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LATEST POSTS 📚

If you’re new, not yet a subscriber, or just plain missed it, here are some of our recent editions.

👋 Getting To Know M3. An handful of ideas and tidbits that I have had over the months, all rolled in to one.
🍊 The Future Of The Creator Economy. An interview with Jennifer Phan, co-founder & CEO at Passionfroot.
🌱 Collection: Explain Your Leadership Philosophy? A collection of thoughts from a collection of leaders.

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HOUSEKEEPING 📨

Week one of twenty flying solo (with my dog) over in Argentina down. The week was filled with a new haircut—Tommy Shelby lookalike—lots of dog walks, and incredible jet lag. Jet lag + insomnia, which is not a combination I’d recommend. It’s not all bad though.

Today’s piece is one I’ve wanted to write for a long time. I think you’ll enjoy it. Newsletters are a fascinating little business that’s going through an extraordinary boom right now. I really think they’ll play a much larger part in GTM strategies for companies all over the world in the coming decade too. Anyway, here is the piece. Enjoy!

BUILDING IN PUBLIC 🔎

How This & Other Newsletters Make Money

Money, cheddar, cheese, bread. You need it, I need it, we all need it. Newsletter operators also need it. But how does a 1500 word email, dropped across to my inbox on a Sunday morning, make enough bank to cover not only the doctor’s bills associated with bleeding fingertips syndrome, but in some cases some absolute dosh (Australian colloquialism for money). If you have ever asked yourself this question, well good news: I am here to save you. I am your Lisan al Gaib of the details, the Kwisatz Haderach of insider intel.

Learning to write on the internet is a genuine superpower, and when applied to newsletter, it opens up what I firmly believe is the greatest business model on earth, newsletters. Your chances of building a decacorn newsletter are slim to none, but your chances of buying a great house with a movie room and a decent sized lap pool is orders of magnitude higher through newsletters.

Newsletter business models

There are a number of ways to skin the cat that is the newsletter business model, a number of which we’ll break down shortly—below though I’ve collated a neat little table with the most common examples.

Man, this is a big table.

There are probably a handful more, but for today, let’s take a look at the models above. Some are great, some are totally bogus, and there is one surprising model that I am really excited to dive into that will blow your mind. Also, here is some fun maths to chew on by the smartest guy in newsletters, Matt McGarry.

Interesting right? So unless you wanna be star in the remake of Mo’ Money, Mo Problems read on cowboy. I am about to break this entirely down for you right here and right now.

The Great Lenny Rachitsky

When I say ‘The Great Lenny Rachitsky,’ I really do mean it. If Joe Rogan is The Podfather in today’s world—_{technically anyone who knows podcasting knows the true Podfather moniker actually resides with Ricky Gervais}—then Lenny is the Godfather of the SaaS newsletter.

*_{Technically this should probably go to Ben Thompson who we’ll speak about later as well.}

In 2019 Lenny started his newsletter named the wonderfully clear, ‘Lenny’s Newsletter,’ and the following year he announced that he was adding a paid plan to his newsletter. What “adding a paid plan” meant was actually limiting non-paid readers to ~1 edition per month.

This was a risky decision. But the market decided that his content was that valuable—mainly targeted towards product peeps, founders and growth nerds—that they were willing to pay for it. Lenny’s paid subscribers receive two posts per week along with an invite to a subscriber-only Slack community, access to a private hand-curated directory of resources, discounts, product coaches, recruiters, and more. Today, the Slack community has 19,440 members. I know because I am one of them.

Lenny doesn’t monetise through ads. The main revenue stream is his paid subscription, which retails at $15 per month. There are annual discounts, and there may be some grandfathered in prices, but if you take the number right from the top it’s 19,400 subscribers at $15, meaning he makes $291,660 per month, or $3,499,200 annually. Not too bad at all.

Now, I need to be clear here; what we have calculated is just from Lenny’s paid subscribers. It does not include income that comes from his swag store, his events, his job’s board, and most meaningfully, his podcast / YouTube, which he recently quoted as making as much money as his newsletter.

My honest assumption from what I can see is that Lenny would make closer to $10 million dollars per year from the brand that is Lenny. And that number would be growing fast.

Packy McCormick of Not Boring

The next cab of the rank today is Packy McCormick, who might be my favourite writer on the internet. Packy writes incredibly detailed breakdowns on how the world / internet works that make me feel incredible dumb, while actually helping me get smart.

Some of his more popular posts include; Excel Never Dies, The Great Online Game and my all-time favourite read, the Sci-Fi Idea Bank. The latter being the one resource I would turn to should I ever finish my time at my startup, Athyna, and be looking for an idea that might genuinely change the world.

Packy started writing in 2019 just after he took David Perell’s writing course, announcing it with this tweet. 12 months later, as per his own 1 year review piece, Packy had grown to 42k subscribers.

With such strong results in year one, and in the middle of a bull market for tech, which is Packy’s strong suit, he decided it was time to monetise, midway through his second year, around the same timeframe it took Lenny to do the same.

A buddy of mine Chenell, who writes great deep dives on creators, did a breakdown on Packy in 2023 and worked out some back of the napkin maths on what he might be making per year on his newsletter using some open data points and some assumptions. For context, Packy has two products; main placement ads at the top of the newsletter, and long form deep dive pieces written on your company, often referred to as ‘advertorials.’ He is the TL;DR with that in mind.

Four million dollaydoos for a years work putting pen to paper, not too shabby. Packy’s audience is ~40% larger today than it was last year as well. But that’s not actually the most interesting thing Packy does. He also runs what started as a syndicate, then grew into a venture fund in Not Boring Capital, which is now in Fund III, raising $30M, with a cap of $50M. The first two funds seemed to be rather successful too.

If you consider the standard 2/20 model of venture capital, then Packy would be taking home between $600k-$1M in management fees alone. Not to mention the 20% carried interest on the portfolio. Incredible.

💡 Note: One of things Tom credits to his success is his content assistant he hires through Athyna. Reach out if you want to up your game too.

Stratechery & The Van Trump Report

If you’re a 30 something founder writing about tech newsletter’s you’ll lead with Lenny. If you are in your 40s and you do the same you are leading with Ben Thompson, and his media brand, circa 2013, Stratechery. It’s assumed that Ben has somewhere in the vicinity of 40-50,000 paid subscribers today. If this is the case, and it’s safe to assume it’s close enough to the mark, then Ben would make north of $5M from his newsletter alone.

The first Statechery send was shipped on March 25th, 2013 and since then the brand has grown to one of the most respected reads in tech.

Another OG newsletter boss is Kevin Van Trump—who I assume went to same the same branding school as Lenny—who writes the The Van Trump Report. Kevin’s story was highlighted after a chance meeting with Sam Parr, founder of The Hustle at a conference Sam was speaking at. Sam presented on newsletter growth, but had his mind blown when Kevin and he were speaking after the conference.

Kevin shared that he had a much more modest audience by volume—something in the vicinity of 30,000 subs—but that he was making $20 million dollars annual via those subscribers. Kevin, like Lenny, is pay to play. The difference being is Kevin charged 4x as much at $60 per month.

Through the success of his newsletter, Kevin also created FarmCon, an annual conference for thousands of farmers, and Ag Swag, a company making hats, shirts, vests, for other companies across the industry.

How Open Source CEO makes money

This newsletter really relies mainly on the main ads you see at the top of each send and then advertorial pieces I do for select companies. So far I have done written pieces for the following companies: Deel (x2), Sidebar (x2), Convex (2nd coming soon), PostHog (x2), and Attio (2nd coming soon).

The future for me / us

There is one business model that I really do like, that I could see myself implementing through the newsletter in the future, and that is a growth stage investment syndicate. I stumbled upon a guy named Alex recently. Alex runs the Last Money In newsletter and community. Last Money In has only 41k subscribers but brings in $200k in ad revenue, and his paid newsletter, Deal Sheet, has $500K in ARR. They do it through having a paid entry to see the best deal flow across multiple investment syndicates.

I wouldn’t follow that route, but instead, invest in secondary markets into startups we all know and love. Think Figure, Anthropic, Deel, Rippling, OpenAI, Anduril, Databricks, Stripe etc. Why secondaries? Well, in simple terms, it’s easy due diligence for me to understand.

I have access to the best early stage startups APAC has to offer through my investing at Startmate, but if I want to bring my audience along for the ride, I want to make things simpler and back exciting companies that are less opaque. I am serious about this, and would like to start building some interest so if you’re interested, let me know.

The other thing I find interesting about this opportunity is that if we can build this syndicate, we can get decent allocation into some of the hottest opportunities with companies that are literally shaping the world as we see things today.

A fun resource from Packy

If you are interested in playing around with a model that will show you the difference between the subscription versus the sponsorship model, you can head over to this open source resource Packy shared in Not Boring’s 1 year in post.

It’s a fun and easy way to play around with figures if you are a newsletter operator yourself, or currently an outsider thinking about dipping your toe into the space.

Summary

Well, I hope you enjoyed this little waltz down newsletter lane. There are many ways to make this business model work. Most are common, like ads and subscriptions, but then there are more bespoke and unique ways; owning your products, building an investment fund. One thing I do know is that newsletters are awesome. And learning to write online is a great skill today, and one that will unlock the keys to the playground that is the internet for anyone who dedicates themselves to the craft. Ciao!

Extra reading

• How Ben Thompson Got 40,000+ Paid Newsletter Subscribers - August, 2023

• How Lenny Rachitsky Gets 18k People to Pay for His Content - August, 2024

And that's it! You can follow me on Twitter and LinkedIn and also don’t forget to check out Athyna while you’re at it.

BRAIN FOOD 🧠 

It’s safe to say the bald brothers behind a16z, said Andreessen and said Horowitz are pretty bullish about the recent election results. This episode was an interesting look at how they look at the relationship between government and tech, and how making things difficult for the tech section really ends up being a national security risk.

HIRING ZONE 👀 

Today we are highlighting AI talent available through, Athyna. If you are looking for the best bespoke tech talent, these stars are ready to work with you—today! Reach out here if we can make an introduction to these talents and get $1,000 discount on behalf of us.

TWEETS OF THE WEEK 🐣 

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 Attio—powerful, flexible and data-driven, the exact CRM your business needs.

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

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