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That's P-E-R-M-U-T-I-V-E. [upbeat music] Crying rooms are, are, you know... That's the future of work. A crying room? I don't know about that. Yeah. Have you ever heard of that? No. Yeah.
I have not heard of a crying room. Yeah. I... Because, like, it's been normalized that you can cry at work, which I'm fine with. Oh, my God. Fair enough. I'm gonna go get a croissant.
[upbeat music] Welcome to the Rebooting show. I'm Brian Morrissey.
This week I'm speaking to Austin Rief, the CEO and co-founder of Morning Brew. You probably already know the story of Morning Brew, but a quick recap.
Austin and his co-founder, Alex Lieberman, began Morning Brew as students at the University of Michigan.
You know, their insight was that most business news was boring and didn't connect with people their age, so they made a daily newsletter that did. Hi, I'm Dan Toomey from Morning Brew. Elon Musk or Kanye West?
Bro, what is going on in this current social media landscape? I'm Sidjno Julu, and this is your Brew Breakdown. Why do markets sometimes go up when there's a full-blown war? I'm Anish Mitra, and this is Brew Breakdown.
And it grew and kept growing, and Axel Springer bought a majority stake in Morning Brew in October twenty twenty at a seventy-five million dollar valuation.
And Morning Brew now has over four million email subscribers to its main newsletter and another million to its B2B email newsletters, which include Marketing Brew, Retail Brew, and a few others. Business keeps growing.
It's over two hundred and fifty people. It's amazing. And this is actually the second podcast I've done with Austin.
W-we spoke back in two thousand nineteen when Morning Brew was just eighteen people, so it's fun to revisit that with Austin and also to hear more about how Morning Brew is approaching growing its business far beyond its main email newsletter, in particular, how it's approaching creators.
You know, this is something that keeps coming up again and again.
And Morning Brew has been bringing on creators, uh, with the bet that it can use Morning Brew's reach and infrastructure and monetization capabilities in order to turbocharge the growth of, of creators far beyond what they could do on their own.
So I think that's gonna be an interesting trend we're gonna see because, you know, the pendulum always swings too far in one direction.
I think it's probably swung too far in the direction of individuals versus institutions, and there's probably a middle ground, like for most things.
And, uh, it'll be interesting to see where that middle ground is and how companies approach that. We also discuss Morning Brew's efforts to diversify its revenue 'cause everyone has to diversify its revenue.
It's doing so with courses and apparently selling mouse pads, so we'll find out more about that. I think you'll enjoy the conversation. As always, send me your feedback at bmorrissey@gmail.com.
[upbeat music] All right, we'll get right into it. Let's do it. We'll do it live. How's that? Let's do it. Austin, welcome to the podcast, really appreciate it. Yeah, thanks for having me.
So I was going back and, you know, we did a podcast, it was May two thousand nineteen at the... when I was at Digiday, and it was in an office. And Morning Brew was, was all of eighteen people at the time.
And you said to me, it was very funny 'cause one of the things you had said, you're like, "I don't wanna take venture capital and be expected to grow to, like, a hundred and fifty million dollars in three to five years."
[laughs] Now how big are you guys? Uh, we are two hundred and fifty employees. We'll do about eighty million of revenue this year, and we're still maintaining those hefty double-digit profit margins. Okay.
That's the thing, you didn't even have to take VC money, and you'll probably get there. So let's go... Like, I, I don't wanna go back 'cause I think everyone has heard the sort of Morning Brew, like, founding story.
A lot of times we do that, but, like, I feel like it's, like, well-known. And I wanna sort of l- focus on, like, where Morning Brew is going now because you guys nailed the first act, right?
And I, I think of your first act was email. In the podcast that we did in two thousand nineteen we talked about this a lot, and you talked about focus, and you just chose to win at email and, and that worked. Yes.
Oh, yeah, it worked. But you're not an email company now, right? No, we are not an email company. We, we think about a lot, like, what we call ourselves, media company, consumer business.
We're just a company that creates great content, engages our audience, and tries to make money doing it. Okay. But email is still the core of what you do. I mean, it's your core connection to, to consumers, yeah?
Yeah, I think emails are... As, as you know, e-email's a really important way to connect with your audience, regardless of how you monetize them or how you engage with them.
Uh, maintaining that relationship with, with email is so important. But the first area you expanded into is podcasts, right? Yeah. The first business line we expanded to was the B2B business, right? Okay.
Those were still newsletters, but we did... You know, we did retail, we did marketing, we just launched IT, we're launching CFO. Uh, outside of that, yes, it was podcasting.Okay, so B2B was like...
I, so I'm trying to get at, like, the growth areas. Yeah. 'Cause, like, when you nail one thing- Like- 'Cause, like, email is like, it's confining. Like, you couldn't have built up...
You couldn't build $150 million business off of, like, an e-there's just simply not enough surface there. I mean, you could do, like, a, I mean, just one email, right? So- Yeah, yeah.
Off of one email, no, you, we couldn't. [laughs] You'd have to have incredible ad rates for that, and everyone in the world would have to get your email. It's possible.
So you decided- We're working, we're working on that. Yeah. [laughs] So you decided to go into B2B, and then into these other areas we'll talk about.
Let's just start with the B2B thing 'cause it's an area near and dear to my heart. I never considered Morning Brew necessarily a B2B product, right?
Yeah, I mean, p-I don't think people k- think about it that way, but it definitely is, right? Not, not the daily newsletter, but the other newsletters are absolutely- Right... B2B products.
That's what I mean, like, but Morning Brew, the email, is not like a, a, a, a B2B. No, it's a consumer product, for sure. Yeah.
So but I always see, like, any time consumer media goes into B2B, they, they usually screw it up. I don't know why it is.
But why did you think that B2B would be a natural first place to expand from Morning Brew the newsletter? Yeah, so when we started thinking about what's next beyond the daily newsletter,
I started to think a lot about, you know, what, what the other consumer media brands did, the, the BuzzFeeds, the VICEs, and I didn't really see an opportunity there, right?
I was still in the mindset of this great business, and I wasn't sure if there was great business to build, uh, on social platforms, right?
I saw a lot of these companies fail to pivot to video, you know, all these things that, that you've spoken about over the years.
But I saw a bunch of people who no one was talking about, a-and, and I think one, just a shout-out, was Sean over at Industry Dive.
I saw the incredible businesses they were building, and I thought to myself, "We can do that, and we can do it better." Maybe not better than Sean is doing it in some ways, but different.
Compete on a different axis and, and create a really great business.
And so we surveyed our audience, and of course, like, we had people in the retail industry, we had people in the marketing industry, and so we thought, "What if we took the same tone, style, design, format we have, and translate that to, to industry products?"
So the competitive advantage that you saw or e- like, you know, just, like, your leverage in it was, I mean, you're starting from, like, a large base, like, I, I don't know...
I mean, Morning Brew, the, the newsletter, has, I think, four million, like, subscribers now. Yeah. A little over four million. But, like, at the time it was... At the time it was a little bit less.
But, like, still, it's easier when you start with a big base to be able to funnel different audiences in, right? Yeah, and that was the, the really important thing. It was actually twofold. One's more obvious.
I think one's a little less obvious that people don't talk about. The obvious one is, yes, we had millions of people reading our newsletters, and we knew they would read other newsletters we had.
The second one, and I don't think people talk about this enough, is there are people who are just email people, and there are people who aren't email people. Yeah.
And if you think about, like, The Ringer, for example, what is The Ringer really good at? They're really good at taking someone and putting them on Bill Simmons' podcast, and that grows their podcast, right?
Because there are certain people who listen to podcasts. There are certain people who don't.
So in addition to being a sports media company, The Ringer is a podcast company, and there's a psychographic of person, the t-type of person who listens to podcasts, and they typically listen to more than one.
They have collected a lot of those people. We have collected not just a lot of business people or business-interested people. We've collected a lot of people who read emails.
And so when we promote another email product, the conversion rates are so high, right? Way, way higher than you'd expect. Mm. And way higher than when we plug...
If we said, "Hey, we have the same exact newsletter," but we had it, have it in video format, the click-through rates are- Yeah... are very, very low. Way, way lower than you think.
But the conversion from email to email is incredibly high. So not only have we collected business-interested people. We've collected email-interested people. We've taken advantage of that.
So y-you're in, I think, five verticals now? I can't keep track. We'll be in... Yes, we'll be in seven by end of this year. I think combined have a million subscribers or subscriptions?
You corrected me when- Subscribers. A, a million subscribers. Okay. Although, yes, we, we had a- It's divisible. Yeah. [laughs] I had all these, like, Morning Brew, like, fanboys coming at me on Twitter. I don't...
[laughs] But that's okay. I know my way around the Twitter fighting pits. So e-explain, though, a little bit. Are those, like, new people, or are you just segmenting your existing audience?
'Cause like you said, like, people who read email, like, it's like, that's the way it is. People who listen to podcasts listen to podcasts. And I, you know, there's different...
I think there's just different dynamics in these two media formats. But are you, like, growing the subscriber base or, and the audience, or are you just segmenting it? So at first, of course, the segmentation.
Day one, it's a huge lift, which allows these products to be basically profitable day one, month one, because we're able to sell into a list of people who we have.
But what we've done a pretty good job at, and which we're working really hard at, is growing new audience, net new people who aren't signed up for Morning Brew, which also over time gets tougher because you have more and more people signed up for Morning Brew.
So a larger pool of the population of people are reading Morning Brew, but, uh, I don't know if you've seen, but we actually just spun off all of our B2B newsletters. So now Retail Brew is on retailbrew.com.
IT Brew is on itbrew.com.
With the intention of really building those up into standalone properties and building those out over time and growing the audiences to have individualized, like, net new audiences that can sustain themselves and grow on their own.
Okay. And the, the advertiser base, 'cause this is all, all ads. This is not, like, subscription, or paid subscription. Everything we've spoken about so far is all... Yeah, no, no, no subscription ever. Yeah.
So but the advertiser base is different. Yeah. Very different, yes. A-a-and as we go, even e-every new vertical we go into is more and more different. Yeah. So how do you manage that?
Like, I mean, do you have a different sales team? Because, like, I think this is where the challenges of, of operating... Almost... I mean, they're related business, but they're slightly different, right?
Like, it's, it's hard to have-You know, sales teams that are handling both things. 'Cause oftentimes salespeople are good at one thing, but not necessarily the other thing and the clients oftentimes are different, right?
Yeah. And so the, the sales team's all under one roof but there's different pods.
So there is one pod who is dedicated to selling into B2B clients, and we really push B2B clients to get in front of a B2B audience, which are these verticals. The integrated marketing team, same idea. They're split too.
And so we, as we do more and more of this, we can support more and more people who are dedicated solely to B2B. So it has gotten, uh, more and more separate over time. Right.
And the, but the ad products themselves are fairly similar, right? Like, you're not doing special ad products for a B2B marketer. 'Cause I mean, B2B does have its own, you know, a lot of stuff is leads-based.
I don't know. I mean, I, I, I'd always heard over the years that you...
And it's actually one of the reasons I, I had reached out for you to be on the podcast, 'cause I'd heard that your ads do really well, so I was like, "Oh, they might be onto something." [laughs] Yeah.
So- So the, I would say the advert- for any advertisers out there, our ad- [laughs]... products perform quite well. But we don't do lead gen yet. That will be coming in the next year.
That is the next iteration of Morning Brew's ad products.
Uh, we will be thinking through, and we are thinking through how we launch a, a lead gen product that is not a replacement for our ad product, but is in addition to. Yeah.
So now are, are you, are you looking to reinvent the white paper? [laughs] No, I, I don't think so. But I mean, there are some- Well, no, and it's like B2B marketing is very, has its very tried and true stuff.
That's why it's like, you know, that's why the white papers and webinars are, are, are s- Yeah, but they- Because they work... yeah, and, and so we do a, a lot of virtual events. Yeah. We don't use the, the W word.
We like the word virtual events. Yeah. We think it sounds nicer. And yeah, I mean, like, you know, to say re- you know, reinvent the white paper m- may actually be- [laughs]... a right, it might be the right phrase.
Like, we think that B2B media is historically pretty dry, and we think that people view B2B audiences as, like, these professionals. But at the end of the day, they're just people, right? Right.
And so we think if we can talk to them like they're people and not like they're professionals, it makes us more engaging, more exciting. And so we're not, you know, doing this crazy new thing. It's lead gen, right?
And so- Yeah... what, what's a great product we can give them that make people wanna actually sign up for something? Yeah.
Virtual events are one thing, content behind a paywall is another, and we're gonna continue to explore other ways.
So you wanna take the, the sort of tone and approach of Morning Brew, and that's a connective tissue through these different brands.
I mean, obviously they have the Brew in it, and you know, you chose a good name 'cause it was able to [laughs] be, like, scalable.
Sometimes, like, people's names, it's like I've talked to them, they're just like, "Oh, geez, we never really thought about it," because, like, it's really difficult then to expand into new areas. Yeah.
And to be honest, that was, that was quite lucky. And that was... Yeah, I, I think the name was great for the daily newsletter. It turns out it's great for a lot of things we do.
But to your question, it's not just what we do within all the B2Bs, it's, it's with everything we do, right? This tone, this conversational, witty tone- Yeah... is the thread that connects every single thing we do.
Right. So I, I... In the 2019 podcast that we did, you talked about, like, um, that you didn't think that you needed to do, like, original reporting. Like, you were like, "That, it's not a focus for us. This is...
Like, we don't think, you know, there's a lot of people out there doing it, and we can contextualize the news."
Obviously, look, I mean, you were bought by Business Insider in many ways, to me I thought it was smart because, like, there's a lot of, like, echoes to how BI grew, and Morning Brew is just a different era growth, you know?
And BI, for years, was an aggregator and was not doing original. And now, like, it's, you know, breaking stories about Elon Musk and stuff. Have you, like, changed in the evolution to embrace the original reporting?
Yeah. We are doing a lot of original reporting now, especially within our B2Bs, but across the business. But the way we think about it is we're not... We're doing original reporting. We're not necessarily breaking news.
Yeah. Or we might break news, but that's not our goal. Our goal is not to get the scoop here and the scoop there that's breaking news. It's like the reaction to it.
So it's this thing happened, and here's our original reporting piece on why that matters or why this company...
You know, why, when Apple, uh, makes changes that affect Facebook, here's how that affects these 10 direct-to-consumer companies, for example. So we are doing a lot of original reporting now.
Actually, more than I ever thought we'd do. So I was very wrong in 2019- [laughs] No... about this. You just... It's evolution, right? I mean, it's- Yeah.
But, like, what I wonder, it's like, like do you wanna get into the, like, the, like, scoops business eventually? And if not, like, why do you not think that...
'Cause that's always been thought of, like, within, like, the sort of journalism world that I've sort of emerged from- Right... and been, like, mired in. It is like, you know, that's the calling card.
You gotta, like, you know, gotta do scoops, you gotta break the story.
Like, can you become premium marquee, like, news brand, and maybe you don't consider yourself that, uh, without, like, really going for the breaking, uh, stories? Yeah.
So I think that was the right thinking in maybe 2012, 2013, right? Yeah. In a, in a page view-driven economy. But w- we've always thought about ourselves as being the best, not the first, right?
And so, you know, we don't make money off page views to our site. It, it's nice, it can, we can convert people to newsletters, but we, we have not changed.
Like, you know, I, I, I personally, and I, I'm not from the media industry. This is my first job, uh, outside of college. What do you mean?
I just read you were, like, one of the most powerful people in media, I, I think. Uh, who? I did. I, I didn't make that list. What? The Hollywood Reporter, uh, made that list.
[laughs] They made a, they made a big mistake there. But no, I, I mean, it, it doesn't... Th- th- the scoop, like, that does nothing for me, right?
If it's great for our audience, if we're providing awesome content for our audience, that's great, but, like, that's not something we champion at Morning Brew is, like, you know, who can break this scoop.
And you, you're right, other publications do it, and they may... That might be great. At the end of the day, like, we're trying to run a really great business. We're a business.
And for us, that doesn't move our top or bottom line.
And therefore, like-Yeah, we don't care nearly as much as creating a great second day story on why that scoop that any of the brands you mentioned why that actually matters to our audience. Like, that's what we focus on.
Okay, so you're not aiming to, like, sort of compete with, like, the Wall Street Journal. Yeah. We haven't wanted to compete with them since day one, and we still don't wanna compete. Okay.
So when you're looking at, like, expansion, obviously B2B, I think was a... I mean, it was a pretty, I don't wanna say obvious area, but it makes a, a ton of sense. But like, um,
talk to me about expanding into different media formats. 'Cause it's one thing to segment an audience into verticals and then grow within the verticals. It's hard. Everything's hard.
But it's another thing to go from being really good at one thing and becoming really good at another thing. Yeah. It, it, it is exceptionally hard. It's something that maybe we spoke about in 2019, but I didn't...
I- I'm sure I thought it was hard then, and I didn't... I, I underestimated it by a factor of 10 or 100. Everything is hard. Being best in class at multiple things is so, so hard. So like, yes- Yeah...
it is incredibly hard. So here's how- So, so how... Oh, I'm sorry. Go on. No. So here's how we got there basically, right? So we, we launched a newsletter, and then we said, "All right.
We don't see room in this multimedia consumer space. Let's launch the B2B thing." And that's going really well, and, and we didn't speak about some things we're doing there, but we're beyond newsletters now.
We're doing events. Yeah. We're doing... We're testing job boards. So we're going down the funnel providing more value for our readers.
But then what we did was we came back and we said, "Let's test that assumption that we made in 2020 when we decided to go into B2B versus creating more different formats of content."
And we said, "Let's talk to our readers." Right? Like, that's how we... That's how we've always been, right? Mm-hmm.
And we found out that one, and this is not rocket science, but one, our readers live in more places than just their inbox. They consume content outside their inbox. You know, not a shocker, but they obviously do.
And two, they care more about just business than just business news.
They care about money and personal finance and investing and, and all of that, and they also care about work life, so productivity and career development and, you know, learning and, and entrepreneurship.
They care about all these things. And so we put all that together and we said, "Okay. Well, our audience exists outside the inbox, and they care about other things beyond business news, so let's put those together."
And that was the, the impetus for us expanding into our multimedia strategy. And as I'm sure you or I hope you've seen, we're doing that very much in a creator-driven way. Yeah.
So we are very focused on bringing creators onto the platform, leveraging their voice. We believe the combination of a creator and our brand is really important for, uh, the expansion of Morning Brew. Yeah.
So talk to me about that because, I mean, we're in this, like, sort of, I call it, like, a period of unbundling. But like, you know, it's always overdone in media, right?
It's like everyone's just like, "No, it's not this. Now it's all this. It's the pivot to whatever." But I do think there's something there with people tend to gravitate towards individuals n- uh, versus institutions.
But there's been a lot obviously about the creator economy, and I think we talked about this. We, we exchanged some DMs about it. 'Cause I was asking you- Yeah, yeah... you were gonna get into this world.
And so explain to me, like, how you see the balance of that institutional brand, I mean, Morning Brew is a strong brand, and the individual brands. Yeah, so I have this pretty strong belief that when you're a...
And this is not just media, right? It's consu- any consumer brand, right?
I think most consumer brands who raise a ton of venture funding, their biggest mistake is they try to, because of those incentives, they try to expand their brand.
They try to stand for multiple different things too quickly, right? You look at a brand like The New York Times, they can stand for a lot of things. How long have they been around?
You know, hun- you know, a hundred years. I, I don't know. A, a very long time. Same thing with The Journal. And so we want to be careful about how far we expanded Morning Brew's purview.
Like, we didn't wanna have Morning Brew Personal Finance and Morning Brew Career and Morning Brew whatever. And so it actually plays well with the creator thing 'cause we can build this house of brands.
Uh, we can build shows like, uh, The Money with Katie Show, which is one of our shows. It's, uh, Katie Gatti, who is a creator we brought on, who speaks to, uh, speaks about personal finance.
We can bring her on, and actually for us, that's a great thing 'cause we don't wanna create Morning Brew Personal Finance that speaks to X audience, uh, in this way, right?
We wanna give ourselves opportunity to speak to a bunch of different audiences. And so it kind of is actually a great marriage.
If we wanted to build a branded house, I think it, it would be at odds, but the creator thing actually plays quite well with what we're trying to do.
Okay, so, like, The Money with Katie, she was doing this, like, on her own, right? And then so what was the pitch to her?
Yeah, so- 'Cause usually, I mean, the whole point of being a creator is to be, like, independent, I think, but maybe not. Well, so, so I, I actually I, I don't think that.
I think that's, like, what you hear from some of the bigger name creators who are, are succeeding and talking about a lot. But I think there's a lot of people out there who are in jobs.
So Katie was n- was not full-time on this. She was in a job, but she didn't wanna go full-time. She didn't wanna be an entrepreneur per se on her own. She wanted some support, and what does Morning Brew provide?
We provide editorial support, right? Editing, producing. We provide distribution, right? It's really hard to break through the clutter and, and grow your audience. We help you do that.
Katie's Instagram has gone from, you know, 10,000 to 100,000. Her newsletter's gone from 5,000 or 10,000 to 100,000. Her podcast has tens and tens of thousands of downloads per episode. Now, we didn't do that alone.
Her amazing content did that, but we were some gas on that fire.
And then lastly, we provide monetization, so ad revenue, commerce, and we have educational products now that we're building, so we have three revenue streams for creators. So we...
We're like business in a box for creators, and that's what we provide for people like Katie.
It's come here, we'll give you editing, we'll give you production, we'll give you monetization, and I think a lot of people find that very attractive.
It's not what people talk about 'cause the sexy thing is like, oh, here's creator X who went on their own, and they make a million dollars a year and have a rolling fund and do this, that, and the other.
But there's a lot of people who don't wanna do that on their own.Yeah, that's a good point. So, w- so but who are some, some of the other creators? I think you forget the... I'm sorry, I'm forgetting Dylan Tolley?
It's the, uh- Oh, so, so s- yeah. So we have a bunch. We have Dan Toomey- Dan... uh, who creates- Sorry... u- unbelievable TikToks. Yeah. He just launched a sh- His TikToks are great, I gotta say. He's great.
He just launched a show, if you haven't seen it, he just launched a great show on our YouTube channel, you should check it out. It's really good.
So we have Dan, uh, he's covering, he's, you know, he's comedy meets business news, meets, like, workplace, right? So he's covering all those areas. We have s- a, a woman named Sejin who's excellent.
She's covering market stuff, breaking things down in the business, uh, business news world. We have Katie, who speaks, you know, Money With Katie is her franchise. Uh, she speaks about personal finance.
We have Excel Dictionary, who has a million and a half followers on Instagram. She does Excel hacks. Uh, and we have Anish, who covers crypto. Yeah. So do you have to cut different deals with them?
So e- every creator is different. It's unique based off of a variety of factors, but yes, everyone is different. It, it is not cookie cutter whatsoever. Okay. But that sounds like they're, they, they have a different...
'Cause I think a lot of times, like, people talk about, you know, because you want the best, everyone wants the best of both worlds, right? Like, I'm in Miami, but I want the best of New York [laughs] and I want Miami.
You know, it's like you want the best of both, and a lot of times you just can't have the best of both. And that's why I'm to New York.
But, like, uh, w- with creators, it's like you wanna have, maybe if you don't wanna do everything yourself, you want the upside, right? [laughs] But you want the institutional support and the infrastructure.
And so, you know, and I think for companies, they want... They understand the power of, like, these individuals, but at the same time, you can't have the enterprise value walk out the door, right? Yeah. T- totally.
I, I, I think it's nuanced, though. This is a conversa- it, it's nuanced, right? So, uh, number one, you have to make sure that your creators are happy, right? That they wanna stay, right?
At the end of the day, they can walk. No matter what deal you cut with them, anyone can leave, right? So, uh, that's one.
Two, you need to make sure that you build a business where the creators are adding value not just to their own franchise, but to the whole ecosystem, so if they do leave, they add more value.
There's more value they've added to the company when they left than when they got there. And three, you need an acceleration and a pace of talent such that if people do leave, you have people there to fill, to backfill.
Yeah. And you, you have to build a great business that, that you can capitalize on these people when they, they work with you. Yeah. Have you sort of had that experience, I guess, with Business Casual, right?
I mean, like, I mean, I f- I feel like podcasts, it might not be creators, but like, you know, they're, it's very, you know, the host is usually, you know, very known with the podcast, particularly when it starts with them.
But, you know, you had- Yeah, I mean, we-... to, like, bring in new talent.
Yeah, we've had a variety of different hosts, and the shows continue to excel from host to host, which I think is actually, uh, a, a great sign for us, right?
So we have gone from one host to another, and downloads have gone up, right, over time. I think it shows,
you know, of course you wanna work with talent that helps amplify the audience, but at the end of the day, Morning Brew is 4.1 million subscribers, or 4.2 million subscribers.
We're starting to grow our audio audience more.
Like, we bring a lot to the table, and I think that's incredibly important when you bring creators on board to show them, like, "Hey, not only look at the, the success of what we've done with, you know, people who we start, build from scratch, but also look at the people we've brought on.
Like, we can keep the audience there, we can retain the audience." And so Business Casual has retained the audience, which is exciting. Yeah.
So how hard was it to build, like, in podcasting and then Y- like you talk about YouTube, like, it's hard to build a YouTube presence. No? Yeah. I, like, I mean- Well-... like, podcasting is hard as hell.
Yeah, so building a podcast, super easy. Creating YouTube content is super easy. Yeah. Creating a good co- creating a good podcast, so hard. Creating good YouTube content, so hard. We are in, like, you know, we are in...
I, I would, like, say we're in the first inning of what we're doing, but like I wouldn't e- you know, we're barely even getting on the field yet.
Like, we're just getting started, which is why it's so exciting, 'cause we're seeing success, but there is so much learning that we're doing. There's so much we have- Yeah... in the pipeline.
Well, I mean, the content is super important, but like, come on, like the growth part. Like, I mean, you guys are- Oh, totally... everyone, everyone is imitating Morning Brew.
I was just talking, I was asking someone for advice about, like, about list hygiene for my own newsletter. [laughs] Get super in the weeds.
And, like, the first thing, he was like, "Well, Morning Brew, like, flushes people after 30 days if they're not, like, engaged."
And it's like f- you- and the referral program, you know, is now basically everyone has copied it and stuff like this. But when you go into these new areas, like, you're, like, a rookie again, right?
So that's why I'm like, um- Oh, no, no... wondering, like, how it was to learn those new skills. Yeah. I, by no means... I mean, we, we haven't even learned them yet, right? Like- Okay...
so it's not as if we have learned them. We're learning them. We're learning the muscles. So again, that's why I say, like, we're in inning one. We've had some successes, we've had some failures. Uh, but that's good.
Like, that's good for us as a business. The... What I would say is, in 2019, you and I spoke a lot about focus, and that's so incredibly important in the early days. But what's challenging about focus is if you succeed,
you haven't, you know, w- we, we... It was very binary at the beginning. Either with a single newsletter, succeeded or failed.
The thing is, we weren't experimenting with anything else, so we didn't build the muscle of failure.
We didn't build the muscle of like, "Hey, we're gonna try this thing, and if it doesn't work in a month, we'll shut it down." Like, we didn't do that, so we did one thing. Yeah. And thankfully it worked.
So we're just as a business, not even just content, everywhere, we're starting to learn, like, how to test and to be okay with, like, we tried this thing and it flopped miserably. It was a complete failure.
We learned a lot, and no one knows. No one remembers. The audience doesn't care that we, we tried it, it didn't work. I mean, we're at the point now where we're failing weekly, which is, to me, like, actually exciting.
So now I'm gonna ask you for a specific, right? Because, like, everyone loves to talk about failure in the, in the abstract.But then when you ask for specifics, they start to [laughs] No, I-...
scramble to some other topic. No. Go look. I mean, you can go look on our TikTok page and our YouTube page. Look at what's done well and look at what hasn't done well.
We've experimented with series on TikTok that we thought would be really great, and we thought we could- Yeah...
take all our creators and throw them all on the same TikTok page, and TikTok algo- the TikTok algorithm would love all of them. Wasn't true, right? Yeah.
The TikTok alg- algorithm likes certain creators more than others on the Morning Brew channel, and so now we're thinking about, okay, like, how do we expose our creators to our audience, but not through the Morning Brew TikTok or through YouTube, right?
Some of our videos, they, they didn't perform very well and, and people didn't like them, and, you know, some of them shut down those series. And so, uh, we're constantly learning, right?
It's not like, it's not like this massive thing. We didn't, we didn't, like, have an event that we thought was gonna have 10,000 people, one person showed up, it was this visible failure. Yeah.
It's just the day-to-day videos that we thought were gonna crush it and we were excited about it, and we put them out there, and we're like, "Oh, no one cares when we talk about this thing.
Let's not talk about that thing anymore." Yeah.
So what the thing that the, the, the current thing that, like, everyone in the media, uh, world has been talking about nonstop, uh, for the last couple years has been subscriptions, yet you guys were always, like, very focused on ads.
And, like, you know, we've talked about this before, like, ads are a good business. They are... You know, we'll see go, we'll see how they hold up in the recession. But, um,
explain diversifying the business, because, you know, ads are, are still a- assume the overwhelming majority of the business, but you are moving into getting direct payments from people. Yeah.
So we, we do have multiple revenue streams now, right? So we have, this year we'll have, obviously, ads, and then we'll have event revenue.
So we're doing three summits this year, one in emerging tech, one in retail, and one in marketing. We're having tickets that are gonna be on average about $750. We'll have about 500 people or so per summit.
So you can do the math, but 750 times 1,200 tickets is meaningful. Mm-hmm. That's real revenue that hopefully we'll generate. Uh, we are also, uh...
We launched an education product, which I was speaking about a little bit before. Yeah. Uh, the Morning Brew, uh, we've, uh, the Leadership Accelerator, we have our Business Essentials program.
They are anywhere from, uh, 1499 to 1999. We'll do seven figures of revenue in those products. Uh, so events, education products. And then we just started to dabble in commerce and monetize our creators through commerce.
So an example of that is we, uh, launched a mouse pad- I saw this... with Excel shortcuts. [laughs] And we sold 40, we've sold 40-some thousand dollars in the first, you know, eight or nine days, which is super exciting.
Yeah. If you're into Excel, you're really into Excel. Oh, we, we have, we have a... The... is quite passionate. I'm terrible and I'm too old to learn, like, macros and stuff like this. I once, like, I...
When I got out of college, I didn't have, I didn't have a job, and so, like, I, I went to a temp agency. I remember it was Contemporary Staffing Solutions, and they were like- Oi...
I, my sister had told me, like, she was like, "Just say you know how to do, like, the stuff they say you can..." And the Excel, she, they were like, "Do you know Excel?" I was like, "Yeah, sure."
And they're like, "Oh, good." Like, "You know, you're just gonna need to go over there and, like, take this little tutorial. It's very easy. It should be fine for you." And I was like, "Oh, no." [laughs] Oh, yeah.
And I was like, well, I could just go to the help and I'll just figure it out, but they shut all that down, and there was this wizard who kept, like, telling me, "No, try again. No, try again."
So then I got sent to, just to do filing at a bank. Anyway. You should, uh, you should be following Excel Dictionary on TikTok. [laughs] It's too late. That's what I'm saying. It's like learning a foreign language.
You get to a certain age, it's just too late. Okay, so wait. You... So the education thing is gonna be, like, over a million dollars. That's pretty good. Yeah. It'll be seven figures this year.
And yeah, we see a, a ton of potential, right? There's basically two types of courses, right? We have the Morning Brew, let's call, like, O&O courses.
Uh, so, uh, we have a leadership one, the business essentials one, and we have a quantitative course, right? And those are, uh, hosted by a bunch of industry professionals.
Like, one thing we lean into in education is it's no professors. It's all people who've actually done the thing they're talking about, right, real-world experience. We have community managers.
They're cohort-based courses, so they're asyn- uh, they're synchronous courses. Uh, and so that's, like, style one, right? Yeah. Morning Brew branded.
But then we have courses that are with the, you know, creator-based courses, right? So Alex, you know, my co-founder- Mm-hmm... in a billion audience course, right? Katie is gonna have a course, right?
Uh, uh, uh, we're calling them sprints for the, the creators, right? Uh, not every creator, but most creators are gonna have these sprints, these...
Uh, they're lower dollar, so they're between, like, two and let's say $600 courses. And yeah, I mean, they're meaningful, right? These creators can, a- and Morning Brew's audience, can really drive volume.
And, and at a ticket price between 200 and $2,000, it's meaningful. And, and once you have, like, the infrastructure and the, like, playbook, ideally, it, it becomes repeatable, you know? And then- Yes.
And, and we have an exceptional team working on that. So we have a, a GM, uh, who was a former CEO of Babson's Executive Education program, and she's doing an amazing job building that out.
We have amazing community managers who make the experience great. And it's crazy.
People will post on LinkedIn, like, "Thank you to, like, uh, Kyle or to Devin," uh, this amazing commu- like, people shout that out on LinkedIn, and it, they're shouting out their community manager- Yeah...
from their cohort. It's, it's amazing. So I mean, you, uh, you guys started this, the business started in 2015, right?
And so, like, up until now, it's been, like, the wind has been at the back as far as the economy goes. Like, I mean, the, the stock market is just, like, up and to the right.
Like, you know, COVID happened, and, like, and that was scary for, like, a couple of months, and then, like, every government got out a bazooka and just [imitates explosion] trillions of dollars.
Um, but now things are a little different. I know when I first bugged you about doing the podcast, you were like, "It's a bad week." [laughs] I don't know if you've seen the markets. [laughs] So how do you see, like...
I mean, first, it's your first recession, um, so welcome. But, like, how are you thinking about, like, managing through this?Yeah, I, I think first off, we're not sure about the severity of the recession, right?
And so my inclination is to, you know, it's very cliche, but hope for the best, but plan for the worst. Mm-hmm.
And so I, you know, I've been taking it very se- honestly, since the beginning of this year, I've been eyeing, uh, just what's going on and slowdown and, and growth stocks dipping, and of course over the last four to six weeks it's been rough, uh, for the market.
And I absolutely think there's gonna be a slowdown. But this is why we've maintained 15 to 30% margins, depending on the quarter, through the good times.
Like, we wanted to run a real business, and so we have so much wiggle room in terms of, uh, our profitability.
And then also we, unlike a lot of media companies who invest their dollars in people, we invest money in people of course too, but we spend a lot of money on marketing, which is a lever we have to pull.
So you know, a lot of people were like, "Well, why are you, why are you, you know, losing money in 2020, 2021?" Like, we ran a good business. Yeah. So I feel really good.
And if things continue to slow down, which we have not seen yet on the ad revenue front, if things slow down, we'll slow down our hiring and we'll react and we'll, we'll only grow in the areas of the business that are growing.
But to me, honestly, and again, this is also like what everyone says, I, I think it's a great opportunity.
We're gonna look to do M&A of great brands who, you know, in tw- you know, if in 2021 you were a break even to 5% margin business- Yeah... and you don't have an ability to raise money, you're...
If this is an 18-month recession, you're probably going out of business. And so we wanna be there to, to buy these companies and these great brands and see what we can do.
So, so M&A is definitely on the table for us at this point. Okay. So are you... How are the... How's the advertising holding out? 'Cause advertising is the first to go, right?
It's easy to turn on and off, and I was like, I was just finishing my own newsletter for tomorrow. It's recounting how, like, you know, recession, every single...
There's always all these articles that, like, appear, like, on, like, Ad Age or, like, now I guess on LinkedIn about how citing the studies that say, "Oh, the last thing that companies should do is cut advertising during a recession," and the first thing that every single company does is cut advertising during a recession.
They just always do it. The CFO knows these articles that... And, and the CFO... Are you seeing softness? Are you seeing that, that trickle down yet? Because there's...
I mean [laughs] you look at the, the bloodbath that the market's been in [laughs] the last month. Ultimately it has to filter down, I would think. Yeah. It, it has to.
So we have not seen a big dip yet, but we're monitoring closely.
Now, thankfully, our B2B business, which is the last of the last to go, in fact, some B2B businesses actually, you know, might accelerate it during a, a recession. We've seen, you know, we've seen very little softening.
Mm. Now, that's not me saying, "Oh, we're not gonna see softening." We, we, of course we are. And as we start to go into what we call our, our brew fronts, you know, selling into 2023, to me that's the real test.
It's are companies going to be spending in July, August, September? Are they gonna buy full-year plans into 2023? That's the real test.
You know, we have a great sales team, and we can sell here and there, uh, for, for, you know, shorter term deals to fill in the gaps.
But w- we'll continue to monitor, uh, but I'm definitely, uh, speaking to, uh, some partners, especially people I know who, who do more, like, brand awareness advertising. Again, to your point you said before- Yeah...
we perform. We actually perform. But brand awareness adverti- you know, display ads, just getting crushed I hear. It's a bad place to be. Yeah. It's a preview for my, uh, newsletter tomorrow when this will come out.
So, uh, let's talk just a little bit and then, and then we'll wrap it up about, like, ad targeting, because, like, I think what's, like, fascinating about email newsletters and almost podcasts to some degree is that it's, like, a media format that is, like...
operates completely separately than, for the most part, outside of, like, live intense stuff, than the programmatic world that has ruled the page view industrial complex.
And, like, does that have, like, a ceiling or, or are you guys gonna have to, like, start...
Or is the next time when we do this podcast are you gonna be talking about your, like, first-party data strategy and, and the rest? Oh, so we have invested over the last 12 to 18 months on our first-party data.
So we have started to collect a lot of first-party data, which is informing a lot of what we're doing, particularly on the B2B side, particularly when it comes to lead gen products. So we, we're there.
We, we can talk about that, 'cause it's been important. With that being said, you know, I've... People have been telling me since 2017, you know, the selling a newsletter caps out, targeting this, that, and the other.
Yeah. And I think we've kind of self-selected the targeting by pushing audiences into different newsletters, different areas.
Uh, but I don't ever see us doing, you know, creating an ad server to target people in The Core newsletter.
You're buying this demographic, you're buying the psychographic, and, you know, it, it is going to cap out at some point, right? I'm...
To your point before, it's not gonna get to $150 billion of revenue on a single newsletter. That is why we're investing in other products. We're investing in different revenue streams.
Uh, but we're not gonna, you know, build an ad server for our, our daily newsletter. Yeah. But you don't see that whole... Like, it doesn't hurt you with advertisers, I guess, is my point. It-
I- i- it's like an unknown, right? Yeah. It's like a known unknown. We don't know. Like, 'cause, 'cause there's no, no one who has it, right? So it's not as if there's someone...
You know, advertisers don't come and they say, "Oh," like, "Brian's newsletter can target the, the CEOs in media companies on Tuesdays."
Like, you know, no one has that product yet, and so maybe we would be doing $150 billion if we built out the ad server of newsletters. I, I don't know, but it's not something we've spent too much time thinking about.
Got it. So final things, like, what's, like, a new initiative that you're most excited about?
I, I, I mentioned it before, but I think it is, um, that combo of the bringing the creators onto the platform, and I think there's a big headwind coming into the creator economy. The crea...
And I tweet about this a lot- Yeah... and people get upset, but the creator economy was propped up by these over, overvalued fintech companies. They had so much capital, and- Yeah...
these fintech businesses, these platformsYou know, uh, they're, the public ones are down 90%. The private ones, half them are probably worthless, honestly, right?
If a public company's down 90% and they're the, the biggest player in the space, the private company that was a copycat is probably worth zero. They were throwing 100K, 200K, 300K- Yeah... at, at creator X- Mm-hmm...
to do their newsletter, creator Y to do their podcast, their YouTube, whatever. I think those people are gonna have to decide, like, do they wanna get jobs, or do they wanna be creators and work at a company?
Like, I think it is gonna be tough to be your own entrepreneur, and I'm excited to hire those people, 'cause there's so many that are talented, and bring them to Morning Brew and build a business around them. Yeah.
And education, of course. Bring, build courses around them. I'm excited for that as well. Yeah. It's funny, 'cause this is in my newsletter tomorrow.
I'm not just gonna take this from you, but, like, because the fintech crypto world, like, there was so much funny money around.
Like, I mean, you think about FTX, the whole company is 200 people or something, and, like, they're just, like, they have their own bazooka of cash, and these marketing departments are tiny, so they can't be, like, super laser focused.
They gotta deploy a ton of capital at once. And when I was hearing some of the deals that were being struck, I was like, "Oh, well, get those now." [laughs] It's like, I don't see how that lasts.
Like, I mean, gold rushes- Yeah... always end. Totally. And I've spoken to probably 100 creators over the last year. And I would talk to them, and I would pitch our sales team.
I think we have one of, if not the best direct sales teams out there. And they'd be like, "Oh, why would I work with you? Crypto thing X gave me a million bucks and I haven't even launched my thing yet." Yeah, yeah.
And it's like, we'll, we'll probably be talking a year and a half. And that is no, no knock on, on anyone, right? But y- i- i- if you have a small audience, y- you...
A company, they just can't give you half a million dollars. They can't give you... It does not return.
And when capital's free, which it was for the last couple years, comp- you know, fintech platform X can give you $200,000 or $500,000 or a million or $2 million.
But when capital costs money and your market cap is worth 90% less than it was six months ago, they just can't, to your point, have a bazooka and just spray that money around the creator economy.
And so yeah, I think that's very exciting for us. Yeah. It reminds me of running. Whenever the wind is at my back, a strong wind, I never notice it. I'm just like, "I'm really strong."
And then when I have to turn around to come back home and the wind's in my face, I'm like, "This sucks." [laughs] Yeah. There are so many creators who, who focused on that first deal, focused on that first check- Yeah...
and didn't think, "I have to perform, uh, if I wanna get a second check from this company." You know, they haven't spent any time in, in, in ad sales and then thinking about account management. Yeah.
And the fact that it's not just about getting that, that first 50,000. It's about getting that second 50,000, that third 50,000, that fourth, and it's really hard.
Running an ad sales business is really challenging, and being a creator is hard, and doing both is obviously- Yeah... exceptionally hard, and that's why we think there's an opportunity here to help people.
How big is your sales team? I mean, 230 people is a lot of people. Yeah. So the, the company's 250, and our- 250... our number of sellers plus our, our creative studio is probably 70 or so. Huh. 60, 70. All right.
That's a lot, that's a lot, uh, to deploy. That's great. [upbeat music] Awesome. Austin, I'll let you go. Thank you so much, really appreciate you taking the time. For sure. We'll do it again three years down the line.
[laughs] Hopefully in three years I'll be retired. [laughs] Well, what, what are you gonna be, like, 30? No, I'm kidding. I'm kidding. I'm kidding. [laughs] And as always, send me your feedback at bmarcy@gmail.com.
Thanks for listening, and thanks to Jay Ray Sparks, who produced this episode. Jay runs Podhelpus, a podcast production studio that can help you build your own podcast. To find out more, go to podhelp.us.
And thank you all for listening. We'll be back next week. [upbeat music]