Latest / Send & Grow by SparkLoop / From side hustle to nearing $1M revenue - with Michael Houck of Houck's Newsletter
Transcript
- EP 24 - Michael Houck === Louis Nicholls: [00:00:00] Welcome to the Send Grow podcast. I'm your host, Louis Nichols. In my day job at Sparkloop, I spend all my time helping the best newsletter operators and media brands in the world to grow their audiences. So I get to see, first hand, what growth tactics, strategies, and channels actually work. Which ones you should copy, and what mistakes you should avoid. And now, with this podcast, you get that access too. Every week, I sit down with a different guest, from industry experts to successful operators, and we go deep on the stuff that you need to know, so you can become really effective at growing and monetizing your email audience. Today, I'm joined on the podcast by Michael Houck. Mike runs the appropriately named Houck's Newsletter, and since going full time on it just a few months ago, Revenue and subscriber growth has exploded. We'll get into why, but [00:01:00] first, Mike, can you give us an introduction to your newsletter in your own words? Well, thanks Michael Houck: for having me, man. I'm super excited to be here and share a little bit about the journey of these past four or five months uh, growing Hauk's Newsletter. I started it as a side project when I was a startup founder at my last company. And it's sort of taken on a life of its own and kind of become my full time thing now. So, we've grown to about 60, 000 subscribers. Up from about 10 K when I went full time on it a couple months ago, it's a newsletter for startup founders. It's an advice column for startup founders. So I give deep dives each Saturday about how to do specific things about fundraising, growth, hiring, leadership, finding product market fit. All things that sort of founders might be interested in. And then every Tuesday I send out a curated email with like my best resources of the week for founders. So these are curated links linked to, you know, blog posts or Twitter posts or anything like that. And then also a framework of the week that I break down a [00:02:00] trend of the week that I create a startup idea around quote of the week tool of the week. And sometimes the tools are sponsored. Sometimes they're, they're not. And yeah, and so we, we do that each week, two issues a week. And we monetize through sponsorships in both issues, and then also paid subscriptions and paid subscribers don't ever see the ads. Louis Nicholls: Got it. Awesome. I just noticed that you said, we, is that the startup we have of me, myself and I, or is there a team behind this? Michael Houck: Uh, it's kind of the Royal we to a degree. I do have a VA who helps me out with a lot of data entry and things like that. And I have one part time Ops guy who helped me out with like background research and things like that. But as far as writing the actual newsletter goes, it's all me. Louis Nicholls: Awesome stuff. So the audience for this is startup founders. Who presumably they're looking for advice. They're looking to grow their own businesses. They're looking to replicate some of your success, which we will touch on in a couple of minutes, most likely. That's I think a really interesting topic around like personality versus, versus branding that we'll get into. It's a hot topic for a lot [00:03:00] of newsletter operators, but before we do that. So a question I always like to ask is. When you're writing the newsletter, when you're creating the newsletter, you're sending this out to these startup founders who've subscribed to it, to your audience. What are you hoping that they'll take away from it when they, they leave? So I like to think of this in, in, at SparkLoop, we think of this in terms of almost like three buckets kind of based on the, what's called the Rethium values from the BBC. So you have the, you know, the opportunity to entertain. to inform or to educate effectively, right? And most newsletters are a mix of some of them, but where does that land for you with, with Howg's newsletter? Is someone coming away primarily informed, entertained, educated, having learned something new? Where does that land for you? Yeah, Michael Houck: we definitely skew more towards the education side of it. And my job is to like, make that engaging and entertaining for people as well. So. I mean, our advice column that goes out every Saturday is just a deep dive on how to do a specific thing that may be counterintuitive to most startup founders. So, uh, we definitely want people to walk away having learned things [00:04:00] that they wouldn't have been able to learn as quickly without just getting it in their inbox every week. Louis Nicholls: And you mentioned that you you've gone full time on this. A couple of months ago now. And since then you've grown from 10 to 50 or 60, 000, 60, 60, 000. Now, very good. Awesome. And a couple of months, which is phenomenal growth. can we go back a little bit before that, before you went full time and talk about sort of the origin story of the newsletter and where the initial subscribers came from, maybe the first hundred, the first thousand, and then let's talk about how you've, you've grown since then, since really sort of, I don't want to say taking this seriously, but, but putting the foot on the gas, I guess. Michael Houck: Yeah, absolutely. So it started as a side project. Um, so my last startup was a membership club for startup founders. And so we were doing a ton of marketing and building up my personal brand and my co founder's personal brand on Twitter and LinkedIn. And so we wanted a channel to establish more credibility for us as founders. And in this case, specifically me. And so I started the newsletter basically to just say, Hey, Hey, If you think our insights are good in this [00:05:00] newsletter, you should join our membership club for startup founders. And yeah, I mean, the company ended up shutting down over last winter and the newsletter had been gaining a lot of traction. On the side, I think in the beginning, it was a few subscribers from a like experimental newsletter. I had spun up 2 or 3 years ago, um, just ran for specified short period of time. But after that ended, I had this like subscriber list. So I added them to this newsletter and then, yeah. As I started taking the project more seriously and I realized that, Hey, this new newsletter is something that could have some serious growth behind it, I started reaching out to other, you know, creators, people that I knew in the space who were creating newsletters and offered cross recommendations and things like that, both cross posts within the newsletter in place of ads, and then also through, you know, like a recommendation network. And so. Yeah, did that for, for quite a while. That got me my first few thousand, uh, subscribers try to referral program, but I think didn't crack the nut. At least then [00:06:00] we'll see down the line if it, if I can do that. But as of now, I have not, I'm not focused on that. Louis Nicholls: Got it. Okay. So this was, and again, this is as a side project while you're doing other things, while you're building other businesses. So presumably it's, it's not something that was sort of. Top of mind, top focus all day, every day. Michael Houck: No, definitely not. Definitely not. I mean, I was running a company that had raised close to 15 million. And we'd also raised a venture fund separately to that, that had raised a few million dollars as well. So I had multiple full time jobs on top of this. This was just, I'd write the newsletter every week and test out new topics and new structures and grow where I could, basically. Louis Nicholls: Awesome. And then what made you decide to, again, I'm going to say, take it seriously, but what I mean is to go full time. Really? Michael Houck: Yeah. I mean, I left the company in December and I actually went, uh, took a few months off and just decided to figure out what I wanted to do next. And during that time, I kept writing the newsletter just basically to keep it going. But over the course of a few weeks of not [00:07:00] working The startup anymore, uh, I realized that there was actually a pretty sizable business opportunity for a not venture backed maybe, but definitely great cash flowing business around the newsletter. And it also let me keep on the bleeding edge of what was happening in the startup world, even though I wasn't currently a venture backed founder. So both of those things were super appealing to me. And so I decided that 2023 was going to be the year of the newsletter for me. Louis Nicholls: Awesome. And before we get into talking a little bit more about how you've grown the newsletter more recently, since you went full time and since, uh, you know, talking about the revenue side of things as well. Something that I find really interesting is when you're writing this kind of educational newsletter, where you have to be giving advice, be You have to be presenting new things that you've thought up a weekly or bi weekly basis. That seems to me to present quite a challenge to do consistently over a long period of time. Because if you're just reporting the news with your own personal slant, there is new news [00:08:00] every week. You don't really have to do very much other than consume it and digest it and spit it back out and sort of, uh, you know, with your own spin on it, how do you make sure that come Sunday and Tuesday, did you say come from those two days a week? How do you make sure that there's a really good piece of content available? Michael Houck: Yeah, I think it's a, it's definitely a unique thing for the educational. Type of newsletter and the advice column, I think, in particular, like our, our Tuesday send is this, you know, curated send where I add analysis to frameworks and trends that we uncover and start up opportunities that we uncover that stuff that can be a little more reactive, but the Saturday advice column is totally proactive. I have to come up with new topics all the time. And so, you know, I think the honest answer is that because of my experience as a founder who, you know, we raised money from a 16 Z and all these great investors and I got. A lot of exposure to that world and kind of had a crazy startup journey. There's a tons of lessons that I can naturally pull out of there. And then the secondary side of that is that I was able to build a great network of, of folks who [00:09:00] also have great lessons that I can, you know, ask them questions about, get their takes on. Include as quotes. You know, we had an issue about how to write the best investor update for founders and included quotes from Ryan Hoover from weekend fun, Greg Eisenberg, Sahil bloom, all these, you know, really established and great people. And so sometimes you can take that route, but most of the time I just batch create a bunch of ideas and topics and have them listed in like an air table database. Actually, I'm a data guy. So have a list in Airtable. And then I'll just draft up notes about them, and when one is ready, that'll be the one that we, that we take live. Louis Nicholls: Awesome. And when you went full time on this, before that point, this had really been, like you said, more of a side project. Almost like a, not an afterthought, but it was something that was really a funnel into, to the business that you'd started at the time, right? And in that sense, it made, it made sense for that to be sort of a personal, a personal project that sort of funneled into a business.[00:10:00] Now that you've gone almost full time on the newsletter, how much of this feels like an exercise in content and personal branding versus an actual business or something that you're treating as if it were a startup or a business? Michael Houck: Yeah, I think it's, it's definitely close to 50 50. I would say that some weeks it's more just me thinking about how to brand myself, position myself against what else is out there in the market. But then other weeks, it's very much operationally in the weeds. You know, how much revenue do I put towards X? How do I, what, what kind of margin do I want to have this month and, uh, where I want to invest my time to, to grow the business in new ways, all that stuff is exciting to me. Um, but it's definitely not pure branding and marketing anymore. I actually, you know, I think that a lot of creators and newsletter operators should think more like startup founders. I actually, I tweeted about this recently. A lot of these solopreneurs and newsletter operators, they talk about how, Oh, I have like a 90 plus percent margin in my business and therefore I can [00:11:00] live the life style that I want to me. That's like taking your chips down too early, right? Because I was a startup founder and I raised venture money. And I think about just like, how do I keep as close to a 0 percent margin as possible while still surviving? Right? So I haven't taken any money out of my newsletter yet. I've reinvested everything in growth. And that's part of the reason why I've been able to grow so quickly for what is a niche startup founder focused newsletter. And also, you know, have the newsletter business as a whole, uh, be closing in pretty rapidly on a million dollar run rate. Louis Nicholls: Yeah. And I'm really excited to dig into the revenue and the growth stuff that you're doing at the moment. It's just interesting to me that because this is a, you know, it's Houck's newsletter, it's, it's your own name attached to it. It's very much personally branded. And the challenge with that obviously is it then becomes very difficult to sell. Essentially, right in the future. Like this is a, this is a personal brand. A lot of the value is attached to you being the person behind it. And we see that with other great newsletters, you know, James Clear's 321, Tim Ferriss newsletter, Harry Dry's [00:12:00] marketing examples, for example, which he actually rebranded to be under his own name, which I thought was a very interesting decision recently. We'll hopefully have him on the podcast soon to talk about that as well. But how are you thinking about this? I mean, are you fine with this? Is this sort of a, Oh, you know, I don't see this as a business or an asset. I see this sort of as a, as an extension of my personal self and as a, you know, kind of in the same way as you'd have an Instagram or a Twitter account with your own, your own name attached to it. Michael Houck: Yeah, I think that's a great question. I've thought a lot about this to me. It's sort of like a Trojan horse into a business. So I think one path could just be writing the newsletter forever, going as big as possible and just keeping it running. And then the extreme other path is, Oh, let me rebrand it right now and get ready to sell it at some point in the future. Right? The path that I'm sort of taking is let me keep this as an asset that's branded around myself for now, but as a wedge into a larger media company around, you know, entrepreneurship, startup founders. And other products that they might be interested in. So some of those might be other media products, either [00:13:00] newsletters or podcasts. I've done some ideation with my team recently on, on those and others still could be even SaaS products and software because you know, that's stuff I've done many times before. So. Yeah, I mean, we'll see where it goes. Still early days, but to me, Houck's newsletter is this Trojan Horse into like the, the Houck Media enterprise. Right. We'll see where that, where that goes working title. Louis Nicholls: Awesome. Yeah. Well, Houck media, it's, it's got a good ring to it, so let's talk about the, the business side of things then. Let's talk about revenue. You have, I think, multiple revenue streams for the newsletter at the moment. Right? Can you gimme a quick rundown of, of what those are and, and maybe how they. They might be changing in the future. If you have any plans to, to mix them up. Yeah, Michael Houck: sure. So, uh, sponsorships is number one, uh, right now we have a featured placement in both of our weekly sends and then our Tuesday send also has a tool of the week. Tool of the week is sponsored for free subscribers and not sponsored. It's, it's organic. We come up with it for our paid subscribers. Uh, we also occasionally will have [00:14:00] like, you know, in our links section, we'll occasionally have like a featured link. I try not to do that too much, but sometimes I throw one in there if it's a good fit for our audience. We also have subscriptions. So launched a subscription plan about the beginning of June. Uh, so about two, two and a half months ago now, and we're, we're at about 400. paid subscribers. So, uh, they pay 15 a month or 150 per year. And for that, they get access to a founder community. I do some events for them. We have a standup masterminds, all sorts of different things, a resource library discounts and perks. There's actually a lot of value packed in. I should probably charge more for it, but I want to add, I want the newsletter to be worth 15 and I want the community to be worth 15 individually, like independently. So those are the main two today, you know, naturally when you run a newsletter. And it's a B2B for all things, uh, all purposes. Naturally, there's, you know, going to be consulting and advising opportunities that pop up from that. Also, because it's startup founders, there's also like investment, angel investment opportunities on the how to spend the revenue side. [00:15:00] But I get some consulting work, very, very limited amount. I try to limit my consulting hours so I can focus on my own business. We do a little bit of that. Obviously, Leverage SparkLoop for some great affiliate revenue coming in from the recommendations that I, that I put out there when people sign up that varies from month to month, but our highest month so far on SparkLoop was about 6, 500. Yeah, and then I've recently launched a marketplace product called Megaphone, where you can get content amplified by big creators in your niche, you know, not these random meme pages, but like actual big creators, you probably already follow. Uh, who I have relationships with and who trust me to put them on the platform and there's a subscription to access that. And then also you can spend money on the platform. We take 0 percent of your spend. We just take the subscription up front and then a share of creator earnings on the back end. So that is a very new, only a couple of weeks old, but rapidly growing revenue stream. That'll probably be my biggest one, uh, before the end of the year. Louis Nicholls: That's awesome. I really like that, that blend of thinking. And I wish more newsletter operators did that because it's, we've had a really tough couple of years, I think, in the [00:16:00] industry where. People didn't consider newsletters to be a business at all. And they would just use the email, what they would call an email list to be essentially a funnel into courses, products, their own consulting, whatever it was that they had, maybe even, you know, an actual product business behind the scenes, those were really profitable. And then you had this rise of, at first you had the sub stacks with the paid newsletter where it was 10 a month for everybody and a few people did really well from that, but most people really struggled and it was a really inefficient way of doing things. And then you saw the swing to the Morning Brew style, oh it's adverts all the way, and then we've had the last year where ads have been, been tricky and people have been, well, we can make a lot of money doing, doing it some other way. And. I'm really, really bullish on really excited by newsletters doing what you're doing, where you have basically the entire value ladder of the newsletter as a business, everything from sort of upscribe where you know, whatever it is, 2 per subscriber on the front end immediately, not a huge amount, but very quickly all the way up through paid newsletters, sponsorships, coaching or [00:17:00] consulting, and then into. An actual product that you can use the audience to, to leverage into. Right. I think that's, that's, if I look at the media companies that seem to be doing really, really well, like, uh, I think Betches, for example, media is a really good example of that Barstool, really good example. I think they nail this and I would love to see more newsletter operators doing, doing similar. Michael Houck: Yeah, I totally agree. Especially when you're, when you're just starting out, you're not sure what your. Killer revenue stream killer product is going to be so it makes sense to experiment and then allocate your time based on where you find success and what resonates with your audience. Louis Nicholls: Yeah. So you said that you have all these revenue streams and they seem to be doing really well. I mean, I think you said you're a million dollar run, right? Is that right? Close. Not quite there yet. Close. Not quite there yet, but I'm sure by the time this comes out, you will, you will have hit it. So let's assume, so you're roughly there, but you're trying to stay cashflow neutral. Tell me about that. Tell me about, you know, how you How does that factor into growth and how are you growing so aggressively? What's, what's been [00:18:00] happening since you made that shift at 10, 000 subscribers and went full time and have just exploded the newsletter up in, uh, over the past two or three months? Michael Houck: Yeah. I mean, you know, we have, we've tested out a couple of different ways to grow. And I think, first of all, let me just say like, I, I'm personally in a fortunate position where I don't need to be taking money off the table for the newsletter right away. Obviously not everyone has that. Opportunity, but it's definitely beneficial to keep your, the money you're taking out as, as low as possible in the early days. You can get that growth flywheel started sooner. Uh, but for us, you know, we spend a good amount of money on, uh, paid ads. So paid acquisition through Twitter, Instagram. Facebook. We've thought about Tik TOK, but we haven't done it. We thought about other newsletters, but we haven't done that. So most of it just goes into like, you know, me mad and testimonial ads and things like that. Obviously we also spend a good amount through the spark loop network. We have partner programs set up. I think our budget is like 20, 000 a month on there. Uh, we've recently raised that from, from 10 cause we've been seeing really good, really good quality of subscribers come through. You know, we also spend money on like other [00:19:00] growth experiments and things like that. I have a designer who works a little bit part time for us as well. So there's like salary and wages for the team, but on the growth side, yeah, it's mostly paid acquisition through ads and spark loop. I do a lot of content marketing as well. You know, I have 90, 000 followers between Twitter and LinkedIn or X and LinkedIn, I should say. And so create a ton of Twitter threads that I write, put them out there and LinkedIn carousel posts. And then I have through megaphone, I'm able to amplify that. And also just through my own personal network, I'm able to amplify that. Uh, with other creators in, in my niche of, you know, startup founders and venture capital. Uh, so those posts tend to get, you know, some attention, which is nice. Louis Nicholls: Yeah. Awesome. Is there any, any experiments you've tried on the growth side that haven't worked out so Michael Houck: well? Well, okay. An interesting one is we, we did really well initially with these, but I've sort of soured on them. Uh, is it like lead magnets leaning into them? So when you combine the power of amplification through megaphone, or just through your own network on social with like auto DM features, and we use tweet hunter for, [00:20:00] for Twitter. So, uh, you can auto DM people who like comment or retweet on a post. So back in March and April, when I was first going like full time on the newsletter, I wanted to grow the subscriber base really quickly to get more revenue coming in from, from ads and just be able to monetize better. I ran a couple of these lead banks, I think we ran five in total. It was like every Friday for like a month or a half or so, we ran one. Uh, and it was like, you know, a database of how, of all these investors or a database of pitch decks that have been successful in the past of like hundreds of them. Right. And they all did really well. Cause they really resonated with my audience. They were spot on, but in order to access them, you had to give us your email. And it like, you know, card lets you link it right to a lot of ESP. So it worked for us and we got as many as like 2000. I think one of them was 2300 subscribers in like a 24 hour period, which is nuts. When the newsletter was at like, you know, 15 K subscribers and it worked really well. We were able to grow fast enough to start working with like Matt McGarry's team [00:21:00] for, for ads. He's been a great partner for us. But the problem is that a lot of those subscribers ended up not sticking around for that long in terms of like. Being engaged, they were just kind of indifferent. Like they kept getting the emails, but I had to clean my list. I clean my list every week. So I keep cleaning my list and removing them and their open rates were, you know, in the thirties, which is just not what I want to see. So I've kind of soured on that as a strategy. It kind of worked because it let us get things moving. But I don't know if I'd run a ton of them today anymore. Louis Nicholls: Yeah, it's so interesting that that topic of, of, of lead magnets where you, I think a lot of people coming into to newsletters from, from working in other spaces, they naturally gravitate to lead magnets because it's what works so well in like the SaaS industry and even in DTC and other places like that. But the challenge, I think, People underestimate when they come into the newsletter spaces. It's not necessarily in finding people who are in your niche. Like it's not actually that hard to target people who are interested in startups and founding and venture capital and stuff like that. [00:22:00] What's hard to do is to find the subset of those people. Who also want to read content in a newsletter format, right? And it's the same with podcasts. It's not hard to find people who are interested in topic a, it's kind of difficult to find people who are interested in topic a, and who also wander around with headphones in for 45 minutes and want to listen to two people talk about it. Right. That's the, I think, I think the, the bigger challenge almost. So it's super interesting to hear you say that the least few so far lead magnets, you get the people through the door, but you can't really. Convert people who aren't newsletter readers into becoming newsletter readers effectively. Michael Houck: Yeah, I think that's right. I mean, we have a ton of subscribers from those few weeks who did come in through the lead magnets and have stuck around, but as far as like a percentage of them, it was just, uh, yeah, it's a big shiny number at first, but it ends up not being what you, what you hope. Louis Nicholls: So that's one thing that hasn't worked necessarily particularly well for you and you mentioned that, you know, it was that was based mainly on looking at the engagement of those subscribers with you running this as a business, [00:23:00] what are the main numbers and main metrics that you are looking at on a regular basis? How are you sort of assessing? The performance other than the headline numbers of here's how much revenue we're making and here's how many subscribers we've got, which are nice vanity metrics, but, uh, maybe not telling us all that much other than, uh, the headlines. Michael Houck: Yeah. I mean, for me, I treat a person who pays for a subscription. To the newsletter, the premium version and the community and all that as like way more than 10 X more valuable than having a person subscribe to the free newsletter. Cause like, yes, you can take more shots on goal with the, you know, having a larger top of top of your list and the free version, but they're less engaged. And if they're not paying for the. The paid version of the newsletter, they are probably less likely to pay for other products you put out too. It's not exclusively true, but just as like, tends to be that way. So for me, my number one thing is like, how many people can I get to convert who join to the paid version? And I test out different landing pages and different messaging, um, and different welcome email campaign drips and things like that [00:24:00] to drive that conversion number up. Because, you know, think about it. If you're adding every incremental subscriber that you add to your free newsletter is probably what, like 10 cents of incremental ad revenue per issue. Right. Maybe. So you send out, you know, I send out, what is it like nine issues per month, nine to 10 issues per month. That's an extra dollar. Per month per subscriber that I'm getting, but if I can convert one of them to the paid version, that's 15 a month. So it's way more valuable. And so for me getting my subscription offer in front of people in as many places as possible is worth it. Even if I increased churn as a result of that from the free version, unless it's like 10 X churn, then it's more of a wash and a trade off. So yeah, for me, conversion to paid is top of mind right now, obviously with like the actual newsletter itself, you want to see that people are. Engaging with it. They're clicking on things, especially for our ad partners. I want to make sure that that they get a good ad CTR with everything that's going on with like Apple mail and their privacy [00:25:00] protections. You can't really trust open rate. Anymore because Apple mail, like automatically, allegedly automatically opens every email they get if the person opens the app or something. So I have a segment carved out of like, Hey, but here are my Apple mail subscribers and here's everyone else. Let me see how I'm doing with the everyone else cohort. So, yeah, I would say that actual click throughs, both on ads and in general, as well as conversion paid are the most important things for the newsletter on the business side, I think it's maybe a little, a little different because we have multiple revenue streams and multiple. Uh, areas of focus as a result, I see megaphone as this like very high growth potential product that we have right now. So a lot of my. Personal focus and time and how I'm thinking about optimizing the business is around driving people to that as much as possible. Louis Nicholls: I guess it's difficult to quantify for you most likely, like what the lifetime value of a subscriber is, including things like Megafone, right? That must be, must be a challenge. Michael Houck: Yeah, honestly, you know, I sort of fly by the seat of my pants a lot with this stuff. It's, it's [00:26:00] an early stage business is the way I'm treating it. It's not a business, I think, however. Want to, or even if I wouldn't want to be able to raise venture capital for just because the ceiling isn't, you know, 1000 billion. So for me, it's, it's an early stage business. I'm still developing it. I'm not super focused on like being the most data driven. I trust my instincts a lot. Um, that's something I learned when I was working one at Airbnb and at Uber and then two, when I was, you know, getting my own startup off the ground, a lot of times. You might get the wrong signals from data early on, and it's, it's always better to take qualitative feedback in the early days because you can actually listen to what your readers or your users are are saying. So for Megaphone, for example, we don't even collect a ton of data right now. It's just I'm having one on one conversations with with our early users. And on the newsletter side, I'm relying on the metrics a bit more because that's a bit more established. Louis Nicholls: Yeah, for sure. For sure. And one of the things that you said there was really interesting to me about the, the comparison between the value of a free subscriber and of a paid subscriber and the trade off of, you know, optimizing [00:27:00] for, for paid subscribers, because they are obviously so much more valuable than a free subscriber at the same time. There's a challenge with the content sort of schedule and quantity and quality, right? You are presumably keeping back some of your content, some of your best content, and making it available only to people who pay. Now, if that content were free... There is an argument that while so many more people would find it and share it and love it, that you would potentially be able to get in front of a lot more people and grow the audience. And then they would, you know, even though they're making less per subscriber, you would, you would make more from in total because you have so many more subscribers and, and stuff like that. So obviously. I have absolutely no idea what the right balance is. And I think most people don't, to be honest. I don't think anyone really has a good handle on this. But how were you thinking about that when you, because it's been a recent decision for you to decide to go pay and decide what stays free and what gets paywalled. How did you split that up? What what felt like the right balance to you? Michael Houck: Yeah, so definitely grappled with this [00:28:00] in the lead up to the launch a lot and then have kind of seen things develop and made some changes since then. So let me first I'll mention like what we do and then I'll mention like. Why we're doing it that way. So for what we do, we have the two posts, Saturday, deep dives are one free per month, and then the other three or four, if it's like a longer month, but the rest of them are paywall. And so I send them out to everyone each week, but there's a paywall break, like, you know, only a third of the way through or a quarter of the way through or something like that. So the majority of the pieces is hidden. And if you want to keep reading that week's topic is interesting to you. You can just sign up for the paid version right there. And so every Saturday. That drives actually a decent amount of paid subscribers just within the first few hours of sending the newsletter out on the Tuesday send that's always free, but I've started to add some like sections within it that are like blurred out and then the paid subscribers see the section and the free subscribers get like a little note on top of it. It says like upgrade to see my full analysis here [00:29:00] or like get extra links this week is another one that I do. Bye. Bye. And that drives even more subscribers than the Saturday one, which is crazy. So I definitely get some people who are like, Oh, why are you doing this? Like, you know, why can't I see this? Whatever. And, you know, I talked to them and I'm like, Hey, this is why I'm trying to run a business, et cetera, et cetera. But it works. They drive, it drives subscribers in both cases. And that's been a good steady flow for us. Tuesday and Saturday are our biggest days for new paid subscribers every single week across the board. I guess your, your point was like, how do you judge the value of. Those paid subscribers versus, you know, hoping that the news don't get shared by more people. If I made every deep dive free. Louis Nicholls: Or I guess another question, just to clarify it, I guess a little bit. Before you launched the paid, did you have the, do you have the same two editions, but both free? Michael Houck: Yes, I just launched the Tuesday one. A couple of weeks before I launched paid, I think like four or five weeks before I launched paid the Saturday one had been the same since, you know, I launched the [00:30:00] newsletter in H2 of last year. Louis Nicholls: Yeah, and the Saturday one is now the one that has become paid exclusive is interesting. How did you sound out your order? That must have been a really nerve wracking moment to say, Hey, you know, you've been receiving this on Saturday. Well, you're going to keep getting the Tuesday one, but this one is now, is now paid. Michael Houck: That was my, that was my establishing the Tuesday one for like a month or so beforehand was so important because. It wasn't, Hey, I'm shutting off access to the content. It's, Hey, I need to monetize my business. Here's, you know, founders understand that my audience understands that. Right. So made it a little bit easier than I think some other niches might've taken it. But I do think I have a thought on the, the idea of like. Leaning in on organic share free newsletter growth versus paid subscription. So for us, I think that at the scale we're at, and even at the scale we were at when we launched paid back at the end of May, beginning of June, the amount of shares that we were getting and the amount of organic new subscribers incrementally that we would get by keeping it all free is [00:31:00] substantially lower. It's a very small percentage of our growth relative to how much we're spending on paid acquisition, because we're all in, we're spending all the money we make basically. So because that ratio is where it is, yes, we definitely lose a little bit of growth, but it doesn't impact our. Our growth rate substantially. So for us, it was the extra subscription revenue was, was more than worth it. Louis Nicholls: Awesome. Well, that's, that's great. And one thing I want to, to ask you before we, before we wrap up is about sort of your experience coming in, taking this, you know, more seriously, making it almost your full time thing. What's something You've learned from doing this over the past couple of months. It could be a mistake. It could just be something that was completely new to you. What's something that, that if you could sort of go back to an earlier version of yourself and say, Hey, do this differently, or think about this more or whatever it is, what would be the one that stands out to you? Michael Houck: Yeah, I would have launched paid from day one. I think, you know, for my specific case, it was a side project for [00:32:00] another business essentially. So it might not have made sense, but if I was starting a newsletter from scratch today and going back to when I decided to take the business more seriously, and then didn't launch paid for a couple months, I would launch the paid version right away. It's just so valuable to be able to build deeper relationships with your subscribers and also to have them much more driving more revenue for your business than, uh, than they'd otherwise be doing. So, yeah, I highly recommend it. Even if you don't have your offer like totally planned out, you don't have. You know, the most detailed user research and what people want from you just to ship it, just launch and test and iterate over time. Yeah, that's something I take from growing a startup a lot is like, it's better to just launch it, get it out there, always be launching stuff, right? Just get it out there. Take your feedback. It's not all going to be roses and sugar plums, right? It'll be, it'll be tough stuff in there. Take it iterate on your business to find like, in this case, content market fit, right? Louis Nicholls: Yeah, definitely. I love that. And it's, it's making me chuckle a [00:33:00] little bit because having been in the startup world myself, it's the same advice, but it's actually, it's much better for newsletters because if you, if you go to a startup operator and say, you know, a common complaint I will hear is they will say, Oh, well, you know, I have pre launch and I've, you know, it's 30 a month or whatever it is. I have 10 people, 10 friends of mine who've already signed up to pay and I've just sort of gently break at them and say, look, Hey, you do realize that we've spoken for 20 minutes in total. And if you ask me to support you with 30 a month in the future, I will happily put my credit card in just to like give you that little kick and support you, but I'm never going to use this useless product that you're building. So I think in that sense for startups is actually a really dangerous thing. But for a newsletter operator, it's fine because. You kind of don't really mind that they're just supporting you. They want to see what you're putting out into the world exists. It's how Twitch and YouTube and all the subscriptions on, on, on Instagram and Twitter work. It's, uh, you know, it's, it's, it's fine that they're supporting you. You will find the content that they want eventually. Whereas with a startup, that's [00:34:00] not necessarily, you know, you're taking that as, as, as. proof that they want the product itself, which is a lot more dangerous. Michael Houck: Yeah, it's super dangerous because you can, you can be like, Oh, this is our target market. Let's build features for this. But with the newsletter, you can use kind of an implicit understanding that those couple first early subscribers are maybe just your friends who want to support you. Louis Nicholls: Yeah. Well, I don't want to jump into the topic of startups because we could be here all day and I want to be very conscious of your time. But one last question before I do let you go. So we've been talking about your newsletter and everything for the past, you know, on 40 or 50 minutes at this point. But what's something that's unique to your newsletter, something that you're doing differently that you haven't seen other people doing often or at all that we didn't really touch on? Michael Houck: I mean, I definitely don't think a lot of people are doing a few things I'm doing. So one using. The like sort of blurred out really, really forcing people towards the upgrade as much as possible. I think I sell that a lot harder in the newsletter than a lot of other folks who [00:35:00] have subscriptions, at least that I see. I also think like communities is somewhat like a lot of newsletter operators are allergic to the word community because they know it's a lot of work for me. I built communities before even startup founder communities before. So for me. I probably spend, I don't know, over 40 hours a week for sure. Even just outside the newsletter, working on the business and working on the community and spending time with my members, do office hours every week and like intro one on ones to every paid subscriber who wants one. So I think when you're building the paid plan, you really need to deliver enough value, like 10 X above what the price is in the early days to get that flywheel going. And I think a lot of other subscription offers that I see don't necessarily go that far with their time. And so I think that's a differentiator for us. And then the other thing is just what I mentioned earlier, which is I'm not trying to make money from this right now. I'm trying to keep our, I'm trying to burn money as much as possible, right? While still keeping my personal finances afloat so that we can grow faster. So I don't think a lot of newsletter [00:36:00] operators are thinking that way, at least especially at the stage that I'm at. Louis Nicholls: Yeah, so being more aggressive, pushing those those blurred out sections, which I love, by the way, we a couple of years ago, we didn't necessarily do that for for upgrades to paid, but we pioneered that as a as a referral reward, you know, make one referral and unlock the extra section. And that does work really well, if you have a compelling extra section, you know, that FOMO, that curiosity of what is this blurred thing that I can't read, and that everyone else can is it can be if you have engaged readers, it can be super effective. Michael Houck: Yeah. I mean, you're trading off of your trust, right? If your audience trusts you, then they'll be more likely to do that. If they're unengaged and just passively reading your newsletter, you know, that's also where the personal branding aspect comes in too, right? They feel a connection to you. They want to see what's on your mind. They'll be more likely to do that. Louis Nicholls: Yeah, for sure. Well, Michael, where can people find you? Where can they find the newsletter? Where can they follow along? Michael Houck: Yeah, totally. So the newsletter is just at halk. news. And then you can find me on [00:37:00] Twitter, @callmeHouck, LinkedIn, Michael Houck. Uh, those are my main channels right now. Louis Nicholls: Awesome stuff. Well, Michael, thank you so much for joining us. It's been great. And I hope that you will come back and join us when you are at, I don't know what, 500, 000 subscribers or so, and let's say 10 million ARR, and we can talk about how you got there. All right. Michael Houck: So we'll, we'll, we'll chat in a year or two. Louis Nicholls: I was about to make, you've stolen my joke. Okay, there we go. Perfect. We'll, we'll leave it at that. Thanks, Michael. Thanks. Thanks for listening to this episode of the Send Grow podcast. If you liked what you heard, here are three quick ways that you can show your support. Number one, leave us a five star rating or review in the podcast app of your choice. Number two, email or DM me with some feedback with your questions or with suggestions for future episodes. And finally, number three, share your favorite quote from the episode on social media. And tag both me and our guest. All of the links for that are available in the show notes and [00:38:00] whatever option you choose. I am really grateful for your support. Thanks and see you next week.