Irrational Confidence Edge

Austin Rief and Sam Parr share how they built successful newsletter businesses despite industry skepticism, attributing their success to simple math, competitor analysis, and recognizing an industry full of outdated thinking.

Key Points:

• Simple Math Led to Conviction:

  • Both founders created basic spreadsheets showing how newsletter subscribers growing 5-10% monthly with flat CPMs could generate significant revenue
  • Sam: "I had the exact same spreadsheet. I listened to every interview with Ben Lehr and I'm like tell me what the CPMs are"
  • Austin: "It was the most basic spreadsheet of newsletter subscribers grow five or 10% a month and CPMs stay flat and over time you can get to hundreds of thousands or millions of dollars of revenue"

• Competitive Intelligence Gathering:

  • Sam met with Business Insider reporters to understand traffic numbers: "Tell me how many people visit your tech part of your website... 80,000,000. Okay then... you're giving me some numbers to triangulate"
  • Both founders studied existing newsletter businesses like theSkim and Thrillist to understand the model

• Industry Filled with "Suckers":

  • Austin: "I don't think we were actually that smart. I just think the people around us were really dumb"
  • "They say at a poker table if you look around and you can't find the sucker, you're the sucker. Well, I think we picked the industry with a lot of suckers"
  • "There were a lot of people who started five or ten years before us and they just weren't smart. They were doing the same thing that they did for ten years"

• Contrarian Thinking Paid Off:

  • Austin: "Even in 2015, '16, '17 we were like yeah Buzzfeed just doesn't make sense, it's not worth a billion dollars"
  • "For five years I think people didn't believe us and over time I think we proved that our model while it seems silly, it actually works. It worked and it made us a bunch of money"

• Validation Through Performance:

  • Both businesses succeeded despite skepticism from industry veterans
  • Their newsletter models ultimately proved more sustainable than many venture-backed media companies