Crushing Local Email at Scale – How 6AM City Sends Millions of Emails Daily (ft. Ryan Heafy)

Foreign. Welcome back to audience Rich. Today we got Ryan Heffey, the co founder and CEO of 6am City, the company behind some of the fastest growing newsletters in the country. They're reaching millions every month with specific local news letters, I guess we can call them. And they've also just had a recent acquisition which we'll talk about a little bit later. And Ryan, excited to have this chat. How you doing?

Awesome. Great to be here with you, Chris.

Awesome. So we'll just start off with a little bit about how you guys scaled the business from kind of beginning to now. Kind of like the, I guess the apparatus, you could say. So if we start there, how are you able to scale 6am City while keeping each local newsletter, you know, truly local, Having that feeling of a local newsletter, possibly voice any of that stuff, you know, as you're expanding?

Yeah, when we. So when we started the company back in 2016, it was a product innovation of a legacy print media company that didn't have a digital footprint yet and always wanted to be in multiple cities. But print was so expensive to scale into multiple markets. And there was also recessionary things that happened back in the 2000s that prevented the print product from growings. In 2016, my business partner Ryan Johnson and I were involved in some leadership things locally in Greenville, South Carolina and he said, hey, help me, come over, come over and help me figure out how to do this, this newsletter thing. The skim is doing this. They're curating content and sharing in a conversational tone. And this guy Ted Williams up in Charlotte, he's got this thing called the Charlotte Agenda. Can we do that here in Greenville? And so I came on board. Between February of 16 and July 16, we pre sold about a half a million dollars of advertising on the back of the legacy print product to launch a newsletter. At the time, the reason that Ryan Johnston, my business partner, brought me to the table was because I brought an engineering background. I came from lean six Sigma quality systems like how do we do this in the most efficient possible manner to a legacy print product? And so we went and said, how can you do this with the fewest amount of people maintaining the quality and consistency of the content at scale? And so we started building and from the very beginning we built a playbook. And in the beginning that playbook became 13 ring binder, then 23 ring binders and 43 ring binders. And over the years we moved that into a platform called Trainual. And now we have an entirely digital playbook for how we built the business. Everything from how we do our audience development, produce our content and HR policies like everything under the sun that we do.

All your SOPs, everything.

Yeah, everything lives in that ecosystem. And that helps us now to onboard staff faster than ever before, get them up to speed. Whether that's selling or creating content or on the revenue fulfillment side, everyone knows and follows the same processes. That allows us to also be decentralized so we can scale up cities across America without ever going there. I mean, I've not been to the majority of the cities that we operate in ever, but I don't need to. We rely on staff that we know how to acquire in those markets that fit the mold of the business. And then we layer in those training procedures to get them up to speed. And so when Greenville started in 16, we were a product innovation, a community journals publishing company. We proved that we could duplicate the model into Second city. And then we launched three more and then more and got an infusion of capital along the way and have scaled that core model now to 31 US markets. In that journey we made some mistakes and we learned a lot. I think one of the biggest mistakes actually is we didn't lean into the audience development. And so when people are scaling newsletters, well, first it is scaling a newsletter is so much harder than running one newsletter like Morning brew compared to us or 1440 compared to us or the skim or Axios initially, like you have one newsletter, one list, one product, you know, you're only putting out one a day. I mean, we're doing, you know, 30 different newsletters every single day. And there's a order of operations that I think not everyone understands is that we know what we found product market fit with the product in one city. So we know how to take that to multiple markets. But then you want to make money and launch new markets. Well, what does it cost to launch that net new market? And then which things do you do first? And we initially scaled by hiring the people first, putting out the product that we knew people wanted. And then we followed it. Well, actually we hired the salespeople first and then we followed it with audience development. And it was backwards. We actually hired too many people up front front. We brought on the salesperson that couldn't sell the product because it didn't have a big enough audience. And so now you're burning you're a quarter million dollars a year per city without the revenue traction because we didn't have the audience. And so over the years we've learned that we should needed to change the process Each city initially had three editor or two editorial folks and a managing editor. And today we have moved to one editor per city with one managing editor per seven or eight cities. So the structure has gotten so much more streamlined. And then even sub to that is more of like an AI empowered seed newsletter that's a feeder. So you start with a seed based newsletter that grows into our launch model and then a growth model and then our profit model. So at the, at its foundation, you know, the seed market has no humans involved. It's relatively all automated and it's profitable, but it only has, it can only go up so high. It's got a threshold on the high end. The profit markets do, you know, over a million dollars a year against, you know, a very small staff as a full time editor, a full time salesperson and some additional overhead. But those are super profitable markets. There's just a, and then there's a linear scale in there. So the journey really becomes picking and getting into all these cities, growing that audience, allowing the revenue to mature against that and then adding a human and adding, recognizing those points when you're getting.

Into these new markets. Or let's go back to the beginning when you first started off that legacy model. Did you guys have a subscriber base to begin with from them that they just weren't doing this or they're just doing the general, the original newsletter where they're sending out articles, driving traffic to the what to their own newspaper and then going into these new markets. Are you trying to establish a base set of subscribers? I know you said you're trying to get the audience first before doing all this other stuff. So what's the like minimum you're looking for to acquire subs? You know, how many subs you're looking to start with in a new city? I mean the people who did this perfectly back in the day, I don't even know, I guess they're still around. They, they had a great model and they messed it up somehow. But Groupon, they would launch in a city and market the hell out of it and get all these signups and they didn't have a single group on a single offer for like almost, almost a year. But they built up a list of 500,000 people in that city or whatever. And then you started getting the sales people marketing. So I, I feel like that's kind of what you're talking about. So what did, what did that look like when you first started? And then these new ones where you're trying to get to the feeder. I Guess the seed file, we could call it seed list to actually launch.

Into when we first so when we back in 2016 to the, to 2021 or so, we let things happen more way more organically. We did start in Greenville, North Carolina with a seed list of like 5,000 subscribers. It's like 85,000 or something today. The seed list back then, I mean back then we didn't know there wasn't nearly as much attention on newsletters, on deliverability. It was easier to get into the inbox. That helped catapult us organically. But that that list grew from like 5,000 to 20,000, you know, maybe over like four years, you know, or 50,000. Today we're trying to get to 50,000 in a market where we've committed to it a human, you know, we want to get to 50,000 as fast as possible and we know we can do that in under a year. And that's just because we've really perfected the audience acquisition tactics and stuff around a city that's, that's changed the game. And so what we're starting to do now through the, our seed market strategy is put ourselves out there in lots of markets where we can start to build our domain authority, appropriate deliverability ratings on all the different things that are judging us to make sure that we are have a good healthy warmed list that's growing and maybe it's growing through our tactics, you know, at 10 people a day, 20 people a day, 30 people a day. And that can scale up as we, as the list gets bigger and we can feed more people into it on a daily basis. You know, how quickly can those lists grow? And what we start to see is traction. And so it allows us to see which markets do our self service revenue tools work in. And you're going okay, we got 1,000, 2,000, 3,000, 5,000 people and we're now making over $5,000 a month through national ads, EPC, CPA, CPL type ads, affiliate stuff and our own self serve ad platform around like listings. Once you hit that threshold where you can cover the cost of a full time staff person, you go put them in, you ramp audience spend even faster now against that market and you go, hey, let's go take it from the 5 or 10,000 subscribers to 25, 50,000. We can do that very, very quickly once we know that we put a human on it and the sales right sales attention to do direct sold because the margins on direct sold in a local market are way higher. Typically you're dealing with a less Sophisticated buyer and folks who are also more interested in like brand based advertising in the community. It's like the brands that are on the back of the race jerseys for the local 5K. Right. They want to be part of the community and so they pay a much higher CP flat rate against an audience. So it's just stair steps. But now today it's all about that list health and the audience in the net new markets. Pairing that with sales traction that then says add a staff person. So we're able to actually operate day one profitably in any market in the country and we can spin them up pretty fast. We've really perfected the launch process and have leveraged a lot of automation tools to support the growth, the content, the production process, the revenue fulfillment. Like we've got that stuff dialed in so well. Now we're 10 years in to this journey and learning about newsletters that we kind of know how to do it and what to do in which order. So that way we are always operating profitably even as we add staff to the mix and just keep pushing the miles milestones up. And the strategy also changes a little bit in the fact that we're in over 400 cities.

We'll talk about, we'll talk about that a little bit.

That gives us. That lets you grow faster too. Right. There's a niche local and then there's a broad spectrum for national reach. That's, that's a game changer for us.

Well, thanks for all that. Sure. People see all the efficiencies and structure you have put in place to be able to. And some people, I see people, I mean the local newsletters like the new hot thing out there. Everyone on Twitter's, you know, I'm launching a local site, I'm doing this and that and then I'm going to launch my eighth local one and it's like one person, like I don't know how this one person is going to be doing eight local ones by themselves. Can they really, you know, provide that value to each of their audiences? I don't know. But it's, it's amazing how you guys have been able to put that all together. Now let's get into email deliverability at scale is what people that follow me or look at myself or listen to me like to talk about or hear about. And in this case I think it's very interesting because obviously we're talking about local versus you know, a lot of people think newsletters as far as like national and world, whatever, you know, you just get an Audience from anything, build a nice list and set from there. But locals, a different ball game. Obviously the way you guys are doing it, where you have hundreds of newsletters out there, deliverability at that scale is different. Like people, like people have challenging challenges delivering at scale on One list from 50,000 to 100,000 to 500,000 to a million. Five million is one thing. Now will you ever have a list at 5 million? By itself? Probably not because there's not that many people in one, in one area for that list. Maybe you have a city in India or something. But you know, now you have to manage, you know, smaller size to medium sized lists, hundreds at a time. And how, how are we being, you know, manage that a little bit. That's, that's, that's going to be an amazing thing to, to keep an eye on and watch Getting into that right now. What ESPs are you using to manage your newsletter infrastructure?

Our primary ESP has been sailed through for the past seven years or so. That's directly integrated CMS, which is BrightSpot. So we use Send API to push our content from our CMS to the esp. Through some recent developments in the business, we now send across multiple different ESPs. So we're also using SendGrid and a couple other platforms as well. And we use Klaviyo for some specific marketing stuff and we use HubSpot for some other specific marketing stuff. So we've, we've had to protect and separate certain initiatives that we do as a business because we don't just send the local news. We have lots of different communication tools and we've made mistakes that have really hurt our deliverability historically. So it's it. We've had to make sure that especially if we're doing something that's super marketing heavy, we take it an entirely different path at a sail through to make sure that we don't compromise our core in any way.

When you're, when you're doing those like you're saying those marketing initiatives, you know a lot of people for targeting the audience or you doing it more, you talk more like on the acquisition of advertisers and stuff outreach, trying to get the revenue in the door.

Revenue in the door. So there's some cult like there's cold email outreach tied to our listings platforms and then there's our actual salespeople who send so many emails. But salespeople naturally get flagged and those tie back to our core domain. And that actually has caused pro deliverability issues from sales outreach where folks aren't getting through to the inbox went on the revenue initiative in the early days that was tied directly to our newsletter.

Domain, the main one.

Yeah. So like in Greenville Today it was GVLToday.com and our salespeople were also emailing and then it would hurt the are generating I think. So learning how to separate and isolate different things has helped over the years. So yes, Every there's different ESPs for different purposes or different platforms that leverage other ESPs for different purposes to ensure that we're not compromising the primary sending domain for the newsletter products.

Perfect. And now that let's just bucket the B2B stuff, sales stuff to the side because that's a whole nother ball game and deliverability issue in its own that I'm not an expert on. I won't say I'm a B2B, you know, email delivery guy. So that's a different thing. The only thing I can say is do what you're doing right? Separate domains, you don't want to be mailed the same one. I mean now you guys have 6am City as a brand, which probably leveraging that as sales across the nation and different locals locales is probably good enough than having to spin up a different domain for, you know, Dallas today and then have different one for the sales. But as far as the newsletter sending domains that you're doing that are on a few different ESPs, I assume from the acquisition you guys have. Are you guys looking to migrate those all together, consolidate in one place or you still can have kind of a shared infrastructure as far as your ESP looks, you know, outlook.

Not that I want to say this on the record, but I will because we are shopping right now. I think one of the things we recognized is that we can operate with certain ESPs at a much lower price point than maybe what we were doing historically. And we've also had some limitations with our current esp. And today with the right tech on our team, we don't necessarily even need to use an ESP because Most of these ESPs are built on the same backend infrastructure, you know, Beehive and somebody else might also might be using the same.

They're all tied into the same SMTP provider, right. Mailgun, sendgrid, Spark something. Amazon, smtp.

Yeah. So the question is, do we migrate to someone net new and join, you know, the party at Beehive? Do you stay at Sail Through? Do you go somewhere else? Or do we build our own for the exact purpose that we need? Because we have the know how There's a lot of different reasons I think for all of those decisions. And you know, do we. Is it more risky not knowing that we may or may not be on a shared IP or dedicated. It's hard when things are outside your control. Like we believe the ESPs that we're working with, right. We think we believe them but sometimes there's some weird. We've had a lot of weird things happen over the years with different ESPs that lead us to question the true.

You're not the only one. You're in the good sending pool. Well, yeah, well nothing's happening here for me and they move somewhere else and you're automatically doing good. You're like, I don't know, they're saying oh no, it's your list, your list is terrible bad data. And then you move it to another ESP and all of a sudden you're freaking skyrocketing again. So I guess we could safe to say ideally you want to have a single ESP slash infrastructure for everything obviously for 1 insights and 2 reduce costs obviously if you're, if you're the direct tie to you the smtp. I mean I don't know if you want to go all the way down to, to buying your own IP pools and stuff. MTA setting, you know, setting up your own MTA infrastructure is probably, you know, a whole nother animal but at least using SFTP so you can see all the insights of what's happening with your IP addresses and all the deliverability metrics by domain everything then that's probably the what you would like to see happen. Now it's getting all get together in a cost effective timely manner.

We now we may still keep two to have and I think you talk about this where you have your primary sending list and then there might be a secondary list that's the less engaged or re engagement campaigns or things that kind of separate out and those may be parsed between ESPs or between lists to make sure that we don't compromise the core.

You're highly engaged subs. That being said, we obviously know that we're kind of spread out and you have, okay, you had your, how many core 31.

31 core markets on sale through right now.

And then you have hundreds of your seed to next stage. So we're talking about three to 400, I don't know, 500 different newsletters. How in the world are you able to see and manage all the deliverability on that especially if you're on different ASPs?

Automation primarily that lets us know when things are going sideways. So proprietary developed flags now that's more coming with the acquisition than it is our history. 31 domains. The team, the team actually does have automations that show us, you know, postmaster outputs and stuff to, to see where things stand on a daily basis. If things are moving. However, that's not perfect and can be delayed. Yeah, it's delayed. The biggest, the biggest problem is like shit, what did we do three days ago?

Yesterday?

Yeah, I don't know what happened.

It shows it from the 20th and today's the 24th and now it shows medium.

Yeah. And then it's trying to reverse engineer what happened to cause those issues. We've gotten pretty good at it because we had to in the recent past, but over the past five years as we scaled, we let things slip through the cracks here and there and we definitely didn't do ourselves a favor from deliverability in certain lists where we might have unintentionally sent to the whole entire list a couple of times or something that Tell everyone. Yeah, tell everyone.

Everyone. No matter who you are, if you've been sending out emails, you've sent to the entire list on an oopsie mistake at least once and there's nothing. That's why I tell people when you're growing your list, if people aren't activating, engaging, engaging, just purge them, delete it from the list because they're never going to come back. They're not going to activate and come back. They resubscribe a later date and you try to activate again. But the worst thing to do is have this bloated file of, of a hundred thousand people that have never engaged you and then all of a sudden you select the wrong segment or the whole list gets sent out and now you just blasted 50% more people than you normally would of unengaged people. And then your metrics just. And then you'll start getting blocked and your stunning domain reputation goes down.

We've done it. And because our list are not hundreds of thousands a piece, especially if we're starting a newer market and We've only got 5,000, 10,000, 20,000 subscribers and you make that mistake, or you make it twice, or you do. What some people do is they sell a dedicated send to an advertiser and then they send it from that same sending domain or instead of a market separate marketing list or something, they send it to their core and everyone reports it as spam. And then you've gotten actual complaints that then hurt your deliverability. So we've learned to Kind of separate and segment out our marketing efforts or that we do dedicated sends, which we do very infrequently because of what it does to your reputation. But yeah, we do make some mistakes. The biggest mistake I think we ever made that was negatively impactful is we actually sent newsletters to the wrong city. So when you send one city's content to an entirely different city's content, it actually got a lot of subscribers, which was odd because it was kind of a nearby by city. But at the same time I got a ton of spam. Yeah, we just got city. It was pretty. It was. We were able to laugh at it, but it did actually affect deliverability.

Were you able to get those old subscribers back to resubscribe to the. To the other list?

Yeah, we had to go do a re engagement campaign and let them know because a lot of people fully unsubscribed, you know, so it was a, a cluster. And so now we still have some issues like that from time to time where people are unsubscribing from all of the lists because of how they can do that with the big. Sometimes you get like the banner or. But the unsubscribe at the top, your Gmail. It's like now you're all of a sudden out of all of the lists, not just one or the other. We also learned that like frequency made a big difference and still like sending once a week versus daily or the timing and when we send welcome emails and stuff. There's a lot of different like trig that have been negative for deliverability versus having a set fixed cadence. The same thing happens every single day at, at, you know, in a window. And that repeatability clearly makes some difference for that.

The ISPs want to see consistency, period consistency and frequency of when things are getting sent. And it can be the day of the week, how many times a day and then on top of that, the consistency of the volume. Like they don't just want to see you at a thousand send and then the next day send 100,000. That just blows it up. They're like, well that's not normal, right? So they want to see it growing over time. They'll see you can have a little spike here because you had like a, you know, a big marketing push you did and you acquired a bunch of people. But then they want to see it come back down to where you're like slowly growing and you know, they don't want you see this big thing after, after, after another. It'll kill your durability credit card fraud.

Detection, like, where it's like, this doesn't look normal.

Decline 2500 at Carvel. I don't know if that's gonna work out. Yeah, I do want to share my audience. So the first time I met Ryan and personally talked, he said he. I mean, now he's actually pretty knowledgeable in the deliverability side of things, where he wasn't. He said he just finished going through months of, like, a deep dive into deliverability because of all these issues he's talking about that he dealt with. So I just wanted to share that, that you've been digging into this stuff for a little while now, so it's pretty impressive.

It's also important to have the right team around you that can do it for you. Well, back in the very beginning, I wrote the newsletters that we put out and sent them and sold them and did all the things. And today, because we have this larger infrastructure, we have a smaller marketing team and a growth marketing team that handles it and are way smarter. And these are folks who live and breathe this every day. And so at scale, that's a little bit different than some other organizations you might have one growth marketing person. We have a team of folks that really focus on audience development, deliverability, the list health, to make sure that the wheels don't fall off the bus, because it's so critically important that everything is correct, because that's where you make your money. So if your list that makes you a million dollars a year goes to shit, then you have a big problem. And so I don't think a lot of folks, most folks operate a newsletter. And then in a way that should be even more important, especially if that's your money maker. Like, you gotta make sure that thing is buttoned up and you should be paying attention to it daily. For us, you know, we try to pay attention to them all equally, but the ones that are super important to us, where we are making our core revenue, we pay very close attention. But at the same time, those lists are matured, they're very healthy, they're cleaned, like, very aggressively. And it takes a lot to throw those ones out of whack at this point.

How big is the biggest list in any of the core markets?

Most of them are in the 80, 75 to 90,000 range or 60 to 90,000 range, depending on the size of the market. It's funny, because some of our markets where we have like 50,000 or 45,000 subscribers makes as much money as a market where we have 80,000 subscribers. Just by the nature of the. The size of the market, we. Yeah, I mean, most of them are in that 60 to 80 range for the most part. What do you think.

What do you think the biggest audience you'll be able to get to in. In a core market? I mean, obviously, if you're like. I mean, it's probably one of the hardest ones, like New York City, there's this ton of people. Like.

I think we can get some pretty huge audiences. The fun fact is that we haven't really tried to grow our audiences too much over the past several years. 6am is a grassroots build. It kind of. We didn't come to the table with a hundred million dollars like some other newsletter companies, and so we had to kind of fight our way. And we've never had a huge amount of money to massively throw at audience development, so we had to be pretty scrappy. And as the lists grew in a lot of our markets that are, you know, closer to a million dollars in annual revenue, once they got to 70, 60, 70, 75,000 subscribers, it was doing that revenue consistently. So we didn't need to necessarily reinvest much more other than backfilling the churn, and then we could redeploy that capital to a net new market. So I think what you'll see from us going forward here is that we're going to actually lean back into those core markets, recognizing that there is actually incremental revenue to push that number up so we can increase rates on our rate cards in those markets too. But we're back pretty aggressively right now, working to grow audience in all of our cities, both core and seed markets, to take it to that next threshold. So the goal is, can we start to top out some of these markets where we just can't get any larger and see what the ultimate pinnacle is in these cities?

What's the. What's the average churn in local markets?

It's pretty low. Like 2% on a monthly basis.

That's great. National and stuff. 5%. I know some that are 10%.

Yeah. I mean, it's usually in the 1 to 2. It depends on the list, but it's. It's pretty healthy. I don't think people understand what that means sometimes. Like, if you have a list of a hundred thousand people and you churn out 2% every month, that's 2,000 people. And if it costs you a dollar a subscriber, that means you have to spend $2,000 a month not to lose any subscribers. So a lot of these people are Thinking they're gonna grow. Grow really quick. You always are. Like, there's a net new and a backfill. Like, just.

We just had a call. We just had a conversation with someone the other day, and he's like, oh, I'm trying to do the math. So I have a hundred thousand people and I have a 10 churn, and it's cost me $3 per subscriber. That's $30,000. Yeah, I'm like, yeah, that's $30,000 to stay where you are. You're not even growing. Yeah, you're probably to be spending $40,000, $50,000 if you want to see growth. So, yeah, people don't.

Yeah. And. Or they have to do the other exercise, which is harder. It requires a lot of experimentation. But how do you grow differently? Part of the reason why we're talking is because we do leverage you all to help grow additionally, like we used to just do, most everyone in newsletters does Facebook lead ads. That's great. And that's probably also old school at this point. Like that's. It's a good consistent thing. But you're also doing it on rented land again, and you're building there. And everyone thinks that that's a good way to go. There's referral and all this other stuff that. That's out there, but it doesn't go fast enough. Like, if you have 10. If you have 10,000 subscribers and you're turning 10%, you're not going to, you're not going to backfill that many organically. It's just not going to happen. You need to be spending cash.

Let's see here. We talked. You probably already broke on. This is like, how are you guys, how are you guys breaking down your sending domains? The sending infrastructure, I'm saying it's just by, it's, it's by geography or by, by market. And then each one has their own sending domain. And then like you said, I guess each market also has probably multiple selling domains, depending on the activity that they're. They're pushing out. Is that basically the setup?

Yeah. Most of our core business operation operates under the same city.com domain structure for leadership, for sales, for core, like internal sales or direct sales. The. Each city does have its own sending domain. We have more domains than I can even count. And because a lot of the domains, like we buy a domain and then you buy like another domain or all the similar domains, initially we thought that we had to do that everywhere. We don't do that anymore because it's not necessary but we would buy like all 10 of the different domains in a market or like.com, co. Whatever. Now you have like dot everything. So we buy what we want. And each city does have its own. We have a couple cities that have gone through a couple where we've had issues and had to like actually replace the domain, the setting domain because our reputation got so bad for a variety of reasons. Either we set up the, set it up wrong from the beginning or we had some attack like attack or we sent three times in the same week. Yeah, we've done some silly things but that's part of learning the, the good.

About having them all followed by a dedicated email drop.

Yeah, yeah, I mean that it's that exact. It's all, all those things have happened and so by them being all separate it in a way isolates them from each other, which is good. And so if we have one city go down or have an issue, it's not impacting all we've always debated back to the very beginning of time is like do you just put them all under one umbrella somehow? And would have that, would that have been better? And today to make that infrastructure change is more than we would want to do. But we did always debate whether or not having all of the cities under one domain was the right way to go. But ultimately the risk assessment said hey.

If everything's there and we trending wise you guys are more covered. Having a unique domain per market for.

Sure makes a lot more work.

Yes. You got, you got the engineering background, the people in place to help you get there.

That's right.

I don't know if, I mean some people probably know but if not that you guys actually built your own self serve ad system for, for the newsletters and for the advertisers, the local advertisers be able to go in there and you know by an event promo, you know, an advertisement or whatever it is going, you know through that is that all tied back to the root 6am city domain and everything communication goes through there for that. When they're getting like their autoresponder stuff that each city has their own billing crap that they're doing with those people.

We've actually built all that on Shopify and so it has an entirely different, it's an entirely different ecosystem on purpose. It does not touch anything. And we've. Most people think of Shopify as buying products like some random knickknack thing or whatever. Home good or we've actually pivoted it entirely to sell newsletter inventory, which is kind of a, maybe a wildly different approach from most folks.

First time I've heard of that.

And then we also, we do it also similarly in Stripe where the transaction process happens there for some listings instances or self serve instances. But we're kind of moving everything into the, that Shopify environment. That gives us a pretty good amount of flexibility in how we can sell. But it also keeps all that transactional email stuff on. This is what you bought and that whole dialogue in an entirely different ecosystem for us, which is great really. Our sending domains for the newsletter. Send the newsletter, that's it.

And then what? So I guess in Shopify you can have like custom products. So what are they selecting when they purchase something? There's fields for them to enter their content or upload an image or anything like that.

Yeah, they can buy an email header, a text ad, a secondary story, whatever the typical newsletter ad placements are. We have all of that available in that ecosystem. And then based off of what they buy, some of it is fully automated through the checkout process and, and others it sends them a form or something to capture or where they can submit additional creative or whatever is required based off of what they purchase. But it's pretty dynamically smart. So depending on what's in your cart, you get a different output on the back end. But that's been a pretty, pretty amazing evolution for us to go there because in the newsletter space a lot of folks are selling advertising and at scale when you're in all these different cities, if your AOV is like a thousand dollars, that's taking a lot of people's. So how do you automate that out so that our salespeople are going after, you know, 20, 30, 50, a hundred thousand dollars contracts instead of 500 to 5,000. And we put all that in an automated capacity and that's actually so automated through now that there's not a back and forth cycle with advertisers. We leverage AI and process product process efficiency to like come up with pre drafts of headlines and copy and all that kind of stuff all happens pretty automated.

Is it able to show or you know, the offerings or whatever the options Are they allowed to select a actual date for the run and it knows based on whatever inventory you have available and it's not or you do have unlimited inventory per option there?

No. Well, I guess it's good that we don't because we have, you know, our sell through rate is pretty high in, in some of the cities where we actually have inventory constraints, we have people in the self serve platform operate on a weekly cadence. So it's kind of like what week or what's your ideal date you want to run? There is still a manual process for us right now on slotting inventory because we, because we have a lot of advertisers we have to do conflict management in our newsletters so that you're not running to hospital or healthcare systems at the same time on the same day. So there's, there's some, there's some operational efficiency in dev work that we may continue to implement to allow it to be even more automated. But right now customer satisfaction is most important and they don't necessarily, certain advertisers don't necessarily like to live alongside each other and we have to make sure that that happens.

Yeah, we already discussed that. How about, do you guys have any email validation tools or services you're using to, you know on a subscriber acquisition? Clean. So you know, I know you say you clean your list pretty thoroughly. Is there anything you're using that other newsletter operators should be using?

The short answer is no and yes. On our legacy core markets we definitely were not doing a lot of validation of who was coming through. Given some deliverability challenges we've had over the year recent years and there's the evolving newsletter landscape, we're doing a lot more of that and part of the recent acquisition that we made is really good at that. And so we're bringing new tools to the table and transparently I'm not very, I'm not well versed in all of them yet. But we have a process where we can now run each individual subscriber through and check and make sure that they're not, they're not a bot, they're not a, or some other emails or like just a number. Like it's 123-87-254 at blah blah blah. You know we get some stuff like that. We are pretty good at actually parsing most of that out of the system on our own with workflows that we've set up to take obvious crap out of the list and then yeah our disengage dormant flows. We have very set type parameters on how fast we turn folks out because list health now oversize is more important than ever. So many people still think like and even advertisers don't understand it. Like I have 100,000 subscribers. Well I have a 10% open rate. Like that is not doing anybody any favors especially the one sending the email keeping your list clean and, and healthy and you know, having 60% or greater open rates, if you can even count open rate as a metric anymore. But, you know, being able to see that you have a large portion of your audience, very large portion of your audience is actively engaged in your product is far more important than having a larger number. And advertisers can see through it. They're looking for actual conversions on their side. And we're very proud of our list health today and that it yields the results that gets advertisers to make a repeat buy. Now, anyone can get them in the door once, can you get them in the door twice? And that has a lot to do with your deliverability because if your deliverability sucks, then your open rate and click through rates are going to be whack. And so it all goes back to this list health and that's been a huge, huge focus for us as a business, especially in this past year or two, to make sure that we're kind of setting the standard for performance, specifically as it relates to the advertisers. That's your ultimate measure of success. Your list health is good. If your advertisers are all renewing their.

Buys, that's, that's a perfect segue into what I was going to bring up now for you, which you may have touched on, answered it a little bit. But how do you balance your volume and quality, especially what happened to perform for advertisers. Advertisers while balancing like the thinnest line of deliverability. Because obviously if you're not, you have a deliberate issue and you're not inboxing and you have advertisers are paying to advertise. How do you manage that process of like, maybe, you know, you're deliberately sucking for a week and having to get back but still perform for the advertisers? Like, how are you guys battling that challenge?

It is not easy. I give you a real life example. As we expand into net new cities, sometimes if you push too hard on the gas and you try to go, go, go, go, go, and you're pumping so many net new people into the audience from all different channels, you can hurt your deliverability materially. Your list had 10 people in it. Well, two of the 10 people flagged it as spam. Well, that's not great, not a good way to start. But we had a list recently where we had some of our made. We set up the list like a year and a half ago and we didn't have all of the right dkim, dmarc, SPF records, all that stuff set up properly and we thought we did. And then we went and took the list to market and said hey let's go and quickly something was wrong. And we didn't necessarily know what was wrong because it's not like these things tell you exactly what what's going on. The deliverability's off. We tried to expedite the launch of a market. Typically we start to grow the list over like 45 or 60 days. And we were trying to like get the market to 10,000 subscribers in like two weeks. Well that was a really bad idea. And so we went from good to bad in a very short order. And digging your way back out of that takes a long time. So at the same time we go into these net new cities because or expand them from our seed stage to our core markets where we staff them up the. We're moving there because advertisers are spending money. And so and we've also told the advertisers, yeah, we're going to be at 10,000 subscribers and then 25 and 50 and this is our roadmap. But then you shoot yourself in the foot and take your deliverability to bad. And so in this specific instance that I'm talking about right now we actually are starting fresh. The road and path to get the deliverability where it needs to be and improve our sender rating and reputation is going to take far too long. And it's uncertain like that it'll even ever get back there. So then you have to start a whole. We have a great core of engaged readers over here subscribers. We can migrate them to the net new list we know have a really healthy foundation. You start there and then you build again. And we kind of mapped it out and the path to start over is a shorter path than trying to get that get back get the list health back in a good place.

And a lot of these, I think we've talked about it before, a lot of these new launches you already have like pre sold inventory on it. Right. You're getting like avatars to come in up front knowing that you're going to be growing this audience. So it helps you see that area. So in this case when you try to kick it off strong, it didn't go so well. So when you relaunch this list, I guess you're just starting back on with those advertisers. Just know that it got delayed a month or two or whatever.

Yeah. And we kind of, we share with them that we're focused on list health and deliverability. And in a way when you, when you fix it like we can be back to 10,000 subscribers in 30 days from zero. You know, we have maybe 4,000 that are engaged or passively engaged or net new or whatever. You know, those come back into the list and then you can kind of, we can grow faster because we've started with a solid core. But those advertisers that were expecting a certain number of impressions or click through end up having to you double run them or you, you know, you're doing make goods basically for a period of time to over deliver for them or you shift them out slightly by a month or two to make sure that there's no issues. But that's, that's, it's a game. I mean it's kind of like carp before the horse kind of thing. Like we go sell and we assume that the growth tactics will work and that they'll work in the same way in every city. And that's also not true. We went and launched three cities at the same exact time, in the exact same way, 100% the same. And one went to the rest of them did great, unexplainable. And sometimes I think there's just different things that happen that or you know, some spam trap or something got into what something, something happened in one list that that hurt it and made it hard to recover from.

So let's shift here because I think we're going to be coming against the end of it pretty soon. But you guys just acquired Good Daily, which is a, I guess an AI driven local newsletter thing. So you know, hundreds of little cities. It's all the guy who's able to automate it all with AI and stuff. You made that acquisition. So what drew you to that, To Good Daily? Was it technology? The team or the, the individual? The market strategy? All of it.

All of it. The technology. So we knew internally that we had a build or buy decision to make on how we were going to go forward as AI has presented itself in the media landscape and as a startup company still we're super nimble. Where a lot of the legacy media brands just take it to, to implement AI tools and to create an AI agent or even explain to people what the hell an AI agent is. It's going to take them forever for a legacy broadcaster print outlet. However, we can embrace it and we can learn and how do you bring and create operational efficiency in house where we have tools that support revenue fulfillment and audience development and all kinds of workflows can be optimized materially so that the Talent on the team can focus on the stuff that they're really good at. Putting absolutely amazing newsletters out in our core cities, the branded content creation and student newsletter studio that we have, all that stuff, that's where the people need to be focused and we're able to automate the other things, which also saves money. The reason that Good Daily was appealing is that Matthew Henderson, who built Good Daily, was a. He is a unicorn developer. He is an absolute rock star. And he's probably the only developer we've met that understands deliverability. His level, I mean, he's, you know, on par, I'm sure with you all on, if not more on this, like the programming side as it relates to all of it, where it was a clear win to support audience development, variability, workflows, and then the content. And it allows us now, through the infrastructure that Matt built, we can go be in any city we want to in the United States overnight. Truly, like, we can go pick tomorrow to launch five new cities if we want to. And what makes that unique or interesting is if you, if we were in 500 cities, which will be in shortly, as we're in 500 cities, if you added 10 subscribers a day times 500 cities, that's 5,000 subscribers a day times 35,000 subscribers.

At 150,000amonth.

Yeah, 150,000amonth. I'm not great at math. I should be good at math. I'm an engineer. I'm not great at the content side. That's. We got some awesome people on the team for that. But from a strategy perspective, let's just, you know, 150,000 subscribers a month. If we only added 10 subscribers per market, you know, you scale that up, 20 is 300,000, 34, 50. I'm at just our ability to move that needle and add, you know, 250,000 subscribers a month is pretty game changing in the newsletter space. And I think it'll actually allow us to drive ourselves to become one of the most relevant media companies on local media, because other folks can't. Traditional legacy news outlets haven't really expanded beyond the markets that they're in with their core paper or broadcast linear TV stuff. And they haven't made the newsletter a product yet. We're so far ahead of folks in that regard that I think we're positioned really, really well to thrive here as we go forward and then take that content and redistribute it in other ways as we go forward. But yeah, it's been pretty cool to bring good daily on board And I think folks will be impressed with what they see that product evolve into. To kind of take on the editorial standards of our core 6:00am product, on the audience development that we're going to do, and on some of the interesting tech infrastructure that we are going to continue to build to support all local outlets.

As far as I think I read could be wrong. But with good daily they, they were out. They're across a bunch of like smaller markets, right? Local like I mean local like not like a big city. It's not going to be Dallas or you know, whatever other ones that you guys have, maybe not even Greenville, you know, they're like smaller towns. How do you see that? Is that like an opportunity that you're looking that could help the overall or is it more using that infrastructure and that concept to go to the bigger cities like that?

It'll, it will work in all markets, big or small. Matt's approach was brilliant and is brilliant in that it's targeting tier 2, tier 3, tier 4 cities in the US that have smaller populations but lack a media presence in a lot of ways. And because we source content from lots of different places, it allows us to bring a product to market and in absence of other media, it becomes the source. And as the source you get better engagement and gives you better deliverability and then it lets you convert the sales. And so we look at it as we're planting seeds in these markets. We'll see which ones grow, which ones grow the fastest, what their potential is, how big can they get and then when do we apply the human layer on it. And so we can go, you know, we're in 400 and some of the cities right now we'll be at 500 relatively quickly. Six, seven, eight, a thousand. You know, there's a lot of opportunity. We also can look at the big cities as multiple. We don't have to just say we're in New York, we can be in Queens and Brooklyn and New York. And so there's maybe a roll up opportunity to, of larger areas that like might make sense or support our ad sales side where we can sell a whole entire region from an ad perspective against a quarter million subscribers instead of just selling one city for 60, 80,000 subscribers.

Awesome. All right, well let's get this towards the end here. I know we're coming, like I said against it. Been a good talk here, but I'm sure you have other things to do like build some more furniture.

That's right.

A few just fun questions here is what's the favorite city you've launched.

I'm going to use this opportunity as a PR play for Greenville, South Carolina. Greenville, our first market we ever launched, Greenville. I traveled around the world for the majority of the calendar year for three years prior to moving to Greenville, South Carolina. And watching this city grow and being able to build a legacy in a market like Greenville has been pretty awesome. Today, Greenville is one of the fastest growing cities in the United States and I don't think I would go anywhere else. And the support that we had here is just people want to celebrate pride and place in the communities where they live. They want to know how to spend their time, talent and treasure locally. We were able to serve that up for them here. And we have people who've been subscribers to our Greenville newsletter since 2016 and they're still subscribers to our newsletter today. And the advertisers too have rode along and grown and expanded their budgets and spend with us. So it's really cool to see what the potential is. And now how can we get all these other cities to follow along and mature and grow from seed through launch growth and become a core newsletter, profitable newsletter for us. And so Journey's been awesome. Granville's my go to, right.

As far as those core cities like that, are you guys doing any event based stuff locally with the community?

We don't do events. We've tried events in the past from an infrastructure perspective and the human capital and workload tied into it. We weigh it like this. Let's say it costs a dollar on average to get a subscriber. If we're going to go spend a thousand dollars on a pop up tent and some other swag and stuff that we're going to bring out there, you know, now we're in it for $2,000 plus people's time. Could I have gone and sunk that money elsewhere and picked up 2,000 subscribers? That's probably a lot more important than the event, unless the event's monetized. And we have other ways to monetize events and things that doesn't require us to be materially involved, but a strategic partner on some events and things where we don't have to do any work but maybe benefit from the list Opportunity for sure all day.

And then what's one thing every local media company should be doing right now?

Making the newsletter a priority and a product that they care about. So many folks want their newsletter to be a thing, but it's just like an RSS feed of who got shot last night, you know, or a bunch of stuff that the community doesn't care about. The newsletter's not designed to be engaging to the consumer. Their sales teams look at it as a afterthought, similar to how like web display used to work. You'd have salespeople that sell like the premium placements in the newspaper or the TV ad spots. They don't want to sell the website and they didn't want to sell the newsletter. But what they're missing is that in any city in America that's got a meaningful population, you could have a million dollar newsletter. Well, make it a priority and you now have a pretty profit engine that's contributing to your bottom line. The other thing is most of them don't understand this stuff around deliverability and audience growth. And so while they think that they've got something as we've worked with several folks and served as kind of the ad, we attempted to serve as an ad partner for certain folks. Their list health is so poor that you can run an ad in it and it gets like two clicks. But they might have a have a million subscribers. Clearly they don't have a million actively engaged subscribers, you know. So yeah, I think, I think folks just need to spend a little bit more time learning and understanding and investing in a product. People want appreciate it.

When are we gonna have the Palm beach county newsletter come out? I might have you put that lunch next week of one of the five you spin up.

I bet we could. You send me the name of the, the Palm Beach, Florida.

Specifically, it's Palm beach county. So I mean there's a lot of like cities within it. West Palm Beach, Palm Beach Island, Palm Beach Gardens, Jupiter, boca.

I got JupiterMorningNews.com for you right now.

Jupiter Morning News. Nice.

And many more to come.

Perfect. Well, Ryan, I appreciate the time. I think it was a good chat. Hope you enjoyed yourself as well.

Appreciate it guys.

Looking forward to chatting in the future here.

Sounds good. We enjoy working with you and the team.

Thanks. Hey, I hope you enjoyed that episode of Audience Bridge Insights. If you did, go ahead and do me a solid, click the subscribe button right around here. You can also subscribe to the newsletter. I have a link down in the description below. Now we have a lot of amazing guests lined up, but until then, keep sending smart.