Zero to 8,000 in five months – that’s The Peak’s subscriber growth and even we're surprised by it. When Taylor, Alex and I launched in August, we had zero expectations. The newsletter was supposed to be a fun side project.
Now, it’s a full time gig and it's because of all of you. And as a thank you, we want to bring you along on this entrepreneurial ride, so you can learn from our experience (failures and all) and maybe even get inspired enough to start your own project.
How are we going to do this?
- Every month, we’ll send an update on The Peak highlighting our successes and challenges with the business. It'll be a raw, full behind the scenes look at what it’s like to build a media business – warts and all.
Where do we start
It's been a crazy four months so I thought we'd start with how we got here...
In this month’s post, we’re going to walk you through our thesis around the business, get into some of the technical details on how we built our audience, sold our first ad placements, and talk about our thinking behind raising capital.
Readers note: One thing we really wanted to do is make sure that you get actionable advice out of these blogs that you can apply to your own career, side-hustle or startup. That's why a lot of the post is written in an instructional tone.
Without further ado, let's get into it!
What's Our Thesis?
"A media company doesn’t sound like a great business" – said everyone. It's not hard to think that when almost everyday you see a headline of a local newspaper going under or a national publication laying off half their staff.
But hear us out...
That's only true of legacy media. In the US especially, new media companies are building innovative and profitable business models reshaping the entire landscape.
In fact, there are a number of profitable newsletters that are doing over $20 million in annual revenue:
But they all have one thing in common... They're American. And when we looked for Canadian equivalents we couldn't find them. So we said screw it and started our own and that's how The Peak was born.
How do we make money?
Let's start with the most important question for any business: how do you make money? The short answer is that it's the exact same way the newsletters above make money: distribution.
What do you mean by distribution?
Distribution is a way to get a product out. Loblaws' distribution are their stores and The Peak's distribution is our newsletter (for now, more on that later).
What do we use that distribution for? Right now, we use it to sell ads. We’ve got this huge audience of Canadian young professionals (you, again!) who read the newsletter on a regular basis and we’re selling advertisers access to that audience.
In the future, we could use it to sell a number of different digital products and services.
How did we get started?
When we decided to launch The Peak, we had no idea if it could be a viable business so we wrote down a number of assumptions that we wanted to confirm to see prove that it could be a profitable and sustainable enterprise. Here were the questions:
Can we create a product that people will enjoy and consistently consume?
Are we able to grow the audience sustainably?
Are advertisers interested in sponsoring newsletters?
The rest of this blog is how we answered those questions.
How big are you?
As of publishing this, we have approximately 8,000 of the best newsletter readers in the world. We're really happy with that number considering how long we've been working on it and in the first section we'll walk you through how we got here.
How we grew the newsletter to 8,000 subscribers
Content is King
After launching in August, we spent the month fine tuning content for the newsletter. Unlike traditional media, we wanted to strip away all the fluff and provide short summaries of the important stories and context on why they matter for you.
We experimented with different formats and tone but landed on the one that we thought fit best for our audience. Once we were happy with the tone, we recruited our closest friends to read it for two weeks and provide their feedback.
Remember, the newsletter is the product and finding product-market fit is critical for success.
After getting positive reviews on the first few editions, we released it into the wild.
First 1,000 Subscribers
We got our first 1,000 subscribers through brute force. We posted on our personal LinkedIn, Facebook, Twitter, and Instagram accounts with a story on why we founded The Peak and what readers could expect.
But the real growth came from direct 1-to-1 messaging. We went through our contact list and individually messaged anyone who might be interested:
Hey! Wanted to let you know I started The Peak, a daily newsletter covering the top Canadian and business news in an informative and entertaining email. Would love if you signed up: readthepeak.com
Between the three of us we were able to assemble our first thousand subs which gave us a good foundation for future growth.
Once we got the first thousand and validated that subscribers were getting value (30% daily open rates), we wanted to really turn the taps on for growth. So we started running Facebook and Instagram ads.
We originally were running traditional ads with a standard subscribe CTA, but quickly found that contests were getting far lower CPAs (Cost Per Acquisition). Although these subscribers were more likely to churn, even after removing the inactive subscribers, we were getting around a. $.60 CPA.
AirPods were our most popular giveaway so we focused on that to get our next 3,000 subscribers.
As our numbers started to grow, we knew we had to set-up a referral system. My co-founder developed a program that would incentivize readers to refer their friends to The Peak. For each new subscriber they referred, the reader would get one point. Points would make them eligible for free swag ranging from stickers to a MacBook Pro at the highest tier.
The program made the most out of our existing list and created a cheap channel for ongoing growth. We expect that between 30-40% of our growth over the next year will come from referrals and are investing heavily into it.
This is a good place to remind you to get your referral link and start earning free stuff right now.
We knew intuitively that business school students would like our product. As they prepare for summer internships and future full-time employment, they need to stay informed on the latest Canadian business news, but want to do it in a tone that resonates with them.
Here’s the issue: I haven’t been on campus in about seven years. So we put a call out for business students to help us grow our brand on campus. In return, they’d get networking opportunities, mentorship, a line on their LinkedIn profile and a reference letter from us.
We recruited six ambassadors initially who did an incredible job. Their success was instrumental in getting us to 7,000 and we’re looking to grow the program in 2021.
Sales 101: How we sold $4,000 in newsletter ads
As mentioned in the introduction, when we launched The Peak, we wanted to prove a number of assumptions we made about the business – and the core one was if we could sell ads.
So in this section, we'll walk you through our thinking around sales and how we proved to ourselves that The Peak could be a real, profitable business.
Set a goal
We didn’t go out trying to land $100,000 worth of ads. We set expectations. The main purpose of this initial round of sales was to validate that advertisers were interested in email newsletters as a potential acquisition channel.
If we could close $4,000 of ads in four months, that was good enough validation that we could build a real business off of the newsletter.
It can be really hard to price anything and you’re going to mess it up. We researched the rates that other newsletters were charging – mostly through listening to podcast interviews with the founders of similar products – and we landed on terms competitive with other outlets.
In our case we originally charged $250 for one week of ads. This worked well for the first batch. We had a number of awesome brands take a chance on us (including Second Closet, Willful, Ego) but, as we grew, we were interested in a more scalable and tiered structure.
For this new model, we charged $50 per 1,000 opens. Our thinking was that advertisers should only be paying for the numbers of eyeballs on their ads, not the size of the overall list which is how online advertising has traditionally been sold.
Once we had pricing, we developed a media kit. Here’s our latest version.
With the media kit done, it was time to start outreach to prospective advertisers. We have a fairly good idea of who our audience is and the types of brands that resonate with them. So we made a list of all the brands that we could think of and started to research their team.
In my experience, I found that anyone on the marketing team is likely a good lead. The higher on the org chart you can go, the more success you’ll get. To find their emails, I’d try all the standard combinations ([email protected], [email protected] etc.) on a tool like Mailtester.
On what to send them, I first tried sending a longer, more detailed email about our service but found that a shorter, straight to the point email worked better. Here’s what I used:
My name's Brett and I'm the founder of the The Peak. We're a daily business, tech and current events newsletter written for a Canadian millennial audience.
We have a readership of over 7,000 Canadian young professionals and each email gets an average open rate of 20-30%.
Would love to chat about how we can help you acquire more [BRAND] customers.
Can we setup 15 minutes to chat later this week?
Sales is a funnel and you want to move every customer down to the final sale. I found that getting advertisers on the phone increase conversion because it put a face to the email.
On the calls, I talked to clients about my background, told them the story of The Peak and then explained why our readers aligned well with their audience. And it worked!
Here are the results:
110 emails sent
15 phone calls
13 closed ad deals
Avg. deal size $320
Total ads sold: $4,160
What’s next for The Peak
You don’t need me to tell you that 2021 is going to be a HUGE year. It’s going to be a big year for The Peak and a big year for world.
Our focus for the first six months is growth of our marquee daily newsletter product and our podcast, The Peak Weekly. Now that we've figured out which channels are the biggest audience drivers, we're going to look to double down on them with resources and money.
On the money point, we've decided to raise capital. Here's our thinking on why:
To get The Peak to where we think it can be, we need to be full-time on it and that requires us to take a salary, which we can't do on existing ad revenue;
We're really confident that with capital we can spend efficiently to rapidly grow our audience faster than without;
And that growth means a faster path to profitability and more long term value in the business.
We're in the process now of raising and are hoping to have our round closed by January.
The idea behind The Peak Weekly is a complement to the daily newsletter. So if you feel behind on the news one week, you'll be able to listen to The Peak Weekly and get up to speed on the biggest stories in 10 minutes.
From a business perspective, a podcast increases our distribution and creates a new channel to sell ads on.
Okay, that's' the first edition of The Peak in Public – thanks so much for getting this far and joining us on this journey.
If you have any questions about the above content, we'd love to hear from you. You can reach me directly at [email protected] – don't hesitate to get in touch!