Deep Dive on $200K/Year Local Newsletter ⏐Ep. #217

I think there's a lot of opportunity, especially for someone that's looking for their first business. It's a really easy business to start. You can easily run this whole business on 15 hours a week.

Every aspiring entrepreneur, they know that having an audience is powerful, but 95% of them have no desire to get in front of the camera. It sucks. I feel like this is a great loophole where you can just through Claude, through ChatGPT, use emails to build an audience. 35,000 people in a city is more powerful than a million TikTok followers that are worldwide.

It is $144,000,000 a year in revenue just on our newsletter ad. Instagram, it's 2800 for one post. It's essentially a business that can't lose. The longer I'm in the business, the more money I'm going to make. If I wanted to in three years, I could run for May.

Now only the OG fans of this podcast will remember this, but a whole year and a half ago, when I first started this podcast, it originally began as a question and answer show and it was live. People would call in, ask me questions about their business or their business idea and I would answer it on the spot. Well, in one of those first episodes, this guy from Canada named Jaz called and he was throwing around this idea for a business and I gave him some advice, he took the advice and now a year later, he has a profitable six figure business on his hands. And he just launched another business that's already profitable that piggybacks on that first business that I helped him launch. This is a business that literally anyone could start with almost no money. The path to growth is very clear and outlined in this episode. So let's go.

I think there's a lot of opportunity in local newsletters, you know, especially for someone that's looking for their first business. Even I would say, right, it's a really easy business to start. And honestly, as step by step as it gets, right? Like, yeah, like you're just basically replacing the traditional media and people are looking for something new. So.

Okay, so why don't we start by you telling me about your local newsletter? Where's it based on, how many subscribers do you have and.

Yeah, yeah, for sure. So my local newsletter, it's called Winnipeg Digest, it's. Most people don't know about Winnipeg, but it's like a cold city here in Canada in the middle of it. And so I started it here. I've been here for about 11, 12 years, you know, and I was looking for my first business to start on my own beforehand I had some experience like growing social media followings to like 100k or something when I was 14, selling them to e commerce companies like theme pages and things of that nature. So wanted to start a business, had seen Ryan Snedden, who does it in Annapolis, do it and had wanted to start it for a while, honestly. And so I thought, okay, it can't really be too difficult. Started it in last year, April. So 2024 April. And then since then we now reach over a hundred thousand Winnipeggers. That's a combination of social media and newsletters. So we have about 73,000 followers on social media.

There's like 800,000 people in Winnipeg, right?

Yeah, it's about 800K. And then our newsletter is at about 35,000 people now. So.

Okay, so 70 something on social, 35,000 on newsletter.

Yeah, yeah, so that's the split now. And yeah, it's good. And we're now trying to start other businesses off for it.

Okay, we'll get into that. Trust me. I'm very curious about that. Now you live in Winnipeg, right?

Yeah, yeah, I live here.

How well do you know the market? How long have you been there?

I've basically grown up here. Like I've been here for over 12, 13 years now. So I know the market fairly well, you know, and Winnipeg isn't necessarily a tech savvy city. I could, you know, it's. I kind of make the joke here that I can copy anything off of Twitter and paste it here and it would do well. Yeah, so it's like not a tech savvy city at all, unlike Calgary or something in Canada. And so, you know, it's a really easy market to start any business here. And so there's low competition.

How successful would you be if you took a, let's say Austin, Texas, 800,000 people, give or take. How successful would you be if you would have taken the exact same playbook and done it in Austin? Austin might be a bad example because they probably have like a hundred local newsletters. So ignoring that, just the fact that you were not a local, how would you have done?

Yeah, I mean if I were to personally start it, I would start it somewhere where you do have a first movers advantage, you know. So that's why Winnipeg did so well for me is because there was no, not even an Instagram account that just filed all the events here. Right. Let alone having a newsletter based on it. So it was a really easy market for me to kind of Take a monopoly over. And the thing is now if anyone else starts as local news that are here in Winnipeg, their cost for acquiring a subscriber is automatically going to be much higher. Right. So I would highly recommend if someone is starting one. So I know a few people in Texas that are starting one and they are now targeting suburbs around Austin rather than the actual city of Austin.

Yeah. So gun to your head, if you had to choose between a city you were very familiar with but didn't have a first movers advantage and a city that you weren't familiar with but did have as first movers advantage, which would you choose?

Yeah, I mean, I think there's multiple models to go about this, so you can definitely even partner up with someone in another city. I would probably go with the place where I have the first movers advantage just because acquiring the acquisition cost per subscriber will be much lower. Right. Like my. I was acquiring subscribers for 15 cents Canadian. Right.

Oh, oh, so like 12, 11 cents US.

Yeah. So even today, like, even today I'm acquiring subscribers for like Matt's like a $30 or something like that. Yeah.

So what is your subscriber worth? Give or take?

Yeah. So they're worth about. If I am able to sell out every single ad slot in my newsletter for the year. And we only do one ad slot per newsletter, about eight to nine dollars a year is kind of what they're worth at the current open rate we.

Have per year too. And I'm guessing your normal open rate, they're probably going to be around for like five plus years.

Yeah, easily. Like we have a 0.05% unsubscribe rate or something like that.

Jeez, that's so good. So it's like you kind of created Slash, invented this money machine that turns a dollar into 40 or $50. As long as you're willing to be patient. You don't get that immediately. It takes five years to get the LTV lifetime value. But nonetheless, like you created this template and now put in one, get out 50, 100.

I mean, it's obviously much easier said than done. Like, I think the biggest problem that local newsletters run into is not. Is not building the audience. Anyone can build the audience. Anyone can turn on Facebook ads and put out a decent product. The thing that you most likely end up will have problems with is getting sponsors, is selling local businesses on a whole new concept of advertising. Yeah. So I think that's the biggest problem that most folks run into is definitely anyone can get to 10 to 15,000 subs, anybody? It's just that acquiring sponsors for 10 to 15,000 subscribers.

Well, here's a perfect example and we're going to get into this. When you talk about how you're going to launch a business based on this, if I want a sponsor for this podcast, they're going to pay me. Call it $20 per thousand views. Right. If I use Spotify ads, like the annoying ads that Spotify puts in themselves, which I turned on for a week just to test, and I'm turning it off. It's $6 per thousand views downloads, which is nothing like that is pennies.

Right.

So $6 from Spotify, $20 if I and or my agent go out and hustle to find sponsors. But if I build my own business that's in this niche, in this vertical, it's relevant to my audience and I put in an ad for it. It's $200 per thousand views. It's not, it's a 10x difference. Right. Like a 50x difference based on, you know, the lazy way of just putting Spotify mid roll ads for, you know, Toyota, Chevrolet, local dealers, which I'm just not going. So there's so much power in having a business mind and having a newsletter or an audience because you can vertically integrate and sell your own stuff and not the local bakery or whatever it is, right?

Yeah. It gets me excited you talking about that. Because like when we started the newsletter, my whole idea was, hey, I'm going to build companies on top of this. And anybody I would talk to would be saying, yeah, but that's like an unrealistic thing. Like, you know, it's tough to obviously run multiple businesses and I totally understand that. And you know, we've obviously shifted the vision a little bit, but if you're going to just go sell ads on top of your local newsletter, it's going to be really hard to monetize. Like you will cap out at max $500,000 a year. Like that is the absolute. Like if you have everything perfect in a great market, you'll still cap out at 500k a year.

But some people are hearing that and thinking, I'm cool with that.

It's definitely not a side gig or it's not a, it's not a bad place to start. Right. But like, if you're really trying to make serious money or trying to grow the business, you'd have to vertically integrate it at some point.

Yeah. Okay, so 35,000 subscribers. How many do you send per week?

We send out three times a week.

Okay. How did you land on that? Did you start with that or did you finish with that?

Yeah. So, I mean, we started with once a week. We felt that there was too much content for us to cover in just a one time a week edition. Then we went to two times a week. And this was like in a span of a month, by the way. Like, this was not. We didn't wait too long. We started once a week, felt there was too much content, then went to two times a week again, still too much content to cover, did three times a week, and then we sometimes started running out of content. So we're like, okay, so three times a week cadence is like a good amount. Where even if one email is shorter than the other two, no one's really complaining about that.

Let's talk about your content. Is it like local news? Is it updates? Is it opinion pieces?

When we started, I remember Ryan saying this one thing. When we started, it was everything other than crime and politics. And that's exactly what we have run with as well. So it's basically events, community updates, city updates, any new bylaws, Anything that is happening in the city basically away from crime and politics is what we promote.

Okay, now I understand politics. You don't want to alienate half of your subscribers, right? Why not? Crime.

Like, we will occasionally talk about it saying something like, oh, the most Wanted report has come out for Winnipeg. Like, you know, just to make people aware of it. We don't necessarily want to talk about like, you know, someone getting stabbed or something like that. Right.

Especially like, it's not the vibe.

Yeah, it's not the vibe. And I mean, Winnipeg is known as like the murder capital of Canada. And so, and so because, because of that reason, we're like, you know what, we're going to change the narrative. And also from a storytelling perspective, it sounds amazing when we say, when we say something like, you know, where everyone says Winnipeg is boring and we're trying to change that narrative.

Yeah, I love that. I just had an idea, like, if you find yourself running out of content, I feel like you could supplement with like opinion pieces. Like, Greg from, you know, from this Neighborhood ranks the three best ice cream shops in Winnipeg, you know?

Yeah, 100%. And we now also integrated a lot of our socials, like on socials, we'll say, Here are the 10 best homes listed in Winnipeg this month or something. Right. So you can integrate a lot of that into our newsletter as well.

How many words on average are your emails?

400 to 2,600.

So pretty long. Pretty big.

Yeah, yeah, they're fairly long. But honestly, half of it is events because each event a small description associated with it.

What are your open rates and click through rates like today versus first couple months?

Yeah, I mean, they've stayed fairly consistent. We've always been above 50%. Click through Rate has always been in the ballpark of like 8 to 12%.

Crazy high, man.

Yeah. So open rig today is about 56 to 60%. So it can vary obviously, depending on the set.

Yeah, yeah. Now I've noticed there's like a, there's like a, a law of newsletters where the bigger it gets, the, the more your open rate drops. Like, in my experience. Have you seen that, like, did it start in the 60s and then very slowly ticks its way down?

Yeah, I mean, it did do that. And then what we started doing was we cleaned our list like two or three times. But that was honestly kind of a mistake on our end because sometimes what ends up happening is, for example, Beehive in this case might be showing that someone is not receiving an email. And they might be. Sometimes they might be opening an email that is showing that they're not opening an email. Right. So it can. So that isn't always fully tracked.

Yeah.

Right. And so the, if you start cleaning your list, you might start cleaning people that are actually reading your email.

I've had the same mistake. I set up an automation in Beehive to clean the list for me and I would just. Every day I wake up and I see these drops overnight and it's like, oh, like, is that the right thing to do? And I finally turned it off and I'm just going to do it manually like once every two months.

Agreed. I think that's the best way to do it.

What is your writing style? Like, are, are you writing all these emails yourself? What is the vibe of the newsletter?

It's super casual. It's like a very, very casual vibe where it's almost like I'm talking to them. You know, it's not written in newsletter jargon. It's a fifth grader reading level, super easy to understand. Even when we're talking about like city bylaws being passed, we're making sure everybody can understand what's happening. And the feedback we get whenever we see a reader out and about it is that, that, hey, we love the positive outlook that you have on the city and the conversational tone of your writing. And so that's the way that we have written it. It's not any news. News jargon that we're using in there.

Yeah. What about AI? Are you using AI to write this or to help write it?

Yeah, I mean, if we started writing this whole thing on our, like just ourselves, it would probably take like 8 hours a day or something. So we do definitely use like Claude and ChatGPT. And then I have two VAs who are kind of responsible for. One is responsible for events, the other ones responsible for writing. And they kind of do everything, everything for me. So that's why it's a little bit automated.

So it's like the first draft through Claude/ChatGPT and then a human goes through and cleans it up.

Yeah, so they do that. And then I go through and usually like late at night, probably 11, 12pm I'm usually going through final draft. An hour of me looking over, making final changes.

It's funny, you said like it would take eight hours a day, but up until two years ago, that's what everyone did, right?

Yeah, yeah, it's been super helpful for us. We haven't gotten into like automating things just yet, like completely automating things, but that's something that, you know, we're looking into.

What is your time involvement per week on this?

Because of sponsors, like bringing in sponsors and sending ad drafts and things of that nature. Like, it ends up being probably close to 20 hours a week. It used to be a lot more because I used to write every edition and also make a social post and stuff. When we also were growing our social media following, it was very heavy video reels, so it was going out and recording them, editing voiceovers. Now we've shifted to completely just carousels. And so that's made our life a lot easier as well.

What is your revenue like your monthly revenue today?

Yeah, today it's about. It can range from 12 to 15,000 currently. So that's the general revenue and then.

Amazing.

Yeah, it's good. Like I grown a decent amount, I would say, in the last like six months is where a bunch of it's starting to compound now.

I always like to use like a rough $0.50 per month per subscriber. It sounds like you're kind of close. Well, actually you might even be above that because that's at 5 cents per week.

Yeah.

So if you were to extrapolate that out, you'd be probably closer to 60 or 70 cents per subscriber per month. If it was 5 per week. Right?

Yeah, that's about the average that we try and go for. We also haven't explored any of the like, Negative CAC and things of that nature. Like, I think that's something that we would do want to explore eventually. I just haven't gone around just yet.

And for those listening or watching, negative CAC is negative customer acquisition costs, where instead of paying Facebook for your leads, like you're getting paid for your, your new subscribers, right?

Yeah.

And is that kind of like, from what I understand that to be, you pay Facebook $1.20 for a subscriber and then they go through a flow like they subscribe and then you say, hey, check out these newsletters. And then once that's done, it's like, hey, fill out this form and then you can kind of sell those leads.

You can do that. The way we would most likely go about doing it if we did it was like, let's say if we sold a discount card or something, right? Like, oh, buy this discount card for $20 and get 10% off of these 20 restaurants or something. Right. What we would do is let's say if we're getting a subscriber for a dollar. Right. And so even if 1 in 10 people convert, right. We're basically making money every single time we're paying Facebook. Right. And that's without going to sponsorships at all. That's just like, just for seven days, basically.

Yeah. I think people also call it self liquidating ads.

Right.

Where you make money for acquiring customers and then you, you show them ads and make more money. That's the gold standard. Yeah, but it takes time. Like there's a lot of things at play, right?

A hundred percent. And I mean, a lot of things are local newsletters, unlike traditional newsletters where you can just plug other newsletters and you know, get them to subscribe to that. The downside with local newsletters is that you can't just plug any, any other AI newsletter or something, you know, start making money off of that.

It's true.

You almost need local offerings that you can offer these readers so it doesn't feel like you're a foreign company or something like that should feel.

Yeah, I feel like someone needs to build a Sparkloop for local newsletters and for those listening Sparkloop. Sparkloop is like a referral engine for newsletters where you subscribe to the. What's the name of your newsletter?

Winnipeg Digest.

The Winnipeg Digest. And then you get a pop up five other newsletters. What you're saying is that there aren't. You don't want to compete with yourself in Winnipeg, so you don't even want to refer them a B, there's no one else to refer, really. So if there was like a Spark Loop that could aggregate all the restaurants or, or auto repair businesses in Winnipeg and you could sell them leads for every time they check that box. Right. Wouldn't that be an interesting business?

I think that's a really good business. Especially because. Well, we can also promote other local newsletters. Right. Because they're completely different cities and someone living in Winnipeg doesn't care about Austin, Texas. Right.

No.

So that's why I think that's a big problem for at least solving that negative CAC issue for us is, you know, you kind of have to make a custom offering just for your subscribers.

Yeah, but like, if I could subscribe to your newsletter and then get like $20 in Kohl's cash.

Yeah.

For checking a box, therefore being added to Kohl's email list, that could be pretty valuable for Kohl's and for you.

Right, agreed. I think, I think that's a, That's a good idea. And then you would obviously have to just put in the. Put in place those partnerships. Right?

Yeah, yeah. If you weren't chasing after sponsors, which I know is like most of your time right now, how much time would it be taking per week to run this?

Man? Like seven hours a max, probably just from. It probably takes about an hour a day for reviewing content for Instagram, sending, you know, making sure the content is good for the newsletter and things of that nature. Yeah, both seven hours a week.

Okay. Outside of Claude chatgpt, what does your tech stack look like for this?

Yeah, I mean, we use Beehive for sending a lot of things Beehive does. Right. So I would say analytics and everything we get from Beehive sponsorships, I track everything in notion. I don't. I haven't really invested in any specific CRM for just tracking sponsors, so I've built kind of a semi custom one in Notion. Yeah, other than that, it's just chassis BT Claude and nothing really other than that. And Instagram is. Yeah. Nothing significant. Canva.

I mean, Beehive is amazing. Do you use like, their boost features or any of their other, like, monetization features?

I don't, because again, those ads don't apply to local. It's not a good experience for the reader at the end of the day. And yeah, like, we want to make money based, like, using the reader as future customers for other businesses. So if we start providing a bad experience, they're going to start opening less and it's just a, you know, downward spiral.

From there, how much are you testing your subject lines or your preview lines, if at all?

Yeah, so we're usually. I mean, now I've gone pretty good at basically knowing which ones are going to do well. In the beginning, we used to test them almost every edition. Now we don't really test them because I know that I automatically almost know which one's going to do better or not.

Yeah. Have you noticed that, like, on the whole, shorter just does better. Shorter subject lines.

100% under five words. Like time should be in there. Something like this weekend.

New urgency.

Yeah, urgency. And so, you know, I would say under five words, kind under five words and under 40 characters.

I love that people just want to say everything, but it's like you're. You're not leaving anything to the imagination. The more you say, the less reason they have to click because you're answering their question. Subject line.

Yeah. Like, I think today's was something like new Winterfit, Costco location. That's it.

They click because they want to know where, when, exactly. Right. You could put like, hey, on the corner of X and Y. New Costco location opening, you know, August 3rd. How small is too small for a market? Because I know you're in Winnipeg, but you're. You live this world. You're talking to other local newsletter operators. What is your experience?

Anything under 100k is too small. I would say even 150k, you know, I would say anything under that is almost too tall. So you want to then broaden out, maybe do your county or something like that. Anything over a million, I almost find it's too much because then you have weight much to cover. Unless you're doing five times a week. If you're doing five times, you may be able to get away with it, but over a million, you're pretty much pushing it with the amount of things that you can add in there. And it's almost over a million people. The city is so spread out that, let's say, I'm not sure with Austin, but someone living in south Winnipeg is probably not going to care about things happening in north Winnipeg.

It's like a different world.

Exactly. It's almost a different cities at that point. So if you're over a million, you should almost have two different newsletters for like, splitting the city in half or something like that.

Yeah.

Yeah.

What are some other creative customer acquisition strategies if. If paid ads just aren't your thing?

Yeah, I mean, honestly, like, you're like, if you're going to spend $100, I would say $90 should be spent on just Facebook ads. You know, if you're going more the creative route, Instagram obviously helps. You had great success with it using ManyChat. We haven't fully explored that channel. That's something we're now exploring. Referrals are huge though. Having, for example, for us we do restaurant guides and hiking guides and we change those according to the season that's about to come up. So let's say with winter, it's going to be top 50 things to do in Winnipeg this winter. Right. And so we kind of change that up according to the season. And so referral guides are huge for us as well.

Are you more interested in growing horizontally and adding more local newsletters or vertically and just going to five days a week? More sponsors, like more vertical integration by launching other businesses that you promote with this?

Yeah, I mean ideally. So I've kind of considered both channels or both kind of ways. If you go vertically, if you go horizontally, there are other companies that do this like 6am City and things like that that I just find your CPMs drop, really drop a lot just because then you start having national brands which are not going to pay you a hundred dollars per thousand views. Right. And so if you start working with Nike, they're not looking to. They're just going to pay you a lump sum which is going to be like 10 CPMs, if that. So that's why I find that rather than just going horizontal, I would rather prove out a money model in my own city. Right. Then go to other cities. So for example, if I start a business on top of this, and I know that, okay, on average each subscriber to me, rather than being worth $7 now is worth $15 a year, then I'm competing on a whole different game when I go to another city, right. Like let's say if I expand into Calgary, what's going to happen is when my competitor can only acquire subscribers for maybe $2 a sub, I can acquire them for 5 and still have a great roas on. On the customer.

Yeah. Okay. Roas return on ad spend.

Yeah.

You mentioned cpm, the amount of money you can charge per thousand opens, right? Not per thousand subs, but opens. Right. What are you charging nowadays for ads?

We're about 70 something dollars. Like probably $75 cpm. Wow. For local, that's huge. Local advertisers and then a lot of them. So we sell annual spots. Like that's kind of our business model is we sell exclusivity. Like if anyone is Looking to sell sponsorship, don't sell one off sponsorships, you're not going to make money. You want to sell annual sponsorships on an exclusivity basis. So if we work with one H Vac company, we're not working with any other H Vac company for that whole year. Right. And so you're trying to sell exclusivity is what your main thing you're trying to sell is. So now when we go to a sponsor, we say, hey, you're basically getting a monopoly over a hundred thousand and it's the only form of advertising that lets you do that.

And you said only one ad per newsletter. So 19,000 opens per send times 75. You're looking at like 1400 for one send.

That's our cost for a one time advertiser. So if, if someone's coming in just a one time ad, like they have an event coming up or something, that's what they'll pay for. Our Instagram, it's double. So it's 2,800 for one, for one post. Yeah. And then obviously if they're annual subscribe or if they're annual sponsor, they get much better ad rates than $70 per thousand cents.

How much better?

Yeah, so right now we're charging about $12,000 for 12 news that are ads. So one per month.

One per month. Okay. That way you don't like oversaturate yourself. They don't see it too often.

Yeah, yeah, 100%. And, and what ends up happening is, you know, so we send out, give or take, let's say 12 newsletters per month, times that by $12,000 a month. So that's I think $144,000 a year in revenue just on our newsletter ads. That doesn't even include our Instagram. Right. And so you know, we're kind of looking at in the ballpark of about 200k when, when you kind of combine everything together and then where, yeah, we have some other like local markets and stuff that we end up running throughout the year. Yeah.

If someone's launching this, like what types of local businesses, local sponsors should they target? Because you've probably learned like this, I'm sure this isn't accurate but like an auto repair store may be much more likely to give you money but not get much ROI out of it. So they're not ever going to do a long term thing. Whereas a local bookstore might be really hard to convert, but they see a really big return on investment and therefore could become like a highly recurring customer. What kind of things like that. Have you learned about the types of sponsors that are best for local newsletters?

I would say probably like event venues are great. Right. So we have an event venue. Who is our annual sponsors? They do. I think this year they're going to be spending $40,000 a year with us. Right. So they're a huge, they're probably our biggest advertiser. Other than that. I just tell people, sell people on ltv, just say that, hey, for example, lifetime value. Yep. So if, let's say a dentist is coming to you or you're talking to a dentist, you ask them. Right. What's on average a customer worth to you? A customer is worth $5,000 to me. Great. So if you're going to spend $10,000 with me, I just need to get you four customers for you to double your return on ad spend with us. Right. And you're telling me I can't get you four out of 35,000 people. Right. So it's an easy sell to make.

Oh, I love that. And honestly, a dentist, a customer for a dentist is probably worth a lot more than that.

Right.

Because they might stay with them for five or 50 years.

100%. So dentists, H vac, plumbing, roofing, high.

Ticket stuff, anything or highly recurring.

Exactly. And like what we do is we actually run a survey. The second someone signs up, they get straight sent to a survey that they fill out what part of the city they live in. Do they own a home? Not own a home. Are they looking to sell a home, buy a home, upsell down? Like, are they looking to, what are they looking to do? Essentially, like, what is their current household income? And so that then allows us to go to advertisers and say, hey, 75% of our audience are homeowners. And that's a very valuable audience for you. So I highly recommend like, you know, it will end up working out for you.

What percentage of your subscribers fill out that survey?

About 87%. Like completion rate.

Are you serious? 87% fill out the survey?

Yeah. So what are.

That's insanity.

Yeah.

That is crazy. And how many questions are in it?

Eight.

Holy cow. I would have thought 5%.

Yeah.

I just think local newsletters are built different. They're just so loyal and they're just like, you're contributing to the community. They're like being a good citizen by contributing to your capitalism. Right. Which you're not complaining.

I mean, I mean, to be fair though, I think if anyone is starting one, please take this from a perspective of when you're bringing on advertisers, don't bring on casinos or clubs if that's not the vibe you're trying to set. Right. Short term might be shooting yourself in the foot, turning down revenue, but long term, your readers really do appreciate that, you know, that they don't have to because your readers are mainly going to be 70% females, 80% females between the ages of 35 to 65. They're all looking to learn about clubs and casinos. So you're much better off just like actually hand picking the advertisers that are going to add value to their life as well.

But I'll tell you what, that demographic that you just named is like the most valuable demographic. Those are the spenders in the household. They are. Right.

And that goes back to like the new business that we're starting and how, why we have picked that business as well.

I'm going to get to that. I'm saving the best for last. What survey tool do you use for that survey?

Beehive. So you can build a survey? Yeah, it's the, it's fairly easy.

Why don't I have a survey on my newsletter? I feel like an idiot. Like I should totally do that.

Yeah, that and polls. I think those two are the most I do polls. Yeah, those are the most used like things that you should probably do in. If you're running a newsletter.

How successful are you in finding sponsors in your subscriber base? Like putting an ad in there for yourself saying, you know, your ad here, does that work?

It does sometimes, but for smaller companies I would say, you know, and that's not really your target audience. So a lot of the larger advertisers are relationships you're building or they'll reach out or something. Like their marketing coordinator is some 23 year old that follows our Instagram and has no idea that even our newsletter even exists. So they'll reach out wanting a feature on the Instagram. I'll hop on the call with them, sell them this whole new world of newsletters and then actually that's where I get the ad dollars from them from. So it's usually like the foot in the door is like some 23 year old marketing coordinator who was like on their team and thinks it's a cool idea to be featured on Instagram.

Are there any like other perks, like local perks like priority seating or you ever get recognized, any intangibles like that?

Yeah, so I mean when I had my face associated with the brand. So in the beginning we did a lot of reels. That's how I grew the Instagram following. Pretty heav. We did a lot of reels, a lot of restaurant reviews and things of that nature. So I would be recognized like, five, six times a day.

That's amazing.

Yeah. Like, I would be at the gym.

Was that cool?

It was cool, for sure. But then I kind of. It was also concerning at the same time because I was like, okay, if I sell this, if I ever want to sell this thing, I can't have my face associated with it. So that's why we switched more to carousels, a way where I disassociated my face from it, and then I can. It becomes a sellable asset at the end of the day.

Yeah, that's fair. All right. So you're dabbling in Christmas lights, is that right?

That's the new business we're starting, yeah.

Okay.

Yeah.

Well, is that the business, or have you done other, like, vertically integrated businesses for this?

No. So that's like our first business on top of this. Yeah. It was. The thinking behind it was it's seasonal, it works great. It doesn't. We forget about it. Right. Second thing is, is that it's high ltv customers. So let's say it's a leasing model, so you don't sell the Christmas lights. Right. So when we lease the Christmas lights out to them, they're usually staying with us for another four or five years. Right. Or even like, let's say three years. So we end up making a lot more money on them in the following years. And then if it works out great, then a natural upsell into it would be permanent lights. So those are the lights that go in your jellyfish? Yeah, yeah. So it would be the permanent lights that kind of go underneath your gutters and stuff like that. Right. And so that's kind of the plan is. Okay. If it works out great, come next spring, we're going to start the permanent lights business. And then also we have a lot of females, obviously, that are readers. That's our primary reader. And I was like, man, if I go and start a H Vac or roofing company or something, you know, if someone's heat goes out, they're not going to say, let me pull up Winnipeg Digest and find the, like, you know, find the H vac tech. So Christmas lights, it was great because I feel like females are primarily the ones making that decision. And that's exactly what's happened as well. So we started running some ads in the Winnipeg Digest. Have already sold, like, five, six jobs before the season has even started at all before the main season kind of kicks in.

So one piece of advice. Take it or leave it. I have a friend that has a Christmas light slash, roofing slash. He has several different successful big home service businesses in Pennsylvania. And he says, like, stay away from permanent lighting. Stay away from jellyfish. He says he only installs it if someone, like, demands it. And he can't have them as a customer any other way because it's just a one time thing. And then he's. Sometimes he has to go out there and maintain it and fix it, and he just hates his life. Every time he says if he could have it his way, permanent lights were never installed. And he only does Christmas lights on the leasing program every year. All right, so when you put this ad in your own newsletter for your other business, are you calling it your other business or is it. Does it seem just like a third party entirely?

Yeah, right now. I mean, we ended up doing. So what we did is we ran a giveaway. I had heard it in some, like Alex from Mozzie Video or something where he mentioned, run a giveaway, give one thing away and call everybody else and say, hey, you get $150 off for just entering the giveaway. So did that got about 300 entries or something like that?

This is a giveaway for free Christmas lights.

Exactly. Yeah. And then we called it Lights the Company. No website, nothing like that at all. But when we do do the brows, it's going to be the same colors as Winnipeg Digest.

Yeah. I love that you're just leaning into it, right? Like support. You're supporting the newsletter by going through me for your Christmas lights. You're probably going to go through someone, go through me.

Yeah. And then now what we're doing is, you know, we can run offers that kind of make it seem like they're exclusive for the readers. So we'll say something like, hey, get your Christmas lights done before October 7th and you get $150 off or something. Right. The first point for us is our season doesn't start until October 15th anyways. So anything that we do before that is just extending our season more and more.

Yes. Yeah, yeah. Now, are you planning on, like, running this? Like, are you outsourcing it to another company? Tell me how the operations of this looks.

In an ideal world. What I would like to do is kind of have Winnipeg Digest as a marketing arm for multiple businesses. So let's say I either acquire equity or I get, like, given equity into businesses, whether that's 15 20%, of course, depending on the size of the business. And we end up becoming like a fully fractional CMO type of situation where they get access to Winnipeg Digest, they get access to me. Right. And then we handle all their marketing for them. Right. And then in return we get some sort of equity share in it. That's the ideal world situation. But to go to a business today and a local business owner and say, hey, give me 15, 20% of your business, that's kind of. They're not going to believe in the fact that, hey, we can actually deliver that value for them. So that's why we started our own business where now at least that's the Christmas lights one where we're going to run everything. So I did my first install yesterday and the.

Nice.

Yeah. And so then the plus point about this is I am learning obviously the skill set of putting the Christmas lights and stuff. And then this is the only company will ideally own. And then after this, this kind of proves that the model that, hey, this works for home services and then we're able to acquire equity into other home services after this.

Yeah. Okay. Of all the businesses out there, what made you think Christmas lights?

Yeah, I mean, it's biggest thing was it's the season, it's seasonality. Right. So.

But most people look at that as a negative, right?

Yeah, for me it was. Well, I have a primary business, which is Winnipeg Digest. I can, I don't have to take away too much time away from this. It's just 10 weeks. I give 10 weeks. If it works out great, amazing. I double down. If it doesn't, then I'm just gonna forget about it like it never existed. And there's no website or anything for it yet. So.

Okay, I like that.

Yeah.

Yeah. What are the unit economics of these jobs? What's an average job size? What are you going to take home per job? I know it's varies from year to year. There's higher costs on year one. Can you break all that down?

Yeah, I mean, this is just our obviously first year doing it. We've booked five jobs the last week. About 1400 dollars is our average job right now. Cost of doing that job for us is most likely going to be like two $300. But like, the thing is, the thing is we're actually doing the labor right now ourselves. Right. So it's owner operated. So that pricing takes into account in the future when we do end up hiring labor and everything like that. And then following years, I think on average, the average is about 85% for the amount of customers that stay on year over year.

Wow. Okay, so the two to 300, that includes the lights or just labor?

No, three. It's about $300. $300 is. It just includes the light.

Okay, so your labor, you're not like counting your labor as a cost? All I heard is, you know, $6,000 of net profit, you know, for. On five jobs.

Yeah, yeah. So right. It's, it's fairly high, at least right now. And then they take about 4ish hours to do 3.4hours to do, which is not terrible for the first year. Second year we've already custom cut the lights for them and already have the bulbs pre screwed. So it's like, you know, that kind of time gets fed into half.

What are you gonna have to pay in labor to have that four hour job done once you do start hiring people?

Yeah, I mean it'll be just minimum wage. It won't be crazy.

A hundred dollars in labor per job, give or take.

It's about 15 an hour, you know, give or take. Let's just say, you know, three people doing a job rate should take three hours. So. Yeah, like give or take 150 bucks.

Wow. Okay, let's say year two, you, you stop doing it yourself. You hire it all out. You basically, you don't have the cogs, the cost of goods sold, the hard cost anymore. Now you have the labor cost, but it's half as much. So if you have, call it 80% margins year one, even if you outsource all the labor year two plus, you have 90% margins.

Yeah. My goal is not to run the business myself, for sure. I will definitely be bringing in an operator where I can get them to like best equity or something over a few years. Of course, there'll be a whole new world of problems, but it'll be fun. You know, I think, I think it'll be fun where, you know, I don't want to run the Christmas lights business at the end of the day.

Right. But I say this all the time, like it's important that people get to know the weeds before they outsource, you know, these core competencies and get out of the weeds. Like, yeah, people are like, oh, I just, I heard a guy on the Internet say I, I did outsourcings. This is, this is, I'm above this. I'm. No, you, you got to know exactly what those weeds look like until you're ready to get out of them.

Exactly. Which is why I decided to do the jobs myself this first year. Easily. I could have, like, hired someone just using the cash flow from Winnipeg Digest. Like, it wouldn't be too difficult. It's just that down the road, I don't want someone saying that it took seven hours when it should have taken three.

Like, bro, I've been on that ladder. I know what you're doing. Yeah.

So that's why. That's the simple reason why I was like, you know what? First year, it's 10 weeks. I just won't have a life for 10 weeks. That's totally fine.

Yeah. Okay. How many jobs do you think you'll do this year based on what your conversion rates are looking like?

Yes. I mean, we sucked at sales for the first, like, seven, eight quotes that we gave out. And then now we've started converting, like, I think in the last, like, six jobs we have, we've converted four of them. Or in the last six quotes, we've converted four of them. I think I am very safely saying that we'll hit $100,000 in revenue in the first year. Jeez. I think so. At least that's not. Yeah.

How did you get better at sales? How did you suck before versus what you're doing today?

Yes. I mean, we would just go in before and try to close them on the, like, at the door, you know, and we would have a pre. Like, we would book an appointment, like a design consult, and they would come out and we would literally just try and close them there. And I didn't realize that. Okay, that's what we shouldn't do. So then I talked to some. A friend of mine who did. Who did painting. So he did door to door painting, like student painting or something like that. And so he's like, yo, if you have a design consult booked, you're going to go inside their home, sit with them, showcase them the mockup before and after, walk them through your booklet, and then you're going to price anchor them to this price. Right. Like just the whole shebang. Right. And so that's kind of what we've started doing now, where we go in and we have the quoted, like $3,000 or something that includes all the trees and the home and the side of the home. And we slowly go with them and take out everything and it gets to like $1500. And then I'm like, okay, if you book before October 7th, you get $150 discount today, right now. Right. And so that's what we've started doing now.

Yeah. And you're closing like 60, 70% of this.

That's the number that will end up at after the season, like 60, 70%.

Now, please tell me you're asking for referrals.

Yeah. So would neighbor.

Neighbor's names.

Yeah. So what we're going to start doing is there is a Christmas lights person on Twitter, he always says this. So it's like a hundred dollars, the gift card or something to a steakhouse or something along those lines. So we're now starting to offer those. Right now we're just getting all of our stuff still printed. Like it's way early in the season. Most people start advertising for this like September 15th. So we're way too early anyways.

Yeah.

Like the homes that we have done, we haven't asked directly for referrals yet, but we will when we finish the job.

I mean, you have no clue. Your conversion rate will only get better through September, October, November even. Right. So whatever it is today, we'll get orders of magnitude better.

Yeah. And these are all. But these are like, there's pros and cons because all these are leads coming through Winnipeg Digest currently. So they're kind of warm leads already. If we start exploring Facebook ads and stuff, those leads are going to be a lot more colder. So our conversion rate should drop there a little bit.

Are you going to do other stuff like that? Yeah, we're not just going to rely on your newsletter.

We're going to do everything. Yeah, we're trying to. A hundred thousand dollars is like, what do we want to do? Base level over the weeks? If we're able to do 150, 200, that would be like ideal world. Yeah.

It blows my mind that you're going to come close to doubling your revenue by adding Christmas lights to a newsletter.

Yeah.

Like, who would have thought of that? Ryan Snedden added luxury wedding bathroom trailers to his newsletter.

Yeah.

And like that became a big business. Right. Because events. Yeah, right, Events. That's what you said too. I already know that you're thinking of the spring and the summer. What other kind of seasonal and or other businesses are you thinking for this?

I know that it's like very. Not like a lot of people do the whole gutter cleaning, window cleaning thing in the summer and. Yeah, I don't want to get into the whole door to door hassle of it. Honestly. I am not a great salesperson training guy and that might be able to become one, but I'm not that right now. My bread and butter is like marketing where I do Facebook ads and things of that nature. So I want to explore businesses which I can utilize that in, you know. And so most likely that's why permanent lights was a natural sell. Also because a lot of Christmas light owners, what ends up happening is they'll say, hey, we're actually 50, 50 on whether we want Christmas lights or not. Right. Because we're considering permanent lights. And the permanent lights average order value is about 4 to 5x whatever Christmas lights are obviously LTV. No, but just a one time cost. So what we're able to do is bring in someone for Christmas light. So let's say first season we make some money on them and then say, okay, if you do permanent lights with us the following year, you get $500 discount. So we're basically just pre selling customers for permanent lights during the Christmas light season. Right. And rather than making that money over three years, we're just going to make that money over two years because they're going to do first season of Christmas lights, then they're going to do permanent likes the following season.

Smart. I should have asked this earlier, but what, what has your timeline look like with your newsletter and like subscriber growth? When did you launch, how many subs did you add those first few months to today?

Yeah, I mean in the beginning we were adding like 4000 ish subs a month. 4,5000 actually. Now it's decreased to like 2 ish k give or take, where you know, we're still spending the same amount of money. So it's about $3,000. But then yeah, you start like saturating your market and things like that. So now pretty soon I think like it might be time where I just turn off ads and try and spend that money on referrals or something. So if we can do whether that's giveaways or lead magnets or something like that for referrals and just try and get more subscribers that way, I think that might be the next thing we try and go into.

So how many months to get to 35,000 it's been.

Yeah, so we started in April, whenever that is. I think like 17 months or something like that.

16.

17.

Okay. Yeah, that's amazing. At this time, no plans to launch other local newsletters. You want to keep growing this way.

I've had a lot of interest from other cities for sure, just because I talk about local newsletters on Twitter and I've kind of. And obviously I've been on your pod and Nick's pod and stuff. So I've had a lot of interest of people saying, hey, can we franchise this out or something. Like that. It's just that I know my dollars will be much better spent trying to vertically integrate this currently. Right. Like so Christmas lights took $10,000 of initial capital to start. If I started another location instead of Christmas Lights, Christmas Lights, I might do $100,000 in 10 weeks. The new location would have taken me 20, $30,000 to then on sponsors make like 50, $60,000 the first year and then once I'm able to prove out a money model, at least in my city. So let's say if I know, okay, I'm gonna on average make $200,000 from just the newsletter and then another 2 to 500,000 from Christmas lights. I might not even explore other businesses after that. It might just be okay. Yeah, that's the business model. I'm going to go to other cities and start.

There's a cash cow.

Yeah. Start the media company based on the media company. Start Christmas Lights. That's it.

Yeah, yeah, yeah. Do you feel confident that you could as of today, with what you know now, pick another city, not move there, not know really anything about it and have just as much success?

100% I could, yeah. Like once you've been in the space for over a year, year and a half and I think for me the USP is the unique selling point would be the social media aspect of things. So social media, if anyone is going to start this, don't forget about social media because at this point I'm a top three followed, let's say account in my city. Right. If I reach out to an account or a business, they're almost obligated to reply to me. So it makes my cold outreach so much easier and the reply rate just skyrockets rather than me emailing them. So if you're going to go down this road also social media is a great way to upsell your current sponsors into saying, hey, I have two different channels that you can reach. Right. So that's the unique selling point if you are going to start one.

Yeah, dude. You got to reach out to local businesses that collect emails and say, hey, I'll do a. I'll give you a free ad in exchange for your list. Like let me share your list basically. Right. Because they're probably not using it. Most companies that collect emails, they just sit there. They don't do. Because it takes work. Yeah, right. To regularly work your list. So a lot of them are going to be dead. But you could say I'm going to run them through a verifier and you could either pay them you know, 10 cents per email. Or just say, I'll give you $2,000 worth of ads for your 20,000 person list. They have no idea what it's worth.

Like, would you just add them to your list? Like, rather than, I guess, sending an email thing. Hey, subscribe.

I would just feel, feel it out. Yeah. Like, try multiple angles. Like, segment the list and let's say it's 20,000. You take four groups of 5,000 to one. You just say, hey, you know, I partner with Mike's Bakery and I would really love you to check out my local newsletter. 5,000. You just kind of work them into your list, segment them differently so you could track them, make sure they're cleaned and scrubbed. How many are opening? Well, it's not bad. Okay. And then the other 2,10,000. Try different kind of creative things.

It's a time game, right? Like, I love biz. This is obviously my first or second business, but I've heard a lot that businesses that are just a time game are the best businesses to be in. Because as long as I'm just in this business and my list keeps growing, it's essentially a business that can't lose. It's an audience that I can not only monetize through ads, but then I can run my own businesses on it. So it's just a time business. As long the longer I'm in the business, the more money I'm going to make.

Oh, man. I just kind of had a thought where it's like every aspiring entrepreneur or entrepreneur or entrepreneur, business owner, whatever, they know that having an audience is powerful, but 95% of them have no desire to get in front of the camera and to do all that stuff because it sucks. It's hard. And I've been there, right? So they don't even consider it. They're like, I know having an audience is valuable, but not for me. I feel like this is a great loophole into that, right? Where you can just through the power of the written word, through Claude, through ChatGPT, through a virtual agent or a virtual assistant, you can use emails to build an audience without having to get in front of the camera, but you can still have all that power. Like, it's like 35,000 people in a city is more powerful than a million TikTok followers that are worldwide. It is.

I joke around with some of my friends. I'm like, if I wanted to, in three years, I could run for mayor, right? Like, if.

Yeah, totally.

I could have enough poll in the city to be able to run for mayor. Yeah, right. But yeah, I think I completely agree with what you said because the biggest problem people run into when looking to make content is what do I talk about in this case, you already have what you're going to talk about because things are happening in your local town.

Fresh content every day.

Yeah, exactly. And this is a business at the very base level. The writing and all that stuff can be given out to one or two VAs and they can handle 90% of the business for you. And all you really have to do is deal with sponsorships. If you're not even able to, you know, give that up if you want, if you are able to also delegate that, then good on you, you know, so it's not a business where you need 40 hours a week. In the beginning, I was spending 40 hours a week to write and also do sponsorships. But as you continue to grow, you can easily run this whole business on 15 hours a week.

I just feel like this, you know, under an hour video is probably about as tactical and specific as you could get on the Internet for launching a local newsletter.

I 100% agree. And honestly, if anyone is going to start one, they can reach out to like the local newsletter community is fairly friendly and you can reach out to anyone. And. And other than that, just go to Facebook, ads, library, search up any local newsletter. You can search up my local newsletter, Winnipeg Digest.

And what's the 80, 20 of your best performing ads? Video, Instagram, Facebook, 15 second, it's simply at the top.

Usually have some sort of a local monument as the background video or image test? Both. I would say video has done better for me. Some sort of a drone footage of a local monument. Then at the top it says struggling to find things to do in Blank city. Right. So let's say struggling to find things to do in Winnipeg. Underneath it, say Winnipeg Digest or Blank newsletter sends you 50 plus events happening in the city every single week. That's it. That is the best performing ads that you will probably find.

One thing I love about this business is how like let's say you're once a week. You can start there. It's very palatable. You do it yourself. You sell out your ads. The easiest lever to pull is now twice a week. Cool. I just doubled my revenue three times a week. Tripled it four or five. Why not seven? Let's do seven. And if you're running out of like current events, you just do opinion pieces.

And if you live in New York or something like a really large city and you don't know how to split things up. You can also like almost niche down twice. So you're already niche down geographically. And then you can do dads in New York.

You can do, you can do freelancers.

New York. Yeah, like freelancer in New York. Because each of those audiences is going to be a million people on its own, if not more in larger cities. So if I lived in Austin, I would have just done something like young dads in Austin or something like that alone is probably like thousand people.

Yeah. I mean, I'd be so bold as to say you'd be dumb to be in New York and just do a New York local newsletter. Like you're just nothing to no one in that sense. Right, Exactly.

Yeah.

Like you, you could do like a Williamsburg Moms.

Yeah.

Like pick a neighborhood, pick a. Yeah. Demographic.

A hundred percent. And just. And the higher obviously end your. Your audience, the more, the more expensive sponsors you can sell. Right. That's the biggest thing. Only downside to new newsletters, I will say, is you might run out of sponsors eventually. You know, if you keep providing a great result. Yeah. Okay. You're obviously always going to have those core sponsors. So you'll have 100, 150, $200,000 worth of revenue coming in. But if that's your goal, go ahead, start one. But you should probably look at ways to monetize on top of the newsletter eventually.

Oh, Jaz, this was great. Where can we look for you if we have questions?

Yeah. Twitter handle is creating jazz, so feel free to reach out if you guys have any questions and happy to chat with whoever wants to jam on some local newsletter ideas.

Yeah. And for the 14 listeners in Winnipeg, Canada, go check out the Winnipeg Digest.

Yeah. And reach out to me and maybe we can grab coffee.

Yeah. Okay.

Yeah.

Thanks, Jaz.

Yeah, thank you.

Hey guys, if you're still listening to this, it's probably because you haven't had a chance to take your AirPods out. You're still mowing the lawn, you're still driving, what have you. If you're still here with me, I would really, really love and appreciate a five star review on Spotify, Apple, or wherever you get your podcast. It would mean a lot. If you want to go the extra mile, share this episode with a friend that might have an interest in starting a business. It would mean a ton. Hope you have the best day of your life today.