How I grew from 1,000 to 25,000 daily readers.

Updates on growing a newsletter business.

[Note from the future (2024): any numbers shared here (e.g. Sparkloop payouts, Facebook conversion rates, etc) will have changed since this was published. Run small tests before you commit too much of your budget to paid growth.]

Here’s my update on Bot Eat Brain. We are now a medium-sized daily AI newsletter with just a bit under 25,000 readers.

This is a screenshot from my dashboard in Beehiiv (newsletter platform) tracking subscriber growth on a ~bi-weekly basis from launch to current day (August 2023).

We make money by selling ads. We grow by buying ads. Mostly on Facebook.

Sparkloop is a crazy growth unlock. It’s a two-sided marketplace that lets newsletter owners pay each other for referrals. When you sign up for a newsletter, you get a popup that recommends other newsletters. It looks like this:

Sparkloop automatically rotates which newsletters are recommended out of a pool of newsletters that I curated from their partner network.

Every time someone opts in I get paid. I also pay for other newsletters to add Bot Eat Brain and send me subscribers.

That marketplace covers 50-75% of my ad spend on Facebook.

I spent over $10,000 on Facebook Ads last month. I got back over $7,000 from Sparkloop. So my effective paid CPA (cost per acquisition) for new readers is about $0.25 cents. I make about $0.40 cents per reader per month (by selling ads in the newsletter)

Screenshot from my Sparkloop dashboard tracking the number of successful (paid) referrals per month. These referrals generate revenue that offsets the cost of ads.

I’m not the first person to figure this out, not by far. This is why newsletters are exploding as a category.

There are always diminishing returns to a cheap growth channel. I check my dashboards daily to make sure the flywheel stays lubricated. The biggest existential risk to this business is a sudden increase in CPA from Facebook Ads or a sudden decrease in payouts from Sparkloop.

Sparkloop payouts cover most of my advertising spend. Money from ads covers the rest + payroll costs for my writing team.

Oh yeah, I have a writing team now: two part-time writers and a part-time editor.

Every day our team of real humans researches everything new in AI and puts together a concise but informative email to summarize what they find.

It costs about $150 per day to have the newsletter researched, written, and edited. I found our writers from Reddit and Upwork.

Building a team freed me up to focus on sales and marketing.

It also solves removes me as a bottleneck to getting the newsletter out on time every day. I’m notoriously bad about staying on any schedule.

I knew from the very beginning that I wouldn’t be able to write a daily newsletter solo. That’s why if you go back to even the very first issues of the newsletters you’ll see multiple authors were involved.

We are approximately break-even with $0 in free cash flow.

Screenshot from my Stripe dashboard (payments processor) showing weekly revenue from selling ads.

Any extra money left at the end of the month gets spent on more ads so that we can grow faster.

On the positive side: the costs to produce the newsletter are pretty much fixed but ad revenue continues to climb (about 30% month-over-month).

At some point in the future, we could turn off the growth tap and start taking profits. The longer we wait to do that, the faster we can grow, and the bigger the eventual payoff should be.

Here’s the checklist I follow that helps me consistently sell the majority of our ad inventory without sucking up huge amounts of time.

The tool I use to manage ads is called Passionfroot. It’s great.

If you’re working on a product that would be relevant to our audience (professionals who want to discover tools to make them more productive), you can buy an ad slot here. I’ll even write the ad for you.

My goal is 100,000 readers by the end of the year.

Right now we’re on track for 50,000, so I need to at least double our growth rate.

This month I’m working on organic social and SEO growth channels. I can’t afford to spend more money on Facebook ads just yet and also those subscribers are less engaged than organic-source subscribers.

I hired a TikTok agency to start making videos for us and I’m turning every article into multiple tweets for the Bot Eat Brain Twitter account.

If you’re interested in how I kickstarted the last 6 months of growth after nearly 6 months with hardly any growth, read this post:

That covers part 1.

Shortly after I made that post I sold 20% of the newsletter to a friend for $10,000.

I took that money and used it to hire writers and start buying Facebook Ads.

I learned how to run Facebook ads from another newsletter writer, Chevy Cas. Right before I left NYC I went to Chevy’s apartment in Brooklyn and recorded this conversation:

It’s worth watching if you’re interested in building a newsletter business.

TL;DW I spent my last 4 months in NYC working on this newsletter business and talking to Chevy almost daily to brainstorm around newsletter growth. Chevy helped me write my first Facebook Ad and start this growth flywheel moving in the first place.

What’s next?

Now that I know how to produce, grow, and monetize a newsletter business I’m thinking about starting more newsletters.

Also planning on getting more ambitious with our reporting.

Related: if you’re building anything cool with AI or robots and would like to be featured in the newsletter please let me know.

More on that coming soon.

Thanks for reading,

-Anthony