How Beacon Hill Makes $550m In Revenue With 12 Paid Newsletters
Agora, Newsletters, Millions, and Ethical Implications - March 23, 2021 (about 4 years ago) • 13:24
Transcript:
| Start Time | Speaker | Text |
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Shaan Puri | You wanna | |
Sam Parr | talk about paid newsletters really quick a topic that we've discussed a lot | |
Shaan Puri | yeah let's do it | |
Sam Parr | But this one is particularly interesting. The reason why is we've talked about this company a lot: Agora Financial. I've brought it up to you a ton. They spun off a couple of their brands and they tried to do a SPAC. When they tried to do a SPAC, the company that they were SPACing with just kind of went down, like dropped significantly.
So, there was already a publicly traded company that was going to buy a few Agora brands. The stock went down big time, but that's not that important. What's important is the numbers behind this paid newsletter business.
So, there's this company called... actually, I don't know what they call this little subsidiary of Agora. I think they call it Beacon Hill. It owns twelve different newsletter brands. Collectively, those newsletter brands do... where did I put the number? $550,000,000 in revenue and $200,000,000 in profit. | |
Shaan Puri | and by the way growing some that grew 77% la over last year | |
Sam Parr |
Is that crazy? Now I'm gonna tell you all some more numbers:
They have 10,000,000 free subscribers, so kinda like The Hustle. That's like they've got 10,000,000 of that. This is even wilder:
- They have 550,000 people paying them between $600 to $1,600 for subscriptions
- Then they have a quarter of a million people paying them $600 to $5,000
- And finally, they have 100,000 people paying them more than $5,000 for a product or a paid newsletter
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Shaan Puri | and what is in this paid newsletter what's the what so here's the thing it's over 5 grand | |
Sam Parr | Here's where things get way crazier. They have some paid newsletters that cost $35,000.
Now, the reason why this gets crazy is that they have 160 products across 12 brands. So what's that math? Each brand has 12 or 13 products.
I don't even understand the products, but basically, I understand the business model. The business model is they get you to buy a $49 thing, and then they get you to buy a $2,000 thing. So they get you to buy that $49 thing, and that $49 thing is like a monthly paid newsletter. It's not significant.
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Shaan Puri | right | |
Sam Parr | I don't understand how they get it to work. A large percentage of those $49 people buy the $2,000 thing.
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Shaan Puri | okay so but I feel like okay so these must be b to b oh newsletters right | |
Sam Parr | No, they're not. Yeah, that's an important part that I left out. Nearly all of this is around [the company] and I will link to their deck. They have a whole deck. It's kind of scammy.
So, they are a financial and wellness company, which is kind of weird. They're talking about health and wellness. If you click "Agora" up there, Sean, under my name, you'll see the deck. They say that their target demographic is self-directed investors.
What's that mean? Well, I'm going to tell you. If you look at the website, it's just a bunch of old, kind of wealthy, white people who are probably Republican. The reason I think this is because they have ads that say things like, "Nancy Pelosi is coming for your guns. You better invest in these 8 stocks." They say crazy stuff like that, right?
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Shaan Puri | it's basically the like motley fool on you know steroids right | |
Sam Parr | Yes, but I think Motley Fool's ethical, these guys aren't? They also sold a book on how to cure diabetes.
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Shaan Puri | oh okay I was gonna ask you why do you think they're unethical and then you answered my question | |
Sam Parr | And so, it's all financial news, financial newsletters, and financial news-related stock picks. It's just a crazy story.
I've brought this up tons of times; we don't have to spend too much time on it, but it's pretty wild to actually see these numbers. I actually guessed that this is how big they were. Now we have proof.
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Shaan Puri | Yeah, you've been talking about Agora as like, you know, doing hundreds of millions of dollars. Some people know about them, but I would say most people don't know about this empire.
This blows away most people's expectations of, you know, a paid newsletter. Right? Like, oh, I just had a paid newsletter as an individual. I made a few hundred thousand dollars total, and I thought I was crushing it. These guys are making hundreds of millions of dollars.
So when you look at this, my honest reaction is, "Dude, why couldn't you have done this with The Hustle? What did they do, or why was the hill too hard to climb where you could scale like this?" Because this is huge.
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Sam Parr | I don't think it was too hard to scale. I think I could have done it. I would say that this business has been around since the seventies. | |
Shaan Puri | right | |
Sam Parr | So, it's kicking ass now. It didn't always kick ass. If you're willing to be patient, you can do it.
Second of all, if you're willing to put your ethics aside a little bit, it actually is quite easy to do. | |
Shaan Puri | Helps, so it's not going to be simple. How would you do this? Let's say you want to be these guys or beat these guys. What does that mean? You're saying you're probably one of the most well-equipped people in the world to do this. How would you have gone about it?
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Sam Parr | Well, what you have to do is create multiple brands under one. It's really hard to have one brand and only a couple of products make all this money, right?
So, for us, we would have done this, and we were going to do it, but then we got bought. The reason I got bought was for a whole different set of reasons, which is basically that I wanted to get a payday. I mean, I was pretty clear about that before. I wanted it. It was cool; it was awesome. I'm going to stay here, but it was nice to hit the lotto ticket.
If I wanted to be patient and do it for 50 years, which I kind of do, to be honest, I would have created trends for subset subcategories. You make the first newsletter the one that people pay for, only like $49 or $50, and we send you just a couple of things a month.
Then the second thing is you go to subcategories and charge $1,000. For example, if there was a newsletter that dissected media companies—I work in the media industry—and you told me it was $4,000 and I also got access to a community, I ain't gonna complain about it.
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Shaan Puri | right I'm I mean | |
Sam Parr | I'm gonna do it if there's something for digital streaming. You know that the five analysts are smart. Twitch is gonna buy that. It's not that challenging. It's not. | |
Shaan Puri | that hard right | |
Sam Parr |
And so that's what I would do from multiple industries. The thing that a lot of newsletter writers do, which I've talked about plenty of times and I don't have to talk about too much, is they do one of two things:
1. They charge too little
2. If they charge too little, they don't have a higher-end back product
You need a front end and a back end. So you need your cheap thing that gets a lot of people, and then you need your paid thing that gets only a few people but charges a lot of money.
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Shaan Puri |
So, you guys at Transiz... like, I don't know, $300 something a year. You could have been $49, and then $5,000 would have been a better mix of value if you were optimizing for "How do we get this thing as profitable as we can, as lucrative as we can?"
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Sam Parr | yeah and had we not gotten bought I would have done that I would have I was like we were about to change it we're about to make that change | |
Shaan Puri | and by the way what happens to transnow people still pay for it or it's free now | |
Sam Parr | They pay for it. We might lower the price. Before, we are either going to make that the back end or we're going to make that the front end. But we were going to copy this model of a $99 thing and then a $2,000 thing.
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Shaan Puri |
Yeah, dude, when I see companies like this, it just makes me want to do it so badly because it seems so doable. Now, I know that in practice... and by the way, we get heat for this sometimes because we're like, "Dude, it's so easy, it's so simple." We're talking relatively, like... building a successful business is hard, okay? It's not just going to instantly happen.
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Sam Parr | We're not saying things are easy. Sometimes we actually do say that word "easy," but really what we mean is simple.
So, like, being able to bench £500, that is simple. It's straightforward. What?
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Shaan Puri | do you do you just you | |
Sam Parr | Here's how you get strong in the bench press: you lift a lot and then you eat a ton. Now, that is quite hard to do for 5 years, but those are the steps you take. So, it's simple. What we're saying is that this is simple; it is not easy. | |
Shaan Puri | I think weight loss is actually a better example because £500 is a hard thing to bench. Weight loss is literally simple. It's like, "Hey, you need to eat these, you know, avoid carbs, avoid sugars. You need to eat a little bit less, fewer calories than you're burning, and you should work out regularly. Just try to get an hour a day of, you know, breaking a sweat."
If you actually just did those two things and said, "Hey, give it like 4 to 5 months, 6 months," boom, you're in great shape. Everybody knows that formula. It is actually simple. Executing it and doing it, having the discipline and the rigor to actually stick to it is hard. But it is way easier, relatively, than becoming a CrossFit champion.
So when we're talking about business, the scale is that. It's hard to create the next Facebook; that's really freaking hard. Is it hard to create a paid community? Well, I don't think most people who try it will do it, but it's relatively way easier than creating the next Facebook.
For people out there who get all sensitive when we call something easy, I'm not trying to mislead you. Yeah, it's going to take work. Most likely, it won't work, and it'll take some time. But we're on a scale of 1 to SpaceX; this is more like a 1 than it is a SpaceX. And that's a scale for people to think about. | |
Sam Parr | I completely agree, and I think now let's talk about what makes this hard.
The first thing is that you have to sell your soul a little bit. Now, many people will not be comfortable with this stuff. Sean is pretty comfortable with it; I think I'm comfortable with it, but I think I'm a little bit less comfortable with it. You have to be a face sometimes. You have to say, "I'm an expert at X, pay me money for me to tell you my thoughts."
Secondly, this is not that. So, guys like James Altucher, who we've had on this podcast, he was ridiculed for doing this with Bitcoin. Everyone made fun of him, but he made $60,000,000 doing it. Still, he got mocked constantly. Shockingly, most people would actually prefer not to make the money and not get made fun of than to make the money and get made fun of.
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Shaan Puri |
Well, the way I think about it is most people truly will not... They are afraid that they're not gonna get the money and get mocked, and so they're like, "Fuck it, I won't do it." If you really had a guarantee, I think people would happily trade reputation points for bank points, but...
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Sam Parr | Well, the... yeah, then perhaps, but that's a moot point. Because the fact is that most people don't even want to.
The first point you made, about them not getting the money at all, is also true. That's why they're not going to do that.
Second, it's a treadmill; you can't stop. This is a lifetime job. So if you're a content creator, you can hire people to do it for you. You 100% can do that, but you actually have to do the work for a little while anyway. So, you're going to have to work.
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Shaan Puri |
And by the way, quick question on hiring because people ask me this and I have no idea. I'm like, "Why don't you ask Sam? He's the one who did it. Why are you asking me?" They'll be like, "Dude, The Hustle has had amazing talent!" Like, they talk about Trung, they talk about Steph Smith, they talk about some of the people you guys [have hired].
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Sam Parr | Well, you do mean me, right? I mean, I consider you to be part of our crew. You, me, Trung, Steph, Colby... we've got a bunch of people. | |
Shaan Puri | So, the question is: where the heck did you find these people? Can you give me the 10 seconds on each? Where'd you find Trung? Where'd you find Steph? Where'd you find Colby? Where'd you find, you know, all these people?
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Sam Parr | Colby worked at a PR firm where he was doing some copywriting work, and Trung, Eamon, and Troy were also involved.
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Shaan Puri | did he just apply to you or you like recognize like oh this guy's good | |
Sam Parr |
Mutual connection, friend of a friend, said "You should talk to this person." Trung came from Eamon Troy, a mutual friend and investor of The Hustle. Steph I found on Twitter because I read her blog. Who else?
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Shaan Puri | I'd say I just want to know, when you found these people, did you cycle through 30 people who kind of sort of sucked before you found the gems?
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Sam Parr |
When we actually sold to HubSpot, they were like, "Wow, you guys have a lot of churn." I'm like, "Yeah, but here's what we do." This is actually quite normal in the editorial industry. You hire a bunch of people, and you've got to either fire them or there's a mutual "Alright, we tried it, it won't work" effect. And that happens a lot.
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Shaan Puri | and you also have | |
Sam Parr | to do it | |
Shaan Puri | tone I would say that was also a key right because you were writing it originally and so you | |
Sam Parr | yeah and you saw the trends community | |
Shaan Puri | the right people | |
Sam Parr | and you saw the trends community like I was the one actually doing | |
Shaan Puri | all the work every day you were posting in that thing | |
Sam Parr |
Yeah, and that sets the culture and it attracts like-minded people. I also think that once you find the winners, then you go all in on them. Trung is what I call... he's a made man. Steph, a made woman. Whenever Steph wants to do something cool, [I say] "Sounds good, what do you need?"
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Shaan Puri | when others can meet | |
Sam Parr | with an idea | |
Shaan Puri | Time to negotiate, baby! It's time to double it. Time to double that number, whatever Sam's number was. It's time to double it. | |
Sam Parr | These guys are all doing great. Whenever an outside person, or a non-main person, comes with an idea, it's, you know, "Why don't you just show me a little MVP and let's just see what people think?" If Trung says something, it's, "Alright, yes sir."
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Shaan Puri | right | |
Sam Parr | Yeah, like you... you're a proven hitmaker.
So, the last thing is, when we interview them, I always ask about the bottom fourth of the resume, which is like the college classes and all the things that they take. I want them to entertain me during the interview.
So, in the same way that you are really good at storytelling, you have to have other people that are good at storytelling as well.
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Shaan Puri | right right |