Latest / Send & Grow by SparkLoop / From Layoff to Payoff: How a laid-off journalist built & sold a paid newsletter — with Matt Brown of Extra Points
Transcript
- S&G - Matt Brown === Louis Nicholls: [00:00:00] Welcome to the Send and Grow podcast. I'm your host, Louis Nichols. In my day job at Spark Loop, 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 firsthand 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 Matt Brown. I've watched Matt grow the Extra Points newsletter from a lockdown project to a sustainable business. Running a niche publication like Extra Points with a paid subscription revenue model is a challenge, but it's a challenge [00:01:00] that Matt's more than ready to handle. In today's episode, we'll get into exactly what's working, what isn't, and what's next for extra points. But Matt, to kick things off, can you give us an intro to the newsletter in your own words? Matt Brown: My name's Matt Brown. I am a sports writer based in Chicago, Illinois. I've been running extra points that name the newsletter for full-time, for a little over three years. But I worked for Vox Media managing their Espb Nation brand for about seven years before then I, I entered as a relatively junior level, you know, analyst slash writer, and then kind of moved up to eventually running a lot of their team site college sports programming. I came into this whole industry sort of through the back door. You know, I don't have a journalism degree. I have a degree in political science. I, I used to be an elementary school teacher. I used to work in political field organizing. I've done some HR work and, and sort of, you know, came into journalism through the back door. I then came into entrepreneurship, not because I [00:02:00] had long this, this was the product that's a long time goal that, that I, you know, I, I I yearned to free myself from the shackles of, of editors and, and, you know, gonna business myself. Extra points was found out, desperation. 'cause I, I was laid off, you know, in April of 2020 as the pandemic was heating up. Sports across the world were canceled. And my, the other kind of things that I, I could do for work, whether that was, you know, PR work or HR consulting or any of these other things. Well with, if the global economy's slowing down, I can't do any of those. And so I started extra points because I needed a job sit and I originally thought, let's just lift this ride for eight months and then maybe I can use this as a springboard for other full-time employment. And it grew so quickly. So fast that before I, I quickly realized actually, nope, this is my job. And, and kind of rolled into it there, the, the newsletter Louis Nicholls: itself. Yeah. Let, let's talk about where that is, where that is today, because I want to go back to the, the origin story and talk about how you got started and how you came up with the idea and where you got your first subscribers from and all that kind of stuff. [00:03:00] But let's talk about, just give listeners an overview of where you are today, who it's for, what do they get outta the newsletter? Sure. That Matt Brown: basic stuff. Sure, sure. So, so extra points today, publishes four times a week. Two of them are free, two of them are behind a premium paywall. I cover what I call the off the field forces that shape college athletics. So this is a newsletter that writes a lot about business stories in college sports. I write about media rights negotiations. I write about apparel, contracts. I write about hiring and fing. But it also includes things like the educational research in sports management or how athletic departments, you know, interface with the university's higher goals. What different people within the industry besides coaches do, and this broad mandate of everything that isn't the actual games themselves. The newsletter right now, you know, it includes original reporting for me, it includes, you know, deeper analysis. It's not really a curated newsletter so much as, as it is a column every day. And, and it, it [00:04:00] serves three different audiences. And, and right now about all three of them, roughly equally, it's a newsletter four on one hand, a term that I say with deep love in my heart, gigantic nerds. If you are an American college sports fan and your fandom is so deep that you're gonna read a story about how people are selling tickets more efficiently, I'm your guy. And there's not a million of those people. But the, but enough of them exists that, that, you know, we're able to, to profitably run this. We also run this for current industry leaders, current industry practitioners. So that might include an athletic director or a conference office leader, but it would also include academics. It would include people that work in the shoe industry, the television industry, and a lot of other reporters read this newsletter. And the people that are working in the growing name image, like this industry, that's a more traditional B two B. The third segment, which I think is pretty unique, is that it's also serving students. We have thousands of students who are studying sports management thinking they might want to go into athletics. Administration and [00:05:00] schools use this as a textbook. It's a, it's a sign to 'em. They're, they're quizzed on it. And, and they, they, they read this because there's not really a whole lot of up-to-date current textbooks given that this industry is changing so quickly right now. And so we have to think as we write things. We probably can't serve all three of our readership groups with every single story, but we could probably hit two out of the three, and then we need to rotate to make sure that everybody's being efficiently served. Louis Nicholls: Got it. So it, it's three audiences that have the, the same newsletter written for them, essentially. Yep. And is the free and, and the premium version, are they both targeted all three audiences or is there a difference between the two? I, I would Matt Brown: say that the, the, the paid audience is probably targeted more towards either the B two B or the academic side. And the, the generalist is more towards free. There's, there's a couple of exceptions. I mean, as, as I sit down and decide, is this a paywall story or is this a free story? My general impulse is the stories that are gonna appeal to the broadest possible audience. We should generally make [00:06:00] free, and if I'm sitting down with an economist to discuss their new white paper about how much you might be able to make for selling naming rights for a stadium, I could probably charge for that one, because that one's not for everybody. Got it. Okay. Louis Nicholls: Awesome. And give us a sense of the size of the newsletter, where it is today, and the revenue streams Matt Brown: as well, if you can. Sure. So right now, A newsletter has close to 16,000 total subscribers, like 15.7 a thousand and, and around 3000 ish are, are, are paying for it. They're not all paying the same price and which, and it's, it grows, you know, about two and a half, 3% for month over month. We make money a little bit differently, I think, than other newsletters of this size because while I, I do sell ads and we do run affiliate market marketing occasionally, probably. Well, north of 90% of our revenue comes from premium subscriptions, and while there we have the retail price, which is $8 a month or $75 for the year. We [00:07:00] also sell bulk subscription packages, and we have a, a product that's called D one Classroom specifically for universities. What we do is we, we, we actually have a full-time salesperson who will call up a, a university or maybe somebody I have a relationship with and say, Hey, you've got 125 students. We'll give, uh, everybody access to extra points and we'll also give you some extra products, maybe some, some custom classroom discussion questions or another new product that I'm sure we we'll probably talk about later, which I know is very unique in this world. And then it will, we'll, we'll give all those, you put all of the, the signups on one credit card and I'll give it to you for 60% off, or I'll give it to you for a flat two year contract. We have a couple of schools that will, you know, pay us $7,000 a year to give this to everybody. And that's what we're trying to, to eventually transition, transition to. It's a long sales cycle. It's not something that works for everybody, but it does give us a lot more income, predictability and stability as we grow the newsletter. Louis Nicholls: Got it. Okay. And you're saying we, who is, who is we? What's the, [00:08:00] the team? Matt Brown: It's a, it's a good, it's a good question because like, I started extra points in 2020, completely independent, you know, my, but my copy editor was occasionally my wife. I did that for a year and I, I, I, I learned that. I could not effectively grow this newsletter to the place where I thought it could be by myself. 'cause it's a, I think a similar challenge that many of your listeners are gonna find here is that you might be an expert at content, or you might be an expert at marketing or an expert on tech, but you're probably not for all of those. And, and for some context, remember this is 2020, you know, most of a, a lot of American institutions are shut down. I have two small children, so I was trying to run this business and wear four different hats and then also teach like Zoom. First grade, and I had a, a, my youngest daughter wasn't in, in, in pre-K yet, so like I was dying. But, but I was also fortunate because when this started, because the business of college athletics was becoming a more important news vertical, many entities [00:09:00] reached out about buying me and I, I talked with several of them and I ended up partnering with a company called D one Tinker, which is a, not a big company, it's about 10 employees, but they are a, a, B two B. Focused just college sports industry publication. And so the way that it works now is that I'm technically an employee there. I have full editorial control over the newsletter that most of my job, they share some of the operational expenses in exchange for revenue share. So D one ticker has a full-time sales person who spends most of his time selling subscription packages for extra points. And we share some of the tech costs. So we share some of the, some of the backend things to help the whole Louis Nicholls: enterprise grow. Got it. Awesome. Well, let's talk a little bit about the, about the early days about how you, you came to this idea. So it's the pandemic, you've been laid off. It's a terrible environment for sort of moving on career-wise. Things are completely up in the air. I, I vaguely remember it. I was, uh, it's roughly the same time as we started Spark gls. So it was a a time when a lot of, a lot of people were trying out new things. [00:10:00] What was it that made you, I mean, you, you've spoken about how. This was sort of a move of outta necessity in a sense to, to need to create a job for yourself. What led you down the path of this topic for a newsletter specifically? Matt Brown: Sure. You know, I, I, I had been experimenting in newsletters for about nine months before I was laid off, and what, what attracted to me about the foreman, Was that idea that you didn't necessarily have to chase scale to be effective. And, and, and this is one of the challenges in American sports meeting, I'm sure this is probably true in Europe and in South America and other places too, that the majority of those publications are, are free and they're supported by programmatic advertising, which then puts a real pressure on chasing traffic and scale. And so what that means in, in college, college sports coverage, which is the world I've been in for such a long time, is it is it kind of incentivizes a homo uh, homogenous coverage, right? I would need to chase the biggest stories involving the biggest [00:11:00] brands to get the, the biggest bunch of clicks. And what I found here is like I'm a guy in Chicago and if I'm competing against E S P N and I'm competing against Fox Sports and these legacy outlets, Broadcast rights and have, you know, mo favored nation status in covering some of these leagues. I can't be competitive. It's very difficult for me to think of something to write about Ohio State Football. Even as an alum, that's gonna be very different and unique from the 44 other people who are covering. But I have found, you know, over my experience of, of being a sports writer, but there's a couple of little sub niches that I have developed real expertise in that everyone else isn't doing. I have have gotten pretty good at filing open records requests to look at financial data for a lot of these, a lot of these programs, I've gotten pretty good at developing relationships with smaller institutions, and it didn't really make sense for me to write about those a whole lot. I had an outlet that needed 400,000 page views so they could go sell an ad for Chase Bank. But if I had, if I own my audience and I can write to maybe a thousand [00:12:00] or 2000 people, I can monetize that in a different way. So the thinking here was, okay. I don't have access to scale. There's aren't really any scale stories happening right now because it's 2020, but there are a couple of sub niches here that I can feel pretty confident I can do better than almost anybody else, or at least that aren't being served. And they're also the things that are more intellectually interesting to me. You know, because I came from this, I. This different background, you know, where I had been in education, where I had been in politics, where I had to do these other things before going into sports writing. I, I knew I, I had subject matter of knowledge of the whole world that maybe somebody that just went to Northwestern or Syracuse and immediately went to cover high school football might've missed because it, college sports in America are very unique that way in that they're not just sports franchises. They're out, they're, they're literally attached to universities. And how that money is spent is political in nature. So that that was the bet that I could really niche down on something where I have unique knowledge and see if I could just hyper serve a smaller chunk of people. And I, I [00:13:00] did not anticipate the reaction to be so strong so quickly. I think I had. A hundred paid subscribers within 48 hours and, uh, you know, was able to, to make real money in less than a year, or just one guy probably doing things wrong. Which, which gave, you know, that was, that was the good proof, proof rather that, that the, the market was ready to respond to this. Louis Nicholls: Yeah. Well, that's awesome. 'cause you've, you've touched on, I was just thinking about which of the two questions I want to ask first, and you kind of touched on both of them there. So you said you had a hundred paying subscribers almost from, from day one. Yeah. When you started the newsletter, was that, I mean, as you're thinking through that process, obviously what I find interesting about this is you started this very much as a business and a lot of newsletter operators, especially the solo ones or the ones who start off solo, I. They aren't that intentional about the business side of the newsletter. It's more I'm going to write some stuff that I enjoy and I think there's something here and oh wow, this could be a business and an opportunity and we'll, we'll think about that later. You made [00:14:00] very clear that this was something that had to be generating revenue, that had to be profitable pretty quickly 'cause it was gonna be supplanting the, the, the primary revenue that you had. When did you decide, okay, paid subscriptions is gonna be the way I'm gonna do that, and also where did those first a hundred subscribers come from? Yeah, no, I mean, Matt Brown: I you, you're racing. I think actually an important point, and I've had this conversation a lot with other operators because, you know, unfortunately there's a lot of journalists that have been laid off over the past couple of years, but most of them don't really, or didn't really have a lot of exposure to the business side of media before they went independent. Like, all I wanna do is write and, and that's okay. When I was at Vox, I had to help sell and packages. I had to manage a budget. I was much more involved in that world. And so being very intentional about it from the beginning didn't feel strange or unfamiliar. That was just what, what I had to do. And I was fortunate that, you know, I had, I had some buyout so I didn't have to be cash positive on day one or, or else I wasn't, I was gonna be [00:15:00] homeless. I had been saving money for this particular event. Wife was still working. So, Wait, you know, that made it easier than how I, I started from the very beginning, but you're right, I was very intentional about this has to be profitable. This has to, I need to have a growth strategy. I need to be analytically minded and I need to make, keep my costs down. And I'm gonna try to make a go out of this, the, the, the first hundred or so subscribers and, and really the first thousand-ish free subscribers came from the fact that I was not starting from zero audience. I like to joke that I wasn't even the most famous Matt Brown writing about college sports when I started. There is another fellow who works for the Athletic, who has my same name. You know, my, my ss e o is terrible and I'm, I'm not a famous guy. Not on TV very often. Louis Nicholls: Oh, you, you are not him. Oh, this is been a terrible, uh, terrible mistake booking. Sorry about that. We're, Matt Brown: uh, it wouldn't be the first time that I've done a radio or done something and they're like, wait, you're not the other guy. But, and, and it's funny 'cause like we're friends, we're about the same age and have a lot of things in common. But I, I, I did have an audit, so [00:16:00] I did have, you know, 15,000 Twitter followers. I had written a book I had been in. If you were really in the weeds of college sports, you probably knew who I was. And so, you know, when I put out to the world, Hey, you know, our stupid corporate overlords at Vox have, have laid me off. I'm gonna make a go out of this. I wasn't starting from scratch. And I, I think that's important. You know, it, it's much, much easier to start from a thousand or start from a hundred or, or being able to say, okay, I've got 800 bucks m r r coming in than it is from nothing. And so I, I had a little bit of a head start, but I wouldn't, the only way I was able to grow that it was by being intentional and creative with how I generated earned media and what I wrote about, because I didn't have a budget for a paid audience acquisition. And furthermore, even if I did, I wouldn't have known what to do with it because that was never something we, I had really experience with at v. Louis Nicholls: Yeah, it's, it's interesting the, the business model you went into is almost the complete opposite of what someone like Vox is doing, where they are very, very good at getting traffic and, and not particularly good at [00:17:00] monetizing. That in, in terms of, you know, compared to something like a a, a paid subscription newsletter where it's very niche and finding the people is hard, but, but monetizing that can be, can be quite lucrative comparatively. Matt Brown: No, it, it's funny you mentioned that because that was a reoccurring struggle when we were there too, right? And, and, and that, and that's something I think just like consumers need to understand that there's not like a currency exchange where you can go somewhere and it's like, I have four traffic, please. I would like to exchange that for, you know, $4. Because who the traffic is and what kind of traffic it is matters so much. And this was a source of, of always constant frustration, uh, for me. And many of the other, the, the sports writers or, or, you know, middle managers in that world was like, we have the audience because that audience is not perfectly aligned with the political audience that you built or the 95 corridor, you know, east coast cultural audience that you built. We don't know how to sell it. And that means our, you know, like the, the, the rates we're able to get for the programmatic ads are terrible compared to what we could give for a smaller audience, where things were more aligned. And, and the part of the [00:18:00] experience I took from that, and, and part of why I think I've been slower to jump on ads as a, as an independent business was realizing that, you know, that head sale processes is hard and it, it often takes time and it takes expertise and relationships. And I knew, I know how to be a reporter. And I know how to get on TV or get on the radio and I know how to market report. I don't know as much about programmatic ad sales packages or custom ad sales packages, and the time that it would take me to be good at that is times that I'm taking away from what I am good at. So why don't I find a business model that makes it easier for me to earn money in the short term based on what I'm good at? Louis Nicholls: Yeah, for sure. Well, let's talk about the, the audience growth side of things, because you are in a very, very specific niche where what will work for a, a daily newsletter like a. Morning brew or a hustle or a Skimm or someone like that, or even maybe even a slightly more niche newsletter, like a one for marketers, for example. That's not necessarily going to, to work for you in in such a, a small niche. What, what have [00:19:00] been like the, the primary acquisition channels and, and sources that you've used to get to, to the 16,000 subscribers you have now? Matt Brown: Yeah, you, you're right. And that was also something I thought a lot about. 'cause you know, I, I would, I would try to join Newsletterish groups and hang out on LinkedIn and, and, and read many of the industry newsletters that you put out and some of our peers do, and they're not bad ideas. I, I kept on thinking, I don't think this is written for what, what we're trying to do over the first year and a half. Overwhelmingly the two biggest sources for audience acquisition were Twitter and word of mouth. And the, the word of mouth would go, you know, There might be an athletic department with 45 people, and if we could get the ad, the, the head of that department, or an influential person in that department to read the newsletter and they're forwarding the newsletter to the rest of their department or talking about it, we could probably get a, a quarter of those other people signed up, which would, which would happen. My parent company D one ticker, writes a twice a day newsletter that's just curated. By putting my stuff in there all [00:20:00] of the time. It was a, a very regular source for us to drive more industry people in there or other reporters would look at it and they would say, Hey, this is good. You should, you should read this too. This is unique. Right. And then, you know, I, I was, I would, I would say I was Twitter native beforehand. Twitter is, is the, dom was the dominant social network for sports. It'll be a place where people are talking as a, as a second screen experience during games, during matches all of the time. And it's the native place for most sports reporters. And less so now, but over the last, you know, couple of years unquestioned. And if I'm already there all the time and I'm already building up a voice and, and, and being very conversational, I could get 50, 70 new Twitter subscribers without going viral over the course of a month. Just 'cause like that's where my sources are, that's where I, you know, that's, that's where I'm talking on a regular basis. We experimented in that first year and a half with some paid audience acquisition. We bought a couple of Reddit ads. I bought some ads on, on on sports podcasts, and we did a couple of newsletter ad swaps, [00:21:00] and those are mostly pretty ineffective. The, the podcast ad advertising did work, but it ended up being pretty expensive. We were paying like six, seven bucks for a subscriber, which, you know, I couldn't really afford to keep doing, but we never did Facebook, we never did pay Twitter ad acquisition or what we call earned media, right? If I broke a story, other news ads are gonna write about it. And we would use that to help promote what we were doing. Even later, I think around the year two mark, I hit a, a pretty big scoop about the development of a college football video game, which is very highly anticipated, you know, among regular fans and threw some fortuitous open records requests. I, I was the one to break the news when that game was gonna be released and when it was gonna be postponed and like the nuts and bolts of how it happened. And that ended up being in the New York Times that ended up being in the Washington Post that got me outta E S P N I. And you can't buy that kind of of advertising to reach our particular market because both fans, students, and [00:22:00] administrators are all watching that stuff. Louis Nicholls: Yeah, definitely, definitely. And you, you, you had a, a game of your own as well, right? Matt Brown: Yes. Yeah. So let's, let's talk about that. 'cause I think this is, this is one of the more unique things that we've. So I am not a software developer by trade, by any means. I, I don't consider myself an especially tech adept person, but I think, I think a year or so ago, I, I got this idea that, you know, I do work with large data sets a lot, and so maybe if I learned a little bit of Python that might help me analyze this, some of these data, these data libraries and make maybe help me be a better, right. Python's not extremely complicated. Middle schoolers configure some of these things. So I, I, you know, I would do like Code Academy or of course they at night or, you know, when I, when I was a slope here and as a way of demonstrating what I'd learned, you know, just like you would teach a undergraduate computer science student, I made a little game. And, you know, my newsletter is one that, that uses humor, [00:23:00] read and read. It uses an informal voice when talking about technical things. So I wrote a very simple python like text adventure called Athletic Director Simulator 3000. And the idea was like, and you know, you're the in charge of a university and you have a couple of scenarios and, and you get to pick and, and it was extremely low tech, all, you know, tech space. It was silly, right? I, I think the way that you won the first version of the game was by buying lots of subscriptions to extra points, right? And then like, oh, well, you know, it's, here's an extra $20 billion to your department. And it was, it was a fun little joke for Reddit people. What we were, what, what, what we didn't expect was so many people in the industry who played this very stupid little old game that I think any 14 year old could have done and said like, we loved it. We wish we could play more of it. You should keep working at it. And then my parent company said like, well, what would it take for you to make this a real game? Like, well, I need to learn how to code and, and someone else and have to do some of these other things. But we, we, we talked about it. We ended up actually turning it into a real thing, which we released it two weeks ago. And [00:24:00] what we did is we partnered with a, uh, a third party contractor to kind of build out, flesh out the game a little bit more in Java and Construct three, which is like a no code game engine. We built it to look like the organ trail, so it's black and green graphics. So it looks like it came out in Apple two E like I think in the press documents of saying like, your favorite sports writers have built 1980 three's, hottest computer game. You know, it's eight bit audio and everything. And, and, but what we did is we, we built out this really robust question scenario database, and we vetted it against real administrators and real coaches and, and again, and, and tried to couch this in, you know, a pretty realistic journey. And then players have to respond to these questions while balancing a budget and their support and the wins on the field. Like if you, you, if you fire up a copy of the Apple two or Omega versions of football, this doesn't look that dissimilar from that. And what we've built to thinking it's worth us spending six or $7,000 to build this game and hopefully maintaining it won't cost us that much 'cause my programming skills have gotten better [00:25:00] and as, as have our teams. But we can use this. To help us sell the classroom package because instructors will look at this and think like, this is a useful thing that we can use in our classrooms and, and, and keep our students engaged. 'cause 20 year olds, most of 'em don't do a whole lot of reading if they can get away with it these days. But, but we've also found that it was a another hook for our readers and for the, the casuals. Like right now you have to be a paid subscriber to play the game. I think. In a couple of months, maybe after we get a little bit better at developing it, could this, you know, be a $12 thing you buy on Steam somewhere? Like sure. But, but for now we're using it as a way to get into conversations for the classroom package that we weren't in before and to, to cut down. I churn right? To give people yet another reason to stick around and keep paying us the $8 a month. And you know, in the first two weeks I had 6,000 people played the game. Wow. You know, we were up a little bit on, on our paid subscription growth, you know, over overturn that we historically are in July, and it's been really fun to kind of stretch my, our [00:26:00] creative thought process in a new way. Louis Nicholls: Awesome. So it is, it's completely gated in that case, to play Matt Brown: it. Yeah. Well, we did, what we did at release is we made a free for 72 hours. Mm-hmm. So, like everybody, you know, you're, you won't give, it's not enough time for you to like completely master the game, but everybody can see it and now it's completely gated. And that may change at some point in the future as we add more features or if there's a premium or a free version of it right now. But like, what, what we've been kind of subtly trying to do is like sending out complimentary versions to streamers and having them play as a way of advertising the game. You know, it's a, it's a new industry than just newsletters, and so I understand we're not gonna do everything perfectly, but we're excited about its potential as a, as a lead magnet for us. Right? Yeah. Louis Nicholls: I mean, I. I love that idea and I love the idea of, of using it sort of more directly to, to grow the audience. Is there any sort of competitive element to it or shareable element? Is there anything that you would potentially [00:27:00] share with a friend or compete with a friend and head-to-head or Matt Brown: something like that? Yeah, we, there, there is a scoreboard feature and uh, we've, we've configured something on the backend for like our university clients that we could tell them, you know, every week, Hey, You know, the, the folks here at South Carolina have, have the best scores. So the folks here at Cleveland State, or the folks at this other institution, and we have seen our users for the high score. Like one of the things that's been very funny over the f, you know, the first two weeks. One of the top 20 high scores so far is a sitting uni like athletic director, like, you know, somebody in, at a mid-major institution, but he's not the top score, which means, and, and you know, a lot of the events are, are, are somewhat randomized, which we did on purpose for realism's sake. Mm-hmm. So, yes. You know, actually being good at this job in real life doesn't like guarantee you that you'll get the heine score, but that is very funny. I, I think what we're probably gonna do in August is, is do a newsletter or maybe a, a, a video. Of me playing the game with another athletic director and, and kind of going through there and see, you know, if, if a journalist can beat a i [00:28:00] I, I think that would, that would make a, a compelling little video clip. Louis Nicholls: Yeah, for sure. For sure. I, I think people would, would love that, that, that challenge. That's amazing. And then you could even potentially be using it upfront. As sort of more directly generate, like you can put your email address into play and then you can only play for a certain amount before having to upgrade. For example, there, things like that, you can as Matt Brown: well. I think if we were more adept developers. That is something we may, or that we would probably be doing upfront or we may end up doing down the line. Now, the way that it's set up is you start at one school and you can get promoted and, and, and face different challenges. Move up from there. Could we change that to where you get promoted once and then you have to pay, like potentially? I, I think we need, we, we also need more data. I, before I think we, we can be very comfortable in just saying we're definitely gonna go this way or the other. We have a game design document. We have a couple of ideas, but I. I think we have to be humble enough to realize that computer games are a different world than [00:29:00] than reporting about university budgets. And so maybe, maybe our guts are wrong. Louis Nicholls: Yeah. Well, let's talk more about the, the plans for the future. So I guess let's start with revenue. So the, the main revenue streams here at the moment is that the paid subscription, and something you've touched on that, that I want to get into is, you said not all paying subscribers are, are currently paying the same. Can you give the, the breakdown of, of how that works? Matt Brown: Sure. So as, as an, as an example, right? If you're, if you're buying retail $8 a month or 74 a year Louis Nicholls: mm-hmm. Do, do you offer both monthly and annually? I Matt Brown: do, and yeah. I, I would prefer if everybody paid annually because people lose their credit cards. Right. People, you know, things change. And we have, we have unexpected churn. Like our, our data shows that if somebody sticks around for more than one month, we're usually gonna have them for at least seven. But I, you know, if, if 75 was the only price point we, we offered, we would like, based on our audience, it, I wouldn't be confident that it would come out ahead of us. But if we're [00:30:00] selling bulk, then you, you could get a subscription for four or six or potentially less. So we might offer, like I, we offer this for a couple of newsrooms where multiple reporters are, are using the newsletter. Well, you got, if you got six paid subscriptions from one domain name like, Why don't you just put it all in one credit card and we'll, I'll lower the price for you. Uh, since we had so many students, subscribers, they're not paying the $8, they're paying four, and then a couple of institutions even less Louis Nicholls: than that. Got it. So you have the, effectively the, the, the bulk seat pricing, and then you have the, the upfront list price. But you don't have any other packages. There's no sort of premium tier or something like that? Matt Brown: Not, not yet. We, we used to, when we were with CK uh, which, which was the toy I used when I launched. And they, they made it easier to, to have different tiers and we, we would have, uh, the very professional term that I used for it, I think was like the super deluxe Holy Shit package, uh, for people that really wanted that to, you know, that, that wanted to support me more than they wanted the stuff. And I, I charged [00:31:00] 150 year and I, I like, sent them some stickers. I'm like, well, thank you. I don't believe we can e easily do that with beehive. We couldn't really do it with ghost when we've used all three and they all have, you know, they're good at some things and, and, and growing in others. We've, we've talked about offering a, a more expensive, you know, deluxe, super deluxe plan. We have a couple of other ways to, to drive value from it. I don't think it's gonna happen this year. And then, you know, every once in a while we'll run a sale, right? Like if I, if I, if I look in my metrics and I find somebody who's been opening the emails at a 75% clip and for six months on the free side, I might say for six bucks, you know, person who's clearly reading this a lot, you should pay for it. You know, a couple of times. Louis Nicholls: Yeah, for sure. I mean, you said earlier you have about about 3000 subscribers who are maybe themselves not paying, but they're effectively paid subscribers. They are, they're, they have a, they're part of a paid plan out of the, the 16,000, so that's roughly, uh, that's, what's that just under a 20%, something like an 18% or something. [00:32:00] Rate of, of paid two. To free or pay to audience? When, when, when you, when Matt Brown: you count everything. Yes. I, I mean for, I, I think our free to pay conversion rate for people that are not part of an institutional plan is like nine and a half, which isn't bad. No, no, no, no. But I, I, I, I know enough newsletters to know that, like, boy, getting that to really beating nine and a half if we're, if we execute everything perfectly, maybe we can get to 11. But I don't know how it's realistic to get really above that. Which, which means that, you know, we either have to keep growing the top of the funnel or we have to figure out other ways to monetize the markets. Louis Nicholls: Yeah. Well, that's one of the questions I, I always love to, to to think about when someone is, When they have that, that higher than, than average. So I mean, people say anecdotally that a 10% conversion rate from, from free to paid is, is awesome. I think in practice that's, that's, that's not average. That is, that is very good. I think, I don't know why that number got floated around as 10% converting from free to paid, because it's, that's, I think very, very good. So when, when I see someone who is there or [00:33:00] even higher, I always have to sort of stop and ask myself the question well, Are they doing something particularly interesting in terms of being able to convert subscribers from free to paid? Or are they sort of lagging on the ability to add more free subscribers in basically, you know, they're very good at getting the, the super fans in, but, but struggling. That's a question that I had for you, which is you are in a super, super small niche and I was talking to a, to, to John who runs the Amazon Insiders Newsletter recently, which is also a, a super small niche. It's a, a newsletter for. For people who sell products on Amazon, you know, seven and eight figure products. And he was saying, you know, with his growth goals, he expects to get something like 1% of the, the total potential audience for, for his product or for his newsletter. He, he, he's hoping to, to achieve that by the end of the year. Do you have any sense of like if every single person who was a good fit for your newsletter was reading it, how many people that would be, would that be hundreds of thousands? Millions? Matt Brown: Yeah. This, this is a good question and I. [00:34:00] I, I feel pretty confident that it's not millions, right? Like there for our parent company has a, you know, D one ticker. I don't, I don't think I'm gonna get in trouble for sharing this, it know has readership, uh, north of 40,000. So there's at least that many people that are interested in this. And there's over 400 sports management departments at universities in the United States. It's not practical for us to get even half of the market share, but we have a very small percentage of it. And the, the feedback we get in the marketplace is generally, Yeah, not that what we're offering isn't good enough or affordable enough. It's more of administratively selling to public institutions in this country. It just takes frigging forever or we're, we're, we're not getting it. Like the, the, the people that buy it almost always renew because we're much cheaper than, than the competition. So I think in a perfect, in a perfect world, extra points. Might have a hundred thousand subscribers. I think it, it's a great business if it has 35,000 subscribers, it doesn't need to be two piece four 8 million. We think more about in terms of [00:35:00] revenue and expenses than we do total subscribers. And, and part of that is because we don't candidly, effectively do a great job of monetizing the free list if they don't become paid subscribers. But we, we, we think that they're still, they're still unclaimed audience here, parti. I mean, we either, we just, we haven't found them yet, or we, we, we haven't won them all. Louis Nicholls: Got it. For sure. Yeah. And we are gonna, I, I want to talk more about options and Sure. Thoughts around monetizing that, that audience, other than the paid subscription, but seeing as we, we have you here doing such a great job on converting those, those subscribers to paid, it is something that I think in general, newsletters are, especially the solo operators sleep on. But even the larger brands, to be honest, when they're in a niche, there aren't many that do a good job of selling. Team seats and team packages. And I was saying this to even to, I'm sure you read Jacob Donnelley's, uh, a media operator. I was saying that to him. We have 10 people on the, the Spark Loop team currently. We, I, I've [00:36:00] been paying for a media operator for years. No one has ever reached out to me from them and said, Hey. You are signed up with your sparkly P m L address. We know who you are. We know that everyone on your team should probably be reading this here, has a discounted rate and we'll give you, you know, 10 seats for, I dunno, whatever he's charging now, a hundred dollars a month instead of the, the two or 300 that it, it should be if it was, you know, all individual or something. So how do you go about, or how does your team, you mentioned you're working with someone, how do you go about effectively selling those, those bulk packages? Matt Brown: Well, we do it in two ways. Uh, when, when I'm selling to a non university system, I do it almost exactly how you described, like I, I, I, I will check your domains and I've done this for a couple of newsrooms or a couple of conferences and say, Hey, really love that you've got four people on, you know, of your employees who are, who are paying for this. Um, I know the resources are a challenge for you. Why don't we. Put 'em all one card and I'll make, I'll give you a pretty steep [00:37:00] discount for it. Right. And that way we can, we can give it to everybody, especially because I know that you're forwarding some of these emails to them, so they're reading it, so why don't we just pay for it? And for universities we found it's a great business, but executing it is really difficult. And, and part of that is because it's, it's unclear who the decision maker is and, and there's no heart of fast rule because at some places it's very much the instructor. At some places it's the dean, and some places it's department head and you know, so who has, who has the money is is the other thing with sports management that might be under the school of education, might be in the business school, it might be in the exercise science school, might be in the athletic department. And you know, that takes a lot of phone calls. The, we've had the best luck at in institutions where I've already had a, a personal relationship where I've spoken on a conference where I know some of the instructors rather than cold calling or. That we can say, Hey, school X, Y, and Z is using this because higher ed, we have learned is a very copy cap. And if you're able to say that your peer institutions or your aspirational [00:38:00] institutions are using this tool that gets you in the door for a conversation that maybe you wouldn't have had before. But like our, our open rate or like our ability to get meetings booked while we were calling in cold for places we didn't have a relationship with, even though we were offering something that would've saved their students hundreds of dollars was terrible. You know, 2%. 1%. It wasn't until we had something else to, to help us get that meeting that helped us execute Louis Nicholls: better. Interesting, interesting. So you are, you're finding those leads, you're reaching out, you're offering them the package. What, what's sort of like an, an average contract that you'd be offering to one of these, these Matt Brown: institutions? So there, we offer it in two formats. Uh, I wish we only did them one, but, but we have to, we have to do two because of just the realities of, of, of higher ed. Right. What we do is we tell people, if you can guarantee. At least 10 students are gonna pay and sign up for this. We will give you the full package though, which is a 50% off discount and the extra extra things attached to it. And if you pay for everybody at [00:39:00] once, then we can give you a bigger discount. And those discounts is we'll scale at 25, 50, a hundred, 200. Because one of the, one of the challenges, and I say this with love, but this, this is just a reality here. The most of the students that are studying sports management, Are not kids that got 30 fives on their a c t. They're not always the most academically prepared, mature, or professional students that you can get anywhere. And we work with, with some very elite institutions. But are, are, we mostly are working with regional public schools or first generation college student targeting private schools. So we're working with, with, with people that are generally not as very academically inclined or mature and well, and that this is true not just for us, but ask any instructor anywhere. I imagine this is true outside of the United States too. They don't buy the books, right? Like I know, I, I have a political science degree. I did not buy every textbook that I was assigned either. So if we have a class with 35 students, we know even if it's assigned, we're not gonna get 35 signups. We might try to chase them [00:40:00] down and we might get at, and, and that's a, that's a business challenge for us. So we don't have a great solve for it. So that's why we go and we say like, if you pay, if you put this all on the department credit card, we are prepared to offer a screaming discount just so we don't have to chase down 19 year olds. To make sure they subscribe correctly and some places will let us do that and some Louis Nicholls: places won't. I guess you're in a slightly unique position here with your audience where if I'm paying for a, for five seats for my, my team at work, hopefully most people are gonna be sticking around for a long time and it doesn't really matter if people swap in and swap out. Whereas for you, you have three or four years in the US maybe five in some cases, and then people are swapping in and swapping out every year, and you have to go back and, and get those people in through the door on the, the college side. Matt Brown: Yeah. Yeah, that's, that's, that's exactly it. And, and quite frankly, even on the administrative side, the turnover is so high that, that people typically leave after, after two or three years. Uh, all, all the time. The bulk of our customer service requests are from college students who forgot to cancel. Even after I, [00:41:00] we, you know, we emailed them three times and then they come back. They're like, well, why the hell are they charged for this for the last nine months? I'm like, it's time for you to learn a little something about the real world. Call, check your email. And, and they ask really nicely. I'll refund them a little bit, but I, I don't always do it. Especially 'cause sometimes they can get kind of belligerent. I'm like, I, I send you a notice literally every month that says you're about to be charged again. I have no way of knowing, doing it or not. So I, I don't see how we could do this without having a salesperson because we, we have not figured out how to automate or make this process so efficient that we don't need somebody whose job it is, is to, is to book 30 of these calls. Louis Nicholls: Yeah. Yeah, for sure. Well, let's jump into talking about something that you are, you are currently, I wouldn't say struggling with, but sort of the thing that seems to be on your mind on the monetization front, right? Which we've already touched on a little bit. Branching out from those paid subscriptions into the other ways to monetize maybe the free audience. Yeah. Matt Brown: That, that is something we think about a lot. And you know, the video game I think is, is part of this strategy. [00:42:00] But if we recognize we're not gonna be able to reach unlimited scale, we don't have 200,000 plus people out there, what other ways can we monetize this audience? And, and that might be through advertising, that might be through selling audience insights that might be through. I mean, like the, the, the comment, you know, the, the template is like, well, you should sell a course, you should sell a class or a mastermind or, or, you know, sell your consulting time. And like we had, we've, I've offered free consulting time with me as part of a reader referral reward, and it hasn't moved the needle at all. I, I've, I've, I've recommended this in like a prize for a couple of things before and people haven't picked up on it. And it probably could sell a course on like, how to read a budget, how to file an open records request. But I can't just whip that out in a week between doing four other things here. And I look at it the way other people do it. I, I almost wonder like, is your newsletter that good? Because it, it still takes me three and a half hours, four hours a day to write it because I have to, I'm doing reporting [00:43:00] or I, I, if I'm writing something in an hour, it's because I, I've spent 10 years learning, so I could write that thing in and out. So we're still, I think, struggling to efficiently handle those other things. Louis Nicholls: I mean, the thing that stands out to me about that is that you have these three very distinct groupings of, of audiences, right? Who presumably. They all play into the other monetization angles sort of uniquely. For example, you have the, the students who, I'm guessing people will want to reach them in your audience, but I mean, they're definitely not going to be spending money on sponsoring the newsletter, for example. But again, presumably they're interesting for maybe other groups of your audience or other people to be able to reach because presumably they'll be on the job market soon and, and so on. The we, we've had, we've had these Matt Brown: same thoughts. You know, the conventional wisdom for operators is that your readers will become your sponsors. We have a little blurb in our footnote of every newsletter we send out. Here's our sales email. We've had several conversations [00:44:00] with people that have reached out to us about those kind of things. Part of the struggle has been many of the people that have reached out to us don't have money. Or they, they end up, they end up flaking on, or they, or, you know, they're doing a startup and they wanna reach sports audiences and they can only commit to a two ad buy purchase. Well, probably not gonna get a ton of success for, you know, 10,000 opens. But, and then they, and then they, they don't have the funds to, to, to continue. And then the kinda AAA SaaS, big money software people in our world, people that are trying to sell to administrators will look and say, Even though you're, you're more affordable. If I really need to reach all of the decision makers, you don't have quite enough of them for me to justify buying out with you versus somebody else. We could probably do a better job of aligning our ad sales package across a company a little, a little bit better. Our one, one of my hopes was as we sign up, more schools have a more robust group of, of college students that would be more attractive to, to other conventional sponsorship opportunities that wanna reach students specifically.[00:45:00] I think we're kind of in a weird spot audience-wise, where 15,000 people is, should be enough to sell some ads. But the click-through rate, given the kind of newsletter that we are, is not strong enough to, for a lot of people to want to gel in unless it's an affiliate or a C P C deal, which I am, I'll do, but I'm not very excited about. And, and that, and that's kind of where we've been so far. The, the other challenge too unique to our world is, I am picky about who I sell ads to. And so one of the executive decisions that I've made is I'm not gonna take any gambling money, which is far and away they're the biggest source of advertising revenue for anything adjacent to sports. And I do that both for regulatory reasons. I live in Illinois that has really strict rules about about how taxes work if you work with gaming entities. But I also do it for ideological reasons, not because I'm a prude. But 'cause I feel like that would undermine the editorial independence of what I'm doing, given who else I'm talking to, to have, like, you know, athlete [00:46:00] rights brought to you by DraftKings. I don't, I don't, I don't think that would work. I also, after one really bad experience where a lot of my readers complained, I said, I'm done with crypto. Um, if I'm done with gambling, crypto's the same thing in my eyes. I'm done with that. Well, brother, that's, that's most of the newsletter ad market right there. The, the last thing's ai. And I've talked with a couple of those, but like the only, only people that have been really aggressive have been AI companies that are trying to help people cheat on term papers. And I'm like, yes, I get that college students will be interested in that, but you can understand how that would undermine how I actually make my money if I'm, you know, you know, doing that. So that's, finding the, the right partners has been, has been a challenge. Yeah. I mean, Louis Nicholls: it's a really interesting conundrum, I guess. Matt Brown: Yeah, we, we, I, I, I will say like we worked with a couple of third party. Newsletter ad sale farms, you know the mm-hmm. Entities that are saying for a commission, we'll sell some of your ads. Or, or, or, you know, we, we've paid for lead sheets before. Right. And we haven't had any success with any [00:47:00] of those. And it's not, 'cause I don't think that they're bad companies, but if you're scraping. Who else is buying ads on newsletters? They're gonna get the same a hundred companies or the, and the, the which, which, after we've hit the, the seven other sports firms to everyone else selling vitamin water or, or nutritional gummies, we're, we're, we're out. Like if, if, if I was writing about startups, I think all this would be very, very different. And it's weird 'cause like you think like, Hey, I have an audience of 80% male, affluent, educated Americans. You would think that that would be a more attractive niche, but, We, we haven't cracked it yet. Louis Nicholls: Yeah. What about events? Have you played around with the idea of events real live or, or so in person or online? We, Matt Brown: I, I, it's a good idea and we've thought about it and I think what's stopping us now isn't that we're not committed to the idea. I think it's, there's a lot of Zoom events out there, and I think if we wanna do this, we wanna do it really well. And this, I think is part of the bigger challenge for any solo operator or almost solo operator. [00:48:00] Is that any other thing you decide to do has opportunity to cost, right. For the time it's gonna take me to, to really master an event is time that's not being spent elsewhere. And if the newsletter only took me two hours a week, I could afford to do that. But because our, our whole, nobody in our company has events experience, we'd either have to pay for that knowledge, outsource it, or we'd have to figure something out. Like I'll, I'll tell you like one of my, my, my dream ideas that we just haven't found the right partner for. Would be an event where we partner with maybe the Chronicle of Higher Education or some trade group that's working with university presidents or administrators who are later in their careers are gonna have to manage athletics. And they don't do it now, and they need to know what they don't know. Like we could, we could set up a meeting where we know enough athletic administrators, we could set up a, a a cocktail hour and with, with deans and presidents and administrators and, you know, we could kind of mc or we can help, you know, speed date right and everything. We just haven't, we haven't found the right partners or the right people yet, but like, you know that, that, that would be a good [00:49:00] idea. I think a lot of our third party extra time has been spent on the computer game rather than executing maybe a, a different strategy, whether that's case studies, whether that's, Events, whether that's paid matchmaking, we, we, we just have to find the right time. Yeah. Louis Nicholls: How much research and how much feedback do you collect from your audience on what they are currently or have recently been spending money on sort of like large, relevant purchases and, and things like that? Yeah. Well Matt Brown: this, this is a good question too. Whenever somebody subscribes to extra points free or paid in their welcome email, they get a two question survey. It we, we ask them. One demographic question, which is, Hey, are you involved? Are you like a, are you a student? Are you in the industry? Are you in the media? Or I think there's like one other group. And then we ask them, why did you subscribe? We have that exported to a spreadsheet. We do an Audi annual audience survey, you know, typically in, in December where we, we get some [00:50:00] feedback about not just some other more granular demographic information, but also what, what, what they're looking for in the newsletter, what they like, what they don't like. Well, the other thing that we do is like someone subscribes using their work email. I'm gonna look 'em up on LinkedIn and I'm gonna enter in like their job title and everything, but, but we don't collect so much granular data that beyond what Google Analytics might tell us about your income or about where else you're spending. We know just as professionals, the kind of things that athletic administrators and reporters and college students spend their money. But I couldn't be so granular to say, this user with a 62% open rate is planning on going to Jamaica. Like I don't. And I'm afraid to ask for more information given that the pushback that might come. Louis Nicholls: Yeah, I mean it's, I think it's a valid concern. I think you also have the, there's the opportunity to couch a lot of this that's, you know, relevant to your audience in the form of an annual or a, a quarterly survey or even a survey on specific things, right? So spending habits related to. [00:51:00] Learning resources or, you know, software or, or whatever it is. And to be able to then, to then use that to, to effectively then go out to those brands. And especially if it's in a niche where they haven't been sponsoring newsletters before, that's always a challenge, right? The conventional wisdom is that you want to go out to people who are already sponsoring newsletters 'cause they're gonna be easier to catch. But if you, if you have that data, you can say, well look, I can't tell you who it is, but we surveyed our audience and we know that several decision makers of this kind are purchasing. You know this product and they have made those decisions in the recent past, would you be interested in getting in front of X, many more of them? That can be quite, quite nice Matt Brown: intro, I think. I think, I think that that probably is ultimately the mo I get and, and, and that, and it is kinda the challenge, right? Because the people that would be the best fit for us, I think are just not sponsoring newsletters, right? And, and that might be because they're only sponsoring things for scale. That might be because of the economy. They, they're not sponsoring people, period. It might be, we're not reaching the right decision makers because the lead sheet information that we have is, is [00:52:00] outdated. It could be a, a multitude of different things, but the folks that are, I think would be most enthusiastic about buying a month long campaign or two month campaign with us are, are probably people that are not showing the lead sheets yet. We just have to. Find them and convert. Louis Nicholls: Yeah, for sure. One question I do like to ask before we, we wrap things up though, is, you know, we've been talking now for Wow, just over an hour about newsletters and about your experience and your journey and, and what you've got planned for the future. Is there a question that you think I should have asked you that people would be interested in that I didn't. Matt Brown: That is a good question, and that's one that I usually handle a lot of my professional interviews with too. The one, I think it kind of advice I'd give to other operators or the, the, the mistake that I, I think I see other people entering the space do is not really focusing enough on what differentiates your product. I, I think the thing that has made extra points successful has been the fact that I write a lot of [00:53:00] information that our consumers really can't find anywhere else. That, whether that is through original reporting, whether that's, that's that picking up the phone and, and getting other analysis or the fact that I have pretty deep subject matter expertise about this field. If I had decided to make this, you know, here's five Lakes with a paragraph of analysis about sports business world, I might have a larger audience, but I would definitely not make as much money and, and I wouldn't, I wouldn't have some of the professional relationships, so this wouldn't be as deep. As it is, and that that does mean by following that path. That does mean I've had to make sacrifices elsewhere. I don't have a sophisticated ad operation as many of, of our peers or, or, or larger newsletters. I think if you don't have something you can write about that's different from everybody else, or if you don't have a very clear, you know, explanation for why you are valuable, because there's so many newsletters, I don't think that you're, that you can be successful even within sports where there's not a ton of other newsletters right now. I think the field is, is too crowded to do curation without curation. Plus, like the thing I beg for everybody, even, even if you're [00:54:00] not a reporter, and I'm guessing most people that listen to this are not reporters. If you're doing a five link curated newsletter, the easiest way for you to stand out among all the other curated newsletters is to pick up the phone and call somebody that's in the story that you linked, even if it's only a paragraph. 'cause now you've got two quotes and you've got an old nugget that nobody else has, and that's gonna give you ideas for your next story. I think it's really hard to be successful in this world if you're not able to do that. Louis Nicholls: Yeah. Well I love that. I think that's awesome advice to end on, Matt, where can people find you and the newsletter and anything else you want to to share? We'll put it in the show notes Matt Brown: as well. Obviously you can find the newsletter@extrapointsmb.com. You know extra points, Matt Brown. Hit points mb.com is is the newsletter. You can find me on Twitter at Matt Brown ep or you can shoot me an email at matt@extrapointsmb.com. Louis Nicholls: Awesome. And people can also go and find the more popular mats on Twitter as well. I'm, I'm sure. Listen, Matt Brown: since this has launched, I have bested hip. I, I started out less, [00:55:00] less, less, less big on Twitter. Where do you know, who knows if Twitter's gonna be there in two weeks, but, Matt Brown in clinic. If you're listening, the invitation for Mortal Kombat is still open. Louis Nicholls: Well, that's the, the cage match people want to see, I'm sure. Sure. Thank you so much, Matt. Matt Brown: It's been a pleasure. Thanks for having me. Thanks. Louis Nicholls: Thanks for listening to this episode of the Send and 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 dmm 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 whatever option you choose. I am really grateful for your support. Thanks, and see you next week.