The Newsletter Business

How an email based business is thriving in the age of social media

Welcome back to this week’s edition of The Tech Bridge.
Today, we’re diving into the booming world of newsletters

In 2014, Alex Lieberman started writing a newsletter for 500 people summarising business news, solving a very genuine problem statement.

“Established media outlets like the Wall Street Journal were publishing dry and dense news stories. It was difficult to read and was taking too much time to cover”

And he called the newsletter “Morning Brew”. The simple idea became such a wonder hit that in the next 4 years they touched the magic number of 1 million subscribers! Eventually in 2020, Morning Brew got acquired for a whooping $75million dollars!

Many more newsletters jumped on this train. The Hustle (acq. for $25mil), Milk Road (acq. for $millions), Axios (acq. for $525mil!!!) and so many more.

It’s evidently not as easy as just writing emails. Newsletters have always been known to generate revenue in 2 ways. Subscriptions or Ad Revenue. Morning Brew had an ad based revenue model, an inspiration for us to keep our newsletter free :)

SaaS entered the market

Wherever money flows, SaaS business follow. The newsletter business, till this date, is highly unorganised. It doesn’t fall under neither classical media nor social media. Hence, pricing becomes an issue. Sourcing clients become an issue. Creating subscription model becomes as issue. So a lot of players created business to facilitate this.

Paved
The Ad revenue business is what created the giants of Newsletter business. And Paved struck gold here. They created a platform solely to help newsletters find relevant sponsorship opportunities, taking a cut out of their amount (no upfront fee)

This is the breadwinner of many major newsletters. Most of the creators don’t like to charge their audience (including us). But finding (relevant!) sponsors is tougher than building an email list. You can check them out

Beehiv
Started in 2021 by an ex Morning Brew employee, Beehiv entered the market with a different agenda altogether. Combining ad revenue system with newsletter building solution.

Beehiv streamlined the entire newsletter process right from creation to revenue generation. This is not a sponsored post. Although, if you wish to check it out, you can get a free trial+ 20% discount here

Substack
Started in 2017, Substack created a newsletter building tool. It’s core motto has been to remove Native Ads and marketing.

When readers pay writers and creators directly, they can focus on doing the work they care about most.

Substack has today grown over to 20 million active users with over 500,000 paid subscribers. The concept stuck but a lot of creators fail to make a thriving business out of this.

Now why did I bring out this topic into a tech building newsletter?
Because money is not the only reason people are building newsletters these days. The Hustle was acquired by Hubspot. Nearly all tech SaaS companies have started creating newsletters nowadays. The sole reason being, this is the best way today to have a focused user base, whom you can reach out to on your wish.

Acquiring customers is tough. Retaining customers is even tougher. And newsletters are a great way to launch products, get initial set of users, receive feedback and so much more. The modern economy is built on attention, hence the modern business is moving towards unconventional routes to reach the market.

I’ll be writing a detailed post on how to build a newsletter business from scratch in The Tool Smith publication. Do subscribe. It’s my dedicated channel where I explain the process of mastering modern day AI and SaaS tools.

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Thank you and take care
MJ.