How to build a $100M+ newsletter business

I still think the big opportunity in the media space, if someone wants to take a big swing, someone wants to go build a billion-dollar company, it's—

Wait, so say, what were you saying earlier, how you hated me? Oh no, you didn't hate me.

No, I didn't hate you. Like, I hated you. Just to be clear.

I hated you.

I did not hate you. Like, I feel like also part of like my shtick has always been like, I don't hate anyone. I try to kill people with kindness. I try like people have to feel like douchebags for hating me because there's no way to hate me. Like, I feel like that was my M.O. for a while. But I remember, yeah, I remember being on the phone with Tim Shaw and he was investor in The Hustle also, right?

Yeah. I was so mad at him for investing in both of our companies. I was so angry.

Yeah. And I remember being on the phone with him and I was like, we're talking about you for some reason. And I was like, yeah, like, I would love to talk to Sam, but I don't know if he wants to talk to me or us, and Tim was just like, yeah, I don't think he likes you guys very much. And no, but anyway, I didn't, I didn't hate you, but I was jealous of certain things at The Hustle. And one of the things I was most jealous of was the welcome email. Like, I remember reading the welcome email and being like, this is so fricking good. And I'm so angry that we don't have one that is as good as this.

I would have traded you the welcome email for your guys's ability to be like financially like just, you guys are far more than competent, but I was barely competent. So I, so like the envy went both ways. Um, all right. So here's what I want to do for this show. So here's the deal. So wait, do you guys say what you sold for? Is that public or not?

We, yeah, we could say $75 million, I think is the, the, uh, uh, public number.

So collectively, The Hustle and Morning Brew, we sold for like hundreds of millions of dollars. And I, we were sort of like the graduating class of like 2020 or whatever. We were the early people in the newsletter game. We didn't like invent it, but we kind of helped pioneer a little bit of what is popular today. And now officially, as of a couple of weeks ago, we are both— or all three of us are officially out of our companies. I've been out for a minute. Alex has been out for a minute. Now Austin is out and we could finally reveal like a bunch of information.

And sorry, Sam, to be clear, I'm technically, uh, executive chairman.

So I'm no longer day to day, but I am executive chairman of Morning Brew.

You are no longer operating, but I think you guys, uh, do you still have equity ownership?

No, we're, we're both fully out.

All right. So that's what I mean. And so what I wanted to do was I wanted to go year by year when we each started, and I want to explain to the listener what we were doing in that year, what our revenue and profit was, what our subscriber growth was, things we learned. And also we have to add this, things that we would do differently if it, if we were starting again today and things that we wish we had done. Does that sound good?

Yeah, sounds good. I'm also excited for it because at the time I didn't know any of your numbers. So this is like the first time I actually know your numbers as we were going through it.

I think I've like shared with Austin like my whole data room at this point. The cool thing about having a data room is like you're supposed to have, you know, all the information that's easily accessible so you can go like go back and look back.

Yeah, but this is, this is the first time it's all been in one place. We've piecemealed it, but I think it'll be fun to just side by side it.

So you guys started in 2015. What was the original premise? And weren't you guys both in college?

Yeah. So I was a senior at Michigan. Austin was a sophomore. I mean, both of us were kind of on the finance track. The general premise, and it's so funny because like we've told this story so many times about how it started. I don't know if it's actually the truth. It's just what I remember is the story. But basically was I was helping students prep for job interviews. I would ask kids during these mock interviews, how do you keep up with the business world? Every single student would say, I read the Wall Street Journal, but my— but it's dry. I can't get through the whole thing. My parents told me I have to read it. And so at some point I was like, this is crazy. These kids are about to spend their whole careers in business, yet they don't have something that they enjoy reading. So I started putting together the kind of OG version of Morning Brew, which was called Market Corner, and it was a PDF that I'd attach to an email listserv every day. And Austin was one of my readers.

Can I tell you what I think the real story was? Because it's probably the same story as mine.

Sure.

You saw the success of The Skimm and you just said, I'm just going to do this for finance people, or in my case, tech guys.

Definitely possible.

Yeah, I think that's partly true. I do think Alex started the PDF version. Like, there were two versions. There was the Market Corner, and then there was turning into Morning Brew. The evolution of Morning Brew was totally inspired off of, wow, if these two women in New York City could get millions of people, I think maybe a million people at the time reading, like, why can't we do the same? There's a bunch of, you know, at the time we thought dudes in finance who wanted to read about the business world.

And, uh, did you have any revenue in year 1?

No.

No.

Which, by the way, I'll say was a huge advantage for us that I don't think you had with The Hustle is Austin and I were still in school. So we basically had a year and a half to 2 years of like fake timeline where we didn't have to worry about bringing in revenue.

So in 2015, I think I was 25. Uh, it wasn't The Hustle. It was just an event called HustleCon. And that year, I think it had made around $400,000 in revenue. Revenue and like $200,000 in profit. Like, it was like a good event, but we— and it was basically like a TED Talk for entrepreneurs. But I was so scrappy and I honestly regret it. One of my biggest regrets in life is buying the supplies that I needed for that event at Costco and returning the stuff that we didn't use. And I didn't realize that you throw things away once, like Costco throws it away. And it was like the most shame that I'd ever felt. Was like, do it being that like cheap and horrible. And that was it.

Was the Hustle that profitable? Like when you did it that first year, was it profitable?

Yeah. Yeah. Because it was just me. And then I, and then I asked my buddy John to help and it was just us two. And yeah, it made it. So like when we started in the year 2015 or sorry, so the next year in 2016, I started the Hustle because I was like, conferences suck. I want to create a newsletter because I saw the Skimm. I read about Thrillist on Mixergy.com. And a bunch of other, and like a bunch of other newsletter businesses. And when I started that business, I had $500,000 in my bank and it was all from conferences.

It's pretty wild.

I think what you said is interesting about the math, right? I think at the time, and we have a funny story we can tell now that we've held back for a while, uh, about John Steinberg and our first interaction with him. But so many people came to us and they would say like, this is so stupid. Why are you doing this newsletter thing? It makes no sense. But Alex and I would sit there every night and we'd go through a spreadsheet and it was the most basic spreadsheet of, you know, newsletter subscribers grow 5 or 10% a month and CPMs stay flat. And over time you can get to hundreds of thousands or millions of dollars of revenue a month. And I think it was really that simple.

I had the exact same spreadsheet. I listened to every interview with Ben Lear and I'm like, tell me what the CPMs are. And then I met with Business Insider reporters and I said, tell me how many people visit your tech part of your website? Oh, $80 million. Okay, then yeah, like you're giving me some numbers to triangulate.

Yeah. And like at the time everyone was spending millions of dollars putting video on Facebook and, you know, I don't think we were actually that smart. I just think the people around us were really dumb. I do think one of the big advantages, you know, they say at a poker table, if you look around and you can't find the sucker, you're the sucker. Well, I think we picked the industry with a lot of suckers. There were a lot of people who started 5 or 10 years before us and they just weren't smart. They were doing the same thing that they did for 10 years. And, you know, even in 2015, 2017, we were like, BuzzFeed, it just doesn't make sense. It's not worth a billion dollars. And for 5 years, I think people didn't believe us. And over time, I think we, we proved that our model, while it seems silly, it actually works. It worked and it made us a bunch of money.

All right. A few episodes ago, I talked about something and I got thousands of messages asking me to go deeper and to explain. And that's what I'm about to do. So I told you guys how I use ChatGPT as a life coach or a thought partner. And what I did was I uploaded all types of amazing information. So I uploaded my personal finances, my net worth, my goals, different books that I like, issues going on in my personal life and businesses. I uploaded so much information. And so the output is that I have this GPT that I can ask questions that I'm having issues with in my life. Like, how should I respond to this email? What's the right decision knowing that you know my goals for the future? Things like that. And so I worked with HubSpot to put together a step-by-step process showing the audience, showing you the software that I used to make this, the information that I had ChatGPT ask me, all this stuff. So it's super easy for you to use and Like I said, I use this like 10 or 20 times a day. It's literally changed my life. And so if you want that, it's free. There's a link below. Just click it, enter your email, and we will send you everything you need to know to set this up in just about 20 minutes. And I'll show you how I use it again, 10 to 20 times a day. Um, all right. So check it out. The link is below in the description. Back to the episode. All right. So fast forward to 2016. Where are you guys at? Uh, how many subscribers do you have? What was your revenue in 2016? What's the business?

Yeah. So 2016 was the year when at this point I'm working full-time on Wall Street, doing the brew in basically, you know, let's call it 7 p.m. to 11 p.m. every night, falling asleep with my laptop on my lap.

Where were you working?

I was at Morgan Stanley.

Was that miserable?

Yeah.

Yes, it was. My, my entire life was like built up to that point because remember, like, My dad was a trader on Wall Street for 20 years. My mom was like, this is all I knew, but it was horrible. And going back to what Austin was saying about, just like there not being a lot of smart people in media, I actually think the best thing we did is like I call it like IQ arbitrage where I was on a trading desk. Everyone was a PhD in math. I was the dumbest person on my desk, like not even a shadow of a doubt. And just by moving to media, I became not the dumbest person. September of 2016, I quit my job. Also, it was hilarious. Right before that, I almost got fired from Morgan Stanley because they were worried I was insider trading through Morning Brew's newsletter. So, so they basically, HR found out about Morning Brew, which I was supposed to have permission to work on. The guy who was supposed to give me permission and told me he would got fired in a massive layoff at Morgan Stanley. So I didn't get permission and they basically had me meet with Morgan Stanley lawyers, two litigators that were defending Morgan Stanley saying, you can never tell anyone about this meeting, but, um, we are concerned that you are trying to make investment decisions, uh, and get private information using your newsletter. So that was kind of like the last straw for me, made me really not enjoy the job. Quit my job. We raised a small round in 2016. 2016 is also the year when we talked to Jon Steinberg as he was starting Cheddar.

And Jon Steinberg is, uh, like a media executive. Did you guys see the Facebook message? Yeah. That he sent me? Yeah. So this guy named Jon Steinberg, at the time I think I'm 26 and I'm just like a guy in a shitty apartment trying to do this newsletter. And Jon Steinberg is the president or CEO of BuzzFeed. And he's about to start a new company called Cheddar.

He was at BuzzFeed, then he went to Daily Mail North America that he was the CEO of. He stepped down from Daily Mail and then he sent Austin and I an email. Austin, what was the subject line? Like, what did the email say again?

Yeah, so it was from his— we had no idea who John Steinberg was. We didn't know the media industry. And we get an email from— it's like johnsteinberg-somenumbers@gmail.com. And he emails us, intro line, subject line, intro to founders. Body of the email, like what you're doing, period. That was the whole email. So we looked the guy up on LinkedIn and we're like, holy shit, this guy's a big deal. You know, we give him a call and I mean, Alex can tell the story better, but he turns it, he flips on us. He makes us think that he's excited in us. He's going to, he's going to invest in us, all this stuff. And then he brings Alex to his office and I'll let Alex take it away. What happens?

Go ahead.

Yeah.

So I, I go to John's office, which at the time was a tiny, like, closet of a WeWork space. And it was him, Peter Gorenstein, who was his co-founder and the chief content officer. And I get there and I think the conversation is going to be about how John is going to invest in Morning Brew or how Morning Brew maybe will have a segment on Cheddar that would create, you know, audience and distribution for us. Instead, he starts interviewing me.

Yeah, because he wanted you to work there.

Yes. So he started interviewing me. He's like, okay, so, uh, Fitbit earnings come out. You need to get an expert on the story to talk about what this means. Who are you talking to? How are you finding them? Let's go. And I was like, well, I'm going to figure out a way to get to the CEO.

Oh, you fell into it. Yeah.

And I was— and then at some point in the conversation, I was like, you know, to be honest, I'm, you know, I'm not interested in a job at Cheddar, like, I thought we were going to be talking about a partnership with Morning Brew or you guys investing in us. And I will never forget this line. Honestly, I have some respect he said this because he wasn't wrong. He goes, to be totally honest, the cost of the legal fees to do this deal would be more than what I would pay for you guys. And I was like, damn, he's right. Right now. He's right.

I have a very similar story. First of all, related to John, I just found an old message on Facebook that I got. Here's his opening two lines. Have we met? We should meet.

He's amazing.

He's done it like 4 or 5 times and that guy's motor just runs like he is just unbelievable.

So this is— we're in the year 2016. I get an email, or maybe I cold email Ben Lear, who started this thing called Thrillist, which became Group Nine, like a billion-dollar company. And then he's one of the co-founders of Lear Hippa, which is like one of the most preeminent VCs in New York. We start talking and I think he's gonna buy The Hustle right out the gate. And I'm like, hell yeah, like $5 million. I'm, I'm, I'm, that's how much I have right now already. Like he, the offer's gonna happen. And he brings in the president of the company and it turns into an interview, the exact same thing. And I was like, oh, I thought you were gonna buy us. He's like, Brother, this is a newsletter. This will never make more than like $2 million a year. And I was like, well, I don't know, man. Like, if you do the math, he was like, no, like, you should come and join us. Like, you know, we're, we're a real company. Like, if you want to, like, make this work, you have to join our company. And I— forever that has been a chip on my shoulder.

And just think about, like, how valuable it was that we were all kind of like both had conviction and were like irrationally confident in what we were doing. Because like you could see so many other scenarios where someone's like, you know, googly-eyed by someone who's super successful and goes and joins their thing. And then it basically cuts all of the possible upside that, you know, we ended up experiencing with our businesses.

So this is— all right, so we're in the year 2016. The Hustle launched on 4/20/16. And so that year we did $400K in revenue. I think we had at the end of the year, we had like 100,000 subscribers. I had this strategy where I was writing these crazy blog posts and getting like 500,000 to 1 million people a month coming to our website. And that's how we grew. And I think of the $400K, I think $100,000 was advertising revenue. And I think it was 4 of us at the time. Where, where were you guys?

So that's, that's amazing because in 2016 we did our first ad deal. Uh, it was a watch brand called Emil Hart. I believe it was about a $3,000 deal for, for 3. We used to call them exposures. We were so naive. We called them ad exposures. Uh, it was 3 of us. We had a writer who ironically, we poached someone from BI. I think I'm not kidding. I think he made it like 7 days. Like he barely made it at the company. He quit because we wanted him to work more than a 9 to 5. But, you know, we did $25,000 that year. You did $400,000. We were 3 of us that I was still in college.

So mine, ours were events. So it wasn't advertising, which is way less like, yeah, but you guys did what, still 100,000 of ads?

That's pretty good.

Yeah, we started advertising, I believe, in June, and I looked at my first deal. It was $4,600. I cold email a guy named Chris Martinez at Wealthfront.

So funny. That's the funny thing is it kind of reminds me of like if you go to my LinkedIn and look at my DMs from last 10 years, I have basically DM'd every human being that has worked in growth marketing or media over the last 10 years. And I remember that name, Chris Martinez, because I probably emailed him 12 times over that year to try to get him to do a deal with us.

I don't know who Chris is anymore. I haven't talked to him, but if you're listening, thank you. The things I would do differently from 16 is we raised a little bit of funding. I would not have done that. I thought, and in fact, I tried to raise way more money, but no one invested. Which ended up being a blessing because I made a lot of money because I owned the majority of the company. But, uh, that's what I would do differently. So if you're listening to this, I, if I were starting today, I would not raise funding at all. Would you agree?

I think raising funding is all about your business needs, right? I certainly wouldn't have raised more money than we did, but we did need the $750,000. I actually, uh, specifically remember this is now fast forwarding to 2017. It was December 27th, 2017. And I didn't realize that payroll goes out early if it's New Year's Eve because they don't do payroll on holidays. And I had a check in my hand that was going to make payroll and I had to sprint to JP Morgan because they were going to close at 5 o'clock. It was like 4:55. And you know, when people say you were close to missing payroll, I was literally 2 minutes away from missing payroll. So we didn't need every penny. From a cash flow perspective, because obviously media companies, the accounts receivable on them, you might, you might need 30, 60, 90, or 120 days just to get paid. So we did need the money. But yeah, for a media venture, I don't think you should raise— you should raise as little as humanly possible.

I will, I will say there is one thing I would have done differently and like one big lesson from that period and the raise. The first is we had 28 individual investors. So we had 28 people who wrote checks from $2,500 to $100,000.

Same.

If I was to do it again, I would have way fewer. Uh, I would also try to suss out if these people are going to be difficult because we'll fast forward at some point, but there were some very difficult investors when we sold the business. The second is time is a crazy thing in startups and you always think you can get more done in a shorter period of time. And I remember we had a slide in our investor deck that showed our 1-year plan to investors and that slide, looking back on it now, took us 9 years. We tried everything in that slide and took us 9 years to try everything. And most of those things did not work. But yeah, it took 9 years to accomplish our 1-year plan.

All right. So we're now— we are in 2017. Do you remember we ended the year? I tell the story differently. I tell the story that we went from 100,000 to 500,000 subscribers. I think I missed a year because I went back In 2017, we ended the year with 250,000 subscribers. We had $2.2 million in revenue. $400K was events, $1.8 million was advertising. And my big learning that year was hiring a sales team. I did a lot. I think I did the first year of ad sales and I was horrible at it. I didn't realize how uptight you had to be. You had to be like buttoned up. I didn't know. I didn't understand this. Where were you guys at the end of 2017?

Yeah, so '17 was the year that we were both full-time, or I was only full-time half the year. We ended at 100,000 subs. We did $300,000 of revenue. We finally started taking a salary. We were taking $60K each, but that was the first real year we hired our first— we hired Tyler Denk, who now is the CEO of Beehive. I'm sure everyone listening knows Beehive, and he was transformational for us.

What was his job? Everything.

Do you remember his— do you remember his first title, Austin?

Do you remember?

No. Growth engineer.

Growth engineer.

Yeah, yeah, yeah. I mean, he did everything. And between him and then we had Michael Schwartz, who also now works at Beehive, who was our first writer. And then we had— he brought on Neal Freiman, who still works at Morning Brew today. He is— I mean, like, look, Alex was the visionary of the Morning Brew voice, but I do think Neal was really the executor and took it to the next level. Neal is— I think I spoke about him last time I was on the podcast. Neal was huge for Morning Brew. He really did. What Alex and I couldn't do, which was take this idea in our head and put it on paper every single day, 365 days a year for now 10+ years.

I also think Neil is a great example of what we did well at The Brew and what you did well at The Hustle, which is I think about our first 3 writing hires, Neil, Michael Schwartz, and then this, uh, woman Nikki, and all of them were non-traditional hires. Like I think both the Morning Brew and Hustle were really good at finding undiscovered talent. Seeing a ceiling in them that other people didn't realize. And it was the same thing for you. Like, I remember, we'll talk about it later, but like, I watched your writers like a hawk. I could read a Hustle story and knew, knew who wrote it without seeing a name attached to the story. And, and I knew their backgrounds and none of these people were what media companies would traditionally hire as talent.

Dude, I tried to recruit media people and they laughed at me. Like, I emailed this one famous journalist and she said, that's cute, thank you. Like, like I tried to. And so the only people I could afford and be convinced to do this stuff were like, for example, Lindsay Quinn was a blogger at like a procurement startup or something, or I don't even remember. Like, she was not a writer, but she could write and wanted to write. And you sell them on the dream of like, wouldn't it be fun if you could do this hobby all the time and make money from it? And that's the only people we could convince to join us.

She was, she was my writing hero. The number of times in my career I've tried to poach her is Very non-zero.

Yeah, she was fantastic.

And this really fast forwards to 2018, but Alex isn't kidding. We knew every single writer you had. We knew, and Alex in particular knew every single story, who wrote them. And, and we would come to work every day, end of 2017, 2018. We would, for the first 2 to 3 hours, print out Morning Brew, print out Axios, print out the Hustle, print out the Skimm, and with a paper and pen, and Alex led the charge, would go through every single story. He'd circle what he'd like, he'd X out what he didn't like. And look, Alex is the most likable person on the planet. You now know this, Sam. I'm sure a lot of listeners know how likable Alex is. The only person on the planet I know who doesn't like Alex is our first writer, because Alex would sit there and just you know, cross out half the words he put in the newsletter and be like, look, Lindsey Quinn wrote this same story better than you did. Like, be better. And I mean, we were, we were maniacal. We were, you know, we lost our minds to the game. We were crazy about this newsletter thing.

And for the record, I didn't do that. And that's a regret. Like, now that I'm older and understand how company building works, like, I would, I would, like, if you told me you were doing that, I'd be like, you guys are insane. Just have fun. Do what feels good. But that does not— like, once you get past, I don't know, $5 million in revenue or something like that, you, you could— and that means you probably have some type of product-market fit. You could absolutely iterate your way to being like wonderful, you know, starting like you're at a B or a C+, you can get yourself to an A+ through iteration.

And honestly, I think a lot of me being maniacal with the content came from like what Austin had taught me along the way around standard setting. And basically this, the standard of your business is what you allow. And so like if you allow suboptimal content to be written, that is the new standard you set. Like basically you're implicit by saying, not saying anything to something, you're implicitly saying that that is okay. And to me, that was my biggest fear is if I said okay to things that were not exceptional content, that was the new standard of our business.

How old were you guys during this era? In 2018?

I was 22, 23, right?

Yeah. And I, yeah, I mean, I'm what, a year and a half older than you?

Yes.

You were 24.

Yeah, dude. You guys were like, I, I'm, I'm like what you guys are in when you were 22 today. I am now a 22-year-old Austin and 22-year-old Alex. Like I totally buy into everything you're saying back then. I completely would have laughed at you and your way, but is 100% the right way. Like being, It's crazy how mature you guys were at such a young age.

Yeah. When we sat down at first to set our core values, two— and at the time I thought core values were fluffy. Now in hindsight, I actually regret that we didn't, you know, write those in stone and keep those. We messed around with them a bunch, but two core values were really important was one, have an ownership mentality, act like you're an owner. And if you own something, you're going to every day critique it. You're going to give it feedback. You're going to, care a ton. You're going to drive every single day to that. And the second is underdog mentality. We came into work every day, a group of misfits, a group of people who had no idea what they were doing in the media industry. And we just act like an underdog. It's March Madness right now. You just see that the way these underdogs show up to games, they're loose, right? They don't have this weight on their shoulders. And every day we came into work and we were like, screw it, we are going to kick the shit out of all these legacy media companies who raised these, let's see, $100 million of funding. Alex and I would sit down and say, what could you possibly do with $100 million of funding? And what they did is they burned it on fire and flushed it down the toilet and added no value to their companies. Yeah.

I also, I also just think it's like at the time, Austin and I, like we just had such a fire. And I think for Austin, similar to you, Sam, like Austin kind of creates like an opponent in his head and that is enough to basically just create this like insatiable drive to win. I think for me, I actually have less of that. But the thing that compensated at the time was like the two things. It was like my, my dad dying and feeling like I needed to provide for my family. And I told you this last time when we saw each other in person, Sam, like me being bullied from 5th grade to 12th grade and feeling like I just wanted to prove that I was like worthy. That was more than enough where I think even when the, the brew is small, Austin and I had this like deep in our bones feeling that we were going to succeed, like the business would ultimately sell and it was just a matter of time.

That's what I have always admired about you guys was you have this really cool combination of optimism and pessimism where Austin is like afraid all the time, yet like is logical enough to be like, I'm going to do this, this, this. And then like the likely outcomes are A, B, and C. I did not feel that way. I was, I was a scarcity mindset. And so in 2018, you guys did $3.1 million in revenue. You had 10 employees. And how many subscribers did you have?

So 2018, we went from 100,000 to 1 million subscribers.

So in 2018, I think we ended the year at 500,000 subscribers. We had $5.1 million in revenue. About 1 million was from events. Uh, and I paid my, uh, we had $160 grand in profit and that was the first year that we spent on advertising. I went and looked back. So we got to like $200,000 organically and then we spent money on ads and I spent $1 million that year. Did you guys spend money on ads that year to get to 1 million subscribers?

We spent every penny we possibly could. I would track daily cash flow to make sure that we had enough money and we put— I mean, 2018 was the year for us. That was the year that, I mean, there were days in 2018 we were growing 20,000. You know this. We would do these MacBook giveaways. We would grow 25,000, 25,000 subscribers in a day. So yes, we spent every dollar we could possibly find. And my only regret is we couldn't figure out a way to find more money to put more money into Facebook ads.

Uh, if I remember, By the end of that year, we were spending like $500K a month on ads, right?

Yeah, at least.

At least. That's crazy. I, I was being— I had such a poor mindset where I didn't look at it. You guys, because you had this finance background and also I think you are just more like this naturally anyway, you had this mentality of like, well, I, I will spend $1 to make— like, if $1 turns into $1.1, I will spend every $1 I have. For me, it was like, 80,000 a month. That's astronomical. It doesn't matter what the return is. Like, you know what I mean? Like, like that, that was a failure. That, that's an immature mindset.

I also feel like part of it was like Austin and I were younger than you. We also like, you know, at the time we were only making $60K or I think we had upped our salary that year to $120K. And I don't like, I think part of maybe your mentality for the hustle was like, this is kind of just like a cash-flowing lifestyle business for me that I'm going to just like— I can continue to pull money out of the business as like the vast majority owner of it. I feel like Austin and I at the time weren't thinking about monetizing it for ourselves in the same way.

Yeah. And Sam, I knew you thought that, right? Because, you know, the deal in Rippling, that whole thing just happened. And we certainly didn't have someone in your lap, but we would talk to all your former employees. We would get every bit of information we possibly could. And I knew that you had a profit threshold. You're like, I want to profit this every month. And I said, well, that means Sam's taking his foot off the gas. And so Sam's taking his foot off the gas. I'm going to do the opposite. We're going to—

which is funny. We did. I did make a lot of profit. I did actually make a lot of profit. Like we grew revenue like 50% most every year. But like I did not. So I— yeah. And I think that you were talking about values. I wish I would have. So, you know, I think, I think you guys matured earlier than I did. I was still really immature. And I didn't codify my values and I didn't codify the culture. I started the company when I was 24, 25, and I think I evolved to where I am today when I was like 31. You guys were kind of like 31-year-old Sam when you were 21. But had I done it over again, and if you're listening, I would codify your values early on and stick to it. Also, what a lot of people do is they buy ads because so back then this was only, you know, a handful of years ago. Back then it felt like buying ads was more like there weren't that many experts now to buy ads. It's like commonplace, like you, you, it's way more common. And so, uh, uh, people buy ads way earlier for their products now. And I actually think that's a huge mistake.

Totally. Yeah, I totally agree. I mean, that's the part of the story that, uh, we didn't talk about is like we didn't do paid acquisition until 2017, really. So 2015 and 2016 to get to 100,000 subscribers, it was entirely organic growth. So by the time we actually were paying for subscribers, like, we knew we had a great product. We knew how long subscribers were staying. We also knew how to, like, work within scarcity of not having money, but finding ways to grow regardless. And I think that muscle, if you skip over it, is a really bad thing.

Okay. And another thing that I learned that— well, I learned— so I'll say in 2019, so we're in 2019, you guys did $3.1 million in revenue with $3 million in profit.

13.1.

Sorry, 13.1 million in revenue, 3 million in profit, a salary each of 250, a team of 25. We did about 8 million in revenue, which, with 640 being from events, we did profit of $200,000, but we did cash flow of $1.6 million. And we had— and I'll explain why. So at that point, I sort of switched the business to caring about cash flow, and I had subs of about $1.2 million. And that year we launched this podcast, Sean, uh, uh, under the Hustle name launched, uh, my first million. This year in 2019, the thing I learned was that, you know how like a lot of social media companies are like, who cares about revenue? Who cares about profit? Just grow your users. This was the year that I learned that to be true, that if you know that you make a certain amount of revenue per advertising, uh, via advertising or subscription per user, that's the only thing that matters. It's just getting more users. And I wish I would have understood that a little bit earlier.

Yeah, I think what we learned this year was we started to see the plateau of not just newsletter growth, but of the economics of newsletters. Morning Brew got to a point where we started to ask ourselves, how much could you make on a single newsletter?

I think it was $18 for us per subscriber, right? 50 cents a month for advertising, maybe.

That, that sounds right. I don't know exactly. Yeah, there's 75 cents, something like that. I think that that makes sense. But what we learned was at some point, and the answer ends up being far, far down the road, but we started to ask ourselves, you know, do we just want to be a single newsletter or are we going to get to a place of diminishing returns from pumping more and more money? And we were spending this year, we probably spent $6 to $7 million on paid acquisition. So we spent what you did in revenue almost. Just pumping growth back in. And we started to ask ourselves, does this make sense? And that's where we learned about industry dives. And we started to really take the approach of, wait, our audience works in retail, they work in marketing, they work in, as CFOs or in finance. What if we took that path? The CPMs are higher. You don't need to grow as fast. It's not a race to the bottom. It's more of an engagement play. And so that's when we went into our industry verticals. Yeah.

And, and what I would say is also that year, I actually think of all the years in the business, 2019 was the most important year, um, because that was the year when Austin and I, I can't remember what month it was, but basically I would say Austin and I really never got in big arguments or fights in the history of the business. But in that year was the year that I could tell Austin was, or a single day Austin was most upset with me. Because basically what I remember is Austin and I were still working in the business like we were in the frickin mud and all we could think about was like making sure the newsletter went out tomorrow, making sure we were getting an ad deal for Friday. Like we could not see a month or a quarter ahead of us.

That's a really stressful time.

Yeah. And I remember one day we were in WeWork. I got a message from Austin on Slack saying, hey, One of our investors, who is this guy Scott, who created the Snuggie and he has a bunch of other products, he told Austin, because Austin had asked him about like, what are things, what are resources you have to like operationalize your business and run your business? And he goes, I use this book, Traction, and you're going to read it and you're going to adopt in your business. Austin read it and he gets back to me. He messaged me in Slack. And it's like, dude, you need to read this book yesterday. And this is what we're going to do. And I remember a day goes by and I did— or a few days went by and I didn't read the book. And Austin messages me and says, did you read the book? And I said no. And he says something along the lines of, I don't understand why you're not doing the thing that is the most important thing in our business right now. And I could tell for the first time that, like, he was actually pissed at me. So I went that day and I read the entire book. I did not work. I went to the highest floor of our WeWork and just read the book. And I think a few things happened. One is traction was a game changer for our business. I also think that really became the inflection point where Austin really took over as CEO of the business in kind of not in title but in, action. And like, I think it was a transformational year for the company.

I read that book around the same era and it had the exact same impact on me. And in fact, On Tuesday, it's Wednesday. Yesterday I hired an EOS implementer and I met with him yesterday to implement it into, uh, uh, Hampton. And so for those listening, EOS, it's called Entrepreneur's Operating System. It's a framework to run your company. It's based off a book called Traction. Uh, that's so funny that we all came across this at the same time.

Yeah, I'd love for you to do a full episode of My First Million. I think everyone would like where you kind of do a postmortem and talk about how you implemented it. Reveal as much as you could because we didn't hire an implementer. I thought it was a waste of time and money.

Totally worth it.

And that's my biggest regret is not hiring an implementer because I didn't want to be the bad guy. I didn't want to be the bully. You basically spend— you could say, I don't know, probably thousands of dollars.

$60,000. It's usually like the guy I talked to, it's $60 grand a year. Wow.

Which, by the way, which, by the way, is why it's an unbelievable business. It's basically like a digital franchising business. It's, it's such a cool business.

Yeah, it's— but it's worth it. Uh, it's basically, it's $60 grand a year. It's basically an executive coach slash organizer, but it's so funny that it happens if you're running a company. Once you get to like the $5 to $10 million mark, that's where it's like, all right, what we are doing is mostly working at least good. Let's do more of it. And how do I do more of it without killing myself and creating redundancies and building a company and transition from going from a business to a company. And that is where that book helped me 100%.

Yeah, I kind of thought about it at the time as like first chapter of Morning Brew was newsletter as a hobby. Second chapter of Morning Brew was newsletter as a business, and third chapter was like newsletter business, meaning multiple newsletters. And there was no way we were going to be able to do more than one newsletter unless we figured our shit out because we were too in the weeds.

How many subscribers did you guys have at the end of '19?

I'd say probably about 2. Right. I went from 1 to 2, maybe from 1 to 1.8. But again, that year was defined as us maturing as a business. So Sam, at The Hustle, where were you in terms of maturation? I mean, you had— you were doing more than we did. You had events and you had an ad business and you launched My First Million. Like, how was the business actually being run?

Oh, and I have to say, we launched Trends that year. And so Trends was basically a $300 a year subscription where like I had this woman named Julie and Steph Smith write a weekly email. And then we had a Facebook group where you could talk about like interesting companies. That's why we started measuring cash flow, because I learned the importance of building $300 upfront versus monthly. So at that point in the company, I just had so many like demons that I was still just getting out of. And like what I learned about running a company at that era was that the issues that you have as a person transcend into like the company. And I wish I didn't have like you guys had each other, each other as like right-hand man. And I didn't have that like at the company where I could like confess to someone all the things I'm nervous about. And so I ran the company using EOS and I had Brad, Adam, Ryan. So Brad did content, Adam did sales. I think I had Scott Nixon who did growth and I, and I think we had one person who did events who I couldn't remember. And then I had Steph Smith who did trends. So I had 5 people who reported to me. And I was kind of beginning to get a little checked out because I was so exhausted at this stage. You know, exhaustion kicks in around year 4 or 5, and I was starting to get dead from running the company, and I just did not care anymore. Like, Sean came to me wanting to launch MFM, and I was like, that's stupid. Like, I hated everything. And I was like, this is stupid. But if you really want to do it, you know, we'll be the publisher, so we own it. But, uh, show me an episode. And he sent me the episode and I was like, Fine, we'll do it. And like, but there was no— and I published it the next week. There was no planning, there was nothing. And I really was immature for not doing planning, not having longer-term thinking, and for exhausting myself out.

Yeah. One thing I'll say is I think in that year that you kind of felt like mentally toast and like a little lost like that, that was the year that I felt the same way. I think for different reasons. The other thing that's, I think, just an interesting observation is like you, you mentioned like Austin and I had each other as right-hand people as we're going through the business. And I think that's true to some degree. But I also think Austin and my relationship has evolved a lot over the years because I think we started the business so young that the way, like when I co-found a company now and the kind of the level of direct communication and feedback to each other that I have with like even for StoryArc with my CEO, it looks very different than the way that Austin and I would give feedback to each other in the brew. And it's not because like, it's not for any other reason other than we didn't have the maturity to speak with like radical candor and speak openly. I think we were like afraid about critiquing each other, giving feedback. And so I actually think, at least for me, a lot of my growth honestly came through like things like therapy or like dealing with it on my own. I— it's funny, I think Austin and I as co-founders today will look so different than us as co-founders you know, in 2016 through 2019?

I will say for me, I think my big maturation, like I matured a lot during the sale process. We dealt with so much and so many different stakeholders. And look, Alex and I are really lucky. Like we grew up with, with nice families and we started this business and basically from day one, Everything took off. Like we had no hardship. And the hardest part of running the business professionally, the hardest part of running the business was when we had the sale process and we had some investors who were pissed at us for selling too early, the same investors who 6 months early were begging us to sell. We had employees who felt as if they didn't own enough of the company. And, and what you learn is when it's when you sell a company, there's a huge lump sum of money that's in a paper. And when everyone sees that lump sum, everyone starts thinking like, oh, how can I get mine? How can I get my money? Sure, I only own 0.25% of this company, but actually I kind of view myself as a co-founder. I kind of view myself as more than worth 0.5% of this company. And I think I took that very personally. It was very hard for me. It was very hard for me. And at the time I was, I was a bull in a bull in a china shop, right? And I remember taking these calls and my, my now wife was in the other room and I'm on the calls with these people and my wife goes, Austin, you're an asshole. And I'm like, what do you mean? She goes, you're a total asshole. And I'm like, but I'm right. And she goes, you're totally right, but you can be right and not be an asshole. And I was like, oh. I didn't know that was possible. I didn't know you could like— that was a thing. So I was the total asshole up until then. And I think I've matured a little bit since then.

Well, you're still a bull in a china shop in a great way. You know what I was telling you earlier was I would never want to have an argument with you. I don't want to fight with you because you will win a lot of times because you're so smart and you're, you're, you're just like intense. And so let's go to the year 2020. The year 2020 is the years we both sold. So 2020, you did $20 million in revenue, $6 million in profit. We did, uh, $12 million in revenue, and I forgot how much profit we did, but we had about $3 million in cash and we had 1.5 million subs. I think you had 3. And the beginning of that quarter, Q1, we were probably in the same spot. I thought we were going out of business. COVID hit. We thought— I thought it was over. Did you think that?

Yeah.

I mean, I, It's very interesting. Like, I can remember with these big moments, like, exactly where I was pacing in a room talking to Austin. Like, I literally remember pacing back and forth in my now in-laws' main room talking to Austin. We were talking about one of our biggest sponsors, who is a financial services company that I can't remember the exact number, but let's just say it was like they had a $75,000 sponsorship coming the next day. And the day before, as COVID was starting, they canceled it. So, right, $75,000 gone in one conversation. And then basically the floodgates opened and I can't remember the exact amount, but let's just call it like in a period of a few weeks, 30% of all revenue that we had booked vanished. And I remember Austin and I going back and forth being like, how the hell are we going to make enough money to just not fire people? I remember the first lever we pulled is we basically turned paid acquisition, paid marketing down to zero. But him and I literally, like, we brainstormed everything from starting a Patreon and asking people to donate all the way to our education business. Like, we ended up launching an education business at The Brew, which we've since shuttered. But the reason that started was to bring in short-term cash. And that first education thing was a partnership with Scott Galloway when he was starting Section 4, his Section 4.

We did the same thing. We did an edu— like a course and it made $300,000 in one month and it like helped save us. And that was the year that I learned what the word force majeure meant. And it was crazy. I, I, I thought we were going out of business. And I remember you guys had just signed like an $80,000 a month, like, office lease. And I was like, yeah, I hope this brings them down. I hope this is their downfall. And I remember during this era, I remember I got a, one of our advertisers who we shared because when we got going, something we didn't say earlier, advertising in newsletters wasn't really much of a thing. We had to convince like early adopters to give it a shot. And so we had a lot of this, we had shared advertisers and I would beg them like show me their click-through rate versus our click-through rate. And what I learned was like it was basically like the same for a lot. Like it wasn't like significantly different. But the first half of that year, I thought we were going to go out of business. The second half, everything fucking boomed. Yeah, it was crazy. It was like the business was booming. Like our trends thing was selling like crazy. People were spending like crazy. It was a boom. And we ended up getting, like, I remember we got— what was that called where the government gave you money? Like P something?

Yeah.

Uh, yeah, we like got some of that money because our events business got shut down entirely. And I was like, I don't, I don't know how I'm going to make payroll. And then it turned out I'm like, damn, I kind of feel bad because we killed it. We killed it that year. Like, it felt great.

I remember the emotional journey of the acquisition was crazy for Austin and I because our— I don't know how long your sale process was, but our company—

90 days. It was, it was LOI. LOI to, LOI to closing was 90 days, but then there was like 30 or 60 days of flirting.

Yeah.

So ours looked completely different. Our process, like end to end, was 11 months. So the first conversation with the person at, on the Axel Springer side of things was November of 2019. And I remember we first got deal terms. I can't remember when it was, but let's just call it like January or February. March, everything—

from Axel Spring, or from who?

Yeah, from Axel.

Yeah.

And I remember what happened was in March, world shuts down. There's a period of 3 weeks where Austin and I are like, forget a deal. We don't even know if we're going to have a business. And then after those 3 weeks, starting in April, everything ripped. And we went from Austin and I being like, Like we— not that we don't even think we're going to have a deal. We don't even know if we're going to have a company after this too. We're way underpriced. We're doing so well. Are we even being paid appropriately for how much the business is ripping now? And that roller coaster in those 3 or 4 months was insane.

It—

so we both sold that year. The sales process, that was the most intense part of my life. It was horrible. Like, it was so miserable. I was so bummed for like almost every day for 3 months. This woman who works with me, her name's Edie. She still works at HubSpot, I believe. I hired her earlier that year, or maybe a few months before COVID hit, and she was probably 63 or 65. She basically had birthed her daughter a little bit later in life, in her 40s, and was like, now that my daughter is 20, I'm going to go back to work to prove to her that young women can kick ass. And I was like, Hell yeah, you're the best. I'm going to— I would love to hire you. And so she was like our HR person and our accountant person, and she was great. But then I learned during the deal process, like, I would— we would be on a meeting with like me, HubSpot, which had like 6 people, KPMG accountants, 6 people, and then 6 lawyers. So it's like, that would have been like, like, like, like a, like a $20,000 meeting. And I hear Edie and I kind of see her bring her iPhone up and take a picture. And I was like, Edie, what the hell are you doing? And she was like, I don't know how to take a screenshot on my computer. And they're talking about Dropbox and I don't know how to use Dropbox. So I'm trying to like take pictures. I'm like, Edie, I got to teach you how to use Dropbox, man. So she's like brilliant. She like nailed it and she was so good at her job, but she didn't know some of the technical stuff like using Dropbox. So I had to teach her. During this process. And I'm like, I can't tell them that. Like, we— this is how scrappy we are.

Wait, did you use a banker?

Dude, I hired a banker. So the first time I tried to sell, I hired a banker and we ended up getting an offer from Vice and it was an all-stock offer. Thank God I didn't take that. And I—

you'd be working at McDonald's.

Oh my God. It was like I went to tour the office and like no one was there and I was like, where is everyone? And they were all in sexual harassment training because like incidents there were like so common. I'm like, you guys suck. And so I hired a banker for that and I hated it. And then I always thought that HubSpot or a company like that should buy us. And they reached out to me and, um, I was like, I don't need a banker. Like, I'm going to negotiate this. When I started the company, my goal was to make $20 million by the age of 30. I was like, as long as I make that, I don't care. And the deal allowed that to happen. And so I didn't hire a banker. Um, and I actually talked to Kip, the CMO of HubSpot, and he told me that he tried buying you guys and he was like, I wanted to buy both of y'all and own the business newsletter space. And he's like, but they were too far along and you guys hadn't talked to anyone. So I knew we were going to be able to buy you, but not them.

Yeah. So, uh, I don't know if Kip is totally being truthful there. I think Kip wanted to buy us. I got the impression at the time that they weren't going to make a $120 million bet on, on email newsletters. They were really interested, but because we did a better job of monetizing each subscriber, you know, we were more expensive and the Hustle didn't care, or HubSpot didn't care about that extra revenue, like, you know, okay, it's, or profit, right? What's $10 million of profit to the, the HubSpot? They cared about our users, right? The classic and vertical integration. And I think that you, you know, you said you always thought you were going to sell to HubSpot. I always thought we were going to sell to Fidelity or E-Trade or Robinhood. I thought it made so much sense as an acquisition play and as a retention play. And, you know, we, we pitched— Alex and I were talking about this last night. Sam, I don't think I've ever told you this story. I definitely haven't told it on the podcast, but we pitched SoFi and the CEO of SoFi at the time was formerly the CEO or COO of Twitter. I think Anthony Noto, and he really liked us, uh, or at least liked the business. And we went, we pitched a group of executives at SoFi and it's over Zoom. This is during COVID And I'm like, Alex, this is our pitch. Like, this is our moment. We're going to sell for hundreds of millions. We're gonna get all the stock in SoFi. It was going crazy. And we pitched them for 15 minutes. And the woman, I'm not kidding, deadpan looks at Alex and goes, I don't get it. Ah, you know, I'm like, which part? And she's like, why would we buy you guys? I don't get the whole thing. And I was like, well, you know, content to commerce, we have an audience. And the other guy, like the head of business development, flips the background of his screen and he shows SoFi Stadium, right? He shows their big stadium and he goes, 300 million eyeballs a year. I'm like, what? He goes, that's how many people see this stadium. You think we want 3 million emails? What are we going to do with 3 million emails? And that was the entire call.

What a douche. That—

they—

your wife should have talked to them. That's insane to me.

But, but I think, Austin, I feel like you made a good point about like just the lesson in incentives there. Yeah, I mean, at the end of the day, we were telling the, the marketing team of a company, we can market your product better than you can. You know, what CMO, what head of marketing is going to buy a company unless they have a ton of humility if they believe that our pitch is we can do your job better than you can. And I think that she was pretty fearful. And so that's why, that's why that deal didn't go through. So, you know, and we couldn't even get in touch with the Fidelities of the world, the E-Trade of the world. They didn't think like that was even a conversation. So that's when we went to more media buyers like Axel Springer, who already had made the offer, and a few others. Uh, and look, we, we, we shopped. I don't know about you. I'm curious how many conversations you had. We shopped it to everyone and we got no—

I shopped it to all traditional media companies. No one was interested. Hearst, Hearst wasn't interested. Like New York Times wasn't. No, no media people were interested. And frankly, I hate the media industry. So I was kind of happy.

Yeah. And that's part of the reason we sold is we were, we were, I mean, a couple hours before we signed, we were unsure. I was talking to all these people, getting all this advice. But we came back to, we own the vast majority of the company and we didn't get a single offer in writing from another company. And that was just terrifying to us. We said, what if Axel Springer goes away and we're never going to be able to sell this company? Of course, in hindsight, that's not true. But at the time you're so scared. It was a, you know, we made a decision. I think it was the right decision in hindsight, but we did it partly because we were scared.

Can I, all right, I want to rattle off The— so my story ends there. In 2020, we sold, um, you guys sold half the company and then later sold the rest. I'm gonna rattle off the future numbers, but then I wanna talk about like future stuff, like what people listening can learn. So '21, you did $46 million in revenue and $10 million in profit. '22, $70 million in revenue, $10 million in profit. '23 was the same numbers. And so I imagine the business now is in the $70, $80, $90 million range, something like that. But you guys aren't, um, owners anymore. What do you think people doing now— newsletters are really popular. So I remember when Substack started, I thought it was the dumbest idea ever. I chose not to invest in Beehive. I thought that was a silly idea. I was wrong about both of those things. What do you think that the people starting now are getting wrong and where's the opportunity in your opinion in this space?

I think the number one thing that people get wrong is they view this arbitrage that we had in 2017 and they think it exists today. They think the same economics exist today because they read a blog post that Tyler Denk wrote in 2018. The value of a subscriber is significantly less than it was when we started because there are so many newsletters out there. And people forget that the most important thing, it goes back to what did we do in 2018? We printed the newsletter out every day and we were not maniacal over the content. Every person out there I see now on, on Beehive, not 99%, like, oh, here's an untapped market. Let me write like C+ or B- content and let me use all these growth hacks and I'm going to get to a million subscribers and I'm going to sell all these ads. And then they get to half a million or a million subscribers if they can, and their ads don't sell for $50,000. They sell for $3,000 and the economics don't work because there's not enough engagement because the content's not good enough. And so just people aren't focusing on the content. It's all about the content. That'd be like selling a SaaS product and the code not being very— or the product not working that well. Like you have to focus on the content first. Everything else follows.

Yeah. Uh, I would just add on and Austin and I have obviously talked about this at length, but the more niche, the better. Like the internet is just this long tail of millions of niches and the more niche you go, especially if you pick the right niches, not only can you get higher CPMs, and I would argue that like in this advertising pullback that has happened for like the Brew or just media companies in general, B2B has been less impacted. But the other part about it is, you know, the trouble we had at Morning Brew, which I think you had less of at The Hustle, is we didn't know, we could not figure out how to monetize our audience directly. We tried everything. We tried selling, uh, merch to them. We tried the education product. We couldn't figure out a good solution for your audience. Like, I think Hustle Trends was a really smart product for your audience. The more niche you go, I think the more clear it becomes how you can directly monetize your audience.

I think, a big thing to learn for people starting now is my strategy was partially right, partially wrong. The strategy that I had, I hated advertising. I remember Do you guys remember how, like, the sales guys always wear jeans and a plaid shirt and these bright brown shoes? I remember I bought a pair of those brown shoes and I wore them to one meeting in New York, and I took them off at the end of the meeting and I threw them away, and I, like, went home in my socks. I was like, I'm never wearing these fucking brown shoes that tech salespeople wear ever again. I will never wear these brown shoes. I just, like, distinctly remember that, uh, because I hated it. And so I was like, I want to create products to sell to my audience. And what a lot of people get wrong about that is they go outside. So like, you know, I think Adam and Becca at Workweek wanted to sell like software products or something like that. And that strategy that they and many other people, if who are, or I don't even know if they did do it, but whoever wants to try and do that, it will almost always fail. Because in order to make a business like this work where you sell stuff to your audience, you almost always have to be— it has to be within your core competency of content. And if the founder is not like what Mark Zuckerberg was to Facebook of being like a tech wizard, you need to be that about content. Otherwise it's not always, but almost always. Otherwise the, the business sucks. And so I think that for the people listening, if you are going to build something, go super hard on content, make money via advertising, which is the right thing to do. And then if you do make money in other ways, you will almost always want to make money in ways that fit within like the ikigai of like your company's core competency and what the world wants is some type of contenty media thing.

Yeah, we see it all the time where people start a media company, they try to sell a product. And it's really hard because you're pivoting from a content company to a product company or software company. It's really, really tough.

It's like BuzzFeed, like doing, um, um, haven't they tried like making ovens or something like that?

Yeah. With Tasty, they have like their entire cookware brand. Yeah. I think at the end of the day, it's like basically you just are adding so much complexity to your business, especially the more you get out of your core. Because it's like people— like a media company and content, like content is the product. A media company is a business. Then what you're basically saying is you want to create an entirely different business. And now what you need to figure out is the entirely different business. Is the product exceptional? Do you have someone who understands it deeply, who can run it? Then the media side, can you keep that going in the right way? And then also, is there an intersection where your audience not only trusts you but trusts the thing that you're now selling them, that's a different product. Like, there are so many more moving pieces.

What else for, um, uh, different, um, opportunity? You guys had on here that you being based in New York helped. I agree with that. It helped you guys a lot. I think being like, if you are an AI company, being in San Francisco is beneficial. If you are a media or content company, being in New York is beneficial.

I think that was huge for us. I think if you want to build a a big brand in media, you have to be where the ad agencies are. And I mean, Alex was just grinding, going to ad agencies, meeting with people, talking to people. If he lived in Austin, those people weren't there. He was never going to be able to meet with them in person.

Yeah, it's like you're way— you're not in it to win it if you are not in New York.

Yeah. One other thing I would say is like, I think actually, Sam, you and I feel differently about newsletters now. Like, I know kind of your perspective is like newsletters are so much harder. You, you wouldn't necessarily do it today. My, my general view is like, I feel like we're like past early of every media channel on planet Earth. Like, I don't think anything is early anymore. Like podcasts have been saturated. YouTube's been saturated. Newsletters have been saturated. Like everything is harder in my mind. So I think like the game overall has become harder. Um, that said, I still think there are going to always be opportunities, especially in a niche that you know a lot about, to succeed. So like, I would say I'm— I am still bullish on newsletters as a way of owning your audience. I just think the level you have to play the game is higher than where we had to play the game. Um, one other just random thought is I used to always hate the news business. Like, I thought the news business was such a bad business to be in. Because you need so many people to crank out content. The economics are horrible. I would actually argue with kind of where we are in society now and, you know, really like general distrust of news broadly, of traditional news broadly. I think there's a ton of opportunity to actually disrupt news as an upstart. And I think we've seen that with like Barry Weiss and the Free Press. And I think we'll see more of that over the next few years.

So here's one of my takes on is for like where interesting opportunities are. I would bet my life, I bet my life you guys agree with me. Quarterly or monthly hardcover magazines or some type of physical newsletter.

Yeah, I love that.

I almost made— so we did MoneyWise, a podcast about— it's like a personal finance podcast for high net worth people. I almost made that. Um, uh, I was gonna make it a $500, $2,000 a year, uh, shows up quarterly in a manila envelope with stapled printer paper, but really well-written articles to keep it like, like to feel like a mom and pop type of like underground zine. That's what I thought about doing. And I still think someone could pull that off.

Have you seen Arena Magazine?

Is that the thing you love?

Yeah. So I think it's really cool. Uh, it's this guy, Max Mayer. I believe he worked at 8VC with Joe Longsdale and he started this magazine. It's quarterly now. I don't, I can't tell you if it's going to be a big business, but they tell the coolest stories and it's beautiful. Like this thing is done, you know, like a magazine from 20 or 30 years ago where you're selling super high gloss paper. And the graphics are amazing and then you're probably charging a $7,000 CPM to some beauty brand that— it's amazing. And Stripe is making these really cool ads and Ramp. It's, it's awesome. Everyone should check out ArenaMag.

What I would do is— so you said beautiful. I would make it the opposite of beautiful. I would pick an industry that has a lot of employees, whether it's like the financial advisory industry or the advertising world industry, something where there's like 100, or a few hundred thousand people, but you are only 1 or 2 degrees separated from each person. And the whole name of the game would be name as many names as possible and as many companies as possible in it. And so you would want to like buy it for all of your staff and you would have like rankings, like the top this person this quarter. And it would, because it was almost like the difference. Do you remember when Oscar started advertising in the subway versus on like a computer? If for some reason when you see Casper out in the open versus on Facebook, you think, oh wow, this is like way more legit and exciting. I would do that right now for an industry and I would name as many names as possible. So they would just be paying money, an annual fee per year just to have their name on paper.

Yeah, like that.

The Parr 30 Under 30, something like that. But for like financial advisors or something. But I hate financial advisors, so it would be like, like, you all suck, but here's the least sucky ones. Any other interesting opportunities that you want to bring up?

I think that's, I mean, the media space, I think that's it for like the newsletter stuff. I still think the big opportunity in the media space, if someone wants to take a big swing, someone wants to go build a billion dollar company, it's to do what we're talking about into, or what The Hustle did, right? Use content to build something like a trend, but do it to the extreme. So I think the best example right now, look at what Overtime's doing. Oh, Dan Porter, who's been on the show, is amazing. Right? And for the first 3 years of this business, I didn't get it at all. I said, over time—

I thought it was so stupid.

So dumb. I was like, this guy's an idiot. He left all these awesome jobs. He could do anything. And he built another company off a ton of funding. And all he did was just put sports on social. And next thing you know, he's doing basketball tournaments. I'm like, huh, that's like kind of cute. And then he's running a league that's trying to compete with college basketball. And I'm like, holy shit, this guy is on a different level. He's trying to compete with the NCAA and the NBA. That's a big swing. Like, you know, if, if in a couple of years I build another big company, I would think like that, right? Whether it's, you know, basketball like that or padel, I think is really interesting. Or there's people now thinking about doing in tennis. There are so many interesting niches where you can go take a massive swing and try to compete with you know, the biggest organizations in the world.

Yeah, I have a few on that. On top of that, the first is a media company focused on alternatives.

What's an alternative? Alternative to what?

Like alternative investments. So like real estate, private equity, venture, etc. Like my whole thing is alternative investments are becoming a bigger part of people's portfolios, but they're more opaque. They're harder to understand, but they're also really interesting ways to monetize people who are investing in alternatives. I think basically a company that becomes like the go-to source for figuring out the complexity of investing in alternative assets is going to make a killing. I think that's the first. The second is basically for a long time, Austin and I talked about how an amazing way to monetize our audience, if we could figure it out, would be like our version of Motley Fool. And the reason we never did it is like Motley Fool's built an incredible business, but it doesn't feel good. Yeah, but, but, but our thing was like the marketing just does not feel good to us. And so I think if someone can figure out how to support retail investors in a way that makes them smarter about not losing their money in the markets and media is just like, you know, the funnel to it, even like when we were at that newsletter conference, 2 weeks ago, right? And James Altucher was talking about what he makes on his premium thing.

He said he made $100— he said it on stage. He said $120 million a year in revenue.

Yeah. And so, so I think that is still a massive opportunity as well.

This is awesome, guys. Thanks for doing this. How do you feel? Feel good.

That was like therapy for me.

That was the most therapy I've done in my life, I think.

But for the record, you know, I never hated you guys. I hated the story that I made up of you. And for the listener, over the past like 3 or 4 years, Austin and I have become very, very close where our families are hanging out on Saturday. Alex, you and our— we did a family hang 2 weeks ago. I have nothing but love for you guys. I consider you guys family and you're some of my closest friends. And so it's been fun to get soft instead of like, you know, wanting to compete because now that I know more about you guys over the past, like, 10 years. I don't want to ever compete against you ever again. You guys are very formidable and not people I want to go against. It was horrible.

Nothing but love from our side.

Yeah, quite the 180 from 2018.

It was all a story, which, by the way, I think if you're listening to this and you have a company, having that story was so helpful. Yeah, like going— having an enemy was so helpful, even if it's made up.

It's funny you say that. I will use this time, uh, to plug my new newsletter that's launching. And one of my first newsletters that I've written is about enemies. And I think having an enemy, whether it's real or fake, right? For us, it was the skin and the hustle. I think it's really, really important. Um, you know, Beehive has ConvertKit, uh, and I think it just motivates everyone just a little bit more.

And I know Nathan and he's the sweetest guy ever. I've gotten to know Tyler a little bit and he seems like a wonderful guy. And I'm like, I'm not going to start— stop you guys from fighting because I think a fight's good. And also I know that you're both wonderful people and you would love each other in a different world or when this is all done. But you have— I'm like, you have to have that. So I'm on board.

Just 6 years from now, one of them is going to have a podcast, My First Email, and they're going to both be on it and it's going to be all hugs.

What's your thing, Austin? Where do they get it?

You can just find it in my Twitter DMs or sorry, my Twitter bio.

Well, I appreciate y'all and, uh, thanks for doing this. If you Google your name, Austin, by the way, it's that stupid photo of you guys on the white wall that you've been using for like 15 years, and it's your last episode of My First Million. So it's funny how we have all come to work together. Um, all right, we appreciate y'all. That's it. That's the pod.

Thanks.