Sam Parr never set out to launch a media company. A few years ago, he was fresh from selling a company he had founded and was looking for something else to do. He decided to recruit about a dozen entrepreneurs as speakers and hosted an event he called Hustlecon.
The event was a success, and Parr expanded it into a media website that published daily content. But while the site generated some viral hits, Parr eventually became convinced that the email inbox would produce a much more intimate experience and a better delivery system, so he relaunched The Hustle as a standalone newsletter.
Since then, The Hustle has amassed a growing number of diehard followers who evangelize the newsletter to their friends, converse in a private Facebook group, and even meet up in person.
I interviewed Parr about what strategies he used to grow the subscriber base, how his editorial team goes about picking daily topics, and what kind of companies like to advertise on a newsletter.
To listen to the interview, subscribe to The Business of Content on your favorite podcast player, or you can play the YouTube video below. If you scroll down you’ll also find a transcript of the interview.
Simon Owens: Hey Sam, thanks for joining us.
Sam Parr: Thanks for having me.
You’re the founder of a business-focused newsletter called The Hustle. It recently surpassed 1 million subscribers. But it actually didn’t start out as a newsletter, it started out as a conference called Hustlecon. What was Hustlecon?
A few years ago, maybe 2015, I had sold a business that I had co-founded, and I was looking for something new to do. I knew I was going to start something else, but I just wanted to kill some time and get inspired, so I hosted Hustlecon.
The premise was that it would be a TED Talk for entrepreneurs. I hosted it at a concert venue because I love live music and wanted to make it feel like that. Hustlecon was a 15-person speaker event where each person had about 15 minutes to tell their story about how they started and grew their business. Every speaker was a founder who wasn’t technical. In order to promote the event, I just created an email newsletter where I would write stories about the speakers, and it sold out, unexpectedly, and was quite profitable, again unexpectedly. And that’s how it started.
At the time, were you thinking this could be something? Or did you just consider it a one-off thing?
I did not think that conferences could be big enough, in and of themselves, to interest me. At the worst case scenario, I own this business that spits off a lot of cash each time I host an event, and that’s cool to own. Wonderful. But it wasn’t like ‘how do I turn the conference itself into something massive?’
Because it’s really only so scalable, based on how many people you can get to a physical location. In Silicon Valley, where the focus is on scale, that might not have been as much an interest to you.
Yeah, and I also didn’t want to run conferences all the time. It didn’t excite me in the morning. It was fun to do it while I was doing it, but knowing I was just a guy who did conferences, that in itself didn’t get me excited.
How did Hustlecon transition into becoming a media company?
Basically, I did the first event, and it was quite successful, compared to my expectations. And I did the second one, and it was way more successful. Around that time, I took some time off and drove my motorcycle across the country, and I read the biography of Ted Turner. And Ted Turner was from Atlanta, the South. I’m from Missouri. I lived in Tennessee. He ended up starting CNN, and it changed our culture. And he was always considered a little bit of an outsider. And his life seemed amazing. It seemed very fulfilling, like he was doing some good.
And I thought look, I don’t have a ton of experience. I’ve done this conference deal for a few months, and it’s made hundreds of thousands of dollars, which is wonderful, but that’s not huge. I’m not necessarily qualified. But he wasn’t qualified either, and he did it. He was an outsider, and I’m kind of an outsider too, so what the hell. If I could convince these strangers to come from the internet and buy tickets, then maybe I could put that on steroids and make it bigger.
The original incarnation was different from what it turned out to be. It originally was a more bloggy site — the closest analogy would be a Business Insider. That was what it was to begin with.
Yeah, it was bloggy, and it wasn’t a lot of news. It was some news, but we did crazy stuff early on. We created a Kindle bestselling book to game the system and prove that the Kindle system is pretty flawed, and a lot of people were taking advantage of it, so we took advantage of it to call that out.
Or we lived on Soylent for 30 days. Or we had a guy who talked about his experience microdosing on LSD. We did a lot of stuff like that, and we were getting a lot of traffic early on.
But it’s really hard to start now and have that pageview strategy and that be your main source of income if you want that to be your main source of business.
Because you have to have such massive scale. CPM rates are so low that you really need to be generating millions upon millions of pageviews every month just to break even.
Right, and that’s totally possible. I’ve been part of companies that have a wonderful business by doing that. But in order to scale and become massive, which is what appeals to me, I just didn’t think that strategy was the way to do it.
Tell me about the transition of being a web-based business that was publishing articles on the web to being this standalone email where everything that you were publishing was contained within a single email sent to people’s inboxes.
From the beginning I knew that email was more powerful than probably social, push notifications, app downloads, all of that combined. If you go and do some research on ecommerce companies, you’ll find that they say that email is one of the most predictable ways they earn revenue. An email subscriber is worth more than any other kind of subscriber.
I knew that, just because that’s data that exists. And with Hustlecon I made close to $200,000 with a list of 10,000 people. And so we thought what’s the difference if someone is reading an article on Safari vs the mail app, when the phone is still the same size. The background is still white. You still control the experience. The mail app is one of six, or seven, or eight apps that most people in my target demographic use every day, multiple times a day. What if we built this entire business inside of email? And the numbers just added up to where it made sense. It made sense from the beginning that this could work.
That’s when we switched, April 19th, 2016, to all email, and we didn’t care about pageviews.
Email is the only universal platform. We think about Facebook being huge, but it’s the one platform that has more users than Facebook, Twitter, or any of these things. Every single person has an email address.
Email is the internet. And everyone uses it. If you look at the updates to email, what’s been the biggest update in decades? It’s the promotional and social tabs on Gmail. Not a lot has happened.
Because there’s more friction to the inbox, where someone has to sign up for your newsletter to receive it, it’s harder to get the conversion, but once you get the conversion, there’s a lot less noise. With Twitter, if someone follows you on Twitter, you’re still competing with thousands of other Twitter accounts that are tweeting, sharing, and quote tweeting, and it just pushes your stuff down very quickly. Whereas with an inbox, it’s a lot less busy than your average social media feed, and people opt into it, so that’s why that subscriber is worth more. It’s harder to get them, but once they’re there, probably close to 100 percent of your subscribers at least see the subject line of your email, even if they’re not all opening it.
You said it. It’s far more intimate. It’s better on many many levels. It’s also a way better business. I know what the lifetime value of a user is. If you ask a website-first media company what the lifetime value is, if they know it, I bet you it took them a long time to figure it out. Whereas with us we knew immediately what it was, and that’s why we grew so fast. I know what my lifetime value is for each subscriber, therefore I can spend X amount to acquire a customer, and once I find those channels to acquire a customer, I can go fast.
Tell me about the content of the email. If you had to explain the appeal of it, I’m guessing you would say it’s the style, it’s the tone, it’s the voice of the email. Tell me about what kind of content you’re creating, and what it takes from a staffing standpoint to craft the email.
The majority of people we hired don’t have traditional media experience, and that’s very much on purpose. It’s because when we started, it was me just blogging. I’m a self-taught blogger, and I don’t have a traditional education on it. The idea was I know that I’m pretty intelligent, and I know that my friends are intelligent, but also I like to have fun, I like to joke around with my buddies. So I’m just going to combine that and write like I speak.
So early on we just trained our writers to be like that. And it’s worked out quite well.
You use kind of a conversational voice, getting away from the stilted, AP-style approach to writing content.
Absolutely. It’s very bloggy. It doesn’t follow the standards that The New York Times or the other legacy media companies have. Mostly because when I started I had no idea what that meant. But also, now that I do know, I’m thankful that we don’t follow that.
How are you choosing topics? Is it mainly curation and summary?
The idea early on is, look, there’s this entire generation of people, guys like you, me, a bunch of my friends, are the audience. And it’s a group of people who are mostly youngish, but it doesn’t matter what age they are. They all think young. And the idea is that they want to put a dent in the world through the work that they do. And they don’t want a 9 to 5. They want something where there’s work life integration, where their careers are mission oriented. And we knew there were a lot of people like that.
The way that we select content is to think about ways to get that done. One way of trying to solve that is by giving them news, business news. So we’ll select stories that we think will help them get their job done, help them succeed at work. We stay away from politics because a lot of people cover politics, and that market is saturated enough and I don’t think there needs to be more noise there. We strictly stick with business.
We curate a lot and will give our opinions on whatever it is we’re curating. We call it the Jon Stewart effect, where we won’t necessarily break the news, but we’ll give you an interesting angle on it that you hadn’t heard before. Or we’ll make it funny and self-deprecating. It builds trust with our audience, but it also is quite useful and helpful, so people rely on us for our opinions.
For a long time early on I was, like, whatever the data says, let’s do it. But now it’s a combination of data and following our gut. Our writing team has almost like an SNL writers room meeting where they come prepared with the stories they think are important, and then they riff on it and see if they have interesting angles, and then they go do their thing, and then they come back and edit it.
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So it’s almost like a TV writers room.
Yeah. I read an article several years ago about how SNL did it, and I was like let’s do that.
Is it every morning? When is that happening?
Yeah, every day at noon.
And how many people are in that room?
I only have a staff of four editorial people.
And what does the rest of the staff look like in terms of the makeup of actual job titles?
We have about 25 people. We could double that tomorrow if we wanted to, because the business is doing well. But we’re trying to figure out where to plug people in and what we want to accomplish.
We have an office in Austin, and we have a sales team of about six people. We have people who support the sales staff. We have a team of copywriters who create our advertisements, but also write copy for other things that we have on the website or email.
We have a tech team. The email you see is just the tip of the iceberg. The tech we’re building is amazing. That’s going to be the foundation for all of our expansion. We have developers who are building things. Everyone who subscribes to our newsletter, we have a ton of information about them through both first party and third party data. We know how to look at that data to figure out what we should build and how to get what we build to the customer.
We also have an events team. And we have a growth team.
It sounds like the tech team is building analytics products that will inform the editorial product?
Kind of. We’ve raised a little bit of angel money, but we haven’t take any venture capital. So I guess in that sense we’re bootstrapped. And so, in order to make our business run efficiently, we need tools to allow our team to do a lot with very little. We have this system that sends the email using email service provider best practices. It’s basically like SEO for email. Our writers spend time in there and write.
Depending on certain metrics, different users get different advertisements. That’s actually a hard problem to solve, and so we had to build that ourselves. Our whole business, our sales process, is run through our CMS. We even connected it with our bank, so when someone signs an invoice, that money gets sent to our bank automatically, and I can withdraw from that account receivable. So this CMS is the center of our entire business.
You just passed a million subscribers. Can you talk about what you did? You were talking about your growth team. I’m assuming that’s what they’re focused on. Tell me about the strategies you were using to grow those subscribers. There’s a lot of friction to get someone to opt-in to your email, and you’re not operating a web-centric company. How do you generate those leads that turn into subscribers?
Early on, we identified four or five channels, and we’ve been laser focused on those four or five channels for two and a half years now.
The first thing, early on, before we were just a newsletter, we’d get a fair amount of traffic. We’d get a million unique visitors a month, just to the blog. So we figured out how to convert those users into subscribers.
The second thing is we have an ambassador program, and we have 7,000 ambassadors, and each ambassador refers many people.
The third thing is, we did a lot of partnerships. We would email a list about a company, and that company would email their list about us.
And then the fourth thing was paid advertising. We advertised on other newsletters, on Facebook, on LinkedIn. And I know how much I can buy a new subscriber for, but we have that lifetime value amount, and we are just able to spend a lot of money, because we earn that money back in a month and a half.
One thing that you’ve gotten a lot of attention for is your ambassador program. And that’s an incentive program where you actually reward your most hardcore users for helping you get new subscribers. You generate a link that they can send to their friends or contacts, and you can track how many individual referrals they get. Can you talk about the rewards you offer these people at different tiers to try to get them to refer people for the newsletter?
We launched this with Hustlecon. We had a bunch of people who wanted affiliate links, and we were like, ‘we don’t really want to do affiliate, but what we will do is, if you get people to sign up to the email list for Hustlecon, we’ll just give you a free ticket.’
And so we built that from scratch and decided to do that for the email. It changes all the time, but let’s say you refer four people, then you get access to our Facebook group. If you refer 10 people, you get a sticker. 25 people you get a t-shirt. 50 people, a pair of socks. It just keeps going like that.
The Facebook group is this vibrant community. It’s fascinating, because it’s really a self-sustaining group. It’s not like you guys are having to drive all the discussion. It drives its own discussion. What did you notice as the group was growing, and how were they using the group?
The thing about communities is that a lot of people who don’t know what they’re talking about, or they’re new to the game, they’re just like ‘I’m going to set this up and it’s going to work.’ But with community, you have to build it yourself. The Reddit guys, when they first started, would make like 30 different user names and just post a ton of stuff, and comment on their own stuff with different user names.
We didn’t do that with our group, but I was in there every day posting stuff, commenting on everyone else’s stuff, doing that for like a year and a half. And that’s a ton of work. It takes a ton of time to make it look self-sustaining. And so I was doing that for a long time.
I’m friends with a lot of the ambassadors now. We have a lot of ambassadors, and they know my name, and I recognize a lot of their names. And whenever I travel, I meet some of them. And it’s a great way to get insider information on your customers and your readers. It helps me understand what we’re doing, and why we’re doing it, and who we’re doing it for.
We’re launching new products in the next couple months, and we use that ambassador group to test different ideas.
So you’ll say ‘we’re thinking of this at our next Hustlecon, what do you guys think of it?’ That kind of feedback?
Yeah, or I’ll put a poll in there that says ‘how many of you use this type of product?’ And I’ll get hundreds of responses. And I’ll say, oh wow, out of all of our ambassadors, a ton of them are using this type of CRM, or whatever it is I’m asking about.
Whenever I’m building new products, I never ask them ‘what do you think of this idea?’ Or ‘will you buy this?’ I always ask them questions that reveal their behavior. So if I want to know if our customers pay for content, or if I’m thinking of a paid subscription for us, I wouldn’t say, ‘hey, would you guys pay for this?’ Instead I’ll say ‘how many of you pay for the New York Times, the Wall Street Journal, or any other kind of subscription, and why?’ That validates or disvalidates it.
A lot of them are entrepreneurs too, so they’ll post something like ‘can anyone recommend a Wordpress developer or a graphic designer?’ So you see them using it as a collaboration tool?
Yeah, because everyone’s in a similar boat. They’re able to post their emotional issues or their actual logistical issues. Like ‘I’m going to buy this type of product, what’s the best?’ Or ‘I’m really struggling on how to handle this employee, what would you guys do?’
It’s a type of feedback group, and it’s a group of friends who don’t all know each other, but everyone is in similar situations.
How do you monetize the newsletter? You mentioned advertising. Are there any other ways?
Right now, it’s 100 percent advertising.
You also do events, right?
Well, that’s not monetizing the email. We do events, and events make a lot of revenue, but that’s a different line item. We have media revenue, and we have event revenue. Media revenue is far bigger, and will be much bigger. Our only media revenue is in-email advertising.
In terms of promoting the events, the more subscribers you have, the bigger the brand, the easier it is to sell tickets. A lot of media companies would think of the events as part of the media company itself, but it seems like you don’t really consider it in the same category.
I don’t consider it in the same category. I consider it a different unit. It has to be profitable, or else we don’t do it. It’s kind of like a flywheel, where the better the media and email gets, the better and bigger the events will get. And the bigger the events have gotten, the better the email has gotten. They help each other, but they are separate units.
How many events are you doing, and where are they taking place?
We started with just one, and we will have done about 15 in 2018. We do them in major cities where our readers are. New York, Chicago, Austin, San Francisco, and LA. Some are big events. In San Francisco, we can host an evening event and get 1,000 paying people to come. And it’s cheap, like $20. Or we’ll have a Hustlecon and we can get 2,000 or 3,000 people to come, and that’s more expensive. That’s like $500. Or we’ll do free meetups throughout the country.
Are you able to use geotagging, where you’re able to email all the Hustle subscribers who live in Chicago because you’re having an event there?
What I prefer to do is take everyone in Chicago and send them a dedicated email. But I like to mention the national events. If someone who lives in Chicago sees there’s an event in New York, and they have a friend in New York who they think would like this type of stuff, I still want that Chicago person to see it. So I’ll mention all the events in the daily email. But then every once in a while, if we want more people to come to an event in New York, I can take all of the thousands of New York subscribers and send them something special.
For the advertisement side, what’s the difference between selling ads in a newsletter versus banner ads on a website?
Well I’ve never done it for a website. And I don’t have much experience in media, other than with this company. So it’s hard for me to say how it’s different from websites. But I do know that, with us, there’s a funny story I think about. If you’ve ever seen that movie Get Rich or Die Trying with 50 Cent. He’s a drug dealer, and the drug dealer next to him pushes this one addict away because the addict wants to pay in change, and 50 Cent is like, give me your change, I’ll take change. It’s all money to me.
That’s how we were early on, and kind of still are. We work with really small startups that will pay $5,000. Early on it was like $500. My first deal I ever closed, I think it was $800, or $1,000. With email, we’re able to do some of these smaller buys, and it goes all the way to really big buys, where it’s like six figures.
But with these early buyers, they want to spend a dollar and then make more than a dollar back. So it’s very performance driven. I don’t know if the web is so much performance driven, but we’re very performance driven, and the marketers need to see a return.
Is it all direct relationships? There’s no programmatic ad tech you can plug in your newsletter and do all the work? You have to sell each one of those yourself.
That exists, but I don’t think it’s any good. We’ve worked with nearly 400 advertisers, and 100 percent of them have been direct.
And it’s one advertiser, one newsletter?
We can split it. Let’s say we have 1 million subscribers, and Away Travel, Wework, and Quest Nutrition, those people come to us and say how many people they want to reach. We can say, ‘ok, let’s give Away Travel 200,000 people today, and 200,000 people tomorrow. Let’s give Wework 300,000 people in today’s email. We’ll give Quest the remaining 500,000.’
How do you pick that 500,000? Is it random, or is there some kind of targeting that’s going on there?
We don’t do a lot of targeting, because I don’t think it’s the right way to go yet, but we could do it. We’ve tested it.
When a user signs up, they’re assigned a certain digit. Our system is designed so the users don’t get ad fatigue. We can show a Wework ad X times a month to different users, so we never fatigue them. And we still get high results.
Right now, random has worked out great. You know on Facebook how you have lookalike audiences? That’s almost what we have. It’s just one big lookalike audience for a very entrepreneurial, professional, high spending audience who will purchase Salesforce or a $1,000-a-month software, so it’s a very highly targeted demographic already.
Are you crafting the creative?
In our CMS, once someone signs an invoice, they’re automatically sent a link, and they fill out a bunch of information, and then our copywriters make the advertisements, and they send it to them to approve, and that’s how it rolls.
We can reuse some ads, because only a certain number of people have seen it.
You mentioned direct response. With the podcasting space, that’s a huge part of that. Is that a big component of what you’re doing? Focusing on conversions with your advertising?
Absolutely. When we were early on, the big companies like Verizon or Target, they would never work with us. They didn’t know us. They thought that we were small, and they didn’t care about us. So we had to work with some of the people who came to our conferences. These were companies that were little and didn’t have brand budgets, and they need to make money.
Yeah, we’re able to track sales, and we need to hit their CPA, otherwise it’s not worth it for them, and we won’t get them as a future sponsor.
Now the Microsofts of the world, they’ll work with us, and they’ll do brand advertising. But we’re still performance driven.
I don’t know how much you’re following the media world at large, but it’s kind of on fire. There’s a lot of stuff happening with Facebook right now, in terms of them pulling back reach for pages. There are all these companies going under because they tried pivoting to video, and it turned out those were empty pageviews. How exempt is your company from all that?
We’re very exempt. And I feel lucky. And we’re not going down that media route. We’re a media company now because we make money from advertising, but we have the ability to expand beyond that. My infrastructure is so low. If I wanted to run this company with six people, it would still make a whole lot of money. We’re building this to be much larger than one of those companies that pivots to video. I think that was such a huge mistake.
The problem with media companies is they forget the basic principles of business, which is you buy a widget for $1, and you have to sell it for more than $1, and it has to be a product that people like. These people who did these pivots to video, it was so obvious that it was just chasing a trend. And there’s not longterm value there. I work very hard every day to make sure we don’t fall down that path and make the same mistakes that many, many people are making.
Do you have any goals to expand The Hustle beyond newsletters?
Yeah, the plan early on, from day one, was to grow to a million subscribers via email, and for our email to be the launching pad for more businesses. So yeah, we’re going to expand very quickly to launch more products to our audiences.
Can you give any hint as to what some of those might be?
We’re tinkering with this one product called Trends. When you have a large audience like we do that all fits in a similar demographic, we can see how they behave and how they interact with different types of content or advertising. We can see a lot of interesting trends.
News is what happens in the past. We think we have some data that shows what will happen in the next six, 12, 24 months. And so what I’m doing now is we’re hiring a lot of analysts, and we’re going to analyze a lot of the data, and I want to create a subscription product for both our advertisers and our consumers, who are all very entrepreneurial. And I want to use our data that we collect on a day to day basis, as well as doing surveys with this demographic, and have our team of analysts spot trends that hopefully entrepreneurs can pounce on and start businesses based on this information.
So kind of like a research company that’s generating its own data.
I think that’s incredibly interesting to me. When we talk to our advertisers, a lot of them pay for Gartner or Forrester, but they don’t have a lot of trust in them. A lot of our companies were started by people in their 20s and 30s, and Gartner is pretty old. It launched in the 70s. And they don’t believe that these companies are quick and have the latest and greatest information. But with The Hustle, we can get it right away. We could survey a group of 10,000 people very quickly, and we know what that means and can spin that up very fast.
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