May 3, 2019

Alex Lieberman: The 8-Figure Email Newsletter (Morning Brew) – Noah Kagan Presents

Check out the Noah Kagan Presents Episode Page & Show Notes

Key Takeaways

• The best ways to manage anxiety – get enough sleep, eat well, and exercise
• Advice on creating an email newsletter:
  • Create a newsletter people actually want
    • “If people like something, they become your best evangelist and salesperson”
  • Be your own consumer – write about something you yourself would want to read
• Advice on finding an email sponsor:
  • “Find the person who really, really, really wants to get in front of who you know your reader is”
  • “Find the person whos price and elasticity is so high because they NEED to get in front of your audience”
  • Approach people who are already spending money on advertising (like on Facebook/Instagram ads or in other email newsletters) and offer to solve their problem more effectively
• Morning Brew currently has two advertising spots – one at the very top of their daily email and one further down
  • What do they charge? – It’s based on unique opens, but the higher position currently averages ~$25k/email, with the lower averaging $15k/email
• Building a great company takes TIME and COMMITMENT
  • “If you expect something to happen overnight or even over a year, you’re setting your expectations the wrong way”

Intro

• Alex (@alexlieb11) is the co-creator of Morning Brew and their daily newsletter
  • It currently has over 1 million subscribers and generated 8 figures of revenue in 2018

Managing Anxiety

• “There are 3 core things I need to do to balance myself – sleep, eat well, and exercise”
  • “I make sure I don’t skimp on those when I’m anxious. If I do, it just starts a downward spiral.”
  • It’s simple stuff – “But doing it for 20 years straight is really difficult”
• What is Alex anxious about today?
  • Not being in the office and falling behind on work
  • His living situation (he doesn’t go into detail)
  • He’s flying on a private jet tomorrow and is worried about it crashing
  • In general – it’s when a lot of small things add up
    • “The things where there’s ambiguity and I feel like I’m not in control, that’s where I get the most nervous”
• How else does Alex manage anxiety?
  • He regularly talks to a therapist (every 2 weeks) and meditates
• But one thing to remember
  • If your life is always great and you’re never anxious, perhaps it means you’re not pushing yourself hard enough outside your comfort zone
• How does Noah deal with anxiety?
  • His big go to is making a list of whatever he needs to get done

If someone were to describe Alex…

• “I think they would say I’m definitely the creative in the bunch, the one who’s shooting out idea after idea after idea, with no ego attached to them”
  • “Probably 8 out of 10 of my ideas are going to be complete shit”

Escaping Email

• Up until 2 weeks ago, Alex was spending 3-3.5 hours a day answering email
  • He finally hired an assistant (his mom) – why?
    • He made a list of things he was/was not good at (or didn’t enjoy doing)
      • “I started making sure that I was on a path to no longer be doing anything in that second column…I’d be doing myself and everyone on the team a disservice otherwise”
    • This decision cut back the number of emails Alex personally has to deal with from ~350 to 75

Building an Audience

• Alex and Austin started the Morning Brew newsletter in 2015
  • By April 2018, they had 180,000 superscribes
  • by November, they hit 700,000
  • In February, they surpassed 1 million
• “Building an audience is really freakin’ hard”
  • But here’s the key thing that really helped originally – Alex was his own consumer (he’d been reading the Wall Street Journal for 12 years prior to starting Morning Brew)
• Advice on creating a newsletter:
  • “The hardest thing is actually realizing there’s a newsletter to be created”
    • “Email has become so sexy in the last few years that people just say they want to create email now” (similar to how everyone’s flocking to podcasts)
    • You NEED to ask yourself:
      • What’s the appetite? Who are you writing for? Who is the audience”
      • Is email the best delivery mechanism for the above? (you can’t assume it is) – Different audiences consume content in different ways
    • So to sum up – create a newsletter people actually want
  • Write for yourself
    • This is why it’s a good idea to be your own consumer
    • If you’re not writing for yourself, at least surround yourself with people you are writing for, so you know you’re actually creating something they’ll give a shit about
• “Think of how many media brands there are and how few have actually built an audience that gives a shit about them – that’s where there’s real opportunity”

The Early Days of Morning Brew

• In late 2014, Alex sent out the first versions of the newsletter while attending the Ross School of Business at the University of Michigan
  • It was just a PDF attached to an email – “Market Corner” was the original name (and only Alex was working on it at the time)
  • Alex describes it as a “daily business roundup”
  • He continued to send it out EVERY day (besides weekends) – PERSISTENCE
• Alex originally used LISTSERV to manage the email address
  • At first, he added everyone to the email list manually (the first “sign ups” were friends & family as well as few friends who he had been helping prep for job interviews)
• “The original product (the email) looked like such shit…it was horrible”
  • BUT – it was good enough that people wanted to share it 
    • Word spread and the list grew to about 1,000 subscribers (Alex was still adding email addresses to the list manually)
• What else helped?
  • The original ~200 subscribers were very engaging and quick to give feedback (so they had a fast feedback loop)
  • Another principle that Alex kept in mind:
    • “If people like something, they become your best evangelist and salesperson”
• Over winter break of his senior year, Alex brought on his co-founder, Austin Rief
• In March 2015, the newsletter changed names to Morning Brew (they also started using MailChimp)
  • The original logo was created by a senior at the University of Michigan in the arts department
  • The writers, at the time, were unpaid “college writers who just wanted to get involved in creating better business content”

Growing Morning Brew Early On

• One tactic – they printed out index card shaped pieces of paper with business riddles and handed them out on campus
  • The answer would only be given if you signed up for the newsletter
• Alex and Austin made a bunch of flyers for the newsletter and would put them in the common areas around the Ross School of Business 
  • Janitors would obviously throw them out – but they kept on doing it
    • At some point, the school eventually told them to stop
• Austin and Alex spoke to a TON of business classes/clubs around campus explaining what Morning Brew was
  • At the end of their talks, they’d pass around a sheet of paper collecting email addresses
    • Why not just tell people to sign up online? – It was too much of a physical barrier

The REAL Growth

• Today, Morning Brew’s referral program makes up ~25% of their growth
  • At 3 referrals – you get access to Morning Brew’s Sunday edition
  • At 5 – you get stickers
  • At 10 – you get an invite to their Facebook group which contains a ton of high-quality business discussions
  • At 15 – you get a phone wallet
  • At 25 – a Morning Brew t-shirt
  • At 50 – a Morning Brew crewneck sweatshirt
  • At 75 –  a Morning Brew mug
  • (They’ve spent “tens of thousands” on the referral program, but – “the acquisition cost for each referral is negligible”)
• They also occasionally do giveaways
  • The most popular – MacBooks Giveaway Days
    • On these days, they give away 2 MacBooks – one to someone who had referred a new subscriber and 1 to the person that they referred
    • Alex estimates that on these giveaway days they increase their list size by ~mid 5-figures
    • But they key – you only get the referral credit when someone double opts-in (to prevent spam sign ups and people gaming the system)

What growth strategies didn’t work?

• Cross-promotion and partnerships with other email newsletters
  • “So few partnerships actually work out and end up being worth your time”

Getting to 1 Million Subscribers

• ~250k subscribers came from the referral program
• ~15% of the million signed up after landing on their website
• The other 60% were through paid acquisition
  • Things like Facebook and Instagram ads
    • Originally they targeted anyone aged 18-45 in the United States who showed an interest in business
      • But over time, they discovered female subscribers cost 3x more to acquire (so for a short period, they only targeted males)
  • Why so much? – The acquisition costs were pretty low for a high-quality subscriber (someone who opens 5 out of their first 10 newsletters)
  • They’ve spent over $1 million so far on paid acquisition

Looking Forward

• Alex and Austin Rief (his co-founder) are trying to decide the ultimate direction for the business
  • They could just keep it under the category of a “lifestyle business”
  • OR – they could reinvest money back into the business, build a product, and then sell it to their growing audience in 3-4 years
  • OR – they could sell the business (it’ll be hard to ever replicate their recent 2018-2019 growth)
• Here’s what Alex does know he wants out of life and work:
  • To feel like he’s providing a service that helps people
  • To feel like he’s working around really smart people and being intellectually challenged
  • To not ever have to worry about money again
  • “What motivates us seems to be helping people”
    • “Every time I hear about the Morning Brew helping an individual subscriber …those stories never get old to me”

Email Advertising

• “Find the person who really, really, really wants to get in front of who you know your reader is”
  • “Find the person whos price and elasticity is so high because they NEED to get in front of your audience”
• The first revenue Morning Brew made was from an ad deal with the University of Virginia ($700 for one ad)
  • How did they get the ad deal?
    • Alex received a sponsored message on LinkedIn from someone in the admissions department targeting him for one of their master’s program.
    • Alex messaged them back stating that his audience might be of value and…boom
    • THE KEY – Alex targeted someone who was already spending money on advertising and offered to solve their problem more effectively
      • LESSON – Find people who are already spending money on advertising (like Facebook ads, Instagram ads, or in other email newsletters) and approach them

Advertising with Morning Brew Moving Forward

• Alex has found that they’re starting to get too expensive for many advertising targets (he hints that their rates are approaching $50k for one email appearance)
  • How do they charge? – Based on the number of unique opens
    • But in the future, Alex thinks they’ll start charging a fixed fee
  • Morning Brew currently has two advertising spots – one at the very top of their daily email and one further down
    • The higher position currently averages ~$25k/email, with the lower averaging $15k/email

The Morning Brew Podcast – Coming soon?

• Noah suggests that Morning Brew start a short daily podcast where they read their newsletter content
  • But….then their newsletter opens might drop
  • And….they’d have to eventually monetize, and Alex doubts it would move the needle much in terms of their overall revenue
  • AND….Alex has concerns about the podcast advertising space
    • What if the frequent podcast advertisers (ZipRecruiter, Butcher Box etc.) decide to change strategies?
• “I think a lot of people are going into podcasts just because they hear other people are”
  • You need to ask yourself – “Is this the best channel to deliver our message to the audience?”
    • (because often times, it’s not)

Wrapping Up

• Building a great company takes TIME and COMMITMENT
  • “You have to love what you’re doing and feel so passionate about the value you’re providing”
  • “If you expect something to happen overnight or even over a year, you’re setting your expectations the wrong way”
  • “I haven’t gone a day in the last 4 years where I haven’t thought about Morning Brew – THAT’S the mentality you need to have”

Random

• If you don’t open a Morning Brew email for 4 weeks straight, you’ll get a re-engagement email asking if you still want to receive them
• Morning Brew just branched and launched a separate Emerging Technology newsletter
• Morning Brew currently has a 3 person advertising sales team
  • 75% of their efforts are outbound 
• Companies Alex is fond of:
  • “I think what Axios is building is incredible”
  • The Athletic 

These notes were edited by RoRoPa Editing Services