How they got to 2k, and then 100k and then 1.5m subscribers. With each part of the journey you get a different growth strategy! You'll love that one 😉
|Aug 9, 2020||7|
Here is what's up.
Three newsletters inspired me to start this substack: Morning Brew, theSkimm, and Cb Insights. Morning Brew has over 2.2m subscribers, is profit-funded, and, most importantly, is fun to read every morning! Today we explore how they got their first 1000 subscribers (and more 😉).
From 0 to 2000 subscribers in 3 months
Morning Brew was a side hustle for almost two years. When Alex and Austin started the company in 2015, they had a budget of 100$/month. Here is how they got their first 2000 subscribers.
Helping students with interview Prep
The first tens of students and the reason why Alex Lieberman started Morning Brew was that he had to take only two classes in senior year at the University of Michigan. Subsequently, he decided to fill his time by helping out other finance-major seniors to prep for interviews. He had a sweet gig lined up @ Morgan Stanley and thought a daily round-up about the financial world would keep his financial acumen sharp for the desk trader job he accepted at Morgan Stanley. It was a win-win situation for everyone
Three-minute pitches, a pen & a paper
After having some initial traction and positive reception from his friends, Alex wanted to expand his audience to the entire campus, not just seniors looking for finance jobs. So he & Austin reached out to every business class and business club, convinced the teacher/president to give them three minutes to pitch the newsletter. Then, Alex passed out a piece of paper for interested students to write down their names and emails. Everything was done manually in the early days. The newsletter was a pdf attached to an email, not even a written email😌.
From 2k to 100k subscribers
For the next part of the journey, they figured they have built something people enjoy reading; their open rates were (and still are) almost double that of the industry average(42%), and students were actively engaged with the newsletter. So what they needed was to scale themselves. Pitching students worked, but they couldn't do a roadshow on every campus in the country, so they came up with two solutions to scale themselves
The ambassador program was the closest thing to creating tens(and later hundreds) of Alex(s) and Austin(s)to pitch campuses all over the country. Here is how it evolved over time.
1️⃣ First-Year - Quality:
During the first run of the ambassador program, only the most impressive 10-15 people were chosen to become ambassadors. This strategy backfired, the most remarkable students were often students that stretched themselves so thin that they wouldn't be able to give their 101% to spreading the Brew on campus.
2️⃣ Second Year- Quantity:
During the second run of the ambassador program, they let everyone in. This also backfired as Austin & Alex didn't have the resources/time to manage and extract the most value from such a significant cohort.
3️⃣ Third Year- Quantity -> Quality:
Their sweet spot came in the mix of the two approaches. They would have an application process that would take up 15-20 minutes to fill so they would deter any non-serious people. Then they would admit almost everyone that completed the application but deploy the majority resources and time to only the top performing 10% of the ambassadors. Power law distribution rules!
Cross-promotion with other newsletters
The other big driver for them to hit the six-digit subscriber mark was (free) cross-promotion with a similar-sized newsletter. This strategy was advantageous because they didn't need to change consumer behavior; they knew everyone they were targeting was already familiar with and engaged with a newsletter as part of their daily/weekly/monthly routine.
From 100k - 1.5 million subscribers.
Just like they needed to scale themselves in the early days and later came up with the ambassador program, now they needed to scale the ambassador program to reach millions of people. So they came up with
The referral program.
The referral program they developed works exceptionally well and is, according to the company, the primary subscribers driver at that period. To date, 250k people referred at least one person to Morning Brew. The reason it works so well, for the company and customers alike, is that the acquisition cost of a single subscriber goes down as you refer more people. So the company and its users are correctly aligned. Usually, as a company scales, it becomes more expensive to acquire customers, but Morning Brew built a rewards system out of this world and did not adhere to this phenomenon.
I think you should visit Tyler's medium post for a deep-dive into how he built this.
After building a substantial user base to justify charging premium ad dollars and generating profits, they recycled these profits into the business through paid advertisement. Today, paid ads account for around 30% of new subscribers. Combined with the referral system, they described starting paid digital ads as "adding fuel to the fire." It just got the flywheel spinning real hard, real fast.
If you on the other hand need to get some early traction for your company or side project. Here is some actionable insights...you can use Melbado.
Melbado is a platform where founders can register their startup to attract first users and get additional exposure.
That's it for today 😉, See you next Saturday