The Startup Ideas Podcast - Why Every Creator Should Have a Newsletter with Austin Rief

Episode Date: December 15, 2022

►►Subscribe to Greg's weekly newsletter for insights on community,creators and commerce.You'll also find out when new and exclusiveepisodes come out from Where it Happens. And it's totally free.https://latecheckout.substack.comFIND ME ON SOCIAL:Twitter: https://twitter.com/gregisenbergInstagram: https://instagram.com/gregisenberg/TikTok: https://tiktok.com/@gregisenbergLINKS FOR THIS EPISODE:Production Team: https://www.bigoceanpodcasting.comAustin Rief: https://twitter.com/austin_riefSHOW NOTES:0:00 - Intro3:54 - The verticalization of email12:10 - Deconstructing the Mr. Beast content model16:27 - The pros and cons of different newsletter categories27:22 - Too niche or not niche enough?33:00 - How to start a newsletter in 202335:20 - Newsletter monetization42:17 - How Austin Rief thinks about AI and media businesses44:37 - Can you be friends with the competition?47:47 - Austin Rief peers into the crystal ball

All right. So let's dive into it. I wanted to bring you on because I'm fascinated by email, which is hilarious that I'm saying this because we're entering 20, 23. I remember 20 times email, quote unquote, dying, right? Email is dead. Email is dead. But I'm still fascinated by it. And you're the email guy, you know, CEO of Morning Brew, one of my favorite email newsletters. And I wanted to kick off by asking you, you know, it's 2023, let's say. You're starting a media company. Would you start a newsletter business in 2023? Quickly, before I answer that, going back to your comment around email it did, I actually just saw a tweet storm. And it was, there must be some tool where you can go back and so one must have uploaded, like all these newspapers. And it's searchable. And someone

searched, like the youth, youth is lazier, like young people are lazy. And they took a tweet from, they tweeted every year since like 1920 of a newspaper or recently, you know, website quoting, young people are lazy. And I feel the same way to your point about newsletters. The number of times I've heard emails dead. And then the year later, the same publication will write emails alive. And I think how it's been leveraged has changed over time and there's opportunity and there's not opportunity. You know, it comes and goes in different places. But, I mean, I just saw a stat. I think 87. A half percent of people. in the U.S. use email as their number one form of communication. So, you know, as in general,

can you start an email business 100%. I think the question is what does that actually mean to be an email business? I have, I classify email businesses in different ways and I can, I can break those down, but high level, every business, every creator should have an email. And why is that? Like, why should every creator have an email newsletter? Yeah, I think platforms typically come and go. Snapchat was really popular, and now at least for my friends, it's less popular. And Facebook was popular and it's not. And people change algorithms. You know, algorithms change.

But newsletters, for the most part, is a way to build a connection with people. It's a very intimate connection. I think people don't really think about this. Podcasts, the platform we're on now, and newsletters are both incredibly intimate. Right? When I'm reading my inbox, I'm either, except for junk emails, which typically now are actually filtered out, Gmail does a good job of this. your emails are from your friends, your family, and your co-workers. And so if I can get in that inbox, you kind of treat Morning Brew like it's a friend,

like it's a coworker, and it takes a level of seriousness. And so I think that's the first thing. And the second thing is newsletters have really good conversion rates, click-through rates. So you can, over time, if you want to sell something else, you can sell something else, push something else you can. But you don't have to. It's long forms. You can push something to people every day.

That's long. I mean, that's what we did at Morning Brew, right? The idea was the whole idea behind Morning Brew was we saw these other publications and they had newsletters, but it was a link to their website. We said, what if we didn't do that? And this seems so simple now. But what if the whole newsletter was just the goal was to read it in email? And that worked quite well.

And so, I mean, yeah, there's a million different ways to go about it. But definitely everyone should have a newsletter. And, you know, let's say it's, you know, 20 years from now, do you think people are going to be using email more or less? the same? I think the same, right? I mean, I probably heard seven years ago at this point, maybe five years ago, Slack was going to take over email. I think if anything, Slack is just incremental.

And if anything, it actually clears your inbox for email, right? Because it's more of the back and forth shorth, shorthhand communication. But yeah, I don't see email going away anytime soon. Can you talk a little bit about, you know, the verticalization of email? Because, like, I've seen Morning Brew expand from, you know, business sort of oriented email, you have marketing brew now, I think you have like a health brew vertical. Like, how do you think about expanding to different verticals? Can you walk through a little bit of that process? Yeah, I'll talk about morning brew and then we should talk about the email ecosystem as a

whole. But for Morning Brew, we created a daily email newsletter in 2015. And then in 2018, we had almost a million subscribers and we started to think, what's next, right? We could either just, you know, kind of four hour work week at so to speak, we had a team of seven or eight. It was super profitable, but we realized, we knew we wanted to do more, and we also knew that we were very motivated people. And we weren't going to keep this team of eight or ten really motivated people if we did the same thing for a decade. And so we asked our audience, what do you want? And we realized two things. One, our audience really loved our tone, our voice, the way we wrote.

But two, and I don't think people realize this is there's a certain type of person who just consumes newsletters, right? And so I'm sure you've seen this. the best or one of the best ways to grow a newsletter is to promote yourself in other newsletters. We saw that. Our cross-promotion had our highest quality subscribers. So we'd run ads and other newsletters. And those subscribers would click more, they'd read more, they'd read for longer. And so we basically said, what if we, instead of promoting other people's newsletters,

we promoted our own. And I kind of fell in love with this weird niche world of B2B media, which is serving professional audiences, right? not people who want to learn about personal finance, although we do that too, and not people who like cars or watches, but people who work in a job function and make them better at their job, HR, retail, marketing, IT, CFO, and the CPMs in those newsletters are so high because advertisers have a really high willingness to get in front of those people, right? If you're selling IT software, it's really tough to get in front of VPs and CIOs at businesses. you're not going to really successfully acquire people via an Instagram ad to spend $100,000

on enterprise software. So it's a great business model. And it increases LTV. So you might read the daily. And then two hours later, you read marketing brew because you're a marketing professional or you read CFO brew because you're a CFO professional. And so it's allowed us to acquire more subscribers for the daily because we can monetize them more in other ways.

I mean, obviously you know this about me, but I'm like obsessed with niches. and what I love about you guys is you're kind of like thinking about, okay, what are the different niches out there in B2B, prioritizing which ones make most sense for your audience, cross-promoting using that medium. Like, for example, that method works in email newsletters, but it also works in podcasts. Like if I do an ad for where it happens on the Morning Gru network or whatever, like, I bet you a bunch of those podcasts listeners are going to come here. why HubSpot with their network, for example, like if you listen to My First Million,

most of the ads are not athletic greens. None of them are. It's all internal. It's all internal. It's all promoting their network. And by the way, we're trying to do the same exact thing, right? We're building a network as well, but it's hard because it's hard to convert people from newsletter to podcast versus, to your point.

It's very easy to move people around from podcast to podcast. And where does video in this whole ecosystem? like, you know, everyone's saying video, video, video, short form is everything. Like, how do you think about video in your whole morning brewer ecosystem? For us, short form is important, but it's hard to monetize. And so you have to do short form in a really inexpensive way. And so either you need to take long form and make it in short form, right? So take a podcast, clip this up and put it all over TikTok.

There's a bunch of people out there who do that quite successfully. I know a few who we've worked with. That's option one or option two, make it at basically zero costs, right? And so make it with just a great personality and a camera. But it's very challenging to monetize short form via ads at least because how do you integrate an ad partner into a 30 second video? Yeah, I think from what I'm seeing is like you need to come up with like an innovative show concept.

So I'm addicted. I don't know how I got here. But like my TikTok feed is like 80% watch. Talk. It's all these like live negotiations in Midtown, New York. Are you on there? I'm on the same exact. I watch the same videos. By the way, another great niche. I love that niche, right? People, high willingness to pay, irrational willingness to pay, some would say, I love that. I love that TikTok. Everyone needs to watch this because I think if you watch watch watch talk and some of these live negotiations, I think it's actually like the future video and how to think about using short form. There's one show I

watch. It's called buying time. It's the first thing I see when I wake up. It's the last thing I see when I go to sleep type thing. Yeah, I know. I've seen this. I love this. It's kind of like an older guy mixed with a younger guy and they go into jewelry shops and they're like, okay, how much for the Rolex Daytona, you know, gold, 1984? And the guy's like, it's going to be 52K. And then the buyer guys are like, well, 52K, what are you? What are you? What are you crazy? 52K? that's worth 45 tops and then it's this live negotiation and it's just so entertaining the watch that first of all you get connected to the characters and then you realize that there's this whole like underbelly inner like they're saying words that people don't really understand most people don't

understand like at the end of every watch transaction they're like you know shake their hands they're like huzzal or something they're like mazal and then you know boom did you ever watch uh pawn stars I've seen a few episodes of Ponset. It's like Pond Stars, but on drugs, right? It's Pond Stars, but, you know, not made for 30 minutes of TV or 23 minutes with commercials. It's pawn stars, but you just get hit with that dopamine or that adrenaline rush every time and you feel like you're in the negotiation.

I love it. Yeah, exactly. Like sometimes I'll watch it before bed and I'm just like too amped up to even go to sleep. I'm like, you know, I need a ticket to, you know, 50 Second Street and to like, to like, like the Diamond District, whatever, in New York, because I need to, like, get in there and, you know, and I don't even have any watches. Like, that's like, I'm not a watch guy, but it's just, I'm not a watch guy either.

What's different between Pond Stars and this is that Pond Stars is like, it feels like a bit more universally understood. Like, there's only a small percentage of people, you and I not included, that have gone into into a Rolex negotiation for like a very rare Rolex. And that's what I think, okay, so like to break it down, like if you're going to create short form, what do you need to create? You've got to create like an interesting story that's really cheap to your point, right? Cheap to make. Yeah.

And then you need to drive them to something. Yeah. I think that's the key with short form as well as if you're doing it as an individual, not as a brand, right? For us, brand awareness is important, people knowing about Morning Brew. But to your point, I think that's the key. I'm sure you know Daniel Mack, right? Daniel Mack does a car video. and he's been clever about incorporating brands in there, but that's all still branded content.

It's all one-off videos. And you have to sell individual videos, right? It's really tough to scale a business, right? If you're trying to make, you know, nice money, it's great to do one-off branded videos. But it's tough to scale a custom video versus if I can just slap American Express's logo and say, hey, they're going to sponsor the next 10 videos. And so, yeah, I think the concept has to have a downf funnel verticalized opportunity, which I know you love. And maybe for this watch guy, it's building an online watch marketplace and trying to compete with, you know, one of these online brands, like a Hohinky, for example, and trying to build one of those and doing a really inexpensive way. They probably get way more views than Hohinky does on all their content combined. Oh, 100%. To challenge you a little bit, do you think that people looked at Mr. Beast like seven years ago or six years?

years ago and been like, why are you creating YouTube content? It's so hard. The, you know, the CPMs are so low. You can't really create a, you know, a business there. Like, does it worry you at all that you're like primarily focused on newsletter and not focused on video? Yeah, so we absolutely are focusing on video. We, we just have to right size our investment with, you know, with the opportunity for us, right? And so we have so much direct opportunity and newsletter. But we are in the processing Q1. We're going to launch a daily show. which would be an audio, video version of Morning Brew, which we're really excited about. So we totally see the opportunity, particularly in YouTube and longer form.

But short form, this question still exists. What are you driving to to your point? And I think one of the challenges is, you know, we've seen a lot of YouTube channels grow a ton via shorts. But what we haven't seen is a lot of those YouTube channels convert those shorts viewers to long-form viewers, right? And so that's something we're tracking a lot. We've grown a lot via YouTube shorts. The question is, how many of those shorts people, people will consume shorts, right? It's more of an international audience.

How many of those people are watching our long form content? I think that's a big thing to track because if it's a lot, then yeah, I think we're going to continue to invest more and more. I heard recently, I think this is true that Mr. Beast got offered, what was it, like a billion or two for his empire? Do you know the number? Yeah, yeah. How do you think about Mr. Beasts empire?

Like, what do you think it's worth? my guess is he can make more than a billion dollars over the course of his lifetime. I don't know how someone's going to make a billion dollars by buying it, right? I think ultimately he's going to have to spin off companies one by one and the cumulative value of the companies he spent. I mean, feastables, I've heard the numbers are crazy. I know he said on a pie gas, I think he was doing high six figures per day in Walmart. Right. So that right there is what?

$100 million of revenue, right? If that's a million dollars a day, that's, you know, so something, something in the hundreds of millions of revenue. So that right there in a year might be a billion dollar brand alone. And his equity stake, I'm sure is not 100 percent, but he has Beast Burger. And he's, you know, I met him a few months ago. And he has plans to build software businesses and other things. And so, yeah, the cumulative enterprise value of what he creates will be well above a billion dollars. If you were Mr. Beast and you wanted to create an email newsletter, how would you go about it? That's a tough question.

I actually spoke to him about this for a little bit. I think it depends if he wants to continue the same brand cross channel, right? Does he want to continue to do? Because he could do crazy giveways. And he could build the world biggest email newsletter in like two months, right? Because he could give away, you know, half a million bucks. But what's the content, right? People will watch his long-form content for the payoff of seeing people make money.

But I mean, I would make it in that vein. It would be almost like a gimmick, right? He would pay you some amount of money or do some amount of raffle for every open. And there would be some way they would get compensation, whether it's some arbitrage for an advertiser or whether it's you have to buy feastable, something like that. So I would use email for him as a way, again, to push content to people. and push something of theirs. I don't know what I know those plans are, but again,

like maybe you have to buy a pack of feastables to get signed up for some lottery or something like that. And I would make it a way where every time you open up the email, you have an opportunity to make money. And I think that would build a habit, right? Like you want, when people open up,

and newsletters later they get something. For Morning Brew, hopefully it's a nugget of information. Maybe for Mr. Beast, it's like you get the opportunity to win 10 grand or something like that. There's a few things of that why it's really smart. I think one is if you're a creator,

and you're trying to create an email newsletter around it, you have to ask yourself, what is unique to my audience? And what do I think they're going to like? And at the same time, how do I push email newsletters forward? Just like you did, you know, when Morning Brew came out, there really wasn't anything like it. Key insights, get smarter in five minutes. Like, I remember when it came out, I was like,

it was like an aha moment for me. And I think, yeah, if you're a creator, or even if you're not created, if you're going to create an email newsletter, you have to be asking yourself, how do I push this format forward? Do you agree? Yeah. Well, yeah, so let's break down. So I have a framework for how we think about email newsletters, right? This probably doesn't encompass all of them, but I'm going to do my best, right? And so I think there's like kind of, and we can go through them all and talk about pros and kinds, right? The way I think about it are, is there's basically three different types of newsletters, right?

there is the editorial or narrative email, right? That's like maybe what Pachy writes or what, you know, a substacker would write. So you have a full one piece of content. It could just as easily be a blog post, but newsletter or it being a newsletter kind of just gives a little bit of a unique brand and also gives you a way to deliver that content. It could just as easily be a single an email with a link, but it's not, it's all in email because the format is attractive. So that's number one.

Number two is curation of medium and long-form content, right? The morning brews, the hustles, the skims. Those are more general. But then there's also more niche ones like Milk Road, right? So that's number two. And the third is more of what I would call just like curation of links or more of a short form. Hey, here's a bunch of tidbits. I'm going to market something to you.

That's the way I classify it. So it's the long-form, Paki-like, you know, Barry Weiss or whatever newsletter. It's the morning brew, you know, curation of different stories. And it's the short form. I think each one has pros and cons and each one had their moment. And some are kind of leaving the spotlight. I think some are coming into the spotlight. Can you elaborate on the pros and cons of that?

And also who's having their spotlight now and why? Yeah. So the first one, right? Editorial or the narrative-based emails. To me, that is really, really hard. To write something long form every week, twice a week. It's incredibly challenging to do and make it compelling over the course of not months, but years. But if you can do that, it's probably the best business because people are

getting your full voice, right? It's all you. Look at Ben Thompson. He's now expanded to other things, but for so long, he's had this amazing newsletter he wrote every day. But again, the con is it's so hard to keep up that level of intensity. It's all based on you. There are tricks and things you can do, guest writers and things like that. But at the end of the day, if you're billing that, it basically is a one-person show really hard, but the upside's nice. My take on that is like you're basically like firehosing value to people so much. It's like a book of value in an email that people trust you so much when you're one of those people. Yeah, but you have to be top of the game.

You have to be unbelievable to do that. Yeah. I mean, our friend Julian Shapiro would say it's. impossible to weekly come up with creative insights every single week at high, high, high quality. That's why he only writes an email like once a month or something because he's just being put on the treadmill to do that is just so hard. Yeah, I think mentally and psychologically it's challenging. I think it's possible, right? Again, if you're Ben Thompson and you're doing it based off the markets, you know, you have earnings every week and you can talk about companies. Are you going to make this groundbreaking

theory that people talk about every week? No, definitely not. But you're on a treadmill and it's really hard to get off. But I also think it's probably the fastest way. So let's call it $100,000 of revenue. I will say Ben Thompson did call me silly once in one of his emails. So I have a little bit of a grudge, but you know, I can get past it. I love his emails. They're super long, super like packed with info. And obviously there's the business model there of like you can charge for that, right? Like, people are willing to pay for it. Like people, people, people pay for Lenny Wachitsky's newsletter plus community and they're happy to do it because I think a lot of them are super long, super in-depth, super niche. Yeah. Now, and I'm not going to name names. Name names. No, I'm,

I had so much respect for people to do this, but I would say is I think a lot of people long-term we're going to struggle, right? I think a lot of people in this category that even the ones who are say this is hard to begin with, but even the ones who are successful, I think they built a brand off their eight to 10 or 12 first posts. They banked like their most insightful stuff, right? It's really, really good. And they had the Twitter community or whatever else promote them because they're connected. Maybe they know a bunch of VCs who have followers. Maybe they know journalists. Maybe they were just first to this. And so they're the first investigative journalists. And I think the growth rates of these things are going to slow down dramatically and churns are going to increase over time.

I think a lot of people are signed up to these because they want to feel like a supporter, but how many of these can you support? And how many years in the row can I support for 200 bucks a year? Something I read almost never. And I think the answer is going to be more than we think. I think it's going to be a lot of people are going to really struggle. You're not going to support as many people as you originally wanted to. I want to support 25 of these.

I'll support my favorite three. A lot of people ask me, Greg, how do you build products that foster community? Well, I've got good news. That's exactly what Lake Checkout does, my company. We partner with the largest brands in the world and fast-paced startups to design products that resonate with your community. We add a couple interesting clients every single year. So if you're interested, and that sounds like you, email Front Desk at the website. Late checkout. Studio with what you're working on, what you need help with.

And don't forget to mention the Where It Happens Pod. Thank you. We'll go back to the other categories. But what do you think of these bundle newsletter companies? Like there's every, I think it's called every.tio is one. Like, what do you think of those businesses? I think bundle economics are quite hard. And everything is doing great, right?

And so it's really good for them. I think they have an interesting value prop of like, we're going to be this more holistic business experience. But I think in general, bundling's hard because the person who adds the most value to the bundle is always going to be curious why they're in the bundle to begin with and why the bundle's not adding them value. And I think it's very much a game of who adds the value. And you know, you're not bundling it with distribution and technology like a Netflix or a Disney. Right.

And so it makes sense for most people to be a part of the bundle of a Disney Plus, right? as in let me sell my content to Disney because, one, we're talking about such high numbers, such big scale. And two, they're adding so much value. It's hard to, you know, deliver my 90-minute movie to a lot of people in a quick way, attack-friendly way. A newsletter is a newsletter. So I think it's hard to bundle.

Okay, cool. Let's go back to the list. Cool. Number two, curation of medium and long-form content. Two buckets here. here. General news, niche news, right? Let's talk about general. You have the hustle, the skim, and the morning brew. There's more, I'm sure. To me, that train has left the station. And of course, I say this and there will be, but I don't think there will be many more multi-million person

reader general news, general business news, email news letters that, you know, are standalone companies, whether they're bootstrapped or VC backs. I just, I don't think it's. I don't think it's going to happen. And it's because the economics have gotten very difficult to scale to this size. Facebook ads were so much cheaper. It was so much easier to acquire subscribers. So you could grow faster and also churn was less because there was less competition. But with more people starting newsletters, there's now a morning brew for X and we're disrupting ourselves because of that. We're doing it too. And there's so many niche publications. Whereas before I said, hey, maybe I could read the hustle because I'm interested in business, you know, general tech news.

Now you say, hey, maybe I'm a product manager. Maybe I'll just listen to or read, you know, listen to Lenny's podcast or read Lenny's newsletter. And I don't need to read a general tech publication. And so as we get more niche, it's going to be very hard to scale big newsletters into the multi-millions. We have four and a half million subscribers to our daily. And I don't think anyone will get there. I think you've said before that media businesses and newsletter businesses have, it's like the easiest way to get to eight figures and the hardest way to get to 10 figures or something like that. Totally.

Yeah. So, I mean, so many media companies, it's easy to get to 10, 20, 30, relatively to get to 10, 20, 30 million. So you get to 100 million of revenue is incredibly hard. And I think that makes sense. I think you're completely right, by the way. I think like, there's only so much. many of these that people are going to subscribe to. And so that makes sense. What's, what's the third category? But second category is a part two, though. General business,

medium and long form content, very tough. But I think the sweet spot, the real opportunity, and if anyone's starting one of these, hit me up. I will co-found it with you. I will fund it. It is morning brew, again, but for X, a growing niche. So I'll give the example, Milk Road. Milk Road hit it perfectly. They said, hey, we really, we can't be the next morning brewer, the hustle. It's too competitive. It's too general. So let's go niche. Let's go into a growing industry, which is crypto, right? We have this huge tailwind. Crypto, again, is an outlier, right, because of the grifts, because of the money-making opportunities. People want to consume anything, right? So they hit all that. But what they did is they had a

really distinct and unique tone. And I think because of that, it was just very niche, but the niche was big and growing. And so you can create a newsletter in a big and growing niche. I think there's a huge opportunity to have a whole company, but definitely a newsletter, right? So you're doing it in community, right? And there's a huge opportunity there. Sean did it in crypto. I think someone can do it in AI, right, and create a great AI newsletter and review all the tools and talk about what's happening. I think there's opportunity in space, right? People are really interested now in space manufacturing and what's going on in space. And there's an opportunity. there. And so I think that's where the opportunity is. Build a verticalized brand. I don't think it can

only exist in newsletter. But I think newsletter can be a huge part, the biggest part, of your revenue strategy for a verticalized media business. And if I was starting one and said, hey, I want to get to a million dollars of profit, I would make, let's call even the milk road for X and pick a niche. And I would just get started there. And I think that is still the biggest opportunity is to go more niche and maybe even more niche than you think, right? But go niche and build something unique, distinct, hasn't been done before, hasn't been thought of in that way, in that tone, in that voice. Again, the way everything was very consistent and coherent like Sean did with Milk Road. How do you know if you're too niche or not niche enough? What kind of questions do you have to ask yourself to get to that

conclusion? Yeah, so I'll explain how we make decisions for Morning Brew. And I think it will will apply. Right. So for morning brew, we are in the universe of ad-based businesses. So this is all just ad-based businesses. And we can talk about subscription in a second. But if you're going to have an ad-based business, you need to make sure there's enough content to talk about. Right. So, for example, people are like, why don't you have a media brew? You're in the media industry. The reason we don't have a media brew is because there'd only be one newsletter a week at most. There's not that much content to cover for an ad-based public, a general ad-based publication. And so, it's amount of content. It's advertisers in the space. So how many advertisers are in the space?

You can go, look, like, is there a big conference? Is there a big trade show in the space? How many people are sponsoring that? All those people can sponsor your publication. And then our third criteria, which is unique to us, is how many people who read Morning Brew are in this industry, who want to read this newsletter? That framework is taken from Sean Griffey over an industry dive, and it served us really, really well. Now, the last thing I'll say is, you, You can throw all that out the door if you're targeting senior execs and CEO. So, for example, media is not that big, but if you have Bob Eiger and you have the CEO of, you know, Zazlov over at Warner Media and all these other execs, it doesn't matter if you have 300 subscribers. If you have the right 300 subscribers, people will pay to get in front of them.

But I'm talking about, you know, the more, you know, let's call it 20, late 20s, early 30s audience. I heard a, I heard a story about Tim Ferriss that he. He designed his blog for billionaires to read it. So when asked about, hey, should we include a pop-up to get email subscribers on the website, you know how you're like scrolling. And it's like, oh, hey, like, I mean, you know this. Like put your email address in to get subscribed to, you know, five bites by Tim Ferriss or Friday fives. He said, I think about designing my website as if Bill Gates is reading my website.

And because if you think about it, like Tim probably has a bunch of billionaires who read his stuff. Totally. Yeah, read his stuff. So I think it's an interesting framework for thinking about like creating a startup, which is especially if you're in the B2B space, how do you think about crafting an experience for that type of audience from a product's perspective? A hundred percent. And to be honest, you should be creating content for billionaires or at least very rich people, right? it's very hard to build a media company if you're not building B2B or you're not building for high income earners. And that's why some of these niche publications, I've spoken a lot about B2B

AI. But there's other ones, right? I know people who have three, four thousand subscribers, but it's a Ferrari enthusiast newsletter. And you charge a thousand bucks a year, a Rolex enthusiast, right? So if I was starting a newsletter today, it'd be super high income or it'd be B2B and going after one of those niches that's growing in a growing industry and, you know, ride the wave. Have you seen Ben Tossel's AI newsletter? I've heard he has an AI newsletter, but I haven't read it yet. So I think you'd like it. It's Milk Road for X, AI.

It's called Ben's Bytes. I think he's gone from zero subs to, you know, 10,000 subs in a very short amount of time. Yeah. If Ben's listening, what's up then? Ben's listening because Ben, Ben, Ben was on the show a couple of weeks ago and people loved it. He talked about, like, his favorite AI tools. And I think there's a few reasons why his newsletter's taking off. The first is, it's really authentic.

He was the no-code guy before he was the AI guy. So he's just spent, like, he sold his last company in his Zapier or Zapier. He just, like, knows a lot about no code and tools like that. So, like, AI just is a tool in that tool set. So his stories are just, and his content comes across authentic, check. And then the other thing is he's just really good at finding all these niche AI tools that are coming out. Like he's good at it. Want to hear something funny?

Yeah. When you sign up for Ben's Bytes, which I just did, there's one newsletter recommended in the newsletter Swap. And it's milk road. Oh, no way. That's hilarious. Yeah. There you have it. Let's close the loop here.

Let's go to the third newsletter. Yep. The third is the curation of links, the marketing email, the, you know, the Greg's Corner. Here's five interesting things I found today. I think that is a great bang for your buck because if you can curate well, curation is valuable, right? And so if I can curate five things, 10 things or, you know, write a little quip here and there. That's great.

It's not a business, right? It's a part of a stack. If you're a creator, you should, at minimum, have one of those, right? And you may actually say, well, that's, that's all I want to do because my, my main format is podcast. My main format is Twitter. I think you need, again, to have some connection, but that's not a business. I think too many people think their five sentence roundup or whatever is a business. And it's not. It's just a part of, of your extension of your brand. It's worthwhile. You know, it's, it's, it's necessary, but not sufficient for, for success in building your

creator stack. If you wanted to do one of these categories, you want to build a newsletter in one of these categories today, it's a new year, new newsletter. How do people actually get started? Like, should they create like a one pager of like, here's my mission and here's like how many times a day I'm a week I'm going to write? Like, you know, what tools should they use? Like could you give in a nutshell, how should people think about starting? Yeah, so I think the first thing is you need to figure out what you're writing about, right? What community are you writing about? Let's say it's marketers, right? Writing to marketers. You need to embed yourself in that community. Do a lot of user interviews. Understand what they consume, what they're not getting out of their content,

and understand what it's like to be a marketer. Ideally, you were a marketer because you want to be able to speak their lingo, right? You want to feel like an insider. I think you're going to succeed if you feel like you're inside the community, you're telling the community, you're informing from the inside. And then you need to do what we did in the early days of Morning Brew, which is persona work. You need to say, hey, who's the writer of marketing brew, right? Who's the writer of Morning Brew? Who's the writer of The Hustle, Milk Road, the Skim? You know, it's a 27-year-old woman who spends her weekends doing this and who does, you know, who eats this food. And that's what we did for Morning Brew. We're like, who is the persona? Who's the person? What are they doing the

weekends? Right? What do they drink? Do they go out on Friday nights? Do they go watch? Do they go watch a TED talk, how frequently do they make the decision to go to, listen to Malcolm Gladwell speak at their school versus going out to a bar? And those are all the questions we asked ourselves to align on who is this coming from. And then you know who the reader is, you know who's writing it, and then you should have to get reps and get better and better. And that's all just copywriting practice, right? I was not an amazing writer when I started writing this. I'm still not an amazing writer by any means, I think that was the best decision we made, which was to replace ourselves. We realized we could speak in the tone, we could convert in the tone, we could write a couple

sentences in the tone, but day and day out, we couldn't write that tone across a full newsletter. And so make sure you can write in the tone, you want to write or replace yourself. But if you're a one person business, of course, you're going to have to write it. And so write in a tone you can actually execute on. Shifting gears a little bit to monetization of newsletters and media. at businesses. Morning Brew has courses now. Can you talk about how beyond advertising, how is Morning Brew monetizing?

And how did you think about those products versus other products? Yeah. So we started the newsletter. We started building up an ad business. And our ad business is still the vast majority of our revenue. But we knew we wanted direct revenue. And so we built out a consumer revenue team. And we tested a lot of things.

We failed on a ton of things. We thought people would want Morning Bruce swag. They did. They just don't want to pay for it. Right. And again, it's all relative to a $70 million ad business. So if you sell half a million dollars of swag a year,

and that's your cap. The question's like, well, you know, it's nice, but it's not going to move the needle. And the question always came up. Would you ever launch a subscription? And I always said, for content, no. But I think you can launch a subscription. Or would you charge people, I think,

was the general question. I said, no, I think it's really tough to charge people unless you have a serious level of expertise or you're going very niche or the New York Times, the Washington Post. You have a 100 or 200-year-old brand. I said, but I would charge people for community and for access and for upward mobility to advance their career. And I said that enough. And then, you know, Alex was a big part of this as well. We were kind of like, well, what if we did that? What if we actually, you know, created that. And along with the amazing team of early people, we built what was originally called MBA, which was the Morning Brew Accelerator, which is now seven courses. We have six to eight week courses. We have one week courses. We've tested day long courses. And the idea is Morning Brew's

news, but it's also education. And so some people want to be educated by with five minutes in the morning. Some people want to be educated with another five minutes in the afternoon. Some people want to be educated by watching our YouTube. But there are some people who want to spend six to eight weeks with us learning about business analytics, learning about leadership, learning about financial forecasting. And I think our brand has the ability to expand into a larger education brand. And so we had a pretty successful year doing that, you know, going direct to consumer. And we're going to continue to go direct to consumer next year, but we're also going B to B. And we're selling into businesses. And we're saying, hey, four of your employees paid for

this program, let's do it for 50 or 100 of your employees next year. Are the courses cohort-based? Are you with other students? You get to meet them. Yeah, so they're cohort-based courses. And so that's a lot of what we provide, too, is it's a network. For a lot of people, the education is nice, but the network is really important. Getting a newsletter, listening to a podcast, reading a tweet could sometimes feel very, you know, one way. But I think that, education is such a natural evolution for where you guys are going because like I'm sure a bunch of people are like, hey, there's probably other people reading marketing brew that are like me that I'd love to meet. You know, you call it literally an MBA. Like one of the reasons why people spend $80,000 a year in an MBA is because they want to meet interesting people. So if you

could curate those groups of people, I think that's a huge, huge opportunity. I agree and I also think that it's something that is missing in the discourse around online courses, right? You're like, oh, so you do a course, you should not do a course? Is it worth the money? Is it not? People say, oh, there's content on YouTube. And that might be the case. But there's accountability. There's community. I think those are two really important things that don't exist with content on the internet. It depends the course, right? But I think like overall, like the accountability meaning, hey, like I spent X amount of dollars. I'm actually going to go and do this.

Like I run a course called Community College and like people come out of that course and they give them tools to like come up with an idea for a community based product and they like launch products. So it's like, hey, you're going to launch a product in 30 days and you're going to have other people kind of like pushing you to do that. That's worth something. And then hey, you're also like you can meet like you met Alex, your co-founder in school. Right.

Totally. we've had people meet co-founders in our classes like it's it's bonkers right and i think like that's when it becomes worth it is if you get a really high quality vetted group of people and it can't be all you know some people could be very experienced some people should be earlier on like you want a diverse group but that's a really important piece of it so i like that you're doing that yeah it's all about how you curate in the group of people and are they like-minded are they are they motivated And that's what we look for. What else besides courses are you interested in potentially monetize?

I mean, do you have a list of, you know, ideas? I'm not saying you're going to do them, but like what are some ideas around other ways that a newsletter could monetize beyond courses? Yes. So at Morning Brew, we view ourselves more of a media company than a course. So we do events. We do in-person events. We do these summits.

And again, if you're a B2B publication, or if you have a valuable audience, but B2B is where we do our events, there's a big opportunity to get four or 500 people in a room, and advertisers will spend real money to meet these people and talk to these people. We don't do these as much because normally it's not impactful, again, compared to a $70 million P&L, but for creators out there, small niche dinners, you get 12, 15 people in finance marketers in a room, you take them to a dinner, and companies will pay a lot of money

to get in front of those people. You need to talk to the right person, and you need to have the right people in the room, but it's all about curation for those. I think that's really interesting events, you know, bigger newsletters, right? Maybe something much larger, bigger scale. Beyond that, I think there is an opportunity

for non-coer-based courses, right? Like, you know, people are succeeding with gun road and things like that, those. It just needs to be priced correctly. You know, you need to make sure the value is there, but it needs to be priced way less in the cohort-based course because you don't get all of that. Right. You know, I had Jack Butcher on the show recently. He has a good model around that. Like it's great model. Yeah. For 50, 100, $150.

Justin Welsh, you know, you know him too. He's on the LinkedIn side and social media side. He charges $150 for his course. Like, you shouldn't be paying more than a couple hundred bucks for some of these courses. And it's a volume play. If you're doing Gummo, it's volume play. Absolutely. You know, I got to. to ask about AI and how you're thinking about how AI changes the media business. So I've been playing around with, you know, chat, GPT3 a lot. I've really enjoyed, you know, messing around with that. I actually have a list of like the top 10 AI products I want to mess around with over, you know, winter break or over the Christmas break. And so I'll, know a lot more and I'll probably put a bunch of content on Twitter about my experience doing that. I'm really excited about that.

I think, though, what it can do, people are like, oh, it's going to write its own newsletter and like maybe, but I think it does two things. One, it makes writers way more efficient. You can start with ideas. You can edit things easier. You can have rough drafts easier. That's the first thing. It can make you a more efficient writer, right? There's nothing more daunting than looking at a plain piece of paper.

And AI can help you not look at a plain piece of paper. But I think the second thing is it only makes great copywriting. more important. It makes great copywriting super unique. And I think it's going to make the best copywriters worth so much more. Because when there's more content out there and there's more content that looks like everything, how do you stand out? How do you resonate with an audience? How are you leveraging the AI to make you the best possible copywriter? And I think that's going to be a big transition. I couldn't agree more. But one follow-up question to that is when you were playing with chat gTP like how did it feel like as a writer as a person in the media business like what was

that feeling that you had when you when you put something in there and you saw those answers i mean it's magical like chat is magical like it is it is almost scary it is the closest experience i've had to like wow this is not real life yeah i think really it's it's weird i think it's 90% magical 10 frightening. It's like my analogy for it is like you're in New York, right? So it's like imagine it's wintertime, right? It's December, but it's like 50 degrees Fahrenheit out or 60 degrees Fahrenheit out. You're like, wow, it's so nice. The sun is out. And it's like, yeah, that's magical, but it's also like kind of frightening. Totally. A couple more questions. You and Sam Parr on the surface, like you would think you wouldn't be friends, but you're friends. Or he ran the hustle, which was a direct

competitor to Morning Brew. Could you talk a little bit about how you're able to have a, you know, a good friendship with someone like that? Yeah, so we weren't friends until we sold our businesses, right? By the way, I'm going on my first million this week. And I think that's what I'm to talk to him about it. And I want to do it in a public manner. I don't want to speak for Sam, but I will speak for Sam anyways. And I'll see if he agrees on. Wednesday, but I don't know if either of us had the humility or the, or mature enough to be friends with each other at that time. I think we both had so much personal effort and, and so much of our self-worth was tied up in our businesses. And I think we very much view them as our babies.

And they were so competitive. At least they seem so competitive. that there's no way we could have been friends. Now, after the facts, all of a sudden, we have so many similarities, so many stories we can share with each other about, oh, he was doing this, I was doing that. And that's how I think we bonded. And now I have so much respect for him and how he's different than me and how he's the same as I am. And I think one interesting thing is I viewed him as he started the hustle. When he ran the hustle, I had heard stories and I heard him on podcasts.

and I viewed him as very, very rude. And I was like, oh, this guy is like an asshole. He seems like a complete asshole. And now, you know, I've been working with him on a couple projects. I've been on calls with him. And I've realized that he has this level of, let's call it, abrasiveness that I actually think works really well for him. He's very transparent.

And I can see how it turns off a lot of people. But I can also see how it's super effective when he's around people who are receptive to that. And he builds this culture, this culture, these people who are radically transparent and are open with people. I was on a call with him. And I don't want to give the specifics, but someone started and said something. And Sam was based, that's like the effect of like, dude, what are you saying? I don't know why we're on this call. And he didn't meet it in a real way at all. And it was, and the guy, you know, took it really well and we all reset. And there are so many people just yes each other the death in the corporate world. And Sam does not do that. Sam is, again,

just a little bit abrasive, I think in a great way. I learned a lot from that one interaction, just the way he carries himself. And I think it's really effective. And I think it's why he's so good at going zero to one. He has no time to waste with niceties. Oh, yeah, that makes sense. It's like, no, no, no, that made no sense. What are you talking about?

Like, regroup and come back to me. And I've learned to love that. I've learned to use some of that in how I run morning through and how I think about things. So, yeah, we weren't friends initially, but now I think we've become very good friends. I love it. I love it. You know, you're a New Yorker, so I feel like you've got tough skin and you're able to take it. Yeah.

Okay. Last question. Where do you see media going in five years? What does it look like? How is it different? How is it similar? More verticalize, more niche. Again, morning roof for X and this for Y.

And it's just, you know, the cost to distribute content is zero. It costs nothing to send an email. It costs nothing to post on YouTube. And so people are going to get. more and more niche. By the way, I don't think this is just meaty. I think it's all of consumer. Consumer is going to go niche and verticalize. Why would I buy the mattress, the general mattress? Why can buy the mattress for guys who are 510 and, you know, weigh, you know, 175 pounds and work out, right? Or why would I eat at this restaurant? I just think

that just general is going away and things can be so customized, so tailored to you. I think, by the way, that drives out a lot of the venture returns in consumer. I think it's very tough because of that, because it is niche. I mean, I think media is going to have a big part in all these consumer brands, right? And so you're going to have your Rolex newsletter and you're going to sell watch collabs and you're going to have watch events and media is going to be a part of a broader consumer strategy. And so I think you're going to have niche, you're going to have verticalize. And yes, you're going to have a media industry.

but the difference in content and commerce and consumer, it's all going to kind of just turn into one. And every business is going to be a media company, every commerce company is a media company, every media company is a commerce company. It's all just going to look, like a lot of these companies already do today, it's going to be built from day one.

You heard it here first. General is going away. Nishes, Nishes the future. Austin Reeve, thanks for dropping by. Always a pleasure chatting with you. Where could folks find you? I'm on Twitter. Austin underscore Reef.

Austin underscore Reef. Go follow him. Sign up to the Morningbrew, of course. Morningbrew.com. Yeah, morningbrew.com. Cool. All right. We're out.

Thanks. Thank you.