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🗺️ The Four Type Of Managers & How To Manage Them. A leadership performance matrix to assess your team.
🌀 We Raised $2.5M To Build Athyna AI. Launching Athyna AI, how we got here, and how you can join the ride.
😩 Your First Product Will Be A Dumpster Fire. Teething problems of world leading companies.

PARTNERS 💫

HOUSEKEEPING 📨

Today’s piece is a fun one. Something I’ve been really thinking hard about for the last couple of years. Creators and how they are slowly taking over the B2B landscape. I think if you are a founder and you are not building your media slash creator strategy, you are going to fail in the coming years. More on that later.

We are in a position now where we can reach out to the best companies in the world to tell their story. And that will only accelerate in the future. It’s a real privilege. So thank you for reading and making that possible. Anyway, let’s move on to today’s edition.

TL;DR ME 🙄

• Negative CAC through media and tech. Smart companies are reducing their customer acquisition costs by integrating with creator brands, effectively turning lead generation into a profit centre.

• Understand CAC and why it matters. Customer Acquisition Cost (CAC) is a critical metric for business health, impacting profitability, growth potential, and if a VC will fund you in 2024.

• The rise of the creator economy. Influencers and creators are reshaping marketing strategies. They are leveraging authentic engagement and vast reach into products to serve their audiences.

• Case studies of success. Companies like HubSpot and Robinhood are leveraging media acquisitions and creator partnerships to achieve negative CAC.

• Future of media and tech integrations. The intersection of media and tech is evolving, with new tools and strategies emerging to further reduce CAC and enhance customer engagement.

THE CURRICULUM 📚

Media + Tech = Negative CAC

The marketing and communications landscape is changing. It happened with B2C a decade ago with the nauseating rise of the influencer. Now it’s happening in tech. This time with the creator economy movement.

Traditional media has been in structural decline for years, while new media—podcasts, communities, blogs and newsletters—is here, and it is thriving.

This matters because we, as leaders, need to know where to spend our budgets in the best way possible. We need to know where we have the greatest chance at turning $1 into $5. It used to be Facebook Ads, before that it was grey hatting your SEO. Cold outbound at scale worked wonders for years.

There have always been channels for a smart founder to go and exploit. In other words, you always knew how to grow. But now those dollars that get pumped into the Meta machine don’t come out as $5, they come out as $1 dollar and 10 cents.

In today’s piece we aim to demystify the creator channel, and show you how it may be possible for you to aim for negative CAC in the not too distant future.

Understand CAC and why it matters

CAC, or customer acquisition costs, isn’t rocket science. It’s the art dividing the expenses to acquire customers, mainly the cost of sales and marketing, by the total number of customers acquired over a given period. Having said that, CAC is more important than ever today.

In the last decade, as we went through the ZIRP period, the rhetoric was growth at all costs wins. Blitzscaling was being fetishised from San Francisco to Saint Petersburg. Companies like Fast were out there burning $120M to get to $600k of revenue. Those days are dead.

Today, money is not cheap, but expensive. Growth is not given, it is earned. And how much money you spend to land Acme Corp really does matter. This is where creators come into our story, and the idea of owning your audience.

Case studies: companies building through creators and vice versa

Let’s take a look at a few differing examples of companies that are building through creators, and conversely, some creators that are leveraging their own audiences to build big companies of their own.

Hubspot

In early 2021, in peak mania, Hubspot announced an acquisition that may have seemed odd to some. One of the leaders in CRM and marketing automations was buying The Hustle—a daily newsletter?

Although it’s not your typical tech acquisition, it made great financial sense. If you’re selling software, you are working with customers who more than likely have an incredibly high lifetime value.

Not only had they purchased one of the largest newsletters in the world, they also snared the My First Million podcast, which happens to be one of the most popular podcasts in the world, hosted by Sam Parr and Shaan Puri.

My First Million is kinda like the Joe Rogan Experience of business. Very loose, lots of banter, and with a broad listenership. Perfect for Hubspot, whose customer skew SMB.

Following this acquisition, in an incredibly crowded space where the cost to acquire customers is intensely competitive, Hubspot now have two owned media assets. And these assets will continue to drive revenue and brand value to Hubspot over the short to medium term.

Take a look at Ahrefs and you’ll see that HubSpot gets 12.3M monthly organic users into their website every month from their content strategy. This is just an extension of that.

Following the success of My First Million, Hubspot built out the Hubspot Podcast Network, which now boasts a total of 34 podcast. Incredible.

The many agencies of Sahil Bloom

Sahil Bloom, the ultimate threadboi cum business mastermind, has single-handedly turned has massive Twitter following into a portfolio of cash flowing businesses generating more than $10M in annual revenue.

Sahil, up until quite recently, was working in private equity. So rather than partner with large brands, or be acquired into big tech, he decided the better option was to take his influence and plow it into his own ventures. Some of which you can see below.

He built creator themed agencies. Most of which are selling done-for-you packages, using offshore talent to power it in the backend. The incredible thing about Sahil is he only wrote his first Twitter thread in May of 2020.

Sahil owns every one of the agencies mentioned, and runs ads for partners inside of his newsletter. This is the first instance of negative CAC we will hear today. It’s feasible that with every newsletter send Sahil could sell tens of thousands in ad inventory and drive tens of thousands of value to his companies at the same time. Negative CAC.

Robinhood eats up MarketSnacks

When Robinhood snapped up MarketSnacks in 2019, it wasn’t just a casual foray into content; it was a calculated move to turn passive users into engaged, informed investors. MarketSnacks, known for its witty, accessible takes on financial news, seamlessly morphed into Robinhood Snacks.

This integration meant that every Robinhood user now had a financial guru in their pocket, translating Wall Street jargon into everyday language for 10’s of millions of subscribers. Imagine getting your daily market updates with the same ease and humour as scrolling through your social feed—that’s the Robinhood Snacks effect.

Since then Robinhood has launched an independent media arm, Sherwood Media, led by co-founder and former editor-in-chief of The Verge, Joshua Topolsky. Sherwood, which not only houses Snacks, also just acquired Chartr, a company specializing in data visualizations and it plans to integrate into, you guessed it, Snacks.

In June of 2023, the company said it planned to expand to events, podcasts and build out a print magazine.

Jimmy Donaldson aka MrBeast

MrBeast first uploaded a video at 13 years old. It was a nonsensical, un-engaging two-minute Minecraft play through. You would never have assumed that video would be the spark that catalysed the transition of little Jimmy Donaldson, into the 266M subscriber, MrBeast, as we know him today.

And my company, Athyna

At Athyna, we have been leaning heavily into the idea of growth through creators. Firstly through me and this newsletter. The very fact that you are reading these words right now probably has you thinking—’hmm, yes I have been meaning to reach out about hiring through Athyna.’

If not, that’s ok. But it does help and it is working. This newsletter, Open Source CEO, is not owned by Athyna. It’s a separate company. But with 30k subscribers in the first year you can assume this newsletter might get to 100k within the first two. And maybe 200k the year after that.

That gives me a phenomenal media asset—a great company in it’s own right—that through good, engaging content, funnels leads into my other company, Athyna. It’s not exactly negative CAC but it would be if Athyna was the owner.

The other place we are investing energy is into a creator program. Our recent cap was mostly led by creators. We now have ~15 of the world’s biggest and/or fastest growing B2B creators as investors in Athyna.

We think that while our competitors are battling it out, digitally trying to make 10c on each dollar, we will make a 10-100x return on our partnership with our creators. The upside is endless.

Other movements in the space

But that’s not it. Companies all over the map are scooping up media. Take the Pendo purchase of Mind the Product for example, the premier brand for 300,000 product managers, designers, and developers.

Take a look at this list of other recent acquisitions. Tech acquisitions of value add media and community brands.

Admittedly, more than one of these acquisitions has been spun back out or re-purchased—most famously by Dave Portnoy buying Barstool back for $1—but the point remains. More and more companies are acquiring media brands.

The future of CAC and creators

All-In podcast co-host David Friedberg said recently that; “In 30 years time all traditional brands will be dead.” And I tend to believe him. As more techno-first, social-native youngsters grow up into the next generation of decision makers, more and more old media will recede into memory.

In the not too distant future; media will be led by humans, not brands. Creators will spawn businesses as fast as the algorithm refreshes, and who knows, maybe the first TikTok star will run for office. The future is coming fast, be ready.

How you can apply this

• Set your strategy. Decide whether you want to build, partner or buy. Build is slow, partnering has lower upside and buying is expensive. All can work, the first step is to identify which fits for you.

• Then go and execute. The key here is to get start on a creator strategy. Ideally it’s owned media. Buying or building. Then you are in control of your own destiny. The new age SEO.

Further study

• Stripe, HubSpot, And JP Morgan Are Buying Audiences, CB Insights - October, 2021

• Should you buy a media company? Kyle Poyar - October, 2022

• The Rationale Behind a $27M Acquisition, Failory - May, 2024

• Mastering Customer Acquisition Cost, Equals - Unknown

And that’s it! Now get out their and start building, buying or partnering with your own media brands.

BRAIN FOOD 🧠 

A nice read from Productify on product strategy today. This is the only Strategy Framework you need. Period. The internet is legit the only education you’l ever need.

TWEETS OF THE WEEK 🦧 

Love this from Blackbird co-founder, Niki Scevak, this week.

Sponsored by Feastables, haha.

Which leads me to my final point.

TOOLS WE USE 🛠️

Every week we highlight tools we actually use inside of our business and give them an honest review. Today we are highlighting PostHog - product analytics, session replay, feature flags, A/B testing, data warehouse and more.

See the full set of tools we use inside of Athyna & Open Source CEO here.

HOW I CAN HELP 🥳

Here are the options I have for us to work together. If any of them are interesting to you—hit me up!

🌏 Hiring global talent: Check out my startup Athyna.
🧰 Want to outperform the competition: See our suite of tools & resources.
🏡 Looking for a personal board of directors: Check out Sidebar.
👀 Reach thousands of tech leaders: Advertise with us here.

And that’s it! See you next time. ✌️