I tried to share a thread today, and didn't realize it got cut off 2 tweets in.
To everyone nice enough to like it anyways, here's the FULL scoop on the newsletter engine
(a model we developed to explain the newsletter business) 🧵...
This is the Newsletter Engine. It shows how money/attention flow through a newsletter business.
What's really cool - when you understand how it works, you can use it to deconstruct any newsletter biz, diagnose problems, and find new opportunities.
Let's break it down.
There are 3 levels to the Newsletter Engine, starting from the foundation and building upward.
The levels are:
1️⃣ Product - What you make
2️⃣ Monetization - How it makes money
3️⃣ Growth - How you get new readers
Product is the foundation of any newsletter. It's made up of 3 components:
1️⃣ Content - your editorial strategy
2️⃣ Tech - tools that power your company
3️⃣ Community - how you craft a sense of belonging among readers
Let's take a closer look at each...
Content: The structure of your email, as well as its voice and worldview.
When people talk about their favorite newsletter, most often, they talk about how it covers a topic, not what it covers.
You can write about anything as long as you have a voice that's unique.
Tech: ESP gets all the attention, but there are 5 key parts to a newsletter company's tech stack:
-Website
-Registration Software
-Payment Processor
-Email Service Provider
-Analytics
Together, these facilitate the key interactions you have with readers or ad clients.
Community: The sense of belonging you're able to create among readers.
This is what keeps people around.
These 3 -- content, tech, and community -- touch every part of your newsletter business.
They're core to who you are, and key to your success.
You can never grow or monetize your way out of a product problem.
Moving up, you have the monetization layer. There are 3 basic ways to make money from a newsletter:
At the very top, you have growth funnels drawing new readers in. There are 3 main levers for growth:
1️⃣ Time (e.g. social media & other free tactics)
2️⃣ Money (e.g. ads and influencers)
3️⃣ Audience (e.g. referral programs)
All together, it works like this:
1️⃣ A reader enters via your growth funnel.
2️⃣ Their attention is turned into money w/ your monetization strategy.
3️⃣ That money is re-invested in growth & product.
4️⃣ The cycle continues.
Attention in >> Money out >> Reinvest >>Rinse Repeat
So, how do we use this?
Well, one cool thing about the Newsletter Engine is that it offers a framework you can use to deconstruct and learn from any newsletter business.
Say we want to learn from Morning Brew...
We start with the product layer, and know we need to break down 3 things:
-Their content/editorial strategy
-The technology they use
-Their community strategy
Look at content/voice, and ask yourself:
1) What, specifically, do they offer? (e.g. How many newsletters? Published how often? etc...)
2) What editorial rules do they live by (e.g. describe their voice, use of graphics, etc...)
You'll learn a lot, and start seeing white space
Later, you look at tech.
You can unearth a lot about a newsletter's tech stack by plugging their URL into builtwith.com
@denk_tweets has also written some interesting pieces on the tech powering MB:
The Newsletter Engine gives you a framework for understanding how the business works, deconstructing other businesses, and even finding white space in the industry.
If this was helpful, go ahead and share it with someone who needs it.
We developed this model over 6+ months of dedicated research. I'll be sharing a lot more from our findings in the coming weeks.
DM if you have questions or want me on your podcast too. Happy to share more!
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