YouTube Transcript:
How to Make $50K a Month With a Newsletter with Michael Houck

how long does it take to turn a
newsletter into a thriving business well
Michael Houck went from zero dollars to
fifty thousand dollars a month in just
five months if you are ambitious with
the newsletter and you have a goal for
it to be a big Revenue driver for you
and build a business around it then I
would say think big and find the right
information sources to learn that side
of the business route just try to learn
the way that founders of startups think
rather than the way that creators are
typically taught to think Michael is a
startup founder and former VC turned
full-time newsletter Creator he's very
quickly grown his email list to almost
60 000 subscribers and in this episode
of crazies and air he shares how you can
treat your newsletter like a business
yeah I actually have a bit of a contrary
intake on this so I see a lot of
creators and newsletter operators and
people who are in this space building
their business to have like the best
margin that they can have right away the
most cash flow that they can they can
keep um right away 90 margins great it's
a great business but for me coming from
startup mentality I want to have a zero
percent margin for as long as as I
possibly can afford to
interesting because if I do that then I
can reinvest a lot more into growth and
I can grow a lot faster so I see a lot
of other people making you know creating
their newsletters and trying to grow
their social media audience and whatever
it might be and it takes them a long
time
um because they're they're bringing as
much off the table as they can and you
know not everyone can be at zero percent
margin you gotta feed yourself and all
that good stuff but as low as you can in
my opinion is the best for as long as
you can because then you can just grow
faster so I've been full time on this
for a little under five months now I was
you know doing it as a side project
before then but in those you know four
or five months or so I've grown from
about 10K followers or 10K subscribers
to 60k and we're on Pace to be at a
million dollar run rate for the business
before the end of the year wow that's
insane so how do you feel what do you
think made you attract that size
audience in such a short period of time
I mean my Niche is is startup Founders
Venture Capital business building all
that and that's a niche that you know is
very valuable for sure but there's a lot
of noise in it from people who haven't
actually gone out and done it right so I
think that the credibility that I bring
based on what I built in the past and my
ability to see kind of both sides of the
equation as a former VC and a startup
founder
um has really resonated with a lot of
people
um and obviously the content has to be
good too what do you think makes good
content that has helped you to stand out
in such a crowded Niche yeah I mean I
try to just be very to the point
um startup Founders and people who are
building businesses don't have a lot of
time to get the flowery words and the
the pretty pros and all that stuff they
just want the facts the Tactical advice
that they can actually go and Implement
in their business and that's how I talk
anyway so it works for me
will actually change
five months full time what what do you
think you did differently from those
five months to before so I mean I
started the newsletter as a side project
for my last business it was to build up
my personal brand to therefore make us
more attractive to customers right right
I was putting out one of these articles
one of these deep Dives every week
um but had no Ambitions beyond that with
it I wasn't you know trying to invest a
ton of money into growth that was more
of like somewhere to point people when
they're interested in you know becoming
customers part of our business so when I
left the business earlier this year I
basically just decided to take growth
more seriously and treat it as a real
business that could grow to be pretty
big I had done some analysis and I
talked to you know a bunch of people
like Lenny richardski saw hillblum good
friends of mine and kind of learned what
the the potential scope of this business
was
um which allowed me to to make the
decision to go all in and also come up
with a growth strategy that would
actually let us achieve that pretty
quickly so for me it was really just
like a mental shift of like hey I'm
going all in on this and so therefore
I'm going to spend more time attention
and money on ways to grow it and what
was that gross strategy so like how much
did you invest in things like ads or you
know did you put more time into organic
growth or was it everything like how did
you go about it yeah I mean I think it's
important to you know some people say
you want to focus on one channel and
just like own that channel and be the
best of that channel I think that works
for a lot of people for me I have a very
short attention span and so I try to do
a little bit of everything and then
double down on what's working later
right run a ton of experiments and then
iterate and double down on what's
working so you know I have a sizable
audience on Twitter or X I guess now and
uh LinkedIn
um it's like over 90k between the two
platforms I think uh somewhere around
there I was able to do a lot of like
content marketing on there and get a lot
of my first couple thousand subscribers
just from you know putting a CTA at the
end of my threads on X or you know in
the in the comments to my Carousel posts
on LinkedIn but after we got to a
certain point I want to say 10K or so I
started to run lead magnets where I was
like you know comment and you'll get
this resource but you'll also be
subscribed to the newsletter those added
a ton of subscribers in a short period
of time we added like almost 15K
subscribers in a couple weeks doing a
few of those those are lower quality
subscribers so like it's a you know an
open rate in the probably high 30s
rather than 50 plus so some of them have
churned out but it let us get off the
ground really quickly and get get things
moving I also invested a bunch into at
that point into spark Loop and into
um like paid ads on social too so
Facebook Instagram and also Twitter
actually Twitter's ad platform has got a
lot better uh in the past like six
months or so at least we're making it
easy to get good space at a good CPM and
so yeah that those those have been the
bigger growth that I was kind of later
on but in the early days it was uh yeah
it was content marketing and then also
newsletter swaps so I knew a bunch of
people who had similar size newsletters
were all trying to grow at the same time
we just would run like in place of
running an ad we would swap each other's
piping up each those newsletters so that
worked out pretty well too and you said
that you you know like liked to run
experiments see what was working and
then Double Down was there anything that
surprised you either you know it was
more successful than you thought it
would be or you know it's a really
popular growth hack that didn't work
well for you at all
yeah I mean on the first part the lead
magnets were were surprising I you know
they're super cringe right let's just be
honest about that one when you post
something on Twitter and you're like
comment like one word Below in all DMT
like
but when you're trying to get something
off the ground you like have to be
Shameless you have to lean into being
cringe and so
um that worked a lot better than I
thought it would I thought maybe I get a
couple hundred subscribers a week from
it but we did like five or six of them
we got almost 15K so crazy I think that
was just like the right lead magnets for
my audience really it really resonated
as far as something we did that didn't
work as well as I thought it took me a
while to get paid ads right honestly
once we started running them I'm not you
know I'm not a growth marketer I'm not a
demand generator person that's not my
background and so I was getting CPAs for
ads in like the 350 range which is just
untenable but then I started working
with uh Matt McGarry who runs grow
letter great you know Ad Agency he
previously uh did a lot of growth for
the hustle and milk Road and kind of
notice the ins and outs of newsletter
growth you know dirty secret of the
newsletter industry is that all the big
newsletters get 90 of their subscribers
from Paid ads
it's funny because I just had a chat
with him just before you oh no way yeah
great
um but he's been a huge help he's
brought our CPA down by more than like
half
crazy so what was the changes that he
made that you you know that you think
were most effective well his creative
was better I'm you know I'm not a
designer so my ads were pretty ugly and
then also he just understands how to how
to Target really effectively so I like
taken some advice from him and that's
you know I tried to implement it but
when he uh when he brought in it was it
was much more effective let's talk about
your lead magnets like what do you think
made them so effective at bringing in
new subscribers yeah I added like images
that were blurred out which I think like
drove fomo and like
proved it was real but two was like kind
of annoying so like you just wanted to
comment to like see what it was you know
yeah uh so he did that and then also I
required both comments and retweets in
order for people to get sent the
resource which you know is just like
exponentially better than like saying
just like this or just comment on this
to get the resource so we were able to
drive you know hundreds of thousands of
Impressions on X for each one and you
know convert a good amount of
subscribers from it and then let's talk
about how you've managed to turn this
into a business because you went from
making nothing to fifty thousand dollars
a month in five months which is just
crazy like how is that possible what did
you do yeah I think actually from the
time that I sent that to you we've
actually increased it um we're at uh I
just checked this morning actually we're
at 66k in the last 30.
um so yeah it's been crazy you know I
needed to survive right I needed to make
money to get this business off the
ground and justify it and bring in great
people like Matt to help me out so yeah
I'm a hustler I always look for
different opportunities wherever I can
find them um I think for our case you
know we get the majority of Revenue
today comes from sponsorships so we have
a couple options we have like a featured
placement at the top of the ad people
can you know get like top billing we
have a secondary ad in our Tuesday send
uh that's in like the middle of the
newsletter and then a new thing we've
been doing recently is selling like
sponsored deep Dives but they don't
they're not like structured like ads for
example I'll sit down and do an
interview with the founder of a company
and get their story get their background
uh try to understand like unique points
and unique learnings that can be taken
from their journey and then I'll write
um you know like a 1500 ish word Deep
dive on it and use that as one of our
Saturday emails but it comes off super
organically because it's about the
lesson it's not like Hey try this cool
product you know so we're seeing great
response from that uh we just launched
it a couple weeks ago we've already sold
three of them uh first one actually
comes out this week which I'm pretty
excited about so yeah so those have been
great and then you know with running a
business like this where I'm a startup
founder and
um I'm writing to Startup Founders they
want to get my expertise so there's like
a very limited amount of time that I
reserve for Consulting uh every month as
well that drives a little bit of Revenue
a few months ago two months ago we
launched a subscription plan a paid plan
for the newsletter and people pay 15 a
month or 150 a year they get access to
extra content uh community of Founders I
run a bunch of Fireside Chats people
people keep telling me that they're
getting too much value from it
I should charge more but you know I I
want to 10x the value at the at the
prices at first so
um those three streams where the
majority of their revenue comes from
today um but then I actually just
launched a few weeks ago a product
called megaphone that is a marketplace
where you can basically pay a
subscription and then pay individual
creators in the marketplace to amplify
your posts on social media I mean
there's like very legit creators like
it's not like a random Anonymous meme
accounts
hours in the various places of the world
that might not be your target audience
these are like people you probably
already follow that I know personally
that's gone crazy we have we're up to a
6K mrr in just a couple weeks on that
and so that's uh that's going to be our
biggest Revenue stream by the end of the
year crazy so how did you kind of like
because
all very quickly like the space of a
couple of them so did you just start
everything at the same time
you know was it like I'm gonna do
sponsorships first see how that goes
then I mean you know like how did this
all work yeah I mean sponsorships were
the I thought the lowest hanging fruit
because I could have started the paid
plan right away but if I would have done
that a bunch of my time would have
gotten sucked into the community right
away and I would have been doing it for
like no 15 a month not a lot to like uh
you know build a business around so if I
wanted to grow quickly I had to get cash
flow in right away so that's why I went
to sponsorships first and I knew that
the founder Niche very valuable to
advertisers to sponsors so uh we were
able to charge a decent DPM right away
after that I expanded to two issues a
week from the original just Saturday
deep Dives uh so I doubled my ad revenue
from that at that point I felt like we'd
enough cash flow coming in where I was
comfortable spending time with the
community so decided to launch that and
then the idea for megaphone just kind of
happened by accident like I I texted a
couple friends one day and I was like
Hey would this be interesting to you and
every single one of them was like can I
pay for this today crazy
that's amazing and how do you know how
to price everything like you know
sponsorships deep Dives you know like
have you gone about even the membership
like some people have said that you're
charging too little like how did you
know what prices are
yeah I mean each one is kind of
different on the I mean I worked in in
pricing at Uber one of one of my teams
um for a while was the uh the driver and
eater pricing on ubereats at the
marketplace so I've been doing pricing
for a long time for the sponsorships
it's really just based on like how many
people are actually reading the
newsletter and like what the niche is
right so for me founder Niche pretty
valuable and we had you know
ex-subscribers I was able to say okay at
this CPM
um this is what the price would be but
we've iterated over time you know we've
we've tried uh various price points as
the oh do we get more uh conversion from
potential sponsors we're talking to at
different price points and how do we
weigh that against uh the results that
we're delivering so we want repeat
sponsors that's the number one name of
the game we actually got two people uh
confirmed this morning is repeating
which is awesome yeah so it's really
just like are we getting the results we
want and those results are our sponsors
getting the results so that we get them
to come back time and time again and our
ad sales process is much simpler
um so kind of more of an art than a
science there when it comes to the
community you know the way you structure
any like newsletter business
subscription is you have a front-end
offer and you have a back-end offer so
the front-end offer is like your low
price point just like get access to the
newsletter and maybe some extra stuff
this is something that people can make
an impulse purchase
um or just join because they see one
piece of content that looks interesting
to them they want to see where it goes I
launched that first um some people say
to launch that second but I launched it
first so I can talk about why but then
you also have your back end offer and
this is like your high price point like
annual pricing only you know like a
thousand dollars or more a year and
maybe for that you get like a
subscription to courses masterminds
one-on-one time with with the founder so
that's something I'm thinking about
right now maybe I'll launch that later
this year we'll see but yeah for me the
front end offer was more appealing to
start with because I wanted to create
like a center of gravity around the
newsletter where people were actually
spending time meeting other Founders
interacting with each other and building
up the the brand around it and I thought
that would be the more effective way to
do that how did you decide what
that offering would be for like a
membership or a community like you know
what how much you're going to offer for
that price point I mean I just want to
I'm just offering as much as I can I'm
just layering as much on top as I can
until people are just like blown away
right like my goal is to get if you want
to subscribe for the newsletter cool 15
a month should be nothing because the
newsletter content has to be so good so
I'm always working to improve the
content and on the other side I'm like
what can I throw in here that will
really resonate with people that will
make the community side and the perk
side also independently worth 15 because
you don't want to make it combine
fifteen dollars you want to make each
part independently with 15 because
that's how people make decisions based
on what they actually want out of it
right
um so for me you know it's only two
months old the community so I'm still
trying new things right we're launching
an expert Network for people who can
help you with various tasks about you
know growing your startup or building
your pitch deck or whatever it might be
we're launching that later this month
we've launched fundraising Support
Services we've launched a weekly casual
chat you know Fireside Chats every
couple weeks I'm just testing stuff out
right now to see what resonates with
them and once we figure out what that is
we'll Double Down On It and what about
sponsorships how do you find sponsors
for your news essay yeah so we have we
get sponsors in three ways um the first
one is through our agency partners so we
work with a couple great agencies uh at
Austra madrev uh both are both are
fantastic and they send us some
percentage of our sponsors and initiate
those relationships we do a ton of
outbound and inbound though because on
the inbound side you know my personal
brand is you know decently out there on
social media so people find us that way
also our audience is business owners and
some of those business owners want to
emphasize or want to advertise to other
business owners so it becomes a good
opportunity for them to just naturally
use the newsletter for something other
than reading it uh so we get a lot of
inbound from there and then on the
outbound side we actually will look at
what uh what brands and what what
partners are sponsoring other
newsletters in our similar Niche we'll
track that I think we track like 70 or
80 newsletters every week now wow and
then we reach out we find the contacts
for them and we reach out to uh to a
bunch of them when we have open
inventory wow it seems like you have a
lot going on like you've got a lot of
content that you're creating a lot of
revenue streams you're adding plus
you're like tracking things and looking
at analytics like how are you managing
all of it
um I work a lot
the honest answer
um you know I I just focus on the
highest leverage things that I can do
right I have a I have a VA who helps me
out a lot I have a part-time Ops guy who
helps me out with Partnerships
um in particular and some other stuff
but the actual content creation you know
experiments pricing growing stuff out
growing stuff in various parts of the
business that's all me and honestly I
just do it by you know being a
heat-seeking missile towards whatever
your biggest problem or highest leverage
opportunity is yeah and I want to talk
about your recent acquisition of another
newsletter so daily dose of startups why
did you decide to acquire that
newsletter yeah so that was an
experiment I think that we're going to
end up seeing a rise in m a in the
newsletter space probably next year uh
reason for that is because you know
there's only so much ad budget for
newsletters to go around and I think
tools like beehive and convertkit and
even like spark Looper are inspiring
people to create newsletters more and
more and more and so we're seeing a huge
rush of new newsletters in the space I
do think that more Brands will want to
advertise in newsletters as a result and
I do think other brands will increase
their budgets in newsletters as a result
but I think that the pace of newsletters
will outpace the growth in available
budget and so what that's going to do is
probably create a bubble and my
estimation is that bubble will happen or
that bubble will start to pop next year
at some point and so I plan to be in a
position where I can acquire some of
these other newsletters at relatively
affordable attractive prices and so I
want to test that out and so the way I
test that out was daily dose of startups
was just a small newsletter 2100
subscribers it wasn't very active the
guy who was running it had a bunch of
other newsletter products that he was
running too so this one had kind of
Fallen by the wayside a little bit but
had a good subscriber list it was very
specifically in the same Niche that I'm
already operating in and so what I
wanted to see was hey if I buy this can
I get it at a price that's attractive
and B
I roll those subscribers into my
existing email list and have them like
not miss too much of a beat and get
value out of the content that I'm
putting out so we did that we got it at
a price that I think made sense on both
sides uh deal closed in like 55 minutes
um and then he sent out an email letting
them know what was happening and then I
sent one out saying hey you're gonna get
your first email from me like this week
or tomorrow whatever it was and I shut
down the other newsletter I imported the
list into my beehive page and we're now
I want to say like two months maybe a
little less than two months out from
that and uh the unsubscribe rates are
way better than I thought they would be
and the engagement rates are way harder
than I thought they would be I was
expecting like you know 30 unsubscribed
or something like that but it's only
been like six percent unsubscribed I
think we have under 100 people who've
unsubscribed maybe even lower than that
so it's been really attractive um and so
I think that that proves to me that
there is the ability to do this even if
you know I just rolled the newsletter
into my own which isn't probably what I
would do next year I'd probably keep
them as standard newsletters and just
hire writers to keep them running in
most cases so it just gave me more
optionality for when that happens next
year next year interesting why did you
decide that then that you probably would
like keep those newsletters as they are
rather than immersion like what what
from that experiment did you get to make
you decide that I mean is it gonna be an
ad hoc decision Case by case decision
for sure but like I guess what I'm what
I'm trying to say is that next year I
think you know they'll be attractive
newsletter opportunities and other
verticals than just startups right so
maybe there's one in you know Finance or
maybe there's one in I don't know
politics or or marketing or whatever
else I'm just gonna optimize what the
most attractive opportunity is
um and so it might not make any sense to
roll them into house newsletter and it
might make sense for Hawks newsletter to
kind of become a holding company for for
media assets right interesting
um what you seem to be very good at you
know the business side of new classes
which I guess makes sense given your
startup background so like what advice
would you give to newsletter creators
who are very good at the creative side
but aren't necessarily good at
monetization and the business side yeah
I mean I would say to seek out the best
content to learn it
um you know first of all not everybody
is creating a newsletter so that they
can build the biggest business ever
right like we should just get that out
in the in the open air right some people
are just writing a newsletter because
they want to write a newsletter and they
have people who want to hear from them
and maybe they'll monetize it but it's
not their primary revenue stream I think
that's great I think more people should
do that too but if you are like
ambitious with the newsletter and you
have a goal for it to be a big Revenue
driver for you and build a business
around it then I would say think big and
and find the right information sources
to to learn that side of the business
route like Matt Matt McGarry does a
great job breaking shutdown in his
newsletter uh I think it's called
newsletter operator and then
um also on his Twitter he posts so much
information for free so he's a great
resource there but yeah I would say
treat your newsletter like a startup and
think about it you know read Paul Graham
essays read y combinator content uh just
try to learn the the way that Founders
startups think uh rather than the way
that like creators are typically tough
to think
important is things
I mean the startup world you talk a lot
about product Market fit so how relevant
is that to the newsletter industry if
you want to build a business
yeah I mean it's entirely uh relevant
right you're you need to you need to
lead with your credibility you need to
make people think that hey I actually
want to read this topic from this person
right it's not enough to just say to
just write about an interesting topic
and think people are going to care about
it you need to write about an
interesting topic and make the content
great because they trust you as the
writer
um to do it so I think that just happens
with the track record over time uh you
know when I started my newsletter I
didn't know what the heck I was doing I
was experimenting with different
sections and different ways for to
engage with my readers and most of them
failed
um but once I found my groove once I
went full time on it that was a
different story so I would just say
um to you know to lean into that as much
as possible yeah what's your mindset for
growth now and you know what's next for
you as a new center creator
yeah I mean let's let's pour the
gasoline on you know
I love it I just influenced my my spark
Loop budget from 10K to 20K a month oh
wow I'm running a bunch of paid ads as
well I'm writing Twitter threads three
times a week LinkedIn posts five times a
week
um I'm all in I want this the email list
my original goal was to get the email
list of 50K by the end of the year uh
when I went full time in like q1 uh now
I'm already hit 50k so I have reset the
goal to 100K but it's trending towards
hitting that in November so maybe I need
to think bigger I I love that you're
investing so much into it but what
advice would you give to someone who
maybe doesn't have that kind of budget
you know to start investing into ads and
Spark Loop like what is the best way for
them to you know be as driven and growth
orientated as you but you know with what
resources they have yeah for sure I mean
you only reach that scale once you get
to a certain point right yeah
in the early days you know lean into
content marketing lean into swaps with
other people whether that's
recommendations after they subscribe to
your newsletter or whether it's like in
place of ads you know get your audience
comfortable with seeing quote unquote
ads but just show them other newsletters
and therefore you know have those
reciprocate by showing you
um that drove a lot of our growth early
on so I I would say follow that formula
as much as possible
um but yeah leaning into content
marketing is a great way to get started
um and you know that worked for us so I
would recommend that other thing would
be you know monetize as soon as possible
I think a lot of people wait to monetize
either because they are worried about
introducing ads or because they just
aren't prioritizing it and they're
prioritizing the content which is fine
but you know bringing in Revenue gives
leverage to your business to invest more
so I would say you know use tools like
passion fruit to set up a sponsorship
offering even if it's only a little bit
of money even if it's only just getting
started and you know you can't work with
every sponsor in the world yet I would
say monetize as soon as possible yeah I
love that advice I've already asked you
you know what's something you've taken
as a startup founder that you've applied
to being a Creator but now I'm going to
ask you what's something that surprised
you or you know something you've learned
entering the Creator world that you know
has helped you grow
hmm it's a good question I I think that
honestly the thing that surprised me the
most is how similar it is to being a
startup founder honestly it's you know
I've approached it pretty much the same
way but I didn't think I was going to do
that when I started
um but just treating it more like a
business has been
um has been usually beneficial in a
short period of time for us so I would I
would recommend that another thing
though is just that like you know when
you're a startup founder you're in the
weeds you have like crazy crisis
meetings all the time you know your
product is breaking whatever it might be
your users are complaining whatever
happens and you have to just be super
available for all these calls all these
teams syncs sometimes and things like
that being a Creator I really like it
because if I don't want to have meetings
I don't have to right I literally own
schedule 100 and if I want to go to the
park at 3 8 3 P.M in the afternoon I can
do that yeah no I like that okay so I'm
gonna end with a quick fly around now so
I'm gonna ask you five questions that I
ask every Grace that comes on air
starting with and you've kind of already
answered this what's your favorite thing
about about being a greater
um yeah probably just the probably just
the freedom of getting to
um you know run my own uh business or
Creator business or whatever it is uh
exactly how I want to uh owning 100 of
it and uh just setting up setting up my
life exactly as I want to yeah also I
would add on to that too because my
Niche is startup Founders it really lets
me keep on like The Cutting Edge the
bleeding edge of where technology and
businesses in the world is going
um so that energizes me keeps me super
passionate every day and I love that and
what's something that gives you the most
inspiration for what you create
my readers
um you know I ask all my readers all the
time you know what topics am I not
covering what problems are you having
right now I think the best content comes
authentically like that and so I try to
spend as much time talking to my to my
readers as possible to to get that oh I
love that and what's one tool that helps
you the most as a Creator I mean there's
a lot I I use a lot of different tools
my community couldn't exist without
Circle my newsletter wouldn't be half as
good as it is without beehive I wouldn't
have made as much money as quickly
without passion fruit so you know
triumvirate there is uh is powering a
lot of stuff for me I love that and
what's something that helps you with
your creator work-life balance my wife
I'm not good at work life balance on my
own I work all the time so having uh
having someone to to make me remember to
enjoy the rest of life is uh is good and
what's one piece of advice that you'd
give to other creators treat your you
know Creator business like a business
right think about how to grow it invest
as much as you can without putting
yourself at risk
um yeah just treat it like a business
amazing thank you so much Michael I feel
like this is such a great conversation I
feel like especially for people who feel
like they can't turn it into a business
I think this is the conversation that
will really help them change their mind
especially how quickly you manage to do
it so thank you so much for coming on
air yeah thanks so much for having me
this was uh this was a lot of fun you
can find Michael on Twitter LinkedIn and
his newsletter and if you are a Creator
and one of your revenue streams is
sponsorships check out passion fruit we
help you to streamline your entire
workflow
I'll see you in the next one