Organic Before Paid

Alex Lieberman and Austin Rief believe in establishing strong organic growth before investing in paid acquisition, which helped Morning Brew build a sustainable business model. They contrast their approach with common startup practices today and emphasize the importance of content quality over growth hacking.

Key Points:

• Organic Growth First Approach:

  • Morning Brew didn't do paid acquisition until 2017, after reaching 100,000 subscribers organically in 2015-2016
  • "By the time we actually were paying for subscribers, we knew we had a great product, we knew how long subscribers were staying"
  • Developing the "muscle" of growing without money is critical - "if you skip over it is a really bad thing"

• Paid Acquisition Strategy:

  • By 2018, they were spending approximately "500k a month on ads"
  • Eventually scaled to spending "6 to $7,000,000 on paid acquisition" annually
  • Followed the principle: "if $1 turns into $1.1, I will spend every $1 I have"

• Content Quality Over Growth Hacks:

  • "The most important thing... we were maniacal over the content"
  • "People aren't focusing on the content, it's all about the content"
  • "That'd be like selling a SaaS product and the code not being variable, the product not working that well"

• Newsletter Economics:

  • The value per subscriber has decreased: "The value of a subscriber is significantly less than it was when we started"
  • Many creators misunderstand the economics: "They think the same economics exist today because they read a blog post... in 2018"
  • Poor content leads to poor engagement and lower ad rates: "They sell for $3,000 [instead of $50,000] and the economics don't work"

• Niche Focus Recommendation:

  • "The more niche the better"
  • "The internet is just this long tail of millions of niches"
  • Niche audiences enable higher CPMs and clearer direct monetization opportunities