I was wrong about newsletters...

Since 2008 I’ve used email marketing… and last year I saw an explosion of newsletters-as-a-business become really “hot”.

And 5 months ago I gave an update on how both it’s doing along with the future of it…

I wanted to share an update and my thoughts… focusing on a core part of what I discovered this year.

To be clear and to start: I still deeply believe in using newsletters as a way to fuel your business.

What I’m not bullish on is a newsletter as the sole business.

Of course, going into newsletters, I had a feeling that was the case, however, at this point I have enough data, behind the scenes understanding and experience to safely say…

If your newsletter is the business… you’re going to have a bad day.

Matt from Newsletter Operator (not affiliated) posted something this weekend and I agree with almost all of it.

He did an incredible job at being able to distill what I’ve been seeing this year and what for most simply makes sense.

When I take a bet, I attempt to take a bet that is big enough to prove if something is worth pursuing or not. Simply put— I never want to do something “a little bit” as failure allows you to find success.

I’m going to keep this really simple in terms of when I believe a newsletter makes sense for your business.

1. You are a sole operator and you want to take care of most everything alongside of a VA and you’re looking for a business that can generate 6-figures/year.

2. You have an audience of a lot of people and you want to bring them off of a platform you don’t own so you can own it and the cost of traffic is basically free.

3. You are able to partner or obtain traffic and subscribers for very little cost that are highly relevant for what you’re writing.

4. You have an existing business that is going well and you want to increase the number of leads over the life cycle of your business that may not be ready to buy today but may in the future.

5. You are able to bring low ticket products, membership, education, software or some other high ROI or high LTV to that audience that is owned by you.

Every other case does not make sense and is likely a shiny object syndrome scenario.

Today, we own about 20 newsletters. Some of them have 2,000 subscribers and some of them have over 100,000 subscribers.

The lowest open rate is 42% and the highest is 77%. Some have a CTR of 0.5% and some have a CTR of 9%.

Simply put— we’ve seen what works and what doesn’t work.

Our model originally with newsletters was to create lead flow for the companies that we owned inside of our portfolio.

As time went on we ended up a little further away from that model than I’d like to admit.

We attempted to monetize in many different ways and in the end we realized that keeping it with its original intent was a much better strategy.

Why? For us, there are better, higher return ways to generate revenue.

We decided to continue to focus on our newsletters, not as a place to generate direct revenue, but to create omnipresence inside of an industry and to fuel our ownership in education and software businesses.

We found that while sponsorships makes a lot of sense, the person buying the sponsorship wins more than the person delivering. Further, the cost of delivery and possible return on investment makes it a valuable business for those doing less than 7-figures— for us it didn’t make sense. Instead, going into 2024 we will only allow those businesses we own to sponsor our media.

We realized that our model of using low ticket to subsidize subscribers makes a lot of sense and in many cases absolutely crushed it.

We realized that using tools to monetize co-registrations didn’t make a lot of sense and simply created people who opened emails (maybe?) but didn’t click them.

We realized that open rate will be obsolete within the next 12 months and the only thing that will matter to advertisers will be click rate— even if I disagree if that metric is the wrong one to use for true R.O.I.

We realized that the cost of running a media company at scale simply did not make sense and majority of the costs were actually from attempting to make it a direct-profit driver instead of a value-driver for the dozens of businesses we own and eventually hundreds of businesses we will own.

In short— newsletters and owned media makes a lot of sense. However, I believe the opportunity that people see isn’t the true one.

The real opportunity? Owning your audience.

The true version of how this works? Getting lead flow for your existing business or taking your influence and moving it into a platform you own.

Again, this assumes if you want to make it a “big business” and of course, there are outliers to what I’m saying.

Our direction moving forward will be to own dozens of newsletters… however, instead of attempting to make profit.

Our pure intention? Great content that people fall in love with and being able to build value for those companies we own.

A lost leader— for the expansion of our portfolio’s total addressable market.

For you… if you’re thinking about the newsletter game or have one… my suggestion is to ensure that the newsletter isn’t the model… but rather, it’s the fuel for the business model.

- Scott