"Email Is Dead." This $75M Newsletter Disagrees. Here's How:
Good afternoon and happy New Year!
2022, the bar is low. Lower than ever before.
I want to say thank you for being here. It means so much to me that you've taken the time to read and subscribe to my newsletter. There are trillions of other newsletters and I appreciate you allowing Rocket Fuel a few moments of your time at the beginning of each week.
I’ve received many messages from you all on LinkedIn about how you’re enjoying in the newsletter including helpful feedback on how I can make it better.
With that being said, many of you might be receiving this newsletter via an email from LinkedIn. And a lot of you shared with me that you’ve tried communicating with me through this email. I’ve spoken with LinkedIn and unfortunately there’s no way for me to see your email responses. SAD!
So email me email@example.com or message on LinkedIn if you have any feedback on the newsletter.
This is just the beginning for Rocket Fuel. I’ve got a lot of exciting ideas & developments to add over the next year - but in this week's edition:
how Morning Brew grew their flagship newsletter
content, newsletters, and the landscape of media
the importance of focusing on one platform and when to diversify
Let’s dive in.
For those who haven't heard, Morning Brew is a newsletter-first media company that offers young professionals engaging, entertaining business news.
In 2015, Morning Brew co-founders Alex Lieberman and Austin Rief – (classmates at the University of Michigan) – after realizing that their fellow business students were bored by traditional business news, so they created a daily newsletter that later came the $75M newsletter, Morning Brew.
It's known they had no media background and that they started with a simple question:
"How do we think a newsletter should function that educates modern business leaders in the business world?"
Austin shares they began with two guiding principles:
"We wanted to write our newsletters in a conversational tone.
We wanted to write for intellectually curious readers."
What started off as a small project to help out their classmates at the University of Michigan has transformed into a global community.
In 2018, Morning Brew grew to 160,000 subscribers (approximately the population of Jackson, Mississippi).
In 2019, Morning Brew surpassed 1M subscribers (or the population of Austin, Texas).
Since then, they've launched other products - newsletters like Retail Brew, Emerging Tech Brew, and Marketing Brew. Additionally, audio. They've launched a few podcasts with their most popular podcast being Business Casual, boasting over 1M downloads.
The big payoff came in 2020: Morning Brew grew revenue by 333%, from $3M in 2018 to $13M in 2019.
Their flagship daily newsletter (6x/week) Morning Brew was the primary breadwinner, “accounting for approximately 95% of the company’s overall revenue in 2019,” Digiday reported.
In 2020, Morning Brew hit 2M subscribers with a reported average open rate of 42%.
That's a million modern business professionals opening their newsletter every day.
As a point of comparison, a 15-25% open rate is considered “good” in most industries).
A direct to consumer relationship with easy two-way communication.
Also in 2020, Insider Inc. (parent co of Business Insider) bought a majority stake in Morning Brew "in all-cash deal valued at $75M," Axios shared.
I shared in my 'How To Think Like A Media Company (For anyone... for real)' how Web 2.0 and the iPhone has changed the way consumers are entertained and educated forever.
There are over 4.75 billion mobile phones in use today, including over 2 billion smartphones, most of which possess supercomputer-like capabilities that can be used to create (and consume) content in seconds.
Each of these devices is, in fact, a broadcasting device (or channel).
That’s over 4.75 billion Broadcast Channels alone just from mobile phones. Directly reachable and accessible through channels on the internet like social media and email.
As Co-Founder Alex Lieberman shares,
"The money flows where the audience goes".
Why did Hubspot purchase The Hustle (business newsletter) for a reported $27M?
Why did NBC CBS, Fox, ESPN and Amazon pay $110 billion for media rights to the NFL for the next 11 years?
Why did Spotify sign a $100M with Joe Rogan to keep his podcast exclusive on their platform?
Simple. There is a tight grip on massive distribution.
And now on the other side of the coin, why is it that newspaper advertising revenue is down 77% in the last 13 years?
We live in an age where individuals can build an audience, just like companies can.
Web 1.0 refers to the first stage of the World Wide Web evolution.
This was the first time Internet technology was accessible to anyone. Computers were cheaper to make allowing more consumers to purchase them.
The huge majority of internet users in Web 1 were consumers of content. Personal web pages weren't common but they were accessible. Websites consisted mainly of static pages hosted on ISP-run web servers, or on free web hosting services.
When Web 2.0 came into our lives (arguably around around 2004), the internet changed.
Web 2.0 refers to the advent of websites that emphasize user-generated content, ease of use, participatory culture and interoperability for end users.
Let's quickly breakdown what this means.
User-generated content = any form of content—text, posts, images, memes, videos, reviews, etc.—created by individual people (not brands) and published to an online or social network.
Ease of use = Tools like WordPress launched in 2003 making websites and blogs easier and cheaper to create. YouTube launched in 2005 which made it easy and free for anyone to make video content.
Participatory culture = With these new tools to create content, content consumers could easily interact and engage with the creators and publishers. Before the internet, you couldn't interact directly with your favorite TV show or newspaper column. Now people are tuning into podcasts, YouTube shows, and livestreams for their main content consumption. And, again, they can interact directly with their favorite creators.
Interoperability for end users = the ability of different computer systems, computer devices, applications and products to connect and communicate in a coordinated way, without effort from the end user. Functions of interoperable components include data access, data protection, data transmission and cross-organizational collaboration.
Simply stated, there's a TON of background processes and systems happening behind the scenes that make our technology use possible. The more expensive those systems are to operate or improve, the less convenience we (the end users) have when experiencing the technology.
During this period, we were introduced to every social media site. Social media networking was invented and hit mainstream adoption in less than 10 years.
For the first time in history, billions of humans had easy accessibility to create blogs, vlogs, podcast shows, software products, communication channels, virtual communities, all from their laptop and a WiFi connection.
How did Morning Brew grow their flagship newsletter?
In an interview with Jason Schulweis, head of brand partnerships at Morning Brew, Live Intent shares just how it’s done.
"We are obsessed with gathering qualitative feedback."
Morning Brew gathers insights from its audience to build the best user experiences. That doesn’t just mean they measure email opens and clicks. They also share a dialogue with readers to learn about their specific interests and needs.
“For the most part, it’s an absolutely amazing relationship where a lot of readers will click ‘Reply’ and have a whole conversation with our editors on a regular basis,” Schulweis says.
The Morning Brew team didn't combine large email lists and bunch them together to start their newsletter. They gradually and intentionally grew their newsletter by focusing on a single platform, referral programs, and A/B testing subject lines.
The Referral Program
According to a popular Medium blog post by Morning Brew’s Product Lead Tyler Denk, the media company’s referral program accounts for 30% of their total subscribers and is the “secret sauce” that accelerated their growth flywheel.
Morning Brew leverages reader loyalty to grow subscribers organically through an incentivized referral program. Each subscriber gets a unique referral link – included at the bottom of every newsletter – and is encouraged to share it via email and social media. The subscriber can then earn various rewards based on number of referrals. Three referrals unlock a premium Sunday newsletter called Light Roast, 15 earn the subscriber a “Rise and Grind” coffee mug, and so on.
This word-of-mouth referral program is the biggest contributor to Morning Brew’s subscriber growth, says Rief.
“When you refer other people to this newsletter it gives you a sense of belonging,” says Rief. “We also very strategically place content in the newsletter that are talking points – fun facts or trivia that you may share with coworkers.”
The Subject Lines
One thing all successful referral programs share is they create a clean experience from a potential subscriber to a loyal one. In other words, they need to provide new subscribers with a seamless onboarding experience.
In the context of creating a newsletter audience, the initial touchpoint is typically a welcome mail. But for that welcome email to be opened in the first place, you need an enticing subject line. And as far as subject lines go? Morning Brew delivers every time.
The secret to their subject line success? They test their subject lines every morning (for more info on how they go about this, check out this Twitter thread from Morning Brew writer, Toby Howell).
Toby kicks off the thread with this Tweet:
"First off, we actually do A/B test our subject lines. we send the email out early to four separate batches of ~80,000 readers. Each batch gets a different subject line. Whichever one has the highest open rate goes out to the remaining 1.8 million readers."
Read the rest of his thread to master your email subject lines.
I shared in my How The Mayor of Miami is a Masterclass in Branding & Community Building the importance of focusing on one platform.
Don't try and do all social media channels all at once. Unless you have a big content team, you will burn yourself out.
Morning Brew could've attempted to diversify their content and channels to quickly. But instead they focused on creating a massive and highly engaged newsletter that they can use to grow other content formats and channels.
Get really great at creating content on one platform before you move on to the next.
Two Benefits to this approach:
1) Focus - It's easier to be a Master at creating content for one specific platform when you give 100% Focus
2) Once a platform is built up, it accelerates the growth of the next platform (Ex. having 10k followers on Twitter or LinkedIn makes it easier to build a 1k email list).
Co-Founders of Morning Brew saw how they could build a valuable, scalable company through media. They saw how easy it was to create content and overtime build a highly engaged business community. They knew how valuable community in a digital format can be.
If you have any feedback on this edition.... please message me on LinkedIn or email me firstname.lastname@example.org
Co-Founders of Morning Brew had no previous media experience. Stop selling yourself short. You can do it too. Now is a better time than ever to create your own distribution.
Focus on a single channel where you can create your own distribution and it's set up to grow organically. Think YouTube, a podcast, or a Newsletter. Don't focus on a new channel until you master your first channel. Follow the 80/20 Channel Rule I often talk about. If content is your game, spend 80% of your time on one channel and 20% of your time testing other channels.
Internet innovation over the years has made it easy and cheap to create a content channel. Just start.
If you're creating a community around a podcast, newsletter, or YouTube - be obsessed about collecting feedback. Iterate your content based on what you learn from your audience.
Thanks for reading this Rocket Fuel edition #5! Like I mentioned, let me know what you think!!