💰 Subscriber ARR on Substack: $43K
💰 Subscriber ARR on Gumroad: $18K
😊 Customer Count: 100+
💔 Monthly Churn on Substack: 8%
📝 Free Email List: 2,700
🔎 Average Newsletter Visitors: 1500
In December last year, I decided to launch a paid newsletter. This was before newsletters were hot and before I’d heard of Substack. I chose the newsletter medium as a way to scale and replace consulting. Previously, I was working with investors, helping them to acquire and operate revenue-generating content websites, but kept running into myself as the bottle neck. I wasn’t scalable, and I’ve never truly enjoyed consulting. Instead of charging ~ $1K/m and working with 5 clients at a time, I could instead charge $49/m and aim to get 100 paying customers.
I started out on Gumroad and reached ~ 70 paying customers by leveraging the name I had built in the website investing space (from the Flipping Websites brand I sold) - in fact I called it Patey Premium which was a working title I couldn’t improve on! But my personal email list of ~2K was not enough to keep growing the revenue base. I needed more eyeballs.
I created a free weekly newsletter called Website Investing Weekly that gave a review of the week’s news, but while positively received, it wasn’t moving the needle. As soon as an email was sent it would not be seen by someone new.
When I saw that Substack offered both free and paid newsletters published on the web (which could be shared), where you could create a funnel between them... I was all in. I had previously built and sold a six figure software review site in the funnel space and could see how free newsletter content, could directly convert free subscribers into paying subscribers.
Back in May I announced the switch from Gumroad + email provider to Substack, started formatting the free newsletter much better (emulating the best I could find such as Morning Brew, The Hustle and Stacked Marketer) and created a weekly podcast. With the podcast I did something relatively innovative. I got the idea of having a paid podcast from the Acquired Podcast who have a free one and also a paid one called the LP Program, but having two podcasts seemed like too much work. Instead I did longer form interviews and simply split them into part 1 and part 2, with the second part for paying subscribers, which converted well.
I was able to reach over 100 paying subscribers by the summer but I was burning out trying to be a one man media publisher, I needed to build a team.
I emailed out that I was looking for help with the newsletter, deals email and podcast and quickly filled the positions from subscribers which was great.
Now that I had gotten my time back, I started thinking about where to take the publication next. I’d received an acquisition / partnership offer from a company in the space, but the proposed direction didn’t resonate with me. I knew it was time to reach out to Travis.
I always had the idea to sell the newsletter to Travis Jamison from Smash VC as I knew he had previously acquired the Founders Grid newsletter from Chris Osborne. Indeed, Travis was one of the first advertisers of my free newsletter with his SEO agency Smash Digital and I was wondering if part of the reason was to keep in touch with me too. It felt we were on the same wavelength.
People say you shouldn’t build to sell, but the Built To Sell Audiobook had a big impact on me when I listened to it back in 2016 before I had sold any asset.
Travis said he was interested in investing as a minority owner. Because I’ve had exits previously, a minority investment didn’t make financial sense as it wouldn’t change anything for me. It made more sense for me to cashflow the business without the stress of taking investment - although I knew Travis would be as cool as a cucumber, I hate the thought of losing someone else’s money.
Then, Travis said he was open to buying the whole business if I’d stay on for 6 months to transition. That certainly was interesting to me, especially as this business only started 7 months prior, built during a global pandemic.
But I wanted to know what I would be doing next before exiting. I was having a lot of fun with this newsletter and couldn’t yet see what the next move was.
Travis had a project on the back burner he wanted to create but hadn’t yet found the time. He wanted to create a paid community for entrepreneurial investors - an audience that wasn’t being served by existing communities. People who have had success building and selling websites and startups who are now interested in and actively looking to generate cashflow from their capital.
I mentioned on a recent Newsletter Crew podcast that the end point for paid newsletters set up by creators (rather than journalists) is a community. A community is where you can offer the most value. It is the hardest business model to copy as it’s about relationships and trust. And as Travis set out to me, it has incredibly low churn and even negative churn over time as you can increase the price as you increase the value.
Today, we just announced that the Substack publication I started is now part of investing.io - a home for entrepreneurs turned investors.
As Travis states in the announcement post:
There are so many types of "investors", but I feel that the community that I most connect with, and can benefit the most, is the one of entrepreneurs who turned into investors due to success in online business. I believe that we have a special skill-set and industry knowledge that common stock pickers will never understand. I believe we can make outsized returns, with lower risk, using the specialized knowledge that only we have, and if nothing else... "investopreneurs" are the people I enjoy spending my time with.
Travis and I consider this as the ultimate business, leveraging media to both attract the right type of community members and also entrepreneurial dealflow which the community will invest in (such as my recent investment into Chris Osborne’s The Newsletter Company).
There will be more deal-flow, faster deal-flow, and an expanding pool of assets to invest in.
But what’s most important to us is that we spend time and grow as a community together, both online and IRL - we will get into events and find lots of excuses to meet up after this pandemic!