Category: Case Study

Geoff Sharpe is the co-founder of Lookout Media up in Canada. They have a string of three local newsletters, spread between Ottawa and Vancouver, and have grown to over 65k subscribers and six-figures in revenue.

Last week, he jumped on Zoom with me to share a bunch of what they’ve learned, including:

1. The Importance of Hard Editorial Decisions
2. Keys to Growth
3. Keys to Selling Memberships
4. Keys to Selling Ads

He gave me permission to write it all up, so that’s what we’ll look at today.

Even if you’re not running a local newsletter, a lot of this will still be useful. And if you are, I highly recommend connecting with Geoff – he’ knows a ton about this and is really generous with his insights.

1. The Importance of Hard Editorial Decisions

If you’re reading this, you probably already know the fundamental rule of newsletters is, “quality first.” You can have all the growth hacks in the world, but if the stories suck, you’re just not going to get any organic traction.

That’s especially true if you’re heading into markets that already have other players on the field.

Ottawa and Vancouver both have hundreds of thousands of residents. There are plenty of existing news sources for them.

So one of the most important decisions Geoff and his co-founder Robert Hiltz made early on was how they’d be different.

Specifically, they focused on what they weren’t going to do.

“You’re never gonna beat a local news company at getting local news,” he told me. “But where you can beat them is having an interesting analysis and point of view.”

In other words, personality.

The Lookout team didn’t think Vancouver needed more listicles about “Five Best Pasta Places In Town,” so they decided to focus on deeper coverage of local news, events, and restaurants, with the goal of becoming a trusted resource.

Under-the-radar restaurants, and data-backed regional news

If you’re going through this, give yourself time. Geoff says it took them 3-6 months of testing (publishing 3x per week) to really find their editorial groove. But now, three years in, the brand carries weight, and gets recognized on its own. That gives them the flexibility to bring on new writers or potentially even expand to new locations because they took the time to build the foundation.

2. Keys to Growth

Like most of the local newsletter operators I’ve talked to so far, Geoff and the Lookout team rely primarily on Facebook and Instagram ads to grow their audiences.

“You want to know my targeting for these ads?” he said, laughing. “The city.”

He keeps the audience targeting super simple, letting Meta handle most of the optimization on its own, and as a result, he’s seeing ~$0.60-$0.70 CPAs, with high open and click rates.

They’ve experimented with a lot of formats, but a few things he likes to test in ads include:

• Images of recognizable local landmarks
• Different “contrast messages” that tap into local identity or even tribalism (e.g. “If you live in XYZ, you won’t want to read this.”)

3. Keys to Selling Memberships

This was fascinating…

Like other local newsletter founders I’ve talked to recently, Geoff told me that it’s tough to scale local ad sales. Budgets are relatively small, and you spend a lot of time educating old-school business owners on benefits of a newsletter audience.

But Lookout compensates for that by leaning hard on paid subscriptions and he estimates ~75% of their revenue (!) is from paying subscribers right now.

That’s excellent from a business perspective because paid newsletters carry several unique advantages like:

• Increased Audience LTV: Readers become worth more, which changes how much you can spend to advertise to them.
• Diversified Revenue: Ad markets are fickle, and change with the wind. Having subscription revenue protects you from sudden shocks
• Recurring Revenue: Maybe the biggest benefit of paid subs – many of them keep paying year after year, funding your growth plans

Lookout offers memberships in either monthly or annual format. First year goes for ~$75, then the price increases to ~$120, which means they could lose ~30% of readers from year one to two and still earn more.

He told me that annual is better to focus on, since they find churn is ~2x higher on monthly subs, and for the Lookout group, he estimates ~85% of paying members are on annual plans.

It’s wild to hear that this is possible with local newsletters, but there you go!

Interestingly, I recently asked Farhan Mohamed of Overstory Media, how he would recommend I think about revenue if I wanted to build a $1m local newsletter in Austin, and he said something similar; Think about how to make ads 25% of the pie, and fill the rest with things like events, paid subscriptions, etc.

This 25% ad ratio may be a broader theme in the industry.

So how does Lookout sell these paid memberships? Well, there are two components:

• Get Clear On The Value: Insiders get access to content free readers can’t see, including their updates from city hall meetings, and long-form pieces on restaurant gems.
• “Support Local Media”: They lean into this narrative, and it works. Interestingly, I’ve heard this from other local media founders too – readers seem happy to pay to support quality local writers.

The highest-leverage time he’s found to sell paid memberships is 2-3 months in, after people have experienced some of the value and gained an affinity for the newsletter.

So, he focuses on quarterly sales drives. They make a limited number of memberships available at a discount, and lean hard on the narrative of why people should support now.

4. Keys to Selling Ads

Okay, so selling ads is hard. But you should still try it.

Geoff’s biggest tip was to do what you can to pre-qualify advertisers by making sure they have the budget before you get on a call with them.

They use Tally as their contact form. We used them at Hampton too because they have this cool feature where they can collect data from forms poeple don’t finish filling out. Can be super useful for you.

He reviews submissions and emails promising leads to set up a call.

Pro Tip from Geoff: Set up your sales flow so that anyone who doesn’t pre-qualify for a live call can still be funneled to an automated checkout where they can buy inexpensive ads in your newsletter without any face-to-face interaction.

Another major insight – keep it simple.

I’ve heard this from several other local newsletter founders too – a lot of local advertisers just aren’t as sophisticated as venture-backed tech startups or large global brands. They’re not used to seeing performance data, or measuring direct ROI.

That’s not a dig on them. It just means that when you’re selling you need to position the value differently than you might in other circumstances.

A lot of these business owners are used to buying ads in local newspapers, so Geoff often guides the conversation toward the problems those publishers are having right now.

“When was the last time you saw and clicked on a banner ad on a website?” he often asks.

When you frame it that way, people intuitively understand the issue, and it opens the door to talk about other types of advertising options.

For More From Geoff…

Check him out on Twitter, and if you’re in Ottawa or Vancouver, check out their newsletters here:

• Vancity Lookout
• Ottawa Lookout
• Capital Eats

Often times, when we talk about how a newsletter grew or made money, we talk about the tactics they used. But it’s easy to forget there were people behind those tactics. People who, day in and day out, thought about the problems, tried stuff, found solutions.

I’m not talking about founders and CEOs. I’m talking about the people behind the scenes, who actually have their hands in things.

Sometimes they’re well-known. Most of the time, they’re not. But they’re out there, and if you track ‘em down, you can learn a lot from them.

Here’s how I like to do it…

First, I read a few old interviews with the founders of a company, and news stories going back the last few years, jotting down milestones as I find them.

Pro Tip: Founders are typically very slow to talk about this year’s numbers. But they’re almost always happy to talk about last year, so if you just read a few interviews over several years, you can piece together a really interesting picture.

For example, I’m working on a case study for Morning Brew. After just four short articles, I find myself with something like this👇

Ugly, right? This doesn’t have to be pretty

Right away, you can see there were a few fascinating turning points in the company’s audience, revenue, and team size:

• 2017-2018: They 10X’d the audience, crossing 1M subscribers
• 2018-2019: Revenue more than quadrupled from $3 to $13 million
• 2020-2021: They added ~100 people to the team, two per week for a year

Why? How? Most important, who were the people that actually did the work to make this happen, and what have they shared about it? That’s where my mind goes.

I’ve got a process for finding these “keystone employees“, but it’s a bit involved. So to keep this short, I’m going to cut straight to the chase.

If you want me to write it up, click this.

I’ll check the data and if enough people click it, I’ll do a tutorial on exactly the tools and steps I use to reverse engineer some of the most important hires companies make.

At any rate, the rest of this email is a look at a few people you may not know who played pivotal roles in growing Morning Brew to $40m+, along with some of the insights hey’ve shared about how they did it.

We’ll look at four key areas of growth:

1. Audience
2. Content
3. Revenue
4. Staffing

If you’re hoping to build, “The Morning Brew for XYZ,” think about when you’re going to hire for these roles, where you might find your version of these people, and what you can learn from the ones who did it first.

1. Audience

If you’re deep in the newsletter space, you may actually know of Tyler Denk. Today, he’s the founder of Beehiiv, the very platform this email was written on.

But before that, he was a growth engineer at Morning Brew, and specifically, he was the guy who built the technology behind their world-famous referral program (along with many other things).

He was one of the first two employees* and was there through the acquisition, working on product and growth, and managing 6-figure marketing budgets.

Learn From Him: Back in the day, he wrote two excellent pieces on how the referral program works, and the tech that powered the newsletter. He also did a great written interview on the early days of the brew, and has appeared on several podcasts, to talk about various aspects of the journey…

• From scaling Morning Brew to Building Newsletter Platform
• How MB Generates 365K Referrals Per Year
• Inside Morning Brew’s Referral Program
• Grow Your Newsletter in Less Than 1 Hour

*Michael Schwartz was their first employee. Both he and Tyler are building at Beehiiv now, which goes to show how these companies can become talent incubators that launch other successful businesses. Smooth Media is another company founded and led by several by Brew alums.

Big Takeaway: Lightning doesn’t strike twice. Rather than strictly copying the Brew’s referral program, you should try to learn from their hiring strategy. Early on, find someone who’s scrappy, independent, can try a lot, and will find/build the thing that becomes your uniquely effective growth lever.

2. Content

Neal Freyman was hired as a writer in June of 2017, which makes him another one of the earliest-ever employees of the company. He quickly became managing editor, and has now been there through the rise of eleven publications, hundreds of employees, and millions of readers.

I don’t think I can name anyone else in the industry with that kind of editorial experience.

Learn From Him: While he writes regularly for various Brew properties, you have to dig a little deeper to find him talking about how he does his job. Still, it’s out there. He’s appeared on several podcasts to discuss…

• Creating Content for 3M+ Readers
• Pitch a Daily Newsletter
• The Future of Editorial Newsletters
• How to Grow Your Newsletter

He’s also done written interviews on Balancing the Grind and Thrive Global, and interestingly, used to publish on Quora before the brew. It’s pretty cool, you can see the style taking shape there.

Big Takeaway: Content benefits from committed guidance. Are you building an environment where someone can and wants to A) rise up through the ranks and B) stick around for a long time?

3. Revenue

The first major jump in revenue came between 2018 and 2019, when the company more than quadrupled from $3m to $13m in a year. From there, they roughly doubled every year until 2022 (my most recent data) when they did $36 million in the first half of the year.

Wild.

A key person behind this was Jason Schulweis, who joined as head of brand partnerships in mid-2019 and helped completely restructure the sales team.

Learn From Him: He moved on in 2022, but left behind a great body of work outlining what that period looked like.

Every year, he did an annual review (Year 1, Year 2, Year 3) that not only included major strategic decisions and their outcomes, but also linked off to lots of other posts he wrote along the way explaining his decision-making, hypotheses, and lessons learned (from hiring, to B2B advertising, to connecting the dots).

He also appeared on several industry podcasts, including…

• You Should Talk To
• Radicle Insights
• Motivated Podcast
• Leagueside Podcast
• The Media Roundtable
• The Business of Newsletters

Big Takeaway: Experience pays. Before the Brew, Schulweis had led teams at Yahoo, Thrillist, Live Nation, and Media Link. He was able to see the structural problems holding the initial team back, and fix them quickly. If growth and content benefitted from having young, scrappy go-getters, revenue seems like the corollary – pay to bring in someone who’s been there.

4. Staffing

Probably the most overlooked part of growing a company, but crucial to building a cohesive team.

Morning Brew made its first HR hire, Kate Noel, in January of 2020, when the company had ~30 employees, and was doing 8-figures in revenue. She’s still there as of this writing, serving as SVP, head of people ops, and has helped the company grow to 300+ employees.

Similarly impressive is their second HR hire, Lily Mittman. She joined as senior director of talent acquisition immediately after the brew was acquired by Business Insider in late 2020, and was the first person in the company to sit in a talent acquisition role.

Over the course of her first year, she helped take the team from ~75 to ~175 people. Two hires a week. Every week. For. A. Year.

Learn From Them: I can’t imagine the stories these two could tell (although I suppose the first rule of HR is you don’t talk about what goes on in HR). Perhaps for that reason, they haven’t published a ton of inside baseball. But they have appeared in some places…

• Kate led this panel on attracting and retaining talent
• Lily appeared on the HR Impact Podcast

Someone really needs to sit down with these two though and talk about what it’s like to handle the people side of a media company going through sustained hyper-growth.

Big Takeaway: Brew co-founder Alex Lieberman once wrote that, “I’ve realized that it’s very difficult to ever hire too early for HR,” which on its own is an interesting insight for people who are scaling.

Wrapping Up

Scaling a newsletter is about more than tactics. It’s about the people behind the tactics, how they looked at the problem of growth, and what they learned from what they went through.

The founders, yes. But increasingly as it grows, the people lower down who are closer to the work.

Find those people, talk to them or learn from their work, and you end up with a much higher-fidelity understanding of what you’re going to encounter, and how to deal with it.

Now I’ve known about Justin Welsh for a long time, but it wasn’t until I saw this clip on Youtube the other week that I realized just how big his media empire is (starts at 4:04)…

There’s nothing I like more than when I find someone who’s making way more money than I expected, and doing it on their own terms.

So I dug in deeper, listening to hours and hours of podcast interviews, reading other deep dives, and buying his course to see what I could learn from the way he’s grown.

1. TL;DR
2. Superpowers
3. Background
4. Business Model
5. Growth
6. Tech Stack

1. TL;DR

In 2023, Justin Welsh will do ~$1.7m from his solo creator business…

• About 76% of that comes from sales of his courses ($150/ea.)
• The rest is a mix of consulting, ads, and affiliate/subscription sales
• All of this is powered by his LinkedIn, Twitter, and newsletter

2. Superpowers

After reviewing a lot of his work, I’ve come to the conclusion that he’s got two main superpowers:

Systems Thinking: The thing that stood out most to me is that Justin has an incredibly dialed-in system for writing and distributing content (more on this in a bit). He’s a total mercenary here, with systems designed to let him produce consistently, even when he doesn’t feel inspired. This is huge.

He also comes across as a bit dispassionate, observing what works and cutting what doesn’t, without getting caught up in the mystique of being a “creator.”

Playing A Long Game: This is the part that’s hardest to internalize, but he’s willing to spend a year or more building up an audience somewhere before ever selling to them. For anyone starting this journey, this is torture to hear. But it’s also a common thread you see with a lot of successful creators.

3. Background

The first thing you need to know is that Justin isn’t a writer. Or at least, he wasn’t…

He was a sales guy. But after more than a decade in high-stress high-growth startups led to drinking, an overwhelming panic attack, and a visit from EMT’s, he started planning his escape.

The background in sales is important for two reasons.

First, it should give you hope if you don’t consider yourself a writer either. This trade is learnable, for the most part. It’s not as precious as some would lead you to believe. Justin’s an example of just how much is possible, even without a “writer” background.

Second, you’ll see how it informs his approach to the business (I believe this is one of his unique advantages).

At any rate, about seven months before he left his job as a sales exec, he started publishing to LinkedIn with the idea of eventually landing consulting gigs to replace his job.

It worked. And as his audience grew, people started asking him more and more about how he was doing that. Today, most of his work actually focuses on helping people grow their own audiences.

4. Business Model

Remember, the main business model for these kinds of media companies is simple: They’re monetized via free, front-end, and back-end products. (More on each here)

It would be tempting to focus exclusively on the part of his business that does most of the revenue – the courses.

But if you do that, you’d miss the bigger picture. So instead, let’s go through the bullseye model in-full.

Free Products

While Justin has built an audience across LinkedIn, Twitter, and a newsletter, he currently only monetizes ads on the newsletter:

Look at how simple this sales page is.

He runs up to two ad spots, both at $3k/issue. And each ad is text-only, up to two sentences.

What that means is that the ad business is set up in such a way that it doesn’t take much of his time. Advertisers likely buy, submit their ad text to him async, and he schedules/runs without much else.

According to the interview he did with Noah Kagan, of the $1.7m he’ll do in revenue this year, ~$30k will come from affiliate deals, and ~$120k will come from the ad system above.

If you’re doing the mental math, $6k/wk times 52 weeks is a lot more than $120k. I chalk the difference up to one of a few things:

1. That estimate could be old, based on lower pricing (the price was $2k until very recently)
2. He may have <100% fill rates. Many newsletters do, so plan accordingly
3. Ads may not be a priority for him (with 75%+ of revenue coming via courses)

Of these, I lean most toward No. 3.

Front-End Products

As a quick reminder, front-end products are primarily defined by their price. They can be one-time payment (like courses) or subscriptions, but typically hover in the $50-$100 range. Low enough to be impulse buys.

This is where the bulk of his business sits, and it’s comprised of two major revenue streams:

• Courses: He sells 2 courses on Gumroad for $150/ea.
• Subscriptions: He runs a paid newsletter ($9/mo) where he shares the social media templates he’s using to drive traffic.

These are both comfortably in “front-end” territory. And between the two, he’ll do ~$1.4m this year (the vast majority of which is represented by course sales).

The paid subscription is an up-sell for members of his course, and I want to take a second to point out how smart this is.

One of the most important and often overlooked aspects of paid subscriptions is that they give you recurring revenue.

To understand just how great this is, let’s pretend you’re selling a course, and like Justin, you’re able to sell $1m worth of seats this year.

That’s impressive. But do you know what you need to do next year?

That’s right – sell $1m worth of seats all over again. More if you want the biz to grow.

Now, pretend you make $1m selling a subscription product, and 50% of those people renew for a second year. You start year two with $500k in the bank, and even if your ability to sell stays capped at $1m in sales per year, your overall revenue continues to grow.

More money for the same work. That’s the magic of paid subscriptions.

His model is a little different. I believe the paid subscription is billed monthly, which changes some of the math.

But the big idea here is that it’s smart as a course creator to experiment with value-added subscriptions and recurring revenue.

The other thing he did well… when designing the paid subscription was to focus on different rather than more.

Newsletter writers often struggle with this when deciding when/how to take their newsletter paid.

The option many default to is to offer more. (E.g., Free subscribers get one email a week, but paid members get two or more.)

That’s a mistake.

Generally speaking, unless you’re sharing verrry valuable information that’s directly tied to your reader’s income, they just aren’t that motivated to get more of your emails. For the most part, they barely have time to read the ones you already send.

So a more strategy will always limit your income to only your most dedicated readers.

But if you sell a subscription that offers something different from the free newsletter (ideally something valuable, that helps them make money, save money, or save time) it becomes harder to resist.

Social media templates to grow your solo-preneur business is a great example.

Back-End Products

Similar to front-end products, back-end products can be one-off or subscription-based products that are primarily characterized by their price (typically $500 and up).

In media, when you talk about back-end products, most people think about high-ticket subscriptions. But I tend to lump consulting and coaching into the back end as well, because…

1. It’s a higher-ticket, higher-touch service
2. It can be sold using free or front-end products

According to his interview with Noah, Justin does ~$150k in coaching each year.

He doesn’t talk a lot about what kind of coaching that is. It’s not clearly available on his site. Nonetheless, it’s a good example of how building a large audience brings valuable opportunities. Even the side income is a great salary on its own.

5. Growth

I’m actually not going to spend too much time writing about how Justin grows for two reasons…

First, many others have already done a great job deconstructing his process. Here are a few of my favorites:

• Chenell Basilio’s deep dive is a must-read
• Justin’s interview with Noah Kagan is similarly fantastic
• This episode of Bootstrapped Stories is probably the best single interview I found – and includes detailed thoughts on his approach to social media, content creation, networking and more.

But more importantly, the topic of how he grows is the main thing Justin himself writes about.

It’s the topic of both his current courses, and he’s also broken it down in detail for free many, many times. (Like here)

I took his Content Operating System course. It’s great. Specifically for anyone who knows what their niche is, but isn’t sure what they should do day-to-day to grow their audience on Twitter or LinkedIn.

If I were to break down my personal takeaways, they would be:

• Promotion > Production: After writing an article, he finds about a half-dozen different ways to package and share insights from the piece (e.g., contrarian take, listicle, etc.) then uses a tool like Hypefury to pre-write and pre-schedule that content on his social channels over 6-12 weeks. I like this ratio of promoting much more than you publish.

• Regular Growth C2A’s: Every week, he promotes his newsletter once the day before the email goes out (“sign up to get XYZ tomorrow”) and once the day after. I’ve already begun testing this at Hampton and it’s extremely effective, sometimes driving more clicks and signups than even our most popular and helpful Twitter threads. That’s a big deal because the threads take way longer to write.

• This is a business: An aspect of Justin’s work that I think often goes over-looked is that he’s not here to “have fun.” Sure, he’s having fun. But his business functions like a machine – the newsletter is short and to-the-point, it’s written on a schedule, promoted in the same ways each week, and those posts publish consistently, at the same times. In a world where many people romanticize being a “creator”, I find this refreshing.

There is, of course, a lot more to get from his course. But these were the things that had the biggest impact on me.

6. Tech Stack

I was a little surprised by the tech stack Justin’s using – I hadn’t heard of most of the tools on it.

Kajabi does most of the heavy lifting, powering his site, courses, and email list. The rest is mostly tools for pre-scheduling the afore-mentioned social media content and analytics.

One thing I’d love to know is more about how he uses his analytics suite. If you go back through enough of his work, it’s pretty clear that he tests things pretty systematically. I’m guessing that’s a holdover from his days leading sales teams.

It’d be interesting to learn more about how he tests, and what he tracks.

One cool thing to note is that he’s also become an affiliate for several of the companies whose tools he relies on to run his business.

It’s not a huge income (Roughly ~$25-$30k according to Chenell Basillio’s breakdown of his business).

But that’s enough to go on a few killer vacations a year. All for passively recommending tools he already uses.

It makes me think about how all of us have some similar opportunity. No matter what you do, chances are there’s something the people around you know you for. Something they ask you about.

You don’t have to be a business owner to benefit from this.

Even if you’re an employee, and you write about the work you do at your job. It wouldn’t take much to put up a simple tools page with some affiliate links.

Actually seems like a great first-step for people trying to build a personal following around a topic they already know well. Having the affiliate links up would allow you to monetize without having to build an entire course, and can free you to focus on publishing.

The income would likely be small at first, but its growth would be a good indicator of the trust you’re building with your audience, and more important, a signal that people are willing to buy things from your recommendation. Once you have that, you can build and launch products much more confidently.