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The ability to get something and launch something is quite easy, and so the barriers are extremely low. You know, setting up, you know, a newsletter is quite easy, right?

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You, I believe, make around five hundred thousand dollars, like half a million approximately this year. How do you make that work? The quality of the journalism is what drives people to become members.

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Journalism is not necessarily that complicated. It's, like, produce really good journalism. I wrote down something you said.

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You actually don't wanna listen to your audience as much as some of these people say that you do. What people are willing to pay for is very different from what they're willing to sort of say that they want.

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The job of journalists is to spark curiosity and interest in people, bring them towards things that they might not necessarily even know that they're interested in. What have you found really does not work?

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Like, what have the failures been in trying to convert people to paid subscriptions? It is tough. Um- Welcome back to the Creator Spotlight podcast.

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My name is Francis Zierer, and today we are speaking with Jeff Sharp, the founder of Lookout Media, a local news company up in Canada. He has four newsletters across Ottawa, Vancouver, and the Yukon.

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And what's special about this one compared to some of the other local media entrepreneur types I've had on here is he monetizes primarily through paid subscriptions, about seventy-five percent mix paid subscriptions and advertising.

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Um, and he also focuses on hard news, on journalism.

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He has reporters on staff, whereas a bunch of the other people I've spoken to in this sort of new local media entrepreneur space are primarily monetizing through, um, advertising and running newsletters that are largely based on local event aggregation, which Jeff does too, but also with a lot more original reporting.

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This is a really good conversation. I hope you enjoy. You currently have four total newsletters under your businesses, the Ottawa Lookout, Capital Eats, Vancity Lookout, and Yukon Lookout.

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And I understand that this, that you're on a, a, a rate of maybe five hundred thousand dollars approximately, half a million approximately this year. Get- getting, getting close, I would say.

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Yeah, that's, that would be, like, the stretch goal. Um, but yeah. [laughs] Yeah. And so you're four years in. I think November was when you first launched. Tell me, you've got four now.

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Has it been, like, just one every year? Or how-- What's the order it's been of launching these?

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Uh, we started in a city called Ottawa in Canada and then moved over to Vancouver, um, and then did one up in, doing one up in the Yukon.

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Um, the way it sort of worked has been, like, every two years, I guess you could say.

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Uh, but I think we're trying to move into more of a one-year thing based on how things are going, but we'll, you know, we'll, we'll see. But it sort of, um...

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It's, it's, it has changed a little bit too in terms of what we're looking for and how we're doing it, which I'm sure we'll, we'll get into. But yeah- Mm-hmm... that's been sort of the timeline. Yeah. Um, okay.

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Longtime listeners will have listened to my episodes with Ryan Sneddon, Michael Kaufman, Landon Huselig, in that order.

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Uh, these guys are really talented local media, local newsletter entrepreneurs, but part of why I've been looking forward to speaking with you is, from everything you've told me about how your business operates, it's a little different.

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These guys are doing largely event aggregation and advertiser-supported. These are free products. There's no subscription.

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You bel- I believe, make around seventy-five percent of the revenue comes from paid subscriptions, twenty-five percent is from ads. So it's a very different business.

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You're also more trafficking in actual news, in hard news. You do do the event aggregation, um, but it's a lot more than that, correct? Yeah. You summed it up really nicely. [laughs] That's, that's my job.

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[laughs] Um, okay. How do you make that work? Like, if, if, if I've talked to all these people who have this really solid model, and I haven't really...

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I mean, I've spoken to some people who, who do, do more, like, actual reporting and, and producing original information.

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I'm thinking of this one person in particular, Umberin Ali, who I spoke to last summer, and she runs this grant-funded journalism project in, in New Jersey. There are paid subscriptions, but they monetize through grants.

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And so my basic understanding is that it is relatively easy to s- not, I mean, let's not say it's the simplest thing, but it's relatively- Mm...

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easy to spin up a events aggregation, advertiser-supported local media company than it is to do what you're doing, which is more reporting based and more subscription based. What makes it work?

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Which is a big question, but, like, we'll, we'll go out from there. Yeah.

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Well, I think the first thing, just to talk on your point about, about growth, I think we've kind of entered a world where, like, you know, spooling up Facebook ads, you know, setting up, you know, a newsletter, you know, a Beehiiv, whatever it may be, is quite easy, right?

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So you've... We're in a situation now where I think the, um, the ability to get something and launch something is quite easy, and so the barriers are extremely low.

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You know, if you have a couple grand, you can get a newsletter going, especially on the local side where ad costs are quite low, um, pretty fast.

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And so for a lot of people who are starting them, they're, you know, more entrepreneurs, right? They, they, uh, they see an opportunity, the... and, and there definitely is opportunities there.

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But a lot of them are not necessarily what you'd say, like, are, are journalists, right, or, or want- Mm... to work with journalists. They're more interested in sort of, yeah, the events.

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You know, look at 6:00 AM City and what they're doing. It's an incredible little, you know, little, quite a big, uh, business that they're building based on good news and, and event curation and things like that.

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The way I've sort of approached it and when we started it was, um, saw a market opportunity for building something that was a little bit more news heavy, focused on newsletters, you know, bringing in a little bit of, like, Axios, Puck, even a bit of 6:00 AM City as well, um, and delivering that over email.

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And so the reason we went that route was, you know, two reasons. One, my former co-founder was a journalist, and so it made sense to do that.

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And second, you know, my background in, in work that I've done lends itself to building that type of product.

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I actually did, you know, a long time ago, experiment with, like, just a, a good news newsletter, and that, you know, that was interesting too.

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But, um, you know, what w-we sort of pushed into was, okay, like, we have this experience with journalism. We know how to do this. We know that there's models out there that work really well.

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It's my background, having worked with journalists, you know-And I, I, I run like, you know, marketing. I do my own sort of agency work. Um, you know, paid growth acquisition, membership engagement, things like that.

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I've worked a lot with nonprofits and charities, so I also understand how to turn someone from sort of a engaged reader and user, and push them towards actually making sort of a purchase decision, um, giving up their money for something that's maybe a little bit less tangible than just a product.

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And there's a lot of steps to go into, into doing that, that just a lot of... You know, quite frankly, a lot of people just don't necessarily know how to do.

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And, and I can totally understand why a lot of local newsletter operators are staying away from that type of stuff because it does take a certain, I'd say a certain set of skills and mindset and, like, you know, ability to work with, with journalists and things like that, that allows you to sort of push into that space.

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So not everyone, I would say, um, can do that or frankly, frankly should do that.

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And there's positives and negatives to, to either sort of business model, um, but we've found a really good medium between all of them and how it all works, which, you know, I'm sure we'll talk about as we go. Yeah.

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Okay. There's, uh, the... Basically the entire rest of the episode is contained in, in all the [laughs] things you just, you just put down there. [laughs] Uh, but, but something I wanna talk about first.

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Um, when I first met you, about a month ago we spoke, uh, I wrote down something you said. You, you were giving me this contrarian advice- Mm...

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that you actually don't wanna listen to your audience as much as some of these people say that you do, right?

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Like, if you just ran surveys and what does, what does your audience want, you might end up just realizing that, oh, they just want events aggregation. They don't want hard news. Don't poke the bear.

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Don't put in anything that could be polarizing in any way. Um, and I wrote down what you said.

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You said, "If we followed what our audience wants, we would just be an events newsletter," and clearly that is not what you do. That's not what you want to do. Um, tell me about this.

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If, like, if the au- I guess this is a, this is a matter of re- revealed preferences, right? Yes. The audience might say they want this one thing, but they actually do want this more complex product.

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And, and, and I certainly said that not to be contrarian. I think there's certainly elements of, like, you have to listen to your audience, and we absolutely do that. We're doing a lot of surveys.

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We're, we're constantly looking and seeing what engages people.

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But you have to, especially if you're in sort of this type of space, you know, making editorial decisions about what you wanna cover and things like that, you have to choose what you don't do as well, as well as what you do.

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And so again, it comes back to, like, understanding where you're approaching things. So like, you know, there's, there's... Journalists could write about anything, right? Mm.

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Like, there's millions and millions of things to write about. But by choosing what they do, they set their editorial standards of how they wanna cover stuff.

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And so for us, you know, we always see lots of clicks on events. Readers tell us time and time again they come to us for events.

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But if we became a purely an events-based, um, newsletter like a lot of other places, people wouldn't really be willing to pay sort of that $100 a year, $10 a month to support us because, you know, you can go out and find events in, in a lot of other ways too.

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There's a utility function, of course, of, of saying, you know, "Give me events," and that type of thing.

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But the reason we've stayed away from that and don't listen to our audience in that regard is just because we know that by, um, putting together really good journalism through testing, through seeing what, uh, sort of gets engagement, that what are- people are willing to pay for is very different from what they're willing to sort of say that they want, right?

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Mm. And so I think for a lot of these other newsletters, it makes total sense to go that route because they're not doing a membership, um, and paywalled funded model, whereas we are.

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So we also don't necessarily just listen to, like, what people say they want in terms of story topics either because, you know, the job of, of, of a media company and journalists is to, you know, spark curiosity and interest in people and, and, and bring them towards things that they might not necessarily be...

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even know that they're interested in, right?

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So if I only did what people told us to cover in terms of topics, it would be an event-based newsletter and a, uh, and a real estate, uh, based [laughs] newsletter because that's what- Well, part of, but, but part of running a media company and having, making editorial decisions is, is giving an audience what they don't know that they want.

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Exactly. Exactly. And so from that standpoint, you don't wanna listen entirely to your audience.

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I think taking cues and knowing where those guardrails are about what you should do and shouldn't do is super valuable, and a lot of traditional publications do not do that.

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But I would say if you're almost looking at it as a spectrum, you've got, like, on the far side traditional news outlets that, like, don't really a lot of times listen to their audience at all.

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[laughs] And then on the other side, maybe you have people who are entirely listening to their audience and, and shaping it entirely that way.

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You know, we sit in that middle spot where it's like, yes, we will hear what people say, but we know the topics that people are willing to pay for, and we know what our audience, um, is willing to engage with.

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But we also have the editorial stuff that we're focused on, and, uh, that's what keeps people sort of opening the newsletter and engaging. [whooshing sound] Hi there.

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My name's Tom, and I'm the producer here on Creator Spotlight.

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I promise we'll get back to the episode in about 30 seconds or so, but just before I sat down to edit this episode with Jeff, I was looking through our YouTube analytics, and I realized that around 70% of you that regularly watch our show are not actually subscribed to the channel.

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And I thought that was wild. But then I thought about it a little bit more, and I realized that's kinda normal with YouTube. I'm the same.

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You watch the same videos over and over from the same channels, and YouTube just keeps recommending it. So you don't actually need to subscribe. But the thing is, we've got some new content in the works.

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As well as this w- regular weekly episode that we do, we're gonna be putting out some breakdown videos, highlights, and some new formats that are gonna shake things up a little bit. So make sure you're subscribed.

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If you wanna learn the absolute most from the creators that we have on, then subscribe to the channel, and we'll repay the favor by trying to improve the videos every week and put out more content for you.

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[whooshing sound] Yeah. Um, okay. Backing up a little bit here. You are not a journalist. Uh, you founded this with somebody who was a journalist who no longer, who you no longer work with. Um, I, I...

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It strikes me that that is probably a big reason why you've had some success.

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I think that I see people who, uh, maybeHave a, a background in journalism, but they never really had much of a background in, in the business side.

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They weren't really exposed to that, and it's often harder for these people to set up a business like yours and, and, and build these structures, build these, these revenue streams. Um, say a little bit more...

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We don't have to do a full history of your career, but, like, in as much as you've worked in non-profits, I believe you've done some work with the government, like what is this work you're alluding to where you worked a lot with journalists and that has helped you understand how to do sort of both sides of the bus- of this business, which is the business and the editorial p- side?

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Yeah. So I worked in sort of the non-profit media space for a while. I did sort of like, um, started like a social media page and then started working with journalists to like write different stuff.

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But a lot, I would say, like most of my experience that comes to bear here is just like working, I guess, in like a team setting you could say, or, or running sort of agency stuff.

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So I think, you know, the experience of working with, you know, a team and, and journalists is basically like, you know, you have to set the direction of what you want and then put sort of guardrails around like, "Yes, this is what we wanna cover, don't wanna cover."

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Um, you know, and, and the skills that I'm sort of bringing to the table with these journalists is like they don't have to worry about the business operations. They don't have to worry about the audience growth piece.

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They don't have to even worry about necessarily generating, uh, members or, or revenue per se.

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It's giving them sort of the, the tools to work with, you know, how we want these stories structured, and then also like working with them on stuff that does resonate with, with them and guiding them that way.

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And so, you know, I, I, I... Not to get too deep, deep into it, but I... The, the process I use for this and my agency and all the other stuff I worked on is the, um, uh, Entrepreneurial Operating System by Gino Wickman.

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I'm sure other of your guests have talked about it.

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But that has been sort of a way to unlock, um, you know, everyone's ability to do stuff by just having a clear business structure of how to approach, you know, quarterly goals, yearly goals, what our values are.

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Um, using all of that has really helped, I think, unlock, uh, everyone's expertise in being able to work together on this, uh, um, on this stuff.

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See, that's really interesting you say that because, you know, it's, AKA EOS as it's abbreviated, um, I don't think it's ever come up on this show, though, you know- Mm... as an employee of Beehive.

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Like it's something we've, that I believe we use, um, at Beehive, and I've, I've bought the book because I knew we were using the, that EOS, and so I wanted to read a little bit about it.

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But I think this is precisely like y- I mean, you say it kind of offhand, but I think this is precisely the difference that like a lot of people who don't have that, any background in business and just producing editorial, um, they wouldn't have heard of that thing.

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And like they're, like these kind of like ways of structuring a business and structuring a team and like splitting up functions and stuff that can be kind of table stakes for the modern entrepreneur.

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I think the modern journalist who's becoming a creator journalist isn't necessarily as exposed to those things, right? N- no, totally. I mean, for journalists, like, like I've said, I've worked with quite a few.

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They're mostly focused on just writing really good journalism. Yeah. And, uh, and, and for a lot of them, it's, it's, they don't think about that other piece, and that's not their job necessarily either.

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And so that's where, you know, I've come in and been able to help is say like, "Look, like I can plug you in as a, as a local journalist in this city.

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I can plug you into this system that we know works, you know, these templates that work, this approach to membership that works, the type of stories and sort of product-based newsletter that- that's gonna actually drive members and signups.

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And, you know, you can have the, your editorial focus on sort of building out sort of the best stuff in, in the city."

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And, and, um, and so that sort of approach of like taking a real business lens on stuff is not really something, I think... We're going back to like some of the, the other local journalists you, you mentioned.

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A lot of them are more entrepreneurial- Yeah... and are probably thinking that way, but they're not necessarily doing the journalist stuff.

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So my role a lot of times is like bridging that gap and serving that function to like elevate and, and bring the journalism more to people in a way that's actually gonna like generate good revenue, you know, for the business and for the journalists.

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Yeah. Um, how much of the revenue, let's say if you're hitting that, uh, half a million dollar run rate, how much of this revenue are you putting back into the business?

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'Cause I think you, you make your living through your agency, Sharp Strategies, right? Like this, you don't... Do you pull a salary from, from Lookout? Well, yeah, and I try to be transparent about this.

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I mean, te- technically, I've, I've, quote unquote, "lost money" on it 'cause I gave a l- I... Just not to get too deep into it. Yeah.

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But I, you know, I gave a loan to that business to, to start it and stuff like that, and I haven't paid it back, but I don't need to. But it, it is a...

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It is profitable, so I should make that clear, but I'm putting the profits back into the business. So I have not paid myself any like salary or, or dividends or anything like that.

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Like my focus is purely on like growing this into something that, um, you know, can be sustainable in a lot of different cities, right?

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At some point I will, I will have to as I sort of move away from doing all my [chuckles] all my- Yeah... other work. But, um, you know, for me, it's, it's...

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I'm, I'm fortunate enough that I've got, you know, my other agency work that, that helps, you know, pay the bills, and I can focus on this as sort of like a long-term business piece.

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And then, you know, like, for me, it's like, well, if the choice is between paying myself and I don't need to and hiring another journalist, I'm gonna hire another journalist every single time. [chuckles] Yeah.

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Well, and this is, this is, I think, a difference from the, the other folks I've talked to who are like so... Like they put all their time into this, and they want it to be this lifestyle business for them.

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And like they don't have to add, add a journalist to the mix, right? That only complicates things.

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So I think you're rare in that you are kind of prioritizing the journalism, and it is important for you to, to put the money back into hiring journalists. Um, so your team, it's four people, right? Yeah.

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So I can talk through the team function. Yeah. So like, uh, yeah, my, uh, uh, my role is sort of the, you know, CEO, visionary if you- The publisher...

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the EOS publisher, that, uh, the EOS model, visionary, operator, all that type of stuff.

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And, and technical term would be publisher, but I also serve as like the managing editor of like reviewing content, working with the team, stuff like that. So- You do some of the writing sometimes too, right?

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I, I do do some of the writing too. So I actually, uh, really enjoy, uh, doing like food review writing. So like I, I could talk about that in a second too. But yeah, the func- I've read your burger reviews. Y- yeah.

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[chuckles] There you go. [laughs] Um, so there's like, uh, each city has its own sort of like journalistUm, they also have, in, in Ottawa, we have, like, a food writer, um, as well.

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I do food writing in, in, in Vancouver as well. And so, like, basically right now it's, like, one journalist in each city. Um, ideally there's, like, a food writer there. And the journalist is doing, like...

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There's a mix of everything, so when-- Not to get too deep into it. Please do. But those are basically the functions.

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We also just hired a salesperson, and we're trying to hire a- another person, another journalist to help with both publications as sort of like a senior, um, editor. And so the... Yeah, we, we just hired a salesperson.

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I already mentioned that. And yeah, so the functions are basically, like, the journalists do, you know, all the writing, things like that.

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I'll help pitch in, um, on sort of like the newsletter product, so it's a three-times-a-week newsletter that goes out. Each-- We're not churning out like two to three articles a day.

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It's like one article per newsletter, bit more in-depth. So the journalists are working on sort of the really in-depth journalism piece.

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I'm pitching in on, like, putting the events in the newsletter, and they're writing other newsletter summary stuff. And then we have our food writers, quote unquote, my, my colleague in Ottawa and then myself.

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Uh, we're doing, like, pretty in-depth restaurant review stuff, so think like New York Times-style Mm-hmm...

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reviews, not cl-like click, clickbait, um, [tsking] uh, like, you know, TikTok stuff that you see and, like, paid reviews. We don't do that.

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So we're going very back to, like, old school way of sort of, um, restaurant stuff, and that's been incredibly popular, and we just, like, held an event too, which I can always talk about as well based on that.

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Um, but yeah, those are sort of the functions right now that the team does and, you know, I try to let the journalists stay focused on, um, you know, journalism, but they'll help, like, you know, upload stuff to, to Beehiiv and, and- Yeah...

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things like that, and that type of stuff. But, uh, we are sort of figuring out, yeah, like, how do you, how do you build this sustainably?

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And there's quite a few publications out there that are doing this in a similar way, so there's lots we can draw from, which is nice. Are you tired of explaining the same thing over and over again to your coworkers?

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That's G-U-I-D-D-E dot com. Yeah. Uh, I wanna talk about the food aspect for a second, so you mentioned New York Times reviews. I'm a, I'm a big food guy. I read a lot of New York Times food content, Eater, et cetera.

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I think it's worth noting how, you know, it's, it's expensive to do this well, and it's the typical, you go to a restaurant three times. The New York Times as well, Pete Wells, who, he left, I think, last summer now.

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But, um, you know, he was k- kinda one of these last pseudo-anonymous, uh, critics, and now they have two people who, you know, their faces are quite public, and they're even doing video content.

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So it's like even this, like, kind of bastion of food criticism- Mm-hmm... is, is changing. Eater as well, I think they, you know, they've done a layoff at least once a year for the last three years.

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Um, and they've restructured a lot, and now I don't think they actually have, like, a full, at least in New York, a senior food critic on staff.

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Um, all of which is to say, like, it's been interesting and a bit sad watching these things change.

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Um, so I'm wondering, like, e- especially that you have, like, a dedicated, uh, a, a, you know, food, food journalist on staff, how do you guys make it work?

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Like, what are the editorial standards you guys practice for, for food journalism?

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Well, and, maybe just on the business side, total transparency too, like, the food stuff doesn't necessarily, um, isn't really that profitable. Mm.

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But what it does do is a real retention aspect of, like, another piece that you can plug into the news that helps keep people and engage them in a completely different way. Yeah.

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On the, on the editorial side of stuff, like, when it comes to journalism stuff, like, it, you kinda have to... You, you have, like, a set of, like, ethics that you follow and things like that.

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But, like, if you're a s- you know, a single journalist doing something, like, you, you can do whatever you want. So it really comes down to, like, you know, your values of how you wanna run it- Mm...

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and being consistent on that. And for us, you know, we don't take payment for a restaurant review. If someone, like, pays for a tour or something, we're very clear on that.

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And it's just, people really app- And the, it... I would say the way to think about it is in the age of where, um, you see these TikTok videos where it's like, "Come to me.

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Come with me to this amazing new restaurant," there, you know, there's a utility piece of food journalism where it's like, "I need to go find somewhere to eat. Where should I go?" Mm. That's great.

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But then there's also the, like, "I live in my city, and I need someone trusted to tell me where to, where to go and what to eat and, and what I should do with my afternoon."

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And so that's the spot we've really broken into, is, like, building a trust piece. So it's not just our- Yeah... brand that people trust. It's the food writer themselves.

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So we have a picture of them in the newsletter so people know who they are. This person is not anonymous, but, um, you know, they're also not just going to really expensive places, right?

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They're going to these affordable mom-and-pop places, you know. The, the new family that just moved here five years ago from Sri Lanka has opened up a Sri Lankan restaurant and is doing incredible stuff.

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And that's the type of stories that we wanna tell is, like, the local fabric of the city. And while, you know, people are not willing to pay for this stuff in the same way- Mm...

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that they would with news, and we've tested this. We've won a paywall on our, [chuckles] on our food stuff. What it does do is build up trust for ancillary stuff.

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So we ran our first event recently, you know, $120 tickets, sold out in a week. You know, we've got more plans to do this. Um, there's advertising, which also works for the food stuff.

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But it really helps solidify the mission of what we're doing, which is trying to help people understand and live their, you know, best life in, in, in the city. And the food journalism comes from that.

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And so once you break that trust of, like-Oh yeah, you can pay us and we'll write something nice about you. Yeah. You know, you lose that trust instantly.

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Like, trust is so hard to build and so easy to lose that you just have to sort of stick with what you're doing.

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And so, you know, I, I think that I've never been more excited about local journalism and even local food journalism, even with the stuff that's happening.

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And so, um, I just see it as sort of a, a, a big component of, of what we're doing.

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Even if it doesn't generate members, it still has a huge role to play, um, in sort of that intangible stuff too that maybe is, like, a little bit harder to measure. Yeah.

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Well, on the intangible, you, you just kept bringing up how this builds trust, right? Um, tell me a little bit about how you guys build and maintain that trust.

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Maybe do you have editorial guidelines, style guides that you, like, set from the very start and have just remained, like, ironclad? Um, tell me about that side of it. Yeah.

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There's just standard journalism practices about, you know, fact-checking, getting sources, stuff like that.

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So, you know, we follow all of that stuff, but if that was enough, then there wouldn't be a trust gap in journalism, right? [laughs] Yeah.

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And I think what we're trying to do with this and why email is so effective at this is because you can build not just, like, a relationship with the brand, but a relationship with the journalists and the people who are writing.

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So to give you an example, like, we... You know our journalists in Ottawa, um, can't go anywhere and do events without being stopped by people saying, "Hey, I read the newsletter. Hey, I love it.

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You know, thank you for everything you're doing." And, uh, you know, when you used to work at other publications, and that never happened. Yeah.

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Uh, even some of these other bigger publications, this doesn't happen to these journalists.

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And so you see this with, like, um, you know, Puck and some of these other newsletters where there's a level of trust that's built up in the institutional brand, but also in the individual.

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And we're obviously seeing this with, you know, the massive creator economy and everything else. But for us it's, it's a combination of the two.

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So you know what you're getting with our brand, but then you also build that trust with the journalist who- Mm-hmm... who you see every day in your inbox.

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And so this is just a person who's, like, delivering you the news and is a, is a trusted source. And so again, though, it's a, it's a fine line of, like, how do you not break that trust?

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We get some complaints sometimes about different things. But I think if we... Again, if you're only listening to what your audience says, they would... You know, we wouldn't cover hard news.

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But that hard news by, you know, us sourcing these issues and bringing it up with people has built a level of trust that, um, you know, allows us to do a lot of interesting things and, and has built a really strong brand.

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[lips smack] And, uh, gets people to pay for it. So I know that- Yes... at the, uh... Around the beginning of the year, I think, I f- I can't remember if this is another podcast I listened to or an interview you did.

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You said that there were around 2,500 total paying members. I believe that most of these people are paying on, on an annual basis, not a monthly basis. Um, and I wanted to, like, break a lot down around this.

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But the first thing, I wonder... So I typically see two reasons that people pay for creator or new media products, right?

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One is to get information they can't get anywhere else, which that's why you're doing hard news, right? And then two is just kind of to support the creator or the endeavor on principle.

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So it seems like people pay both of th- these, both of these [laughs] reasons, uh, influence why people pay you. I wonder if you think there's any other reasons besides those two.

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Um, well, I'll have to fact-check you on that. We're actually at 3,000 members now, but that's- Amazing... 'cause I... Yeah. So I... Us- We, we were at 2,500 before. We just hit 3,000.

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So it's, um, yeah, it's, it's, it's growing fast. But I would say, I would say those are sort of like the two main reasons, right? Like, and there's obviously a million different models of, of how to do this, you know.

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Again, with, like, Puck News, you're, you're getting... You're paying to get these, like, insights into this industry that you need to know- Yeah... for your work. For your job. It's a great- Mm-hmm.

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Yeah, for your job, like Financial Times, that type of thing. And then there's, like, the nonprofit news outlets where you're paying to support, uh, the journalism that you're seeing, and that's a model that, like,

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really works really well.

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And we're trying to bring both of them together, and I would be totally frank to say, like, I don't think we've found the perfect model between the two yet, but we're getting closer to it [laughs] Yeah.

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Um, in the sense that, like, by showing... You know, our, our model works this way. Basically, we have a paywall on, like, you know, a couple stories a month, and then...

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But you're also paying to, like, you know, support the, the journalism, and that's a lot of the messaging that we use.

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You're also getting a couple other perks like, um, you know, discounts to events, first access to events, um, eventually, like, commenting features, things like that. Mm-hmm.

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So we're always trying to think about what that mix of things, um, is.

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And, like, you know, if anyone is thinking about doing this type of journalism too, I highly recommend or, or, you know, news stuff, checking out The Mill, uh, UK.

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It's a UK publication that we've copied a lot of stuff from. Based in Manchester. Yeah, Manchester. Mm-hmm. And they have a whole network of, of things now. And so we're trying to do a bit of that.

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And, and I would say, like, the, the quality of the journalism is what drives people to become members because they see the stories reflected in the places that they, that they live. Mm-hmm.

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And one thing we've really pivoted towards recently is, is focusing more on, like, neighborhoods, and so, like, what's happening in this community. And so by bringing it even closer to people, people are being...

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are willing to say, "Hey, I need to know what's going on in my backyard. You know, I'm willing to become a member to do that."

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And, and, and so we're thinking about, like, more models around that, whether it's, like, you know, neighborhood newsletters like what, um, Block Club in, in Chicago is doing, or just like, you know, sort of subject mat- topical newsletters that are related to certain niche communities.

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So yeah, it, it's a whole sort of like, you know, just experimenting to see what works and- Yeah... you know, talking to the audience and, and sort of seeing where the metrics are.

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But, you know, w- we haven't figured out the perfect model yet, but the mix of the two seems to work quite well. Uh, one brief aside e- the, with The Mill in Manchester.

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I'm always curious if independent media operators are, like, talking to each other and trading notes.

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Are you kind of just, like, watching and, and, and learning, or have you spoken with the people who run it?I've- I'm creeping from afar.

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[laughs] I, [laughs] I, uh, I sent them, uh, sent the, the, the owner there a message, and we never ended up, uh, ended up connecting. But you can make... You can connect the dots in terms of, like- Yeah...

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what places are doing. Like, I would just say to, like, take, like, a 40-foot, you know, moving it really high up is, like, journalism is not necessarily that complicated.

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It's, like, produce really good journalism, which, like, The Mill is just, like, you know, they're producing incredible stuff, and they have just a great team of writers, and so I think that is a big part of it. Mm.

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Um, if you're doing that, then, like, as long as you have the business model stuff in place, you can... I think it's a, it's a good time to be doing this stuff. Yeah. Um, okay.

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So I understand, I don't know if this has changed as well, but I understood [laughs] from one of these podcasts that around 25% of your revenue comes from a yearly December membership drive, which, you know, makes me think of, like, growing up and listening to the radio on the way to school, and the local radio station doing these membership drives, right?

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Um, I, I think I've seen more people doing this.

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I know Project C, um, longtime listeners will know Liz Kelly Nelson, past guest, like, they've re- recently been doing this kind of th- I think it's 32 independent journalists involved.

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Um, anyways, point is, these membership drives seem to work really well. Tell me about your membership drive system. Yeah.

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So, uh, this is modeled off of what nonprofits and charities have known for a long time, which is that, uh, and, you know, NPR being a great example of that, is that campaigns as a mechanism for raising money work really well.

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Um, and this is, like, uh, uh, I would say, like, the media space is, in the last, like, five to 10 years, has finally started catching up to what, um, nonprofits and charities have been doing a lot of.

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Like, a lot of their revenue, vast majority comes from email. Mm. Um, sort of like direct marketing type stuff, and like e-commerce companies, same type of thing, huge revenue in email.

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So, um, the way, uh, I approach this stuff and, like, the publications that are doing, um, this type of stuff too is, like, you kinda think of it as sort of like a, you know, it's a big marketing campaign.

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But there's a few, like, component pieces that, that really go into that. So the first is some sort of like, you know, um, mission or hook, right?

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So on our journalism side, it's like, you know, for us, it's, it, uh, recently was, like, there's this big development happening in Ottawa that a lot of people are concerned about. Mm.

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So we launched a crowdfunding campaign to say, you know, "We're gonna cover this story in depth. You know, help g- you know, become a member to help support this."

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So having some sort of mission tied to that is re- is, for us anyway, is really important because it's not just, like, "Give us money so we can write." You have to put that meta-narrative on it, right?

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And so, um, having a sort of like mission around it, storytelling, sort of creating some sort of arc around this type of thing over, like, a month period, right?

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Where it's like, "Here's the issue that we want to address. Um, hey, we just wrote about a story about this, and this is what we discovered. Now we wanna get more in depth into it.

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Okay, we've got five writers who wanna write this story. Like, that's why we need this money. Um, okay, we're, we're now short. Like, we're a week out, and we're still, like, you know- Yeah... 20 members short."

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It's like

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creating a story around what you're doing is incredibly powerful, and, like, I see a lot of local onsh- local media guys doing this already just in different sort of functions that aren't really, uh, memberships.

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So in creating the story, [laughs] and what it does is it gi- it, it allows, like, the consumer to be a participant in the story. Like, that's the goal- Exactly... of the story. Yeah. Exactly.

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And so that they feel like they're part of it, right, and they want to support it. And, like, because we have a real work that they're doing, they know that something will come of it.

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You're also setting, like, a target and a timeline. Mm. So, like, "We need 30 new members to fund this series by October 31st."

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And so setting that deadline helps anchor it in people's minds that something has to be done by this point. Mm.

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And so putting that timeline really does help drive a lot of stuff, and we do see, like, you know, 30% of members maybe come in in that last, like, maybe week out of a month, uh, month campaign.

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And so it's like, you know, tying a lot of these little pieces in to create, like, a campaign arc does so much better than just, like, "Hey, can you choke... throw us three new members to [laughs] support us," right?

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Yeah. It's like giving people a reason why, and a story can be very compelling.

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And that, you know, nonprofits and charities have done this, you know, incredibly well, and, and p- news publications are increasingly starting to do it more. Mm-hmm.

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Um, really quick, I wanna talk about the, uh, the pricing. I understand that you have different pricing for the different newsletters, um, be- based really on, like, the competition of the market.

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It's much more competitive in Vancouver compared to Ottawa, so you've had to price it a little lower, right? Yeah. Pricing was sort of finicky. We've, we definitely fooled around with, like, a bunch of different pricing.

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Like, we tried it, um, you know, m- quite a bit higher. Didn't really work, so we've lowered it down. Like, Ottawa's $125. Vancouver is $99. For a year. For a year, exactly.

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And, and like I said, I think about 75% of our, 80% of our members are paying yearly, and we optimize for that. So the discounts are usually, usually yearly, not monthly.

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And, uh, well, also actually I meant to ask, too, regarding the December drive, is that discounted at all? Yeah.

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So usually what we'll do is we'll start it, run it for, like, half the time without a discount, introduce a discount as part of it. Um, generally speaking, it'll be our biggest discount of the year, too.

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Um, so people know, like, that's coming up, and, and, you know, we can say it's the, it's the biggest one. And so we do get a ton of members from that as well because there's an- that anticipation. Mm.

242
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And it's the end of the year, so people know that there's, like, a, a real hard deadline there. [laughs] Yeah.

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Um, on the pricing side too, like, like I said, we tried, um, you know, paying for the food journalism as a separate subscription, then, like, combining the two together as, like, a discounted one.

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And then so we've tried a bunch of different things. It's been very messy, but the last year we've definitely nailed it down and feel pretty good about, about it. But it does depend on the market too, right?

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We, we tr- With the- Yeah... with, with the food journalism, sorry, really quick. So you also have, like... Y- you've got a separate food journalism product for Ottawa, but not for Vancouver.

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For Vancouver, it's just part of the, the one product.By his name We d-- it, so it, it, that is actually just like purely technical.

247
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Like we shouldn't have [laughs] frankly done it that way because of the way like Beehive works, we really should have had it under one thing. You have to pay more.

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So, so the way Van- the Vancouver one works, and this is what I would recommend, is like we have one website. And so it's, again, it's a bit like ad hoc-y. Like there's not really a, a perfect situation.

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But the Vancouver one is like we have the main newsletter list, and then we have a, a food list, but the, um, the, the p- the paywall on the website is on the news website.

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So we just link, we sync memberships between the two. So like the free ones are all on the Beehive, um, uh, food list so that they can access all the paywalled stuff.

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And so it's, it's, it's a bit like y- you're working with like, you know, the tools as they are, right? So like uh, a multi-publication type thing.

252
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The, the challenge we've run into with Ottawa, not to get too deep into it, is like sharing subscriptions, different websites, different brands.

253
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Like when we go forward for the rest of our publications, we'll definitely, um, be keeping them under sort of like one brand. It's worked really well in Ottawa, I would say. Mm-hmm.

254
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But it's more just like it adds another website that I have to manage [laughs] Yeah. Which is less, uh, less fun than, uh, than, uh, doing just, uh, one. Yeah. Uh, last thing on paid subscriptions for now.

255
00:37:45.724 --> 00:37:53.544
Um, you mentioned a- again just now that, uh, people weren't necessarily being converted on the, on the food journalism. What have you found really does not work?

256
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Like what have the failures been in trying to convert people to paid subscriptions? Uh, well, recently actually I can, I can talk about one.

257
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Like we, um, we just, uh, did, uh, so the FIFA World Cup is coming to Vancouver- Yeah... uh, as part of everywhere in, in, in North America. To Thomas Müller's Vancouver. Yeah, yeah, exactly. Right?

258
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It's, uh, it's, he's, he's ours now. Um, but, uh, y- you know, we, I've had a theory that this would, you know, engage a lot of people and be a thing that would drive a lot of membership stuff.

259
00:38:22.384 --> 00:38:26.614
And it, and it hasn't really necessarily done that in the same way. And so like- Mm...

260
00:38:26.624 --> 00:38:42.644
these individual like issues in Vancouver maybe are just like less resonant than a place in like Ottawa, let's say, or we just didn't get enough, you know, free engagement on the survey to like determine that this was actually an issue that we should or shouldn't run on.

261
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That was alerting for me, like we need more early signs to, to push forward on something like that. So that's been a, that's been a big one.

262
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Um, I would say the, the people not willing to pay for food journalism is another one. Like godspeed to all those, you know, people doing Sub Stack food journalism stuff. Like it is, it is tough.

263
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Um, so that's been another one on the membership side. Um, getting the paywall stuff right has been a real challenge, I would say.

264
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Like, uh, we just tried, um, you know, really discounted like $1 for three months type, uh, discount and- Just as a way of like, let's see if we can get them addicted to it kind of.

265
00:39:19.424 --> 00:39:21.413
Y- yeah, exactly, and like didn't work at all. Yeah.

266
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And now that may just be like we didn't push it properly or that type of thing, but, um, uh, you do see a lot of this in other subscription-based, uh, publications where you're doing like $1 for, you know, six months, like, you know, $10 for a year, and then a higher price thing.

267
00:39:35.664 --> 00:39:45.954
Um, I don't know, it just doesn't seem to work, and I think maybe one theory is that like it's not a publication that you need per se- Mm... in the sense of like, you know, like a- I could just-...

268
00:39:45.984 --> 00:39:50.974
like a business journal... Google Maps and look at the stars and check out some reviews. Well, and that's it, for the food journalism especially. Yeah.

269
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It's like it's more of a utility function, and so like, uh, that's why the writer of it, you know, is more important.

270
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So yeah, there's been like a few little things like that, but I think we've gotten the membership stuff to a better spot now in terms of what we offer.

271
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Are you tired of explaining the same thing over and over again to your coworkers? It's time to let AI do the explaining for you.

272
00:40:08.924 --> 00:40:16.964
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273
00:40:17.044 --> 00:40:25.484
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274
00:40:26.024 --> 00:40:39.284
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275
00:40:39.464 --> 00:40:55.304
That is G-U-I-D-D-E.com. You said that, um, that, that Lookout is profitable. How long did it take to reach profitability? You've been around for four years. Um, I think like, it, it, profitability is tough, right?

276
00:40:55.354 --> 00:41:04.244
'Cause my co-founder also didn't really take a salary for a while. Mm. So like when people talk about like profitability, it's always like you gotta get a little bit under the hood on that.

277
00:41:04.284 --> 00:41:12.924
Like if I was paying myself a, a salary right now, it wouldn't be profitable- Yeah... in that sense, right? Um, but I would say like, you know, year two, um...

278
00:41:12.984 --> 00:41:20.044
Year one and a half, year one and a half I knew we had something. Year two was like, okay, we can pay my colleague like a, a decent salary.

279
00:41:20.684 --> 00:41:28.904
Um, so for a while, and like I don't operate a business in a, in a, I would never be willing to operate this in a deficit. I'm just like too risk-averse.

280
00:41:28.964 --> 00:41:36.544
So like I, again, going back to the EOS system, I have a very clear budget projections, what, what are things gonna cost.

281
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I only hire if like I can do a year of, say, you know, a year to nine months of these costs without any sort of like real impact. There's no perfect formula for it, but I am a very conservative person.

282
00:41:48.584 --> 00:41:58.714
I think that's been the mistake in media for a long time- Mm... is like trying to grow too fast, and seen this in some media companies in Canada. Like, you know, 6AM City is growing really fast.

283
00:41:58.744 --> 00:42:07.004
Like I do wonder like how long that can be sustainable. Some of these other pla- some of these other places, like I think that's been the mistake is, is growing too quickly. What was it, like The Messenger last year?

284
00:42:07.024 --> 00:42:11.764
Oh, God. They raised a ton of money, shut down- Yeah. [laughs]... it all, shut down really quickly. Burned it ex- Yeah. That's a great example.

285
00:42:11.904 --> 00:42:16.304
So, you know, and, and, and look, like the, the, these journalists that I've hired, like they,

286
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their expectation is that, you know, we're gonna run a sustainable operation so that they can stay there and do their work forever. And I, you know, I take that trust incredibly, incredibly seriously.

287
00:42:26.504 --> 00:42:33.164
And so it's all about making decisions that are, you know, sustainable for not just the, the publication, but for the team that, that we have, right?

288
00:42:33.244 --> 00:42:41.844
So yeah, it's a lot of number crunching and making sure that you're following stuff, and, and b- we are profitable and will continue to be profitable for the foreseeable future.

289
00:42:42.064 --> 00:42:47.784
When you first hit that profit, you know, like we could put in quotes profitability with the, uh, the aside of, of your own labor. Yeah.

290
00:42:47.864 --> 00:42:59.492
Um, so when you first hit that profitability though, around two years in, how many newsletters were there, and was the, um, subscription and ad revenue mix still about seventy-five, twenty-five?No, it was like 90/10.

291
00:42:59.592 --> 00:43:11.112
So 90% members, 10% [laughs] ads, um, uh, two years in, and, uh, we were just Ottawa then. Okay. So it was basically like once you can get a, a, a, one of these ones to a point of like sustainability- Then you expand...

292
00:43:11.182 --> 00:43:19.872
profitability, then you can think about expanding because then you c- you have a bit more runway to be able to, to do this stuff, so you're not like... Yeah, you're not losing a ton of money immediately.

293
00:43:20.012 --> 00:43:31.872
I mean, there's that runway now. Like, I think, you know, based on what, how I'm seeing things, it's like a year, year and a half towards profitability for a publication if we do it slow. Now, there's different...

294
00:43:31.912 --> 00:43:41.012
Like, you could spend a bunch more money on Facebook ads to grow that really quickly. Now, we have a salesperson, maybe that changes as well too, but you kind of have to have the budget to account for that. Yeah.

295
00:43:41.092 --> 00:43:42.442
Uh, let's talk about ad sales.

296
00:43:42.512 --> 00:43:52.192
So 25% ads, um, I understand you're selling to plenty of local businesses, that you might have to do some education on, on, like, h- what it means to advertise in a newsletter, what to expect.

297
00:43:52.652 --> 00:43:58.972
Tell me about your process for selling ads in the newsletter, um, and how that's changed as well since you've h- been able to hire someone.

298
00:43:59.652 --> 00:44:08.832
Well, I've definitely drawn a lot from a lot of the people that you've interviewed. [laughs] Because, uh, sales is not my area of expertise, though, like, I'm, I'm very comfortable talking about this stuff.

299
00:44:09.352 --> 00:44:22.932
The, um, the challenge on the newsletter ad side, and I would say this is, like, a key component on the local media piece, is there is a serious, um, level of l- low level of sophistication when it comes to running ads.

300
00:44:23.052 --> 00:44:30.192
Not that local advertisers don't know how to do this stuff. It's just newsletter ads are new and haven't penetrated to that local level. Mm-hmm.

301
00:44:30.332 --> 00:44:40.912
So there's a level of education that comes with this where it's like, okay, this is a newsletter ad. [laughs] This is what... This is not a banner ad on a website that's gonna appear for a month, right? Yeah.

302
00:44:41.002 --> 00:44:49.812
It's, it's... You're gonna get all your impressions in a couple days. And so that education piece is really, really tough and, and hurdling that can be a real, uh, a real challenge.

303
00:44:49.892 --> 00:44:56.012
So, like, over time, we've altered our media kit and pitch deck to be more about, like, a bit of an education piece. If someone is...

304
00:44:56.252 --> 00:45:01.812
A lot of our ads, basically all our ads recently, up until recently, have come from inbound requests.

305
00:45:01.992 --> 00:45:09.052
I've done no outbound work, um, just because I don't have time and, and membership drives most of our, most of our revenue.

306
00:45:09.122 --> 00:45:15.732
So the people who come in have a little bit of experience with us, so it's a little bit different. But the cold selling, yeah, is different.

307
00:45:15.772 --> 00:45:23.012
It's like we have to educate people on that and, um, uh, you know, I, again, draw from a lot of what other people are doing because they're [laughs] much better at it than me.

308
00:45:23.032 --> 00:45:31.252
But the, the other piece I'd say is, like, on the local side, it's, like, being able to show that you're reaching, like, a, a certain subset of, of people.

309
00:45:31.272 --> 00:45:40.622
Like, one, one reason we're expanding, hopefully until sort of more neighborhood-based, um, newsletters and things like that, uh, is because there's a demand for it. It's, you know- Yeah...

310
00:45:40.652 --> 00:45:49.572
being able to go to a local business and say, "I can reach 5,000 people in this one little community," that's a pretty effective pitch versus maybe a broader, a broader message.

311
00:45:49.652 --> 00:45:53.771
So yeah, it's, a- again, it's a bit of experimentation, seeing what works, and like, um, yeah.

312
00:45:53.952 --> 00:46:04.752
I, I'm very bullish on it, about it in the future, but it's been such a low piece of our, of our focus just because of what I'm spending time on. Um, a couple questions about the adverti- the, the advertisers themselves.

313
00:46:04.952 --> 00:46:13.462
Uh, one, are there, like, one or two businesses you could give an exa- as an example that have been your most frequent advertisers that you've worked with for a long time? A lot of events. Mm.

314
00:46:13.492 --> 00:46:15.752
So, like, the events are very cyclical.

315
00:46:15.852 --> 00:46:28.512
They know that because of the, the research we've done with our surveys that, like, 30, 40% of our audience says they've either, like, uh, they've attended an event because of what they've seen or, or have considered attending an event based on what they've seen.

316
00:46:28.532 --> 00:46:36.052
So that data point has been really useful to sell to advertisers. We had, like, a, an, an environmental housing group that had, you know, uh, used...

317
00:46:36.512 --> 00:46:44.912
signed up for a, for a six-month contract to sort of, like, push the different projects that they were doing on home stuff, which has been super, um, super popular.

318
00:46:45.012 --> 00:46:51.012
Uh, you know, real estate, uh, businesses have been, um, really interested because, like, the stuff is really engaging.

319
00:46:51.032 --> 00:47:01.822
But on the flip side of that is, like, just because we get, you know, 1,000, 1,500 clicks on a home, you know, we can't sell it for a lot because people are kinda clicking on it because they like the design of the home.

320
00:47:01.832 --> 00:47:07.032
Voyeurs. Right? Yeah. So yeah, exactly. So you have to understand, like, who your audience is and what they're willing to do.

321
00:47:07.092 --> 00:47:13.051
Like, we've experimented with financial products recently, and have had a lot, a little bit of less success on that. Hmm.

322
00:47:13.252 --> 00:47:20.572
Um, so it's sort of like, yeah, you're, you're monitoring, you're seeing how it goes, and then you're, you're trying to go to new businesses to sort of pitch that stuff.

323
00:47:20.612 --> 00:47:28.962
And like, yeah, we, we've sort of identified some different, um, industries that we wanna go after and, and, and so we're, we're working on that in more of an outbound perspective.

324
00:47:29.012 --> 00:47:36.612
But yeah, it's mostly entirely been inbound. Uh, are these businesses... And I'm sure it's maybe too broad of a spread for you to even paint it with broad strokes here.

325
00:47:36.692 --> 00:47:46.192
Um, I'm curious where else they're already advertising. Are this... Is like other local media products? Yeah. Is it, are they doing meta ads? Mostly local, like other local media businesses.

326
00:47:46.252 --> 00:47:52.232
So it's like a, you know, we want them to consider us as part of their next media mix- Hmm... in a lot of situations, right?

327
00:47:52.252 --> 00:48:00.872
And so I think part of the challenge, and this is just, you know, I, I'd be interested in chatting with other groups on this too, but there's, um, there's a balance of, like, how do you sell it?

328
00:48:00.952 --> 00:48:09.222
Is it purely an intent-based thing that you can get a sale from this, or is it a function of, like, building the brand in the local community?

329
00:48:09.752 --> 00:48:19.972
I think the challenge is if you're trying to go up against Google Search and, uh, and Facebook ads from a performance standpoint, you're gonna be in... You're not gonna be able to beat that, right? Yeah.

330
00:48:19.992 --> 00:48:24.432
[laughs] As a, as, as someone who runs an agency and does this stuff, like, you're not gonna be able to beat it.

331
00:48:24.492 --> 00:48:33.952
But where you can beat it on is, like, this is a trusted space to run your ads, that you're going to build a relationship with our readers over time because we have that trust.

332
00:48:34.332 --> 00:48:45.892
And when they come to make that, uh, purchase decision, so, like, thinking of the newsletter ads as higher up in the funnel rather than necessarily just lower, um, that's where the real value, I think- Hmm...

333
00:48:45.972 --> 00:48:55.212
is unlocked with this stuff, is selling against a brand intent education piece more so than just, um, a direct purchase.

334
00:48:55.272 --> 00:49:01.992
Because it, you know, you can tell them, you know, you're gonna be in a safe, trusted place, that your brand is gonna, you know, have a much higher lift.

335
00:49:02.032 --> 00:49:10.945
And, like, if you've done the surveys to, like-You know, ask readers what they think about stuff. You, there are some compelling points that you can use to help sell that for sure. Mm-hmm.

336
00:49:11.376 --> 00:49:16.676
Uh, on the topic of being unable to beat meta ads, like this is from a podcast as well from the beginning of the year.

337
00:49:16.736 --> 00:49:27.256
I understand [chuckles] that ninety percent of your growth, which at that time was around a hundred thousand subscribers, ninety percent of your growth has come from meta with about a sixty to seventy cent cost per acquisition.

338
00:49:28.016 --> 00:49:37.086
Yeah. I mean, it would be sixty to seventy percent, uh, Can- uh, Canadian, uh- Canadian... or no, no, sorry. The, uh, sixty, yeah, sixty to seventy cents on the low side of things. Yeah.

339
00:49:37.116 --> 00:49:48.236
Now, what we've actually done, and not to give a plug to Beehiiv here, but I'm, I'm gonna do it, is like over time you can see like how these audience segments, um, these audience segments work and the engagement levels.

340
00:49:48.296 --> 00:50:00.796
So like while I can go out and run ads on like food content and get sixty to seventy cent leads, those people don't convert to members at the same rate as like, uh, one ad that asks about news, right? Yeah.

341
00:50:00.836 --> 00:50:14.056
So while I pay like more now for leads, the quality of the lead is much higher because the end goal that I'm optimizing for is very different than just, um, you know, getting a low cost lead.

342
00:50:14.116 --> 00:50:21.786
So I am suspect when sometimes when I do see like low cost leads. I, I, I believe a lot of it because like you can get really low cost local leads.

343
00:50:22.356 --> 00:50:28.766
But, um, there is a difference between acquiring someone who like may open a newsletter for a little bit versus acquiring someone who's eventually gonna give you a hundred bucks.

344
00:50:28.836 --> 00:50:38.996
This is, I mean, going back to what we were talking about, about, uh, half an hour ago or so about, uh, maybe journalists not, uh, having never heard of an EOS, you know, these kind of lingos and terms and frameworks.

345
00:50:39.096 --> 00:50:49.816
I think just this basic concept of like, well, what's the lifetime value or LTV, as the acronym goes, of a subscriber, and then that's how you, that's how you justify even doing meta ads in the first place.

346
00:50:49.856 --> 00:50:53.336
That's what allows you to invest in that. Yeah, exactly.

347
00:50:53.396 --> 00:51:00.655
H- Knowing those numbers is really important and like, I don't know, on the, on the Stripe dashboard, it, it changes every day depending on when people, when people churn.

348
00:51:00.716 --> 00:51:06.946
But, um, it's, you know, thinking through what... That's why it's so important to set out at the beginning that it's like- Mm...

349
00:51:07.036 --> 00:51:17.076
we're gonna run a membership-based publication because then, uh, the a- the sort of basic premise of, okay, membership organization means we need high quality people who are gonna become members.

350
00:51:17.496 --> 00:51:26.906
If I just said we're running an impression-based business that's gonna deliver ads, I would optimize every other downstream decision completely different to get to that point, right? Mm.

351
00:51:26.936 --> 00:51:33.786
So starting at the beginning and working your way forward is so important because all those decisions have cascading effects of, of what we do.

352
00:51:33.796 --> 00:51:40.756
And so like with our food publication, now we know that like we can actually get money from people from events rather than memberships.

353
00:51:40.836 --> 00:51:50.076
So like I've told our reporter, you know, "Scale down the member-only newsletter posts we're doing because like I know now that we can make more money from, from events."

354
00:51:50.116 --> 00:51:54.616
And so, you know, optimizing towards that type of stuff helps make those other decisions.

355
00:51:54.926 --> 00:52:02.106
So if you have your north guiding stars of like what your, what your goal is, what you're optimizing towards, it makes a lot of these other things so much easier.

356
00:52:02.116 --> 00:52:11.076
And I n- not to like completely go on a different tangent, but I do see this a lot with a lot of like local newsletter operators where it's like, "Oh, I'm gonna start this business off the side of this.

357
00:52:11.136 --> 00:52:16.496
I'm gonna do this off the side of this." Yeah. And it's like, you know, sometimes you just gotta stay focused on this stuff, right?

358
00:52:16.536 --> 00:52:25.996
You can, you can do anyth- Like with an audience, you could theoretically do anything, but anything means nothing if you're not like focusing in on, on sort of that outcome, right?

359
00:52:26.076 --> 00:52:33.776
So like, you know, being judicious about what you're doing and knowing what you say no to I think is also really important around making those decisions.

360
00:52:33.796 --> 00:52:41.085
But again, having the, the goal or the sort of like starting point of how you're doing it helps make a lot of those decisions a lot easier. Yeah.

361
00:52:41.136 --> 00:52:49.656
Based on what you just said, so I wanted to ask your sort of, you know, bird's eye view of this local media, local newsletter startup space, right?

362
00:52:49.736 --> 00:52:53.616
We've, we've referenced some of the other guys I've spoken to and how you're doing some things a little bit differently.

363
00:52:53.636 --> 00:53:03.646
And the, the other person I brought up, Umberin Ali, who's doing things even more differently with grant funding. What is your like, you know, fifty-foot, a hundred-foot- [chuckles]...

364
00:53:03.656 --> 00:53:16.196
bird's-eye view perspective of this like new media local newsletter, local media space? I'd say I guess I'm like bullish and bearish on it, which is sort of like, uh, you know, a wishy-washy answer.

365
00:53:16.286 --> 00:53:19.136
[chuckles] But I think, uh, I think there's a couple pieces to that.

366
00:53:19.176 --> 00:53:28.516
I'm, I'm quite bullish on it because I think that the, the new models that are coming out are gonna build the journalism of the future, like The Mill in UK just doing incredible, incredible local news stuff.

367
00:53:29.056 --> 00:53:41.676
Um, and so I think that if you're marrying like really high quality journalism with really interesting writers and breaking down those barriers between people, you know, and serving a need in these communities, like you're, you're gonna go really far.

368
00:53:42.136 --> 00:53:49.466
Where I'm a bit more bearish and like I would be a little bit more concerned, um, to an extent, is like when you see, you know, 6 a.m.

369
00:53:49.576 --> 00:53:57.756
City talking about being able to go into like hundreds and hundreds of communities with AI newsletters, uh, of summaries of content and, and events that are happening.

370
00:53:57.816 --> 00:54:15.236
W- My concern on that end is that, one, you know, if you're, if you're just doing an event summary newsletter, you're not creating enough of a moat to warrant someone sticking around forever, and then it just becomes an arbitrage game of, "How can I get the most people at the lowest, uh, cost?"

371
00:54:15.286 --> 00:54:20.776
And then it's not really a, it's not really a local newsletter, it's a Facebook ads- [chuckles] Yeah...

372
00:54:20.816 --> 00:54:26.336
which, you know, uh, you can make money off that, and not to say you can't, but I think that's sort of the competitive landscape that we're dealing with.

373
00:54:26.376 --> 00:54:33.046
We're also dealing with AI that can summarize everything and, and put that, um, into people's inboxes really quickly.

374
00:54:33.076 --> 00:54:49.396
And so, you know, I think there, if th- there's gonna be a real challenge I think for some of these sort of like quick f- quick local news operators that, that spool up because it's so easy to launch something and get going that someone like 6 a.m.

375
00:54:49.496 --> 00:54:55.686
City can come into this place that maybe you spent a couple grand on to get three thousand people and just build that in a week. Yeah.

376
00:54:55.736 --> 00:55:12.948
And so if it becomes a game of who can build the biggest audience to deliver, you know, positive news summaries, um, I think some of these local news people might end up losing outTo these bigger players, because if, if it's just an execution game of that and doesn't-- editorial doesn't matter, then it's just whoever has the most money, right?

377
00:55:13.048 --> 00:55:22.768
So that would be a concern on, on my end. But I think like the people who are doing it really well have built their own sort of like really strong brand around it too.

378
00:55:22.818 --> 00:55:30.988
And then brand, there's a million different things you can do on that. Like, you know, good graphics, you know, the way you talk to people, presenting yourself, things like that.

379
00:55:31.428 --> 00:55:42.678
I think if you're playing the game of just summarizing stuff, I think in the long term, this is gonna be a real challenging environment to, to win out in, especially if you're just, yeah, playing that arbitrage game.

380
00:55:43.148 --> 00:55:51.428
And, and, and the other, and just the last piece is like, as we build up these like local newsletters everywhere, the CPMs are gonna go down, right? Mm-hmm. There's way more inventory.

381
00:55:51.468 --> 00:55:55.448
And so we're already seeing that I think in a lot of space right now. So that's why having...

382
00:55:55.928 --> 00:56:04.948
You see a lot of these, um, newsletter entrepreneurs talking about how it's like we move beyond the ad game and you have to find revenue from other spots, and I think that's 100% right.

383
00:56:04.988 --> 00:56:17.048
But I question, I guess, for some of these people who are just doing events and, and news summaries, like is that, is that possible? Mm. Maybe it is. But I think the competition there makes it, it makes it a lot harder.

384
00:56:17.448 --> 00:56:26.868
Yeah. I think, uh, I was gonna say, like with Landon, Michael, and Ryan, right? These, these people I mentioned earlier, like they are all really engaging with their communities, right?

385
00:56:26.888 --> 00:56:32.868
And like they're, they're going to these events in person. They're talking to people. They're like building these relationships, and like that's the moat, right?

386
00:56:33.008 --> 00:56:43.338
Like that's the moat that protects them, that protects you from, from a 6:00 AM city and just this total like arbitrage, you know, meta ads and then selling ads against it, uh, right? Like that... It's just- Exactly...

387
00:56:43.348 --> 00:56:47.008
being in person, being a member of your community. I think that's what people want.

388
00:56:47.028 --> 00:56:56.218
And I think that too is like, talking to Landon about like, um, the, the what-- I forget what it's called, but like the equivalent of the Ottawa Citizen in Wichita, the one that's been around for 100 plus years- Mm...

389
00:56:56.218 --> 00:57:05.028
and is now owned by a conglomerate. It's like they now g- you know, I'm paraphrasing Landon here, are m- are just not as connected to the community.

390
00:57:05.138 --> 00:57:17.148
And so like that seems to be just what it comes back to is like the, the moat is being a person in real life [chuckles] and talking to people. Yes. That breaks it down from like the faceless brand into something that...

391
00:57:17.188 --> 00:57:23.028
And that, that itself can be a moat, right? If you're inserting personality and you can be trusted, that's a huge differentiator.

392
00:57:23.048 --> 00:57:33.048
But I think like trying to scale that becomes like a little bit harder because then again, it just goes back to like, how can I acquire an audience really fast and serve them, you know, quick content, right?

393
00:57:33.088 --> 00:57:40.377
I mean, even like I would just say like the trends that we're seeing in, in like YouTube stuff, like long form video content's increasingly popular, right? Mm-hmm.

394
00:57:40.388 --> 00:57:49.268
Even though like obviously TikTok and this other stuff is really doing well, but if you're, if you're producing like really good stuff, I think it does stand out. Yeah.

395
00:57:49.368 --> 00:57:54.338
Um, one thing, so I know that your co-founder went to the Ottawa Citizen, right?

396
00:57:54.468 --> 00:58:04.638
Um, is there something here where like, a- again, I'm thinking of how difficult it can be to stand up a business like this and how it wasn't, uh, you know, it technically wasn't profitable even when it was profitable because- Mm-hmm...

397
00:58:04.868 --> 00:58:12.458
you guys weren't necessarily taking an income. Is that like, I, I, I don't know if you wanna get into this, but is that a thing where it's just like this

398
00:58:13.368 --> 00:58:21.368
could not support two people putting in labor that wasn't being compensated? I, I think so, and that's part of the challenge I think.

399
00:58:21.488 --> 00:58:31.348
Like when you can do a startup off the side of your desk, uh, you know, you've got infinity runway because you're- [chuckles] Yeah.... you know, you're, you're able to sort of fund it from your, from your own stuff.

400
00:58:31.378 --> 00:58:36.748
And like, uh, with my, with my colleague, like he was the first one who was paid because he was doing, you know...

401
00:58:36.808 --> 00:58:44.078
Once we started getting money, he was basically starting being paid immediately because he was, didn't, didn't- He didn't have a marketing agency. Like he- Yeah, exactly. Yeah.

402
00:58:44.128 --> 00:58:50.448
So a- and so that's sort of the balance piece is like you kinda have to build the business around like what you can and, and, and can't do.

403
00:58:50.488 --> 00:58:57.538
And, and I think for him too, like, you know, uh, you know, he was looking for a little bit more stability too, which I completely, completely understand. Yeah.

404
00:58:57.548 --> 00:59:05.548
Like we're still very, very good friends and stuff like that. But, uh, yeah, it definitely depends on sort of like, you know, where you're at and what you're doing and like...

405
00:59:06.028 --> 00:59:13.298
I guess it also depends too on, on how you like working with people. I have friends who, you know, three friends who started a business newsletter in Canada, The Peak, that was, um,

406
00:59:14.248 --> 00:59:22.138
sold a couple years ago, and they were just a great team that were able, you know, to work together. But they also had a lot of like complementary skills and were able- Yeah...

407
00:59:22.138 --> 00:59:30.168
to scale up faster and had outside funding that gave them that runway. Like, you know, the, this, this is not an outside funded publication.

408
00:59:30.228 --> 00:59:38.948
Like I, you know, funded this entirely my- myself, so it's, it's sort of like there's... Yeah. The, the, so having an understanding of like who you're working with, where you wanna go.

409
00:59:38.988 --> 00:59:51.357
Like it worked for a while because we were very transparent and honest about how we wanted to approach things and, uh, and I think that's why the, this sort of like breakup, quote unquote, "worked so well" because we knew we had this sort of stuff in place for that- Yeah...

410
00:59:51.368 --> 00:59:54.488
and knew what we both wanted, and were working really closely together.

411
00:59:54.548 --> 01:00:02.588
So yeah, I mean, having a good team and the r- hiring the right people, especially if you're thinking of taking that next step, like the people is the most important function, I would say.

412
01:00:02.608 --> 01:00:09.188
The, the, like you can have the best systems in place and the best training and stuff like that, but if you don't have the right team, it's just not gonna work.

413
01:00:09.268 --> 01:00:18.468
I'm like in, in all that, I'm trying to pull out like some piece of advice for, you know, the, the journalist who maybe recently got laid off or, and i- i- is trying to start their own thing.

414
01:00:18.938 --> 01:00:26.508
Um, or, you know, just the independent person, creator, who does not necessarily have the business background and is trying to stand something up and like what I'm hearing is, don't go it alone.

415
01:00:26.668 --> 01:00:32.948
It might, it might seem intimidating because you might, you c- you're gonna have to share any profits, the spoils, right?

416
01:00:32.988 --> 01:00:41.248
But like you're going to have a sure thing building something together with someone with complementary skills and not just trying to, to carry everything yourself.

417
01:00:41.948 --> 01:00:52.188
I think if you're an entrepreneurial journalist, you have a unique niche that, uh, there's a lot of money in the industry, then it is much easier to do. And like you have a preexisting audience that you can do this to.

418
01:00:52.248 --> 01:01:03.628
But like, you know, we don't do any social media stuff. Like all our audience- Yeah... has come from like organic sharing and paid ads, and that's just because that's my background to be able to, to grow that.

419
01:01:03.658 --> 01:01:05.548
And so I wouldn't have been able to do this wi- without that.

420
01:01:05.628 --> 01:01:16.736
But for the journalist who's just starting out and, you know, they don't have those specific skillsYou know, it's definitely a lot, a lot harder, and that's where finding someone, um, can be really beneficial, right?

421
01:01:16.776 --> 01:01:21.526
And so, like, you know, if you do end up finding someone, it's really critical that you, like, [laughs]

422
01:01:21.716 --> 01:01:33.676
join with them quickly and, and sort of build that structure that's gonna work because, uh, you know, finding the right people's the most important thing, whether it's someone you're joining with or, um, you know, hiring on a freelance basis, that type of thing.

423
01:01:34.036 --> 01:01:42.916
Yeah. Um, if $100,000 landed in Lookout's bank account today, how would you, how would you use it? Uh, I would hire a managing editor.

424
01:01:43.196 --> 01:01:53.076
[laughs] Um, so, uh, we are hiring sort of like a senior editor right now, but I would, uh, basically like the... Not to get, again, too deep into the business, but- Please do. Yeah...

425
01:01:53.106 --> 01:01:57.296
e- every s- every sort of thing is, like, m- removing me from part of that equation.

426
01:01:57.396 --> 01:02:12.816
So the next step is to bring someone on who can help the journalists do a lot of editorial stuff, so reviewing stuff, um, working with them on editorial calendar, things like that, so then I can go work on, okay, let's launch another newsletter in another city, and I can work with that journalist.

427
01:02:12.876 --> 01:02:19.826
So each sort of function r- uh, of money that, you know, we're using right now is replacing a role [laughs] that I'm doing- [laughs]...

428
01:02:19.826 --> 01:02:38.656
so that, uh, I can then do that role again in somewhere else because we know, like, I sort of know the model now in these different cities about what works, and it's more just, like, having the resources to be able to, um, just honestly be able to execute on it 'cause it, you know, that's the other thing is, like, execution is, like, 80% of the game.

429
01:02:38.716 --> 01:02:44.836
Everyone has a million ideas, but- Yeah... if you're not gonna ex- if you can't execute it on it well, it's just not gonna go anywhere. Yeah. Um, last question then.

430
01:02:44.876 --> 01:02:57.516
You've been doing this for four years almost, almost exactly. In four years, how many different cities would you hope to be in? Uh, I'd love to be in, like, five or six I would say.

431
01:02:57.856 --> 01:03:06.776
Um, I think fi- I think five would be a good number, and then we'll hopefully be doing, like, you know, like, neighborhood newsletters in every city- Yeah... too.

432
01:03:06.816 --> 01:03:18.716
Like, I think if you were looking at, like, what, uh, you know, what The Lookout looks like, it's similar to Chicago, uh, Block Club. Um, it's similar to, like, what the UK, uh, The Mill is doing.

433
01:03:19.216 --> 01:03:29.516
Um, and it's, and it's not so much just the cities too, right? It's like I would love our journalism to be even better. Uh, just like pr- uh, basically, like, we're getting there in Ottawa. I think we're pretty close.

434
01:03:29.596 --> 01:03:50.016
But I, I really believe, like, we can have the best journalism brand in each city we operate in because of how, uh, the model works and what we're writing about and things like that, so that's sort of, like, we've got our 10-year, three-year goals, but that's sort of a big one is, like, be that, the most trusted brand with our audience, uh, for news, and I think we're, I think we're well on our way for that.

435
01:03:50.596 --> 01:03:57.336
I love it. Uh, well, we'll end it here. Geoff, thank you for coming on. Great to be here. Thanks again. Of course. And listener, we will, uh, see you next week.

436
01:03:58.436 --> 01:04:09.096
[upbeat music] If you've just listened to that entire episode and you want to learn more about local newsletters, this episode is for you, episode 38 with Michael Kofman. It's one of our most popular episodes.

437
01:04:09.116 --> 01:04:17.836
Michael gives some great information on how to build a great brand, growing organically, and how to build a sustainable revenue model. Go listen to it. Tell us what you think.