[04:12] So I discovered you because we’re in the same trans group. And you write a really cool newsletter, which I’m sure we’ll talk about at length in this interview because that’s what we’re going to be talking about. But for the folks who don’t know who you are and haven’t heard of you yet, let’s start there. Who the hell are you?

• Sure. So, I run a newsletter called Contrarian Thinking so you guys can check that out. It’s all about unconventional ways to cash flow and think critically. And that’s contrarianthinking.substack.com. And that’s really just an iteration of the fact that I’ve been on alternatives, and investment banking, and private equity investor for quite a few years now. And I kind of—I got interested in how could we teach people things that I wish I was I’ve learned while I was on Wall Street, or even better, while I went to my MBA or went to undergrad. 

And I was a little annoyed about the fact that in finance, there’s this term which is “Get rich quietly.” And I understand what people mean by it. It means don’t have fancy cars, don’t have the elaborate pantsuit suits, all that jazz. But I also think it’s hard to enrich others if you’re just focusing on getting rich by yourself. And so that’s why I started Contrarian Thinking, as I thought, “We should share these ideas across the board. And it’s not a zero sum game, and making money.” And in creating mental frameworks to think a little bit more critically. The world could probably use some contrarian ways to do both of those these days. 

So I went from being a conflict journalist forever and a day ago. I crossed the US-Mexico border to work in a Goldman, doing the whole Wall Street asset management buildout, to becoming a private equity partner at a cannabis firm, to building out a couple of my own businesses. And that got me to finally sharing some of those ideas and hanging out with my—a couple 100,000 contrarian homies.

[06:08] Absolutely, of which I am one. And folks, if you haven’t checked out our newsletter yet, I highly recommend that you do. That’s why I invited Codie to be on the show. It is a superb newsletter. It comes up weekly, I believe. Right?

• That’s right.

[06:20] Yeah. Full of really cool ideas. Was it you that wrote about the bubble hotels, or was that Sam? I don’t remember.

• No, I didn’t do bubble hotels. I did hipster campsites for profit. 

[6:33] Yes. 

• Yeah. And then stuff about modular homes. 

[6:37] Yes. 

• Yeah. Those are pretty interesting. Yeah. This week’s it’s about inflation, which is a scarier topic but an interesting one nonetheless.

[06:46] Absolutely. All right. So we’re going to talk about newsletters as a business because, one, you’ve got a successful newsletter. Two, I’ve never done an interview about newsletters as a business. And three, I think there’s an incredible opportunity for anyone who is interested in doing this to get into it. And of course, you’re going to tell me all about that because you know far more about it than I do. 

So let’s give the quick background on Contrarian Thinking, like, when did you start it? Why did you start it? What was the problem you were trying to solve and so forth?

• So I started Contrarian Thinking in January of 2020. And the problem that I was trying to solve was, I think the most important thing in wealth creation and in—I don’t know—leading a successful life, I hate to say, is your ability to ask questions. And I’m a former journalist, so that might lend itself to why I think that’s so important. But the best investors ask the right questions, and the best CEOs ask the right questions, and then find the answers to them. 

And what I’ve been seeing of late is that people aren’t questioning things so much anymore. And that there’s a little bit of a push back to pushing back to the biggest narrative that’s put out there. Whether it’s—the glaring one is politically, but even in regards to business, or whatever the case may be. And so I started writing Contrarian Thinking because I want to push people to think. And I think we go to school for people to tell us what to think, not how to think. And so that’s why I started Contrarian Thinking. 

And then, I have an underlying belief that without financial freedom, there’s really no freedom. And so if we compare our ability to think critically with our ability to earn unconventionally, we can be pretty powerful in building the world that we’re all interested in building. And that was the impetus behind Contrarian Thinking.

[08:42] Absolutely. And man, I agree with everything that you said there. There’s so many opportunities these days that conventional thinking just doesn’t expose you to. And the more you get into this world of online commerce—whatever you would like to call it—there’s just so many neat ideas and cool people out there. And you need to expose your brain to that kind of stuff. 

Okay. So newsletters as a business model, not something I ever thought of doing because I don’t have your journalist background. I came into this and thought, “Well, I could probably talk on a microphone and ask them good questions.” So 10 years later, I’m still doing that. Let’s talk about the pros and the cons of the newsletter as a business model. Let’s start with the pros. What is so compelling about this as a business model?

• Well, I think it’s really a resurgence. Right? Everybody used to have email lists, right? They didn’t call them newsletters, but they used to have email lists in which they send you—that was pre-blog, that was pre-social media. And then it kind of went away with the advent of social media. Well, first, the blogs, and then social media. But what people forget is that email is the one platform that allows you to go direct to your recipient, as opposed to being on somebody else’s sort of ground. Right? 

When you do social media, it’s up to those social media sites how they change the algorithms, whether or not you’re allowed to have access. I was thinking this last year before we’ve seen how quickly platforms can kick anybody off. Right? But even before that, they just tweak an algorithm, and they can turn your monetization off. From Amazon tweaking an algorithm, and then the next day your business is 50% less profitable, or even 100% less profitable. 

And so the newsletter business to me is one of imperative. If you have any sort of business, and you don’t have an email list or a newsletter, I think that’s probably a mistake. Because one, you cannot get direct to your consumer, especially if you’re in a world like today where most things are locked down. And so to me, it’s really important that you can get in that email inbox, and nobody else can control your ability to touch your end client. The interesting part about newsletters in particular, I think, is it meets at a crossroads. I mean, there’s a piece on there that I wrote about sort of the declining journalism industry as we know it, which I don’t think is a surprise for anyone. I saw it back in 2007, when I left journalism because I saw the sort of polarization already happening then. And the focus on opinion news, as opposed to factual news. And so I just—it didn’t sit well with me. So I left journalism. 

I went to numbers, which were much more quantifiable. And I think today, what people are realizing is that the big news sources, first of all, they’re all too focused on clickbait. They’re all too focused on telling us the most aggressive version of whatever the narrative is in order to suck us in. And they go too wide. They’ve gotten so big that they can’t niche down and add real value in the things that we care about. And so this micro industry is started, which is newsletters. And so I think Agora Financial has been one of the biggest acquirers and revenue generators from newsletters. I do about a billion dollars a year at their bottom line on financial newsletters, and I think that’ll be the future. There’s going to be more pay. There’s going to be more paywalls. There’s going to be more micro, and there’s going to be more local newsletters, and we will have to pay content creators for access.

[12:10] So all of those are very compelling arguments. I would assume that the startup costs are relatively low because really all you need to do is have a computer and sit and write. Am I missing anything?

• Nope, super cheap. I think newsletters have some of the best margins out there 60% to 85% margins across the board even with teams.

[12:29] So let’s talk about—actually, before we get into monetization, let’s talk about some of the cons of newsletters. Are there any?

• Yeah. I mean, of course. Content is tough. I mean, you know in the software business. You can create something once, iterate on it, and sell it continuously. When it comes to a newsletter, you have to continuously produce content. And so each week, I give a newsletter that’s completely different from the one the previous week. And so that’s infinitely less scalable. And Google which has the ability as a software to just self replicate, and continue to be accessed with the same technology just iterated on. And so that’s definitely a downside. 

But I think the other thing with newsletters is because they’re so low of a barrier to entry, a lot of people play the game. And so you end up getting a graveyard of newsletters because everybody starts it since it’s really easy to start. And then not very many people continue it over the long term. So I think those are the two hardest part. And maybe third, people don’t realize how to monetize these things yet. Most newsletters are under monetized. And I think most newsletters aren’t treated like a real business. It’s like, “Oh, my blog…my newsletter,” as opposed to thinking about it as a business. And I’ve certainly been guilty of that as well.

[13:52] So great segue to my next question on monetization. So let’s talk about that. And what are all the ways that you can monetize your newsletter and talk specifically about what you’ve done, what you’re doing, and what you’re planning to do with your own, if you would?

• Yeah. Well, so there’s…I actually have a—I should pull it up here. So I have a whole blog post that basically walks you. So if you go to contrarianthinking.substack.com, and you search. And you ask—you can search “wrote a book.” If you search “wrote a book” in there, it’ll take you to this newsletter segment, which basically talks about all the monetization channels I have on this newsletter so I can just pull them up and show them to you. And I share with you the model of how exactly I built up the newsletter from a revenue perspective and the different revenue lines I have. 

There’s seven revenue lines that are on this newsletter right now. And how I layered them is totally up to you, but I started with info products. So I like?and these are just—an info product would just be a guide you sell online, let’s say, or something that you know, you could have some sort of video content online. You create it once you sell continuously. Not dissimilar to software, it just doesn’t age well. Right?The software, you can keep iterating on. Info content, you have to actually go in and change the whole content in order to change it. 

So I started with info products. And I think that’s a smart way to go. Then I went with a premium membership. And so that’s—you pay to actually get some of the content. I actually did that first with another business we have called Unconventional Acquisitions. And so I created an info product for them, which is a course on how to buy and sell small businesses because I’m on PE—it’s sort of my specialty. And then I did a mastermind, which would be a premium membership that allows for people to interact and engage on that a very high price point. Which allows us to do $30,000, $50,000, $60,000 a month in sales.

And then, a lot of people put on ad or sponsorship revenue. I have only used my own businesses and products to sponsor Contrarian Thinking, but plenty of people put out ads and get sponsorships. I think for most people, it doesn’t make sense because the newsletters are too small to actually get meaningful revenue but you can. And then we have an affiliate business where if we like and use products, we include affiliate links. You can get revenue off that. We also have ancillary channels. So we get YouTube ad revenue off one of the other Unconventional Acquisitions businesses. 

And then what we usually do on top of that is create some sort of merch or hard products that we can sell people once they start getting engaged. So for Contrarian Thinking, we have a journal now, and we have some stickers. And I’m working on some shirts, and some swag. None of those are going to be huge income producing, it’s more of a branding. And it’s fun to do, and you can reward your subscribers for doing things for you with some cool branded swag. 

So those are the revenue lines we have on there now. We could go and create a lot more. But I think when you first start a newsletter, the smartest way to go—in my opinion?is keep your funnel free. So keep some free product open, allow for people to buy something from you, some small dollar info product item if you can, then layer on those more expensive products, and then layer on the additional revenue streams. 

And with that, Substack has a great calculator that shows you how much you can make per premium subscriber. And then on my newsletter piece, you can actually see how much—if you have, I think I do an example of 20,000 and 10,000 subscribers, how much each revenue stream is going to give you and why. And I backdoor those numbers for you,

[17:44] You’re now up to about 100,000 subscribers, is that right? 

• That’s right. 

[17:49] And you started in January of 2020, roughly 12 months ago. So that’s pretty phenomenal growth. What has been the secret to having your subscriber base grow so quickly? And I don’t imagine it’s probably one thing, it’s probably a number of things.

• Yeah, that’s always the devils in the details. Right? Well, there’s another blog post on there, actually, that talks about my first 10,000 subscribers. And I think that one’s good for people to read. So you just go into Contrarian Thinking and search “first 10,000 subscribers” but with links…

[18:16] Folks, we’ll put links in the show notes to all these things. So Codie, make sure you give those links afterwards.

• Perfect. Will do.

But the first thing that I did was very tactical. I would love to be one of those people that just build something, and immediately everybody comes running. Unfortunately, that’s never been the case. I’ve had to drag them to start, and then the snowball starts rolling downhill. But when I first started, I sent an invites to maybe my thousand contacts that I had. I didn’t auto subscribe anybody. But I reached out to all of them individually and basically said, “I’m starting this thing, here’s the why. Here’s the what. Here’s why I want you to be involved. And if you want to come along for the journey, great.” 

And so the template that I used is actually in that post, but it was pretty sincere. It was like, “I want to have a conversation with you all. I can’t on a consistent basis. This is a way for us to do it and share ideas.” And then as soon as I did that, I would layer on different strategies. Some of the easier ones are just social media outreach. So I use Buffer to schedule social media posts across all the various platforms. I use Creator Studio for Facebook to schedule Instagram and Facebook posts, and all things would be a flywheel going back to the newsletter. 

I think the most successful thing to newsletter growth is after you’ve gotten work hard yourself organically to get your first 2000-3000 subscribers. Once you get to your first 2000 or 3000 subscribers through just elbow grease, then it’s all about cross promotes. And getting to other newsletters that are similarly-sized and saying, “Hey, I like what you’re doing. Do you like what I’m doing? How about we share what each other’s doing to our audience and see if we can grow together?” And that has been really beneficial for me throughout. But there’s no doubt about it. 

If you’re not going to use ads for email growth, it is a grind. And it takes a while to use ads, that’s a whole different thing. But then you got to pay something like $1-$3 per email subscriber, and that can be tough for people to do if they’re just starting out.

[20:22] Are you able to be profitable paying three bucks an email subscriber now that you’re a year into it at the size you’re at?

• I don’t use ads, and I never have. So yeah, we’d be profitable because our info products are high-priced. And we sell—and with our big subscriber base—we sell a certain enough of them. I think I looked down to our individual subscriber is about $3. $3.14 is about the revenue they give us on an annual basis. I haven’t actually figured out the LTV of them yet. We’ve only been doing this for 12 months. I don’t really know how to forecast churn on these types of products, so we’ll just have to see as we go. 

But my whole goal was trying to grow something organically, and try to grow something that can be profitable without having to juice it up through ad revenue. And it’s really, because that’s not my strength. I don’t know anything about using Facebook ads, or Instagram ads, or Google ads. Lots of people do. And I think eventually we’ll add those on top of it. But while we were growing organically, it just didn’t feel right or necessary.

[21:31] Yeah, join the club. It’s what I feel like when it comes to ads I almost never used them. And I should and it’s been to my detriment. And every year, I think I got to start doing it this year. And I… This year. I’m gonna start doing it this year. All right, so was it—would you say it was more difficult to go from zero to 10,000, than it was to go from, say, 50,000 to 100,000?

• They’re both hard. I think the first 10,000 is actually the easiest because it’s exciting. As they continue to grow, you’re like, “It’s new,” and you keep going. And now mind you, I run a private equity firm and I’m a partner at a PE firm. I don’t do this full time. And so, as your business starts—as your newsletter, which now I think of as a business starts to get 50,000-100,000, there’s a lot more controls and work that you have to put into it, in my opinion. And so it is faster to get to 50,000-100,000, than to get from zero to 10,000. But it’s equally a grind. And I think, if you want to hit those types of numbers, you’ve got to be consistent in content, and working at it. 

And a lot of the average newsletter dies after six months. And so, and most people don’t post weekly, even for the first 90 days. And so I think it is making sure that you create that habit to do it, even when you don’t want to do it, even when you think the post that week is terrible. And then you post something that’s not that great, and then you lose some subscribers, and then that’s traumatizing. And so you’re like, “Oh, I’m not even gonna post anymore because I’m gonna lose them.” And you have to get out of those mindsets early on. And then, as you go along further, that shakes out a little bit more. But even now, I’ll have some weeks where, like, “Why are we only growing by 300 people?” or whatever the case may be. And that just happens in a business.

[23:29] So for folks who listen to my show know that I’m a very big fan of systems and processes. And so we’re talking a lot about content creation, and the importance of content creation to basically how quickly your newsletter is going to grow—how quality it will be, how will your churn, meaning contents everything. So talk to me a little bit about how you go about the process of content creation week, after week, after week without burning yourself out and running out of the light bulbs that happen in the shower because that only goes so far.

• Yeah. Well, you’re right. First of all, I have something I call the three C’s. So before you start a newsletter—in my opinion—you got to make sure, one, it’s a segment in which people will pay cash for something that you’re writing about. So like, let me give an example. Like, say you’re into knitting. And so you want to do a knitting newsletter, while I would go and make sure that people are spending money. Like what’s the total addressable market? Just like a startup, quite honestly. What’s the market for knitting? Are people into this? Is it a growing segment? Do people spend money—what is the average knitter spend on knitting things per year? So first, you want to make sure that some cash people are willing to spend. 

Then you want to make sure there’s a crowd of people willing to spend it. I like to do that by checking Facebook groups. So I’ll go and say like “knitting” in Facebook groups, and in it you’ll find almost any subject a lot of them will have 100,000 person groups, where they talk all day about how to knit mittens  or whatever the subject of the day is. And so, if you find those two things, then that usually means there’s a market big enough for you to at least create your thousand true fans, which probably means you need to have a 10,000 person, maybe a 20,000 person email list in order to have your 1000 true fans, which means you can make a living off of this type of thing. 

And the last thing, though, is the most important, which is curious. Is this something that you are naturally curious about? That if nobody pays you, and if you weren’t writing anything about you would be interested, and reading about it, and engaged about it anyways. And if you don’t have those three things, don’t start the newsletter, in my opinion, because you’ll burn out. 

And then the other thing that I think is important, is to naturally keep chasing your curiosity. So one of the ways that I do that is I’m always talking to individuals about what’s working for them. And I’m an idea fief all the time. I’m like, “Oh, wait. How are you making money?” “Wait, what’s happening there?” “Oh, wait. You had something like this happen to you?” And I’m just taking notes and scribbling it down all the time, as I’m listening to the world around me. And then I correlate those. I keep them in an Evernote file. And every time I’m struggling for a subject, I just go back. I’m like, “Oh, yeah. That was an interesting conversation about a guy who had a request to buy out part of his business because it’s the competitor everyone wanted in the space.” That would be an interesting story, right? 

And so anything like that, I’m going to take a little note. And then I’m going to come back to it and think about “How could this make people money? And is this a framework or a trend that we can play off of?” And so I think that’s the key. And then being stupid organized, which is a struggle for me. So I use Notion to plan out all of our content to keep our mood boards in there to share with the rest of the team, and that has helped us a lot.

[26:57] So if someone is thinking, “Oh, this is cool. I like the idea of a newsletter.” I guess there’s two questions that come to mind. One, have you found in your personal experience that having the newsletter has subsequently created additional opportunities for you, which weren’t at all on your radar screen? One of the questions. And then the second part is, do they have to start one from scratch?

• Oh, yeah. Great. Love these questions. So good. One is yes. I mean, let me tell you the pain points first, before I just sound like Pollyanna telling everybody out there to go start a newsletter tomorrow. Which is if you have—what’s going to happen is once you have success in your newsletter—meaning followers, traction, lots of people engaging—you’re going to get pushback. Anytime you have success, you’ll get pushback from people that are not used to seeing you in that light. So I am a partner in a PE firm, explaining to my other partners why this newsletter that I have is now something that all of our investors read, that takes some getting used to. Right? Explaining to my friends who want to then have phone calls with me about every idea that I have out in the newsletter, because they think it’s cool, and I have to say, “No, I’m sorry. I do not have time to have a call with every single one of you.” That part is a little bit painful. 

So just expect that if it succeeds, you will have some pain because people don’t like change. And people get nervous when you have success and it starts to blossom. They are nervous that you’re not—they get nervous that you’re not going to focus as much on the things that you were doing before. And they get nervous that you might supersede or walk away from them. And this is the same thing with startup success to or side hustle success happens with everybody. So just expect that. 

But the part that I think’s more interesting about it is, when you start a newsletter like this, you will not be able to guess the things that will happen to you. If you are putting out authentic content that really is driven by your curiosity, and you figure out your voice in it. And so I think those things are super important. The reason that people connect with Contrarian Thinking is like I’m a little bit of a snarky asshole in it. I’m—you’ve listened to it—I’m like, opinionated. I throw elbows. There’s some entertainment to it, right? And so people know, if they’re reading it, they’re like, “Oh, that’s a Contrarian Thinking post because that’s Codie. And she’s been whatever she’s been.” 

And then on top of that, snarky entertainment, and maybe you get a chuckle or two is like, “Oh, wow. This is like something that I can take today. And Codie takes something that might be kind of complex, and makes it pretty simplistic, and then applies some new ideas or trends on top of it, and tells me exactly how to execute on it.” So like, well, that’s cool because it’s not all theories. And for the most part I act on the ideas myself and I build in public, which is really important. 

So if you do those particular things, I think a newsletter is great. And you’re going to be really surprised. I’ve raised millions of dollars from this newsletter. I’ve had 85 people start a side hustle from it, 29 people started newsletters, eight people bought businesses from it, and then I get to have conversations with people like you who give me ideas I never would have thought of. And that doesn’t happen when you don’t have an audience. 

Last spot on my little rant that I have going on here is, one of my last blog posts was talking about the four types of leverage, which historically have been labor, employment, capital, money, code—like you—software, and now audience. And you didn’t use to be able to really generate much from your audience, even if you were a celebrity. So few celebrities had brands, websites, social media power. It didn’t really exist back in the day. You still had to get chosen for movies, right? You still have to have a director select you. And now we have this audience as leverage. And if you have leverage, you will never starve. And so I think you can have any type of four types of leverage. But that is really powerful. And so the last point to your question about…Oh, my gosh, now I forgot what was your question?

[31:26] Did you have to build one from… There’s two questions to get there. Kind of unrelated so let’s just pretend…

• And I just get so excited thinking about leverage renting. So do you have to build—so couple things. No, first of all, you don’t. I’m a big proponent of doing the exact opposite of what I did, which is buying things. When it comes to investing, or building businesses. I buy every time. I try to start nothing. And I think that’s really beneficial if you’re investing or building a business for cash flow or profit, right? Most of us don’t build or do a startup because we’re like, “This has to exist in the world.” “And I’m starting my restaurant because there’s no other restaurant in the world like it,” or “I’m starting my accounting firm because it’s the only accounting firm in the world.” It’s like, “No, I don’t want to work for the man anymore. I like to be my own owner. I think I got a little bit of a niche. And hey, I’d like to become a multi millionaire.” 

And so if that’s the case, why not instead, just buy the business? So that when you close the deal, you’re profitable on day one. You walk away with cash. And I think it’s the same for a newsletter. We’ve bought two newsletters thus far. And I’m going to keep acquiring them because it’s so much easier to grow through M&A than organically. Organic growth, like we were talking about, is tough. You got to go out and beg and plead people for you to give them value. But M&A, you can do it in day one. And newsletters are a highly uncollateralized asset class, which people have not figured out how to buy yet.

[33:02] And when you make one of these acquisitions, Codie, you’re not continuing to write three different newsletters, you just fold them all into Contrarian Thinking? So basically, you’re buying subscribers, or is it different than that?

• So there’s some funky email rules that mean you can’t really do that always. Though nobody usually comes after anybody for that. But actually what I do just to stay compliant because I have other businesses and liabilities that I want to be careful about, I run their newsletters for a period, and give option forms for them to transfer to my newsletter. So I don’t auto subscribe anybody to Contrarian Thinking. 

And I also just try to think about business for the most part. What would I like people do to me? I don’t want to be added, and then all of a sudden subscribed to some other newsletter, even if it is highly valuable. So some people do it that way. It is actually legal, if you buy it within a business framework, and you disclose it in the right way. But I’m thoughtful on that.

[34:00] So then, if you’re making these acquisitions, you’ve got now three times as much content to write, is that correct? Or do you have writers that are writing the other ones? And you’re the key writer behind Contrarian Thinking?

• Yeah. I have writers that read the other ones. And we only have a—what’s called a 90 or 100-day window, or 120-day window in which they’re writing the content, continuing to push the readers over to Contrarian Thinking. And then eventually execute the business overall. 

A lot of times we resell the newsletters. And so for that reason, I keep it kind of quiet, which ones we’ve bought or sold because not everybody needs to know that. But that is the real play. It’s just like a private equity play. You get into the business, you optimize it, grow the subscribers. Then I transitioned those subscribers over to Contrarian Thinking, hopefully the newsletters still grow and at that time, turn around and sell it to somebody else. And they usually want to run the business as a newsletter themselves. And they want to keep running that newsletter. So I would actually have last value if all I did is take the subscribers and pull them into Contrarian Thinking. Instead I act as though Contrarian Thinking is a sponsor, or a guest blogger, or a guest post.

[35:11] Yeah, absolutely. Only you’re not really guest posting, you’re just owning both of them for a period of time until you’ve extracted all the value that you think you can extract. And then you take that asset, and resell it to somebody else, and recapture what you paid, or hopefully a little bit more than what you paid.

• Yeah, or more. That’s the beauty of M&A.

[35:29] Have you ever gone and say, “Hey, I’m going to try and find a really popular large Facebook group that’s poorly monetized,” and then bought that group to become the foundation? So your base of subscribers, you could basically sponsor the Facebook group with your new newsletter, to try and suck them off the Facebook platform into your email subscriber list.

• So I’ve thought about it with Facebook and with Instagram accounts. The reason we’ve never done it is because it’s against their policies. You’re not allowed to sell those accounts. And because it’s against their policy—it’s not illegal. But it’s very easy for that account to steal the account back from you. And so even if you take the email address associated with that account, they can show their credit card statement. They can show the incorporation of it initially. They can show all these things where you could buy the asset and then get locked out of it. And that sort of freaks me out. 

So the only way I would do it is if I bought from a known entity and had some sort of remediation or an ability to de-risk that happening. But I do think it’s a good idea. You just have to figure out how to do it correctly. And I definitely know a lot of people are doing it.

[36:42] And so for then anyone in the audience that does want to shop for a newsletter that might be for sale, how does want to get deal flow for that? Where are you gonna find these things?

• Yeah. I mean, a couple different things. So I’ve used Deuce a lot. D-E-U-C-E. Yeah, it’s a platform for selling and buying newsletters called Deuce. So that’s an option. There’s also newsletters located on bizbuysell. There’s newsletters located on Empire Flippers. There’s newsletters located on Flippa, F-L-I-P-P-A. All of those are sites for acquiring businesses, whether they’re online or brick and mortar. 

So we’ve looked at all of those, but it’s a grind. You really have to dedicate some weekly time to acquiring them. And you have to expect. Like somebody the other day, we reached out to a newsletter that had 18,000 subscribers. It had been defunct for 12 months. So it hadn’t sent anything in 12 months. And it made $0 in profit. And the guy wanted $150,000 for the newsletter. What we’re on man. and so you just kind of write back like, “That’s cute. No.” 

But like a lot of people because this isn’t a known entity, they don’t understand that newsletters are like any other business. We buy you a two to three x your profits. And if you don’t have profits, we could figure out some sort of deal. But it’s definitely not going to be on a dollar by dollar basis for your subscribers. And that’s not happening. And so you do have to get these—you got to separate through a ton of these. 

And you have to—the other thing that’s tough in that space—is you’ve got to, there’s some times where you just want to like knock heads. And you just have to realize that most people have never been approached to buy anything from them. And so they hear these like stories of people buying businesses for millions of dollars. And so they have lollipop dreams, and so you got to kind of be kind to them. And instead of hammering them about the ridiculous nature, instead sort of say, “Hey, this is how it’s typically broken down.” And actually, it’s the opposite of what you’re taught about negotiation. 

When you’re going to buy newsletters, tell them first how you’re going to value your newsletter and tell them at what basis. Because they’ll embarrass themselves if you don’t tell them that. And then they’ll disengage. And so—because they’ll have built this idea that’s up here and you won’t be able to reach it. So start out by first saying, “Hey, I buy newsletters on two to three x profit. If you don’t have any profit in the business, we could figure out a per dollar cost for your subscribers, but it’s going to be based on your open rate and conversion rate over to my newsletter. And so you know if that’s of interest to you at those sort of metrics, and let’s have a conversation.”

[39:37] Yep, makes a lot of sense. Last question, why Substack versus a blog? For example on WordPress, self hosted that you totally control the platform. Because earlier you talked about the risks of being on Facebook or whatever, They can change things and then your SOL. And here you are putting your content on an asset that you don’t know.

• Yeah. So we do not have the majority of the newsletter subscribers on Substack. So we’re on three platforms. We’re on MailChimp, we’re on Substack, and we’re on FUB. And the reason we’re on those three platforms is exactly what you said. 

First, I wanted to test each one and see which one made the most sense. I have a legacy system that I had a newsletter and email subscribers on for some time that MailChimp, and I wanted to see what the subscription rate would be between them. Substack is the easiest to drive people to and without us having to build an interface. So a lot of—every subscriber that’s on substack is a new subscriber. But MailChimp has legacy emails on it. And FuU is where we go for all—like most of our cross promotions go through. And so now going forward, that’s totally not sustainable. And I actually want to control the design of it. 

So Substack has a really poor—oh my gosh, what’s the word? So when a person comes to a subscription rate—so basically, our conversion rate on Substack is like 10%. It’s really bad. And so we have people come to our sites, and only 10% of them sign up. Whereas when people go to the cross promotes we do, we have something like 50%. And so we’re creating our own website for exactly that reason. We’re going to test it out with—I don’t know some percentage of the subscribers and then eventually migrate to that all entirely. I also thought Substack might help with driving traffic to the newsletter earlier but it’s not really a big driver in that way. So I don’t think it’s worth it. Plus they take 10% of every dollar you earn on premium membership, which is way too much.

[41:42] Yeah, I think if I remember correctly, Jason Fried from Basecamp. I think he was on some Substack and moved off Substack for….

• Yeah. I believe it. I think a lot of people do that.

[41:56] FUB. Is that fub.bk? What is that?

• No. FUB is actually—it’s called Follow Up Boss. It’s actually a legacy CRM system. The reason that we use that one is that one of the newsletters that we’ve acquired is in the real estate space. And so it came on this platform.

[42:18] Okay. So thank you very much for making some time to come on the show, and explain to myself and to my audience about the business opportunity behind newsletters. I do—I went in the pre-interview, I asked you if you would come with some kind of special offer in case anybody wanted to go work with you, Codie.

• Thanks. Gosh, you remembered this because I never do. So we—I think we have two special offers for you guys. So the first one, and I got to check the boss, which is my assistant who always decides what these are. Okay, so the—you have a discount code for Unconventional Acquisitions. So if anybody wants to learn how to buy a small business, or how to acquire a newsletter, or how to acquire an online business, you go to howtobuyasmallbusiness.com and the code is “Bright Ideas.” And that’s 25% off everything. And then Contrarian Cash Flow, which is our premium version of Contrarian Thinking is coming out in February. And if they want to purchase that, then you’ll get a 25% discount as well with the code “Bright Ideas.”

[43:21] Okay, and that’s contrariancashflow.com?

• That is actually going to be at contrarianthink.com. I’ll send you the links. So that’s contrarianthink.com and then how to buy a small business. Either one, use code “Bright Ideas.”

[43:37] Okay. I know that you’re pretty active on Twitter, in case folks might want to engage with you on the twittersphere, I believe you’re @codie_sanchez. Right?

• Yep, that’s right. Somebody else took my actual name, which I’m not into. But I’m @Codie_Sanchez. 

[43:55] Damn, that’s a good thing about being a Trent Dyrsmid. Do you know how many Trent Dyrsmids are in the world?

• Does that mean—I wouldn’t think there’s anyone named Codie Sanchez. Maybe they just front ran me on that trade. And I gotta buy that username too.

[44:07] Right. Yeah. I would love to know what percentage our audience knew what front ran you on the trade mean.

• Oh yeah, probably.

[44:16]  I do. But anyway, it’s not important. That’s just Trent being an idiot.

• Yeah, investing jargon.

[44:24] Yeah, I spent—my first career was in your space. So I understand what that is. Anyway, I guess my audience is gonna think I’m an egotistical ass by now. So thank you so much for being on the show. It was a pleasure to have you here. And I’d look forward to keeping in touch.

• Right back at you. Thanks again for having me, Trent.

Thank you so much for listening. That concludes this episode of the show. If you enjoyed this episode, I would love it if you would take a moment and like rate and review the show on your favorite podcast listening app. To get to the show notes for today’s episode go to brightideas.co/358 thank you so much for tuning in. Take care. Bye.