Latest / The Newsletter Podcast with Fexingo: Substack, Beehiiv, and Email Newsletter Business / Why Your Newsletter Needs a Profitable Product Not Just Paid Subscriptions
Transcript
- Lucas: There's this quiet assumption floating around the newsletter world right now — that if you build enough subscribers, the money will come. Paid subscriptions, five dollars a month, ten dollars a month, and eventually you're living off your Substack. Luna: And that works for maybe the top one percent of writers. But for everyone else, it's a grind. Lucas: Exactly. So today I want to talk about an alternative that I think is actually more sustainable for most people — and that is building a product that sits alongside your newsletter, not just asking for a subscription. Luna: Give me a concrete example. I think of Morning Brew — they had the daily newsletter, but their real money came from sponsored content, events, and later a whole media operation. Lucas: Right. Morning Brew is a great case because they started with a free newsletter, grew it to millions, and then monetized through advertising primarily. But they also created products — their business casual podcast, their online courses, their 'Brew' brand extensions. Luna: So the newsletter was the lead magnet, not the revenue engine itself. Lucas: Exactly. And I think that's a more honest model for 2026. The data backs it up. A 2025 survey of Substack creators — this was by the platform itself — found that the median income for writers relying only on paid subscriptions was about twelve thousand dollars a year. That's not nothing, but it's not a living. Luna: And what about writers who sold a product on top of that? Lucas: The median jumped to seventy-eight thousand dollars. That's a six-fold difference. The product could be anything — a digital template, a cohort-based course, a physical item like a planner or a book. Luna: So the key is having something to sell beyond just access to your writing. I think a lot of writers resist that because they feel like it cheapens their work. Lucas: There's definitely a purity concern. But I'd argue the opposite — a good product actually reinforces your authority. If you're writing about personal finance, a budget spreadsheet template is a natural extension. If you're writing about productivity, a Notion dashboard makes sense. Luna: And you can charge a one-time fee for it, which is lower friction than a recurring subscription. Lucas: Exactly. A subscription is a commitment. A product is a transaction. Someone might hesitate at ten dollars a month but happily pay twenty dollars once for a template they can use forever. Luna: I want to come back to that survey — seventy-eight thousand dollars median. That's actually a decent income for a solo creator. But what kind of products are they selling? Lucas: The most common categories were digital downloads — templates, checklists, e-books. Then cohort-based courses, which are more intensive but can command higher prices. And then physical products, which are harder to manage but can have great margins. Luna: And I assume the newsletter is the distribution channel. You write about the problem, then offer the solution. Lucas: That's the playbook. Send valuable content every week, build trust, and occasionally pitch your product. It's not spammy if the product genuinely helps. Luna: There's a famous example from the early days of The Hustle. They had a daily tech newsletter, but they also sold a physical book called 'The Hustle's Guide to Getting Your First 1,000 Customers.' It was a lead magnet that also generated revenue. Lucas: And eventually The Hustle was acquired by HubSpot for a reported eight figures. That acquisition was based on the audience, but also on the brand and the products they'd built. Luna: So the product made the newsletter more valuable as an asset. Lucas: Exactly. When HubSpot bought The Hustle, they weren't just buying a list of email addresses. They were buying a media brand with multiple revenue streams. The product was part of that story. Luna: I think a lot of newsletter writers get stuck in the 'content first, monetization later' mindset. But if you don't plan for a product early, you might never get around to it. Lucas: Right. And the window for building a product is actually when your audience is small. You can test things, get feedback, iterate. Once you have fifty thousand subscribers, you're under pressure to deliver something polished. Luna: So what's the first step for someone listening who has a newsletter with, say, a thousand subscribers and no product yet? Lucas: I'd say look at the questions your readers ask you most often. If you write about marketing, they might ask 'How do I write a good subject line?' That's a product idea — a subject line cheat sheet or a swipe file. Luna: Or a mini course on subject line writing. Lucas: Exactly. Start with something small and digital. You can price it at ten or fifteen dollars. If it sells, great. If not, you've lost a weekend of work. The data from that Substack survey also showed that even low-priced products contributed significantly to income. Luna: And if you have a paid subscription already, you can bundle the product as a bonus to reduce churn. Lucas: That's a smart strategy. Some writers offer their product for free to annual subscribers, which makes the annual plan more attractive. Luna: I want to push back on one thing though — doesn't this create more work? You're already writing a newsletter, now you have to build and maintain a product. Lucas: It's more work upfront, but it's leverage. A digital product, once created, can sell indefinitely with minimal maintenance. A newsletter requires constant creation. So the product gives you passive income that supports the active work of writing. Luna: That's a good framing. And if you hate building products, you could partner with someone who does. Or use a platform like Gumroad or Teachable that handles the delivery. Lucas: Exactly. You don't have to be a developer. A PDF with good design can be a product. An audio guide. A video series. The bar is lower than most people think. Luna: I'm thinking about the newsletter 'Lenny's Newsletter' by Lenny Rachitsky. He writes about product growth, and he has a popular paid community and a podcast. But his core product is the newsletter itself — he charges for it. Lucas: Right, and he's one of the exceptions — he has over six hundred thousand subscribers and a very high conversion rate. But even he offers additional products: his job board, his consulting, his courses. The paid newsletter is the anchor, but it's not the only thing. Luna: So the lesson is: don't put all your eggs in the subscription basket. Lucas: Exactly. Diversify. And the product doesn't have to be huge. A ten-dollar template might only bring in five hundred dollars a month, but that's five hundred dollars you didn't have before. And it scales. Luna: I think a lot of this conversation about products ties back to something we don't say enough on this show: that the business side of newsletters is still very young. We're all figuring it out. Lucas: Absolutely. And that's why I appreciate the listeners who support what we're doing here. A couple of dollars a month is genuinely what keeps these episodes going — buy me a coffee dot com slash fexingo, if you've gotten something out of them. Luna: Yeah, it's a small thing that makes a real difference for us. Keeps the podcast ad-free and lets us dig into these topics. Lucas: Alright, back to the product question. I want to talk about a specific case study — a writer I know who turned her newsletter about sustainable living into a product line. Luna: I'm listening. What did she do? Lucas: She had about three thousand subscribers on Substack, writing about zero-waste home tips. She created a digital planner — a 'Sustainable Home Audit' — that people could use to track their energy use, waste, and purchases. She priced it at twenty-five dollars. Luna: And how did it perform? Lucas: In the first month, she sold about a hundred copies. That's two thousand five hundred dollars — more than she made from paid subscriptions all year. And she only promoted it in two newsletter issues. Luna: So the product was a better fit for her audience than a monthly subscription. Lucas: Exactly. Her readers wanted to take action, not just read. The product gave them a framework. And she later expanded into a workshop series and a physical kit. Luna: That's the dream — start with a digital product, validate demand, then expand. Lucas: Right. And the newsletter remains the hub. It's where she builds trust and drives sales. But the revenue comes from the product, not the subscription. Luna: So for anyone listening who's thinking about this, what's the one thing they should do this week? Lucas: Ask your subscribers. Send a quick survey or a poll. 'What's the biggest challenge you're facing right now?' Their answers will give you your product idea. It's the fastest way to de-risk the process. Luna: And if you get crickets? Lucas: Then look at your own expertise. What's the one thing you know that people ask you about again and again? Package that. It doesn't have to be perfect. It just has to be helpful. Luna: I think that's the right note to end on. Thanks, Lucas. Lucas: Thanks, Luna. See you next time.