Treating your newsletter like a high growth business

How long does it take to build a successful business around your content? For Michael Houck, it took just 5 months, building Houck’s Newsletter into a £50,000 per month business.

Michael is a former VC and start-up founder. His newsletter began as a side project, but everything changed when he decided to take it more seriously. "I did some analysis, and I talked to good friends of mine, like Lenny Rachitsky and Sahil Bloom, to learn what the potential scope of this business was. That helped me make the decision to go all-in and come up with a growth strategy that would allow me to achieve that pretty quickly." In this Creator Spotlight, Michael shares those exact strategies to help you treat your platform as a business.

Create Content That Resonates

The success of a newsletter depends on the quality of its content and understanding the needs of your audience. "I write for startup founders and people who are building businesses. They want tactical advice they can actually implement in their business without any unnecessary fluff." Michael may be in a saturated niche, but that hasn't stopped him from standing out. "There's a lot of noise in my niche, but I offer credibility based on what I've built in the past and my ability to see both sides of the equation as a former VC and a startup founder. That really resonates with a lot of people."

Run Multiple Experiments

Creators are commonly told to focus on one channel to grow, but Michael decided to experiment and double down on what was working instead.

He leveraged content marketing on LinkedIn and X, paid ads on social media, Sparkloop, newsletter swaps, and lead magnets. "Lead magnets were especially surprising to me: I thought I'd get a couple of hundred subscribers a week from lead magnets, but we grew by almost 15,000 subscribers. Let's be honest, it can be a bit cringe, but when you're trying to get something off the ground, you have to be shameless and lean into being cringe." On the other hand, Michael had to fine-tune his paid advertising efforts with the help of experts like Matt McGarry. Michael highlights the importance of adapting and iterating your strategies as you go.

Embrace a Low Margin Approach

Michael's focus on growth has allowed him to take a contrarian approach. While many creators aim for high margins right away, Michael kept his margins at 0% for as long as he could afford to. "I see a lot of creators trying to grow their audience, and it takes them a long time because they're bringing as much off the table as they can. But if you keep your margins low, you can reinvest in growth and grow a lot faster." This approach turned Michael's newsletter from a side project with 10,000 readers into a thriving business with 60,000 subscribers in just a few months.

Despite Michael's impressive growth, he's not slowing down. "I just increased my Spark Loop budget from £10,000 to £20,000 a month. I'm running a bunch of paid ads, I'm writing Twitter threads three times a week, LinkedIn posts five times a week. I'm all in." Michael acknowledges not every creator can invest so heavily in growth. "You can only reach that scale once you get to a certain point, so in the early days, lean into content marketing and newsletter swaps." Michael also recommends monetising as soon as possible: "use tools like Passionfroot to set up a sponsorship offering so that, even if you're only earning a bit of money, it gives you the option to create leverage."

Monetisation

Michael's journey is not just about his impressive subscriber growth; it's also about how he went from making nothing to over £60,000 a month. Michael has a diverse range of revenue streams:

• Sponsorships
• A subscription plan where people pay £15 a month or £150 a year for access to extra content and a community of founders
• 1:1 consulting
• His most recent product, Megaphone, a marketplace for creators.

Newsletter sponsorships

Michael turned to sponsorships, the lowest hanging fruit, to make his newsletter a legitimate business as early as possible. "I wouldn't have made as much money as quickly as I did without Passionfroot and the sponsorship slots I offer." Houck's newsletter offers different tiers for sponsors, including featured ads, secondary ads, and deep dives with in-depth interviews with company founders. Michael finds sponsors in various ways: through agencies, his audience, inbound requests, and looking at sponsors of newsletters within the same niche. "Getting repeat sponsors is the name of the game, so we've tried different price points, and we look at the results we're delivering to make sure sponsors come back repeatedly."

Michael Houck’s Passionfroot page offers sponsors different tiers and packages

Advice for Creators

Michael's story is impressive and it's a great reminder that creators don't have to wait to turn their passion into a thriving business. Here are the key takeaways:

1. Treat It Like a Startup: Embrace a startup mindset, focusing on experimentation and growth.
2. Product-Market Fit: Ensure your content resonates with your target audience and delivers value consistently.
3. Build Credibility: Establish yourself as a trusted source in your niche to attract and retain subscribers.
4. Learn From Others: Get advice from people within the industry or work with experts to help you grow more effectively.
5. Diversify Your Growth Strategy: Experiment with various channels and strategies to find what works best for your creator business.
6. Monetise As Early As Possible: You're not a business until you're earning money. Even if it's not much to begin with, reinvest any profit back into your business.

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