286 - Best of 2025! The Cheat Code to Building a $400k Local Newsletter Empire with Ryan Sneddon

I think it's crazy that you have almost half of your town on your newsletter. Yeah, that's Facebook ads. There is a massive shift happening right now in how purchasing decisions are made that you're probably not even aware of. And I'm obsessed with it. Hyper local and niche communities are freaking cleaning up. Check this data out. In 2021, Facebook showed that local groups had grown by over 50% in the previous year with these groups seeing higher engagement rates than the broader interest groups. 86% of consumers are now more likely to trust a brand or product recommendation if it comes from a small niche community or a micro influencer. 54% of internet users worldwide are more likely to purchase a product recommended in a niche community that they belong to when compared to broader social media platforms. 61% of people trust local media news sources over national ones. 72% of millennials prefer content that is tailored to their community. 58% of businesses plan to increase spending on hyper local digital advertising from $148 billion to $174 billion up almost 20% over the next two years. Consumers increasingly trust and prefer localized niche content over broader sources. And my favorite business in the space. Newsletters. Welcome to NICONOMICS, the show for entrepreneurs and watchmeners curious to learn how other businesses work. My name is Nicholas Huluski and I'm an entrepreneur with multiple seven figure exits who has owned and operated a dozen businesses and created millions of dollars in shareholder value. And on this show, I let my curiosity drive as I get successful entrepreneurs to peel back the curtain and walk me through exactly how their businesses operate. Well, on today's episode we dive into the story of Ryan Sneaton. He's an entrepreneur who turned a simple idea into a profitable local newsletter that's taken Annapolis, Maryland by storm. And in this episode, you will learn how Ryan built his $240,000 a year in revenue newsletter from a $21,000 investment. The journey to grow that list to 20,000 subscribers in a town of only 41,000 people. It's almost 50%. And what he learned after running out of cash, not once, but twice. But most importantly, you will join me on my quest to figure out how entrepreneurs can take advantage of this growing trend of hyper local and niche community businesses. You're not going to want to miss this one. I hope you enjoy. Okay, guys, we're going to get back to the show in just one second, but first a message from a sponsor who is me. Oh, it's me because I'm doing the show for free. Listen, I want to give you $100. All you have to do is this go to Apple or Spotify. Give me five stars, write a review, screenshot that review, send it to me Nick at cofounders.com and you will be entered to win $100 Amazon gift card every four episodes. I'm going to choose a winner at random and I'm going to do this five times $500 for five stars. I just made that up. And it's what I'm calling it. Please, go to Apple or Spotify, leave a review, screenshot it, send it to me Nick at cofounders.com and you'll be entered to win $100 Amazon gift card. All right, let's get back to the show. Ryan, welcome to an economics. I'm stoked that you're here. You're comfortable. You have a beer. We are going to get rolling right now. Tell me in a short sentence, what is your business and how do you make money? So my business is a localized email newsletter. We send email every weekday to the people of Annapolis, Maryland, about 19,000 readers, about 41,000 people in town. And we just tell them what's going on. Like where's the live music, what restaurant just opened, what's the city council up to, no crime, no politics. It's always positive. And we make money through selling, advertising in that newsletter, just like a newspaper used to. And you just have that one location in Annapolis, or do you have other locations around the country? Just a one for now. But the idea from day one, we're four years in now, the idea from day one was always to have more. And I think by the end of the year here, we'll either start another one that I'm the sole owner of or a partner in or we're actually working on a cool licensing program. And I have some people interested in that. So one way or another, teaser for later, maybe one way or another, there's going to be another scoop out there by the end of 2024, come hell or high water. Awesome. How did you get into it? What's your background? Nothing like this. My, I'm a mechanical engineer from school. I'm a software consultant by discipline or like trade. I quit doing that. I never wanted to be an engineer. I just wanted to degree in one of the things like one. But while I was a software consultant, someone exposed me to the email newsletter just as a content medium, not as a business model. But then I quickly got into it as a business model and decided that this was the one for me or the business model for me. Let's see, probably. So I quit my job from January 2020 and then by July of 2020, I figured this was for me and started in August. So a lot of people, especially on social media, are big into newsletters. And the reason for that is Instagram, Twitter, Facebook, Google, they can change their algorithm at any time. And if they change the algorithm, it changes how much you reach actually impacts the people that are following you. But with the newsletter, you own the email addresses, you have direct access to individuals. So especially recently, I've seen a lot of people trying to grow their newsletters over the last few years. What was your thinking as you were looking at this business that convinced you, that you wanted to go in on newsletters in 2020? It was definitely that. And I've had little micro episodes of seeing that like everyone's so well, we'll hit a spam filter and our email usually has like a 65% operate. And sometimes it'll go down to like 30. And that's only ever happened twice or three times, three times in the last four years. But they've all been in the last two months. And so it's like, it's horrible when it happens. I mean, you're literally going from, I'm reaching 12,000 people every day to now I'm reaching six. And that's like a tiny micro heart attack that I have when that happens. But I can only imagine if you had a business built on Facebook or Google or anything like that. And you were getting 200,000 site visits a day. And then the next day, you're getting 10. And there's no sign of it changing because Google changed the algorithm. They're not changing it back. For me, the algorithm always bounces back up the next day. But if it wasn't going to, that would be so demoralizing. So that was part of it. It was also just the, I think I can do this. I think this is the best delivery format. Short of a text message. Everybody opens text messages, right? Pretty much everybody. Although there are some psychopaths out there with thousands of unwritten texts. Most people open their texts. But probably like the second best would be email. And so that was what really appealed to me was if you get someone's email address that inboxes a trusted place, you can really start to build trust. You'll be there regularly and they'll know your name. Eventually, they'll stop opening your email just because the subject line is good. But because they see the front line is you and you've built up that trust. You said you have 19,000 subscribers in anapolis? Yeah. 19446. I just got to look at the whiteboard behind me. How does the business model work? Like, how do you make money? I know you sell ads. That makes sense to me, right? But what is the economic model of selling ads actually look like? How's it generated? Yeah. So I basically looked at it in the beginning. Pick the number out of thin air to charge for ads and then said, what is my average customer worth? Customer being reader, not advertiser. And I said, if my advertiser or my readers will stay on for a year, then there were $7 at a 50% open rate. So based on staying for a year, 50% open rate, excuse me. And the price I was selling for ads, there were $7. So if I could run a Facebook ad and get an email subscriber for less than $7, I could be profitable. And both of those numbers were very conservative on purpose. The 50% open rate was conservative. We've since gone higher than that, much higher than that, even though open rates are a little bit less accurate now. But we're still well above that. And people stay on for much, much longer than a year. People don't unsubscribe very often to this. So that was my thought. If I'm an advertiser and I'm like, and just broadly speaking, for newsletters, I'm not talking about the hyperlocal that you have. But you have 19,000 subscribers. Is there like a dollar per subscriber that I pay you per month for ads? There was it a per week, per letter sent. Like how do I as the advertiser assign an economic value for the ad space in your newsletter? So there's a cost to it, which is the, it's loosely based on a cost per 1,000 impressions. It used to be a very common way of selling ads, digital space, but is a little bit less now with CPM. I can essentially open rates getting less accurate. Yeah, CPM, cost per 1,000, cost per mill, mill being like the Latin for 1,000, I think. So that's how I loosely based it. It's still based on that, but basically being four years were pretty established now. Our subscribers grow a little bit every month, every week, every day actually. Basically now we've just set a price and here's the price is what you pay, but I encourage my customers, my clients to look at it a little bit differently, where I really push into them. What is your average customer value worth? And if you're going to pay me $800 a month or $1,500 a month based on what kind of ads you're buying, how many of customers do we need to get for you for this to become a profitable investment? Okay. And I don't think a lot of other people in town are selling that way. Or I think they should be because that's the easiest way. If I can convince a dentist that, hey, you're a veterinarian, here's a real example, we have a dentist too, and they're killing it, but a veterinarian, the last time I talked to them, they've been advertising for about a year, and they've gotten 41 clients, or that was two months ago, they got 40 new clients, I haven't talked to them recently. Wow. But just from advertising with you. Just for me, they've gotten more clients than that, but that's, you're directly attributable to us. And I'm sure there's a little bit of slap there. We've probably sent them a little bit more. And but they know that they've got 41 from us. They know their average lifetime customer value. They actually didn't share it with us. But they're very happy with the results. And so they're renewing and they're very happy to pay their monthly bills. That's how I encourage my clients to look at it is, what do you need to get? Don't think that this is an $800 a month marketing cost. That's the wrong way to think about this. Think about what do we need to do for you to get a positive return investment. If I tell you that you can give me $800 and I'll give you $2000 when you do that all the time. That's the easiest sale in the world. You're having them evaluate it based on return on ad spend as opposed to just thinking about it as a halt. I hate the term marketing budget. Whenever I hear that in the sales meeting, I try to switch it to return on ad spend. I don't want you to tell me that you have $2000 a month to spend on all the places. I want you to find a place where you can give $2000 a month and get 10 back. That's how you should be thinking about it. And all the lot of these local businesses they don't think like that. Marketing theoretically should be a game of I know that if I put X dollars in, I get Y dollars in return. Or even better formula like if I put X dollars in, I get three X back. That's a nice. I think it's easier to understand one. Much better said, much better said than what I said. But so many times it's like, well, I put X dollars in and I get I don't even know back. They don't even know what they get back. Yeah, that's a real problem. Or they don't even know what their customer value is worth. Like I said, mine is very, very conservatively valued at $7 a subscriber. It's way more than that because they stay on for more than a year in our open rate tire. But I know if I run a Facebook ad and I'm getting an email address for less than $7 I know I'm making money on my port. We handed it to the portable toilets on that one. I know I have like $1800 to spend on a customer. I can spend that to acquire them. If I have to buy a customer a yet cooler to get their deal, I can still do it because I know I'm making money. I want to drill into this lifetime value customer acquisition costs because I can tell that you are not only smart and knowledgeable about it, but you like it. So I do like it because people more people need to know this. You ask them how much their customers are worth. And they're like, I don't know. And you're like, how are you been a business for 20 years before I do that though. I just want to tie a bow around this newsletter subscriber thing. So my understanding is there's kind of three metrics that are really important when you're talking about your newsletter. Obviously the number of subscribers. And then the open rate. And then the click through rate are for three things right. Those are the three kind of numbers that people play with the three things that I have on my board behind me. Do you? Because of the three things I care about. And I write an up arrow if they're up week over week in a down arrow if they're down. Because we have now we have people in the office. So it's I like them to see that. You like them coming into your office and you just point to the board. They ask you a question and you're like, I know the team. I like the team like the social media team. I like them to see in the editors. I like them to see. Oh, the click rates up this week. We've done good. And the click rates down. Why is it down? I love them to see that. Do you have on a whiteboard? Yeah, we have a eight foot by four foot whiteboard over here behind me. My favorite thing I've ever bought for the office. One of my offices. We had a big whiteboard like that. And I had a girl who worked for me. She was fantastic. And she got out the electrical tape. And so she made the grids on the board so you could easily erase everything. But it was so clean. She had like all the categories all the dates. And she would go like once a month and update sort of the headers for the rows and the columns. But I love that thing because I was walking and be like, all right, where are we at today. Cool. And we try to do it. I update mine every single day. We've got a counts receivable for advertising or overdue accounts receivable. News that are subscribers Instagram followers. Seven day open rate and a seven day average click rate. And those are right now. Those are the numbers we've decided to track every single day. Tell me those numbers again. What was the first one accounts receivable. So services delivered and we need to be paid. So for accounts receivable. They don't pay you right away. You know, like what net 30 days. We have net 30. Well, it's not 30. But it's like pretty flexible net 30. So I bill on the first day of the month for the last day. It's a flexible net 30. It is a it is a flex. It is anywhere from net 30 to net 60 basically. So I bill on the first day of the month for the last months advertising. So on june July 1st, I'm billing for every piece of advertising ran in June. And then that's due on August 1st. So if you're ad ran on June 1st, I bill you on July 1st, it's due August 1st. That's actually really net 60. But if you're ad ran on the 29th of June and I bill you on the first and then it's due. That's like more like net 30. So it's anywhere from net 30 to net 60. And it's kind of annoying. I hate it. I would assume your business was like you're paying up front. So you have almost like negative working capital. Some people do I do encourage that. And I offer a cat a discount for that. But our average customer is paying about $5800 a year. And a lot of these businesses can't just write a check for that. Yeah. Some of them are paying upwards of 20 and they can't just write a check for that. So we do breaking out month of remakes. So you got AR. What were the other metrics? Overdo AR because I like to see who I need to bother. How badly do I need to bother people? Like right now it's pretty bad. Like our AR is 35,000 and our overdue is 16,000. And I'm like, OK, who do I need to call to be like, how do I get the overdue AR done? What qualifies as overdue more than 30 months or 30 days or more than one day late. Anyone who hasn't paid within their 30 day pay period. Wow. OK. I think that's one client or pretty much one client right now who wanted to pay up front and it's late, but it's not late. It's weird how it's set up. But it's still like, OK, there's money out there that we need to get. How do we get it? And then underneath of that is our newsletter subscribers, our Instagram followers, our seven day average open rate and our seven day average click through rate. So you send daily newsletters. We send five days a week every week. How long did it take you to come up with those metrics as like those are the metrics for the business. Those were like two months old. We've never had an office and I've never actually had the match. Well, that's not true. Maybe six months old because I had a tiny whiteboard in my home office where I had those numbers. But I was messing around with them and figuring out which ones were with the right ones. So I think about six months is when I started really looking at that and looking at them and updating them every day. I've always said and I believe that when you're trying to evaluate the health of your business, many people focus on the P and L. And they're like, oh, I made X number of dollars last month. But the P and L is important, but the P and L really is a lagging indicator of where your business is. And for a business like yours, when you're not collecting up front, like it health care is the same way. There's this lag in between when you provide the service and when you get paid, we're not McDonald's where when I go to McDonald's, I pay for the burger right away. We have this period of time where we're floating costs in order to continue to operate. And so sure you could have a month where I made $15,000 a profit. But if you've got overdue AR of $20,000, your cash flows, your out $5,000. And so what does it matter if you're profitable if you're not actually collecting that stuff? So it takes a while for people to really understand like, oh, the cash game is actually different than just optimizing for the P and L. And you, I mean, two months in, you were like, we're going to forget this out. No, no, no, I mean like it took me probably three and a half years to figure that out. And yeah, no, I mean, I figured this out six months ago. We ran out of money twice before I figured this out. And you think it would only have taken once, but we definitely ran out of money twice. And now I finally figured out because I'm like, all right, I'm not doing it in the third time. We're not running out of money again. Well, the second time, no, the second time just sucked. But the first time running out of money was actually pretty useful because I stopped spending money on basically everything I could. And I stopped spending money on ads to acquire new subscribers. And then we had to get creative and kind of focus on organic growth, which is we still haven't spent money on ads since. So the first time is blessing the second time just sucked. But it's never happening again. Yeah, not not doing that again. It took me a long time. And I like the portable toilet business because as soon as people want a book, they give us a deposit that money goes in the bank. And then they got a pay for their rental a month before the rental happens. So by the time I'm actually delivering the toilet, I'm already paid. It's all good. And if they don't pay, I just don't deliver it. Well, in like in healthcare, I would always tell people our average like days to collection was 45 days. So think about like this. If I take 45 days to get paid for service rendered, then I've got a float cost for 45 days. That's already hard enough. But what if you're growing and things are going great and you double your census or you double the number of patients that you have on paper. It's like, oh, we got all this revenue and that's amazing. Let's hire these nurses. Let's bring on more people. Let's expand to a new office. But I don't get paid for a month and a half. So how do I do that? How do I onboard these people? How do I make sure that I have the money necessary to actually grow in the right way? And like so cash flow management is incredibly important. And until you get burned a couple of times, like you have. You don't prioritize it the way you should. And then once you do get burned, you're like, never again. I can't well after the second time for me. I can't believe it took that long. I'm like, usually I learned things after one mistake, but it did take me to on that. But I am never making that mistake again. Like for the new business, the toilet rental. That's like clean, hygienic, good from day one. That I'm never making that mistake again. Anyone that we do a like a license for this for and they're operating this business outside of me. I'm not going to be a partner in it. That is going to be something we help them with where it's like, these are the numbers that matter as great that you sold 200 even, let's pick a crazy number. You sold $200,000 of ads last month. That's awesome. But some of that you're not going to get paid for two years. So you need to really be smart because we have two year advertisers now. We have two year contracts. We have people who want to sign three year contracts. And it's great. Yeah, we just signed a $50,000 deal. But it's going to take three years to get all that. So we got to be, you know, we can't just go celebrate right now. I love how you describe the toilet business. You're like, yeah, I mean, we started that up. That one's that one's clean. It's hygienic. I'm not dealing with this crap. You know, so many jokes we made in that. When we do it, if we do another episode talking about that, you can't take yourself seriously if you're making a living renting toilets. You just have to lean into that. How big is the local newsletter business? Like how much revenue are you generating a year and what is the bottom line performance? The click. So this year, or you know, probably just to go and last year last year was 240 top line and about 60 bottom line. The 240 there sounds kind of misleading because about 40 of it is an event that we do. But we donate all the profits to a charity. So that's just 40 and 40 out. It's just that's a vanity top line number, if you will. What actually got paid to me and helped me pay the bills was the 60 on the bottom line. And the goal this year, it is 400. Probably not going to hit that. It was 350 and then my sales guy was like, let's make it 400. It's made it 400. We're probably not going to hit that. You know what? I'm hoping he's listening. We're probably not going to hit 350 either. So good after Mike. But yeah, if we make 350, it should be 120 bottom line. How many subscribers did you have over the course of last year? Was it was 19,000 pretty steady or did you start really low and work up to 19? No, it grows every, it grows every month. I actually, I'll pull it up right now because I just do. I'm just going to say that it was 19,000 for the whole year. Your revenue per subscriber last year was like $11 almost. So in the last 12 months, we've gained 3,500. 12 months ago, we had 16,000 today. We have 19,000. Let's just say for argument, say 17,000 was your average subscribers in 2023. 200,000 was your top line revenue because you donated the 40,000. Well, we didn't donate the 40,000. We donated about 5,000. We paid parties are expensive. So he's been about 35 on the party and donated five. But like you said, it's an event. It's a really fun, good party. That's awesome. I'm just saying that's an event that you do that's kind of, yeah, it's a wash. It's 40 in 40 out. So that is $11.80, essentially, is 200,000 divided by $17,000. Yeah. So that goes back to that seven. I told you about the seven is super conservative. How long do you keep subscribers? What's your turn like? We lose about three to eight a day. And so in that same time period, we 12 months audience, we gained 5,368, but 1,838 unsubscribed. So the net positive was 3,530. You're churning a year close to 10%. That's actually a good churn. It is when you think about it's fine, but like also the population of an applis isn't growing that fast. And so at some point, we're going to have to start winning them back or getting them in another way. Maybe daily was too much for them. Maybe we just give them a weekly update. That's the only problem with a local newsletter is you have a smaller tab with all of that data. So what is your LTV for a subscriber? I don't actually know because I don't know how many years they stay because we're only four years in. Just do this thought exercise with me, right? Let's just say that 10% churn every year. That means it will take you seven years to turn over your entire customer. So that's the case. Your LTV is going to be seven years. All right. So 77 around about there. 77. OK. So for kicks and giggles, let's say it's $77. How do you think about your customer acquisition costs? How much does it cost you to acquire a customer? At the current point, we don't do any kind of paid marketing. So it's that's right. A little bit more complicated than you'd have to be like, well, what percentage of my writers time is dedicated to us? You know, content and that sort of thing. In the beginning, it was just very simple. It was how much do they cost to get an email address from a Facebook God. That was the only number I cared about. And so at this point, everything, when you say organic, what does that mean? It means people are sharing it with their friends, either through our referral program or they're just sending it to them. People are looking at our SEO content like we best peets in an apolis. We better than yelp for that. And people, there's obviously big, whatever popups. Oh, wait, you know, if you like this, get more that kind of thing. Best electricians, best coffee shops, all those kind of local focus. Any kind of search like that. Try to be number one for that. Are you writing all that or like who's doing that for you? I wrote in the beginning. Now we have writers to do it. So there is some cost to the customer acquisition. If you've factored in the fact that they're, they're doing that. It's just more complicated than it's not the only way up the Facebook. Yeah. Yeah. Totally. So there is some cost to it. But the referral program, there's not much cost to because our first level, our first milestone is free for us to fulfill. So that is basically just free subscribers. We have, they pay behind a monthly fee, but that is just a cost of sending the emails. What exactly is your newsletter? Like what does it look like? What are you offering in it? How long does it take for the consumer to get through it all? So nobody reads the whole thing. So if you read the whole thing front to back, it would be probably three to four minutes. But nobody reads the whole thing. It's broken down. There's a top story. Sometimes there's not always a top story, but that's usually reserved for a really big thing in town or something that we're promoting. Like it's maybe it's our party or a massive thing. Like if the president were coming to town, that's going to be the number one story. That's our headline thing. Be like the front page of the newspaper. Yeah. It's a newspan. There's an ad. Yeah. It's a space. It's a newspaper. Then there's an ad and then there's a section called Diet the Digest, which is like the miscellaneous stuff. Underneath of that, there's local business news. Like we got a new restaurant. This restaurant's closing. We got a new boutique or this one expanded or some like that. Then there's a featured Instagram post. That's just pretty makes people happy. And the real kind of value is the next one is what's happening. And that's what parties can I go to like what big fundraisers are fun? What did my what can I bring my kids to this week? What's going on this weekend? All those sorts of things. Then below that, there is a civil news section, which is like what the city counts us up to for changing laws or boring government stuff. And then a little bit down further. There's the weather. I don't know why people like the weather in there, especially since we have all these apps. And they got to know that this weather is getting put in at 6 p.m. the night before and you're reading it at 6 a.m. Or maybe noon or whatever you're reading it. It's not the most up to date forecast. And you could literally just Google and Apple's weather and get something or get your favorite app out. But I asked people if we could get rid of it and they were like, no, don't get rid of it. So we've added a couple of things there that make it a little bit more useful. Like wind speed. We're a big sailing boating town. So that's important. Water temperature is important in the summer or in the winter. Kind of in the summer too. So you can want about jellyfish, but definitely in the winter, if you're both still in the water or something like that. And then our most popular thing by far, by a mile is almost at the very bottom. It's right near my lowest tier of ads for a reason because it's the most popular thing. And I got to get people down there to the ads. It's the live music calendar. So it's got probably 80% of the music that's happening in town. It's very comprehensive. It's broken out by day, by venue. You can see exactly who's playing what time. Who is all this stuff for you? That's a lot of stuff in that newsletter. How are you systematizing it? So the live anything that's like programmatic, like that live music calendar in the sports seasons for the college sports here, that would be a programmatic thing. All that is done completely 100% by an administrative assistant overseas works in the Philippines. She's amazing. Definitely more more often do an operations assistant than an administrative assistant now. And then she also compiles all of the other stories. So we're checking a bunch of places. People are sending us stuff. She just puts it all in a pile and my editor used to be me. Now it's an actual person. She looks at it every day and says we're going to cover this, that this and nothing else. Give me five stars, write a review, screenshot that review, send it to me Nick at cofounders.com. And you'll be entered to win a hundred dollar Amazon gift card. Where does your editor get all the stories from? People just send it in or you're on Twitter all day or like, what are you doing? People send it in. We're on Twitter. We're on Instagram. We're on Facebook. We're on Facebook groups. We're looking at websites. We're going to do some of our videos. We're going to do some of our videos on Facebook. We're looking at websites where I'm press release lists. You're outbound. You're like being proactive. Yeah, we're going to look for. for it. We get a lot sent in now, which is really helpful, but we're going to look for a lot of it. Do you think this model is replicable in other cities? And if you do, what do those cities look like? I absolutely think it's replicable. I always say people are the same everywhere. They want to know what they can do in the weekends. They want to know what restaurant they can try. If the new restaurant opened, they want to know if it's worth the money, because not everybody has the flexibility like me, I get to go to these new restaurants or send some of these new restaurants. And it's a cost of our doing business or job is to tell people if they're good or not. A lot of times, sometimes the meals get comped anyway, even if they don't, the meals are right off because it's just a cost of our doing business. It's not like a typical business meal where it's just the normal right off, like we're reviewing it for people. So it's actually a cost of doing business. But not everybody has the flexibility, not everybody can go to the new restaurant and drop $400 on a meal because they got to try everything and take pictures because they got to tell 20,000 people about it the morning. So the average person wants to know, is it worth me spending my money to go to this new restaurant? And so we do that for them. Yeah, we'll work in other cities. So absolutely. People always want to know stuff like that in any city. Media is just taking a hard hit. But like especially traditional media, print media, even cable media. Why do you think your business is able to stay viable when those are like going out of style? Why haven't they adapted to becoming hyper localized to stay profitable? Why are they continuing to shut down? Probably the short answers because they're too big. This is done. I'm full time, but I'm not even full time anymore because I'm working on the toilets and I'm having fun and golfing and going, boating sometimes. I'm working on other stuff. So I'm not even really full time anymore. But I was the only full time for a while. But then I have one full time operations assistant and everybody else is part time. They're contractors. They're freelancers. And I think we have these big media businesses that have to do a similar amount of content. They might have four full time people and they're spending so much more money on it. And I think also just not everybody, I think this is a plague in the journalism world. They want to tell you what they want to tell you about. I'm a journalist. I know what you need to rereading about. I am smarter than you. This is important. You need to pay attention. And I think that's such a wrong way to look at it. I think about it the other way. What is our audience care about? Let's just give them more of that. Like I don't care if our audience cares about, this is an example of something we actually do. And it's a lot of fun. It's not something I don't care about. But it's like we review the crab cakes at all of our local seafood restaurants. And it's super fun. I love doing it. But at the end of the day, if I didn't like crab cakes, but we made a video reviewing the crab cakes and 25,000 people watched it in our town of 41,000 people, you better believe that I would keep reviewing crab cakes. And people just in this industry, I think they know better than you. And they don't give their audiences exactly what they want. Maybe they're not paying attention to what they're clicking on. Maybe they're not paying attention to what they're reading. But I think it's also a combination of they're just too big and they're they're cost are too high. They're just not thinking about it right. Traditional media is kind of leaned into editorializing things as opposed to just reporting on what is what's going on and what people are interested in. Yeah. I think it's a lot of arrogance to be completely honest. I don't think I know any better than anybody in this town. What they should think about or what they should care about. I just pay attention to what they do care about and I give them content around that. I don't sometimes care about it. But I know that other people are like we wrote a story about sharks in the Chesapeake Bay. We're right on the Chesapeake Bay here. The biggest estuary in the country. Maybe the world. It's a great body of water. We boat on it all the time and we do have some sharks in it. And I don't care and sorry. Drop my cup. I don't care at all what kind of sharks are in the bay because I never swim in it. I don't it's dirty. I'm not swimming in it. I know that I'm not going to get hurt by a shark in there. And I know that even if I do swim in it very low likelihood that a shark is going to attack me. The only reason that I would care about what sharks are in there is just because I think it's cool. And I would want to tell us a fun fact when I'm out of the boat maybe. But I'm not going to read it. We actually are my editor. She wrote the story. She did all the research. Hundreds of people clicked on it. Thousands of people actually if you combine all the emails we promoted it in. That's great. But I don't care at all. I'm not going to read it as an editor, as a publisher. There's so much this attitude that I know what's right and you the readers need to listen to me because I'm smarter than you and I'm in them. I'm doing all the research and I'm in the know. And it should actually be the other way of you know, turn the year around and listen to what they want and just give them that. You know, why are you losing readers? Because you're not giving them what they want. I've been fascinated by this space. I told you this on the pre-call. But I heard Andrew Wilkinson talk about this a few years ago and I've seen just a lot more of these hyper localized newsletters becoming popular. So your model just makes sense to me because people want to know locally what's going on. How do you scale this though? Like if you were to go and do another city, how are you thinking about growth? And you kind of talked about it earlier. But what's the plan over the next year or two as you think about expansion? So when I started it was I'm going to do the number I've always picked the magic number is I'm going to I'm just a hundred of these things are all around the country, all around the US, a hundred of these local newsletters. And when I first started, I thought that I would start and own them all. The problem with that is you're basically operating a hundred businesses at that point. And I don't know how many businesses you own, but I own two actually in the process of buying a third, but the third one's very small. And that is hard. I can't run a hundred businesses. There's no way. And it doesn't make any sense also to hire like I know that I talked about Andrew Wilkinson, Andrew Wilkinson, hire CEOs, sometimes hire CEOs to run multiple businesses. It doesn't make any sense to do that because they're all the same kind of business. And so the way that I think this works best is with a local operator and some guidance. And so that's what I'm doing now is finding people in cities that match this under 250, 300,000 person, but also like a cool city people excited to live there is lots happening. Hopefully the population's growing. It's a lot of investment maybe is a good sign. I'm trying to find some people in those cities who want to do this, but don't really know exactly how to do it and either partner with them as an actual business partner or basically license everything I've learned to them and then get this thing operating and they can get to the point that it's taken me four years to get to in one year because they don't have to make any of the same mistakes again. Like they don't need to run out of money because they're running Facebook ads too fast. They don't need to run out of money because they have no idea how to do accounting like all those things they don't need to run out of money because they don't know how to sell ads like all those things I can do just help them get to the point that I'm at faster. That's where I'm that's where I've leaned into now is the path forward to get this to scale. It's interesting because you kind of have three potential channels that you could grow into. One of them is you just own everything, but in order to do that you've got to figure out what can I centralize that is independent of local needs, right? Like what payroll accounts payable maybe the sports calendar maybe that's something like that. But because it's hyper local you need an editor his locals. So like the editing you can't really centralize because you want somebody who's boots on the ground understands that market. You absolutely cannot centralize that because that's part of the difference is I know what's going on in my town and my editor now knows what's going on in town because she's grown up here she knows the city she lives here she loves it here you can't centralize that. I am not arrogant enough to think that just because I did it here I could do it again and be the editor in Frederick Maryland which is about an hour and a half away or Cedar Park Texas. I don't know anything about those communities I've been to Frederick twice I've never been to Cedar Park I can't do it there and so there are things you could centralize and there's things you can't but there's also benefits like I didn't realize this when I first started kind of figured it out by accident when you do this and you attach your face to it and I think you should attach your face to it because I always say this people connect with people not brands so you put your face on this you become the publisher of the editor and people know you around town there are some nice benefits to that I get to go to pretty much any fundraiser in the apples that I want without paying for it. I do. I sometimes I get invited to weddings because people are like oh I would you're I would have you like you become a little bit of a rock star celebrity kind of thing and that's fun if you like it I'm I used to be super expert at super public and as I've actually experienced that a little bit I've gone very private but you still get to enjoy all the benefits of it you just go and have service level conversations and you know you don't often meet like deep deep connections of these things but you still get to go and enjoy them and meet cool people and maybe you make some of those cool connections but I don't need that benefit in Cedar Park Texas for Frederick Mary like I said those two examples I keep using I don't need to be a rock star. are there because they're never going to go there. I'm never going to live there. But somebody else can live there. And they can get that benefit. I can get a little bit of financial benefit by helping them, but they can get most of it. And I feel like that's the real way to scale. I think it'd be really interesting and you've probably thought about all this stuff. But if you found like a micro influencer in the markets that you've identified as potential markets for this, right? It sounds like you kind of have a clear thesis of like, okay, these are the types of markets that I'd be interested in. Because maybe there's somebody there who's like Instagram famous in their town, right? And that would be the person you would go after. Like, hey, I'll partner with you on this. I'll do all the back-end office work. I'll handle all the operations. And then I'll give you a rev share of everything locally. But I need you to curate, be the editor, etc. Because like, they're already tied into the community. It would just give you a leg up on not only getting users to come to the platform, but also having somebody who knows what those users are going to be interest, or subscribers are going to be interested in. I don't know if you thought about that. Maybe I'm like telling you something you already know. Yeah, that's like the unicorn. That's like, that's still, I call it the local operating partner. Like, that's still the same model, right? They just have their own followers to start with. That's like the unicorn. Someone who knows the town and has an audience. If I could find them, that's amazing. But I think in most cases, it's just going to be the person that knows the town really well. And maybe they don't have their own followers. Where are you getting these customers from? How are you getting subscribers? Email subscribers? You're talking about? Yeah. About half of our list has come from Facebook ads. About 25% has come from word-of-mouth, just people telling their friends, or using our referral program. And about 20% or 25% comes from SEO content. Like I was talking about like, best pizza place. Half of your list came from Facebook ads. Yeah. And I went all in on that. People are like, how do I grow this without Facebook ads? And I'm like, slowly. That's fine. If you want to do that, that's totally fine. But at the end of the day, if you want to get this done fast, Facebook ads are the cheat code. How much did it cost you to get the 9,000 that you bought on through Facebook ads? 21,000 dollars. Okay. Yeah. So it's over a dollar per two dollars per customer. Over two dollars. Yeah. I mean, it's a little bit. But you can either do it in 10 years, or you can do it in four years. Why? I think it's crazy. Even less. This is my favorite page in the media kit. It's the fastest growing publication in the Appless. This at Y-axis, or this X-axis goes out for 25 years. And the Y-axis goes up to 20,000 subscribers. And I actually made this a while ago back when we only had 15,000. And so there's other publications, some of them that are even bigger, but it's taken them 25 years to get where we are. I mean, my line's almost vertical. So that's the question. None of these people spend any money on reader acquisition. So do you want to take 25 years? Or do you want to take one here? That's my question. And that's, I just love showing that to advertisers because they're like, how did you do that? I'm like, Facebook ads, it's very simple. You're not going to get that kind of growth organically. And that should go viral every week. An Appalice is a city that almost everybody in the country knows. Yeah. So it's a pretty unique city. It's bigger than it is. It's 41,000 people, but we've got the Naval Academy where the capital of the Maryland, and we're very close to DC. And we have a lot of money here. So it's definitely bigger than it is. Like most people do know an appless. I'm actually not from an appless originally. I live here now, luckily, but I'm from about 45 minutes away. And I used to tell people, nobody has ever heard of my town. There's like 5,000 people in it. So I used to just tell people I was from an appless in college. And almost everybody was like, oh, yeah, cool. I know where that is. Or at least I've heard of it. What's the profile of a town that like, where would you go next to open a location? Let's say you weren't going the model where you're licensing it. Let's say you just wanted to go to open a location. How would you decide on a city to go to? If I was going to just do it 100% me, no partnership, no licensing, anything like that, distance would be important because I would want to be able to be there a lot in the beginning. Because we have a Monday weekly content meeting. And that has been absolutely incredible for the team. And I would want to be able to do that in person, not on Zoom with whatever team I was doing. And also sales are always easier in person and also just more fun. Okay, so tell me what's the size you would look for? Anywhere from that 50 to 250,000 people. But if I was, I already have the two picked out because I used to think I was going to do it this way. I would start with Frederick Maryland, which is about an hour and a half away, about 90,000 people. Really cool town. It's in the mountains of Maryland. Not that we have very big mountains, but people love living there. They got a baseball team, minor league team. They got cool bed and breakfast. They got cool restaurants. People go there. They seek it out. It's a cool town. Yeah. And then an easy other answer would be Charlottesville, Virginia. About two and a half, three hours away. You've definitely heard of Charlottesville. Yeah. It's a UVA. It's awesome. It's got a ton of great wineries, Dave Matthews wineries there. It's a destination. It's funny because you kind of want a destination, but you don't actually want any of the tourists to read your thing because they'll unsubscribe. You want a place that's really cool to live and cool to be and destinations usually are. But you also don't want a super seasonal place. But then even if you do have a destination, you just want the residents to read. You don't care about the tourists. There are other people that are going to focus on that. There's a great town that I absolutely love. I'm going to buy a house someday about cashers North Carolina. We heard of that. No. Absolutely amazing town. It's 95 degrees here in Annapolis today. July 9th. It's probably 75 in cashers. And they might even have a little rain to cool everything down. It's amazing. Towns at like 3,500 feet elevation. There's amazing golf hiking. It's beautiful. It's where I want to spend most of my summers eventually. And a lot of fall too because it's just fantastic. What's too small for this? Yeah. Because you're at 40,000. Anything under 40,000 would be really, really tough to make a full-time living. I think interesting. You could definitely do it as a cool side hustle. But it would be very tough to make a full-time living. But you don't want to town jumping back to like you don't want to town like cashers because they've got 35,000 people or 3500 people in the year-round population in the summer. It goes up to like 40,000. Oh my gosh. And you'd have all of those readers in the summer because you be curating all the cool events. But then you'd have nobody for the like there's nothing happening in cashers in the winter. There's no reason for them to read your newsletter. You'd have to go down to like maybe once a month of a newsletter, maybe two times a month. And you'd still be scraping for content. Like, hey guys, like next season this coffee shop's not going to open. It's going to be this one. But like you can only write about that so many times. So you want a destination. But you don't want the tourists and you don't want seasonal. So I live in Eagle Idaho and I've thought a lot about doing a newsletter here. I'm always looking around like I'll go to the city's website because I want to know about the new construction that's going on or there's lots of new restaurants or like whatever. And I have to like piece it together from Twitter or the city or Facebook or whatever it is. Eagle is the highest income city in the state. It has the highest. It's where a lot of the politicians, business owners, entrepreneurs, etc. live. But there's only like 35,000 people who live here. So they it fails your 50,000 person test. However, the demographic to me feels like if I was ever going to do it in some place like Idaho, it might be a worthwhile demographic. What would I need to look for? Yeah, looking at Eagle, I'm just looking at proximity to Boise on Google Maps and population. So it's really close. You might be able to get away with something like there based on your demographics. Like you just talked about you're probably a really cool place to live. I'm looking at beautiful amazing pictures of this amazing landscape. But then you also could fill in with some Boise content like people who live in Eagle are probably going out to hang out and Boise every once in a while. So you could fill in with big Boise content. Like if a Michelin star chef is opening a restaurant in Boise, people in Eagle are going to care about that. If building is getting building a new development is going up in Boise and it's going to change the skyline, people are going to care about that who live in Eagle. And so you could definitely get away with it from a suburb perspective like that. Could you get away with it if you decided to do weekly as opposed to daily? Yeah, definitely. I probably wouldn't do a daily in Eagle based on the population. And I would imagine that a lot of the news is going to be Boise news. But then you could also go a totally different way and you could add a little bit more state news into it. Like I don't cover anything that has anything to do with the laws that happen that get made here in Apples, where the state capital. So you could add that in. And it's it could be very much more of a bigger, a little bit of a bigger thing and a little tiny bit less local, especially given, you know, your number of people in Eagle 33,000 looks like seems pretty affluent. That's great. And it looks like people probably like living there. But then you also have a big city around you wouldn't do just Eagle. You probably want to do like I live in the treasure valley is what it's called like sprawling suburbia, including Boise. Yeah, maybe something more like that. Okay. So Eagle's probably a little bit of an exception to my rule, but it would probably work just as well there. I could ask you questions for another hour, but we're lumping up again. and sometimes, so let me ask you the rapid-fire questions to end. Was that cool? - I love rapid-fire questions. - Okay. - What do you love about this business? - I love selling ads. I love making, I love getting businesses to give me five dollars and then I give them 15 back. That's such a cool feeling. You know, some of these people that come to us when they're brand new in town and we have built their business with them and I become friends with them. And it must be pretty cool to be like in the know as well. - It is really cool. That's probably the second thing is people call me a man about town or you might say fun to vaunt. I love being at all the things. It's so fun to be included and to go and to see people and to know people. It is so much fun. Those are my favorite two things. - What do you hate about it? - I hate the daily grind. I hate right now, unless I talk like it's talked about. I think I talked about it with you. No, it was a different podcast I was doing early today. Actually, so we've done hundreds of these newsletters now. The first one that went out completely without my any attention for me was actually this week. It was the July 4th newsletter. On July 3rd, we have another fireworks show. And I had a few drinks and it was hanging out and I didn't really, I completely forgot that we were sending one the next day and then I hadn't actually looked at it yet. But my editor wrote it completely or the writers wrote it, she added it completely. And I saw it the next morning and I was like, oops, I totally forgot to look at that. So it took almost four years to get to a point of where I didn't actually see a newsletter before it went out. But for the most part, I do look at it every day. I used to write it every day and edit it. Then I used to just edit it. Now I just kind of look at it. But the daily grind is-- - Daily grind is hard. - And then a close second would be, and this is just my fault, 'cause I could set it up in a way that's better with auto paying stuff. But the other thing is collecting ad money. Looking at the accounts receivable that $35,000 you talked about, that's already services that have been delivered. That's not contracted revenue. I've already completed everything that is required to earn that money, except for caching the check. And I hate that part of it too. That kind of sucks. - For you, let's say you have two hours in the day, you don't have any work responsibilities, no family responsibilities. You can do whatever you want. What are you obsessed with right now? What are you spending your time on? - It depends on the weather. I'm my copoding. I'm my cosolping. I might spend time with my girlfriend. She's not working. She's a new harness. That's tough. I would probably be thinking about exactly how we structure the licensing deals, 'cause that's not done yet. I'd also be thinking about the toilet business, 'cause that's something I'm doing right now. It's the second business. And I just love it. It doesn't feel like work anytime I have to work on that. Probably one of those things. - Okay. - And then last question. What advice would you give yourself? Five years ago. Before you started this entrepreneurial journey, what would you tell yourself? - Two pieces of advice. The first one would be higher faster than you think. You're gonna be uncomfortable with it. And you're gonna feel like they can't do as good a job as you, but you can't do a great job in everything. Way too long to learn that, but I still am very lucky that I've learned it at an early age. I'm only 27. So I feel like by the time I'm 40, I'll be really good at that. And that's a huge advantage. And then the second one would be a learn how to manage a cash flow faster. So you don't run out of money ever because that is not fun. Then also, I probably would caveat the hiring thing, which is don't ever just hire the first person that applies. I did that one time. And I didn't actually, I just told somebody that I was hiring. And then they said, "Oh, you should hire this person." And I just did. I didn't do any application process. That cost me a lot of money. It wasn't the right person, obviously. And that set me back probably about six months financially. - Oh my gosh. - So, that would be part of my advice for the hiring advice. So that's a little bit of a cheating answer 'cause they gave you three. - I love it. - But that those would be my answers. And it would save me a lot of heartache over the next five years. - This has been an awesome conversation. I need to come visit anapolis so I can experience what the VIP treatment is like. - You gotta do it in the summer too. It's really fun here in the summer. It's a little hot, but anytime before or through October, we'll have an absolute blast if you come visit. - Okay. - All right. - Sounds like I gotta come visit Boise too. - You can stay at my house. If you come visit, come to convert kit. You can come stay at my house, say what's up to Nathan Barry. - Sounds great. Apparently you live in like the best summer of Boise so it's probably a great house. - It's yeah. - You know, I've received the advice of by the worst house in the best neighborhood. Maybe you did that. - I can either confirm or deny. - Is this off the record or on the record? I know you media people are always looking for God's questions. Where's the best place we're able to find you? - So probably just Twitter or X at life of underscore scoop. I only talk about local newsletters and toilets. But then if you wanna go a little duper on local newsletters, it's so funny is that you can't not laugh talking out toilets. You gotta take yourself, you can't take yourself too seriously. But if you wanna go a little deeper on local newsletters, I do write a newsletter about local newsletters that I don't update as often as I should. That's at lifeofscoop, no_.behyve.com. Those are the two best places to find me. Those are, that's what I write about everything I'm doing. - Okay man, I can't wait to check in with you in a year and hear about your poop business. - It's gonna be great. (laughs) - All right man, how'd you go? - Thanks Nick. - All right, that's it. Another one for the books, I'll fire it up. I don't know what else to say. I hope you found something valuable in that conversation. I hope you learned something. I hope there's something that you can apply to your business today, tomorrow, in the future that makes you money and makes you more successful, gives you more time with your kids. If there was something, I'd love to hear about it in the comments below, you know, give me some feedback. And if you like actionable advice and you want more of this, I write a weekly newsletter that gives insights, tips, and tricks into the world of entrepreneurship, subscribe in my bio. And if I can help you in any way in your entrepreneurial journey, don't hesitate to reach out to me. Nick at cofounders.com. Sorry Kelly, for more emails. And the last thing is, remember, curiosity is a superpower and you can use it to your advantage. As my mom used to say, there's no such thing as a dumb question. Only dumb people. We'll see you next time.