significantly less attractive.
The one exception is YouTube because it has the potential to be such a strong flywheel that it justifies the upfront expenditure.
Also remember that newsletters have a default state of NEGATIVE growth! I.e. with every broadcast you churn subscribers. There is not a single person who grows their newsletter by writing newsletters. Ergo, you must have a top of funnel channel that drives subs to your newsletter.
A newsletter is a middle of the funnel tool with two functions:
i. Create mental availability: being one of (preferably the first) to come to mind when a prospect is considering buying from your category.
ii. Establish your authority: convince people who are on the fence that you’re the go-to-guy for their market problem.
You now know what took me many years to understand/internalize and still exceedingly few people know this.
They think newsletters are top of funnel which is why they get nowhere.
Contrast this to YouTube where you can absolutely grow by merely making Good capital G content (content that ‘they’ not ‘you’ think is good).
That is because YouTube has a distribution engine built into its business model. The incentive structure is such that what’s best for YouTube aligns reasonably well with what’s best for you; getting eyeballs on your content and keeping them on it for as long as possible.
YT makes money by showing people ads. YTers can monetize by getting a portion of that revenue but much more interesting is to monetize that attention yourself on the backend.
The fact that they’re invested in getting you attention (assuming Good capital G content) is a unique feature that no other platform has. On almost every other platform, you’re in charge of not only creation but also distribution. Which is a wildly unattractive proposition if you really think about.
I'm definitely attracted to the idea of paid growth. Ads were powerful when running Soulmate Strategy.
It was so convenient to be able to turn the faucet on and off.
As for YouTube as top of funnel:
It's cool, but I think since viewers are now accustomed to such a high percentage of videos being excellent (very highly produced), I'd need to REALLY enjoy video production or paying for and managing a producer in order to publish videos that people would actually watch.
In other words, I think I don't have the talent / energy / resources to get noticed there.
I agree that if we were to define 3 tiers (top, middle, and bottom of funnel), generally speaking a newsletter is "middle of funnel".
The main way it could sometimes be top of funnel would be word of mouth, but the content would need to be INCREDIBLY shareable in order to achieve exponential growth.
Top of funnel options include ads, paid placements, guest posting, social media (including YouTube and also Substack Notes & Recommendations).
My hope is to use a newsletter as a 3rd and 4th function (adding to your list of 2):
🟢 ask what problems people have
🟢 distribute solutions
I think newsletter churn (unsubscribes) are important to keep in mind, as you said.
"Net" numbers are what matter.
My hope is that a good newsletter wouldn't literally have a default of negative net growth.
So far I see a net increase in subscribers (presumably from word of mouth or Substack recommendations). It's not enough to go exponential, though, so I need to keep exploring other paths (such as ads).
Did I say anything here that you disagree with? Thanks.
Agree with most of it except changing the default state. That’s most likely a non starter. Similar to how we see loyalty (repeat purchasing) among FMCG consumers increase as a function of market penetration but not the other way around.
Does that mean we’ve proven that it can’t happen? No. But it does imply that it’s unlikely and the marketing efforts for a large fmcg biz are probably better spent on increasing market penetration instead of loyalty.
People just don’t share newsletters. No matter how good they are. And the occasional anomaly isn’t enough the be measurable when compared to the churn of .5-1%
So in my opinion that would be a misallocation of marketing resources. They should be on the TOFU channel instead assuming churn is around industry average.
The second thing I’d slightly disagree with is using the newsletter for qualitative market research.
I think it’s very useful if your nl is large enough and if you can email a survey / ask a question, why not?
But the issue is that it needs to be well-designed (asking ppl about problems instead of solutions- would you like X - is bad for example) and it can be difficult to get enough people to reply.
My preference for smaller solopreneurs is another form of qualitative market research called digital ethnography. Basically go to online hangouts where your audience “bitches and moans” about their “expensive problems” and then research what they’re currently buying in order to fix said expensive problems.
That’ll also inform your: copywriting, positioning, price, pricing architecture, features, and can give you a lead pool for the first set of customers.
Thanks, Brian! I just read your bio. Budapest ➔ Florida ➔ Barcelona. And "In 2018 I quit my engineering job in the US and bought a one-way ticket to Europe." + Tour-guiding. Wow.
We sound similar. Katie and I sold all of our stuff in San Diego in 2016 and got a one-way ticket to Europe and bounced around a bit. Now settled in a suburb north of ATL.
Figuring out my post-software engineering life. :-)
Compounding is magic indeed. If Einstein said so, who am I to doubt his words? :)
Keep growing, Ryan. In the future, we could do guest posts for each other, like you did on Ben's Substack. Recommendations and guest posts are amazing ways to grow on this platform.
Elle Griffin hosted a class that inspired me to start my Substack; she said she doesn't even use (other) social media at all! Just Substack. That was so exciting to hear. She is a huuuge fan of recommendations and guest posts.
I love following your efforts. It took me about 4 years to get a useful income from my doll clothes patterns business. The past 5 years I have made enough to play with my hobbies and travel a bit with single digit hours a week on the shop. I don’t need to make a living from it but I’m sure glad I stuck at it. Probably 40 hour weeks in the first years.
I'm curious: Did creating doll clothes patterns start out as a hobby and then turn into a business?
And did that decrease your enjoyment of the hobby?
I've sometimes heard advice to keep hobbies separate from the pressures of business, but I suspect there are plenty of people who recommend the opposite.
Good question - my own email subscriber journey was on my mind when writing that comment.
I recently started experimenting with a content strategy for my own business (I help entrepreneurs to improve their productivity so they can make $500k+ while working 20 hours per week or less).
My newsletter is a new addition and has been gathering steam, but like my people I often hold myself to high standards and it is worth remembering that it is a work in progress
I largely agree with RJ, though I believe some of the assumptions they make are misplaced. FMCG and service-based businesses work very differently.
My clients before the newsletter came almost exclusively from referrals or Fiverr-driven discovery calls.
I know Fiverr was seen as a cheap marketplace, but I charge premium prices there (far more than "competitors", reflecting my skill and 5* reviews) and have worked with many high value, low-price-sensitivity, clients that I gained from there. Most of whom still work with me (directly) multiple years later.
I started the newsletter to help with the transition away from Fiverr. I get some great clients from there, and with extremely low CAC, but I want to build more control over my funnel and move away from a platform I see as having a bad reputation.
The newsletter has been good, I have had 3 clients come from the newsletter directly already. I have excellent retention, but poor awareness (most ideal clients have never heard from me), and poor MOFU recall (many forgot I exist as I had limited touchpoints). The newsletter is there to fix the MOFU issue, a regular value-driven, reminder that I exist that has already helped conversion.
Room for improvement still, but it is going fairly well. I get great feedback on my newsletter, regularly being told how useful it is, which I think is the primary quality metric right now. Work Smart Wednesday is still fairly young, I think that many people need a good chunk of time before converting from a newsletter so I am optimistic that I will see those conversions further down the line
Should email sub growth be your core marketing strategy than paid marketing should be your main channel. Especially sponsorships of newsletters that have “geometric similarity” (similar shapes).
Expect to pay $1-$5 per sub.
By far, the most efficient way to grow a following. When calculating time invested CAC, social media becomes significantly less attractive.
The one exception is YouTube because it has the potential to be such a strong flywheel that it justifies the upfront expenditure.
Also remember that newsletters have a default state of NEGATIVE growth! I.e. with every broadcast you churn subscribers. There is not a single person who grows their newsletter by writing newsletters. Ergo, you must have a top of funnel channel that drives subs to your newsletter.
A newsletter is a middle of the funnel tool with two functions:
i. Create mental availability: being one of (preferably the first) to come to mind when a prospect is considering buying from your category.
ii. Establish your authority: convince people who are on the fence that you’re the go-to-guy for their market problem.
You now know what took me many years to understand/internalize and still exceedingly few people know this.
They think newsletters are top of funnel which is why they get nowhere.
Contrast this to YouTube where you can absolutely grow by merely making Good capital G content (content that ‘they’ not ‘you’ think is good).
That is because YouTube has a distribution engine built into its business model. The incentive structure is such that what’s best for YouTube aligns reasonably well with what’s best for you; getting eyeballs on your content and keeping them on it for as long as possible.
YT makes money by showing people ads. YTers can monetize by getting a portion of that revenue but much more interesting is to monetize that attention yourself on the backend.
The fact that they’re invested in getting you attention (assuming Good capital G content) is a unique feature that no other platform has. On almost every other platform, you’re in charge of not only creation but also distribution. Which is a wildly unattractive proposition if you really think about.
I love this thoughtful comment, RJ.
I'm definitely attracted to the idea of paid growth. Ads were powerful when running Soulmate Strategy.
It was so convenient to be able to turn the faucet on and off.
As for YouTube as top of funnel:
It's cool, but I think since viewers are now accustomed to such a high percentage of videos being excellent (very highly produced), I'd need to REALLY enjoy video production or paying for and managing a producer in order to publish videos that people would actually watch.
In other words, I think I don't have the talent / energy / resources to get noticed there.
I agree that if we were to define 3 tiers (top, middle, and bottom of funnel), generally speaking a newsletter is "middle of funnel".
The main way it could sometimes be top of funnel would be word of mouth, but the content would need to be INCREDIBLY shareable in order to achieve exponential growth.
Top of funnel options include ads, paid placements, guest posting, social media (including YouTube and also Substack Notes & Recommendations).
My hope is to use a newsletter as a 3rd and 4th function (adding to your list of 2):
🟢 ask what problems people have
🟢 distribute solutions
I think newsletter churn (unsubscribes) are important to keep in mind, as you said.
"Net" numbers are what matter.
My hope is that a good newsletter wouldn't literally have a default of negative net growth.
So far I see a net increase in subscribers (presumably from word of mouth or Substack recommendations). It's not enough to go exponential, though, so I need to keep exploring other paths (such as ads).
Did I say anything here that you disagree with? Thanks.
Agree with most of it except changing the default state. That’s most likely a non starter. Similar to how we see loyalty (repeat purchasing) among FMCG consumers increase as a function of market penetration but not the other way around.
Does that mean we’ve proven that it can’t happen? No. But it does imply that it’s unlikely and the marketing efforts for a large fmcg biz are probably better spent on increasing market penetration instead of loyalty.
People just don’t share newsletters. No matter how good they are. And the occasional anomaly isn’t enough the be measurable when compared to the churn of .5-1%
So in my opinion that would be a misallocation of marketing resources. They should be on the TOFU channel instead assuming churn is around industry average.
The second thing I’d slightly disagree with is using the newsletter for qualitative market research.
I think it’s very useful if your nl is large enough and if you can email a survey / ask a question, why not?
But the issue is that it needs to be well-designed (asking ppl about problems instead of solutions- would you like X - is bad for example) and it can be difficult to get enough people to reply.
My preference for smaller solopreneurs is another form of qualitative market research called digital ethnography. Basically go to online hangouts where your audience “bitches and moans” about their “expensive problems” and then research what they’re currently buying in order to fix said expensive problems.
That’ll also inform your: copywriting, positioning, price, pricing architecture, features, and can give you a lead pool for the first set of customers.
But overall agree w your assessment.
That makes sense. Thanks for these thoughts!
Love the growth update and the numbers breakdown, looking forward to following along on the journey to 10k!
Thanks, Brian! I just read your bio. Budapest ➔ Florida ➔ Barcelona. And "In 2018 I quit my engineering job in the US and bought a one-way ticket to Europe." + Tour-guiding. Wow.
We sound similar. Katie and I sold all of our stuff in San Diego in 2016 and got a one-way ticket to Europe and bounced around a bit. Now settled in a suburb north of ATL.
Figuring out my post-software engineering life. :-)
I also loved being a tour-guide at Princeton.
Looking forward to following along.
Compounding is magic indeed. If Einstein said so, who am I to doubt his words? :)
Keep growing, Ryan. In the future, we could do guest posts for each other, like you did on Ben's Substack. Recommendations and guest posts are amazing ways to grow on this platform.
Elle Griffin hosted a class that inspired me to start my Substack; she said she doesn't even use (other) social media at all! Just Substack. That was so exciting to hear. She is a huuuge fan of recommendations and guest posts.
I love following your efforts. It took me about 4 years to get a useful income from my doll clothes patterns business. The past 5 years I have made enough to play with my hobbies and travel a bit with single digit hours a week on the shop. I don’t need to make a living from it but I’m sure glad I stuck at it. Probably 40 hour weeks in the first years.
That's so inspiring to hear, Val!
I'm curious: Did creating doll clothes patterns start out as a hobby and then turn into a business?
And did that decrease your enjoyment of the hobby?
I've sometimes heard advice to keep hobbies separate from the pressures of business, but I suspect there are plenty of people who recommend the opposite.
I love the reminder that our current ability is the worst it will be - that we should keep working the muscle and improving
Thanks for writing this
Thanks, John! What was on your mind in your own life related to this?
Good question - my own email subscriber journey was on my mind when writing that comment.
I recently started experimenting with a content strategy for my own business (I help entrepreneurs to improve their productivity so they can make $500k+ while working 20 hours per week or less).
My newsletter is a new addition and has been gathering steam, but like my people I often hold myself to high standards and it is worth remembering that it is a work in progress
Cool. What are your thoughts on RJ's 2 comments on this page?
Has your newsletter been helping how you hoped?
How have you been getting clients before the newsletter?
I largely agree with RJ, though I believe some of the assumptions they make are misplaced. FMCG and service-based businesses work very differently.
My clients before the newsletter came almost exclusively from referrals or Fiverr-driven discovery calls.
I know Fiverr was seen as a cheap marketplace, but I charge premium prices there (far more than "competitors", reflecting my skill and 5* reviews) and have worked with many high value, low-price-sensitivity, clients that I gained from there. Most of whom still work with me (directly) multiple years later.
I started the newsletter to help with the transition away from Fiverr. I get some great clients from there, and with extremely low CAC, but I want to build more control over my funnel and move away from a platform I see as having a bad reputation.
The newsletter has been good, I have had 3 clients come from the newsletter directly already. I have excellent retention, but poor awareness (most ideal clients have never heard from me), and poor MOFU recall (many forgot I exist as I had limited touchpoints). The newsletter is there to fix the MOFU issue, a regular value-driven, reminder that I exist that has already helped conversion.
Room for improvement still, but it is going fairly well. I get great feedback on my newsletter, regularly being told how useful it is, which I think is the primary quality metric right now. Work Smart Wednesday is still fairly young, I think that many people need a good chunk of time before converting from a newsletter so I am optimistic that I will see those conversions further down the line
So cool to hear that you've made Fiverr work for you and that you're also able to add other sources of clients!