Paid Newsletters: Deal Memo

31 Days of Security

June 24, 2021


Some content wouldn’t exist without direct support.

When audiences are large enough to attract advertisers. They alter incentives.

Advertising alters incentives.


Paid newsletters make niche content possible that wouldn’t otherwise exist. Write for your readers. Not advertisers.


Paid Newsletters



  • New typesof newsletters will be created. Need an example? Flow State sends you music every weekday.
  • Substack will help writers extractmore value (and commissions) from their audience. Their incentives are aligned.
  • It will be hard to cancelwriters. Paid newsletters make you accountable to your audience. Not sponsors or their stakeholders.
  • More writers will hold eventsSam Parrheld a small meetup at his Airbnb with subscribers. Fintech Today hosts virtual events.
  • Newsletter fellowshipswill become common. Substack CEO, Chris Best, described the Substack Fellowship as a “mini-YC” for writers. 
  • Most writers will add productsto their offering. Paid content is a simple way to monetize. But this leaves money on the table.
  • We will see more newsletterbundles. Bundling newsletters can lead to more revenue and lower reader acquisition costs.
  • More writers will add value with paid communities. Readers bond over shared interests. And unlike content, community can’t be copied. Content is a magnet. Community is a moat.
  • Paid newsletters will launch audience-first empires. Leading to coursescommunitiesfunds and more.
  • Newsletters will become more niche. It’s easier than ever to launch a paid newsletter. More will try, fail and succeed. A long tail will form. The same applies to Micro-Marketplaces and Micro-SaaS.


  • Build a communityon top of your newsletter. Use your platform to connect people. Courtland AllenPieter Levels and Jack Butcher used this content-to-community playbook.
  • Reach 1,000free subscribers then monetize. The founders of Substack estimate a 10% free-to-paid conversion rate if you have:
    1. At least 1,000 subscribers
    2. At least a 50% open rate
    3. Good feedback from your readers
  • Start a podcast. You’ll reach a new audience that prefers to listen. Make money from podcast memberships.
  • Build a SaaSfor your audience. Jane Portman has UserlistPaul Jarvis has Fathom AnalyticsJustin Jackson has fm. Audience-first works.
  • Use your newsletter as a funnelfor books, courses, events and consulting.
  • Gain subscribers by curating and highlighting others. Some will share your work with their audience. The same applies to interview-based podcasts.
  • Use a blog + newsletter strategy to boost discoverabilityTrends #0014 — Paid Communities ranks #1 for ‘paid communities’ on Google. Leading to more subscribers. Gating content hinders discoverability.
  • Own your domain and email list. Substack writers leave breadcrumbs around the web pointing to subdomains. Raising switching costs and leading to lock-inHie and Cloakist offer custom domains for Substack. Ghost has no transaction fees.
  • Use your newsletter as a lead magnet for speeches, consulting and products. Monetize indirectly. Dan Runcie switched from paid to free and monetizes Trapital by consulting.
  • Build a value ladder. Paying subscribers are qualified customers. You’ve built trust. Sell with no (or low) customer acquisition costs. See Audience-First Products.

 Key Lessons

  • Most paid newsletters are micro-monopolies:
    • They’re the sole source of a particularvoice, point-of-view or perspective. In a category of one. There are no substitutes.
    • They can survivetough conditions. Like giving up 20% of revenue and being less capital efficient. Some use paid acquisition. But it’s not a life or death decision for monopolies.
  • Audience = Optionality. Paid newsletters are audience-first products. You can lobby trust and attention from your newsletter to coursescommunitiesand funds.
  • Change the incentives. Change the outcome. Writing for sponsors andreaders alters your writing. Beware of chasing two rabbits.
  • 1,000 True Fans. Small, supportive audiences power niche newsletters. You don’t need millions or thousands of supporters. Maybe 100will do.


“Reader acquisition costs is a made up term.”
Everything is made up. Stay woke.

“What about newsletter fatigue?”

It pushes quality up. With cheap distribution, writers can choose to bundle. Or not. Bundling recreates graduation problems facing traditional media. ? See micro-monopolies.


“Information wants to be free.”

It wants to be made too. Some things wouldn’t exist without direct support.


“You can only monetize a percentage of your audience with paid newsletters.”

What’s your north star? Sponsors change underlying incentives. If this is ok. Carry on… There’s no right or wrong. But don’t fool yourself.


“Most newspapers have sponsors. Why can’t I?”

You can. But you aren’t immune to conflicts of interest.


“Sponsors won’t change what or how I write.”

*Meet Richard Feynman*


“I can find win-win-wins between my audience, sponsors and I.”

You can. Especially in theory. In practice, competing priorities add complexity and break down quickly.


“Ok. But what about income diversification?”

Buy stock. Or real estate. Or build a value ladder. You know your audience and can reach them with low (or no) customer acquisition costs.


“Are you anti-sponsor?”

No. I’m anti-blindspot. You may see ads on one day.


“Substack is quick to start. And I can use Hiye or Cloakist. So why Ghost?”

“Inspiration is perishable.” If this resonates with you. Use Substack. But know this… Google will index the Substack subdomain. You’ll pay 10% transaction fees (not including payment processing fees). But… “Done is better than perfect.”


“Ghost costs too much.”

It’s open-source. Instead of paying $29/month. Pay $5/month. And keep transaction and switching costs low with 0% fees and your own domain.


“Everyone uses Ben Thompson as an example. But how many Ben Thompsons are there out there?”

I don’t hear this asked for OnlyFans. That aside… You don’t have to be Ben Thompson. You need 1,000, or 100, True Fans.


  1. How Newsletters Make Money for Writers with Hamish McKenzie of Substack— Hamish McKenzie, Co-founder of Substack, drops tactical knowledge Find out what he has learned from thousands of paid publications. And why he recommends charging general audiences $5+/mo and professional audiences $10+/mo.
  2. How to Build a Six-Figure Newsletter Without Anyone Knowing— Glen Allsopp shares the stories of several six-figure newsletters. Great, in-depth writing. High signal-noise ratio.
  3. This indie newsletter generated over 10,000 paying subscribers— Robert Cottrell founded The Browser. He shares what he has learned so far. And how he uses an algorithm to find some of his content.
  4. 1 Company, 1 Employee: Tearing Down Stratechery’s Pricing— Patrick Campbell, founder of ProfitWell, explains why Stratechery is priced too low. With data from 1,411 current, former and prospective customers. Spoiler alert: Some would be willing to pay $18.40 per month or $201.39 per year.
  5. How My Newsletter for Developers Generates Subscription Revenue– Adam Roberts shares how he went from ads to subscription.
  6. Who has a paid newsletter? The tweet behind this report.
  7. Product and Media are New Leverage New fortunes will be made with products and media


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