How Matt Paulson scaled MarketBeat to $25m a year

Okay.

All right.

Hello and welcome back to the Make Lemonade podcast show brought to you by Lemon Squeezy, as we hope to inspire.

You to earn money from your own lemonade stand.

I'm one of your co hosts, James, and I'm back here with JR Farr, who is the co founder and CEO of Lemon Squeezy. Today we're joined by guest who is Matt Paulson, who is the founder and CEO of MarketBeat, a financial media company. With their main newsletter, MarketBeat Daily being sent out to over 4 million subscribers, they do over 25 million in revenue and they have over 15 employees and have seen rapid growth over the past few years. J.R. and I speak to Matt about his origin story, how Covid almost 4x the business, Matt's advice to people starting out a newsletter today, and why he's so involved in the local startup community. Oh, and we kick this off talking about why Matt bought a company jet.

Yes, you heard that, right, over to jr.

So, Matt, I've been following you on Twitter for a bit and then, you know, there's been a lot of these, like, you know, tweets or things on LinkedIn like, we are so back. Right? So you do this. We are so back. It's a picture of a private jet with the Market Beat logo on it, which is your company. And so I just, yeah, I sent this to James and I said, what the fuck? You know, like, how do you have a jet? So I got to hear the story of how and why. And wow.

Yeah, I bought the plane about a year ago, which was kind of the perfect time to buy one because up until the end of last year, you could take the full purchase price of a private jet and kind of deduct it all in kind of the first year. Let's say you have a four million dollar jet just for sake of numbers, you know, last year you got 37% of that back as, you know, a tax deduction. So, you know, the down payment was maybe, you know, 800,000. So you get, you know, your, your tax deduction covers your down payment and then some, which is pretty cool. The other thing I learned about private jets is you can finance them on like a 25 year amortization. So my payments on it are, you know, 10, 15 grand a month at most. So it's very, very manageable to own. And yeah, I mean, the, the only thing that really sucks about it is maintenance because, you know, if a coffee pot is in your office, it costs, you know, a couple hundred bucks to replace. If Your coffee pot pod is on your jet and it breaks and needs to replace. It's like six grand.

So what's it cost, Matt, to fire that puppy up and get it going? Like, is it like a. Like a trip is certain amount? It's like minimum, you know, Certain amount.

Yeah. I mean, obviously it all depends on like the. The length because that's how much jet fuel you use, which, you know, is expensive but not a big thing about it. Like, what kills you is just the long term maintenance stuff. You know, pilots are thousand bucks a day or so. Know you're going somewhere, they stay wherever you're staying. So you got to give them a pretty m. And yeah, it's. It's the maintenance stuff that kills you. Like, we repainted the plane. That was 150 grand. We redid the interior to make it like nice and new and, you know, put in a new Internet module because the old one was end of life. That was another 100 grand and all in. I think it was probably six. No, it's probably seven or 800 grand. And just kind of stuff to get the plane up to where. Where I wanted it to be with the paint job and all that stuff. But I kind of knew buying it what I was buying, the work needed to be done. But, you know, it's obviously not a small expense to do that. The other thing, like, you know, I live In Sioux Falls, S.D. there's no. We don't have a lot of direct flights here. So, like, the value of flying private is much higher than if you're in a hub city. Like, I can get to like Dallas or Atlanta or Denver, but like, I don't have a direct to New York City. I don't have a direct to LA most days, you know, so for me, there is a lot, a lot of value in that.

So, jl, when's the lemon squeezy jet coming?

Yeah, yeah, yeah. Well, yeah, I don't know if it's going to be a bit. But I. Yeah, that's. That's impressive, I guess, bringing it back down to like us peasants. Let's talk about. Let's talk about you, Matt. Like, we just ended, you know, with you getting the jet. So what's the early days of Matt? The very beginnings.

You know, I was a kid of the 80s and early 90s and my mom was a school librarian, so they had some technology that most people didn't have. And I had fast Internet through the state network. And so I would have to hang out in the library after School while my mom was working and finishing up for the day. So I'd play on the computers there and learn what I could learn. And eventually we got one at home in 1996 or seven or eight or something like that. We were one of the first families in our city to get cable Internet. So had a computer, had fast Internet when nobody else had it, and kind of taught myself HTML and made a little website about some video games I played at the time, like SimCity 2000 and had like cheat codes and saved games and stuff like that. And I signed up for an ad network account on some ad network that doesn't exist anymore. And like the offer, it was like an affiliate offer for a free web hosting account. And it paid like A$50 whenever somebody signed up for a free web hosting account. So I told all my friends, like, hey, go to my website, click on the link and you can make a website too. And I was making 25, 50 bucks a month doing that. And it was a lot of fun. And you got busy with high school activities like anyone does. Went to college, was in a small town, not a lot of job opportunities. And you know, the choices were work at the grocery store, work at the university, or work at McDonald's. And none of those were all that appealing to me. So I thought, well, I know this technology stuff, maybe I can make some money on the Internet. And initially I kind of started doing some freelance writing work for some sites online. Like I worked for school, newspaper. I thought, well, school will pay me to write, maybe somebody else will pay me to write. Did that for a year or so. Then I thought, well, if I'm writing blog posts that are showing up on other people's blogs, what if they were just on my blog? And maybe I'd make more money that way. And that led to a little personal finance site called American Consumer News. This was 2006, 2007, when like back in the day, like, you know, today everybody has a newsletter. Back then everybody had a personal finance blog and that was just the thing to do. And like mint.com would pay you 150 bucks a month to put a banner on your website. And like the peer to peer lending sites were big and they would pay you affiliate commissions to promote them. And you know, everybody wanted to buy a link on your website for SEO purposes. And that was, you know, a nice little side hustle. You know, I grew that to that blog to like 50 or 60 grand a year in 2000, by 2008. And I thought, well, maybe I could do some more of this. So graduated college, took an a job for a few years, you know, launched a bunch of other sites in a lot of different categories. The one that took off was a website called AmericanBankingNews.com, which I figured I'll write about, like savings accounts and stuff like that.

But Matt, but Matt, real quick, real quick, what's your pull to finance?

Yeah, I mean, I was a Dave Ramsey guy back in the day before he went crazy.

No debt. You believe in no debt?

I did at the time. Now I'm millions of dollars in debt. Commercial real estate stuff.

You're leveraging?

Yeah, yeah. I mean, millions of dollars in debt on a plane alone and, you know, probably another, I don't know, at least 20 million in debt in commercial real estate stuff. Probably more than that. But I try not to think about it. Yeah, no, I was into Dave Ramsey, was in their personal finance books and, like, trying to graduate college debt free. And I did that and wanted to pay off my house really quickly when I bought it. Did that and kind of had the hobby, right? And, you know, I figured, you know, I had the one site that was making me 50 grand. I thought, well, let's make a bunch more sites and see if we can double or triple this. And I never really had success outside of the finance category. Like, I had an audiobook directory I made that would send people to Audible, and I tried to get commissions on audiobook signups, and that didn't really go anywhere. I had a press release site that I grew, but then realized it's a really crappy industry and sold it off. But it was the American Banking News that I later renamed to American Banking and Market News so I could write about the stock market. I got that, like, Google Finance and MSN Money and sometimes Yahoo Finance would pick up her stuff. The secret I realized back then is if you would put like, the stock ticker in the title of the article and the first sentence, like, it would usually show up in the finance tab of kind of the search engines. And, you know, everybody's competing for SEO rankings, but nobody was competing for the other tabs across the top. Like, none of the SEOs are saying, I want to rank in Google Images or Google Shop. Well, you know, now they're saying Google Shopping. But back then, like, it was just on nobody's radar. So I thought, I'm going to take over the Google Finance tab. And I did for a while. There was one point in like 2013 or so, I think we were about 30% of the results in Google finance, because we just had a bunch of like, news websites that were all kind of talking about stocks. And then I had some automated financial content back then that. So we published hundreds of articles per day. Very gray hat, black hat kind of stuff in, you know, today's world. But in the new section of like, finance pages and Google, we were about one out of three results. Getting a couple hundred thousand hits a day from Google. It was fantastic. And obviously they wise stuffed that at some point and it stopped working. But, you know, that was kind of the thing that got me to a million dollars a year with the business.

So it's interesting though, because what James had kind of dug up was during college, you start what we thought we saw. American Consumer news, or, you know, this is kind of your finance blog. But that kind of led to this inception of MarketBeat, which is your company today. Today. Right. So. So what was interesting that James had found was it looked like in like 2011, you had lost half the traffic, and that's where you pulled out the news side. And then you were really worried about platform risk, so you created a mobile app and browser notifications and all these different accounts and YouTube channels to kind of push the business. Is that like a good way to kind of summarize? And that's what kind of led to market beat goes out and, you know, all that starts to happen.

Yeah, that first Google panda update in 2011, I think that where they took down our personal finance sites, traffic got cut in half and kind of thought, you know, I'm not gonna play this game again. So my strategy was just to get everybody as possible on an email list so that, you know, if Google stopped sending traffic, I could still send traffic to the website, you know, with the email list. And obviously that was the right move. Here we are 12 years later with 4 million people on a list. But, you know, I think too many people build online businesses without regard to platform risk. And, you know, build something on the App Store. And then the app Store decides, you know, Apple decides they're going to build that app into iOS, and turns out you don't need a flashlight app anymore or whatever. Same with search engines. They pick winners and losers all the time. And, you know, 10 years ago, like, we were all playing games on Facebook, and now nobody's playing games on Facebook. And, you know, you really want to try to build a business that's not reliant on the whims of some big tech company that's, you know, how do.

You, like, avoid that Platform risk. Is it a case of just like spreading yourself as many places you can, or is it a case of just like picking those that are more resilient to not being on the big tech platforms, like email, for instance?

I'd say a couple things. Like one, you need as many acquisition channels as you can. So today, like we advertise on Facebook and Google and Bing and Taboola and a bunch of finance networks you've never heard of. We have an SEO play, we have partnerships that, where other people advertise our list and really try to get as many people into the top of our funnel as possible from as many different places. And then the other thing is we try to build our audience on platforms that are not company specific. So that's email primarily, it's sms, it's push notifications. Because really with these types of things, for the game to change, like all of the companies need to agree on it and you know, that just typically doesn't happen. So, you know, email has been around for almost 50 years and no sign of it going away. And you know, every few years somebody says email is dead. And here we are, 20 years of people saying email is dead. So, you know, don't feel like there's a lot of platform risk with it and you know, if there is, we'll move on to the next thing.

Mm, mm. And what were you feeling back in 2011? Because you hadn't left your full time job at this point.

Right.

But you had lost half your traffic to your, to your business. It wasn't till 2012 that you decided to sort of reevaluate and quit your job to go all in.

Yeah, I was thinking really hard about it in 2011 to quit my job and losing half my traffic scared me off from doing that. So that, yeah, pushed that plan back about 18 months. But, you know, I recovered from it, you know, probably within a year and grew, even grew from there with the finding out stuff. And I only quit my day job when my kid was born. And so at the time, had my day job, had my, my business, I was finishing a graduate degree and then I had a kid and like, I don't have time to do all these things. What's gonna go and you know, talk to the wife about it and it's like, well, my business makes this, my day job makes this. I really want to finish my degree. Our kid was in the NICU because he was premature and like, gotta quit one of these things. And I think it's the day job. And she was, you know, she was a lot of the. Our other family members weren't super supportive, as you might expect, but my wife was always on board and fully supportive. And she's like, well, as long as we can pay the bills, like, go for it. And, you know, I was, you know, really appreciated her support back then.

So. So, Matt, during that time, I guess when you quit then, is that when you rebrand to Market Beat and you come up with this idea of let's start building a newsletter? Was that like, was it very narrow? Was that kind of your initial thought? Or was it more just this is what the market's doing. This is where I see things are kind of going. I'm just going to start here and see where it takes us. Like, you know what I mean? And then from there, you started to build on it.

Yeah. So we started building the email list in early 2011 on American baking and Market News. And then for a little while, we switched to another brand, which is awful, called Analyst Ratings Network, because, like, our whole thing was we would send out the stock recommendations that Wall street analysts would issue. So, you know, if you like Google upgrades and downgrades, it's like those kind of things. Because, like, I could automate that newsletter and send it out without, like, without any work. So that, well, we'll just make a website for this and then all my other personal finance investing sites will flow into that. And then I went to our friend Rob Walling's conference in 2015. Microconf people are like, what do you do? What's your business called? And it's like. And they like, nobody could remember the name Analyst Ratings Network, because it's a mouthful. And it's like, forever takes forever to say. And, you know, nobody could get it right. Like, nobody could. Like, not a person could repeat it back to me properly. And I don't know if it's just me mumbling or if the name is just really that bad. But after that conference was like, I gotta change the name of this thing. So I went to. Went to sito.com and there was MarketBeat sitting for $9,500, and the rest was history. And I think the only reason it was that cheap is because the Wall Street Journal used to have a column called MarketBeat, but they discontinued it in 2013. They let the trademark expire. So, like, I found a domain name, I looked it up on trademarky or whatever, and, like, this isn't trademarked. Like, maybe I can use this. So bought the domain name and, you know, we got a trademark on it now. So I had that name for eight years now.

This is the stuff I love. Just like this, this just kind of, you know, 10 years in the making, kind of all these little things happen. Finding the domain. It was Wall Street's name, 2013. You wait for the trade, like just the timing.

Right.

That's part of the luck sometimes with entrepreneurship is, oh, I'm lucky, you know, I got lucky. Well, it was just, you know, you kind of had the time. And what I love about this episode by the way, is kind of what you just said about microconf. You're in a, you're in an industry which is finance, stock market. You know, it's not so tech bro, techie. Right. And SaaS. And it's a newsletter and obviously there's a huge newsletter craze which we're going to get into. So kind of just staying on this timeline, you have this newsletter and is it just you, Matt, during this time or you have a team yet? Are you starting to make revenue? Like what, what is happening here?

2015 I had two employees, I had a customer service person. Because if you're emailing hundreds of thousands of people all the time, some of them reply to you and you kind of have to reply back to them. And then I had a developer, I'm a web developer, so I hired another web developer to help me do stuff. And like we had three people running a two or three million dollar business at the time. And you know, we only have 16 people now. So it's, it's grown very slowly and organically from, from a team side but just, you know, it's a pretty simple business. We send out email newsletters and people click on ads and buy stuff. It's just the type of business where you don't need a ton of people. You can scale up without, you know, scaling up staff.

Yeah, but you've not only got the newsletters, you've got all the tools, the website. Where's like a lot of the time going nowadays for everything?

Yeah, I mean for me MarketBeat is kind of a well oiled machine and yeah, I'm mostly like monitoring the numbers. Got all sorts of dashboards and like I see something's not quite right or you know, maybe a newsletter is like not getting the open rate that it should get like this morning. So like in the last year we've started three partner lists with other companies where they send the leads, we run the newsletter, we put the ads in, we create the content, we send it out, we do all the tech stuff. And one of them, the open rate was, you know, not quite where it should be. And I thought, okay, what are we going to do here? And I thought, well, you know, on our main list we kick people off if they don't open in 14 days. Let's just do that with is, you know, this other list too, and that'll solve the problem. So I was writing this script to do that this morning and was about to upload it and then I realized that we kind of ran out of time. And here we are doing a podcast now.

Okay, here we are today 20234 million newsletter subs 25 million in revenue 14 employees 16 employees I want to get into the guts of it, right? Like when I go to the site, I see a lot of things where you've got AdSense type stuff. You have this premium subscription revenue happening. But then you, you know, there's also a lot of other stuff you have. Like what are you doing to get all these subscribers? What campaigns are you running? What lead magnets are you doing? What email drips are you doing? There's obviously some, there's, there's some sort of secret sauce here that I'm trying to kind of understand of how you're doing this.

Yeah, yeah. So you know, we're spending 6 to $800,000 a month right now in advertising to grow the list.

Did you just say 6 to 800,000amonth?

Correct. So that's a big part of it. You know, we still have a big organic presence. You know we do, we still do some automated content. If you go to American banking news.com right now, you'll see it.

So paid media. I'm assuming what you do is you have some sort of campaign that goes out with Facebook, Instagram that leads to some sort of lead magnet to get an email to download some sort of five stocks to invest in in December 2023. You get them going on the email and then there's some sort of drip automation happening and then that promotes your subscription product. Is that, is that kind of the playbook?

Yeah, that covers it. Well the other big like you know, everybody advertises on Facebook and Google. The thing that we do that is very finance specific or there are kind of investing company like investing media agencies that like do placements on like other investing newsletters and websites. And you know, sometimes, you know, there's co registration is still a big thing in the finance space. So like you go to like Forbes is a big one back in the day you go to Forbes and you sign up for a newsletter, and then there'd be ads for other newsletters, and ours is always one of them, so lots of that.

Interesting. So how do you understand the ROI of that spend? Do you do it on a. This, an email subscriber is worth something. Something to us, or, you know, the take rate of that subscriber. So if you get 100 subscribers, you know that you're going to convert this many into the premium plan. How do you follow that through?

Yeah, so we have a dashboard that shows for any given lead source for any given month, here is what we spent on it, and then here's how much money we made. So it's never a question of whether or not it works because all of our advertising partners use a platform called Everflower. And then we can post. When somebody buys something, they post back to our system. So we know that this user bought something. We got paid this amount. So we could say, okay, for the thousand users that came from LinkedIn last month or wherever, we spent X dollars and have had Y dollars in advertising revenue. And we try to break even. About 90 days is kind of what we target. And from there our long term LTV CAC on paid spend is like 6, 6 or 7, which is fantastic.

Okay, so your payback. So your payback period on the spend is six to seven months. Is that what you said? To get fully. It's 90 days.

90 days, yeah.

To break even and then six to seven times spend for a lifetime of a customer?

Yeah, over subscriber. Yeah, over subscriber. About three years. Yeah, it's. It's pretty wild.

So. So, Matt, do you feel like, from what we read with James, you know, there was kind of this two to three employees. I don't know, 2015, you kind of get the domain, you rebrand, that kind of floats. And then it almost seemed like you kind of kind of stayed there until you got to Covid and there was like a huge influx. And then it's really been in the last two or three years where all of a sudden you've really exploded. Is that. Is that fair to say, or.

Yeah, in 2019, I'm gonna get the number right and pull up the report. We did 7.7 million in revenue, and in 2023, we'll do about 29 million. So since COVID we have about 4x to revenue. And obviously, like, as you grow bigger, it's hard to grow at, you know, double a couple times. Like, it's hard to do that. But yeah, I mean, Covid was just a fantastic boom for us and in there you had kind of the GameStop, AMC madness. And that was a big thing for us. And you know, 2021 was probably the most profitable year for like investing websites there will ever be it ever be again. Because it was.

Well, you have the crypto craze. You had like probably, you probably capitalized on all those different fads, right?

Yeah. So like normally our website gets maybe 400,000 pages a day. Like in January, February 21st, when like everybody was telling their mom to buy GameStop, we were like a million, million two hits a day. So it was, it was just wild. Like we were having trouble keeping the server up. Like how can we capitalize on this? And like our highest revenue month ever was January 2021. And like finally, I think in the next couple of months we'll get back to where we were then just because the market was so hot.

What was it like being in that at the time?

Because JR's been through quite a similar.

Thing with Lemon Squeezy calls this the fire hydrant growth where you just, you're fighting fires, trying to, trying to figure out how to grow. What do we do with this kind of scale and influx of subscribers traffic? We're getting remembering back to that time. What were you doing to manage that fire hydrant, getting new people in? Were you working like 14 hour days managing family life? What was that time like for you, Matt?

Yeah, so one thing about it is, you know, the big thing, you know, GameStop, AFC, they had a short squeeze, right? Like yeah, people were trying to push the stock price up to squeeze the shorts and cause them to lose a bunch of money which, you know, forced them sell, which pushes the price even higher. Like MarketBeat. At the time we ranked number one for GameStop short interest and AMC short interest. So like we were just right at the center of it. It was fantastic. So like we just had a ton of scale issues all at once. Like, you know, we went from like one server that had the website and the database on it to like two database servers, two web servers. Like had to do all that pretty quickly. Had to explain to our to send grade Y. Like we had so many new emails on the list. Like that was fine. And then it was really like, okay, well what are we gonna promote right now? It's going to maximize on, on this trend because you know, we promote like boutique financial newsletters and there's always like one hot thing and for the year and like 2023 was, was AI. So you promote like AI stuff and like you make A boatload of money. But there's this game of like knowing like what the hot thing is that you, you need to promote. And yeah, it was a lot of just figuring out, like, okay, how can we capitalize on this? How can we get more access subscribers? And like, you know, it wasn't like a 90 hour a week thing or anything like that, but it was more like, we know this is a short window. How do we capitalize on it while it's here? Yeah, I think we did an okay job, but I think there's a lot more we could have done just in terms of marketing tech that we've gotten so much better at in the last two years.

What did you capitalize with? Did you sell all access, the subscription, or was that primarily the push?

Yeah, so, you know, all access, some of it. And some of it was, you know, the financial newsletter. Publishers were always right about whatever the hot thing is. So we just tried to figure out, like, who's the best at this and who can we promote that all make the most money? And nobody really got it right because that thing lasted maybe three or four months and then it was kind of done. And then our revenue almost fell in half from like 2.9 million to a million five. And then we kind of had to crawl our way back up from there.

So what was that like with the loss of revenue afterwards? Did you sort of know that was going to happen with it being like a short window?

Yeah, I mean, we knew something like it would happen. I don't think we knew how deep it would go, but our profit margin was so high. Like, it's not like we had to cut anything. 20, 21. Our margin was 80. Let's see, what was it? It was our profit margin was 72% that year.

So even with the advertising spend or have you scaled that up more recently?

Yeah, now it's more like 55 to 60% with the advertising spend. And we built out a new office this year. You guys can see the view that I have right there.

Oh my.

Look at that.

Yeah, I saw you kind of rebuilding this thing. I kind of watched it all unfold and it was pretty, pretty amazing, like what you've done.

Yeah. So spending 3 million bucks on an office is kind of torpedoed our profit margin this year, but next year it'll be fine.

Is that all in? Are you done now? Is 3 million the.

Yeah, I mean, it's almost done. There's a couple things that, like, they ordered the wrong colored door handles and. And so they had to reorder those and just little things like that, but we're pretty darn close.

Hey, Matt, I didn't think offices were trendy and cool anymore.

This one is. It's got a 500 gallon fish tank in it. It's got a speakeasy in it, like two espresso machines. We have a garden room, we got a gym, all sorts of cool stuff. Like, my theory is, like, if you make an office like that's cooler than people's houses, then they'll want to come into work. And I think that's true.

What's your view on, like, remote work versus an office? Because JR Lemon Squeezy. Fully remote. Yeah, yeah, fully remote. I work at home, but I really struggle with it, to be honest. Matt, I don't like being at home all the time. I've actually had to hire a desk in a local co working space so I can actually get out of my house. So what's your view on, like, remote work versus the office since you've spent this money on the office?

Yeah, you know, Most people at MarketBeat work in the office two, three days a week. Some people are here five days. You know, I think remote work is fine some of the time, but I think when you're remote all the time, I think you lose a lot. That's why we see a lot of remote companies doing like quarterly in person sprints. And, you know, I think that's a good model. It kind of depends on the company. And, you know, MarketBeat is so kind of ingrained in the Sioux Falls community that, like, you'll always be a Sioux Falls company where a lot of us come into the office and, and kind of have that community and collaboration. But I've got nothing against remote work.

Yeah, you've written a lot and you've done a lot for the Sioux Falls community and being like a hub for that community and startup founders. So it makes sense that you would want to go down that route with the community stuff you do.

Let's go to the newsletter craze because I do think we could go into the homegrown capital and everything he's done with Sioux Falls. But before we get there, I think we get into the newsletter craze.

Yeah, there is. It is wild how how hot newsletters have become in the last couple years with Substack and Beehive and all those platforms. And I mean it. In some ways it's great because, like, newsletters are hot again. But in some ways, like, a lot of the people that are doing it are Just kind of missing the mark in terms of, like, creating a business that provides value to people. So, I mean, one, like, how many. How many AI newsletters does the world really need? So there is definitely, like, saturation there. Right. And, you know, kind of the bragging point that a lot of people use is, you know, my open rate is 60%. And it's like, yeah, when every Apple user opens every email because of mail privacy protection, of course you think it's 60%, but really it's probably 30%, because from what I can tell, at least according to our data, like, half of opens these days are just automated and not actually somebody opening your email. Yeah. So you don't really know who's engaged in your list, who's not, unless you do some pretty sophisticated things. So, like, most people are, like, selling, like, the value of their newsletter based off a number. That's just not true. So I can have a problem with that. The other thing is, like, you know, so much of the advertising that is out there for the kind of new generation of newsletters is kind of following the morning brew, you know, the hustle model, where it's kind of brand sponsorships to brand advertisers that are just really big companies. I struggle to think that they're providing, like, the value they're charging for in a lot of cases. Because if you don't really know your numbers and you aren't really sure, like, if you can prove anybody bought something, like, how sustainable is that? So I suspect we'll see a washout in the next 12 to 18 months, because there's always a washout once people realize, like, this game is harder than they think it is.

Matt, let's go the inverse on that. So I tend to agree with some of the things you're saying. So when you talk about ways to monetize a newsletter, which we'll get in maybe in a second, about how you would think about starting one and what you should. I'd love to hear your advice, but, like, how else do you monetize? Is it more what you're saying, where you build a premium offering and you have more advertising, publisher kind of relationships, partnerships? What is it that you see?

Yeah, I mean, we've always been kind of a performance advertising business, so we typically only get paid when we sell something, which is really great when there's a fantastic match. And when there is not a great match, we send advertisers away because we tell people, you know, we don't think anybody's gonna buy this. You shouldn't advertise here. So it creates a lot of alignment between the advertiser and the publisher. And that's kind of what we do. Like, you know, it'll be a stock brokerage that says, hey, we're looking, you know, to grow our user base. We'll pay you X dollars per new account. And we'll say, no, that's not good enough. You need to pass this. And maybe they'll say, okay or not. And, you know, we can develop that deal and promote them for a while. And, you know, there's alignment there. Right.

So, Matt, and you're like, revenue, like breakdown for you guys. Do you have a percentage of what the all access kind of premium subscription is versus your quote, unquote? What would you call that?

Your.

Your publishing revenue? Advertising revenue.

It used to be more 50, 50, and now it's really shifted kind of 8020 in favor of advertising, really, because there is just so much demand out there. And like, you know, if we have, we saw one product, it's market beat all access. And, you know, people don't want to hear about your product every day just because, you know, you get fatigued on it pretty quickly. So we think, okay, maybe, you know, just generally speaking, like, maybe we email about MarkBeat All Access once a week and the other six days we email about something else because, you know, you can only talk about the same thing for so long before people just get sick of it.

Yeah, well, and we also live in a world now, too, where people's attention spans are, you know, they last maybe five minutes, so they, they need, they need to switch it up.

Yeah, I mean, our most successful, like, email to sell MarketBeato accesses just saying, hey, there's a 50% discount applied to your account, but it's only good through tonight. You know, buy right now or you're gonna lose the discount. And like that. That email will, like, work way better than just about anything interesting.

Do you have sort of the same advertisers that advertise with you or like, are you selling slots in the newsletter? Is it. I'm gonna guess there's more sophistication than that to the way you sell advertising, Matt?

Yeah, you know, a lot of it's either kind of a CPA deal where somebody buys something, we get the money, and then some of it's pay per click. So some of the smaller advertisers that maybe are just getting started, you know, maybe we say, you know, we don't think you're. You're there to be a CPA deal yet. But, you know, if you want to buy, you know, 2,000 email clicks, we'll sell it to you for six grand or whatever, you know, three bucks a click. And they'll try that, see if it works, and if it does, they'll do more of it. And, you know, we work with an advertising agency, a couple of them, to sell some of these smaller clients that are just getting started, because we don't really want to mess with it as much, but they typically sell on a CPC basis. And then, like, when an advertiser gets up to maybe like 100 grand a month, we'll say, okay, we need to be direct with you guys and let's work out a performance deal. And those have gone really well for us.

And what would you say to people starting out newsletters that are scared of doing that model? They do these brand advertising deals. They sell slots for a certain amount, and they're like, yeah, but if I go to the cost per click model, then I've got to kind of guarantee these clicks. Is that sort of the misalignment in value that they give into their audience or to their sponsors?

Yeah, I think what we do is probably harder in some ways than selling to brand advertisers, but I think that's also a lot more sustainable. One thing about us is, like, we don't have an advertising sales team. I got a guy named Will who does all of it. Like, because it's the same advertisers every month, it's just, okay, it's a new creative over. We'll put it in our system. You know, you think of, like, the hustle and those kind of things. Like, they have massive sales teams, right? Like, each person is supposed to sell, like, a million dollars a year, and they might have 30, 40 sales people. Like, I got one guy, and that's all we need. And I keep telling them, like, dude, we got to get your assistant. He's like, nah, I don't know whether you do what. I think we're good just because it's same advertisers coming back month after month. You know, we're adding, you know, tons of new subscribers every month. So they're always hitting new people. And, you know, we've had some of the same people for advertise every month for eight years, and just. You don't really see that. And so, like, once you get it going, it's fantastic.

But, well, what about starting there, Matt? I mean, we're kind of going about this backwards, but, like, I don't Know if it's like, hey, give me like the five most important things. I'm just starting out, I have a newsletter, I'm in this industry. Just give me the five things I need to do over the next, you know, to just get me successful. What would you say?

I think the big thing is finding an advertiser you can develop a long term partnership with that's kind of in your niche or something you really believe in and go find that company and say, hey, we want to promote you guys. That way you can create content about them and be authentic and really provide value and sell them on the idea. I think that works much better than just trying to get the brand advertiser of the week that's got budget to spend. Yeah, it's really thinking about like what are the products that I believe in that I love, that I think my audience would love too. And then like finding those companies and making deals with them.

How about a hybrid approach of brand advertisers and the cost per click ones?

I think it's fine. You know, what works for one company isn't going to work for another. We're not really going after brand advertisers because that's more work than we want to do. But you know, it works well for some people. I mean the morning brew got to 70 million bucks doing that. Right. So they clearly know what they're doing.

Yeah, that's true. And what about the types of newsletters that would work well for people? Because you're saying there's a lot of these trends that are coming and going. The world doesn't need another AI newsletter. What are some markets that are going to stand the test of time? You're obviously very involved in personal finance. Could someone start a finance newsletter with a certain spin on it or there are certain opportunities. You thought if I wasn't doing this, I might go down that route.

Yeah, I mean you definitely want to be more niche down because we don't need more general publications in the world. We got plenty of those. It's like what can you create content about that's got a unique spin on it, is, you know, not been done a thousand times over, but then also has like a base of advertisers that want to reach that audience. Typically if you can write to people that have money, that's like, that's kind of the golden thing is I always think of like probably eight or nine years ago I tried my hand at like the golf industry because like those people are typically have money, they have free time, they Spend money in golf clubs and equipment, and that'd be a great opportunity for somebody.

Yeah, you're right. Are you a golfer yourself, Matt?

No.

Oh, you just saw it as an opportunity because those are. He's right.

He's right. Yeah. Because the, the audience is. Has, you know, they're typically, you know, people with money and, and then how international it is as well. Right. Like it's, it's not just only in the US Like American football.

Right.

Like you could expand internationally pretty easily with that too, which is actually another interesting thing. I'm so. Yeah, I think to kind of distill down what you're saying. And I'm reading a post on your Twitter right now that's kind of saying this, which is just really understanding the audience and maybe why that would be good. I'm. I'm actually curious, Matt, on the publishing frequency, so you said a good time to do it is two to three times a week. Is that enough? As you get going? Is that kind of. And then you expand from there. I mean, obviously you're sending emails, what, seven days a week now, I assume.

Yeah, yeah.

Multiple newsletters, you know, all email once a day. Sometimes some of them take weekends off. But yeah, I mean, I think you want to email as, as much as possible without pissing off too many of your readers. And that frequency is typically a lot more than you think it is. You might email five days a week and somebody might open two days a week, and that's fine. You know, I think a lot of the newsletter people are tech people who, you know, hate. Hate advertising. They hate getting email. So they think, oh, my audiences are going to want five days worth of email. But every single one of them makes the mistake that, like, you are not your audience. They're different people with different interests and, you know, different hobbies and different, like, email habits than you. So, like, you might not want five emails a week, but maybe they do. And you won't know that until you email five days a week and see what happens.

Interesting.

Yeah. Cool. Well, any more questions about the newsletter business, the crazes, everything that's going on, or can we talk about everything else Matt does because he's a busy guy.

No, no, no. We can. We can move on, James. We can move on.

So, Matt, I mentioned everything else. You've got startups, Sioux Falls Community, you started in 2019. You're an investor with Homegrown Capital, which you've as a 70 million fund to invest in tech startups in the Northern Plains. You serve on the Board of a couple of companies. And you've written books as well. With Market Beat going on, why are you so invested in doing all this other stuff and how do you make time for it?

Yeah, I mean I tell people I'm a guy that does a little bit of everything and you know, some of my other businesses, like homegrown Capital, like I got a great partner in it and you know, I'm kind of the brand behind it, like locally, you know, I'm kind of a big name and like we were able to raise a bunch of money and. But my partner Tim does most of the work and you know, sometimes like I help find companies and you know, he does a lot of that. So it's, you know, that's a five hour a week deal for me. Startups who fall is like I'm just a board member. So I go to two meetings a month and that's it. Like now. But four years ago like our startup community was, I don't say in shambles, but not a good spot. And I was not impressed with the efforts that were going on then. So I thought, I'm going to make my own thing. And then once everybody realizes this is the right idea, I'll hand it off to the nonprofit people that could run it, which is what we did. And we got the city to give us an old downtown building. We remodeled it, made it cool. So now we've got you know like a 6,000 square foot building for its co working space and event space and like we're too small to have like a wework or anything like that. So we, we made our own. And yeah, I did some books for a while. Like I have an email marketing book out there. I did some other ones, but the email book is the only one that I, that I update because it's just not profitable to write books unless you're like Stephen King. Right. But it was fun while I did it, but like not going to keep doing that. And when you got a $30 million business on your hand, yeah, you've got.

The typical entrepreneur trait, which is in 2019 you've got 7,8 million dollar business and then you're like, I see a problem and I want to fix it. So I'm just going to go ahead and do it. Despite this other thing taking all of my time.

Yeah, I mean it only took a year before I handed it off to nonprofit startup people in town.

Was it, was it hard to start? What, what did you do differently to.

Bring together before we had this like 40, 000 square foot building on the edge of town that was like next to a tech school and like nobody wanted to go there or office there.

Yeah.

Cuz like it was not a cool place. And like all the government ate like Alphabet soup. Organizations were there, like the SBA and like the Governor's office of Economic Development. And if you're like running a startup, those are probably not the people you want to hang out with. So I was like, this place needs to go away and we need to do something that's just for startup people. And it turns out that was the right answer. So like, I started kind of on the community side. Like, okay, let's build an email list, let's do in person events, let's make a Facebook group, we'll do socials or do networking events and like really create a buzz because the other place that we had before, like had no buzz and like we had office space and like nobody wanted to rent there. And like, wow, this isn't working. So kind of created the community, created the buzz. Like I just had my assistant Maureen, like do all the event planning stuff so like, I didn't really have to do that much. Created a resource guide, had like a. Made like a list of mentors people could hit up and get advice from. And it all worked really well. Kind of the stuff we needed. And the non profit people in our city kind of realized that, and our chamber of commerce people realized that. You know, we kind of said, okay, how about we try to move this downtown and you know, tell all the Alphabet soup people, like, you know, you guys can just go rent an office space somewhere else. You don't need to be here. So we ended up like renting our old facility to the tech school, which they turned it into their like nursing school, which is great. And then we got the city to give us a downtown building and then we raised a million and a half bucks to remodel it. A lot of that was my money, but I was worth it. My mind.

Matt, why is doing all the community stuff so important to you? Because you list out your goals in your about page as well. You've got one goal, which is about the growth and market. B makes sense, but it's also about establishing the entrepreneurship hub in Sioux Falls. Build a permanent home for your church, run for elected office, and be a.

Key leader in the community.

Redefine what effective philanthropy is in your community.

So much of this is to do.

With your region, your community. Why is it important to you?

A lot of it is because there are a lot of people in our community that have done things the same way for a long time. And they say something can't be done or it's too hard or can't solve the problem. Like during COVID like our jcs used to run a community fireworks show. And they said, too hard, can't raise the money, can't do it. And I was like, well, what does it cost? And it was like 20 grand. So I called my buddy Kevin and said, hey, I'll put in ten grand if you put in ten grand. And he said, okay. And so we've been sponsoring the community fireworks show for the last four years and our buddy John runs it and, you know, hires the fireworks people and, you know, they get bounce houses and food trucks and, you know, a whole bunch of stuff like that. And every fourth of July there is the market beating creston capital community fireworks show. And like, I. I don't know why anybody would say that's too hard. Like, 20 grand is, you know, a small number in the grand scheme of things. So. And then like, you solve the problem. So there's a lot of stuff like that in my city.

For those listening who are also in small communities that they feel like things need to change. What's like, things they can do when they don't maybe have a business that can invest their money in and what can they do to make change within their community?

Go make the money first and then do it.

That's the easy answer.

I mean, honestly, like, when I didn't have the business, like, nobody listened to me.

Money talks.

Money talks. Yes.

It's the world we live in, I guess. Sad reality.

What do you do for fun mat outside of work and lamprey and investing and your kids?

I was playing age of Empires 4 for like 2 and a half hours last night. That was a lot of fun. You know, ride my bike when it's nice out. We have a great bike show here in town. Every Saturday I'm doing something with my kids. What do you want to do today? Let's go to the science museum. Let's go to the trampoline park. Let's like, all right, let's go. So have a lot of fun with my kids on weekends and just a little bit of everything.

I love that. Matt, you've been great, man. I've really enjoyed this chat and getting to know you and your business and like, the stuff that goes beyond the business, which I didn't actually think we would talk much about. But the more I'm thinking about it, the more I'm interested in you and the stuff you do in your community. Gerald, have you got any more questions for Matt or anything else that we didn't cover in this episode?

No, we covered everything. I think the big takeaway is just, you know, it's. You see this time and time again. So, you know, Matt's the where I think, like, typical businesses, you know, this is kind of the path.

Right.

Like, not every business is meant for large VC checks and big fundraises and. But also, you know, if you don't give up and you just keep pushing. I mean, Matt, what is it? Matt, it's been 12 years since you've been building this. And so if you just kind of keep digging in and making progress, like, it just. You kind of have to put the work in, right? If you want this, this is what it takes. And there's no. It's. There's nothing sexy about it for the most part. Like, you know, there's. There's the rare unicorns, there's the rare things that happen, but it's just kind of with perseverance and just time, you know, like, you eventually kind of break through. And so, yeah, I think this is another great story. And Matt, I appreciate you, like, being super transparent about your numbers and the business and.

Yeah.

Spending, you know, almost a million dollars a month and.

Which is crazy.

And. Yeah, it's just. It's. It's been great and hopefully we can kind of stay in touch.

Yeah. Thanks for having me on. Enjoy the show. Enjoy the other episode I listened to, and hopefully we'll run into each other again soon.

Absolutely. Matt, thank you so much.